Kirloskar Oil Engines Stock Draws Attention As Data Center Power Demand Lifts Nuclear Theme

Nuclear energy stocks sit at the intersection of energy security, inflation concerns, and the push for lower carbon power. With central banks weighing interest rate moves, energy prices swayed by geopolitics, and global growth moving at different speeds, many investors are looking for sectors tied to essential infrastructure. The Nuclear Energy Stocks screener focuses on uranium producers, enrichment players, and reactor operators that are directly linked to reliable baseload power. This article highlights 3 stocks from that screener to help you quickly identify nuclear opportunities to research further in a complex macro backdrop.

Kirloskar Oil Engines (NSEI:KIRLOSENG)

Overview: Kirloskar Oil Engines is an Indian engineering group that supplies diesel engines, gensets, pumps, and power solutions for sectors such as infrastructure, data centers, agriculture, manufacturing, and defense, with a growing presence in both domestic and export markets.

Operations: Kirloskar Oil Engines generates most of its ₹76.0b revenue from the B2B segment at ₹56.9b, followed by B2C at ₹11.4b and Financial Services at ₹8.8b, with ₹68.0b from India and ₹9.0b from exports.

Market Cap: ₹317.3b

Investors looking at nuclear and critical power infrastructure may find Kirloskar Oil Engines interesting because it ties data center growth, urban infrastructure and unreliable grid power to a broad portfolio of gensets, engines and backup solutions, including recent wins like the 192 MW hyperscale data center order. Earnings expectations, projected returns on equity and a growing aftermarket and service base sit alongside considerations such as a premium P/E, reliance on diesel technology and capital tied up in underperforming financial services. When combined with export exposure to regions with geopolitical risk, this creates a business that is closely linked to long-duration power needs, where factors such as margins, funding structure and execution on large projects warrant close attention.

Kirloskar Oil Engines sits at the crossroads of data center demand and backup power, but the real story may be hiding in its 2 key rewards and 3 important warning signs (1 is major!) that could explain whether recent contract wins are a durable edge or a short window of opportunity.

Larsen & Toubro (BSE:500510)

Overview: Larsen & Toubro is a large Indian engineering and construction group that delivers complex infrastructure, energy, and high tech manufacturing projects worldwide, from metros, power grids, and refineries to nuclear equipment, green hydrogen systems, and defence platforms.

Operations: Larsen & Toubro generates most of its revenue from Infrastructure Projects at ₹1,354.2b and Energy Projects at ₹549.0b, with additional contributions from IT & Technology Services at ₹545.7b, Financial Services at ₹178.5b, and Hi Tech Manufacturing at ₹144.9b, alongside smaller Development Projects and Others.

Market Cap: ₹5,207.3b

Larsen & Toubro gives you exposure to some of the biggest global themes in this screener, including nuclear equipment, clean energy and data center build outs. This is backed by a record order book of ₹6.13t and nearly half of its business coming from international projects, especially the Middle East. The company is also leaning into higher margin IT and digital services, which provides context for its relatively high P/E and recent earnings performance. On the other hand, heavy dependence on government and Middle East orders, project execution risks, and an external debt funded balance sheet mean cash flows and margins can be sensitive to delays or cost overruns. The full picture of how these trade offs stack up for long term investors is more nuanced than the headline growth numbers suggest.

Larsen & Toubro’s record order book and global project mix hint at a bigger story that many investors may be missing. The full risk reward balance only really comes into focus in the 2 key rewards and 1 important warning sign

Bharat Heavy Electricals (BSE:500103)

Overview: Bharat Heavy Electricals is an Indian engineering company that supplies equipment and turnkey solutions for coal, gas, hydro and nuclear power plants, as well as rail, transmission, defence, aerospace, renewables, e mobility and energy storage projects in India and overseas.

Operations: Bharat Heavy Electricals generates most of its revenue from Power at ₹274.3b, with a smaller but meaningful contribution from Industry at ₹85.7b.

Market Cap: ₹1.45t

Bharat Heavy Electricals sits in the middle of India’s power build out, with large orders in supercritical thermal, nuclear related equipment and green hydrogen partnerships such as its tie up with thyssenkrupp nucera for electrolyzers. Earnings have recently moved into consistent profitability with a reported 6.8% net margin and very strong year on year growth. At the same time, return on equity of 9.3% remains moderate and the stock trades on a 59.5x P/E. In addition, the company shows heavy reliance on external borrowings and a board with no independent directors. Taken together, this is a company where strong order flow and cleaner financials are balanced by governance and balance sheet considerations that investors may wish to evaluate carefully.

Profitability returning at Bharat Heavy Electricals with a 6.8% net margin and a 59.5x P/E suggests something in the story is not fully priced in yet, especially once you see the 2 key rewards and 1 important warning sign

The three stocks in this article are just a starting point, and the full screener has surfaced 20 more companies with equally compelling nuclear energy narratives that you can review in the Nuclear Energy Stocks screener. Identify and analyze the exact catalysts and storylines that matter to you by using Simply Wall St to filter for uranium supply chains, reactor exposure, enrichment capacity, or long term power contracts so you can focus on the highest conviction ideas in this theme.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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