KEC International – We Maintain ADD with Target Price of Rs 939 per share

KEC International’s revenue/EBITDA/APAT (miss)/beat stood at +3.2/-0.5/-8.3% vs our estimates. Balance sheet deterioration, elevated NWC days, and weak margins may delay rerating. KECI continues to guide revenue growth of 15% and EBITDA margin of 8% (lower band of 8-8.5%) for FY26. This is supported by higher contribution from double-digit margins in the T&D (Transmission & Distribution) segment, and bottoming out of non-T&D segment losses.

The order inflows (OI) came in at INR 161 bn, led by T&D, while the order book (OB) as of Sep’25 stood at INR 440bn (~2x FY25 revenue), including L1 of INR 50bn. Tailwinds benefitting KECI include robust international T&D outlook, strong India T&D momentum, government focus on renewable energy/BESS/grid modernisation/HVDC, and uptick in real estate projects.

However, headwinds such as labour shortages, subdued execution in transportation segment, extended monsoon in Q2FY26, and uncertainty on global tariffs/geopolitical unrests impacted performance. The civil segment margins are pressured due to labor shortages, monsoon delays, and payment issues in water projects. We have cut estimates to factor in weak profitability and maintain ADD with a TP of INR 939/sh (20x Sep-27 EPS).

Disclaimer : This content is only for informational purpose.  Do not make any investment based solely on this recommendation as it is not based on your unique risk tolerance and investment objectives. Investment in equity markets are subject to market risks and other risks. There is no guarantee of the return that will be given.

Source : HDFC Securities Institutional Equities

To see full report and disclaimer, click on : file:///C:/Users/hslh17245/Downloads/HSIE_Results_Daily_-_12_Nov_25_-_HSIE%20(1).pdf