Earnings Outlook
Large order inflows to boost KEC International's Q1 PAT
This story was originally published at 15:21 IST on 26 July 2025
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By Rati Chaphekar
MUMBAI – KEC International Ltd. is expected to post robust growth in its net profit for the June quarter, according to brokerages tracking the company. This growth is driven by the large order inflows the company has seen in the June quarter that mainly came from the transmission and distribution, cable, and civil segments. The company's revenue is also expected to see a substantial increase on year.
The company is expected to report a net profit of INR 1.2 billion, up 39% on year but down 55% on quarter, according to average of estimates by 12 brokerages. This bottom line growth is substantially higher than the 12% average growth for the industry net profit estimated by Motilal Oswal Financial Services Ltd. The highest estimate for KEC International's net profit is INR 1.6 billion from Antique Stock Broking Ltd. and the lowest estimate is INR 631 million from Anand Rathi Share and Stock Brokers Ltd.
The company's June quarter top line is estimated at INR 50.9 billion, up 13% on year but down 26% on quarter. The lower end of the revenue estimate is INR 49.9 billion from Elara Securities (India) Pvt. Ltd. and the higher end is INR 51.8 billion from Sharekhan Ltd. The revenue growth is in line with the 14% average industry growth estimated by Motilal Oswal.
KEC International saw large order inflows in the reporting quarter. The brokerages are divided on the exact amount of order inflow and these are estimated in the range of INR 43.7 billion and INR 68.5 billion. However, the positive impact of these orders is expected to be partially offset by continued labour shortages and delays in payment collection from water projects in the civil segment.
The company's execution of transmission and distribution segment projects is also expected to pick up. "Margins of the company are expected to improve on year due to fag end execution of legacy projects and moderation in commodity prices," Nomura Equity Research said. Project execution is expected to grow at around 17%, against the guidance of 'more than 20%' given by the management for FY26, according to Nuvama Wealth Management Ltd.
The company's earnings before interest, tax, depreciation, and amortisation are expected to be INR 3.5 billion, up 20% on year but down 34% on quarter, according to average of estimates by 10 brokerages. The lowest estimate is INR 3.3 billion by Kotak and highest estimate is INR 3.8 billion by Antique.
JM Financial Institutional Securities Pvt. Ltd. expects the EBITDA margin to be stable or to improve for diversified companies including KEC International, though the brokerage has not given an estimate for the margin. Prabhudas Liladhar Ltd. expects the EBITDA margin to improve by around 90 basis points owing to improvement in gross margin and employee cost leverage. "We expect EBITDA margins to improve sequentially by 40 bps to 6.4%, driven by pick up in execution as well as lower contribution from the railway segment," Kotak said. The EBITDA margin is expected to expand to 7%, up 100 bps, Motilal Oswal said.
On the back of the healthy top line growth, the company's operating margin is expected to expand and interest cost as a percentage of sales are expected to reduce, Motilal Oswal said. But Nomura expects the interest costs to be largely flattish on year for the company.
The company will announce its earnings for the June quarter Monday. Market participants will watch the management's commentary on the pace of execution, labour availability, payment collections from water projects, margin outlook, and update on net working capital cycle.
Of the 15 research reports on the company available with Informist, 11 have "buy" recommendation on the stock with an average target price of INR 977. The highest target price is INR 1,050 and the lowest target price is INR 905. Four brokerages have "hold" recommendation on the stock.
On Friday, shares of KEC International closed at INR 861.30 on the National Stock exchange, down 1.8%. The stock is almost unchanged since May 27 when the company had announced its March quarter earnings.
Following are the June quarter earnings estimates for KEC International based on reports from five brokerages in descending order of estimate of net profit:
Brokerage | Revenue (INR million) | Net profit (INR million) |
Antique Stock Broking Ltd | 51,625.00 | 1,600.00 |
Prabhudas Lilladher Pvt Ltd | 50,390.00 | 1,418.00 |
Centrum Broking Ltd | 50,984.00 | 1,406.00 |
Nuvama Wealth Management Ltd. | 51,357.00 | 1,326.00 |
Elara Securities (India) Pvt Ltd | 49,983.00 | 1,254.00 |
JM Financial Institutional Securities Pvt Ltd | 50,984.00 | 1,252.00 |
HDFC Securities Ltd | 50,300.00 | 1,200.00 |
Nomura Equity Research | 50,759.00 | 1,193.00 |
Motilal Oswal Financial Services Ltd | 50,935.00 | 1,170.00 |
Sharekhan Ltd. | 51.890.00 | 1,090.00 |
Kotak Institutional Equities | 51,887.00 | 1,076.00 |
Anand Rathi Share and Stock Brokers Ltd | 50,305.00 | 613.00 |
Average | 50,949.00 | 1,218.00 |
End
Edited by Ashish Shirke
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