KEC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.0

📊 Core Financials & Profitability

Profit Trends: Quarterly PAT dropped sharply from ₹161 Cr to ₹36.8 Cr, though YoY profit variation remains positive at 14.6%. EPS of ₹12.3 is modest for a ₹874 stock.

Return Metrics

ROE: 7.00% and ROCE: 14.6% — decent, but below top-tier infra peers.

Debt Profile: Debt-to-equity at 0.65 — moderate and manageable for an EPC-heavy business.

Dividend Yield: 0.63% — modest, with consistent payouts.

💸 Valuation Indicators

Metric Value Insight

P/E Ratio 70.8 Highly overvalued vs. industry PE of 20.6.

P/B Ratio ~4.58 Elevated relative to book value ₹191.

PEG Ratio −4.57 Negative PEG suggests earnings contraction or unreliable growth forecast.

🔍 Conclusion: Valuation is stretched. The market is pricing in future recovery, but current earnings don’t justify the premium.

🏗️ Business Model & Competitive Edge

Core Operations: KEC International is a diversified EPC player in power transmission, railways, civil, cables, and solar.

Strategic Strengths

Global footprint across 110+ countries.

Strong order book and execution capabilities.

Delivered 235.4% returns over 5 years with 13.7% quarterly revenue growth

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Growth Outlook

Consensus price target is ₹1,048.75, implying ~20% upside

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Brokerages like Axis Direct, Sharekhan, and Ventura have targets ranging from ₹950 to ₹1,270

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Technical analysis suggests bullish momentum with price above both 50-DMA and 200-DMA

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📉 Technicals & Entry Zone

RSI: 57.3 — neutral, slightly bullish.

MACD: 11.8 — positive momentum.

DMA Levels: Price above both 50-DMA and 200-DMA — trend strength confirmed.

📌 Suggested Entry Zone: ₹840–₹860 — near DMA levels, offering a better margin of safety.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong order book, global reach, and sector tailwinds support long-term value.

Buy on Dips: Prefer entry below ₹860, especially if RSI cools off.

Monitor: Execution timelines, margin recovery, and infra capex cycles.

You can explore Trendlyne’s analyst targets and research reports or StockPriceArchive’s technical forecast and multibagger outlook for deeper insights. Let me know if you'd like a peer comparison with Kalpataru Projects or RITES next.

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