KEC International Target Price Raised to Rs 558 by Prabhudas Lilladher

KEC International Sees Revenue Decline Amid Labour Shortages and Supply-Chain Disruptions

In a recent research report, Prabhudas Lilladher has revised its earnings per share (EPS) estimates for KEC International (KEC) by -30.1% and -23.9% for FY27E and FY28E, respectively, factoring in slower execution amid labour shortages, prolonged supply-chain and logistics disruptions arising from the Middle East crisis.

KEC International's Q4FY26 performance was muted, with consolidated revenue declining 7% year-over-year (YoY) to Rs63.9 billion. The company's EBITDA margin contracted to 7%, impacted by supply-chain disruptions and dispatch delays, resulting in a revenue loss of approximately Rs4 billion during the quarter amid the ongoing Middle East conflict.

Despite near-term disruptions, management has guided a revenue growth of approximately 12-15% and an order intake target of approximately Rs300 billion, supported by a healthy order inflow in transmission and distribution (T&D) (~Rs180 billion) and civil business (~Rs80 billion). International T&D opportunities remain healthy across the Middle East, Africa, CIS, and Americas, while domestic demand continues to be driven by TBCB transmission projects and substation opportunities.

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Revenue Growth Projections

The stock is currently trading at a price-to-earnings (P/E) ratio of 17.8x and 12.2x on FY27 and FY28E earnings, respectively. Prabhudas Lilladher has rolled forward its estimates to Mar'28E and maintained its 'Accumulate' rating, valuing the business at a P/E ratio of 14x Mar'28E (15.5x Sep'27E earlier) and arriving at a target price of Rs558 (Rs748 earlier).