Published On:July 5 2022
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KEC International aims to double civil contracts business to Rs. 4,000 crore in FY23.

KEC International aims to double civil contracts business to Rs. 4,000 crore in FY23.

KEC International, a global infrastructure engineering, procurement and construction company, is betting on its civil contracts business where it aims to double revenue this fiscal year.

The RPG Group company's total revenue increased 5% to ₹13,700 crore in the last fiscal year ended March 31, led by growth in the civil, railways and cables businesses. The contribution of the civil business to the company's revenue was ₹1,900 crore.

"Last year, we did ₹1,900 crore in revenue and this year we will hit around ₹4,000 crore," managing director Vimal Kejriwal told ET. "We plan to keep on adding at least 40-50% of revenues for at least next couple of years. And once the baseline becomes large, that percentage growth may start coming down. But, I think, the absolute growth would be pretty large."

KEC has 290 projects under execution or in pipeline in India and abroad, with orders of more than ₹8,000 crore for the civil business. The company's total order book is worth more than ₹29,000 crore.

KEC, promoted by Harsh Goenka, has a presence in the verticals of power transmission and distribution, railways, civil, urban infrastructure, solar, smart infrastructure, oil and gas pipelines, and cables. The company expects most of its growth to come from the civil business which is classified into four verticals: urban infrastructure and water; industrial and hydrocarbons; residential and public spaces; and defence and data centres.

"As a part of its diversification strategy, non-T&D (transmission and distribution) business now contributes 50% of revenue compared to 13% in FY16, led by growth in railway and civil," ICICI Securities said recently in a report on KEC. The civil segment is expected to continue to drive growth for the company, it added.

"During FY22, working capital was elevated due to higher losses from subsidiaries; the company maintained higher-than-normal inventory due to commodity inflation; and delayed collection in the railway segment. This led to net debt increasing to ₹2,600 crore in FY22," said ICICI Securities.

According to the company, government spending has been leading the way for the sector's growth. There is an emphasis on smart cities, as well as water and pipelines projects. The company entered the water pipeline segment last year by winning orders as a part of the government's Jal Jeevan mission, which includes construction of water pipelines and treatment plants, among others.

"Rapid urbanisation, housing and metro construction, growth in data centres and revival in industrial capex are expected to drive growth. We see an uptick in the cement sector too with most cement majors planning a capacity expansion. The metals and mining segment is also undergoing expansion, aiding growth," said Kejriwal, who is also the company's CEO.


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