KEC International, the flagship firm of Rama Prasad Goenka Group (RPG Group), on November 1 reported a consolidated net profit of Rs 55.83 crore for the second quarter ended 30 September 2023, largely due to higher sales seen during the quarter.
Consolidated profit for RPG Group's flagship company rose 1 percent to Rs 55.83 crore, while revenue rose 10.7 percent year-on-year to Rs 4,500 crore.
The company's bottom line was impacted due to a tax outgo of Rs 9.95 crore when compared to a tax inflow of Rs 28.67 crore seen in the same period a year ago.
With less than a year to go before India's general elections, there has been an increase in government spending on infrastructure.
KEC International operates in the power transmission & distribution, civil and railways sectors among others.
The company had achieved its highest-ever revenue and order intake in fiscal 2023, with an improvement in working capital.
The EBITDA (earnings before interest, tax, depreciation, and amortisation) margins for the last two quarters also improved sequentially, indicating an upward trend in profitability.
The company's EBITDA margins during Q2FY24 also rose 170 basis points to 6.1 percent.
With strong orders in hand, improving margins, better execution, higher contribution from the subsidiaries, and control over working capital, the company is in good health with strong earnings visibility for the next two years.
Looking ahead, KEC International expects the demand for its services to remain strong, driven by the increasing investments in infrastructure development across the globe.
The company expects to capitalise on this demand by focusing on its core strengths of T&D, railways, civil, and cables. Strong growth in both public and private capex should provide good support.
The company’s expenditure, at Rs 4,449 crore, amounted to 98.9 percent of its net sales in the last quarter. The interest as a percentage of revenues was also up to 4 percent when compared to 3.1 percent in the same period a year ago.
“The strong growth in Revenue has been delivered by good performances in Transmission and Distribution (T&D) and Civil businesses. We continue to deliver an improvement in EBITDA margin every quarter," KEC International’s managing director and CEO Vimal Kejriwal said.
KEC International said that it has a robust order book, which currently stands at Rs 31,320 crore. The company won orders worth Rs 9,000 crore in 2023-24 so far.
KEC International is a global EPC firm, having presence in over 45 countries across the continents.
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