KEC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | KEC | Market Cap | 17,053 Cr. | Current Price | 641 ₹ | High / Low | 947 ₹ |
| Stock P/E | 44.6 | Book Value | 194 ₹ | Dividend Yield | 0.86 % | ROCE | 14.6 % |
| ROE | 7.00 % | Face Value | 2.00 ₹ | DMA 50 | 706 ₹ | DMA 200 | 784 ₹ |
| Chg in FII Hold | -4.17 % | Chg in DII Hold | 2.93 % | PAT Qtr | 78.7 Cr. | PAT Prev Qtr | 106 Cr. |
| RSI | 39.5 | MACD | -19.9 | Volume | 4,84,661 | Avg Vol 1Wk | 6,35,931 |
| Low price | 605 ₹ | High price | 947 ₹ | PEG Ratio | -2.88 | Debt to equity | 0.90 |
| 52w Index | 10.4 % | Qtr Profit Var | 8.00 % | EPS | 12.9 ₹ | Industry PE | 16.9 |
📊 Financials: KEC International shows moderate fundamentals with ROCE at 14.6% and ROE at 7.0%, reflecting below-average capital efficiency. Debt-to-equity ratio of 0.90 indicates high leverage, which requires close monitoring. Quarterly PAT declined from 106 Cr. to 78.7 Cr., highlighting earnings pressure. Cash flows remain steady, but profitability growth is limited.
💹 Valuation: Current P/E of 44.6 is significantly higher than industry average (16.9), suggesting premium valuation. P/B ratio (~3.3) is moderate, while PEG ratio of -2.88 indicates weak growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 610–630 ₹, offering margin of safety compared to current price (641 ₹).
🏢 Business Model & Advantage: KEC operates in engineering, procurement, and construction (EPC) across power transmission, railways, and civil infrastructure. Its competitive advantage lies in scale, diversified project portfolio, and global presence. Market cap of 17,053 Cr. positions it as a mid-cap infrastructure player with resilience but facing profitability challenges.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 610–630 ₹. Long-term investors may hold cautiously given sector demand and diversified operations, but high leverage and weak return metrics temper the outlook. Technical indicators (RSI 39.5, MACD negative) show near-term weakness.
Positive
- DII holding increased (+2.93%), showing strong domestic institutional support.
- Moderate P/B ratio (~3.3) compared to peers.
- Diversified EPC portfolio across power, railways, and civil infrastructure.
- Dividend yield of 0.86% adds modest income appeal.
Limitation
- ROCE (14.6%) and ROE (7.0%) are weak compared to sector leaders.
- High debt-to-equity ratio (0.90) reflects leverage risk.
- High P/E (44.6) compared to industry average (16.9) suggests overvaluation.
- PEG ratio (-2.88) indicates poor growth-adjusted valuation.
- Quarterly PAT decline highlights earnings pressure.
Company Negative News
- Decline in FII holding (-4.17%) reflects reduced foreign investor confidence.
- Weak technical indicators (RSI 39.5, MACD -19.9) show bearish momentum.
Company Positive News
- DII inflows (+2.93%) show strong domestic institutional support.
- Diversified global operations provide resilience against sector cycles.
Industry
- Industry P/E at 16.9 indicates moderate valuation levels.
- Infrastructure sector benefits from government spending and long-term demand.
- Companies with scale and diversified EPC portfolios hold competitive advantage.
Conclusion
⚖️ KEC International demonstrates moderate fundamentals with diversified operations and institutional support. However, high leverage, weak return metrics, and premium valuation temper the outlook. Entry around 610–630 ₹ is recommended for long-term investors, with cautious monitoring of debt levels and profitability trends.
Would you like me to also highlight support and resistance levels based on DMA and RSI to add a technical trading perspective alongside this fundamental view?