KEC International is an A /T+1 group Power Generation industry company with having Face value of Rs. 10. It is the flagship company of the RPG Group a USD 2.1 billion Engineering, Procurement, and Construction (EPC) major delivering projects in key infrastructure sectors such as Power Transmission & Distribution, Railways, Civil, Urban Infrastructure, Solar, Smart Infrastructure, Oil & Gas Pipelines, and Cables. Company has vast manufacturing footprint with 8 manufacturing plants extending across India, Dubai, Brazil and Mexico and global presence which extends across six continents in over 110+ countries. Sector wise Company’s has marked its footprints in 70+ countries for EPC project, 90+ countries for Cables Supply and 65+ countries for Tower supply. It has a global manufacturing capacity of 4,22,200 MPTA which includes manufacturing of Towers, Poles, Hardware, Structures for Railways & Solar. Company has a robust order book of Rs. 30,553 Crore as on March 31, 2023 and marking an order intake growth of 30% with intake of orders worth Rs. 22,738 crores. Its Transmission and Distribution business witnessed significant traction in order intake and secured new orders of Rs. 10,500 Crore. Under its Railways business segment company electrified 1,564 RKM, approximately 24% of India’s railway electrification achievement, contributing towards the Indian Railways’ 100% Electrification Mission. Its civil business segment has delivered a revenue of over Rs. 3,300 Crore with growth of 75% over last year along with a robust order book inflow of over Rs. 6,600 Crore during FY23. Under its urban infrastructure segment company has established a strong footprint in the Metro segment with project value of over Rs. 7,500 Crore, its Oil and Gas business has achieved revenue of Rs. over 480 Crore marking growth of 2.7 times over last year and its Cables business delivered robust order intake of over Rs. 1,700 Crore, a growth of 15% over last year. KEC recently expanded its business portfolio to include Smart Infrastructure with a focus on Smart Cities & Communication, Smart Mobility and Smart Utility and already started receiving orders for the upgrowing business in India.

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was at Rs 4,243.59 crore in June 2023 up 27.89%, Quarterly Net Profit at Rs. 42.33 crore in June 2023 up 36.46% and EBITDA stands at Rs. 247.19 crore in June 2023 up 40.15% as compared to June 2022. Company’s EPS has increased to Rs. 1.65 in June 2023 from Rs. 1.21 in June 2022.

Key Points:

1. Recently the company bagged its biggest ever 600 MWp tracker based solar order of over Rs. 750 Crore project.
2. Recently it has secured a prestigious turnkey order of Rs. 1,145 crores in its Transmission & Distribution (T&D) business for Design, Supply and Installation of 380 kV Overhead Transmission Line in the Kingdom of Saudi Arabia (KSA).
3. It has also secured new orders of Rs. 1,012 crores across its various businesses which includes prestigious orders from new clients in the Data centre and FMCG segments in India for Building a Data centre in Western India and Setting up of manufacturing facility for a global FMCG major in Southern India under its Civil business. A 765 kV Transmission line order in India from an existing private client and Supply of towers, hardware and poles in Americas under T&D business and supply of various types of cables in India and overseas.
4. Recently it has bagged an order worth Rs. 1,065 crores across its various businesses which includes 400 kV Transmission line and GIS Substation order in India, from a subsidiary of a reputed PSU in renewable power generation segment , 400/220 kV AIS Substation order in India, from a leading private developer and Supply of towers in Africa and Supply of towers, hardware and poles in Americas, secured by its subsidiary, SAE Towers.
5. Company has also bagged Rs. 1,042 crores across its various businesses including its maiden international order for a Signaling & Telecommunication project in SAARC and an order in the Metals & Mining segment from a reputed steel player in India.
6. Company bagged an order worth Rs. 1,373 crores across its various businesses which includes orders in the technologically enabled and conventional/emerging segments in India i.e., Automatic Block Signaling (ABS) – Orders for Signaling & Telecommunication for Automatic Block Signaling (ABS) system and Semi High-Speed Rail – Orders for 2 x 25 kV Overhead Electrification (OHE) & associated works for speed upgradation.
7. Company has also secured orders for T&D projects in India, East Asia Pacific and SAARC including 220 kV GIS Substation for a refinery project in India 500 kV Transmission line in Thailand and 132 kV Transmission line and associated substations in Nepal. Under its Solar business it has secured a largest order for a 500 MW Solar PV project in India.
8. Company has bagged orders for HVDC project in India, from a leading private player making its first project in the promising segment of HVDC Terminal Station in India along with orders for 400 kV Overhead Transmission line in Kuwait, 132 kV Underground Cabling order in Nepal and Supply of towers in the United States of America under its Transmission and Distribution business.
9. KEC had acquired Spur Infrastructure Private Limited, an EPC company in the Oil and Gas Pipelines sector which enabled it to accelerate the growth of the Oil & Gas Pipelines business.
10. KEC had also acquired a state-of-the-art automated transmission tower manufacturing facility in mainland Dubai, with a capacity of 50,000 tonnes per annum.
11. Company has also pioneered the use of Covered Conductor Technology for a project in Bengaluru. It has successfully installed 35 MW of projects with the single axis tracker technology, probably the largest in the country.
12. Company had also established 765 kV GIS Substation in Thiruvalam, which was also a first-of-its-kind in South India.
13. KEC international along with its consortium IT company Allied Digital Services also secured an order for Master System Integrator (MSI) for Smart City Components for three smart cities in India.
14. Company has also executed one of the most prestigious river crossing projects in West Bengal involving tower construction in mid river and along the shore. A first of its kind in India with the total height of individual River Crossing (RC) tower structure is ~236 meters (775 feet) which is about 75% of the height of Eiffel Tower and the weight of each RC tower is 1790 MTs.

In last 3 Years the stock gave a return of 93.40% as compared to the rise of Sensex and Nifty in the same period.

KEC International has delivered strong financial performance every year backed by its growing order nook position and being a preferred EPC major for many private as well as PSU companies. It is investor friendly company with an average dividend disbursal of 150%.  Mutual funds have also increased their holdings by 1.5% in the last quarter to 24.7. Company has already forayed into futuristic sectors such as Smart City projects, Solar and other infrastructural projects and with Government’s ambitions for growth of India and making a 3^rd largest economy in the world the company is well poised to enjoy more larger orderbooks in upcoming future. Considering huge order intakes, experienced team of management in all business verticals, good financial performance and low debt company though being an EPC major investor can invest in this company for the growth of their wealth and as well as towards the growth of “BHARAT”  .

- HET ZAVERI

info@smartinvestment.in

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