KEC International: Prabhudas Lilladher Maintains Accumulate Rating, Sees Upside Potential to Rs 558

KEC International Sees Healthy Growth Outlook Across Key Segments

KEC International's management recently discussed the company's FY26 business performance and growth outlook at the annual investor meet. The discussion highlighted a robust growth outlook supported by strong domestic transmission and distribution (T&D) demand, improving international traction, and diversified infrastructure opportunities.

Domestic T&D momentum remains robust, driven by renewable integration, rising power demand, and increasing high-voltage direct current (HVDC) opportunities. Notably, ~7 HVDC projects are currently under discussion, with at least two projects expected to be awarded during FY27. International execution remains stable despite geopolitical disruptions in West Asia, while opportunities across Africa, the Commonwealth of Independent States (CIS), and Middle East energy diversification projects continue to improve.

The Civil segment is witnessing healthy traction across large engineering, procurement, and construction (EPC) projects, buildings & factories, renewable-linked infrastructure, and data centers. The improving project mix and completion of legacy metro projects are expected to support better cash flows and return ratios. Additionally, the Renewables and cables businesses continue to witness healthy traction supported by capacity additions, renewable investments, and rising data-center opportunities. Management remains constructive on the long-term data-center opportunity, aided by expanding mechanical, electrical, and plumbing (MEP) capabilities and faster execution timelines.

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With a robust order book of ~Rs400bn providing better revenue visibility in the near term, management reiterated FY27 revenue growth guidance of ~12–15% and targeted order inflow of ~Rs300bn.

Stock Valuation

The stock is currently trading at a price-to-earnings (P/E) ratio of 18.2x/12.5x on FY27/28E earnings. Despite this, we maintain our 'Accumulate' rating, valuing the business at a PE of 14x Mar'28E, which arrives at a target price of Rs558.

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Note: The revenue growth guidance and targeted order inflow for FY27 are the key figures provided in the report. For ease of comparison, a Markdown table has been used to present these figures.