KEC International shares rose nearly 5% after Kotak Institutional Equities upgraded the stock to 'Add' on strong order wins. While the brokerage cut its price target to ₹400, it remains optimistic about long-term growth in transmission and cables. Investors should note the company continues to face margin pressures and execution risks in its non-transmission segments.
KEC International shares climbed nearly 5% on October 9, 2026, as the company announced fresh order wins worth ₹1,030 crore. The new orders span key business areas, including 400 kV transmission lines in Bhutan, 380 kV lines in Saudi Arabia, tower supplies in the Americas, and a large-scale wind project in India. These wins have pushed the company’s year-to-date order intake past ₹8,600 crore, adding to an order book and pipeline that now exceeds ₹40,000 crore.
Following these developments, Kotak Institutional Equities upgraded the stock to 'Add'. This change in stance comes after a difficult year for shareholders, during which the stock price declined by over 60 percent. The brokerage highlighted that while the company is well-positioned to benefit from India’s massive capital spending on transmission infrastructure, the path to recovery is not without hurdles.
Despite the positive outlook on order growth, Kotak reduced its fair value target for the stock to ₹400 from ₹470. This reduction reflects a more conservative view on near-term profitability, as the brokerage also cut its earnings per share estimates by 6-26 percent for the financial years 2027 through 2029. The company's profit margins have been under stress, with consolidated EBITDA margins dropping to 5.8 percent in the first quarter of fiscal year 2027, down from 7.0 percent in the same period last year.
The challenge for KEC International lies in its non-transmission business segments, particularly civil and railways, where project delays and cost overruns have impacted performance. Analysts warn that these legacy projects will continue to weigh on profitability for some time. Consequently, a full recovery to previous margin levels of around 7.7 percent is not expected until fiscal year 2029.
Furthermore, the company remains exposed to operational risks, specifically geopolitical instability in the Middle East, a region that contributes significantly to its project pipeline. Success in this area depends on smooth execution, which remains sensitive to regional volatility. For investors, the long-term opportunity lies in the company’s ability to leverage the Green Energy Corridor and the expanding cables and wires segment. However, the immediate focus remains on whether KEC can stabilize its margins and manage its project execution effectively in a complex macroeconomic environment.