🧠 At a Glance
Kay Cee Energy is a small-cap EPC player in power transmission & distribution infra. With 3x revenue in FY25, 32% ROE, and a ₹420 Cr market cap, it’s making noise—but its cash flows and promoter sell-down need a reality check.
1. 🚀 Introduction – “Power Infra ka Pataka?”
If your idea of fireworks includes transmission towers and substation automation… congratulations, you’re Kay Cee Energy’s target audience.
Born in 2015, this Jaipur-based EPC firm is now doing ₹150+ Cr in revenue, winning government orders left and right, and throwing out 30%+ ROEs like Holi colors.
But wait—is this a silent compounder, or another cash-hungry EPC trap?
Let’s break it down ⚔️
2. 🏗️ WTF Do They Even Do? – Business Model 101
Kay Cee Energy is in the Engineering, Procurement, and Construction (EPC) business for power transmission and distribution.
📌 Their offerings include:
- Setting up transmission lines, substations, and automation infra
- End-to-end work from tendering → procurement → execution → commissioning
- Post-completion operations & maintenance (O&M) services
- Client base includes State Electricity Boards, Wonder Cement, Airports
📡 Think of them as the electrician cousins of L&T or Kalpataru—with way fewer zeroes on contracts.
3. 💰 Financials – Profits, Margins, ROE: Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 61 | 64 | 153 |
| Net Profit (₹ Cr) | 6 | 7 | 17 |
| OPM (%) | 17% | 20% | 18% |
| ROE (%) | – | 23% | 32% |
| ROCE (%) | – | 23% | 29% |
📈 3Y Revenue CAGR: 45%
📈 3Y PAT CAGR: 77%
Not bad for a company younger than your Zomato account.
But…
- EPS jump from ₹6 to ₹15.57 post-listing looks good—but peep the equity base: they issued fresh equity in FY24. Dilution alert ⚠️
4. 💸 Valuation – Cheap, Meh, or Crack?
At ₹344 per share and a market cap of ₹420 Cr:
- P/E: ~24.6x
- P/BV: 6.1x (Book Value: ₹56.3)
- EV/EBITDA: Likely above 18x
- ROE: 32% – High, but sustainability is a question
🧠 Fair Value Range = ₹280–₹340
Based on sustainable PAT of ₹14–16 Cr with 20–22x P/E (given niche EPC + mid-cap growth)
Right now, it’s priced for growth. Any slip? Toast.
5. 🔍 What’s Cooking – Orders, Ratings, Buzz
🔌 Recent Orders (June 2025):
- ₹28.38 Cr order – Greenfields Airport, Kota (Transmission Line)
- ₹27.53 Cr – Emergency Restoration System (Rajasthan Vidyut)
- ₹16.66 Cr – Wonder Cement (Infra supply)
🧾 Credit Rating (June 2025):
- CRISIL upgrades to BBB-/A3 – Stable outlook, but still borderline investment grade
🚨 Promoter Holding Drop:
- From 70.35% (Mar ’25) → 63.08% (Apr ’25)
That’s -7.3% in one quarter. 👀
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Borrowings (₹ Cr) | 23 | 26 | 55 |
| Reserves (₹ Cr) | 22 | 34 | 51 |
| Total Assets | 80 | 105 | 174 |
| Fixed Assets | 15 | 16 | 20 |
✅ Equity base increased → IPO money?
✅ Healthy reserve buildup
❌ Debt has more than doubled in FY25
This is infra EPC. Capex-heavy. Receivable-heavy. One delay, and you’re stuck like Vande Bharat in Bihar floods.
7. 💵 Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | -14 | 0 | 14 |
| FY24 | -12 | -3 | 15 |
| FY25 | -22 | -2 | 25 |
Kay Cee is classic EPC: “Profit dikhega, paisa nahi milega.”
Negative CFO for 3 straight years, rising WC days, rising debt = cash stress brewing.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 29.3% |
| ROE | 32.1% |
| Debtor Days | 95.6 |
| Inventory Days | 148 |
| Payable Days | 178 |
| Working Capital Days | 199 |
| CCC | 66 |
🥵 3 red flags:
- High working capital days
- Negative operating cash
- High valuation despite small scale
9. 💸 P&L Breakdown – Show Me the Money
- Revenue (FY25): ₹153 Cr
- Expenses: ₹126 Cr
- EBITDA: ₹27 Cr
- Net Profit: ₹17 Cr
- EPS: ₹15.57
⚡ Very efficient margin profile for EPC, but sustainability depends on execution + timely payment.
10. 🥊 Peer Comparison – David vs. Goliaths
| Company | P/E | ROE (%) | Sales (Cr) | MCap (Cr) |
|---|---|---|---|---|
| Kay Cee | 24.6 | 32.1 | 153 | 420 |
| Kalpataru | 38.0 | 9.6 | 22,315 | 21,382 |
| KEC Intl. | 42.9 | 12.1 | 21,846 | 24,494 |
| NBCC | 54.5 | 25.9 | 12,038 | 33,277 |
| Ircon Intl. | 26.5 | 11.9 | 10,759 | 19,275 |
📉 Kay Cee is cheap only on a P/E basis—but risky given its micro-cap size and cash strain.
11. 🧾 Misc – Shareholding & Promoter Behavior
| Date | Promoter Holding |
|---|---|
| Mar 2025 | 70.35% |
| Apr 2025 | 63.08% |
👀 A steep drop without any announced pledging or stake sale rationale.
Also:
- FII + DII buying increasing (now 12.6%)
- Retail shareholding at 24.3% – fairly wide for an SME
12. 🧠 EduInvesting Verdict™
Kay Cee is not your usual boring SME EPC stock.
✅ High ROE/ROCE
✅ Strong order pipeline
✅ Growing brand in the North India infra circle
But also…
❌ Aggressive promoter sell-down
❌ Negative cash flow
❌ High working capital requirements
❌ Valuation not screaming discounted
Final Thought:
“Looks like L&T’s baby cousin—just don’t give it your college fund yet.”
🎯 Tags:
Kay Cee Energy, EPC stocks, SME IPO, Infra stock analysis, Kalpataru vs Kay Cee, high ROE smallcaps, power infra stocks, EduInvesting SME, undervalued EPC companies
✍️ Written by Prashant | 📅 July 1, 2025
