KEC International (KEC) Q2 26/27 earnings summary

Executive summary

• Q2 FY27 consolidated revenue was Rs. 5,467.71 crore, up 9% QoQ but down 10% YoY; net profit was Rs. 29.74 crore versus Rs. 160.75 crore.

• YTD order intake reached Rs. 13,528 crore; the order book was Rs. 39,946 crore and order book plus L1 position was ~Rs. 43,500 crore.

• FY27 revenue growth guidance is 8%-10%; management is prioritizing cash flow, execution and margin recovery amid disruption and project delays.

Financial highlights

• Q2 PBT before exceptional items and tax was Rs. 40.88 crore versus Rs. 212.98 crore YoY; net profit was Rs. 29.74 crore versus Rs. 160.75 crore.

• Q2 EBITDA was Rs. 271 crore, down 37% YoY; EBITDA margin was 4.96% versus 7.07%, while net profit margin was 0.54% versus 2.64%.

• H1 revenue was Rs. 10,491.25 crore versus Rs. 11,114.44 crore; net profit was Rs. 102.37 crore versus Rs. 285.34 crore.

• Standalone Q2 revenue was Rs. 4,160.45 crore versus Rs. 4,948.53 crore YoY; net profit was Rs. 80.41 crore versus Rs. 105.72 crore.

• Middle East disruption deferred Rs. 300-350 crore of Q2 revenue and reduced margins by 1.25-1.5 percentage points; more than Rs. 450 crore of ECL provisions were on the books.

Outlook and guidance

• FY27 revenue growth guidance is 8%-10%, revised from prior expectations of 10% or higher; a strong Q4 uptick is expected, supported by India T&D orders and improving civil execution.

• FY27 margin guidance depends on resolution of Middle East cost claims; FY28 margin recovery is expected, with no level committed.

• T&D revenue is expected to rise significantly from Q4; legacy loss-making projects are expected to close by Q2 FY28.

• Net debt target is ~Rs. 6,000 crore by March 2027; working capital days target is 125 by March, versus 155 days at September 30.

• Tender pipeline exceeds Rs. 2 lakh crore, with management expecting improved performance in coming quarters.