KEC International (KEC) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue grew 14% year-on-year to ₹5,113 crore, with H1 revenue at ₹9,625 crore, and PAT for Q2 at ₹85 crore and H1 at ₹173 crore, reflecting improved profitability.

• EBITDA increased 17% in Q2 and 18% in H1, with margins at 6.3% and 6.4% respectively; PAT surged 53% YoY in Q2 and 76% in H1.

• Achieved record order intake of ₹13,500 crore in Q2, up 50% YoY, with order book plus L1 exceeding ₹45,500 crore.

• Successfully completed QIP raising ₹870 crore, oversubscribed 7x, to enhance financial flexibility and support debt repayment and growth.

• Board approved transfer of Cable business to KEC Asian Cables Limited, effective January 2025.

Financial highlights

• Q2 EBITDA margin improved to 6.3%; H1 margin at 6.4%; Q2 EBIT margin at 2.2% and H1 at 2.3%.

• Q2 PAT margin rose to 1.7%; H1 PAT margin at 1.8%; Q2 interest cost at 3.3% of revenue, with full-year target reduced to 2.5% post-QIP.

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

• Net working capital days reduced to 130 from 133 YoY.

• Basic EPS for H1 FY25 was ₹6.72, up from ₹3.82 in H1 FY24.

Outlook and guidance

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

• Order inflow guidance of ₹25,000 crore for FY25 maintained, with focus on quality and cash flow discipline.

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

• Working capital days targeted to reduce to 100 by year-end.

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