KEC International Limited — Q4 FY25 earnings call

Call held 27 May 2025

Management summary

KEC International delivered a landmark performance in FY25, characterized by record revenues, historic order inflows, and significant deleveraging. The company successfully navigated headwinds in its water and railway segments by recalibrating its order book toward higher-margin T&D projects and larger EPC orders. Management is pivoting toward a leaner balance sheet with a clear target to reduce working capital to 100 days by the end of FY26.

Highlights

  • Record-breaking annual revenue of ₹21,847 crores, representing 10% YoY growth.

  • Q4 FY25 revenue reached an all-time high of ₹6,872 crores, up 11% YoY and 28% sequentially.

  • EBITDA margins for Q4 expanded by 150 bps YoY to 7.8%; FY25 margins improved to 7.0%.

  • Full-year PAT surged 65% YoY to ₹571 crores, driven by lower interest and depreciation costs.

  • Historic annual order intake of ₹24,689 crores, a stellar growth of 36% YoY.

  • Net debt (including acceptances) reduced by over ₹500 crores YoY to ₹4,558 crores.

  • Net Working Capital (NWC) improved by 12 days to 122 days as of March 31, 2025.

  • T&D business achieved milestone revenue of ₹12,833 crores with 23% annual growth.

Concerns

  • Labor Shortage in India

  • Delayed Payments in Water Projects

Key financials

  1. Revenue ₹21,847 Cr +10%YoY
  2. EBITDA Margin 7%
  3. PAT ₹571 Cr +65%YoY
  4. Order Inflow ₹24,689 Cr +36%YoY
  5. Net Debt ₹4,558 Cr -10%YoY
  6. NWC Days 122 days

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
₹22,081 Cr Total
  • T&D ₹12,833 Cr 58.1%
  • Civil ₹4,483 Cr 20.3%
  • Railways (Transportation) ₹2,112 Cr 9.6%
  • Cables ₹1,800 Cr 8.2%
  • Renewables ₹853 Cr 3.9%

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 15%
    what we have said is that we will grow by 15% on the revenue side.

    — Vimal Kejriwal, MD & CEO

  • Cables Revenue Revenue · FY27 · Medium confidence ₹3,500 crores
    What we expect is that by FY '27, we should be, I don't know, maybe around INR3,500 crores or sort of revenue

    — Vimal Kejriwal, MD & CEO

Margin

  • EBITDA Margin Margin · FY26 · Medium confidence 8% to 8.5%

    Previously 9% → 8% to 8.5%

    On the margin, we have been talking about 8% to 8.5% from the current 7%.

    — Vimal Kejriwal, MD & CEO

Other

  • Order Inflow Other · FY26 · High confidence ₹30,000 crores
    we have said that order intake should be around INR30,000 crores.

    — Vimal Kejriwal, MD & CEO

  • Net Working Capital Days Other · FY26 · Medium confidence 100 days

    Previously 122 days → 100 days

    Somewhere we are quite hopeful that by end of this year, we should be closer to about 100 days of NWC.

    — Rajeev Aggarwal, CFO

Capex

  • Annual Capex Capex · FY26 · High confidence ₹400 crores plus
    I think we're talking about INR400 crores plus for FY '26, okay?

    — Vimal Kejriwal, MD & CEO

Risks & concerns

  • Labor Shortage in India

    high

    Persistent labor shortages are impacting execution in Civil and water projects, leading to a more conservative margin outlook.

    Management acknowledged

  • Delayed Payments in Water Projects

    high

    Delayed client payments in Madhya Pradesh and Odisha have forced a slowdown in execution; outstanding receivables stand at ~₹800 crores.

    Both acknowledged

  • Afghanistan Receivables

    medium

    ₹250 crores in net receivables remain stuck; management is hopeful for recovery by Q2 FY26 via ADB.

    Analyst acknowledged

Areas of evasion (1)

  • Specific segmental loss figures for the railway business were not disclosed.

Q&A highlights

3 direct
Revision of FY26 Margin Guidance Direct
I think right now, with what is happening in water and labor, etcetera, shortage, etcetera, we are a bit conservative, okay? I don't know whether we'll be able to achieve 9% or not.

Management proactively lowered their margin guidance for FY26 from 9% to 8-8.5% due to execution headwinds in the water segment and labor shortages.

Asked by Vaibhav Shah

Water Segment Receivables and Execution Direct
So our execution would depend upon what sort of money we receive. So in a way, let's put it this way, there's a cap on what we will execute. So whatever money I get this month, that's the execution we will do next month.

Reveals a strict 'cash-and-carry' execution strategy for the troubled water segment to prevent further working capital bloat.

Asked by Bhoomika Nair

Railway Business Bottoming Out Direct
So clearly, I think it has bottomed out. We did a turnover of around INR2,100 crores. I don't think we want to do below that. If we are going below that, then we may as well shut down the business, okay?

Confirms that the multi-year decline in the railway business has likely ended, with a shift in strategy toward more profitable metro and Kavach projects.

Asked by Renu Baid

2 min read 5 chapters

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.

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