Narayana Murthy’s family office bets Rs 310 cr on 2 new, beaten-down stocks

The September 2026 shareholding filings add two more. Catamaran now holds 1.06% of Kirloskar Oil Engines, a stake worth about Rs 289 cr, and 1.05% of Ador Welding, worth about Rs 23 cr. That is a fresh commitment of over Rs 310 cr, and the Kirloskar stake alone is now one of the biggest in Catamaran's listed book. FE Stock Insights on WhatsApPGet instant alerts on high-conviction investment themes and fundamental deep dives—direct from Financial Express.Join now Kirloskar Oil Engines now trades about 31% below its 52-week high, Ador Welding about 28%.

Both companies have just reported thinner margins, and both blame costlier raw materials. So, is Murthy's office buying a passing dip in two businesses riding India's capex cycle, or stepping into a margin squeeze with further to run? The filings and the financials offer some clues. #1 Kirloskar Oil Engines: The Data Centre Power Stock in Murthy's Book Incorporated in 2009, Kirloskar Oil Engines (KOEL) took over the engine business of the Kirloskar group in a 2010 restructuring.

With a market cap of Rs 26,088 cr, it makes generator sets from 1 kW to 10 MW, plus industrial engines for ships, defence, nuclear plants, railways and farms. It claims about 28% of India's generator set market. Catamaran holds 15,43,969 shares. At the closing price of Rs 1,869 on 22nd October 2026, that stake is worth close to Rs 289 cr. Holdings below 1% are not disclosed, so buying may have started earlier.

From Farm Pumps to AI Data Centres: The 192 MW HyperNext Order Much of the rally rests on data centres. A data centre cannot go dark when the grid trips, so every server hall needs backup generators, and the big ones need dozens. On 19th June 2026, KOEL told the BSE it had won an order from HyperNext, a data centre developer, for 96 units of its 2,500 kVA Optiprime power systems, adding up to 192 MW.

The company called it one of India's largest standby power deployments for data centres. The stock hit its 20% upper circuit on the next trading day. Management now wants KOEL to become a USD 2 billion revenue company by FY30, a little over twice its FY26 consolidated sales. The board has cleared Rs 2,100 cr of new capacity at its Kagal plant, of which Rs 1,400 cr is meant for large engines aimed at data centres and exports.

Kirloskar Oil Engines Financials: 30% EBITDA Growth, With a Lender Inside A caution first. KOEL's consolidated accounts include Arka Fincap, its lending arm. That is why consolidated borrowings stood at Rs 5,374 cr in FY26, while the engine business on its own carried just Rs 131 cr. Of the Rs 523 cr of consolidated interest cost, only Rs 11 cr sits in the standalone business. Financial YearFY21FY22FY23FY24FY25FY265Y CAGRSales (Rs cr)3,2964,0225,0205,8986,3297,70118%EBITDA (Rs cr)3874127341,0271,1811,41430%Net Profit (Rs cr)19717133244047656223% Source: Screener.in EBITDA here refers to operating profit before other income.

Since Arka's interest cost sits below the EBITDA line, that 30% flatters the factory. The standalone engine business grew sales at 16% a year from FY21 to FY26, operating profit at 21% and net profit at 22%. In Q1 FY27, standalone sales rose 16% to Rs 1,461 cr, but EBITDA fell 4% and the margin slipped to 11.2% from 13.5%. Management blamed weaker exports, higher commodity costs and a delay in passing on price hikes.

Consolidated profit fell 17% to Rs 111 cr. Kirloskar Oil Engines Share Price: A 3x Swing in 12 Months The share price of Kirloskar Oil Engines has compounded at 53% a year over five years, as per Screener. In the past 12 months it went from a low of Rs 883 to a high of Rs 2,720, a little over three times, before closing at Rs 1,869 on 22nd October 2026. After the fall, it still trades at a PE of about 46x against a current industry median of about 38x, and at 7 times book value.

The 10-year median PE for the company is 23x while the industry median for the same period is 34x. Its larger rival, Cummins India, trades at about 49x. Promoters hold 41.03%, domestic institutions 27.04% and foreign investors 11.06%. Retail has piled in too. The number of shareholders rose from 68,891 in December 2023 to 1,28,854 in September 2026. Margin Squeeze and the Rs 2,100 Crore Kagal Bet: What Could Go Wrong Three things need watching.

Margins, because another quarter near 11% would test a 46x multiple, and Q2 FY27 numbers are due in the coming weeks. Execution, because Rs 2,100 cr of capex is a big cheque for a business that earned Rs 461 cr of standalone profit in FY26. And competition, because in data centre gensets KOEL is the challenger, not the incumbent, and big orders tend to be lumpy. #2 Ador Welding: A 75-Year-Old Welding Stock at 18x Earnings Incorporated in 1951, Ador Welding is one of India's oldest welding companies.

