K E C Intl.

The T&D business remains the primary growth engine, contributing 70% of the record ₹22,000 crore YTD order inflows. Revenue for the segment grew 17% YoY to ₹3,175 crores in Q3, supported by strong execution in India and the Middle East. Management highlighted a robust tender pipeline of ₹1.5 lakh crores, with significant opportunities emerging in Saudi Arabia, UAE, and India's HVDC market.

KEC achieved a 7% EBITDA margin in Q3, an 80bps expansion YoY and the highest in three years. This was driven by the completion of legacy low-margin orders and a higher share of T&D in the revenue mix (59% in Q3). Management is confident in reaching a 9-10% EBITDA margin in FY26, supported by a 150-200bps expansion and reduced interest costs, which are targeted to fall to 2.9% of revenue.

Despite strong operational performance, working capital remains pressured by delayed payments in the water segment and unresolved disputes in railways. Management identified over ₹500 crores of excess receivables in water projects. However, recent budget allocations for the Jal Jeevan Mission and ₹150 crores in collections in January 2025 provide visibility for debt reduction to ₹4,500-5,000 crores by March 2025.

The company rebranded its railway business as 'Transportation' to reflect a broader infrastructure focus, including new entries into the ropeways segment. In the cables business, KEC successfully transferred the unit to a subsidiary, KEC Asian Cables Limited, and is diversifying into high-margin products like E-Beam and Elastomeric cables, with production expected to commence in Q4 FY26.

Addressing concerns over US tariffs, management noted that their Mexico operations primarily serve the local market, with only $20-30 million in exports to the US. They suggested that tariffs on Mexico could pivot more profitable orders to their Indian facilities. Meanwhile, SAE is witnessing a 3.5x growth in order inflows (₹2,100 crores YTD), although revenue was impacted by Brazilian currency depreciation.