Kirloaskar Oil- Angels.

KIrloskar Oil Engines (KOEL) reported Q3FY2007 results, showing 33%
YoY growth in topline to Rs 456.4cr (Rs 343.3cr). Operating margins has
fallen by ~160bps, mainly on account of rising raw material cost, which
has gone up by ~190bps YoY. Reported PAT has shown substantial jump
of 66% YoY due to sale of investment in G G Dandekar company.
Adjusted PAT reported 18% growth YoY to Rs 25.1cr (Rs 21.3cr). Due to
increased interest cost as well as higher depreciation has impacted pat
margin, which has shown a dip of 70bps YoY to 5.5%. However, fourth
quarter we expect company to deliver better results in terms of
profitability. We remain positive on the future prospects of the company.
At CMP of Rs 264, the stock trades at 16.1x and 12.3x its FY2008E and
FY2009E EPS respectively. We recommend BUY on the stock with Price
Target of Rs 340.