CRISIL has reaffirmed 'AA/Stable/A1+' on the bank facilities of Kirloskar Oil Engines (KOEL). The rating continue to reflect KOEL's strong financial risk profile, marked by low gearing and healthy liquid surpluses, and established position in the small- and medium-sized diesel engines segment, supported by its leading market position across key end-user segments. These rating strengths are partially offset by KOEL's susceptibility to cyclicality in its end-user segments, to volatility in raw material prices, and to intense competition in the diesel engine market.

CRISIL believes that KOEL will maintain its healthy credit profile supported by an established market position, healthy capital structure, and strong liquidity over the medium term. The outlook may be revised to 'Positive' if KOEL demonstrates sustained revenue growth resulting from significantly improved offtake from in its major end-user segments.

Conversely, the outlook may be revised to 'Negative' in case KOEL's revenues experience protracted sluggishness due to underperformance by key customer segments, or in case the company undertakes any large, debt-funded capital expenditure or acquisition.

Shares of the company declined Rs 1.45, or 0.57%, to trade at Rs 251. The total volume of shares traded was 101 at the BSE (11.48 a.m., Tuesday).