KEC International Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

KEC delivered strong revenue growth led by a 31% surge in its core T&D business, which now accounts for 67% of total revenue. However, the company faced significant headwinds in its Civil and Water segments due to labor shortages and payment delays, leading to a downward revision in margin guidance. While the order book remains robust at over ₹41,000 crores, debt levels have spiked, though management expects normalization by year-end.

Highlights

  • Record quarterly revenue of ₹6,001 crores, representing 12% YoY growth.

  • EBITDA margins expanded by 20 bps YoY to 7.2% in Q3; 9M margins at 7.1%.

  • Operating PAT reached ₹171 crores for Q3 and ₹457 crores for 9M FY26.

  • Year-to-Date (YTD) order intake stands at ₹19,300 crores, with T&D contributing 70%.

  • Total order book plus L1 position exceeds ₹41,000 crores.

  • Net debt including acceptances rose to ₹6,806 crores, primarily due to Saudi receivable timing and water project delays.

  • Management revised full-year EBITDA margin guidance downwards to 7% - 7.5% from previous 8% levels.

  • Labor shortages impacted Q3 revenue by an estimated ₹500 - ₹600 crores.

Concerns

  • Labor Shortages

  • Water Project Payment Delays

Key financials

  1. Revenue ₹6,001 Cr +12%YoY
  2. EBITDA Margin 7.2%
  3. Operating PAT ₹171 Cr
  4. Interest Cost 2.9%
  5. Order Book ₹36,725 Cr
  6. Net Debt ₹6,806 Cr +22%YoY

What they filed

Q1 FY27: revenue down 3.3%, net profit down 98.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,484 4,758 6,048 4,030 4,949 +10%4,808 +1%5,260 −13%3,898 −3%
EBITDA230 281 352 197 308 +34%276 −2%273 −22%156 −21%
Net profit58 73 161 37 106 +82%39 −47%247 +53%1 −99%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹6,165 Cr Total
  • T&D ₹4,161 Cr 67.5%
  • Civil ₹923 Cr 15.0%
  • Cables & Conductors ₹556 Cr 9.0%
  • SAE Towers ₹525 Cr 8.5%

Guidance & targets

Margin

  • EBITDA Margin Margin · FY26 · Medium confidence 7% to 7.5%

    Previously 8% to 8.5% → 7% to 7.5%

    We have said that we are at 7.1% for the 9 months, we should be -- for the year will be between 7% to 7.5%.

    — Vimal Kejriwal, MD & CEO

Debt

  • Net Debt Debt · by March '26 end · High confidence ₹5,500 crores
    I think INR5,500 crores is a safe number. We will definitely achieve that number.

    — Vimal Kejriwal, MD & CEO

Other

  • Working Capital Days Other · FY26 · High confidence 110 to 115 days
    110 to 115 days.

    — Rajeev Aggarwal, CFO

Revenue

  • Order Intake Target Revenue · FY27 · Medium confidence ₹35,000 crores
    But I think we should be looking at around INR35,000 crores.

    — Vimal Kejriwal, MD & CEO

Risks & concerns

  • Labor Shortages

    high

    Shortage of 2,000 to 4,000 laborers impacting execution, particularly in Civil projects.

    Management acknowledged

  • Water Project Payment Delays

    high

    Muted payments from state governments (Odisha, MP) leading to a 'calibrated' (slowed) execution approach.

    Both acknowledged

  • Metro Project Commissioning Delays

    medium

    Completed viaducts awaiting inauguration, leading to ongoing maintenance costs of ₹15-20 crores per month without revenue.

    Management acknowledged

Areas of evasion (2)

  • Specific names of Chinese components being imported.
  • Exact margin targets for FY27.

Q&A highlights

3 direct
Margin Guidance Reduction Direct
Because of the slowdown in Water, which is obviously a much higher margin... we have also, based on prudence, have started providing for some of these numbers.

Confirms that previous 8%+ margin targets are no longer achievable this fiscal due to execution delays and provisioning.

Asked by Vaibhav Shah

Debt Increase vs Flat Execution Direct
The only reason why that happened was that there were some large receivables from Saudi, which got moved into the first week of January.

Explains the temporary spike in debt and provides visibility on debt reduction in Q4.

Asked by Parikshit

Labor Shortage Impact Direct
Maybe INR500 crores, INR600 crores for the quarter could have been impacted where we could have got more revenue, especially on the Civil side.

Quantifies the significant revenue leakage caused by external labor availability issues.

Asked by Harshit

2 min read 5 chapters

Detailed narrative

T&D Segment Drives Growth Amidst Structural Shift

The T&D business remains KEC's primary growth engine, delivering ₹4,161 crores in revenue for Q3, a 31% YoY increase. A significant structural shift is occurring in India, where 75% of orders are now coming from private players via the TBCB route, up from 45% last year. The business secured its largest-ever domestic order of ₹1,050 crores from a private developer, and the international pipeline remains robust across the Middle East and Africa.

Margin Guidance Reset Due to Execution Headwinds

Management has lowered its FY26 EBITDA margin guidance to a range of 7% to 7.5%, down from previous expectations of 8% to 8.5%. This revision is attributed to slower progress in high-margin Water projects, closure costs for legacy metro projects, and delays in claim settlements. Additionally, labor shortages and design changes due to new seismic zone regulations in the NCR region have put further pressure on execution timelines and profitability.

Debt Levels and Working Capital Stress

Net debt including acceptances stood at ₹6,806 crores as of December 31, 2025, an increase of over ₹1,200 crores YoY. This spike was driven by strong revenue growth, strategic inventory building, and a delay in receiving large payments from Saudi Arabia (which were subsequently received in early January). Management remains committed to reducing net debt to ₹5,500 crores by March 2026 and maintaining working capital between 110 and 115 days.

Civil Business Pivots to Buildings and Factories

The Civil segment is undergoing a strategic shift, with 60-65% of its ₹11,000 crore order book now comprised of Buildings & Factories (B&F). Management is deliberately defocusing on low-margin road projects due to intense competition. Despite a ₹923 crore revenue performance in Q3, the segment faced a ₹500-600 crore revenue hit due to labor shortages, though the outlook remains positive with multiple orders in hospitals and industrial plants.

SAE Towers and International Recovery

SAE Towers showed a robust recovery with 70% revenue growth in Q3, reaching ₹525 crores. The business has secured ₹1,250 crores in YTD orders, primarily from the North American market (Mexico/U.S.). With an order book and L1 position exceeding ₹2,600 crores, SAE now provides strong revenue visibility for the next two years and is operating at double-digit margins.

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