Detailed Narrative
T&D Business Drives Record Performance
The T&D segment remains KEC's primary growth engine, delivering ₹12,833 crores in revenue for FY25, a 23% increase YoY. The business secured orders worth approximately ₹18,000 crores, more than doubling its international intake compared to the previous year. Management highlighted significant traction in the Middle East, particularly Saudi Arabia and the UAE, and expects the T&D order book to contribute 70% of total inflows in FY26.
Aggressive Deleveraging and Working Capital Management
KEC achieved a substantial reduction in debt, with net debt including acceptances falling by over ₹500 crores YoY to ₹4,558 crores. Notably, borrowings were slashed by ₹1,000 crores in the final quarter alone. Net Working Capital days improved to 122 days from a peak of 134, with a target to reach 100 days by the end of FY26. This improvement is largely attributed to higher collections and a strategic shift toward T&D projects which have better cash flow profiles.
Strategic Recalibration in Civil and Water Segments
The Civil business reported revenues of ₹4,483 crores, but growth was tempered by a conscious slowdown in water projects due to delayed client payments and labor shortages. Management has implemented a 'cash-flow-linked execution' model for water projects, where work pace is strictly tied to monthly receipts. Despite these headwinds, the Civil segment entered the semiconductor space with a significant fast-track order, diversifying its industrial portfolio.
Railways Segment Bottoms Out with New Focus
The Transportation (Railways) business saw a 32% revenue decline to ₹2,112 crores as the company exited low-margin electrification projects on live tracks. Management believes the segment has now bottomed out and is pivoting toward Metro OHE, BLT, and the Kavach safety system. The current order book is described as more profitable, and the segment is expected to turn around by FY27.
Cables Subsidiary and Value Unlocking
The Cables business delivered record performance with revenues exceeding ₹1,800 crores and a 10% growth rate. The business was successfully transferred to a wholly-owned subsidiary, KEC Asian Cables Limited, effective January 1, 2025. Management is targeting ₹3,500 crores in revenue by FY27 and is open to potential capital dilution or a separate listing in the next 1.5 to 2 years to unlock value.