KEC International reported a revenue of ₹4,270 crore (our estimate of ₹4,860 crore), down 2 per cent y-o-y and up 28 per cent q-o-q. Revenue of T&D segment declined by 16 per cent y-o-y to ₹1,940 crore, while non-T&D segment jumped by 15 per cent y-o-y to ₹2,450 crore. EBITDA fell by 29 per cent YoY (up 5.3 per cent q-o-q) at ₹250 crore (our estimate of ₹320 crore), while EBITDA margin declined by 224 bps YoY and 127 bps q-o-q to 5.9 per cent.
The lower margin is attributable to lower execution and losses in legacy projects in Brazil, which are expected to be completed by Q1-FY23. Adjusted PAT came in at ₹110 crore, down 42.3 per cent YoY and up 19.7 per cent q-o-q (our estimate of ₹150 crore).
Order book stood at ₹23,700 crore, 24.1 per cent YoY, while order inflows jumped by 45 per cent in FY22 to ₹17,200 crore led by the civil segment.
Total borrowing increased to ₹480 crore from ₹320 crore YoY. NWC stood at 137 days during Q4-FY22, an improvement of 4 days q-o-q. For FY23/24, we lower the revenue estimate by 4 per cent/3 per cent factoring the lower execution in T&D segment.
We reduce the EBITDA/PAT estimates by 7 per cent/9 per cent for FY23 and 7 per cent/8 per cent for FY24 to factor the lower margin due to higher commodity prices.
We maintain our BUY rating on the stock, with a revised one-year Target Price of ₹521 from ₹569, maintaining the target multiple of 15x FY24 EPS