Company Update : KEC International Ltd by Motilal Oswal Financial Services Ltd
Good performance; a slight miss on PAT
* KEC International’s revenue and EBITDA were in line; however, PAT reported a slight miss.
* Revenue grew 19% YoY to INR60.9b vs. our estimate of INR58.6b. Growth was primarily fueled by the T&D and Cables divisions, which grew 44% and 19% YoY, respectively.
* EBITDA grew by 34% YoY to INR4.3b in line with our estimate, while margin at 7.1% was up 80bp/10bp YoY/QoQ.
* PAT surged 88% YoY to INR1.6b, slighthly missing our estimate by 6%, mainly due to lower than expected other income and a higher tax rate of 24.5% vs. our estimate of 23.0%.
* Order inflow increased 81% YoY to INR105.3b in 2QFY26, taking the closing order book (OB) to INR393b (+15% YoY). T&D/non-T&D mix stood at 65%/35%. OB + L1 position stood at INR440b.
* For 1HFY26, revenue/EBITDA/PAT grew 15%/32%/65% to INR111.1b/ INR7.8b/INR2.9b, while EBITDA margin expanded 90bp YoY to 7.0%.
* For 1HFY26, OCF/FCF stood at negative INR9.2b/INR10.3b, declining 88%/83%. This is mainly due to an increase in working capital.
* For 1HFY26, net debt including acceptances stood at INR64.8b, vs INR52.7b as of 30th Sep’24.
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