KEC International (KEC) Q2 24/25 earnings summary

Executive summary

• Successfully completed QIP raising INR 870.16 crores, oversubscribed 7x, to enhance financial flexibility, support debt repayment, and future growth initiatives.

• Achieved record order intake of INR 13,500 crores in Q2, up 50% year-on-year, with a strong order book plus L1 position exceeding INR 45,500 crores.

• Revenue for Q2 FY25 at INR 5,113 crores, up 14% year-on-year; H1 revenue at INR 9,625 crores, up 10% year-on-year.

• EBITDA grew 17% in Q2 and 18% in H1; PAT for Q2 at INR 85 crores and INR 173 crores for H1.

• Maintained a diversified business portfolio with robust order intake, record order book, and continued focus on sustainability and ESG initiatives.

Financial highlights

• Q2 EBITDA margin increased to 6.3%; H1 margin at 6.4%.

• EBIT margin rose to 2.2% in Q2 and 2.3% in H1.

• 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 INR 5,265 crores as of September 30, down INR 1,074 crores year-on-year.

• Basic EPS for H1 FY25 was INR 6.72, compared to INR 3.82 in H1 FY24.

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 resolution of payment issues.

• Order inflow guidance of INR 25,000 crores for FY25 maintained, with a 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.

• Positive outlook driven by government infrastructure focus, strong order book, and robust tender pipeline.