KEC International ₹1,236 Crore Civil Order: A Deep Dive into Market Impact and Strategic Growth

KEC International, a prominent global infrastructure Engineering, Procurement and Construction (EPC) major, experienced a notable surge in its share price on Wednesday, June 25, following the announcement of a substantial new order. The company confirmed it has secured orders worth ₹1,236 crore in its Civil business. This significant acquisition has propelled KEC International's shares, which opened at ₹909.55 per share on June 25 compared to ₹888.70, to an intraday high of ₹933.95 apiece, representing a climb of over 4.93%. As of the announcement, shares were trading at ₹927.85 apiece on the National Stock Exchange, reflecting a 4.41 percent rise. As of 12:15 Pm, the company’s shares are trading at ₹927.60, with an increase of 4.42%.

Strategic Foray into Premium High-Rise Residential 

This latest order represents KEC International's largest individual order to date within its Buildings & Factories (B&F) segment. The contracts involve high-rise residential projects located in Western India, secured from well-known real estate developers. These projects entail the development of over 50 lakh (5 million) square feet of residential buildings, complete with associated facilities. This marks a crucial milestone in the company's deliberate expansion into the premium high-rise residential segment, with some buildings projected to reach up to G+70 storeys. The company is now constructing over 70 high-rise buildings for marquee clients across the country.

Robust Growth in Year-to-Date Order Intake 

The newly secured orders have substantially fortified KEC's Civil order book, particularly within the B&F segment, and broadened its client base with the addition of two prestigious entities. Consequently, KEC International's year-to-date order intake has exceeded ₹5,500 crore, signifying a healthy growth of approximately 35 percent compared to the previous year.

While the recent order has provided a strong uplift, KEC International's stock has experienced volatility amidst broader weak market sentiments. Over the past six months, the shares have seen a decline of over 21 percent. However, there has been a positive trend in the shorter term, with the stock ascending nearly 8 percent in the last month, or over 7.2 percent. Year-to-date, the stock has tumbled over 23 percent. The company's current market capitalisation stands at ₹24,603.54 crore.

Underlying Financial Health 

For the March quarter (Q4 FY24), the EPC firm reported a 76 percent growth in consolidated net profit, reaching ₹268 crore, compared to ₹152 crore in the same quarter of the previous fiscal year. Revenues for the quarter also increased to ₹6,872 crore, up 11.46 per cent from ₹6,165 crore in the corresponding period a year ago. For the entire fiscal year (FY24), KEC International's net profit (PAT) was ₹571 crore, a 64.55 per cent increase against ₹347 crore in FY24. Revenues for the full fiscal year grew to ₹21,847 crore from ₹19,914 crore.

Global Footprint of an EPC Powerhouse 

KEC International operates as a global infrastructure EPC major with a diverse portfolio. Its presence spans several key verticals, including Power Transmission & Distribution, Civil, Transportation, Renewables, Railways, Urban Infrastructure, Oil & Gas Pipelines, and Cables. The company boasts an extensive international footprint, conducting operations in over 110 countries, encompassing EPC projects, and the supply of towers and cables.

This substantial new order, particularly in the high-growth Civil segment, positions KEC International for continued expansion and reinforces its strategic objectives in the burgeoning Indian real estate and infrastructure landscape.

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