Kay CeeQ1 FY25Construction

Kay Cee

Q1 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 2

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 2

→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.

Category 2

→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.

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Yes

→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.

Yes

→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.

Yes

→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).

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