Kinetic Engineering Ltd Q2 FY26 – From Gearboxes to Gigawatt Dreams: The 1970s Legend Just Got an EV Upgrade (But Profit Took a Coffee Break)
1. At a Glance
Kinetic Engineering Ltd (BSE: 500240) — yes, that same Kinetic of the old Luna mopeds your uncle used to ride in bell-bottoms — is back on the radar, this time in an electric avatar. The company, with a market cap of ₹624 crore, trades at a rather “zen” P/E of 145, suggesting investors are valuing more hope than horsepower. At ₹262 a share, the price is 12% down over the last quarter, but still up 57% over one year.
Q2 FY26 numbers brought mixed vibes — sales rose 10.8% YoY to ₹39.3 crore, but profit after tax came in at a loss of ₹0.17 crore, reversing from a ₹0.52 crore profit last quarter. Operating margins slipped to 4.25%, down from the usual 6–8% rhythm. The company’s ROE (-5.76%) and ROCE (0.43%) are trying their best to stay positive, while debt of ₹72.3 crore is still comfortably balanced by a current ratio of 1.66.
But here’s where things get electric — literally. The newly formed subsidiary Kinetic Watts & Volts Ltd (KWVL) just received ARAI certification and will start EV deliveries from November 2025, aiming for 5,000 units (~₹50 crore) this fiscal and a ₹600 crore full-throttle target by FY27. Now, that’s some high-voltage ambition for a company with annual sales of ₹142 crore.
2. Introduction
Remember the “Kinetic Luna” — “Chal meri Luna” jingles and your dad’s morning temple run on it? Well, the Firodia family’s mechanical dream never died; it just went underground into gearbox grease and auto parts. Kinetic Engineering Ltd (KEL), once the scooter king, is now a parts powerhouse supplying shafts, gears, and assemblies to automakers — and slowly transforming into an EV enabler through its new-age subsidiary KWVL.
From selling 50cc scooters to supplying spline yokes to American Axle, Kinetic’s evolution has been as dramatic as Indian cricket — glorious 80s, painful 90s, and cautious 2020s rebuilding. The company’s topline has largely flatlined over the past three years at around ₹140 crore, but the latest quarterly results show at least some torque coming back to the revenue engine.
The management’s current bet? Go green or go home. The Rs. 9 crore infusion into KWVL and homologation approval from ARAI marks their official pitstop in the EV race. And before you dismiss it as another “EV hype stock,” note this: Kinetic has real production facilities, paint shops, and engineering know-how from the days of 2-stroke madness. It’s not just slides and dreams.
Still, numbers tell their own story. With P/E north of 140 and a price-to-book of 5.75, the stock is priced for perfection. But as every seasoned investor knows, perfection is the rarest part in any gearbox.
3. Business Model – WTF Do They Even Do?
Kinetic Engineering Ltd manufactures automotive components — the real metal that keeps vehicles moving — from shafts, gears, and gearboxes to complete engine assemblies for two-wheelers and three-wheelers. The company also makes body and chassis parts, rims, mufflers, and even small engines (up to 400cc).
Think of KEL as that friend who doesn’t own a car but somehow knows how every car engine works. Their core expertise lies in transmission systems, and they supply both domestic and global clients — including American Axle for spline yokes.
The company operates press, weld, and paint shops and occasionally takes up vehicle assembly projects for exclusive clients. It’s like a restaurant that not only makes the sauce but can also cook your burger and deliver it — if you’re rich enough.
And then there’s Kinetic Watts & Volts Ltd (KWVL), the EV offspring. This subsidiary is where the buzz is. It’s focused on electric mobility, designing and producing chassis and gearboxes for electric mopeds and three-wheelers. With a fresh Rs. 5 crore infusion this April and KEL holding 80% ownership, KWVL has started its supply chain for key EV customers and aims to leverage Kinetic’s half-century-old manufacturing backbone.
In short, Kinetic 2.0 is trying to reinvent itself from a component maker to an EV ecosystem player. The company that once made India move on two wheels now wants to make it move — without fuel.
4. Financials Overview
Let’s crunch the Q2 FY26 (Sept 2025) numbers versus previous periods.
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue (₹ Cr)
39.3
35.47
35.34
+10.8%
+11.2%
EBITDA (₹ Cr)
1.67
0.89
-2.03
+87.6%
Turnaround
PAT (₹ Cr)
-0.17
2.14
0.52
-107.9%
-132.7%
EPS (₹)
-0.03
0.97
0.27
-103.1%
-111.1%
Commentary: Revenue picked up steam — maybe that upgraded paint shop paid off — but profits hit a speed breaker. Operating profit improved from negative to mildly positive territory, but a weak margin of just 4.25% means the company’s gearbox still needs lubrication. The other income, once a savior, seems to have cooled, and with such thin margins, even minor hiccups in raw materials or electricity bills can cause profit U-turns.
5. Valuation Discussion – Fair Value Range
Let’s attempt a fair value range using three methods.
(a) P/E Method
EPS (TTM) = ₹1.91 Industry P/E = 31.8 Even giving KEL a generous 40–60x forward
