KOEL to infuse Rs 150 cr in capex during FY20 to meet new emission norms

Genset major, Kirloskar Oil Engines Ltd (KOEL) Wednesday said it will infuse Rs 150 crore in capex during the next financial year to meet the new emission norms for industrial engines business. "The capex for the current fiscal is Rs 110 crore in various projects while, in the next fiscal we would be pumping another Rs 150 crore for the industrial engines business, to be used to meet the new emission norms," KOEL COO Sanjeev Nimkar said on the sidelines of the launch of new smart intelligent gensets.

The company had spent Rs 50 crore in upgrading the gensets having a capacity of 5 KVA and above with Internet of Things (IoT) that will enable improvising customer satisfaction, he said. "We have invested Rs 50 crore and spent three years to introduce these smart gensets," Nimkar said.

Industrial engines is now a major growth driver for the company registering a growth of 25 per cent. This vertical contributes 20 per cent of the company's total revenue, he said. The new emission norms for BS-IV for off-highway vehicles would be applicable from April 2020.

Nimkar said the company will empower its industrial engines with smart IoT technology from next fiscal. The company Wednesday introduced smart genset model in a city that is IoT enabled and offers benefits like managing the gensets from a remote location, lower downtime and early warning of any possible breakdown.

Nimkar said its EBITA margin had shrunken by about 400 basis points on account of inability to pass on the cost impact owing to hardening of commodity prices of steel, iron and copper in the last one year. "Input cost rose by 7-8 per cent but we have been able to pass on only 3 per cent of the impact while the rest was absorbed," Nimkar said.

The company said it was also 'not' revising price of the new generation IoT enabled gensets. KOEL was projecting to register a double-digit growth and cross a top line of Rs 3,000 crore in FY'19.

(With inputs from agencies.)