KEC International Q3 Results Review - Margin Trajectory To Improve Sequentially: Yes Securities
Going forward, KEC expects adverse impact of SAE legacy projects and margin to improve sequentially
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Yes Securities Report
KEC International Ltd. reported a mixed set of numbers, with healthy topline growth in transmission and distribution (up 40% YoY) and non‐T&D segments such as civil (up 75% YoY) and oil and gas pipelines (up 124%) too contributed to the growth.
Despite robust gross margins, Ebitda margins remained under pressure owing to higher execution of legacy projects at adverse prices and SAE Brazil performance.
Order inflows declined 24% YoY due to delay in order finalisation. As on Q3 FY23 order book stands at ~Rs 289.8 billion (1.8 times trailing twelve months revenue), providing revenue visibility for next few quarters.
Going forward, KEC expects adverse impact of SAE legacy projects and margin to improve sequentially. Management is confident of exceeding previously guided order inflow outlook of Rs 180‐200 billion in FY23 and achieving high single‐digit margins by FY24.
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