- 29 Jul 2024
- ICICIdirect Research
KEC REPORTED A GOOD SET OF Q1FY25 RESULTS
KEC - 695 Change: -5.60 (-0.80 %)News: KEC reported a good set of Q1FY25 results. Consolidated revenue grew 6.32% YoY at ₹4,512 crore. From a segmental perspective, T&D revenue grew 17% YoY at ₹2499 crore. On the other hand Oil & Gas pipeline and Civil segment revenues grew by 21% and 11% respectively. On the flip side railways declined by 38.4%. YTD Order inflow stood at ₹7,664 crore resulting in order backlog of ₹ 32,715 crore and L1 position is at ₹9,500 crore. EBITDA Margin came in at 5.99% in Q1FY25 which expanded by 23 bps YoY and down 30bps QoQ, consequently PAT grew by 107% YoY led by better operational performance and lower finance costs.
View: With strong order backlog and bid pipeline of ₹130000 crore, we believe KEC poses strong revenue growth visibility over the next couple of years. We would await management commentary on the magnitude of margin improvement over FY25-26 which would be critical for the rerating of the stock. However, control leverage despite revenue rising 6% YoY and improvement in working capital will cushion the stock.
Impact: Positive