KEC International shares gained over 3% in Wednesday’s trade after Motilal Oswal upgraded the stock to ‘Buy’ from ‘Neutral’, setting a target price of ₹920 per share.
The upgrade came after the company’s strong Q2FY26 performance, supported by steady growth in its transmission and distribution (T&D) segment and improving outlook for non-T&D businesses like civil and railways.
In the September quarter, KEC’s revenue rose 19% year-on-year, while EBITDA jumped 34%, leading to an 80-basis-point expansion in margins to 7.1%. Net profit surged 88% YoY, although it came in slightly below expectations due to higher interest costs.
Order inflows were another highlight, up 81% YoY to ₹10,500 crore, taking the company’s total order book to ₹39,300 crore — a 15% increase from last year.
Motilal Oswal noted that the T&D segment continues to be KEC’s key growth engine, backed by strong domestic and international demand. The brokerage also expects non-T&D verticals to pick up meaningfully in the second half of FY26 as older, low-margin projects near completion, helping margins improve further.
Although Motilal Oswal trimmed its FY26–28 earnings estimates by 5–11% due to higher debt and working capital requirements, it still expects solid growth ahead — projecting revenue, EBITDA, and PAT to grow at a 17%, 23%, and 33% CAGR, respectively, over FY25–28.
By FY28, the brokerage expects KEC’s return on equity (RoE) and return on capital employed (RoCE) to touch 18% and 16%. At 19x/15x FY27/28 estimated earnings, Motilal Oswal believes the stock offers an attractive entry point post recent corrections, calling KEC a strong play on the revival in private and global T&D capex.
