KEC International, a leading player in infrastructure engineering, saw its shares surge by 4% to reach ₹975 during early trading on 23rd September. The stock rally was driven by the company’s announcement of securing new orders worth ₹1,003 crore across multiple sectors, showcasing its robust business performance despite recent challenges. This uptick in the company’s stock underscores the opportunities that share market investment continues to offer to savvy investors.
New contracts across key business verticals
KEC International secured orders spanning across its railways, civil works, and cable divisions. Each sector has witnessed substantial growth, adding to the company’s diverse order book and further boosting investor confidence in the stock.
Strengthening the company’s core business
Notably, almost 70% of KEC International’s order intake in FY24 has come from its Transmission and Distribution (T&D) segment, indicating that its core business continues to thrive. Vimal Kejriwal, Managing Director and CEO, expressed his confidence in the company’s ongoing success, stating, "Our railways business has strengthened its presence in the emerging tunnel ventilation market, while our civil business has broadened its portfolio with the addition of a new client in the metals and mining space."
For investors looking at share market investments, KEC International's continued expansion into emerging and essential infrastructure sectors presents a strong case for further growth.
Impressive order wins amid financial challenges
Despite securing significant orders this year, KEC International is grappling with certain financial pressures. CARE Ratings recently downgraded the company’s long- and short-term bank facilities due to a slower-than-expected recovery in gross current assets during FY24 and the first quarter of FY25. The agency cited a prolonged increase in gross current asset days and continued reliance on working capital borrowings, including short-term debt, as reasons for the revision. This has placed some stress on the company’s capital structure, which remains highly leveraged.
However, KEC’s impressive order wins continue to reassure investors. In the first half of the current financial year, the company has secured over ₹12,300 crore in orders, accounting for 70% of the total orders it received last year (₹18,102 crore). Such a strong order book is likely to help KEC navigate its financial challenges and could make it an attractive option for those interested in share market investment.
Stock performance and investor outlook
At around 9:20 AM on 23rd September, KEC International’s shares were trading at ₹960, up 2% from the previous day's close on the National Stock Exchange (NSE). Since the start of the year, the company’s stock has surged an impressive 60%, reflecting growing investor confidence and optimism.
The recent rally in KEC International shares highlights the potential of share market investment in infrastructure-related stocks, especially those with a strong order pipeline and diversified business operations. For long-term investors, KEC's expanding business in railways, civil infrastructure, and cables suggests that the company is well-positioned to capitalise on India’s infrastructure growth story.
Conclusion
KEC International’s continued growth, demonstrated by its recent ₹1,003 crore in new orders, positions the company as a significant player in the Indian infrastructure sector. Despite facing some financial pressures, its strong order book and strategic business diversification make it a stock to watch. For those exploring share market investment, KEC International offers a compelling case with its combination of solid business fundamentals and potential for further stock price appreciation.
Investors should monitor how the company manages its financial challenges, but with a surge in new orders and a strong presence in key sectors, KEC International remains a promising option for share market investment.
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