KEC International Q2 profit plunges on margin pressure

KEC International Limited (NSE: KEC) reported a challenging Q2 FY27 performance, with consolidated revenue declining 10.2% YoY to ₹5,468 crore. Profit before tax fell sharply to ₹41 crore from ₹213 crore in the corresponding quarter last year. Key Highlights • Revenue declined 10.2% YoY to ₹5,468 crore. • EBITDA dropped 37% to ₹271 crore. • EBITDA margin contracted to 5% from 7.1% a year earlier. • Profit before tax declined 80.8% to ₹41 crore. • Year-to-date order intake exceeded ₹13,500 crore. • Order book reached a record ₹40,000 crore, supported by strong Transmission & Distribution (T&D) orders. My View KEC International's results highlight the difference between having a strong order book and converting it into profitable execution. The record ₹40,000 crore order book provides encouraging revenue visibility, particularly in the power transmission and distribution business. However, the sharp decline in EBITDA and margin contraction are concerning. Higher execution costs, project mix and working capital requirements can significantly affect profitability in the infrastructure EPC business. The key question is whether the company can convert its strong order pipeline into better-margin projects. What I'm Watching Next I will monitor EBITDA margins, execution of the record order book and interest costs in Q3 FY27. A recovery in margins alongside sustained order inflows would be an important signal of operational improvement. Stance: Cautious. Strong order book visibility is positive, but declining profitability and margin pressure need to be addressed before earnings momentum can recover. Disclosure: I do not have any holding or position in the stock mentioned above.