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Murthy's Office Bets Big on Dip in Two Stocks
26 Oct
Summary
- Murthy's family office bought stakes in two companies near 52-week lows.
- Kirloskar Oil Engines supplies backup power for India's AI data centres.
- Ador Welding, a 75-year-old firm, makes welding rods and machines.
Narayana Murthy's family office, Catamaran, has acquired significant stakes in Kirloskar Oil Engines and Ador Welding, injecting over Rs 310 crore. Both companies are currently trading significantly below their 52-week highs and have recently experienced margin compression due to rising commodity costs.
Kirloskar Oil Engines (KOEL), a major player in India's generator set market, recently secured a large order for backup power systems from data centre developer HyperNext. KOEL is investing Rs 2,100 crore to expand its capacity, aiming for substantial revenue growth by FY30, despite a recent dip in its EBITDA margin.
Ador Welding, a 75-year-old firm, supplies essential welding consumables and machines crucial for India's infrastructure development. While facing margin pressures from steel costs, the company is selectively increasing prices and exploring new product lines, including welding robots.
Both investments represent a strategy of buying into companies experiencing temporary headwinds within India's robust capex and manufacturing cycles. While KOEL trades at a premium valuation, Ador Welding offers a lower entry point. Investors are advised to watch the next two quarters for margin recovery and execution progress.
