- 05 Nov 2024
- ICICI Securities
KEC REPORTED SOLID Q2FY25 RESULTS
News: KEC reported solid Q2FY25 results with revenue at ₹5,113 crore up 14% YoY, mainly from T&D business which grew 28% YoY. KEC's civil and cables business grew 9% and 7% respectively on a YoY basis whereas Railways and Oil & Gas (O&G) business witnessed a degrowth of 35% and 28%, O&G witnessed degrowth on account of a higher base and a declining order book due to delay in projects from the Middle East. Led by better operational performance consolidated EBITDA grew 17% YoY to ₹320 crore, EBITDA Margins expanded ~20bps YoY to 6.3%. As a result PAT came in at ₹85.4 crores up 53% YoY, PAT margins expanded 43bps YoY to 1.67%. The YTD order inflows of ₹13,482 crore was up 50% YoY, order backlog at ₹34,088 crore, L1 position of ~8,500 crore. The NWC days were 130 days a reduction of 3 days YoY.
Views: With a robust order book of ₹42,500 crore including L1 and strong order bid pipeline of ~₹1.5 trn, we believe KEC poses strong revenue growth over the next couple of years. Focus on improving margins coupled with strong revenue growth, effective leverage and working capital management will drive up the stock.
Impact: Positive