This small-cap infra stock engaged in EPC projects across power transmission, railways, civil, and cables, serving global infrastructure needs with engineering expertise. However, recent bribery allegations have put the company under scrutiny, raising concerns about its reputation and future growth. Despite this, it continues to secure major orders. Can it overcome the allegations and regain investor confidence?
Stock Price Movement:
With a market capitalization of Rs. 20,562.62 crore, the shares of KEC International Limited closed at Rs. 772.45 per equity share, down nearly 1.27 percent from its previous day’s close price of Rs. 782.40.
Low Margin business:
KEC International operates on low margins due to its EPC (Engineering, Procurement, and Construction) business model, which faces high competition, cost pressures, and execution risks. In Q3 FY25, its operating profit margin (OPM) stood at 7 percent, impacted by rising raw material costs, project delays, and tight pricing in infrastructure and transmission projects.
Bribery Case:
On March 21, 2025, the Central Bureau of Investigation (CBI) arrested Uday Kumar, Senior General Manager at Power Grid Corporation of India Ltd. (PGCIL), and Suman Singh, Deputy General Manager at KEC International Ltd., for a Rs. 2.4 lakh bribery case. The bribe was allegedly given to expedite contract-related payments between the two companies. The CBI has named five individuals, including Jabraj Singh, Vice-President and North India Head of KEC International, in its First Information Report (FIR).
KEC International clarified that the CBI action is not a material event under SEBI rules and has no major impact on its operations. The company emphasized its commitment to ethical business practices and assured that it will provide updates if required while maintaining compliance with all regulations.
Recent Order:
On March 15, 2025, KEC International secured new orders worth Rs. 1,267 crores across its Transmission & Distribution and Cables businesses. Key orders include an 800 kV HVDC and 765 kV transmission project from PGCIL and supply contracts in the Americas. After this order, the stock surged around 26 percent, reflecting strong investor confidence.
Order book:
KEC International Limited has achieved a record year-to-date order intake of Rs. 13,482 crores, marking a 50 percent year-on-year growth. 69 percent of these orders come from the Transmission and Distribution (T&D) sector. The company’s order book now exceeds Rs. 34,088 crores, and with an L1 position of Rs. 8,500 crores, the total value surpasses Rs. 42,500 crores.
Margin Guidance:
KEC International aims to achieve EBITDA margins between 9 percent and 10 percent by the end of the financial year. This optimistic target is supported by strong project execution, better cost management, and resolving pending payment issues, all of which are expected to boost profitability in the coming months.
Business Segment Performance:
KEC International Limited has delivered strong performance across its business segments. The Transmission & Distribution (T&D) segment saw a 28 percent revenue growth to Rs. 2,831 crores, driven by strong project execution in India and key orders from the Middle East.
The Civil segment reported Rs. 1,152 crores in revenue, growing 9 percent despite challenges like labor shortages and delayed payments. The Railway segment faced a 35 percent revenue decline, but the company secured new orders worth Rs. 1,300 crores, focusing on metro projects.
Oil & Gas revenues stood at Rs. 92 crores, with slower growth due to reduced tendering activities, though international expansion efforts are underway. The Cables segment grew 7 percent to Rs. 441 crores, supported by strategic investments.
In the Renewables segment, KEC International is making significant progress with major solar projects in Rajasthan and Karnataka, backed by a strong order book. Additionally, the company has been recognized for its sustainability efforts, ranking among India’s top companies in ESG initiatives, reinforcing its commitment to green energy and responsible business practices.
Recent quarter results and Ratio:
K E C International Limited’s revenue has increased from Rs. 5,007 crore in Q3 FY24 to Rs. 5,349 crore in Q3 FY25, which has grown by 6.83 percent. The net profit has also grown by 34.02 percent from Rs. 97 crore in Q3 FY24 to Rs. 130 crore in Q3 FY25.
K E C International Limited’s revenue has grown at a CAGR of 12.60 percent over the last five years. In terms of return ratios, the company’s ROCE and ROE should be 16 percent and 8.80 percent, respectively. K E C International Limited has an earnings per share (EPS) of Rs. 17.4, and its debt-to-equity ratio is 0.85x.
Written By – Nikhil Naik
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