1. At a Glance – Blink and You’ll Miss the Profits
Kinetic Engineering Ltd (KEL) is a ₹738 crore market-cap auto component company selling ₹38.37 crore per quarter, earning ₹0.15 crore PAT, and trading at a 535× P/E like it’s already Tesla’s cousin.
Stock price sits around ₹310, up 47% in one year, while ROCE politely whispers at 0.43% and ROE is still negative at -5.76%.
The latest quarter (Q3 FY26) delivered 33% YoY revenue growth, but profits collapsed 93% YoY, because apparently margins are optional in this business. Debt stands at ₹72.3 crore, inventory days are north of 300, and the cash conversion cycle is now longer than a K-drama season.
And yet… the stock refuses to chill.
Why?
Because this is no longer just a gearbox company. It is now “legacy auto + EV optionality + Firodia surname + nostalgia premium”.
Is this a turnaround?
Is this a branding miracle?
Or is the market just bored?
Let’s open the bonnet.
2. Introduction – From Luna to Lithium
If you grew up in India, Kinetic isn’t a company — it’s muscle memory.
The Luna, the ZX, the “chal meri Luna” era. That emotional equity still prints dividends… just not on the balance sheet.
Kinetic Engineering Ltd was incorporated in 1970 and is the flagship of the Firodia Group. For decades, it quietly supplied shafts, gears, transmissions, and engine parts while the spotlight stayed elsewhere.
Then came:
- Debt
- Losses
- Restructuring
- Capital infusions
- And finally… EV dreams
Today, KEL is a strange hybrid:
- Old-school gearbox supplier
- Low-margin job-work manufacturer
- New-age EV platform aspirant
The result?
A company doing ₹152 crore annual revenue, with ₹782 crore enterprise value, and investors pricing in a future that hasn’t fully arrived yet.
Is the optimism
justified?
Or are we front-running a PowerPoint?
Let’s understand what they actually do.
3. Business Model – WTF Do They Even Do?
Kinetic Engineering’s core business is still metal, machines, and margins thinner than chai foam.
What they manufacture
- Transmission components: gear shafts, spline yokes, gearbox assemblies
- Engine components: crankshafts, camshafts, cylinder heads
- Small engines (up to 400 cc)
- Chassis, rims, mufflers, axles
- Assemblies for mopeds, motorcycles, ATVs, lawn mowers
They even supply spline yokes to American Axle, which means quality isn’t the problem — pricing power is.
Services
- Press shop
- Weld shop
- Paint shop
- Full vehicle assembly for select clients
Translation:
They are a manufacturing Swiss Army knife, but unfortunately, most knives are low-margin.
So where does the excitement come from?
Electric Vehicles. Obviously.
4. Financials Overview – Numbers That Argue With Each Other
Quarterly Comparison Table (₹ crore)
| Metric | Latest Qtr (Dec-25) | YoY Qtr (Dec-24) | Prev Qtr (Sep-25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 38.37 | 28.90 | 39.30 | +32.8% | -2.4% |
| EBITDA | 2.02 | -1.50 | 1.67 | NA | +21% |
| PAT | 0.15 | 3.06 | -0.17 | -93.6% | Turned + |
| EPS (₹) | 0.08 | 1.41 | -0.03 | -94% | Turned + |
Annualised EPS (Q3 rule):
Average of Q1, Q2, Q3 EPS × 4 ≈ ₹0.59 (matches reported TTM)
At ₹310, that’s how you get a 535× P/E without trying too hard.
Question for you:
If
