This stock is a leading EPC company in India, specializing in power transmission, railways, civil infrastructure, cables, and renewable energy projects globally. The stock is currently trading at a 36 percent discount, with the market facing a downturn. Investors are now questioning whether this presents a buying opportunity or a risk. Let’s explore whether this stock is a good time to invest.
Stock price movement
With a market capitalization of Rs. 22,414.04 crores, the shares of KEC International Limited were closed at Rs. 842 per equity share, down nearly around 3.71 percent from its previous day’s close price of Rs. 874.40 The stock is down almost 36 percent from the 52-week high of Rs. 1,312.
Company Overview
KEC International Limited was founded on March 18, 2005, and is a leading Indian multinational in the EPC sector, specializing in power transmission, distribution, railways, civil infrastructure, and cables. The company is part of the RPG Group and stands as India’s second-largest manufacturer of electric power transmission towers.
Order book
The company has achieved a record year-to-date order intake of Rs. 13,482 crores, reflecting a 50 percent year-on-year growth, with 69 percent coming from the Transmission and Distribution (T&D) sector.
Furthermore, the order book now exceeds Rs. 34,088 crore, and when combined with the Rs. 8,500 crore L1 position, the total value is over Rs. 42,500 crore.
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Business Segment Performance
The company has shown strong performance across its business segments. In Transmission & Distribution (T&D), revenues grew by 28 percent to Rs. 2,831 crores, driven by strong project execution in India and orders from regions like the Middle East.
The Civil segment saw Rs. 1,152 crores in revenue, growing 9 percent despite challenges like labor shortages and delayed payments. The Railway segment struggled with a 35 percent decline in revenue, though new orders worth Rs. 1,300 crores were secured, focusing on metro projects.
Oil & Gas revenues were Rs. 92 crores, showing slower growth due to a decline in tendering activities, but efforts are focused on international expansion. The Cables segment grew by 7 percent with Rs. 441 crores in revenue, driven by strategic investments.
In Renewables, the company is progressing with significant solar projects in Rajasthan and Karnataka, with a strong order book. Additionally, the company has been recognized for its sustainability efforts, ranking among India’s top companies in ESG initiatives.
Margin Guidance
The management has set a target of achieving EBITDA margins between 9 percent and 10 percent by the end of the financial year. This positive outlook is driven by factors such as improved project execution, better cost management, and the resolution of pending payment issues, all of which are expected to enhance profitability in the coming months.
Written By – Nikhil Naik
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