KEC International is an EPC contractor spanning power transmission and distribution (T&D), towers, cables, civil infrastructure, transportation, renewables, and oil and gas pipelines. T&D is the core earnings engine, contributing roughly two-thirds of revenue and sustaining double-digit EBITDA margins, as seen in Q2 FY26 when T&D revenues grew 44% to INR4,080 crores. The company operates global manufacturing capacity of 483,800 metric tons after completing the Butibori expansion in Q1 FY27, and its order book including L1 stands at over INR40,000 crores, roughly 3 times annual revenue. Overall EBITDA margin is currently around 7% (FY26 guided at 7-7.5%), reflecting drag from civil and transportation segments, but the underlying T&D and SAE tower businesses are already at double-digit or near double-digit margins, indicating that mix shift and legacy project closures hold the key to margin improvement.
The economics persist because the large-scale EPC market is not commoditized. Entry barriers arise from qualification cycles, execution track record, and the ability to handle complex projects; in Saudi Arabia, for example, the client uses invitation-only bidding that favors proven contractors, and KEC has secured repeat orders from private developers and marquee clients. The SAE subsidiary benefits from its Mexico factory, which uses US steel to avoid tariffs on US-bound orders, a structural cost advantage. Further, the company's diversification across geographies and segments, with Middle East contributing ~25% of order book, and its record SAE order book of over INR3,800 crores, reinforces pricing power. The order book of INR37,697 crores as of August 2026 provides multi-year revenue visibility, and the tender pipeline exceeds INR2 lakh crores.
The inflection comes from the closure of legacy low-margin projects and commissioning of new capacity. Butibori was completed in Q1 FY27, elastomeric cables will start production in Q2 FY27 and the E-Beam plant in Q3 FY27, improving cables margins from the current ~5% toward market levels. The civil business, with an order book above INR10,000 crores, is turning around as new profitable orders replace old ones and water project collections improve after budgetary allocations. By FY28, the company targets EBITDA margins of 9-10%, up from 7.5% in FY26, driven by the conclusion of metro projects that are currently losing about INR10 crores per month each, and by higher-margin orders in T&D, HVDC (with a potential INR75,000 crore opportunity from two Indian lines and a Saudi project), and data center power evacuation. Revenue is expected to grow 12-15% in FY27, and with a similar trajectory, the business should be generating annual revenue of roughly INR30,000 crores by FY28, while net debt falls to ~INR5,500 crores by March 2027 and working capital days compress to 110.
Management's walk-talk has been mixed. In November 2025, they guided FY26 EBITDA margin at ~8% and net debt at ~INR5,000 crores, but by January 2026 they revised margin down to 7-7.5% and debt target to INR5,500 crores, citing project delays and water segment issues. However, on the August 2026 call, they reaffirmed FY27 revenue growth of 12-15% and order intake of INR30,000 crores, and committed to reducing debt by INR1,000 crores during the year, starting with Q1 reduction of INR150 crores to INR6,568 crores. They also maintained the high single-digit margin target for FY2028. The record order book and L1 position exceeding INR40,000 crores, along with a Q1 order intake of INR6,300 crores, support the order inflow guidance. Capital allocation remains prudent with capex of around INR400 crores for FY26 and no equity dilution, and the board recommended a dividend of INR5.50 per share.
The quantified path: FY27 revenue growth of 12-15% on the FY26 base, with EBITDA margin expanding from the guided 7-7.5% (FY26) to around 8% in FY27, and then to 9-10% by FY28. Interest costs are expected to fall to ~INR600 crores in FY27 as debt reduces to INR5,500 crores, so even a 100 bps margin improvement translates to a large jump in pre-tax profit. The kill shot is the Middle East supply chain disruption, which could persist into Q2 FY27 and delay execution, and the overdue water segment receivables of INR800-900 crores that threaten working capital. If those normalize, the margin path holds; if not, the company may miss its debt reduction deadline of March 2027. The single most important watchpoint is the actual EBITDA margin in Q3 FY27, which management expects to improve from Q2, as that will confirm the operating leverage story.
companyname: KEC International Limited ticker: KEC sector: Infrastructure / Engineering, Procurement and Construction (EPC) KEC International is an infrastructure EPC contractor headquartered in Mumbai, part of the RPG Group. It was founded in 1945 and has operated for over 80 years. The company designs, builds, and commissions large infrastructure projects across six business verticals: power transmission and distribution, civil construction, cables and conductors, transportation, renewables, ...
Read the full report →capex, margin expansion, new product segment, geographic expansion, order book surge
FY27 revenue growth guided at 12-15% driven by order book and L1 position; FY27 order intake guided at INR30,000 crores
Guidance downgradedmixed
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