KEC International's Q3 results: Profit up 5.5 times to Rs 97 cr, revenue rises 14.4% to Rs 5,007 cr

KEC International

KEC International, the flagship firm of Rama Prasad Goenka Group (RPG Group), on January 30 reported a consolidated net profit of Rs 97 crore for the third quarter ended 31 December 2023, largely due to higher sales seen during the quarter.

Consolidated profit for RPG Group's flagship company rose nearly 5.5 times to Rs 97 crore, while revenue rose 14.4 percent year-on-year (YoY) to Rs 5,006.7 crore.

The company's bottom line improved mainly due to a Rs 55.67 crore change in inventory of finished goods inflow seen during the quarter compared to a Rs  17.91 change in inventory of finished goods outgo 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 Q3FY24 also rose 160 basis points on year to 6.2 percent.

With strong orders in hand, improving margins, and better execution, along with higher contributions from subsidiaries and effective control over working capital, the company believes it is in good health. This outlook provides strong earnings visibility for the next two years, as mentioned in its last earnings call.

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 4,912 core, amounted to 98.1 percent of its net sales in the last quarter. The interest as a percentage of revenues was also up to 3.3 percent compared to 3.2 percent in the same period a year ago.

“Our EBITDA margins continue to show an upward trajectory with an improvement every quarter with the margins increasing by a good 160 basis points, from 4.6 percent in Q3 FY23 to 6.2 percent in Q3 FY24," 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 38,000 crore. The company won orders worth Rs 13,000 crore in 2023-24 so far.

KEC International is a global EPC firm with presence in over 45 countries across the continents.