- 02 Nov 2023
- ICICI Securities
TRAVERSING THROUGH THE MARGIN RECOVERY PATH GRADUALLY....
KEC - 825 Change: 10.60 (1.30 %)News: KEC reported decent Q2FY24 operational performance wherein the revenues grew by 11% YoY to Rs 4499 crore. EBITDA margins have improved YoY and QoQ by 170 bps and 30 bpd respectibley to 6.1% for the quarter. The company reported YTD Order intake of ~Rs. 9,000 crore, with T&D and Civil businesses being the major contributors. On the Order Book: front, backlog stood at Rs. 31,320 crore, healthy growth of ~14% YoY, coupled with, L1 of over Rs. 4,000 crore. Net Working Capital (NWC) stands at 140 days as on 30 th Sep’23 – Reduction of 8 days vis-à-vis 30 th Sep’22.From a segmental perspective, revenues of T&D segment grew by 7% YoY whereas Civil was up 42% YoY and the railway was flattish.
Views: We like the business diversification strategy of KEC across various verticals and their profitable ramup. Strong backlog of Rs 31000 crore provides strong visibility over FY23-FY25 but the key monitarables would be the pace of recovery in margins and reduction of debt.
Impact: Positive