KEC International Ltd. share price target

Strong Q3 led by T&D and civil businesses, though rail revenue was subdued due to increasing competition

Q2 saw in-line margins but PAT was impacted by high interest cost; margins expected to improve in H2

We change our rating from BUY to HOLD as the recent appreciation in stock price leaves us with no upside potential

KEC International reported revenue/EBITDA/PAT growth of 28% / 45% / 36% YoY at INR 42bn / 2.4bn / 423mn. T&D and civil businesses continued to witness strong execution on robust order backlog and normalising of supply chain. The order pipeline remains healthy at >~INR 1trn across segments, which is likely to drive order inflow growth.

Good Q1 with 28% YoY topline growth and 70bps EBITDA margin gains to 5.8%; management sees improving trajectory of profitability

We attended KEC International’s (KECI) annual investor day. Key takeaways: 1)
management is confident of achieving Rs200bn topline driven by strong orderbook and healthy pipeline worth Rs1trn; growth would be led by civil, T&D and oil & gas segments.