KEC International Limited (KEC.NS) Bundle
KEC International's recent numbers demand a closer look: Q4 FY25 revenue jumped to ₹6,872 crore (up 11.46% year‑on‑year) while FY25 revenue hit ₹21,847 crore (+10% YoY), backed by a robust order book of ₹33,398 crore; at the same time net debt fell by over ₹500 crore to ₹4,558 crore as of March 31, 2025, even as EBITDA surged to ₹539 crore in Q4 FY25 (a 39% rise) and margins expanded to 7.8%, signaling meaningful shifts in profitability, leverage and liquidity that investors should unpack-read on for a detailed breakdown of revenue drivers, margin trends, debt dynamics, valuation implications and key risks and opportunities.
KEC International Limited (KEC.NS) - Revenue Analysis
KEC International posted continued top-line growth across FY25 and into FY26, driven by strong execution in transmission & distribution (T&D) and healthy order inflows. Revenue momentum and a sizable order book underpin near-term visibility while deleveraging progress supports balance-sheet resilience.
- Q4 FY25 revenue: ₹6,872 crore (up 11.46% vs ₹6,165 crore in Q4 FY24)
- FY25 full-year revenue: ₹21,847 crore (up 10% vs ₹19,914 crore in FY24)
- Order book (Mar 2025): ₹33,398 crore - strong pipeline for future revenue
- Q2 FY26 revenue: ₹6,092 crore (up 19% YoY vs ₹5,113 crore in Q2 FY25)
- T&D business (Q3 FY25): ₹3,175 crore (17% growth YoY), led by India execution
- Net debt including acceptances (Mar 31, 2025): ₹4,558 crore - >₹500 crore reduction
| Period | Revenue (₹ crore) | YoY Growth | Notes |
|---|---|---|---|
| Q4 FY24 | 6,165 | - | Base quarter for Q4 comparison |
| Q4 FY25 | 6,872 | +11.46% | Strong quarter-on-quarter execution |
| Q2 FY25 | 5,113 | - | Base quarter for Q2 FY26 comparison |
| Q2 FY26 | 6,092 | +19.13% | Broad-based growth across segments |
| FY24 (Full Year) | 19,914 | - | FY24 baseline |
| FY25 (Full Year) | 21,847 | +9.71% | Yearly revenue improvement |
| Q3 FY25 - T&D | 3,175 | +17% | Execution-led growth, strong India contribution |
| Order Book (Mar 2025) | 33,398 | - | Pipeline supporting upcoming revenue |
| Net Debt (Mar 31, 2025) | 4,558 | Decreased >₹500 crore | Including acceptances - improved leverage |
For deeper investor context and shareholder activity related to KEC, see Exploring KEC International Limited Investor Profile: Who's Buying and Why?
KEC International Limited (KEC.NS) - Profitability Metrics
KEC International Limited (KEC.NS) reported material improvements in core profitability across fiscal 2025 and early FY26, driven by higher EBITDA, expanding margins and stronger bottom-line conversion.- Q4 FY25 EBITDA rose to ₹539 crore from ₹388 crore in Q4 FY24 - +39% year-on-year, with EBITDA margin expanding 150 bps to 7.8% from 6.3%.
- Full-year FY25 EBITDA was ₹1,528 crore, up 26% from ₹1,215 crore in FY24, reflecting broad-based operational leverage.
- Q4 FY25 profit before tax (PBT) was ₹342 crore versus ₹193 crore in Q4 FY24 - a 77% increase.
- Early FY26 momentum continued: Q2 FY26 EBITDA rose to ₹430 crore from ₹320 crore in Q2 FY25; margins improved to 7.1% from 6.3%.
- Q2 FY26 profit after tax (PAT) surged 88% to ₹161 crore, up from ₹85 crore in Q2 FY25, indicating improved net profitability and tax/interest dynamics.
| Period | EBITDA (₹ crore) | EBITDA Margin | PBT (₹ crore) | PAT (₹ crore) |
|---|---|---|---|---|
| Q4 FY24 | 388 | 6.3% | 193 | - |
| Q4 FY25 | 539 | 7.8% | 342 | - |
| FY24 (full year) | 1,215 | - | - | - |
| FY25 (full year) | 1,528 | - | - | - |
| Q2 FY25 | 320 | 6.3% | - | 85 |
| Q2 FY26 | 430 | 7.1% | - | 161 |
- Improved margins (+150 bps in Q4 FY25) indicate better pricing, mix or cost control; YoY EBITDA growth (Q4 and FY) shows scalable profitability.
- PBT and PAT growth rates (Q4 PBT +77%, Q2 PAT +88%) point to stronger leverage after fixed costs, lower interest or tax benefits and improved project execution.
