KEC International Falls on 9-Month Power Grid Ban, But Q2 Growth and New Orders Offer Relief

KEC International shares dropped over 9% on November 19 after disclosing that Power Grid Corporation of India (PGCIL) has barred it from bidding for new projects for nine months, effective November 18, 2025, due to an alleged breach of contractual terms first reported in March 2025. However, PGCIL clarified that ongoing projects will not be affected, and KEC stated it does not expect a major financial or operational impact, given its strong order book. The company is exploring options, including legal recourse or appeal for reconsideration. The setback was partially offset by positive developments: Q2 FY26 revenue rose 19% YoY to ₹6,092 crore, with PAT up 88% to ₹161 crore and EBITDA margin improving to 7.1%. H1 profit surged 65% to ₹285 crore on 15% revenue growth. Announced ₹1,016 crore in new orders, taking YTD intake past ₹17,000 crore—up ~17% YoY. Notable wins include a luxury villa project in India and the company’s first oil & gas order in the GCC region, marking entry into a high-growth market. While the ban raises near-term concerns, KEC’s diversified portfolio, healthy order pipeline, and solid execution continue to support its growth outlook. Investors will watch how the situation with Power Grid evolves and whether new wins can offset potential future bid restrictions.