Will KEC International’s Order Momentum Drive Earnings Expansion Through FY26?
About KEC International
KEC International, part of the RPG Group, is a leading global infrastructure EPC company engaged in power transmission, railways, civil, and cables. The firm has diversified across geographies and segments, emerging as a key beneficiary of India’s capex cycle and rising infrastructure spend.
Q2 FY26 showcased strong execution and order momentum despite challenges in some international markets. Revenue rose 19% YoY with double-digit margin growth led by the transmission & distribution segment, which contributed nearly two-thirds of total sales.
Financial Highlights (Q2 FY26)
| Metric | Q2 FY26 | YoY Change |
|---|---|---|
| Revenue | ₹6,090 Cr | +19% |
| EBITDA | ₹430 Cr | +34% |
| EBITDA Margin | 7.1% | vs 6.2% YoY |
| Order Inflow | +70% YoY | ₹39,300 Cr order book |
KEC’s performance was supported by higher execution in the transmission and railways segments. The company continues to maintain its FY26 revenue growth guidance of 15%, backed by a robust order pipeline and geographical diversification.
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Brokerage Commentary
- Elara Securities: Retains Buy rating with a Target Price ₹930.
- Revenue and EBITDA grew above estimates; margins improved to 7.1% driven by mix optimization and cost controls.
- Order inflows rose 70% YoY with a record backlog of ₹39,300 Cr, ensuring strong visibility for FY26–27.
- EPS estimates cut for FY26–28 due to low-margin legacy projects and delayed receivables, but margin recovery expected by H2 FY26.
Despite short-term cash flow concerns, KEC’s diversified project portfolio and rising export order book provide a cushion against domestic delays.
Strengths & Weaknesses
Strengths
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Weaknesses
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The company is actively rebalancing its order mix towards high-margin civil and international EPC projects to drive sustainable profitability.
Opportunities & Threats
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Long-term demand in transmission, renewable, and civil infrastructure continues to provide growth stability for KEC International.
Valuation & Investment View
- Rating: Buy (Elara Securities)
- Target Price: ₹930 (16x Sep’27E P/E)
- Guidance: FY26 revenue growth 15% with improving cash flows in H2.
- Focus: Enhanced order quality, margin normalization, and execution discipline.
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Investor Takeaway
Nifty and Bank Nifty Expert Gulshan Khera, CFP®, who is a SEBI Regd Investment Adviser, along with Indian-Share-Tips.com, notes that KEC International’s strong order inflows, diversified business segments, and improving margins make it a structural play in India’s infrastructure story. Investors can look at staggered accumulation on declines for long-term compounding.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
