Detailed Narrative
T&D and B&F Drive Record Order Backlog
KPIL's flagship T&D and B&F businesses accounted for nearly 90% of order wins in FY25, pushing the consolidated order book to an all-time high of ₹64,495 crores. The T&D segment saw 28% YoY revenue growth, crossing the ₹10,000 crore milestone, while B&F grew 22% with a closing backlog exceeding ₹14,000 crores. Management expects this momentum to continue into FY26 with an order inflow target of ₹26,000-28,000 crores, focusing on complex HVDC and design-build projects.
Strategic De-leveraging and Working Capital Management
The company achieved a significant 25% YoY reduction in consolidated net debt to ₹1,953 crores, aided by a QIP of approximately ₹980 crores and efficient working capital management. Consolidated net working capital days improved to 79 days, well below the management's target of 100 days. This financial strengthening occurred despite an elongated receivable cycle in the Water business, where ₹1,500 crores remains outstanding.
Subsidiary Turnaround and Margin Expansion Roadmap
Management has guided for a 100bps improvement in consolidated PBT margins for FY26 as legacy drags resolve. Losses in Fasttel (Brazil) narrowed to ₹35 crores from ₹70 crores, while the Saudi IBN Omairah projects are nearing completion. Conversely, LMG Sweden reported its best-ever performance with 79% revenue growth and a ₹3,535 crore order book, with the board exploring fundraising options for this subsidiary.
Water Segment: A Cautious Recovery
The Water business was a major drag in FY25 due to delayed collections and deferred fund allocations, resulting in dented revenue growth. However, collections improved in Q4 with ₹570 crores received. While visibility in UP and Jharkhand remains low, management expects 10% growth in FY26 and is being selective in new bidding, focusing on international opportunities to diversify the risk.
Capacity Expansion and New Frontiers
KPIL is expanding its factory production capacity by 50,000 tons per annum to reach a total of 300,000 tons, supporting the robust T&D demand. The company is also making inroads into the data center market, currently working on one project and bidding for 2-3 large projects valued between ₹300-700 crores each. These projects are expected to offer higher ROCE due to lower capex requirements compared to traditional B&F work.