KEC International (KECI IN) – Q4FY26 Result Update – Muted Q4; execution hold key amid ME disruption – ACCUMULATE

We revised our EPS estimates by -30.1%/-23.9% for FY27E/FY28E factoring in slower execution amid labour shortages, prolonged supply-chain and logistics disruptions arising from the Middle East crisis. KEC International (KEC) reported a muted Q4FY26 performance with consolidated revenue declining 7% YoY to Rs63.9bn, while EBITDA margin contracted to 7% impacted by supply-chain disruptions and dispatch delays, resulting in ~Rs4bn revenue loss during the quarter amid the ongoing Middle East conflict. Despite near-term disruptions, management guided ~12–15% revenue growth and order intake target of ~Rs300bn, supported by a healthy order inflow in T&D (~Rs180bn) and Civil business (~Rs80bn). International T&D opportunities remain healthy across the Middle East, Africa, CIS and Americas, while domestic demand continues to be driven by TBCB transmission projects and substation opportunities. The Civil business, however, remained impacted by weak collections in water projects, labour shortages and delayed work fronts, although management expects recovery aided by improved labour availability and ramp-up in delayed projects. The Cables segment is expected to deliver ~15% growth supported by capacity expansion and improving profitability, while the Renewables business is increasingly focusing on wind and private-sector opportunities with recent entry into the wind EPC segment. Working capital remained elevated at ~165 days due to delayed collections and inventory build-up, although management expects gradual normalization supported by improving collections and targeted debt reduction during FY27. The stock is currently trading at a P/E of 17.8x/12.2x on FY27/28E earnings. We roll forward to Mar’28E and maintain our ‘Accumulate’ valuing the business at a PE of 14x Mar’28E (15.5x Sep’27E earlier) arriving at a TP of Rs558 (Rs748 earlier).