KEC International confident of achieving 8% operating margin for FY26

KEC International, a global infrastructure Engineering, Procurement, and Construction (EPC) firm and part of the RPG Group, expects to meet its full-year operating margin guidance of around 8% and maintain 15% revenue growth, according to its Managing Director and CEO, Vimal Kejriwal.Despite margin pressures in the second quarter, Kejriwal said the guidance applies to the full financial year. “We have given an annual guidance of 8%,” he said, explaining that the second half typically contributes about 60% of revenue, which supports better leverage.

The company reported a 19% year-on-year revenue rise in the second quarter, driven by strong performance in the Transmission & Distribution (T&D) business, which grew 44%. The gains were partly offset by a decline in the civil construction segment, affected by monsoon disruptions, labour shortages, and a slowdown in water projects due to payment delays.Delayed payments from the water sector, especially from the state of Orissa, continue to affect cash flows. “Orissa has been a significant laggard, although we did receive some money in the last month or so,” Kejriwal said. These delays have pushed up working capital days and prompted the company to moderate execution in certain projects.

Also Read | KEC International secures ₹1,174 crore in new T&D ordersOn commodity exposure, Kejriwal said KEC remains largely protected. Falling steel prices have been beneficial, while the company’s hedging strategy covers most of its base metal needs. “We are more than 90-95% hedged always. The moment I get an order, we go and hedge it in the market,” he said.

Rising copper prices may cause some cable clients to delay orders, but since cables make up only 8-9% of turnover, it is unlikely to significantly impact overall performance.

KEC International, with a market capitalisation of ₹20,241.85 crore, has seen its shares decline over 26% in the past year.

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