KEC International Gets 'BUY' Upgrade! Broker Raises Target to ₹932 - Is a Major Rally Brewing?

Brokerage Reports

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Updated on 13 Nov 2025, 08:20 am

Prabhudas Lilladher, a brokerage firm, has upgraded its rating on KEC International from 'Accumulate' to 'Buy', assigning a new target price of ₹932, an increase from the previous ₹911. This upgrade is driven by expectations of margin revival in non-Transmission & Distribution businesses and a recent attractive correction in the stock's price.

KEC International reported a solid 19.1% year-on-year (YoY) revenue growth. Its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin expanded by 80 basis points (bps) YoY to reach 7.1%.

The Transmission & Distribution (T&D) segment continues to perform well, supported by a substantial pipeline of approximately ₹200–250 billion in India and ₹400–450 billion internationally, particularly in the Middle East, Africa, and Commonwealth of Independent States (CIS) regions.

Execution in the Civil segment was hampered by prolonged monsoon seasons, labor shortages, and delays in collections within the Water business. However, the management remains optimistic, projecting 10-15% growth for the Civil business in FY26. The Cables segment is demonstrating steady profitability improvements, with planned capacity expansions scheduled to be operational by the first quarter of FY27.

The company is focused on improving its working capital, which currently stands at 138 days. This is expected to be aided by cash inflows in the fourth quarter of FY26, facilitating debt reduction to approximately ₹50 billion by the end of FY26. Management has reiterated its guidance for FY26, expecting around 15% revenue growth and an EBITDA margin of approximately 8%.

Impact This news is highly positive for KEC International's stock, potentially leading to increased investor interest and a higher stock price towards the ₹932 target. It signals confidence in the company's future performance, particularly its ability to manage challenges and grow its order book across segments. The broader capital goods sector might also see positive sentiment. Rating: 7/10

Definitions: * YoY (Year-on-Year): A comparison of a period's results with the same period in the previous year. * EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company's operating performance. * bps (basis points): A unit of measure equal to 1/100th of 1%. 80 bps = 0.80%. * T&D (Transmission & Distribution): Refers to the infrastructure involved in delivering electricity from power plants to consumers. * CIS (Commonwealth of Independent States): A regional organization formed by former Soviet republics. * FY26 (Fiscal Year 2026): The financial year ending in March 2026. * FY27E (Fiscal Year 2027 Estimates): Projected financial results for the fiscal year ending March 2027. * FY28E (Fiscal Year 2028 Estimates): Projected financial results for the fiscal year ending March 2028. * P/E (Price-to-Earnings ratio): A valuation ratio that compares a company's stock price to its earnings per share. * PE: Stands for Price-to-Earnings ratio, same as P/E. * TP (Target Price): The price at which a stock analyst or broker predicts a stock will trade in the future.