KEC International, a leading firm of the RPG Group, has reported a consolidated net profit of Rs 55.83 crore ($7.5 million) for Q2 ended on September 30, 2023. This profit was largely buoyed by increased sales during India's general elections period which saw a surge in government infrastructure spending.
The company, operating in power transmission & distribution, civil and railways sectors, achieved its highest-ever revenue in fiscal 2023 and improved working capital. The firm posted a revenue growth of 10.7% YoY to Rs 4,500 crore ($604 million) and enhanced EBITDA margins to 6.1%, signaling rising profitability.
Despite the positive figures, KEC International's bottom line was impacted by a tax outgo of Rs 9.95 crore ($1.3 million), in stark contrast to the previous year's tax inflow of Rs 28.67 crore ($3.8 million). Last quarter's expenditure accounted for 98.9% of net sales with an interest rate of 4% of revenues.
The firm has a robust order book worth Rs 31,320 crore ($4.2 billion) and won orders worth Rs 9,000 crore ($1.2 billion) in FY23-24 due to strong performances in T&D and Civil businesses. With better execution, higher subsidiary contributions, controlled working capital, and increased global infrastructure investments, KEC's earnings visibility is projected to remain strong for the next two years.
KEC International operates in over 45 countries and expects robust demand going forward, driven by its diverse operational sectors and the global trend towards increased infrastructure investments.
InvestingPro Insights
KEC International, a firm with a strong presence in the Construction & Engineering industry, has a promising outlook according to InvestingPro data and tips. The company's net income is expected to grow this year, a positive indicator for investors. Furthermore, KEC International has been consistent in maintaining dividend payments for 18 consecutive years, demonstrating its commitment to shareholder value.
The firm's revenue growth in the last twelve months as of Q1 2024 stood at a robust 30.24%, with gross profit margins at 32.12%. These figures underscore the firm's strong financial performance.
With a high return over the last decade and a significant price uptick over the past six months, KEC International demonstrates solid investment potential. The InvestingPro platform further offers an additional 8 tips related to KEC International, providing more comprehensive insights for prospective investors.
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