MOSL: K E C INTL. (Buy)-In-line results-Strong new order wins led by Railways/Civil
K E C Intl.: In-line results; Strong new order wins led by Railways/Civil
(KECI IN, Mkt Cap USD1.2b, CMP INR347, TP INR430, 24% Upside, Buy)
- We like KEC's business diversification story as concentration risk from the volatile Power T&D segment comes off. Currently, non-T&D business forms 45% (12% in FY14) of the order book and we expect it to further increase to 65%, led by the Railways/Civil segment.
- We maintain our earnings estimates, TP of INR430 (15x Mar'21 EPS) and Buy rating. New order wins in FY21 are a key monitorable to sustain growth momentum.
- Operating performance in line; Civil segment drives order wins
- 3QFY20 revenue grew 16% to INR30.7b (in-line). EBITDA margin came in at 10.4% (v/s est. 10.5%). Overall, EBITDA grew 13% to INR3.2b and Adj. PAT grew 31% to INR1.5b (in-line).
- Order inflow increased 68% YoY to INR60.5b, helped by exponential growth in the Civil segment as the company has forayed into metros (Kochi and Delhi metro orders). The Railway segment order inflow was also strong at INR12.6b. YTD, the company has garnered orders worth INR98.2b and is L1 in orders worth INR25b (v/s our full-year order inflow est. of INR140b). Order book stood at INR220b (excl. L1 position) with OB/Rev ratio of 1.8x.
KEC International is engaged in the design, manufacture, construction and erection of power transmission lines and related towers in India and other countries. In addition, Co. is engaged in the manufacture and sale and/or resale of petrochemicals including methyl ethyl ketone and isopropyl alcohol. Co. also provides investments and financial services.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.