KEC Bags Orders Worth Rs 1004 Crore

KEC International, a flagship company of the RPG Group and one of the largest Power Transmission Engineering, Procurement & Construction (EPC) firms with a global presence, has recently bagged orders worth a total of Rs 1004 crore.

The company operates in six business verticals, i.e. Transmission, Power Systems, Cables, Telecom, Railways and Water. In the aforesaid bag of orders, company was able to secure contracts amounting to Rs 760 crore in its Transmission business.

It also received two orders worth Rs 314 crore on a turnkey basis from Tamil Nadu Transmission Corporation for erection and supply of 400 KV transmission lines between Anikadavu and Thappagundu and in between Anikadavu and Rasipalayam, the proposed substations.

An order worth Rs 271 crore has come in from Transmission Corporation of Andhra Pradesh for the implementation of a 400 KV transmission line between Kamavarapukota and Chinnakorukondi substation on a turnkey basis.

On the international front, the wholly-owned subsidiary of the company ‘SAE Tower’ has bagged orders worth Rs 147 crore from the United States, Brazil and Mexico for the supply of lattice tower, monopoles and hardware. It also secured a Rs 28 crore order from Kuwait for the design, supply and erection of Gantry at Az Zour substation on a turnkey basis.

Within the Cables vertical, the company has acquired an order worth Rs 98 crore for the supply of power and telecom cables.Its Telecom business has secured a Rs 90 crore order from Maharashtra Transmission Communication Infrastructure for installation of OPGW (Optical Ground Wire) cable and associated hardware.

Within the Power and Systems vertical, the company has been won a contract worth Rs 56 crore for the establishment of a 138 KV substation under the Matanao-Gensan transmission line project and the Matanao expansion project 2 in Philippines.

KEC’s Transmission vertical leads its order book, accounting for 78% of the orders. Considering the geographical segmentation, 47% of the orders come in from India while 22% are from Africa and Central Asia and 9% from the US.

The company has received total orders worth Rs 2185 crore in Q1FY14, where as much as 80% of the orders were in the Transmission segment. Its Power Systems, Cables, Telecom, Railways and Water businesses accounted for 3.50%, 8.30%, 1.80%, 0.30% and 6.10% respectively of the orders it bagged during this period.

The overall order book of the company stands at Rs 10056 crore. As of FY13, its order book-to-sales ratio is 1.77x, which looks decent considering the volatile economic condition. On a YTD basis, however, the stock price of the company lost its value by 61%. Moreover, the company has reported a loss of Rs 9 crore in the elapsed quarter. Thus, investing in this stock in the current scenario would not be advisable.