KEC International Q2 FY26: strong execution, sharper margins, and a record pipeline

KEC International, the RPG Group’s global EPC major across power transmission & distribution (T&D), civil, rail, renewables, oil & gas pipelines and cables, turned in a confident performance for the quarter ended 30 September 2025 (Q2 FY26). Consolidated revenue grew 19% YoY to ₹6,092 crore while PAT jumped 88% YoY to ₹161 crore, with EBITDA margin expanding to 7.1%. Management highlighted continued momentum in T&D and steady profitability improvements, supported by lower finance-cost intensity and a beefy order pipeline.

KEC’s execution engine looks visibly healthier than a year ago. Compared to Q2 FY25, when revenue stood at ₹5,113 crore, EBITDA at ₹320 crore (6.3% margin), PBT at ₹113 crore and PAT at ₹85 crore, the latest print shows simultaneous growth across the P&L and better operating leverage. Finance costs as a share of revenue also improved YoY (2.8% vs 3.3%)—useful in a working-capital-intensive EPC business.

On a sequential view, Q2 stacked up well against Q1 FY26, when KEC had posted revenue of ₹5,023 crore, EBITDA of ₹350 crore (7.0%) and PAT of ₹125 crore. The sequential uptick in topline alongside a maintained-to-improved margin base suggests execution traction as project sites ramp up through the monsoon and early festive months.

Quick-glance comparison: Q2 FY26 vs Q1 FY26 vs Q2 FY25 (Consolidated)

Sources: Company press releases for Q2 FY26 and Q1 FY26; KEC investor deck/Q2 FY25 release for prior-year comps. NSE India Search Archives+2RPG Group+2

What drove the quarter

1) Execution breadth and mix:
Management characterised Q2 as “another quarter of strong performance”, underpinned by higher site productivity and a favourable mix—particularly in T&D, where India grid expansion and inter-regional corridors remain a secular driver. The EBITDA margin widened 80 bps YoY to 7.1%, reflecting better pricing in newer orders, disciplined project management, and easing supply-chain frictions.

2) Financing discipline:
Even as revenue scaled, interest cost intensity fell to 2.8% of revenue versus 3.3% a year ago, aided by tighter collections and better credit utilisation. For context, Q1 had already shown improved working-capital hygiene (NWC at 128 days; net debt including acceptances at ₹5,348 crore). Q2 saw NWC at 138 days and net debt at ₹6,480 crore—elevated versus Jun’25 due to scale-up but still manageable in light of the backlog and intake.

3) Orders and visibility:
If one line captures the improving runway, it’s this: YTD FY26 order intake at ₹16,050 crore (~20% YoY growth) and a record combined Order Book + L1 at over ₹44,000 crore as of the press date. That provides high-quality revenue insurance into H2 and FY27.

Management guidance & street read-through

KEC has been guiding to ~15% revenue growth for FY26 with a targeted EBITDA margin band of ~8.0–8.5% as mix tilts toward better-priced T&D and high-value EPC, and as legacy low-margin projects roll off. Multiple sell-side updates and media interactions with the MD & CEO have echoed this band and top-line trajectory, citing a ~₹1.8 trillion tender pipeline (T&D heavy) and robust bid activity domestically and overseas.

The underlying message: margins should have a tailwind from (a) superior price discipline in new awards, (b) operating leverage from scale, and (c) productivity gains in project execution and supply chain. With Q2 EBITDA at 7.1%, KEC still needs incremental improvement in H2 to crest the guided band—but the order book’s quality and the decline in interest-to-sales ratio suggest the glide path is intact.

What the numbers say—deeper take

Topline momentum: A ₹6,092 crore quarter represents both YoY acceleration and QoQ scale-up. With H1 FY26 revenue at ₹11,114 crore (+15% YoY), KEC is pacing close to its full-year growth aspiration even before the typically stronger H2. The T&D supercycle—driven by renewable evacuation, HVDC corridors, and grid strengthening—remains KEC’s structural backbone.

