KEC International (KECI IN) – Q2FY27 Result Update – Disappointing Q2; Margin recovery key monitorable – BUY
Published on 03 Nov 2026
Management lowered FY27 revenue growth guidance to 8–10% YoY from 12–15% earlier, with recovery expected to be back-ended, led by an execution ramp-up in India T&D. Working capital and net debt remained elevated due to collection spillovers and inventory build-up. The FY27-end working capital target has been revised upwards to ~125 days from ~110 days, while the net debt target has increased to ~INR 60bn from ~INR 55bn by March 2027. Despite near-term execution challenges, a healthy order book provides medium-term revenue visibility. Continued execution in T&D and Cables, selective order intake in civil and transportation, alongside legacy project closures, should support gradual margin improvement. The stock is currently trading at 10.6x/7.2x FY28E/FY29E earnings. We maintain our BUY rating, given the recent stock price correction, and value the business at an unchanged 11x Sep’28E P/E, arriving at a revised target price of INR 406 (from INR 451 earlier).
