KEC International shares rise after co sells cables business to unit for ₹125 crore

KEC International Ltd shares jumped 5% on Monday as the company executed an agreement with its subsidiary to transfer the cables business for a slump sale of ₹125 crore.

The Indian multinational manufacturer of power transmission towers informed the stock exchanges that it had executed a business transfer agreement (BTA) with its subsidiary – KEC Asian Cables Ltd (KACL) on December 30, for the transfer of its Cables Business on a going concern basis through a slump sale.

The subsidiarisation of the Cables Business will enhance KEC International’s focus on its core activities, streamline its go-to-market strategy, and optimise capital allocation, the company stated in an exchange notification on Monday.

The BTA has mentioned that the cables business will be held 100% through the wholly owned subsidiary KEC Asian Cables, and 95% directly by KEC International.

The company has clarified that no potential conflict of interest arises out of the said agreement.

Opening marginally lower at ₹1150.10 apiece on the BSE, shares of KEC International lose 5% to touch an intraday high of ₹1214.25 on Monday.

The stock has rallied over 100% in 2024 and is up the same amount over the last one-year period too.

In an interview with CNBC-TV18 on December 29, the MD & CEO of KEC International, Vimal Kejriwal said that the company aims for earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of nearly 9% by FY26. He also stated strong performance in the transmission and distribution (T&D) sectors.

“On the revenue guidance, we are still where we are at 15% and we will also stick to 15% for the next year. Revenue and margin, we should be there. I am not very sure because there has been a slight delay in some executions on the newer projects. But we should be there. But we have also said that next year we should be above 9% (EBITDA margin),” he said.

The Mumbai-headquartered company has secured orders worth ₹1,040 crore in the T&D segment, bringing its total order inflow for the year to ₹17,300 crore in the ongoing fiscal year.

Shares of KEC International were seen trading 2.5% higher at ₹1185.1 apiece on the BSE following a minor correction from the day’s high on Monday.