KEC International Limited

Industrials — Engineering & Construction · NSE

₹352.40−₹3.70 (−1.04%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

The 60-second version of KEC International Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

KEC International Limited engages in the engineering, procurement, and construction (EPC) business.

IndustryEngineering & Construction

SectorIndustrials

Employees7,878

Annual revenue₹23,301 Cr

How does it make money?

Turns over ₹23,301 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 7,878 employees supports ₹2.96 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.96 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 20.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 9.8% against a peer median of 14.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE14.1%

What is the outlook?

25 analysts covering the stock expect revenue to grow about 13.7% and earnings to grow about 42.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+13.7%

Est. earnings growth+42.7%

Analysts25

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +37% while net margin moved +151% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+37%

Margin effect+151%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Debt/Equity of 0.87x is manageable
• Current ratio of 1.23 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 2.2x — little room if profits dip
✗ Debt has grown 16.7% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

54/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

82/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

16.9x

3Y Median

62.3x

40 monthly readings · mean 61.7x · range 15.5x–135.1x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 73% below its 3y median of 62.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 44% below the peer median of 30.1x.

vs. its own history

Cheap

62.3x median over 40 months · -73%

vs. sector peers

Cheap

30.1x median of 3 peers · -44%

vs. generic bands

Fair

15x–35x

EV/EBITDA

7.8x

PEG

0.33

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 5.2% to 7.8% over 3 years.
Return on equity is rising
ROE has improved from 4.7% to 9.8%.
Return on capital is rising
ROCE has improved from 15.6% to 20.2%.
High return on capital employed
ROCE of 20.2% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 59% over 3 years, from ₹3,383 Cr to ₹5,378 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 166% against revenue up 37% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹743 Cr in the latest year.
🟡Low reported insider holdingOwnership
Reported insider holding is 4.6%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 5.2% to 7.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 73% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 44% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 166% against revenue up 37%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 8% a year✓ 11.1% CAGR
Latest reported year was 0.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹743 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 7 neutral · 2 weak

Market Cap

₹9,381 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.9x

Fair

Fairly valued against the generic band

P/B Ratio

1.52x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹20.8

Profitable

Profitable on a per-share basis

ROE

9.8%

Moderate

Moderate capital efficiency

ROCE

20.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.87x

Moderate

Moderate leverage

Revenue Growth (YoY)

0.0%

Modest

Modest growth

Profit Growth (YoY)

-41.7%

Falling

Profits are shrinking

Dividend Yield

1.56%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹743 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

9.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

4.8%

Weak

Thin margins leave little room for error

Net Margin

2.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.08

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

376.5 / 406.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

26.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹16,997 Cr	₹19,595 Cr	₹21,537 Cr	₹23,301 Cr	+11.1%
EBITDA	₹887 Cr	₹1,285 Cr	₹1,622 Cr	₹1,828 Cr	+27.3%
EBITDA Margin	5.2%	6.6%	7.5%	7.8%	—
PAT (Net Profit)	₹176 Cr	₹347 Cr	₹571 Cr	₹606 Cr	+51.0%
EPS	₹6.85	₹13.49	₹21.8	₹22.75	+49.2%
ROE	4.7%	8.5%	10.7%	9.8%	—
ROCE	15.6%	23.9%	23.2%	20.2%	—
Total Debt	₹3,383 Cr	₹3,961 Cr	₹3,957 Cr	₹5,378 Cr	+16.7%
Free Cash Flow	₹435 Cr	₹74 Cr	₹237 Cr	-₹743 Cr	—

🟢 Revenue has grown at 11.1% a year over 3 years.

🟢 EBITDA has grown at 27.3% a year over 3 years.

🟢 EBITDA Margin has risen from 5.2% to 7.8% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has grown at 51.0% a year over 3 years.

🟢 EPS has grown at 49.2% a year over 3 years.

🟢 ROE has risen from 4.7% to 9.8% over 3 years (+5.2 pts).

🟢 ROCE has risen from 15.6% to 20.2% over 3 years (+4.6 pts).

🔴 Total Debt has grown at 16.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹435 Cr to -₹743 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹25,158 Cr

Total Liabilities

₹18,998 Cr

Cash & Equivalents

₹409 Cr

Operating Cash Flow

-₹414 Cr

Capex

-₹329 Cr

Shareholding (proxy)

Institutional Holding

73.5%

Insider Holding

4.6%

Corporate Actions

Dividend Rate

₹5.5

Ex-Dividend Date

07 Aug 2026

Analyst Consensus

Recommendations

21 Buy · 2 Hold · 2 Sell

Target Price (Mean)

₹533.44

+51.4% vs CMP

Target Range

₹354 – ₹648

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

1 positive2 mixed3 general

KEC International: Has the de-rating gone too far?

Value Research, 14 Aug

KEC Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

KEC International ESG rating rises to 66 for FY26 from 65

scanx.trade, 16 Oct

KEC Int'l: Why Kotak upgraded stock to 'Add' despite 60% fall in a year

Business Standard, 09 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

KEC International Limited Just Missed EPS By 13%: Here's What Analysts Think Will Happen Next

Simply Wall Street, 13 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

KEC International - 10 Nifty500 stocks that have fallen up to 58% in a year

The Economic Times, 14 Oct

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth · Valuation

MiddlingBusiness Quality · Profitability · Risk

WeakFinancial Health

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