Kirloskar Group plans to invest ₹5,000 cr to double revenue by 2030
The Kirloskar Group has seen revenue growth after a decade of stagnation, a period also marked by a protracted battle within the promoter family over the division of assets. To drive growth, the group has been foraying into newer businesses, including real estate.
Mumbai: The Kirloskar Group, led by siblings Atul and Rahul Kirloskar, has set itself a target of doubling the cumulative revenue across companies to $5 billion by 2030 as these firms enter newer businesses and segments.
Spanning four listed companies—Kirloskar Oil Engines Ltd (KOEL), Kirloskar Pneumatic Company Ltd, Kirloskar Ferrous Industries Ltd and Kirloskar Industries Ltd—the group plans to invest ₹5,000 crore over the coming three years in new manufacturing capacities, said Rahul Kirloskar, chairman of Kirloskar Pneumatic and Kirloskar Ferrous.
The group’s revenue growth has been stagnant over the past decade, largely due to a lack of new products. However, a turnaround that began about three years ago has resulted in a sharp revenue uptick across companies. Shareholder interest in the stocks has picked up, too, with stock prices surging across the four companies in 2023 and 2024. The shares have since pared some of the gains, with all four stocks losing over a quarter since the beginning of 2025.
“We have switched gears and we see a bright future ahead of us," Kirloskar said.
The period of stagnation coincided with the protracted battle within the Kirloskar family, with Atul and Rahul on one side and their brother Sanjay Kirloskar, who heads the listed Kirloskar Brothers Ltd, on the other. The acrimony, stemming from the division of assets, persists.
Growth path
The group's revenue growth is expected to come mainly from KOEL, which reported a topline of ₹5,073 crore in fiscal year 2025 (FY25). The company is aiming for $2 billion in revenues (about ₹17,700 crore) by 2030.
Led by Gauri Kirloskar, the daughter of Atul and Aarti Kirloskar, the company is in the middle of a transformation with an entry into new segments like high-horsepower engines and engines running on other fuels besides diesel. KOEL historically makes diesel engines used for power generation and in industrial applications.
“We went from saying we're a diesel engine manufacturer to saying we're an internal combustion engine manufacturer who can run on every fuel," said Gauri Kirloskar, the company’s managing director.
“What we really want to position ourselves as in the next five years is that we're a global technology leader when it comes to power solutions," she said. This includes internal combustion engines, hybrid engines, and fuel cells, she said.
The company's biggest growth engine would be sales of backup power generators to data centres—a business that it is planning to enter and scale rapidly. It will also focus on expanding its exports, which now benefit from comparable emission norms in India and key Western markets like the US and Europe. The company will also give impetus to scaling its existing but small railways and defence businesses.
When the younger Kirloskar took over as KOEL’s managing director in 2022, she set a vision of doubling business in three years. Since then, the company has managed to scale its revenue 1.6 times, and its profit has more than doubled. Kirloskar attributes this turnaround to finding the right leadership for each of the company’s businesses.
“We've been able to provide a platform for leaders to see a growth path within the company and have a degree of autonomy," she said.
The company has a market capitalization of just under ₹13,000 crore compared to Kirloskar Pneumatic ( ₹7,600 crore), Kirloskar Ferrous ( ₹8,500 crore) and Kirloskar Industries ( ₹4,100 crore). Kirloskar Pneumatic makes a range of compressors for industrial applications, while Kirloskar Ferrous makes products from iron casting. Kirloskar Industries is a holding company.
Realty foray, NBFC growth
Arka Fincap Ltd, a non-bank financial company (NBFC) and a subsidiary of KOEL, is looking to pivot into retail lending by financing used vehicle purchases and offering small-ticket loans against property. The non-bank lender has a ₹6,000 crore loanbook split between wholesale loans to real estate companies and loans against property with an average ticket size of ₹1 crore.
KOEL plans to spin off Arka Fincap, established in 2018, into a separately listed company by 2030, Gauri Kirloskar said.
Meanwhile, the group has also started a real estate business, which will use its vacant land parcels. It has already built its first building of 150,000 square feet in the Kothrud vicinity of Pune—all Kirloskar group companies have moved their headquarters to this building. It is now developing a second building in the same location with 1.5 million square feet of floor space. The project will be ready for leasing out by 2028, said Rahul Kirloskar. “The intention is, over the next five years or so, to develop this business and build it up to scale."
Analysts upbeat
“KOEL strategically restructuring its business to reinforce group values and cultivating a strong culture has helped it not only to prepare for the 2X-3Y (double business in three years) journey but also to look at the larger picture of reaching $2 billion by FY30," analysts at Antique Stock Broking noted on 8 August.
Analysts at JM Financial on 7 August said that the new product launches in the high horsepower segment, push on exports, demand recovery in the domestic power generation sector and a healthy industrial segment outlook augur well for the company in the medium to long run.
Analyst remains optimistic on Kirloskar Pneumatic and Kirloskar Ferrous as well.
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