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KEC - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.2
📊 Financial Overview
- Profitability: PAT dropped significantly from ₹161 Cr to ₹36.8 Cr QoQ, though YoY growth is 14.6%.
- Return Metrics: ROE at 7.00% and ROCE at 14.6% are modest, indicating average capital efficiency.
- Valuation: P/E of 66.3 is nearly 3x the industry average (22.1), suggesting steep overvaluation.
- P/B Ratio: With a book value of ₹191 and price of ₹818, P/B is ~4.28, reflecting a premium valuation.
- PEG Ratio: -4.28 signals earnings contraction and valuation distortion.
- Debt Profile: Debt-to-equity ratio of 0.65 is moderate and manageable for an EPC player.
- Momentum: RSI at 35.8 and MACD at -6.82 suggest bearish sentiment and potential for further correction.
🏢 Business Model & Competitive Edge
- KEC International is a global EPC major in power transmission, railways, civil, and cables.
- Its diversified business model and global footprint offer resilience against sectoral volatility.
- Strong execution capabilities and order book visibility support long-term growth potential.
💡 Entry Zone Recommendation
- Current price is below both DMA 50 (₹851) and DMA 200 (₹850), indicating a downtrend.
- Suggested Entry Zone: ₹780–₹810 for accumulation on dips.
- Long-term holding viable if earnings stabilize and valuation normalizes.
✅ Positive
- Diversified business segments across power, railways, and civil infrastructure.
- Debt-to-equity ratio of 0.65 is manageable for capital-intensive operations.
- EPS of ₹12.3 provides a solid earnings base.
⚠️ Limitation
- High P/E and negative PEG ratio suggest valuation concerns.
- ROE is low compared to industry peers.
- Significant QoQ PAT decline raises short-term caution.
📉 Company Negative News
- FII and DII holdings declined marginally, indicating cautious institutional sentiment.
- Stock has corrected ~38% from its 52-week high of ₹1,313.
📈 Company Positive News
- Improving execution in civil and railway segments.
- Strong order book visibility and global project pipeline.
🏭 Industry
- Infrastructure and EPC sectors benefit from government capex and global energy transition.
- Industry P/E of 22.1 supports moderate valuation for quality players.
🧾 Conclusion
- KEC International is a diversified EPC player with global exposure but currently faces earnings volatility and valuation pressure.
- Entry near ₹780–₹810 offers a better risk-reward for long-term investors.
- Monitor earnings recovery and institutional flows for sustained upside.
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