Shares of KEC International Ltd., a prominent infrastructure engineering, procurement, and construction (EPC) firm, have experienced a significant downturn, shedding their "multibagger" status. The stock has plummeted 63% from its all-time high of Rs 1,313.25 recorded on December 4, 2024.
The company's shares, which had previously delivered impressive returns of 204% over three years and 388% over five years by December 2024, have since turned negative. This correction has left investors concerned about their investments. In the past year alone, KEC International shares fell 43%, and over two years, they slipped 39%. The stock also dropped 47% from its 52-week high of Rs 947.30 on June 26 last year, hitting a 52-week low of Rs 466.10 on May 19 this year.
Despite the broader correction, KEC International stock saw a gain of 3.5% in a recent session, trading at Rs 505.70 against its previous close of Rs 488.65 on the BSE. The firm's market capitalization stands at Rs 13,479 crore. With a beta of 1.2, the shares indicate high volatility. Technically, the Relative Strength Index (RSI) is at 39.7, suggesting it is neither overbought nor oversold.
Brokerage Outlooks and Revised Price Targets
Several brokerages have updated their outlooks and price targets for KEC International following the stock's performance.
Elara Securities
Elara Securities has maintained a 'buy' rating on KEC International shares but has revised its price target downwards to Rs 700 from Rs 930. The brokerage cited several factors for slashing its EPS estimates for FY27E/FY28E by 23% and 10% respectively. These include deferred execution schedules due to geopolitical tensions, delays in payments for water projects, high debt, and stretched working capital. Elara expects an earnings Compound Annual Growth Rate (CAGR) of 50% between FY26-29E, with average Return on Equity (ROE) and Return on Capital Employed (ROCE) projected at 20% and 16% respectively for FY27E-29E.
Motilal Oswal (MOSL)
Motilal Oswal (MOSL) also maintains a 'buy' recommendation, setting an unchanged price target of Rs 630 for the stock over the next year. MOSL anticipates a CAGR of 16% in revenue, 15% in EBITDA, and 19% in Profit After Tax (PAT) over FY26-28. This growth is expected to be driven by a 21% increase in order inflows from a robust pipeline, stable EBITDA margins around 7% for FY27E/28E, and stable net working capital. However, MOSL highlighted key risks, including a potential slowdown in order inflows, rising commodity prices, increased receivables and working capital, and heightened competition.
About KEC International
KEC International is the flagship company of the RPG Group and operates globally, executing infrastructure projects in over 30 countries with a footprint in more than 110 countries (including EPC, tower, and cable supply). The company has a diverse presence across various verticals, including power transmission and distribution, railways, civil engineering, urban infrastructure, solar, oil & gas pipelines, and cables.