2 weeks Ago
KEC International is optimistic about improving its profit margins in the financial years 2026 (FY26) and 2027 (FY27). In an interview with CNBC-TV18, Vimal Kejriwal, the MD & CEO of the company, expressed confidence, stating, "We have given a guidance of 8-9% for next year, and I think we are pretty hopeful of achieving that because a large number of legacy projects have started getting over or have already been completed in FY25. So, I think FY26 and FY27 should definitely be better on the margin side.
" Looking ahead, the company anticipates that the Transmission & Distribution (T&D) and civil sectors will be key drivers for growth in their order book. Kejriwal highlighted the continued dominance of the T&D segment, stating, "Even this year, out of an order intake of up to ₹25,000 crore, 72% is T&D. And if you look at that number, among T&D, almost 60% is international and 40% is India.
So, T&D will clearly drive." The civil sector, particularly in residential and water projects, is also expected to contribute significantly to future order inflows. The company is also seeing a substantial increase in its bidding pipeline, which has now reached ₹1.
7–₹1.75 lakh crore. This growth is largely attributed to opportunities in the Middle East, especially Saudi Arabia, and a resurgence in water project bids.
For FY26, KEC International is aiming for a strong order inflow of over ₹30,000 crore, anticipating a growth of around 15%. In the last quarter (January to March 2025), the company secured orders worth approximately ₹6,000 crore. While the total order inflow for the entire fiscal year was close to ₹25,000 crore, slightly below the company's initial guidance.
Currently, KEC International holds a robust order book of around ₹37,000 crore to ₹38,000 crore, which includes projects where the company is the lowest bidder (L1) but the final order is yet to be received. This positive outlook comes at a time when KEC International has recently announced bagging new orders worth ₹1,236 crore for its T&D projects in India and West Asia. Below is the verbatim transcript of the interview.
Q: What was the total order inflow that you saw in January to March quarter (Q4FY25)? Also, for the year, it appears that you have surpassed the guidance that you had given on order inflows. So, what is the number you are ending at? Kejriwal: I think Q4FY25, if I'm not mistaken, was around ₹6,000 crore of order intake. We are still L1 in some of them.
But anyway, we are very close to ₹25,000 crore. We have not actually surpassed the guidance in that sense because we are slightly below ₹25,000 crore. We had said we will do ₹25,000 crore.
And if you look at these orders, 55-60% is from transmission, and then civil, and then cables. I think that's the broad breakup of this particular new order. Q: What about for the coming year? Since you're saying you're L1 in some positions, could you quantify the book at which you're L1? And for FY26, what kind of order inflow are you looking at? What does this take your current order book to? Kejriwal: Our order book plus L1 currently is around ₹37,000–₹38,000 crore.
It will go down slightly because we’ll still have to factor in what would be the March revenues, etc. So, I think broadly, we’ll end up around ₹36,000–₹37,000 crore, including L1, for the year. That’s our expectation.
We expect to grow by 15% or so next year. So, we’re still working out the order intake target, but it will definitely be ₹30,000 crore-plus. Q: Looking at the overall environment and how you're looking at the bidding pipeline ahead for this year, FY26 — I mean, we've discussed this in the past, that the margin profile didn’t improve as much as you would have liked in Q3, but you've always maintained that FY26 and FY27 will be much better from a margin expansion perspective.
I mean, you've been talking about levels of maybe even 9%. So, looking at the bidding intensity and the pipeline, are you still confident of getting to those levels? Kejriwal: So, to me, what is happening is the bidding pipeline is definitely increasing. We’ve always been talking about around ₹1.
4 lakh–₹1.5 lakh crore of tender pipeline — right now it’s gone above that. It’s almost ₹1.
7 lakh–₹1.75 lakh crore. A large part is driven by the Middle East, and especially Saudi Arabia.
We are seeing water projects that were on hold getting bid out. So, some traction we are seeing on the water side also, which is why the bidding pipeline seems to have increased by ₹20,000–₹25,000 crore as compared to last time. On margins, I think we are pretty comfortable.
We have given a guidance of 8-9% for next year, and I think we are pretty hopeful of achieving that because a large number of legacy projects have started getting over or have already been completed in FY25. So, I think FY26 and FY27 should definitely be better on the margin side. Q: Which of the segments — I mean, where are you likely to see maximum traction? Of course, the last couple of orders — you’ve managed several orders from the Middle East as well.
In India, in all our past conversations, you’ve been telling us that obviously the T&D segment has been doing well, while railways was weak. So now, as you look forward to this year — let’s say talk about the next four to five months at least — which segments will drive the order book growth? Kejriwal: So, primarily, it will still be T&D. Even this year, out of an order intake of up to ₹25,000 crore, 72% is T&D.
And if you look at that number, among T&D, almost 60% is international and 40% is India. So, although we understand India T&D much more and we track it more, I’m just saying that T&D international is also doing very, very well. So, T&D will clearly drive.
The second piece will be civil, which was a bit — I’ll say — low this year in order intake. We do expect that to also go up significantly, especially driven by residential and the water segment. And we’re still seeing a lot of traction happening in metals, mining, etc.
Most of our industrial orders have been in the steel segment. So, I think these are the three areas that we see driving our order book in FY26. Q: In the past — you spoke about labour issues that were becoming a bit of a challenge to deal with.
Has that been sorted out? Kejriwal: So, let me put it this way, we are trying unconventional means, which we were not using before. For example, we were never using labour aggregators or contractors like that — so we have started using them. Obviously, mechanisation has picked up a lot.
So, we are trying to see how we can optimise the need for labour. It’s improving. I’d say it’s slightly better than the last quarter.
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