KEC INTERNATIONAL LIMITED - A Buy for 1020

$KEC Investment Rationale: Ÿ KEC International is a global infrastructure Engineering, Procurement and Construction (EPC) major. It has a presence in the verticals of Power Transmission & Distribution, Civil, Transportation, Renewables, Oil & Gas Pipelines, and Cables. The Company is currently executing infrastructure projects in 30+ countries and has a footprint in 110+ countries (includes EPC, Supply of Towers and Cables). It is the flagship Company of the RPG Group. Ÿ• According to the management of the company, its total order intake for FY25 reached Rs.24,600 crore, a 36% YoY growth, marking a record level. The company maintains a strong and optimistic outlook on the sector’s growth, driven by the country’s accelerating energy demands and the government’s firm commitment to expanding renewable energy and strengthening transmission infrastructure. These orders would play a pivotal role in driving its targeted growth going forward. Ÿ• In Q3FY2025, it has reported consolidated revenues of Rs. 5,349 crores, a 7% YoY growth and EBITDA rose 22%, and margins expanded to 7%, the highest in three years. The T&D business saw a 17% YoY revenue growth, driven by strong execution in India, and a YTD order intake exceeding Rs.16,000 crores. The civil business generated over Rs.1,100 crores, hindered by labor shortages and delayed payments. Ÿ• The company’s T&D and cables businesses have gained momentum with multiple new orders. Key wins include 800 kV HVDC and 765 kV transmission line projects from PGCIL, and supply contracts for towers, hardware, and poles in the Americas. The cables segment secured orders both in India and abroad. Management remains optimistic about India’s T&D sector, backed by rising energy demand and strong government support for renewable energy initiatives. Thus, it is expected that the stock may see a price target of Rs.920 in 8 to 10 months’ time frame on three year average P/BV of 4.16x and FY26 BVPS of Rs. 221.23.