Kirloskar Group Expands Focus on Real Estate and Financial Services
The 134-year-old Kirloskar Group is planning a significant expansion into real estate and financial services to drive growth, alongside strengthening its core engineering and manufacturing businesses.
Kirloskar GroupReal EstateFinancial ServicesEngineeringManufacturingReal Estate NewsOct 13, 2025
The 134-year-old conglomerate, known for its engines, compressors, and transmission systems, is targeting a threefold jump in revenues to about $6 billion over the next five years. To meet this revenue goal, the group is planning to invest around ₹6,000 crore across its businesses. The enhanced focus on new businesses that the conglomerate diversified into five years ago comes amid a strategic restructuring of its legacy operations.
Kirloskar is relocating its manufacturing units from Pune to other locations, freeing up large tracts of land to utilize them for building premium real estate projects. "We are in the process of moving the factories out of Pune across all the companies so that the land gets free and the real estate company can develop that land," said Gauri Kirloskar, managing director, Kirloskar Oil Engines (KOEL).
Among the prime parcels identified is Kirloskar Pneumatic's plot near the upcoming Pune International Airport, a fast-developing industrial corridor. "Kirloskar Pneumatic has about 50-60 acres located about 8-10 km from the new Pune airport, and about 160 acres in Nashik," said Rahul Kirloskar, executive chairman, Kirloskar Pneumatic Company (KPCL). He added that parts of the company's operations are already being shifted to enable future development.
Parallelly, the group is scaling up its financial services presence through Arka Fincap, a NBFC and a subsidiary of KOEL. Arka, which currently provides corporate and real estate financing, will transform to a retail-focused, pan-India franchise in its next phase of growth. "Arka has grown into a strong, stable NBFC with a good-quality book," said Gauri Kirloskar. "It is now time to pivot the organisation into its next growth phase—retailisation and granularisation of the book, with a stronger retail focus and nationwide presence."
The new ventures are part of a broader transformation drive within the group that is focused on professionalising leadership, investing in organic growth, and capturing adjacencies. "Every company needs a certain kind of leadership depending on where it is on its journey," said Rahul Kirloskar. "Professionalising the group starts with bringing in the right leadership that can steer the company through its phase of evolution and growth aspirations."
Meanwhile, the group continues to invest aggressively in its core engineering businesses. Kirloskar Ferrous plans to invest around ₹3,000 crore over the next five years, building on its acquisition of ISMT—a forward integration that added tube manufacturing to its portfolio. KPCL is expanding capacity and investing in tech-led products, while KOEL has refocused its move to strengthen defence and power generation verticals.
For KOEL, exports will also be a major thrust area with the company aspiring to grow the share of exports to 30% by 2030 from 12% currently. It has identified the Middle East and Africa as key destinations with its newly developed 1000 kVA gensets. "Defence is a big focus area for us," said Gauri Kirloskar. "We are the only Indian company making engines with fully in-house R&D. Our recent order from the Navy to design and develop a 6MW main propulsion engine is significant because the technology and IP remain with us—in India."
The investments across manufacturing, technology, and new verticals underpin the group's financial ambitions. "I think we will be close to $6 billion in topline," said Rahul Kirloskar. "I hope we have a PBT margin of 15-17% compared to around 12-13% now. Growth will be largely organic, though we may look at small bolt-on acquisitions where they make strategic sense."
Frequently Asked Questions
What is the Kirloskar Group's target revenue over the next five years?
The Kirloskar Group is targeting a threefold jump in revenues to about $6 billion over the next five years.
How much is the Kirloskar Group planning to invest across its businesses?
The group is planning to invest about ₹6,000 crore across its businesses.
What is the Kirloskar Group's strategy for real estate development?
The group is relocating its manufacturing units from Pune to other locations, freeing up large tracts of land to utilize for building premium real estate projects.
What is Arka Fincap's new focus in the financial services sector?
Arka Fincap is transforming to a retail-focused, pan-India franchise in its next phase of growth.
What is Kirloskar Ferrous's major investment plan?
Kirloskar Ferrous plans to invest around ₹3,000 crore over the next five years, building on its acquisition of ISMT.
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