KEC International , a leading global infrastructure Engineering, Procurement and Construction (EPC) major, has outlined its growth strategy and financial projections for the coming years, showcasing a positive outlook for the company's future performance.

Margin Growth Expectations

The company has set its sights on improving profitability, projecting a margin increase of 0.50-1.00% in FY27 compared to FY26 levels. This anticipated improvement suggests KEC International's confidence in its operational efficiency and market positioning.

Revenue and EBITDA Targets

KEC International has reaffirmed its commitment to strong growth, setting a 15.00% revenue growth target. The company also provided guidance on its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins, projecting them to fall within the range of 8.00-8.50% for FY26.

Renewable Business Expansion

In line with the global shift towards sustainable energy solutions, KEC International is placing a significant focus on its renewable business segment. The company anticipates substantial growth in this area, projecting revenues to reach ₹3,000.00-4,000.00 crore over the next 2-3 years. This expansion in the renewable sector underscores KEC's strategic alignment with emerging market trends and environmental considerations.

Strong Performance in Transmission & Distribution

KEC International reported robust performance in its core Transmission & Distribution (T&D) business, achieving strong double-digit EBITDA margins. This performance highlights the company's strength in its traditional business segment, which continues to be a key driver of its overall financial health.

Outlook

The combination of margin improvement expectations, ambitious revenue growth targets, expansion in the renewable sector, and strong performance in the T&D business paints a picture of a company poised for growth. KEC International's strategic focus on both its core competencies and emerging sectors suggests a balanced approach to navigating the evolving infrastructure and energy landscape.

As the company moves forward with its plans, investors and industry observers will likely keep a close eye on KEC International's ability to meet these targets and capitalize on opportunities in the rapidly changing global infrastructure and energy markets.

KEC International , a global infrastructure Engineering, Procurement and Construction (EPC) major, has announced robust financial results for the first quarter, demonstrating significant growth in profitability and revenue.

Financial Highlights

• Revenue Growth: The company reported a consolidated revenue of ₹5,022.88 crore for Q1, marking an 11% increase from ₹4,511.89 crore in the same quarter of the previous year.
• Profit Surge: KEC International's profit after tax (PAT) saw a substantial rise of 41% year-on-year, reaching ₹124.60 crore compared to ₹87.58 crore in the same quarter last year.
• EBITDA Performance: The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew by 19% to ₹350.00 crore, with EBITDA margins expanding by 50 basis points to 7.0%.
• Earnings Per Share: Basic and Diluted Earnings Per Share (EPS) improved to ₹4.68, up from ₹3.41 in the same quarter of the previous year.

Segment Performance

• Transmission & Distribution (T&D): This segment emerged as the primary revenue driver, contributing 63% to the overall revenues, up from 55% in the same quarter of the previous year. The T&D business reported revenues of ₹3,157.00 crore, showing a robust growth of 26% year-on-year.
• Civil Business: Despite facing challenges such as labor shortages and delayed payments in water projects, the civil segment generated revenues of ₹940.00 crore.
• Cables Business: The cables segment demonstrated growth with revenues of ₹383.00 crore, a 5% increase year-on-year.
• Renewables: This segment showed significant promise with revenues of ₹136.00 crore, marking an impressive 87% growth.

Order Book and Future Outlook

KEC International maintains a strong order book position:

• Total Order Book: The company reported a robust order book and L1 (lowest bidder) position of over ₹40,000.00 crore.
• New Orders: In Q1, KEC secured new orders worth approximately ₹5,300.00 crore across its T&D, Civil, and Cables businesses.
• Tender Pipeline: The company has a substantial tender pipeline of over ₹1,80,000.00 crore under evaluation.

Management Commentary

Vimal Kejriwal, Managing Director & CEO of KEC International, stated, "We have started the year on a strong note by delivering a healthy revenue growth, substantial increase in profitability and a reduction in debt levels. Despite headwinds such as persistent manpower shortages and geopolitical uncertainties, we have continued to deliver consistent profitable revenue growth."

He further added, "With a strong focus on execution, a robust and diversified order book & L1 of over ₹40,000 crore and a substantial tender pipeline, we are well positioned to deliver sustained profitable growth in the coming quarters."

Challenges and Outlook

While the overall performance was strong, KEC International noted some challenges:

• Persistent labor shortages in certain segments
• Geopolitical uncertainties affecting some operations
• Subdued performance in the Transportation segment due to heightened competition

Despite these challenges, the company remains optimistic about its growth trajectory, supported by its strong order book, diverse business portfolio, and ongoing expansion initiatives across various segments.

KEC International's Q1 results reflect the company's resilience and strategic positioning in the infrastructure sector, with a positive outlook for the coming quarters backed by a robust order book and strong market demand across its key business segments.