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Informist, Thursday, May 14, 2026

By Shreya Shetty

MUMBAI - KEC International Ltd. is expected to post a year-on-year decline in net profit for the second consecutive quarter, as the company's project execution was affected by supply disruptions amid the war in West Asia, according to analysts.

KEC International is likely to post a consolidated net profit of INR 2.42 billion for the March quarter, down nearly 10% on-year, according to the average of estimates from 11 brokerages. The company's consolidated revenue for the quarter is expected to rise over 4% to INR 71.77 billion, according to the average of the estimates.

Sequentially, the company's net profit is seen rising more than 30%, while revenue is expected to increase nearly 20%. KEC International reported a consolidated net profit of INR 1.86 billion for the December quarter on revenue of INR 60.0 billion. In the year-ago quarter, the company had reported a consolidated net profit of INR 2.68 billion on revenue of INR 68.72 billion.

The highest estimate for the company's net profit is INR 3.00 billion from Kotak Securities Ltd., while the lowest estimate is INR 2.00 billion from HDFC Securities Ltd. The estimates for the company's revenue range from INR 67.54 billion by Anand Rathi Share and Stock Brokers Ltd. to INR 76.17 billion by Equirus Securities Pvt. Ltd.

Though project execution in the transmission and distribution segment improved during the quarter, the benefits have been partially offset by disruptions stemming from the war in West Asia, according to brokerages. "We expect 10% revenue growth driven by a pickup in civil and T&D (transmission and distribution) execution, partially offset by some minor impact on operations in West Asia due to supply-chain challenges," Kotak Securities said in a report.

Companies with greater exposure to West Asia, such as KEC International, are expected to be affected by delays in execution, cash collections, and the award of future projects, according to Emkay Global Financial Services Ltd. A rise in raw material and freight costs due to the closure of the Strait of Hormuz is also expected to affect the company's performance in the March quarter.

Slower execution in the civil business segment and delays in closing legacy projects, which could ultimately affect new project activity, are also expected to weigh on the company's March quarter performance, according to Prabhudas Lilladher Pvt Ltd.

KEC International is expected to report consolidated earnings before interest, taxes, depreciation, and amortisation of INR 5.14 billion, according to the average of estimates of 10 brokerages. The company's EBITDA was INR 5.39 billion in the year-ago quarter.

The company's EBITDA margins are expected to decline by 10–100 basis points from a year ago, largely due to execution delays, according to brokerages. In the year-ago quarter, the company's EBITDA margin was 7.8%.  However, Equirus Securities expects the company to continue to report margin expansion, aided by the execution of projects secured at higher price points.  

"EBITDA margin is likely to contract by 100 bps (basis points) YoY due to higher other expenses," Prabhudas Lilladher said in a report. Motilal Oswal Financial Services Ltd. and Nomura Equity Research expect margins to contract 80 basis points on-year due to lower revenue, resulting in operating deleverage. Kotak Securities expects the company's margins to decline by 10 basis points, as a pickup in execution is offset by supply chain challenges in West Asia.

The company will announce its March quarter earnings on Saturday. Management commentary on the transmission and distribution and civil order pipeline, execution ramp-up, recovery in the non-transmission and distribution business, and pickup in the cables business will be key aspects to monitor, according to brokerages.

More clarity on the impact of Power Grid Corp. of India Ltd. excluding KEC International from its tenders is also awaited, Motilal Oswal said in a report. On Jan. 8, the Delhi High Court upheld an order by Power Grid Corp. debarring KEC International from participating in any of its tenders for nine months from Nov. 18, 2025. However, the court said it would hear KEC International's plea on a limited aspect, namely that other companies were also barring the company from future tenders on the basis of Power Grid Corp.'s ban, due to specific conditions in their tender processes.

At 1426 IST, shares of KEC International were down 0.2% at INR 553.30 on the National Stock Exchange. The stock has declined about 14% since the company reported its results for the December quarter.

Of the 12 research reports on KEC International available with Informist, 11 have a 'buy' recommendation, while one has a 'hold' recommendation. The average target price of the 'buy' recommendations is INR 872, implying an upside of nearly 59% from the current market price.

KEC International is an engineering, procurement, and construction company under the RPG Group. It operates across power transmission and distribution, railways, urban infrastructure, solar, oil and gas pipelines, and cables.

The following are the March quarter earnings estimates for KEC International Ltd., from 11 brokerages in descending order of the estimate of net profit in INR billion:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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