KEC International slumps as Q2 net profit plunges 82% YoY

KEC International slumped 9.40% to Rs 316.05 after the company reported an 82% year-on-year decline in consolidated profit after tax to Rs 30 crore in Q2 FY27 from Rs 161 crore in Q2 FY26.

The company reported a 10% year-on-year decline in consolidated revenue to Rs 5,468 crore from Rs 6,092 crore.

EBITDA declined 37% year on year to Rs 271 crore from Rs 430 crore. EBITDA margin contracted to 5% from 7.1% in Q2 FY26.

Profit before tax stood at Rs 41 crore in Q2 FY27, down 81% from Rs 213 crore in the year-ago quarter. PBT margin declined to 0.7% from 3.5% in Q2 FY26.

Interest costs increased 11% year on year to Rs 191 crore from Rs 171 crore. Depreciation stood at Rs 53 crore compared with Rs 51 crore, while other income increased to Rs 13 crore from Rs 5 crore.

The Transmission and Distribution (T&D) business reported revenue of Rs 3,686 crore, down 10% year on year. Revenue from KEC's T&D business declined 13% to Rs 3,193 crore, while SAE Towers recorded 15% growth to Rs 493 crore.

Non-T&D revenue declined 12% to Rs 1,900 crore. Civil revenue fell 1% to Rs 957 crore, while transportation revenue declined 47% to Rs 224 crore. Oil and gas pipelines revenue increased 77% to Rs 92 crore, renewables revenue fell 93% to Rs 13 crore, and cables and conductors revenue rose 17% to Rs 613 crore.

The company reported year-to-date order intake of over Rs 13,500 crore, including around Rs 9,500 crore from its T&D business. Its order book stood at a record Rs 39,946 crore, while the combined order book and L1 position reached around Rs 43,500 crore. The tender pipeline exceeded Rs 2 lakh crore.

Net debt, including acceptances, stood at around Rs 7,793 crore as of 30 September 2026. The company attributed the elevated debt to delayed collections of around Rs 600 crore, primarily from the Middle East and Afghanistan, additional strategic inventory of around Rs 150 crore, and lower-than-expected realisations from water and metro projects. It said the delayed collections were realised in October 2026 and expects net debt to decline to around Rs 6,000 crore by the end of the year. Net working capital stood at 155 days.

Consolidated net cash used in operating activities stood at Rs 400.37 crore in H1 FY27, lower than Rs 917.09 crore used in H1 FY26.

Managing director and CEO Vimal Kejriwal said the company faced a challenging operating environment due to geopolitical and supply-chain disruptions in the Middle East, right-of-way and land acquisition challenges in India's T&D business, and calibrated supplies for select projects amid elevated global costs. Despite these headwinds, the company delivered sequential revenue growth, led by its T&D business.

The company identified a strong multi-year global T&D investment cycle, renewable energy evacuation projects, HVDC corridors, grid modernisation and rising investments in energy storage as key growth opportunities. However, continued geopolitical uncertainty, project delays in the Middle East, prolonged legal disputes in transportation and metro projects, and right-of-way issues in India remain key challenges.

KEC International is a global infrastructure engineering, procurement and construction (EPC) company. Its businesses span power transmission and distribution, civil construction, transportation, renewables, oil and gas pipelines, and cables. The company has a presence in more than 110 countries and is the flagship company of the RPG Group.

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