KEC International Q2 Results Review- Performance Impacted By Lower Margin, Higher Interest Cost: Motilal Oswal

Motilal Oswal Report

KEC International Ltd.’s results were a mixed bag with in-line revenue being offset by a PAT miss. Revenue growth could have been higher; however, it was impacted by labor shortage and heavy monsoons in certain states. Year-to-date order inflows jumped 50% YoY to Rs 134.8 billion, taking the order book to Rs 340.9 billion, up 9% YoY.

For H1 FY25, the company reported revenue/Ebitda/PAT growth of 10%/14%/76% while for H2 FY25, we expect the same to grow at 13%/41%/84%.

Net debt including acceptances declined YoY and QoQ on better collections. Overall, we continue to expect KEC International to benefit from a strong transmission and distribution tendering pipeline for the coming few years.

We marginally cut our estimates for FY25E/FY26E to bake in Q2 FY25 performance. We maintain a Neutral rating on the stock with a revised target price of Rs 900 (versus Rs 950 earlier).

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