KEC International Ltd Q1 FY27 Earnings Call: Guides 12-15% Revenue Growth, Order Book Crosses Rs. 40,000 Cr

KEC International Ltd held its Q1 FY27 earnings call on August 10, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Resilient Revenue, Margins Under Pressure

• Rs.5,024 Cr revenue — marginally higher YoY in Q1 FY 2026-2027; PBT of Rs.90 Cr (margin 1.8%) and PAT of Rs.73 Cr.
• ~4% standalone EBITDA margin — declined in Q1 FY 2026-2027; T&D at higher margins while railways and civil segments were negative.
• Rs.6,300 Cr order intake — in Q1 FY 2026-2027; L1 position of ~Rs.3,000 Cr; total order book plus L1 at >Rs.40,000 Cr; tender pipeline exceeding Rs.2,00,000 Cr.
• Net debt reduced by Rs.150 Cr — to Rs.6,568 Cr as of June 2026 vs March 2026; absolute interest cost lower than Q4 FY 2025-2026.
• Manufacturing capacity expanded — to 4,83,800 MT with completion of the Butibori facility.
• Near-term headwinds persist — supply chain/logistics delays from Europe/China/India to GCC, elevated freight costs/war surcharges, labor shortages (improving from June 26, 2026), payment delays in water segment, and legal dispute closures.

Robust Pipeline, Middle East Concentration

• >Rs.40,000 Cr order book + L1 — as of Q1 FY 2026-2027; 25% (~Rs.10,000 Cr) split roughly equally between Saudi Arabia and the UAE.
• Rs.30,000 Cr full-year order intake guidance — maintained for FY 2026-2027; 60–65% from T&D international orders expected at Rs.9,000–10,000 Cr (largely West Asia).
• SAE Towers order book at Rs.3,800 Cr — as of Q1 FY 2026-2027; to be delivered over 1.5–2 years; utilization near 100% with margins described as “almost double digit” (~10%).
• Data center EPC opportunity emerging — management expects civil/MEP orders by Q2 FY 2026-2027; typical project size ~Rs.10 Cr per MW; KEC’s edge is integrated civil + MEP capability. Competition includes Tata Projects and L&T.
• Renewables secured Rs.800 Cr — in new orders during Q1 FY 2026-2027.
• Order conversion delays in West Asia — concentrated in Saudi, UAE, and Oman; some L1 positions pending conversion but tender pipeline remains strong.

Legacy Drag Easing, Recovery Seen from Q3

• No specific margin guidance for FY 2026-2027 — management expects quarter-by-quarter improvement; meaningful increase likely from Q3 FY 2026-2027 onwards; Q2 not expected to hit a low but no significant improvement yet.
• Standalone EBITDA shortfall of Rs.150 Cr in Q1 — flagged by an analyst projecting ~Rs.600 Cr full-year hit from legacy projects; management said these are completed projects with no order book backlog except a Rs.100–150 Cr CMRL project finishing in six months.
• Legacy civil and transportation projects — incurring ~Rs.10 Cr/month in maintenance costs each, pending client commissioning, dragging margins.
• Cable margins at ~5% — ~200 bps below market; expected to improve with specialty cables ramp-up by Q4 FY 2026-2027.
• New elastomeric cable products — expected to add Rs.300–Rs.400 Cr in revenue in FY 2027-2028 and improve LT/HT cable margins.
• Effective tax rate improving to 20–22% — as Middle East revenue grows (vs domestic 30–35%), benefiting PAT.
• Margin trajectory dependent on geopolitical developments — management cited that improvement will hinge on “when the war ends.”

Rs.1,200 Cr Debt Reduction Target for FY26-27

• Net debt target of ~Rs.5,500 Cr by March 2027 — reduction of ~Rs.1,200 Cr from ~Rs.6,700 Cr at the start of FY 2026-2027.
• Working capital target of 120 days by Sep 2026 — and 110 days by Mar 2027; management expects releases of Rs.200–Rs.250 Cr from inventory reduction plus debtor inflows from Afghanistan and state water projects.
• Rs.800–Rs.900 Cr total receivables from Afghanistan and GGM (MP & Orissa state projects) — Rs.400–Rs.500 Cr overdue; Rs.110 Cr received in Jul–Aug FY 2026-2027 to date.
• Afghanistan receivables of ~Rs.300 Cr — due from ADB; management received assurances for payment in Q2 FY 2026-2027, otherwise expected by Q3 FY 2026-2027.
• Expected cash inflows in FY 2026-2027 — ~Rs.300–Rs.400 Cr from Afghanistan; ~Rs.300–Rs.400 Cr from overdue water-segment dues; ~Rs.300–Rs.400 Cr from retention money in Saudi Arabia and Middle East; ~Rs.150–Rs.200 Cr from railway arbitration awards (Rs.150–Rs.160 Cr already awarded).
• Interest cost for Q1 at 3.3% — guided to ~2.3% for the full year FY 2026-2027, with total annual interest expected at ~Rs.600 Cr.
• Retention percentages unchanged in GCC — UAE 10%, Saudi 20%, Kuwait 30–35%, but release has been fast-tracked in Saudi and Dubai.

T&D Anchors, Cables Surges, Civil Under Pressure

• T&D segment revenue Rs.3,217 Cr — margins expected to stay near double-digit; order conversion delays concentrated in West Asia.
• Cables & conductors revenue Rs.600 Cr — up 57% YoY in Q1 FY 2026-2027; ~Rs.3,000 Cr full-year capacity with current assets; cable exports were Rs.200 Cr in FY 2025-2026.
• SAE business revenue Rs.450 Cr — up 25% YoY; SAE towers margins at ~10%.
• Civil revenue Rs.993 Cr — up 6% YoY; transportation revenue Rs.259 Cr; both segments remain negative on margins.
• Water segment (Jal Jeevan Mission) — pending order book ~Rs.1,300 Cr; gross debtors ~Rs.800–Rs.900 Cr (~Rs.400 Cr due); water segment profitable at 8–10% margin; most MP and Odisha projects expected to be completed within FY 2026-2027; possibly 2 projects may continue beyond March FY 2026-2027 subject to regular cash flows.
• Merger of KEC Spur Infrastructure — wholly-owned subsidiary (oil & gas pipeline business) being merged into KEC International; initiated.

12–15% Revenue Growth Guidance Intact

• 12–15% revenue growth guidance for FY 2026-2027 — despite flat Q1 due to ~Rs.300 Cr deferment from Middle East projects; full recovery expected in subsequent quarters.
• FY 2027-2028 margins likely better than FY 2025-2026 — management indicated visible improvement in EBITDA margin and PBT from FY 2027-2028; high single-digit standalone margins possible by FY 2027-2028.
• Legacy railway and civil orders winding down — new orders will improve mix through FY 2026-2027; slow-moving railway projects at 95–97% closure.
• No major capex planned immediately — EHV expansion capex on drawing board for FY 2027-2028; routine capex at Rs.50–Rs.75 Cr per year for specialized products like HTLS conductors.
• Key risks to outlook — supply chain/logistics delays, war surcharges, labor shortages, payment delays in water segment, and arbitration issues on railway side remain far-fetched risks.
• Management optimistic on medium-to-long-term — driven by grid investments, renewable energy integration, and data center demand; expects improved execution over remaining quarters of FY 2026-2027.