Will KEC International’s Order Momentum Sustain Its Growth in FY26?
About KEC International
KEC International, part of the RPG Group, is a leading EPC company operating across transmission & distribution, railways, civil, and solar segments. It has been delivering double-digit revenue growth through consistent execution and expanding its international presence in key markets like the Middle East, Africa, and Latin America.
Q2 FY26 results reflect strong top-line growth and operational execution, with healthy contribution from the transmission segment and a solid order book. Margins improved sequentially driven by better project mix and cost control.
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 Book | ₹39,300 Cr | +70% YoY inflow |
Revenue growth was broad-based across T&D, civil, and railway segments, supported by strong order inflows and steady execution. The company’s order inflow jumped over 70% YoY, providing high visibility for FY26 revenue targets.
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Brokerage Commentary
- Elara Securities: Maintains Buy rating with TP ₹930; expects 15% revenue CAGR over FY25–27 driven by strong T&D visibility.
- EPS estimates cut slightly for FY26–28 due to delayed payments and low-margin order execution, but structural growth remains intact.
- T&D share in total revenue at 67% continues to anchor growth stability.
Margins improved to 7.1% aided by better cost absorption and favorable project mix. Execution ramp-up in civil infrastructure and international orders contributed to sequential EBITDA expansion.
Strengths & Weaknesses
Strengths
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Weaknesses
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KEC’s expanding global reach and strong order wins across power, rail, and civil provide stability despite margin pressure from low-yield orders.
Opportunities & Threats
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The company remains confident of achieving 15% revenue growth guidance for FY26 with a focus on cash flow efficiency and higher-margin orders from renewable and civil divisions.
Valuation & Investment View
- Target Price: ₹930 (Elara Securities)
- Valuation: 16x Sep’27E P/E based on execution visibility and strong order pipeline.
- Guidance: FY26 revenue growth 15%, with steady margin outlook of 7–7.5%.
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Investor Takeaway
Nifty and Bank Nifty Expert Gulshan Khera, CFP®, who is a SEBI Regd Investment Adviser at Indian-Share-Tips.com , notes that KEC International’s expanding EPC footprint and robust order inflows make it a strong mid-cap infra bet. Investors may consider staggered accumulation with a medium-term horizon, supported by steady cash flow and diversified exposure.
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.
