KEC International · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
JNNURM collections remain unchanged from prior year at approximately Rs 50-60 crore received till date despite government assurances. Framework conditions and audit requirements still pending, delaying full disbursement. Receivables of Rs 800 crore remain outstanding.
Management declined to provide margin guidance citing inability to quantify impact of freight, steel, and labor cost escalations. Discussions ongoing with Middle East clients on cost pass-through; some contracts have force majeure clauses while others remain under negotiation.
Government tenders (NTPC, NLC) have seen significant undercutting by small EPC players making large-scale solar EPC unviable. KEC has shifted focus to private sector solar and wind; management admits solar market is shut for large players currently.
DSO increased from 88 days to 101 days YoY despite Rs 450 crore collection spillover to April. Saudi retention releases (20% on large projects) and Dubai inventory liquidation expected to normalize collections by Q2. Current working capital days at 155+ vs target of 110.