KEC International Limited (KEC.NS) - Debt vs. Equity Structure
KEC International's recent capital structure movements show measurable deleveraging and strengthened equity cushioning, driven by a combination of active debt reduction and fresh equity issuance.- Net debt (including acceptances) as of March 31, 2025: ₹4,558 crore - down by over ₹500 crore year-over-year.
- Debt-to-equity ratio: 0.7x in FY25, improved from 0.9x in FY24.
- Q2 FY26 interest expense as a percentage of revenue: 2.8%, versus 3.3% in Q2 FY25.
- Equity raise via QIP in Q2 FY25: 91,11,630 shares, proceeds ₹870.16 crore.
- Net working capital days: increased to 138 days from 130 days year-over-year.
| Metric | FY24 | FY25 | Q2 FY25 | Q2 FY26 |
|---|---|---|---|---|
| Net Debt (₹ crore) | ~5,060+ | 4,558 | - | - |
| Debt-to-Equity (x) | 0.9 | 0.7 | - | - |
| Interest Expense / Revenue | - | - | 3.3% | 2.8% |
| QIP Shares Issued | - | - | 91,11,630 | - |
| QIP Proceeds (₹ crore) | - | - | 870.16 | - |
| Net Working Capital Days | 130 | 138 | - | - |
- Reduced net debt and lower leverage (0.7x) point to improved solvency and greater headroom for capex or strategic bids.
- QIP proceeds (₹870.16 crore) materially bolstered the equity base, directly impacting the lower debt-to-equity ratio.
- Lower interest burden (2.8% of revenue in Q2 FY26) enhances EBITA conversion and reduces vulnerability to rate shocks.
- Modest rise in working capital days (138 vs. 130) suggests slightly higher short-term funding needs; prudent monitoring of receivables/inventory cycles is warranted.
KEC International Limited (KEC.NS) - Liquidity and Solvency
KEC International's liquidity and solvency profile strengthened over FY25 and into Q2 FY26, driven by a meaningful reduction in net debt, improved debt ratios, and stronger operating cash flows. Key metrics and their implications are outlined below.- Net debt (including acceptances) decreased by over ₹500 crore, standing at ₹4,558 crore as of March 31, 2025.
- Debt-to-equity ratio improved to 0.7x in FY25, down from 0.9x in FY24, signaling a stronger equity base and lower leverage.
- Interest expense burden eased: interest expenses as a percentage of revenue fell to 2.8% in Q2 FY26 from 3.3% in Q2 FY25.
- Net working capital days increased marginally to 138 from 130 year-on-year, reflecting slightly higher working capital requirements.
- Operating cash flow strengthened: cash flow from operating activities for FY25 was ₹4,000 crore, up 34.7% YoY.
| Metric | Value | Period | YoY / Change |
|---|---|---|---|
| Net Debt (incl. acceptances) | ₹4,558 crore | Mar 31, 2025 | ↓ over ₹500 crore vs prior year |
| Debt-to-Equity Ratio | 0.7x | FY25 | ↓ from 0.9x in FY24 |
| Interest Expense / Revenue | 2.8% | Q2 FY26 | ↓ from 3.3% in Q2 FY25 |
| Net Working Capital Days | 138 days | Q2 FY26 (YoY comparable) | ↑ from 130 days |
| Cash Flow from Operations | ₹4,000 crore | FY25 | ↑ 34.7% YoY |
- Implications for investors: reduced net debt and a lower debt-to-equity ratio imply enhanced financial stability and lower financial risk; lower interest-to-revenue improves profitability resilience; slight increase in working capital days warrants monitoring of receivables and inventory cycles.
- Operational liquidity has been supported by stronger operating cash generation, which augments the company's ability to service debt and fund growth without excessive external financing.
KEC International Limited (KEC.NS) - Valuation Analysis
KEC International's recent financial moves reflect measurable deleveraging, improving interest efficiency and stronger cash generation, while working capital requirements have edged up marginally.| Metric | FY24 | FY25 | Q2 FY25 | Q2 FY26 |
|---|---|---|---|---|
| Net Debt (including acceptances) (₹ crore) | - | 4,558 | - | - |
| Change in Net Debt (YoY) (₹ crore) | - | Decrease of >500 | - | - |
| Debt-to-Equity (x) | 0.9 | 0.7 | - | - |
| Interest Expense / Revenue (%) | - | - | 3.3 | 2.8 |
| Net Working Capital Days | 130 | 138 | 130 | 138 |
| Cash Flow from Operations (₹ crore) | - | 400 | - | - |
| CFO Growth (YoY %) | - | 34.7% | - | - |
- Net debt down by over ₹500 crore to ₹4,558 crore (Mar 31, 2025) - direct positive for valuation multiples sensitive to leverage (EV/EBITDA, net-debt-adjusted metrics).
- Debt-to-equity improved to 0.7x from 0.9x - lower financial risk and higher equity cushion for creditors and investors.
