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At a time when power transmission and distribution contractors have been troubled by the fragmented share they receive from Power Grid Corporation of India (PGCIL), KEC International is among the few listed players that managed a fair pie of the inflows.
The company on Thursday announced order wins totalling Rs 801 crore. A third of the orders were from PGCIL.
The stock moved intra-day by 4 per cent but closed 1.6 per cent higher at Rs 83.
Share of orders
Among the major contractors, RPG group company KEC is next only to Tata Projects in receiving a major share of orders in the current fiscal from PGCIL. In the tower package space, for instance, among the listed players KEC managed a share of 13 per cent of the Rs 4,150 crore of orders awarded so far.
It is the only player that managed a share in double digits with IVRCL Infrastructure and Projects and Kalpataru Power and Transmission coming next with 6 per cent and 5 per cent shares respectively.
Share of the PGCIL orders has reduced for individual companies after PGCIL increased the enlisted contractors from five or six to 16 players. Added to this, orders from the grid company declined 6 per cent for the 11 months ending February 2011 over a year ago, as a result of generation capacity additions lagging behind. As a result, companies such as Jyoti Structures and Kalpataru Power have seen lacklustre growth in their order books.
KEC, on the other hand, while retaining a reasonable pie of the new orders, has countered the slowdown with higher share of exports. Overseas orders accounted for 55 per cent of its order book of Rs 8,000 crore as of December 2010. Acquisition of US-based tower player SAE Towers also helped add to the overseas order wins.
However, the diversification is not risk-free for the company as it has exposure to troubled regions in North Africa. According to reports, its exposure to Egypt is limited to Rs 32 crore of unexecuted orders while it has an Rs 300 crore order in Tunisia. The more recent order wins are from Saudi Arabia and South Africa.
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