KEC International Limited Transfers Cable Business to Subsidiary, Sees Rs 13,500 Crore Order Book Amid Strong Growth Prospects

KEC International Limited Transfers Cable Business to Subsidiary, Sees Rs 13,500 Crore Order Book Amid Strong Growth Prospects

Mumbai, December 28, 2023 - KEC International Limited (KEC) has successfully transferred its cable business to subsidiary KEC Asian Cables Limited (KACL), effective January 1, 2025. This strategic move is expected to streamline operations and enhance efficiency in the cables segment.

The transfer of the cable business comes at a time when KEC's financial performance is looking robust. In Q2 FY'25, the company reported revenues of Rs 5,113 crores, exhibiting a 14 percent year-on-year growth driven by its transmission and distribution (T&D) segment. The company's EBITDA for the quarter grew by 17 percent, with margins improving to 6.3 percent.

The achievement comes as the company secured a record year-to-date order intake of Rs 13,500 crores in Q2 FY'25, marking a 50 percent growth year-on-year. A significant portion (70%) of this order intake came from the T&D segment. The total order book now exceeds Rs 34,000 crores, with an additional Rs 8,500 crores in the pipeline.

"KEC's commitment to business diversification and efficiency is reflected in its decision to transfer its cable business to a subsidiary," said a company spokesperson. "This move will enable KACL to concentrate on optimal operations, leveraging our technology expertise to improve growth prospects."

By sector-wise performance, the transmission and distribution segment recorded revenues of Rs 2,831 crores, up 28 percent year-on-year, driven by robust project execution in India and overseas. The civil segment reported a 9 percent revenue rise to Rs 1,152 crores despite labor shortages.

The oil and gas segment reported revenues of Rs 92 crores with an emphasis on international expansion. Meanwhile, the railways segment declined by 35 percent but secured Rs 1,300 crores in new orders, including metro projects.

In addition, KEC reinforced its commitment to sustainability and ranked as top company in the infrastructure engineering sector for environmental, social, and governance (ESG) principles.

Considering its recent performance and strong order book, KEC's stock has delivered robust gains over the last year and 12.37 percent in the past month. With a growth forecast from EBITDA margin guidance of 9-10 per cent by the end of FY'25, investors may look upon this as an attractive investment opportunity.

Disclaimer: The article is for informational purposes only and not investment advice