Buy KEC International; target of Rs 1000: Sharekhan

Sharekhan's research report on KEC International

Q1FY65 numbers were decent and in line with our estimates, with revenues at Rs 5,073 crore, rising 11% y-o-y, mainly led by the T&D business which grew 26% y-o-y. EBITDA margins rose ~98 bps y-o-y to 7.0%. As a result, PAT rose 42% y-o-y to Rs 125 crore. YTD FY26 order inflows stood at Rs 5,517 crore. Management highlighted a slowdown in tendering activities but expects it to be pick up going ahead. Order book stands at Rs 40,000 crore (incl. L1 of more than Rs 6,000 crore). Management highlighted that the non-T&D business has been lacklustre from past 3-4 quarters due to shortage of labour, collections issues in water segment, slowdown in railways will be picking up from next quarter.

Outlook

We retain a Buy rating with a PT of Rs. 1,000 backed by an improving margin trajectory, robust order pipeline / order book and strong earnings outlook.

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