1. At a Glance
Kinetic Engineering (KEL) stock has multiplied 80% in one year, riding on tiny profits and big dreams. Q1 FY26 profit? ₹0.52 Cr on ₹35 Cr sales – margins are negative. P/E is a nosebleed 130×. The company has more nostalgia than net income.
2. Introduction
Think of Kinetic’s old scooters – they were fun till they broke down. The company now makes auto parts (shafts, gearboxes) but still struggles to shift gears. FY25 revenue ₹142 Cr, PAT ₹6 Cr. Growth? Barely. Valuation? Sky-high. Investors? Thrilled, for now.
3. Business Model (WTF Do They Even Do?)
- Core: Manufactures shafts, transmission gears, gearbox assemblies.
- Customers: OEMs in two‑wheelers, three‑wheelers, CVs.
- Revenue: Mostly from auto components, with other income adding spice.
It’s a small-cap auto parts supplier – not sexy, but it gets the job done (sometimes).
4. Financials Overview
- FY25: Revenue ₹142 Cr (–1%), PAT ₹6 Cr (+20%), OPM 4%.
- Q1 FY26: Revenue ₹35 Cr (–11%), PAT ₹0.52 Cr (flat), OPM –5.7%.
- Verdict: Revenue crawling, profits fragile.
5. Valuation (Fair Value Range Only)
- P/E Method: EPS FY25 ₹2.7, at fair 20–25× → FV ₹55–₹70.
- EV/EBITDA: EBITDA ₹5 Cr, at 8–10× → FV ₹40–₹50.
Current price ₹345 is way beyond fundamentals – priced for perfection.
6. What-If Scenarios
| Scenario | Revenue FY26E | PAT FY26E | FV Range |
|---|---|---|---|
| Bullish | ₹170 Cr | ₹10 Cr | ₹100–₹120 |
| Base | ₹150 Cr | ₹7 Cr | ₹60–₹70 |
| Bearish | ₹130 Cr | ₹3 Cr | ₹30–₹40 |
7. What’s Cooking (SWOT Analysis)
Strengths: Low debt, strong promoter holding (61%).
Weaknesses: Tiny profits, volatile margins, P/E 130×.
Opportunities: EV auto parts supply, new contracts.
Threats: Any earnings miss and stock could crash.
8. Balance Sheet
| FY25 (₹ Cr) | Amount | Snark |
|---|---|---|
| Assets | 237 | Small, like its profits |
| Cash & Inv. | 28 | Some cushion |
| Borrowings | 60 | Manageable |
| Net Worth | 80 | Finally positive after years |
9. Cash Flow (FY23–FY25)
| Year | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY23 | 15 | –4 | –8 | +2 |
| FY24 | 3 | –5 | 0 | –2 |
| FY25 | –19 | –19 | +66 | +28 |
Comment: Cash flows swing like a pendulum; FY25 was saved by financing.
10. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 8.7% |
| ROCE | 8.0% |
| P/E | 130× |
| PAT Margin | 4% |
| D/E | 0.75 |
Punchline: Returns mediocre, valuation insane.
11. P&L Breakdown (3 Years)
| Year | Revenue | EBITDA% | PAT |
|---|---|---|---|
| FY23 | 135 Cr | 9% | 3 Cr |
| FY24 | 143 Cr | 5% | 5 Cr |
| FY25 | 142 Cr | 4% | 6 Cr |
Comment: Revenue flat, profits crawling.
12. Peer Comparison
| Company | Rev (Cr) | PAT (Cr) | P/E |
|---|---|---|---|
| Kinetic Engg. | 142 | 6 | 130× |
| Bosch | 18,087 | 2,012 | 56× |
| Bharat Forge | 15,123 | 923 | 63× |
| Endurance Tech. | 11,561 | 782 | 46× |
Comment: The drunk guest at a party of giants.
13. EduInvesting Verdict™
Kinetic’s stock price runs on nostalgia, not numbers. Debt is manageable, profits exist, but valuation is outrageous.
Verdict: “More hype than horsepower. Enjoy the ride, but keep an eye on the brakes.”
Written by EduInvesting Team | 28 July 2025
Tags: Kinetic Engineering, Auto Components, Smallcap Bubble, EduInvesting Premium