Profitability curve: The company widened EBITDA to ₹430 crore with 7.1% margin. This is the third consecutive quarter (including Q4 FY25 and Q1 FY26) where the margin trend has moved in the right direction, aided by a richer order mix and operating discipline. The PAT jump to ₹161 crore underscores the double benefit of operating leverage and moderated finance cost intensity.

Balance sheet and cash conversion: Net working-capital days in EPC often oscillate with execution phases. KEC’s NWC at 138 days is slightly above Jun-end levels but broadly within a corridor that lets the company scale. The YTD net debt movement mirrors growth-driven utilisation; importantly, earlier measures (like debt reduction over FY24–Q1 FY26) established headroom for this scale-up.

Order book quality: The headline >₹44,000 crore (Order Book + L1) matters not just for size but pricing discipline. Management’s emphasis that newer awards carry better economics suggests room for margin accretion into FY26-FY27 as execution converts.

Risks to watch

• Working-capital elasticity: Receivable cycles and retention release can stretch with government counterparties and overseas projects, affecting debt and interest costs. Q2’s NWC uptick is a reminder to track this closely.

• Manpower & logistics: Management has previously flagged site manpower tightness and geopolitical/logistics frictions. Any flare-ups could nudge timelines and costs.

• Commodity & supply chain: Steel/cable inputs and freight remain moving parts; however, newer contracts typically factor in better pass-throughs.

Outlook: on track for guidance, H2 should carry the baton

With H1 revenue at ₹11,114 crore and PAT at ₹285 crore, KEC heads into H2 with strong visibility. Achieving the ~8–8.5% EBITDA margin guidance for FY26 will likely require continued mix improvement and execution efficiencies in Q3/Q4, but the order book, L1 and tender pipeline provide the right ingredients. If financing discipline (interest-to-sales ratio) stays near the ~3% handle and working-capital days are kept in check, bottom-line compounding should follow.

Management words (highlights)

“We have delivered another quarter of strong performance… EBITDA margins expanded to 7.1% and PBT/PAT rose 88% YoY. The Order Book + L1 is at a record level of over ₹44,000 crore. With strong execution and a substantial tender pipeline, we are well positioned to drive sustained and profitable growth in the coming quarters.” — Vimal Kejriwal, MD & CEO, Q2 FY26 release.

Data appendix (for your newsroom notes)

• Q2 FY26 (Consolidated): Revenue ₹6,092 cr; EBITDA ₹430 cr; EBITDA% 7.1; PBT ₹213 cr; PAT ₹161 cr; PAT% 2.6; Interest/Revenue 2.8%; YTD order intake ₹16,050 cr; Order book ₹39,325 cr + L1 ~₹5,000 cr; NWC 138 days; Net debt ₹6,480 cr.

• Q1 FY26 (Consolidated): Revenue ₹5,023 cr; EBITDA ₹350 cr; EBITDA% 7.0; PBT ₹159 cr; PAT ₹125 cr; Net debt ₹5,348 cr; NWC 128 days.

• Q2 FY25 (Consolidated): Revenue ₹5,113 cr; EBITDA ₹320 cr; EBITDA% 6.3; PBT ₹113 cr; PAT ₹85 cr; Interest/Revenue 3.3%.

Final take for readers (human-tone paragraph)

KEC International’s Q2 FY26 reads like a company settling into a higher gear. The topline is scaling, but more importantly the profitability curve is bending up—7-plus percent EBITDA is now a trend, not a blip. Debt has ticked up with growth, yet the interest drag is lighter than last year, and that shows up in the bottom line. With ₹16,000-plus crore of YTD orders already in the bag and a record >₹44,000 crore in order book + L1, the next few quarters are about smart execution and cash conversion. Management’s 15% growth and 8–8.5% margin ambition for FY26 might demand a little more acceleration in H2, but the runway—grid expansion, renewables evacuation, and a muscular T&D pipeline—looks long and straight. For investors, that adds up to a simple story: higher quality growth with improving economics.

Citations

Primary figures and quotes are drawn from KEC’s official Q2 FY26 press release (Nov 10, 2025) and Q1 FY26 press release (Jul 28, 2025), with prior-year comps from the company’s Q2 FY25 materials:
Guidance/targets and tender-pipeline context referenced from credible coverage and research notes: