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1. At a Glance
Kinetic Engineering is a classic turnaround — on paper. The ₹158 crore revenue in FY26 marks an 11% bounce from the prior year; the ₹1.03 crore net profit clips a 144% jump in one year. Sounds redemptive, except the profit remains a whisper and the margins are thinner than a transmission shaft.
The company holds ₹62 crore net cash. The market values it at ₹515 crore. There’s a real story here — a 50-year legacy in automotive parts, a bet on EVs, and promoters infusing capital at ₹171 per share. But the return metrics remain skeletal: a 1.4% ROE, a 3.6% ROCE, and a P/E of 288× on reported earnings.
The question isn’t about growth. It’s about whether a company burning margins while retooling from ICE to EV survives the wait.
2. Introduction
Kinetic Engineering Ltd was founded in 1970 by the late H.K. Firodia, a figure whose imprint spans Bajaj Auto and Force Motors — names that shaped India’s automotive epoch. KEL itself became a household word in two-wheelers: the Kinetic Luna, the Kinetic DX scooter, the Kinetic Honda joint venture. By the 1990s, the company was a household name.
In 2011, the company pivoted away from vehicle assembly and focused on automotive components — transmissions, drivelines, shafts, gearboxes. Revenue rose from ₹135 crore (FY23) to ₹158 crore (FY26), a crawl rather than a sprint. The company supplies to Mahindra, Ashok Leyland, Tata Motors, American Axle.
In September 2022, KEL formed a subsidiary, Kinetic Watts & Volts Ltd (KWVL), to re-enter the two-wheeler space, this time with electric scooters under the Kinetic DX brand. As of February 2026, the company has sold roughly 600 units and operates 7 dealerships, with plans to expand to 15 by March 2026 and 30 by end-Q4. The promoters have committed to infuse ₹177 crore through warrants at ₹171 per share to fund the EV ramp.
The stock closed at ₹216 on 11 June 2026 (prices referenced are not live). It has climbed 8% over the past year.
3. Business Model: WTF Do They Even Do?
Kinetic Engineering operates three verticals. The first, transmission, accounts for half the revenue — gearboxes, planet gears, sun shafts, constant-mesh assemblies for ICE and soon EV drivetrains. The second, driveline, is roughly a third — spline yokes, stub shafts, differentials, axles. The third, EV components, is nascent, representing just 6% of sales as of 9M FY26.
The business is vertically integrated. KEL forges and casts raw material (steel, aluminium, alloys), then machines precision components in-house. The Ahmednagar facility sprawls across 50 acres, housing 32 production sheds and 460+ machines, staffed by 1,000+ employees.
Geographically, the company is domestic-heavy: India accounts for 67% of sales (9M FY26), with the US and Mexico each taking roughly 15% — exports to OEMs and Tier-1 suppliers, not knock-offs.
The customer base is concentrated. The top 5 customers account for 76% of revenue (9M FY26); the top 10 account for 95%. Mahindra, Ashok Leyland, Tata Motors, Renault India, American Axle carry the weight. This is not a fragmented market play; it’s a bet on whether long-standing OEM relationships survive the ICE-to-EV transition.
4. Financials Overview
Figures are consolidated, in ₹ crore.
Metric
FY24
FY25
FY26
YoY Change
Revenue
143.2
141.7
157.8
+11%
EBITDA
8.0
6.0
6.9
+15%
PAT
5.2
6.4
1.0
-84%
EPS
2.35
2.74
0.43
-84%
The FY26 Q4 results (ending 31 March 2026) show why the headline masks the strain. Q4 sales hit ₹44.7 crore (+16% YoY), but net profit collapsed to ₹0.27 crore (₹0.11 per share) versus ₹1.01 crore in Q4 FY25. The 9M FY26 trend is worse: ₹1.5 crore profit on ₹113 crore revenue — a 1.3% net margin.
EBITDA margin sits at 4.4% (FY26), down from 4.3% (FY25). Interest expense rose to ₹5.8 crore (FY26) from ₹4.9 crore (FY25) as the company borrowed ₹71 crore (consolidated, as of March 2025) to fund the EV subsidiary and factory upgrades.
The company carries ₹62 crore net cash (as of March 2025), calculated as ₹101 crore borrowings less ₹163 crore cash and equivalents. It is tax-free — no tax liability in FY24, FY25, or FY26 due to prior-year losses.
5. Market Expectations & Historical Multiples
This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.
Metric
Current
Historical Average (3Y)
Peer Median
P/E
288×
56×
27×
EV/EBITDA
39.6×
85×
11×
P/B
3.46×
2.80×
3.27×
ROE
1.42%
1.70%
13.5%
ROCE
3.61%
2.20%
15.88%
The market currently pays 288× earnings here, versus a peer median of 27×. The outlier is justified by a footnote: the reported EPS of ₹0.43 is the product of ₹1.03 crore profit split across 2.38 crore shares — a profit figure compressed by ₹7.9 crore in one-time “other income” in FY26. Excluding that, operating cash was thinner still.
The EV/EBITDA of 39.6× sits above both the company’s 5-year average and the peer band, signaling the market is pricing in a recovery
