KEC International (KEC) Q2 24/25 earnings summary

Executive summary

• Achieved strong revenue and profit growth in Q2 and H1 FY25, with Q2 revenue at ₹5,113 crore, up 14% YoY, and PAT at ₹85 crore, supported by robust order intake and a diversified business portfolio.

• Successfully completed a QIP raising ₹870.16 crore in September 2024, oversubscribed 7x, to enhance financial flexibility, support debt repayment, and growth initiatives.

• Board approved transfer of the Cable business to a new subsidiary, effective January 2025.

• Maintained focus on sustainability, ESG initiatives, and operational excellence, earning recognition as India's most sustainable infrastructure engineering company.

• Record order intake of ₹13,500 crore in Q2, up 50% YoY, with a robust order book exceeding ₹34,000 crore and L1 position over ₹42,500 crore.

Financial highlights

• Q2 FY25 revenue rose 14% YoY to ₹5,113 crore; H1 revenue at ₹9,625 crore, up 10% YoY.

• Q2 EBITDA up 17% YoY to ₹320 crore; H1 EBITDA up 18% YoY to ₹615 crore; EBITDA margin improved to 6.3% in Q2 and 6.4% in H1.

• PAT for Q2 at ₹85 crore and H1 at ₹173 crore, with Q2 PAT up 53% YoY and H1 up 76% YoY.

• Interest expenses as a percentage of revenue reduced by 70 bps in Q2 and 40 bps in H1; Q2 interest cost at 3.3%.

• Net debt (including acceptances) at ₹5,265 crore as of September 30, down ₹1,074 crore YoY; debt-equity ratio improved to 0.86.

Outlook and guidance

• Confident of achieving EBITDA margins of 9%-10% by year-end, with margin ramp-up expected in H2 due to higher-margin projects and payment resolutions.

• Order inflow guidance for FY25 maintained at ₹25,000 crore, with a strong tender pipeline of ₹1,50,000 crore.

• Revenue growth of at least 15% expected for FY26, supported by a large order book.

• Targeting net working capital days of 100 by year-end; current net working capital days at 130.

• Management does not expect material financial impact from Afghanistan projects on hold, as they are funded by international agencies.