KEC International shares surged by 12.4%, reaching a new all-time high of ₹747.70 per share in early Wednesday trading. This surge followed the company's announcement of multiple orders worth ₹1,012 crore across its diverse business segments.
In a regulatory filing made on Tuesday, the company said that its civil business had secured orders from new clients in the data centre and FMCG segments in India. These included a project involving the construction of a data centre in Western India and the establishment of a manufacturing facility for a prominent global FMCG company in Southern India.
In the transmission and distribution segment, KEC International secured an order for a 765 kV transmission line in India from an existing private client. Additionally, the company secured contracts for the supply of towers, hardware, and poles in the Americas.
Furthermore, the company secured orders for various types of cables, both in India and overseas, under its cables segment. This marks the company's second order win in less than a month, following an order worth ₹1,007 crore secured on August 18. In the same month, on August 3, the company also secured orders valued at ₹1,065 crore across its diverse business lines.
Commenting on the order wins, Vimal Kejriwal, MD & CEO of KEC International Ltd., said "We are pleased with the continuous inflow of orders, especially in our T&D and civil businesses. The civil business continues to diversify its customer base with the addition of marquee clients. The prestigious order for building a data centre reaffirms our confidence in the strong growth of this segment. We are particularly encouraged by the continuous inflow of tower supply orders from the North American market."
KEC International is a global infrastructure engineering, procurement, and construction (EPC) major. It has a presence in the verticals of power transmission and distribution, railways, civil and urban infrastructure, solar, smart infrastructure, oil and gas pipelines, and cables.
The company's shares have been on a winning streak for the last six months, producing a return of 51.63%, led by strong order wins and a healthy performance in the June quarter.
In Q1 FY24, the company recorded a net profit of ₹42 crore, a 35.48% improvement compared to a net profit of ₹31 crore in the same period last year. Its revenue from operations for the quarter reached ₹4,244 crore, a growth of 28% YoY, driven by stronger execution in the T&D segment by 71% YoY and the civil segment by 60% YoY.
EBITDA margin improved by 68 basis points YoY to 5.8% during the quarter due to benign commodity prices and a moderation in employee costs as a percentage of revenue. The total order book, along with the current L1, stands at Rs. 35,000 crore as of June 30, 2023.
Looking ahead, the Green Hydrogen targets by 2030 are likely to bring in over 8 lakh crore investments, with a significant increase in projects for solar, associated transmission lines and substations, as well as gas storage and pipeline projects for green hydrogen and ammonia.
This presents a significant opportunity for KEC, leveraging its end-to-end EPC expertise in solar, transmission lines, substations, oil and gas, and civil infrastructure, the company said in its FY23 annual report.
Further, the company said it continues to maintain a strong footprint in the SAARC market by securing order wins in Nepal and Bangladesh to further strengthen its presence in the region. In addition to transmission and distribution projects, the company has also been targeting underground cabling and renewable energy projects throughout the SAARC region, it added.
22 analysts polled by MintGenie on average have a 'hold' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.
