Shares of Kirloskar Oil Engines Ltd (KOEL) extended their gains for the second straight session on Monday, surging 20 per cent to hit an all-time high of Rs 2,390.80. At this level, the stock has rallied 82.35 per cent over the last six months.

The strong upmove came after the company secured a 192MW hyperscalar data centre genset supply order from HyperNext for 2,500KVA Optimprime Dual Core Systems. JM Financial has upgraded the stock from 'Add' to 'Buy' and raised its target price. The domestic brokerage noted that the order win marked a significant inroad for the company into the colo (colocation) and hyperscalar data centre space, which is currently dominated by Cummins India Ltd.

"Our research suggests this is equivalent to QSK65 (2,250-2,500KVA) offering by peer Cummins in the data centre space. Earlier, the 2,500KVA Optiprime was deployed at a Mumbai data centre of a leading bank. The data centre segment is dominated by Cummins (80 per cent-plus market share) and, thus, this news flow represents a key breakthrough highlighting reduced technology gap," JM stated.

"While the 2,500KVA engine is in the limelight, KOEL has developed a 2,750KVA engine as well, which is DCCP (or data centre) grade, essentially offering the equivalent to KKC's QSK78 node. In the last six months, KOEL has also developed up to 3,000/3,300KVA engines. It is on track to develop 6MW marine propulsion engine by FY28 (protype 70 per cent funded by the government). The focus on indigenisation of technology is a key driving factor for growth as well," it added.

"KOEL has committed Rs 1,400 crore capex for expanding the Kagal factory capacity by 20,000 engines/pa. This will further strengthen its HHP (high horsepower) offering, support export growth and at peak (FY30E) support Rs 500–600 crore additional sales. The improved mix also supports margins," the brokerage also said.

JM has raised its target price to Rs 2,430 from Rs 1,955 earlier.

KOEL highlighted that HyperNext has emerged as an innovative force in the digital infrastructure sector, developing future-ready data center ecosystems designed to support AI workloads, hyperscale cloud deployments, and enterprise digital transformation initiatives.