Kirloskar Oil Engines net cash falls to Rs 309 crore in Q2 FY27
Key highlights
- KOEL’s reported net cash position was Rs 309 crore in Q2 FY27, down Rs 176 crore from Q1 FY27.
- KOEL’s Q2 FY27 inventory was Rs 938 crore, up Rs 118 crore sequentially, while inventory days were 63.
- KOEL’s Q2 FY27 receivables were Rs 928 crore, up Rs 164 crore sequentially, with days rising to 43.
- KOEL’s Q2 FY27 payables were Rs 1,066 crore, up Rs 116 crore sequentially, while payable days fell to 75.
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Kirloskar Oil Engines (KOEL) reported a Rs 309 crore net cash position in Q2 FY27, down Rs 176 crore from Rs 485 crore in Q1 FY27, while standalone inventories and receivables increased by a combined Rs 282 crore. The working-capital figures exclude the standalone B2C business transferred to KFD.
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What changed in KOEL’s net cash position in Q2 FY27?
KOEL’s reported net cash position fell to Rs 309 crore at Q2 FY27 from Rs 485 crore at Q1 FY27, a sequential reduction of Rs 176 crore. It was also Rs 243 crore below the Rs 552 crore reported at Q4 FY26 and Rs 166 crore below the Rs 475 crore recorded in Q2 FY26. The table heading describes the metric as a net cash position, while its accompanying note describes the asterisked measure as net debt, including treasury investments and excluding unclaimed dividends.
The Q2 FY27 amount was the lowest of the five reported quarter-end positions in the presentation. KOEL reported Rs 348 crore in Q3 FY26, Rs 552 crore in Q4 FY26, Rs 485 crore in Q1 FY27 and Rs 309 crore in Q2 FY27. The reduction coincided with standalone net sales increasing 18% sequentially to Rs 1,722.5 crore from Rs 1,461.4 crore.
How did KOEL’s inventories change in Q2 FY27?
KOEL’s standalone inventory rose to Rs 938 crore in Q2 FY27 from Rs 820 crore in Q1 FY27, an increase of Rs 118 crore, while inventory days declined by one day to 63 days from 64 days. Compared with Q4 FY26, inventory was Rs 335 crore higher than Rs 603 crore and inventory days were 15 days higher than 48 days.
The increase in the closing inventory balance occurred alongside higher sales. Standalone net sales reached Rs 1,722.5 crore in Q2 FY27, up 19% from Rs 1,449.3 crore in Q2 FY26, while inventory rose 39% from Rs 675 crore. Inventory days were 64 days in Q2 FY26 and 63 days in Q2 FY27, leaving the reported days measure broadly unchanged year on year despite the higher balance.
KOEL reported inventory of Rs 675 crore in Q2 FY26, Rs 669 crore in Q3 FY26, Rs 603 crore in Q4 FY26, Rs 820 crore in Q1 FY27 and Rs 938 crore in Q2 FY27. The company calculates its days figures using average values and the trailing three months method, rather than only a quarter-end balance and one quarter’s cost base.
Why did KOEL’s receivables matter for working capital?
KOEL’s receivables increased to Rs 928 crore in Q2 FY27 from Rs 764 crore in Q1 FY27, a sequential increase of Rs 164 crore, and receivable days rose to 43 from 42. Against Q2 FY26, receivables were Rs 224 crore higher than the Rs 704 crore balance, while days increased by three from 40 days.
The increase in receivables exceeded the Rs 118 crore rise in inventory during Q2 FY27. Together, inventories and receivables increased by Rs 282 crore between Q1 FY27 and Q2 FY27, from Rs 1,584 crore to Rs 1,866 crore. This movement occurred alongside the Rs 176 crore reduction in the reported net cash position, although KOEL does not provide a cash-flow bridge or assign a direct cause for that change.
Receivables were Rs 783 crore in Q4 FY26, then declined to Rs 764 crore in Q1 FY27 before reaching Rs 928 crore in Q2 FY27. Over those same dates, receivable days moved from 41 days to 42 days and then 43 days, showing both a higher closing balance and a gradual increase in the company’s reported days measure.
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Did higher payables offset KOEL’s inventory and receivables increase?
KOEL’s payables increased to Rs 1,066 crore in Q2 FY27 from Rs 950 crore in Q1 FY27, an increase of Rs 116 crore, but this was less than the Rs 282 crore combined increase in inventories and receivables. Payable days declined to 75 days from 81 days even as the closing payable amount increased.
Inventories plus receivables less payables widened to Rs 800 crore in Q2 FY27 from Rs 634 crore in Q1 FY27. This is a calculation from the reported quarter-end balances, not a company-disclosed cash-flow measure: Rs 938 crore plus Rs 928 crore less Rs 1,066 crore, compared with Rs 820 crore plus Rs 764 crore less Rs 950 crore.
How did KOEL’s working capital compare with operating performance?
KOEL’s working-capital balances increased during a quarter of higher standalone revenue but lower year-on-year profitability. Revenue from operations rose 18% sequentially to Rs 1,739 crore in Q2 FY27 and 19% year on year from Rs 1,459.5 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) were Rs 191.1 crore, down 6% from Rs 204 crore in Q2 FY26, while EBITDA margin was 11.0% compared with 14.0%.
Profit after tax from continuing operations was Rs 115.2 crore in Q2 FY27, up from Rs 99.3 crore in Q1 FY27 but down from Rs 133.5 crore in Q2 FY26. Its margin was 6.6%, compared with 6.7% in Q1 FY27 and 9.2% a year earlier. The standalone performance figures cover continuing operations and exclude exceptional items where applicable, while the working-capital data exclude the transferred standalone B2C business.
Conclusion
KOEL’s Q2 FY27 figures show a lower reported net cash position alongside a Rs 282 crore sequential increase in inventories and receivables. Payables rose by Rs 116 crore, but the balance-sheet calculation of inventories plus receivables less payables increased by Rs 166 crore to Rs 800 crore from Rs 634 crore.
The presentation does not disclose a target for net cash, inventory days, receivable days or payable days. The unresolved point for subsequent updates is whether inventory days of 63, receivable days of 43 and payable days of 75 move alongside the reported net cash position after Q2 FY27.