KEC International Q1 FY27 Results (NSE: KEC)
Signal: Steady quarter
The read
The key inflection is a reversal from the prior two quarters of YoY margin expansion: consolidated operating margin fell to 5.79% from 6.97% YoY and 7.01% in Q4FY26, while PAT fell 41.7% to ₹72.62 crore despite a 423bps gross-margin expansion; the weakness is concentrated in the much larger EPC business, while cables grew 56.9% YoY.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹5,023.54 Cr | 0.0% | -21.4% |
| EBIT | ₹253.93 Cr | -18.0% | |
| Net profit | ₹72.62 Cr | -41.7% | |
| EPS | ₹2.73 | -41.7% | |
| EBIT margin | 5.79% |
P&L walk
Consolidated revenue of ₹5023.54 crore was flat YoY but fell 21.4% QoQ; gross margin expanded to 55.25% from 51.02% YoY as material costs declined to 44.74% of revenue from 49.00%, but operating margin contracted to 5.79% from 6.97%, with EBITDA down 14.3% YoY and PAT down 41.7% to ₹72.62 crore.
Segments
The cable-led Others segment was the growth and margin bright spot, with revenue up 56.9% YoY to ₹600.67 crore and result up 160.1% to ₹27.96 crore, but EPC, representing ₹4595.21 crore of revenue, declined 3.3% YoY and result fell 22.5% to ₹262.85 crore, dragging the group.
Key positives
- Gross margin expanded 423bps YoY to 55.25% as material costs declined to 44.74% of revenue from 49.00%, providing a variable-cost tailwind despite the weak earnings outcome.
- The Others segment, mainly cables, grew revenue 56.9% YoY to ₹600.67 crore and segment result 160.1% to ₹27.96 crore.
- Depreciation rose 10.8% YoY alongside an 8.5% increase in segment assets, producing a clean depreciation-to-capex cross-check.
Key concerns
- Consolidated PAT declined 41.7% YoY to ₹72.62 crore and EPS declined 41.7% to ₹2.73, reversing the +37.2% and +88.2% EPS growth recorded in Q1FY26 and Q2FY26.
- Operating margin contracted 118bps YoY to 5.79% even though gross margin expanded 423bps, pointing to weaker conversion below materials.
- EPC revenue declined 3.3% YoY to ₹4595.21 crore and segment result declined 22.5% to ₹262.85 crore, overwhelming the cable segment's growth.
- Debtor days increased to 109 from 98 YoY and inventory days to 56 from 41 YoY, while the debt-equity ratio rose to 0.88x from 0.79x.
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