KEC - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: KEC International Ltd. (₹860)

Investment Rating: 3.3

KEC offers infrastructure exposure with solid execution capabilities and decent capital returns. The recent correction from highs makes it more attractive, though current valuation still needs earnings support for sustainable upside.

🏗️ Fundamental View

ROCE: 18.0%, ROE: 12.0%

✅ Healthy asset and equity efficiency — good sign for long-term compounding.

PEG Ratio: 2.21

❌ Expensive for its growth — price may be running ahead of fundamentals.

EPS: ₹22.8, P/E: 37.7 vs Industry PE: 23.8

⚠️ Overvalued relative to peers — potential volatility if earnings slip.

Dividend Yield: 0.64%

🔸 Mild yield — not meaningful for income investing.

Debt-to-Equity: 0.74

🟠 Slightly elevated — manageable for infra firms, but leverage should improve.

Qtr Profit Var: ↑ 42.3%, but Q/Q PAT dropped from ₹268 Cr to ₹125 Cr

🔍 Strong YoY momentum, but quarterly dip needs scrutiny — possibly seasonal or project timing related.

📉 Technical Analysis

DMA 50: ₹864, DMA 200: ₹853

Price hovering around both — neutral trend with possibility of breakout or breakdown.

RSI: 44.2, MACD: -4.54

Mild bearish signal — wait for MACD reversal and RSI climb toward 50+ for entry confirmation.

Volume: Strong

Uptick in interest — supports range-bound accumulation.

FII/DII Shift

FII ▲ 0.6%, DII ▼ 1.63% — foreign investors accumulating, domestic taking profits perhaps after previous rally.

📍 Ideal Entry Price Zone

Accumulation Range: ₹805–₹840

Aligns with RSI support, MACD bottoming signals, and value zone near DMA200.

Best entered in staggered tranches or post-earnings review.

📆 Exit Strategy / Holding Horizon

If holding the stock

Holding Duration: 1.5–3 years

Targeting infra recovery and execution visibility — better for medium-term growth.

Exit Range: ₹1,180–₹1,300

Matches prior highs — consider booking profits if PEG remains >2 without EPS growth momentum.

Risk Flags

ROE slips <10%

PEG >2.5 with declining EPS

2+ quarters of PAT stagnation

MACD fails to cross zero after consolidation

🧭 Verdict

KEC is a cyclical infrastructure play with decent fundamentals. Though valuation is rich, its ROCE and PAT variance support a recovery narrative. It's a moderate-growth, execution-sensitive candidate — good for diversified portfolios targeting capex and infra themes.

Want me to line this up against Kalpataru Power or Techno Electric for a sharper sector lens? I’d be happy to layer in that comparison.

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