KEC International soars 7% on securing new orders worth of Rs 1,349 crore

Analyst at Reliance Securities said, considering strong revenue visibility backed by healthy order book, earnings momentum with higher margin from Q4FY23 onwards and likely improvement in return ratio

Shares of KEC International rallied 7 per cent to Rs 501 on the BSE in Tuesday’s intra-day trade after the company secured new orders worth of Rs 1,349 crore across its various businesses. With these orders, KEC’s year to date order intake has now surpassed Rs 13,000 crore, a robust growth of around 20 per cent vis-à-vis last year, the company said.

At 09:20 AM; the stock of heavy electrical equipment company traded 5 per cent higher at Rs 490, as compared to 0.12 per cent rise in the S&P BSE Sensex. The trading volumes at the counter jumped over 10-fold with a combined around 1.4 million shares changing hands on the NSE and BSE.

KEC’s transmission & distribution (T&D) business has secured orders for T&D projects in India, Saarc, Middle East and America. The company forayed into the growing segment of high-voltage direct current (HVDC) terminal stations. The civil business has secured orders for building a data centre and for infra works in the hydrocarbon segment in India. The cable business has secured orders for various types of cables in India and overseas.

KEC International, a RPG Group Company, is a global infrastructure engineering, procurement and construction (EPC) major. It has presence in the verticals of power transmission and distribution, railways, civil, urban infrastructure, solar, smart infrastructure, oil & gas pipelines, and cables.

Meanwhile, in past one week, the stock has outperformed the market by surging 20 per cent, as compared to 1 per cent decline in the S&P BSE Sensex. It hit a 52-week high of Rs 549 on February 7, 2022.

KEC is well-placed to capitalize on the current industrial upcycle in India and a revival in overseas markets. Railway and civil segments emerged as the key drivers, which accounted for around 40 per cent of its current order book as of Q2FY23 from just 8 per cent in FY15. The company entered the oil & gas space with the acquisition of Spur Infrastructure last year. The acquisition will accelerate growth in this sector and establish this business as one of the key growth drivers, going forward, analyst at Reliance Securities said.

The brokerage firm expects a strong order intake to continue ahead, led by a higher T&D spending by PGCIL and SEBs, improved railway ordering and recovery in the overseas markets, and continued growth in railway & civil segments. Considering strong revenue visibility backed by healthy order book, earnings momentum with higher margin from Q4FY23 onwards and likely improvement in return ratio.