Rub-off effect? Why did Kirloskar stocks jump up to 20% today

Shares of Kirloskar Group companies recorded a sharp uptick in Monday's trading session. Kirloskar Oil Engines Ltd (KOEL) and Kirloskar Industries Ltd gained the most by rising 20 per cent, respectively. KOEL touched a record high of Rs 2,390.80, while Kirloskar Industries hit the upper price band of Rs 4,497.95.

That said, Kirloskar Pneumatic Company Ltd was last seen up 8.08 per cent at Rs 2,108.70, while Kirloskar Ferrous Industries Ltd's stock climbed 5.07 per cent to Rs 501.25 at last check.

The strong upmove followed JM Financial upgrading KOEL's stock from 'Add' to 'Buy' after the company secured a 192MW hyperscalar data centre genset supply order from HyperNext for 2,500KVA Optimprime Dual Core Systems.

The domestic brokerage noted that the order win marked a significant inroad for the company into the colo (colocation) and hyperscalar data centre space, which is currently dominated by Cummins India Ltd.

"Our research suggests this is equivalent to QSK65 (2,250-2,500KVA) offering by peer Cummins in the data centre space. Earlier, the 2,500KVA Optiprime was deployed at a Mumbai data centre of a leading bank. The data centre segment is dominated by Cummins (80 per cent-plus market share) and, thus, this news flow represents a key breakthrough highlighting reduced technology gap," JM stated.

The brokerage has raised its target price to Rs 2,430 from Rs 1,955 earlier.

Market expert Avinash Gorakshakar told Business Today, "KOEL's Q4 FY26 numbers were good, and I think the management commentary and the order book both look very impressive. Even in the current year, considering the kind of order inflow run rate, I wouldn't be surprised if FY27 also turns out to be a very strong year."

He added, "Our view is that if investors want to look at this company, it may be better to buy it in a staggered manner, as today's sharp upmove could possibly lead to some profit booking at a later stage. However, the outlook for the next 12 to 15 months definitely looks positive."

Meanwhile, Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, largely attributed the sharp upmove in Kirloskar shares to a rub-off effect from positive sentiment surrounding KOEL.