Kay Cee Q1 FY26 Earnings Analysis

- Transmission lines work worth Rs. 7,000 to Rs. 8,000 crore expected in Rajasthan over next 3-5 years. - EPC work in transmission expected to be Rs. 15,000 to Rs. 20,000 crore due to renewable energy expansion. - Target revenue for FY’26 is Rs. 275 crore to Rs. 300 crore, maintaining supply to services ratio around 60-70% supply and 30-40% services. - Orders worth Rs. 500 crore anticipated to be added in FY’26, with tender pipeline of Rs. 180 crore currently quoted. - Order book expected to grow from Rs. 537 crore to approx. Rs. 750 crore by next year. - Company expects margin improvements with backward integration (manufacturing facility) contributing 2-3% net margin improvement. - Renewable energy transmission and solar parks (via JV) are key growth drivers, primarily focused in Rajasthan but with some expansion in other states.

- The company expects revenue to grow significantly, targeting Rs. 275 crore to Rs. 300 crore in FY’26 and an order book of Rs. 750 crore by next year. - EBITDA margin is targeted to not fall below 18%, with efforts to increase it beyond previous levels of around 21%. - Backward integration through setting up manufacturing facilities for conductors and transformers is expected to improve net PAT margin by 2% to 3%. - The company plans to start manufacturing by March 2026, contributing to margin improvement. - Operational leverage is expected as order execution speeds up, with margins anticipated to stabilize and improve over next quarters despite temporary dips due to supply-service mix. - Strong bidding pipeline worth Rs. 180 crore and high success rate (~70%) in tenders suggest sustained order inflows supporting growth. - No immediate plans for new fundraising; QIP of Rs. 25 crore raised to support working capital and growth.

- The company is working on a backward integration plan focusing on transformer manufacturing (13.5 ampere transformer DPR under preparation). - CAPEX for the transformer project is estimated between Rs. 7 crore and Rs. 10 crore; Rs. 3 crore has already been invested, with the remaining Rs. 7 crore pending. - Manufacturing for the transformer project is planned to start before March 2026; structural work is mostly completed. - Backward integration manufacturing is expected to improve net PAT margin by approximately 2% to 3%. - Investment projects are adjusted based on ongoing EPC work and project requirements. - Current CAPEX related to backward integration includes Rs. 3 crore already invested; total CAPEX planned around Rs. 10 crore. - The transformer manufacturing project is expected to be completed by the fourth quarter of FY 2026. - Additional strategic investment includes expenditure on non-fund based limits (Rs. 10 crore to Rs. 15 crore may be required for bank guarantees).

- Currently, Kaycee Energy & Infra Limited has no immediate plans for new fundraising through equity or debt; they recently completed a QIP raising Rs. 25 crore. - Future fundraising needs will depend on the type and scale of contracts they secure. - If required, additional funds may be raised either through equity or loans, but no definite plans exist at present. - Short-term capital loan might be needed, mainly non-fund based facilities like bank guarantees, potentially between Rs. 10 crore to Rs. 15 crore. - Fundraising decisions will be evaluated based on working capital requirements and order inflow in the future.

- Current order book as of April 30, 2025, stands at approximately Rs. 537 crore. - The execution timeline for this order book extends up to December 2026, with contracts ranging from 6 months to 5 years. - Rs. 120 crore orders received in April 2025 are included in the current Rs. 537 crore order book. - The company expects to execute Rs. 300 crore of orders in FY 2025-26. - Target order book for the beginning of next fiscal year (FY 2026-27) is around Rs. 750 crore. - Quotes have been made for tenders worth Rs. 180 crore recently, with technical bids cleared but price bids pending. - The success rate in tender bids is above 70%, with bids for tenders worth Rs. 800-900 crore made recently. - New orders of Rs. 500 crore are confidently expected within the current fiscal year.