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KEC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental 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.