- Interest as a percentage of revenue fell to 2.8% in Q2 FY26 from 3.3% in Q2 FY25 - indicates reduced interest burden and incremental operating margin retention.
- Operating cash flow of ₹400 crore in FY25, up 34.7% YoY - supports earnings quality and reduces reliance on external funding for capex/working capital.
- Net working capital days increased to 138 from 130 - marginal uptick in cash conversion cycle that may temporarily pressure free cash flow if the trend continues.
- Reduced net debt and better debt-to-equity typically compress weighted average cost of capital (WACC), supporting higher present value of future cash flows.
- Lower interest-to-revenue ratio boosts free cash flow margins, improving DCF-based valuations and debt-servicing covenants.
- A small rise in working capital days should be monitored: if persistent, it can offset benefits from deleveraging by increasing short-term liquidity needs.
- Improved operating cash flow provides flexibility for strategic investments, share buybacks, or accelerated debt repayment - all valuation-positive options depending on allocation.
KEC International Limited (KEC.NS) - Risk Factors
KEC International Limited (KEC.NS) operates across transmission & distribution, cables, civil, railways and solar EPC, which exposes the company to multiple risk vectors that materially affect cash flows, margins and balance-sheet metrics. The following section breaks down the principal risk categories, quantifies where possible, and links each risk to realistic financial consequences and mitigants.- Geopolitical and country risk
- Commodity price risk (steel, aluminium, copper, fuel)
- Cybersecurity and data risk
- Execution risk: delays, cost overruns, resource constraints
- Demand risk and macro sensitivity
- Environmental, Health & Safety (EHS) risks
| Risk | Primary Financial Channels Affected | Typical Quantitative Range | Mitigants |
|---|---|---|---|
| Geopolitical / Country Risk | Order book, receivables, working capital, credit lines | 25-40% of order book exposure; delays can require 100-300 crore incremental financing | Advance payments, export-credit support, geographic diversification |
| Commodity Price Volatility | Gross margins, EBITDA | 10% commodity swing → ~3-5 pp margin impact depending on raw-material intensity | Escalation clauses, bulk buying, supplier contracts |
| Cybersecurity | Operational continuity, legal/penalty costs | Incident remediation: 10-100+ crore depending on scale | IT security investments, incident response plans |
| Execution / Delivery | Revenue recognition, margins, working capital | Cost overruns 5-20% on affected projects | Project governance, milestone billing, performance bonds |
| Demand / Macroeconomic | Order inflows, utilization, cash flow | Order intake swings ±20-40% YoY in cycles | Market diversification, aftermarket focus |
| EHS | Project delays, fines, reputational costs | Major incidents: 10s to 100+ crore impact | Strict EHS systems, insurance, audits |
KEC International Limited (KEC.NS) - Growth Opportunities
KEC International Limited (KEC.NS) enters FY26 with a robust development runway supported by a sizable order book, improved leverage metrics, stronger cash generation and margin expansion - factors that collectively enhance its capacity to pursue organic growth, selective capital expenditure and strategic acquisitions.- Order book strength: Order book of ₹33,398 crore as of March 2025 provides visibility on revenue conversion and backlog-driven growth.
- Leverage reduction: Net debt (including acceptances) down by over ₹500 crore to ₹4,558 crore as of 31 March 2025, enabling strategic flexibility.
- Working capital dynamics: Net working capital days rose slightly to 138 in Q2 FY26 from 130 YoY, indicating modest additional cash tied in operations.
- Operating cash flow: Cash flow from operating activities for FY25 at ₹4,000 crore - a 34.7% YoY improvement - supporting reinvestment capacity.
- Capital structure: Debt-to-equity improved to 0.7x in FY25 from 0.9x in FY24, strengthening the balance sheet for growth initiatives.
- Margin recovery: EBITDA margin expanded by 150 bps to 7.8% in Q4 FY25 (vs. 6.3% in Q4 FY24), reflecting operational efficiency gains.
| Metric | Value | Period / Comparison |
|---|---|---|
| Order Book | ₹33,398 crore | As of Mar 2025 |
| Net Debt (incl. acceptances) | ₹4,558 crore | As of 31 Mar 2025; ↓ >₹500 crore YoY |
| Net Working Capital Days | 138 days | Q2 FY26 (vs 130 days Q2 LY) |
| Operating Cash Flow | ₹4,000 crore | FY25; +34.7% YoY |
| Debt-to-Equity Ratio | 0.7x | FY25 (0.9x in FY24) |
| EBITDA Margin (Quarter) | 7.8% | Q4 FY25 (6.3% Q4 FY24) |
- Key growth levers: backlog conversion, international EPC demand, grid modernization projects, cross-selling within power & infra segments, and margin-driven cash reinvestment.
- Financial flexibility use cases: targeted capex for manufacturing/equipment, strategic bolt-on acquisitions, working capital optimization programs and deleveraging to further reduce interest cost.
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