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Target: ₹600
CMP: ₹596.50
KEC International (KEC) posted revenue of Rs 17,282 crore in FY23, reporting a growth of 26 per cent. The growth was delivered by both T&D and Non-T&D businesses.
The order intake for the FY23 was at a record level of ₹22,378 crore, with a robust growth of 30 per cent y-o-y. The order intake has been contributed primarily by T&D, Civil, Railways, Cables, and Oil & Gas operations. The traction in order intake has significantly expanded the company’s closing order book to an all-time high of ₹30,553 crore. Additionally, It has an L1 position of over ₹3,500 crore, which is diversified across various businesses.
Both T&D and Civil verticals saw robust growth of 27 per cent and 75 per cent y-o-y and secured orders worth ₹10,000 crore and ₹6,600 crore during the year.
The company has a well-diversified and robust order book plus an L1 position which gives healthy revenue visibility for the next 2 years.. However, despite improved business sentiments, business situation and margins, higher finance charges are expected to keep pressure on profitability. We maintain our Hold recommendation on the stock with a TP of ₹600/share, implying no upside potential from the CMP.
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