With a market cap of Rs 2,211 cr, it makes welding electrodes, wires, fluxes, machines and automation systems from five plants, with capacity for 90,000 tonnes of consumables and 30,000 welding machines a year. Catamaran holds 1,82,798 shares, or 1.05%, worth about Rs 23 cr at Rs 1,270. That is a starter-sized position, roughly one-twelfth of what it has put into Kirloskar Oil Engines. Why Every Bridge, Pipeline and Factory Needs a Welder Almost everything India is building, from bridges and pipelines to ships, power plants and factory sheds, is held together by a weld.

Consumables get used up on every job, so demand follows fabrication activity rather than one large order. In its investor presentation filed with the BSE on 22nd October 2026, Ador also flagged new consumables approved for nuclear applications and a push into welding robots. Ador Welding Financials: The Messy Five Years Behind the Clean-Up Financial YearFY21FY22FY23FY24FY25FY265Y CAGRSales (Rs cr)4476617771,0671,1171,13520%EBITDA (Rs cr)22618912110512341%Net Profit (Rs cr)-124559894383NM Source: Screener.in EBITDA here refers to operating profit before other income.

NM: not meaningful. Read these with care. FY21 was a Covid year and a loss year, so a five-year profit growth rate means nothing, and the 41% EBITDA growth is flattered by a tiny base. Starting from FY22 instead, sales grew at about 15% a year and EBITDA at about 19%. Profits also took two one-off hits. Exceptional charges of Rs 41.7 cr in the September 2024 quarter, partly linked to the merger of group firm Ador Fontech, dragged down FY25.

A Rs 27.9 cr provision on an ONGC flare project then pushed the June 2025 quarter into a loss. From FY27, Ador reports as a single welding business. H1 FY27 consolidated net profit came in at Rs 54.5 cr, against Rs 21.1 cr a year earlier, though that base includes the loss quarter. In Q2 FY27 alone, standalone sales grew 23% to Rs 344 cr, but net profit rose only about 4% to Rs 26.7 cr, as gross margin fell 4.4 percentage points to 34.2% on costlier steel.

Management says it is raising prices selectively. Ador Welding Share Price and Valuation: Why the Discount to ESAB India The share price of Ador Welding has compounded at 15% a year over five years, as per Screener. In the past 12 months it moved between Rs 848 and Rs 1,766, and was trading at Rs 1,270 on 23rd October 2026, close to 6% lower on the day of its post-results analyst call. At that price, Ador trades at a PE of about 18x.

Its closest listed rival, ESAB India, trades at about 39x. The 10-year median PE for the company is 23x while the industry median for the same period is 33x. The gap is not a mystery. ESAB earns a return on capital of about 65%, against Ador's 23%. Still, Ador is almost debt free, generated Rs 117 cr of operating cash in FY26, and has paid out about 55% of its profit as dividend in recent years. For its 75th year, the board has declared a special interim dividend of Rs 7.50 a share, with 30th October 2026 as the record date.

Institutional Patience Domestic institutions have lifted their stake to 11.16% from 4.43% in December 2023, and foreign investors to 1.07% from 0.37% in March 2026. Meanwhile, the number of shareholders has dropped from 41,468 in December 2024 to 34,050. Retail money is leaving just as institutions, and now Catamaran, walk in. Steel is the main raw material in welding rods and wires, so the price hikes have to stick.

Borrowings, though small, rose to Rs 30 cr in September 2026 from Rs 3 cr in March, and debtor days climbed to 75 in FY26 from 63. The Murthy Strategy: Buying the Dip or Catching a Falling Knife? Side by side, the two look like opposites. KOEL is large, popular and riding the AI data centre theme at 46x earnings. Ador is small, overlooked and priced at 18x after years of cleaning up its books. Yet they share more than a filing date.

Both sell into India's manufacturing and capex cycle, both grew sales at a double-digit pace in their latest quarter, and both are losing margin to input costs right now. Murthy's office has bought into that squeeze, not around it. A family office with patient capital can sit through two weak quarters. Most individual portfolios cannot. KOEL now has to show the margin dip was a timing problem, and Ador has to show its price hikes are holding.

The sensible move is to put both stocks on a watchlist and let the next two quarters do the talking. Disclaimer Note: We have relied on data from www.Screener.in and www.trendlyne.com throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information, including filings made available on the BSE website. The purpose of this article is only to share interesting charts, data points and thought-provoking opinions.

It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. Suhel Khan has been a passionate follower of the markets for over a decade. During this period, He was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers