Capital Goods : Sector update :KPIL reported in-line revenue and EBITDA, while PAT was above our estimates in 3QFY26 by Motilal Oswal Financial Services Ltd
In-line revenue/EBITDA, beat on PAT
* KPIL reported in-line revenue and EBITDA, while PAT was above our estimates in 3QFY26.
* Revenue at INR58b grew 20% YoY, driven by strong execution in T&D, B&F, Oil and Gas, and Urban Infra business. T&D/B&F revenue grew 14%/17% YoY, while O&G/Urban Infra saw strong growth of 56%/79% YoY. Railways grew by 31% YoY, while Water segment continued to witness challenges, declining 26% YoY.
* Absolute EBITDA grew 20% YoY to INR5b (in line), while EBITDA margin at 8.3% was slightly below our estimate of 8.5%. EBITDA margin expansion was constrained due to the completion of legacy projects in Fasttel (Brazil), lower revenue in Water business and a decline in income from Road BOOT assets after the termination of Wainganga Expressway.
* A lower-than-expected tax rate drove strong 48% YoY growth in adj. PAT to INR2.3b, above our estimate of INR2.2b. ? YTD order inflow stood at INR195b, leading to an order book of INR633b (+3% YoY).
* NWC days were at a comfortable level of 97 vs. 112 in 3QFY25. ? Net debt was flat YoY at INR18b in 3QFY26.
* With reference to the new labor code, the company has recognized a one-lime impact of INR295m – reported as an exceptional item.
* For 9MFY26, revenue/EBITDA/PAT stood at INR162b/INR14b/INR6b, up 28%/28%/56%, while margins were flat YoY at 8.4%.
* The company completed the sale of Vindhyachal Road Asset (VEPL) in Jan’26 for an enterprise value of ~INR8b (post-closing adjustments). The company has received cash flows of INR6b. Investment in VEPL stood at ~INR4b as of 31st Dec’25.
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