Brokerage firm Prabhudas Lilladher has maintained an 'Accumulate' rating on KEC International, revising its target price to Rs 523. The update follows a weak Q1 FY27 performance, where net profit fell 42% due to execution delays and geopolitical challenges. Investors should monitor the company's efforts to reduce debt and improve working capital efficiency.
Prabhudas Lilladher has updated its outlook on KEC International, maintaining an 'Accumulate' rating while revising the target price to Rs 523, down from Rs 558. This adjustment reflects the company's recent operational challenges highlighted in its latest quarterly earnings. As of August 12, 2026, KEC International shares were trading around Rs 447.50.
KEC International’s financial results for the first quarter of fiscal year 2027 showed a flat revenue performance at Rs 5,024 crore. However, net profit saw a significant decline of 42% year-on-year, coming in at Rs 73 crore. Management and brokerage analysis attribute this pressure to a combination of geopolitical instability in the Middle East, labor shortages, and execution difficulties related to legacy projects.
Despite these immediate hurdles, the company continues to maintain a strong order book, which now exceeds Rs 40,000 crore, including L1 (lowest bidder) positions. The Transmission and Distribution (T&D) segment remains a core contributor, supported by a healthy pipeline of projects in High Voltage Direct Current (HVDC) systems and data centers. Additionally, the Cables segment delivered robust performance with a 57% revenue growth, showing potential for further contribution to the company's product mix.
Operational headwinds remain a focus for the company. The Civil, Transportation, and Water segments have been underperforming due to the closure of legacy projects and high receivables, which have impacted working capital. Increased logistics and freight costs have also exerted pressure on profit margins. The brokerage noted that the company is experiencing slower-than-expected normalization of its working capital cycle.
Management has reaffirmed its revenue growth guidance of 12-15% for the full fiscal year 2027, anticipating a recovery in the second half of the year as conditions in West Asia stabilize. A key financial monitorable for shareholders is the company's balance sheet management. The management has set a goal to reduce net debt from approximately Rs 65.7 billion to Rs 55 billion by the end of March 2027.
Investors may keep track of these working capital levels and the company's ability to execute its large order book efficiently amidst current geopolitical and cost pressures. Future updates on project commissioning and margin recovery will be essential to understanding the company's performance trajectory.