Saudi Aramco Contract Boost

KPIL’s combined order book, totaling Rs. 51,753 crore, along with an additional L1 position exceeding Rs. 6,000 crore, ensures revenue visibility for more than three years. According to an international media report, Saudi Aramco has issued a letter of intent for approximately 16 EPC packages valued at USD 10 billion for its Master Gas System expansion (Phase 3). Industry sources suggest that KPIL may emerge as the lowest bidder for three packages. Winning an order in this prestigious project would not only make KPIL eligible for future large projects but also lead to a re-evaluation of the stock.

KPIL’s entry into the new underground tunnelling segment and the emerging opportunities related to construction for data centers, airports, and industrial plants will further contribute to its growth momentum. The combination of a robust order book, a promising tender pipeline, merger synergies, and the alleviation of cost challenges is expected to enhance the company’s performance.

The analysis suggests buying, with a revised target price of Rs. 1,140, considering the stock’s reasonable valuation at approximately 15 times its estimated earnings for FY2026

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