KEC - K E C Intl.

📊 NSE: KEC 🏢 Transmisson Line Towers / Equipment 📅 Last Updated: 12/14/2025 8:45

💰 Financial Performance

Revenue Growth by Segment

The T&D segment grew 44% YoY in Q2 FY26 (INR 4,080 Cr vs INR 2,831 Cr) and 36% in H1 FY26. The Cables & Conductors business achieved 15% YoY growth in order intake during FY25, reaching INR 2,212 Cr. Standalone revenue growth (excluding Cables) was 22% for Q2 FY26 and 19% for H1 FY26.

Geographic Revenue Split

KEC derives approximately 33-45% of its total revenues from overseas projects across 110+ countries. Domestic demand is driven by government infrastructure spending and private capex cycles.

Profitability Margins

Net Profit Margin (PAT Margin) improved to 2.1% in Q2 FY26 from 1.3% in Q2 FY25. PBT margins rose to 2.7% in Q2 FY26 from 1.6% YoY. Operating Profit Margins (OPM) improved from 5.3% in FY23 to 7.7% in FY25, with a further 50 bps improvement targeted for H2 FY26.

EBITDA Margin

EBITDA margin expanded by 80 bps to 7.1% in Q2 FY26 compared to 6.3% in Q2 FY25. H1 FY26 EBITDA margin stood at 5.6% compared to 5.1% in H1 FY25, driven by the execution of higher-margin projects and the completion of low-margin Brazil EPC contracts.

Capital Expenditure

KEC plans a total capex of INR 400 Cr for FY26, which includes the expansion of Cables Factories. Maintenance capex is expected to be INR 150-250 Cr per annum over the medium term.

Credit Rating & Borrowing

ICRA reaffirmed the [ICRA]A+ (Stable) rating. Finance costs (including bank charges) were 3.8% of Operating Income in FY25 and are projected to be 3.4%-3.6% in FY26. Interest as a percentage of sales was 2.9% in Q2 FY26.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Steel (used in towers), Aluminum and Zinc (for conductors/cables), and Copper. Steel represents a significant risk as 40-50% of the order book is fixed-price.

Import Sources

KEC operates manufacturing facilities in India, Dubai, Brazil, and Mexico, sourcing materials locally and globally to support projects in 110+ countries.

Key Suppliers

Not disclosed in available documents; however, the company notes that purchases from the top 10 trading houses account for 62.70% of total trading house purchases.

Capacity Expansion

Planned capex of INR 400 Cr in FY26 is specifically allocated for expanding Cables Factories to meet growing demand in solar and power sectors.

Raw Material Costs

Raw material costs are a major component of the EPC business; 40-50% of the order book is fixed-price, making margins vulnerable to steel price volatility. Aluminum and Zinc are hedged via board-approved policies.

Manufacturing Efficiency

The company has implemented ISO 9001:2015 across all verticals and uses SAP ERP to enhance operational efficiency and monitor key processes.

Logistics & Distribution

Not disclosed as a specific percentage; however, distribution is global, with sales to dealers/distributors accounting for 8.64% of total sales.

📈 Strategic Growth

Expected Growth Rate

18%

Growth Strategy

Growth is driven by a record order book + L1 position of over INR 44,000 Cr. Strategy includes diversifying into non-T&D segments (Civil, Railways, Oil & Gas), focusing on high-tech HVDC and Kavach projects, and streamlining the Cables business through a new subsidiary, KEC Asian Cables Limited.

Products & Services

Power transmission towers, power cables, solar cables, aluminum conductors, fiber optic cables, railway electrification, metro civil works, Train Collision Avoidance Systems (Kavach), and oil & gas pipelines.

Brand Portfolio

KEC International, RPG Group, KEC Asian Cables, KEC Spur Infrastructure.

New Products/Services

Expansion into HVDC projects, urban infra (metro civil), and TCAS/Kavach for railways. Cables business reached record intake of INR 2,212 Cr in FY25.

Market Expansion

Targeting growth in India, West Asia, Africa, and Americas. Recent strategic wins in Kuwait-Saudi Arabia interconnection projects.

Market Share & Ranking

KEC is a global infrastructure EPC major and a leader in the domestic power transmission segment, with a presence in 110+ countries.

Strategic Alliances

Uses project-specific technical collaborations and joint ventures to mitigate execution risks in technologically enabled areas like HVDC and Renewables.

🌍 External Factors

Industry Trends

The industry is shifting toward renewable energy integration and technologically advanced infrastructure (HVDC, Metro, Kavach). KEC is positioning itself by diversifying into these high-growth non-T&D segments.

Competitive Landscape

Operates in an extremely competitive scenario in India, particularly in the Oil & Gas and T&D sectors, competing with other global EPC majors.

Competitive Moat

Moat is built on a global footprint (110+ countries), RPG Group heritage, and strong technical qualifications in specialized EPC segments. This is sustainable due to high entry barriers in large-scale international turnkey projects.

Macro Economic Sensitivity

Highly sensitive to infrastructure spending cycles and interest rates. A 1% change in interest rates would impact the INR 146 Cr quarterly interest burden.

Consumer Behavior

Shift toward green energy and efficient public transport (Metro/Railways) is driving demand for KEC's Renewables and Transportation divisions.

Geopolitical Risks

Operations in 110+ countries expose KEC to political unrest and supply chain disruptions, particularly in West Asia and Africa.

⚖️ Regulatory & Governance

Industry Regulations

Subject to tightening environmental regulations on effluent treatment and safety standards, necessitating increased investment in compliance.

Environmental Compliance

Emissions and waste are within CPCB/SPCB limits. No pending show cause/legal notices from environmental boards as of end-FY25.

Taxation Policy Impact

Effective tax rate was 22.9% in H1 FY26 compared to 22.8% in H1 FY25.

Legal Contingencies

The company is examining legal recourse regarding a PGCIL matter that could impact a tender pipeline of INR 180,000 Cr. There were no pending show cause notices from CPCB/SPCB at the end of FY25.