KEC Q2 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹6,092 Cr
verified against source
Revenue YoY
19%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
KEC International delivered a strong Q2 FY26 with Rs 6,920 crore revenue (+19% YoY) and EBITDA margin expansion of 80bps to 7.1%, while PAT surged 88% YoY to Rs 161 crore. The T&D segment was the standout performer with 44% revenue growth and double-digit margins, now contributing 65% of total revenues versus 55% last year. YTD order intake of Rs 16,000 crore (+20% YoY) with L1 positions of Rs 5,000 crore provides robust visibility; the total order book including L1 stands at a record Rs 44,000 crore. Civil and Railways segments remained under pressure due to labor shortages, delayed water sector payments, and legacy low-margin metro projects, but management expects H2 margin recovery to ~8.5%+ enabling full-year 8% EBITDA margin guidance. Working capital normalization and Rs 5,000 crore debt target by year-end address balance sheet concerns. Risks include RO (Right of Way) bottlenecks in transmission, Afghan ADB receivables delay, and elevated NWC at 138 days.
Colored figures show movement against the previous available record.
Guidance to track
- Full year EBITDA margin guidance of 8% (H1: 7%, H2 expected >8.5%) representing 60-80bps annual expansion from FY25's ~7.3%
- Net debt of Rs 6,480 crore expected to decline to ~Rs 5,000 crore driven by Afghan ADB payment (~$30mn in Q4), metro project commissioning cash flows, and order advances
- Civil business expected to grow 10-15% from Rs 4,400 crore last year, reaching Rs 5,000 crore, driven by execution of new high-margin B&F orders and completion of legacy low-margin metro projects
- Next fiscal year civil expected to grow 15-20% with margins improving to higher single-digit as legacy projects close and newer factory/residential/data center orders contribute
- Above-normal capex of Rs 400 crore (vs typical Rs 250-300 crore) due to cable EBAM/Elastomeric expansion and tower manufacturing capacity additions in Nagpur, Dubai, Jaipur, and Jabalpur
Risks flagged
- RO issues persist in transmission line completion despite Ministry of Power's revised higher compensation guidelines (voluntary for states). Gujarat and Rajasthan solar corridors particularly affected. MD acknowledged 'not good' situation despite some state adoption improving.
- ~$30 million ADB payment from Afghanistan projects delayed from Q2/Q3 to Q4 FY26 despite ADB written confirmation. World Bank and US Aid portions already received (Rs 450 crore recovered); total receivables at risk if further delays occur.
- Water segment dues remain elevated at Rs 875 crore (flat vs March 2025) with payments on cash-and-carry basis. Madhya Pradesh improving but Odisha remains slow. Management adopted calibrated execution approach, directly impacting civil revenue growth.
- NWC elevated at 138 days vs industry peers. Drivers: 20% retention in Saudi projects being released now, steel inventory buildup (Rs 250-300 crore conscious decision due to benign prices), AR overflow from September to October (Rs 400 crore), and Q4 payables reduction due to high Q4 revenues.
- Non-T&D segments (civil, railways, cables, renewables, oil & gas) collectively delivering only ~1.5% EBITDA margin in H1 despite management's stated goal of reaching 8-9% EBITDA. Railways specifically underperformed with flattish/declining trajectory for 3-4 years.
Key quotes
- Headline numbers are improving. We said from 6.3 we have gone up to 7.1 and we are still looking at reaching our 8% for the year which means around 8.8 or 8.9 for the balance H2.
- We have significantly enhanced our bottom line with a remarkable PBT growth of 88% in both Q2 and H1. We have achieved a PAT of Rs 161 crores in Q2 and Rs 285 crores in H1. The growth in PBT and PAT continues to outpace EBITDA growth.
- We have a well-diversified and strong order book of over Rs 39,000 crores as on date including the L1 position. Our order book and L1 stands at a record level of Rs 44,000 crores.
- I don't think we are looking at increasing our debt beyond this, not in our plans... we expect that [debt] to be a peak debt. It has started to come down.
- There is clearly RO issue. There's no question about it... The problem is that they [transmission lines] are not getting completed because of RO.
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