Kirloskar Oil Engines shares up 36% in 2 days. Should you buy or sell?

Shares of Kirloskar Oil Engines Ltd (KOEL) extended their spectacular rally on Tuesday, surging 13.76% to an intraday high of Rs 2,720.

The stock had already gained 20% in the previous session, taking its cumulative rise to nearly 36% over the last two trading days.The sharp rally was triggered by the company's announcement of a major order from HyperNext, a next-generation digital infrastructure company focused on hyperscale-ready, AI-enabled data centre solutions.

Following the development, leading brokerages including JM Financial, Axis Capital and Motilal Oswal reiterated their bullish stance on the stock.KOEL has secured an order for 192 MW of power capacity, comprising 96 units of its 2,500 kVA Optiprime Dual Core power systems, making it one of the largest deployments of high-capacity power systems for hyperscale data centres in India.The systems will power HyperNext's upcoming digital infrastructure projects aimed at supporting the growing demand from cloud computing, artificial intelligence and mission-critical enterprise applications.

The order is expected to strengthen KOEL's position in the fast-growing data centre power solutions segment.Brokerages remain positiveJM Financial upgraded the stock to 'Buy', citing KOEL's planned Rs 14 billion capex to expand its Kagal facility by 20,000 engines annually.

The brokerage believes the expansion will strengthen the company's high-horsepower (HHP) engine portfolio, support export growth and generate additional revenue of Rs 5–6 billion at peak utilisation.

JM Financial raised its valuation multiple to 42x FY28 earnings and assigned a target price of Rs 2,430.Axis Capital maintained its 'Buy' rating and increased its target price to Rs 2,300, highlighting the potential for faster growth in KOEL's high-horsepower power generation business.

The brokerage expects successful execution of the HyperNext order to further enhance the company's presence in the data centre segment and drive stronger earnings growth.Meanwhile, Motilal Oswal reiterated its 'Buy' recommendation with a target price of Rs 2,350, reflecting confidence in KOEL's long-term growth prospects and earnings trajectory.With a marquee data centre order in hand and strong backing from brokerages, KOEL remains firmly on investors' radar as a key beneficiary of India's expanding digital infrastructure and AI-led data centre boom.Share price trendThe latest surge adds to KOEL's impressive performance over the past year.

The stock has rallied around 85% in the last three months and generated a return of nearly 182% over the past 12 months, almost tripling investor wealth.

At current levels, the company commands a market capitalisation of approximately Rs 34,737 crore and touched a fresh 52-week high during Tuesday's session.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own.

These do not represent the views of Economic Times.) ...