Accumulate KEC International; target of Rs 748: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on KEC International with a target price of Rs 748 in its research report dated January 31, 2026.

Broker Research

February 03, 2026 / 13:37 IST

Accumulate

Prabhudas Lilladher's research report on KEC International

Jindal Steel (JINDALST) reported weak consolidated operating performance in Q3FY26, impacted by higher opex (Rs3.5bn) on external coke purchases, higher coke rate in the initial teething period, weak flats pricing and low-margin flat products in the initial phase. These factors, coupled with increasing coking coal costs (USD2/t), led to EBITDA/t declining to Rs6,986 (ex-forex gains of Rs0.41bn). Average NSR fell sharper (7.2% QoQ) than industry average, while volumes grew 20% YoY, driven by the ramp-up of BF2 and BOF2. With the ramp-up of the captive coke oven battery and higher steel prices, the management expects EBITDA/t to recover in Q4. The management reiterated its FY26 sales volume guidance of 8.5-9mt, which suggests strong 15%+ volume growth in Q4.

Outlook

We downgrade our rating from ‘Buy’ to ‘Accumulate’ due to slowdown progress in water projects, delays in projects closure and execution of new projects. We value the business at a PE of 15.5x Sep’27E (17x Sep’27E earlier) arriving at a TP of Rs748 (Rs932 earlier).

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