KEC International Q3 Results: Profit Rises 34% But Misses Estimates
Revenue rose 6.8% to Rs 5,349 crore in the three months ended December.
KEC International Ltd. reported a 34% year-on-year rise in net profit for the third quarter of this financial year, missing analysts' estimates.
The civil construction company recorded a net profit of Rs 130 crore for the quarter ended December, compared to Rs 97 crore in the same quarter of the previous fiscal, according to an exchange notification on Monday. This was below the Rs 162-crore estimate by analysts tracked by Bloomberg.
Revenue increased 6.8% year-on-year for the three months ended December, reaching Rs 5,349 crore. Analysts had projected revenue of Rs 5,615 crore.
Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose 22% year-on-year to Rs 374.5 crore. The Ebitda margin expanded to 7% from 6.1% in the same period the previous year. Analyst estimates for the Ebitda and Ebitda margin tracked by Bloomberg were Rs 399 crore and 7% respectively.
KEC International flagged challenges, such as persistent manpower shortages, geopolitical uncertainties and increased competition in the transportation segment, leading to cash flow and margin pressures. The company also reported a slowdown in water projects due to delayed collections.
"Despite challenges... we achieved growth in our revenues. The outlook in all our major businesses remains optimistic," Chief Executive Officer Vimal Kejriwal said. "With a solid and diversified order book + L1 of over Rs 41,000 crore, improved execution visibility, benign cost environment, and a substantial tender pipeline, we are well positioned to deliver sustained growth in the coming quarters."
In its investor presentation, the company highlighted several tailwinds, including the government's focus on infrastructure, strong momentum in the transmission and distribution segment, and increasing private sector capital expenditure.
Shares of the company closed 3.88% lower at Rs 794.55 per share, compared to a 0.52% decline in the NSE Nifty 50. It has risen 21.83% in the last 12 months.
Thirteen out of the 24 analysts tracking KEC International have a 'buy' rating on the stock, seven recommend 'hold' and four suggest 'sell', according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 30.1%.
