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KEC - Fundamental Analysis: Financial Health & Valuation

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Rating: 3.8

Last Updated Time : 19 Mar 26, 07:10 pm

Fundamental Rating: 3.8

Stock Code KEC Market Cap 14,947 Cr. Current Price 562 ₹ High / Low 947 ₹
Stock P/E 39.1 Book Value 194 ₹ Dividend Yield 0.98 % ROCE 14.6 %
ROE 7.00 % Face Value 2.00 ₹ DMA 50 610 ₹ DMA 200 728 ₹
Chg in FII Hold -4.17 % Chg in DII Hold 2.93 % PAT Qtr 78.7 Cr. PAT Prev Qtr 106 Cr.
RSI 45.2 MACD -20.8 Volume 9,81,598 Avg Vol 1Wk 18,70,940
Low price 518 ₹ High price 947 ₹ PEG Ratio -2.53 Debt to equity 0.90
52w Index 10.2 % Qtr Profit Var 8.00 % EPS 12.9 ₹ Industry PE 15.2

📊 Core Financials

  • Revenue & Profitability: PAT declined sequentially (₹106 Cr → ₹78.7 Cr), showing short-term weakness. EPS at ₹12.9 reflects modest earnings capacity.
  • Margins: ROCE at 14.6% is moderate, while ROE at 7% highlights weak profitability.
  • Debt: Debt-to-equity ratio of 0.90 indicates relatively high leverage compared to peers.
  • Cash Flow: Operating performance is stable but debt levels and margin pressures reduce flexibility.

💹 Valuation Indicators

  • P/E: 39.1, significantly above industry average (15.2), suggesting premium valuation.
  • P/B: 2.9 (₹562 / ₹194), reflecting fair pricing relative to book value.
  • PEG Ratio: -2.53, distorted due to earnings slowdown, making valuation less attractive.
  • Intrinsic Value: Current price ₹562 is above fair value; better entry closer to ₹520–540.

🏢 Business Model & Competitive Advantage

  • Strong presence in EPC and infrastructure projects with diversified operations.
  • Exposure to power transmission and construction sectors supports demand.
  • High debt and weak profitability ratios limit competitive advantage.

📈 Entry Zone & Long-Term Guidance

  • Entry Zone: ₹520–540 range offers attractive entry.
  • Long-Term Holding: Suitable for investors seeking exposure to infrastructure growth, though debt and profitability concerns warrant caution.


✅ Positive

  • DII holdings increased by 2.93%, showing strong domestic institutional support.
  • Dividend yield of 0.98% adds to shareholder returns.
  • ROCE at 14.6% indicates moderate efficiency.

⚠️ Limitation

  • Sequential PAT decline (₹106 Cr → ₹78.7 Cr).
  • ROE at 7% highlights weak profitability.
  • Debt-to-equity ratio of 0.90 indicates high leverage.
  • High P/E (39.1) compared to industry average (15.2).

📉 Company Negative News

  • FII holdings decreased by 4.17%, showing reduced foreign investor confidence.
  • Technical indicators (RSI 45.2, MACD -20.8) suggest bearish momentum.
  • Sequential profit decline raises concerns about earnings consistency.

📈 Company Positive News

  • DII holdings increased by 2.93%, reflecting strong domestic institutional support.
  • Dividend yield of 0.98% supports investor returns.
  • 52-week index gain of 10.2% shows resilience despite volatility.

🏭 Industry

  • Industry P/E at 15.2, much lower than company’s P/E, indicating premium valuation.
  • Infrastructure and EPC sector remains cyclical but supported by government spending and capital projects.

🔎 Conclusion

  • KEC demonstrates moderate fundamentals with exposure to infrastructure growth but faces profitability and leverage challenges.
  • Valuation is premium compared to industry, making entry less attractive at current levels.
  • Entry zone between ₹520–540 is favorable for long-term investors.
  • Overall, a fundamentally stable company with sectoral demand support, though short-term momentum weakness and high debt warrant caution.

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