India Capex Momentum Capex story intact despite Middle East concerns

研报英文原文证据摘录

India Capex Momentum Capex story intact despite Middle East concerns

act.

◆ Margin: Margins remained under pressure during the quarter due to revenue mix, commodity and FX and supply chain disruptions due to Middle East

crisis. Increasing competitive intensity to weigh on pricing power. It has some price variation built into long-term contracts, but with ceilings.

CG Power and ◆ Growth outlook: Power Systems outlook is strong both in domestic and international markets. Railways growth is expected to be driven by new

Industrial Solutions product launches and exports.

◆ Management indicated input cost inflation in motors business has been largely passed on through price hikes of 17.5% over the past 3-4 quarters,

while the transformers business has price variation clauses to manage commodity inflation.

◆ CG semi G2 facility will be commissioned by end of CY26 with capacity to manufacture 14.5m chips per day.

◆ Greenfield power transformer facility is expected to be commissioned during July-August 2026 with initial capacity of 25,000-30,000 MVA and scale it

to 45,000 MVA by the end of CY26. Post expansion, total capacity is expected to be 1,10,000 MVA.

◆ Management actively exploring M&A opportunities to enhance design capabilities in semiconductors.

KEC International ◆ Growth outlook: Management expects c12-15% revenue growth in FY27. Order intake is projected to be cINR300bn. Government's enhanced non-

fossil fuel capacity target (from 500GW by 2030 to 900 GW by 2035) will drive significant investment in transmission lines, substations, and green

energy corridors. Tendering activity continues to be strong across Middle East, region supported by grid expansion and renewable integration.

◆ Debt reduction: KEC plans to reduce debt by INR10bn to INR55bn by the end of FY27.