01 — At a Glance
The Global Infrastructure Firm Pretending It Doesn’t Have Execution Headaches
- 52-Week High / Low₹947 / ₹518
- Q3 FY26 Revenue₹6,001 Cr
- 9M FY26 Revenue₹17,116 Cr
- Q3 FY26 PAT₹127 Cr
- TTM EPS₹25.59
- Book Value₹212
- Price to Book2.49x
- Debt / Equity0.94x
- Order Book + L1>₹41,000 Cr
- Tender Pipeline₹1,80,000 Cr
The Setup: KEC just posted Q3 FY26 revenue of ₹6,001 crore (+12% YoY), with EBITDA margin of 7.2% (up 20 bps YoY). Order book stands at ₹36,725 crore—the highest in 11 years. Management says ₹1,80,000 crore of tenders are floating around. But here’s the thing: they’re also telling you margins will hover around 7–7.5% this year, profitability is trapped in water projects that won’t pay up, and half the Civil segment is executing with 2,000–3,000 more workers than they actually need. High growth, compressed margins, execution chaos. Classic infrastructure playbook.
02 — Introduction
Who Even Is KEC, and Why Does Their Stock Keep Falling?
Let’s set the stage. KEC International is one of the world’s largest power transmission EPC (Engineering, Procurement, Construction) companies. They’ve been around since 1945. RPG Group owns them. And they operate in over 110 countries doing things like: building transmission towers (through their acquisition SAE Towers), laying power lines, designing substations, building railways, executing solar projects, manufacturing power cables, and apparently also trying to install immersion cooling systems in data centres—though they’ll admit that’s “four to five years away.”
In FY25, they delivered ₹21,847 crore in revenue. In the first nine months of FY26 (April–December 2025), they’ve already crossed ₹17,116 crore. They’re growing. Fast. But the stock is down 23.4% over the last year. Why? Because every time they post a result, they also post a new excuse for why margins are compressed, why working capital is exploding, why clients aren’t paying for water projects, why legacy metro projects aren’t inaugurated yet, and why they need another ₹300–400 crores in debt to fund growth.
Q3 FY26 was no exception. Revenue +12% YoY. EBITDA +15%. But PAT only +35.5% because interest costs and exceptional provisions ate the gain. The order book is gangster (₹36,725 Cr)—bigger than their entire annual revenue. But profitability remains pinched between execution challenges and poor pricing on legacy work. Management’s honest about the headwinds. Your portfolio’s angry about it anyway.
Concall Tone (Jan 2026): Management said “very conscious decision to degrow transportation,” “calibrated approach to Water,” and “under-absorption of overheads.” Translation: we took on projects we shouldn’t have, payments are late, and we’re now in damage-control mode.
03 — Business Model: Building The World’s Power Grid (Slowly)
Six Business Verticals. Three Are Growing. Three Are a Mess.
KEC operates across six main verticals, and the story of FY25–FY26 is essentially a tale of one (T&D) thriving, two (Civil, Renewables) struggling with execution, and three (Transportation, Cables, Oil & Gas) in various states of repositioning.
Transmission & Distribution (T&D): 57% of FY25 revenue, but now 67% of 9M FY26 revenue. This is the cash cow. They design and build high-voltage transmission lines, substations, and distribution networks. Revenue grew 48% from FY23 to FY25. T&D has a “success ratio” of 10–15% in competitive bids, and management explicitly said they’re targeting “private sector clients” because India’s intrastate transmission projects have moved to TBCB (Tariff Based Competitive Bidding), where market share just jumped from 45% to 75% in favour of private players. KEC’s positioning itself nicely here.
Civil (Buildings, Factories, Water): 20% of FY25 revenue. This segment is the chaos epicentre. Water projects (part of Jal Jeevan Mission and similar) have slow payments. Building & Factory projects are executing fine, but labor shortages are “costing ₹500–600 crore per quarter” in missed revenue. Management literally said they moved headcount from 18,000 to 24,000, and still need 2,000–4,000 more. They’ve deliberately “throttled” water execution to protect margins because collections are slower than a government approval process.
Transportation (Railways, Metro, Signalling): 9% of FY25 revenue, down from 21% in FY23. This is intentional. Management made a “very conscious decision to degrow” because legacy metro projects are stuck in closure limbo (they’re technically complete, but haven’t been inaugurated—and KEC is still maintaining them, burning ₹15–20 crore per month). They’re shifting focus to KAVACH (train collision avoidance system) and other technology-led safety systems, which have better margins.
Renewables: 4% of FY25 revenue, but revenue grew 870% from FY23 to FY25. Two 500 MW solar projects are progressing. They just entered wind (100+ MW order). But profitability is thin because it’s still project-ramp phase.
Cables & Conductors: 8% of FY25 revenue. Growing, hedged (100% commodity hedged on orders), with capex planned for new elastomeric cables.
Oil & Gas: 2% of FY25 revenue. Weak domestic pipeline, so they’re chasing Middle East work.
💬 Here’s the elephant: T&D is on 🔥, but Civil is in 🚒 mode. Which will dominate earnings in 12 months—the booming segment or the one that’s learning to say “no”?
04 — Financials Overview
Q3 FY26: Growing Revenue. Shrinking Profit Margins. Story of Infrastructure, 2025–26.
Result type: Quarterly Results | Q3 FY26 EPS: ₹4.79 | Annualised EPS (Q3×4): ₹19.16 | TTM EPS: ₹25.59
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 6,001 | 5,349 | 6,092 | +12.2% | -1.5% |
| Operating Profit (EBITDA) | 430 | 374 | 430 | +15.0% | Flat |
| EBITDA Margin % | 7.2% | 7.0% | 7.1% | +20 bps | +10 bps |
| PAT (Before Exceptional) | 171 | 155 | 161 | +10.3% | +6.2% |
| PAT (Reported) | 127 | 130 | 161 | -2.3% | -21.1% |
| EPS (₹) | 4.79 | 4.87 | 6.04 | -1.6% | -20.7% |
Read This Carefully: Q3 revenue grew 12.2% YoY, but PAT (reported) actually fell -2.3%. Why? An “exceptional provision of ₹59 crores in line with the new Labor Code.” Strip that out, and operating PAT grew 10.3%. More importantly: QoQ revenue fell 1.5% (Q3 at ₹6,001 vs Q2 at ₹6,092), suggesting execution momentum isn’t as smooth as “12% YoY growth” sounds. EBITDA margin of 7.2% is held up by management’s acknowledgment that it’s a “transition year” and that normalized margins are 9–10% (but won’t be reached until FY28). In other words: they’re telling you today’s margins are artificially depressed.
05 — Valuation: Fair Value Range
What’s This Infrastructure Empire Actually Worth?
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