Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Research

| More

Initiating Coverage - KEI Industries: Angel Broking

Posted On: 2016-12-30 08:42:08

Wiring for growth

KEI Industries (KEI) is a cable manufacturing company and also engaged in Engineering, Procurement and Construction (EPC) business. It offers high and low tension cables, control and instrumentation cables, house wires, stainless steel wires, and high-technology specialty cables. Its manufacturing facilities are located at Bhiwadi, Chopanki & Silvassa. Through export KEI is present in over 45 countries across the globe.

Healthy order book indicates strong revenue visibility: KEI's current order book stands at Rs.3,233cr (Rs.2,154cr from EPC segment, Rs.667cr from Cable segment, Rs.200cr from EHV segment, Rs.49cr from Substation and the balance from EPC L1 business). Its order book grew by ~28% in the last 3 years on the back of order inflows from State Electricity Boards, Power grid, etc. This gives KEI, a revenue visibility for the next 12-16 months.

Strengthening distribution network and higher ad Spend to increase B2C business: KEI's consistent effort to increase its retail business from 30% of revenue in FY16 to 40-45% of revenue in the next 2-3 years on the back of strengthening distribution network (currently 926 which is expect to increase 1500 by FY19) and higher ad spend (increased from Rs.2cr in FY13 to Rs.7cr in FY16 and expected to spend). Exports to continue its growth momentum: KEI's exports (8% of revenue in FY16) is expected to reach a level of ~14-15% in next two years on the back of higher order execution from current order book of ~Rs.180cr and participation in various international tenders worth Rs.500cr. We expect a strong ~26% growth CAGR over FY2016-19 in exports.

Interest cost as % of net sales to decline by 150bp over FY16-19: We expect the company's interest cost to decline due to (1) full repayment of its Rs.211cr term loan in next 2-3 years and (2) marginally lower interest cost arising due to the improvement in credit rating. While company may see some rise in its working capital requirement due to higher sales in EPC segment, the debt repayment and low interest rate should offset the same. Due to this, we expect interest cost to decline as % of sales which will further result in better profitability.

Outlook and Valuation: We expect KEI to report net revenue CAGR of ~13% to ~Rs.3,335cr over FY2016-19E mainly due to (a) higher order book execution in EPC segment (b) growth in EHV business and (c) higher B2C sales and (d) higher exports. On the bottom-line front, we expect a CAGR of ~24% to Rs.118cr over the same period on the back strong revenue and lower interest cost. At the CMP of Rs.124, the stock trades at 8.1x its FY2019E EPS of Rs.15.3. We initiate coverage on the stock with a Buy recommendation and target price of Rs.153 based on 10x FY2019E EPS, indicating an upside of ~23% from the current levels.

Shares of KEI INDUSTRIES LTD. was last trading in BSE at Rs.122.45 as compared to the previous close of Rs. 122.55. The total number of shares traded during the day was 41421 in over 943 trades.

The stock hit an intraday high of Rs. 125.35 and intraday low of 122.1. The net turnover during the day was Rs. 5119030.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Views on LIC Housing Finance Limited 4QFY2017 Results: Angel Broking
Wipro - Q4FY17 Result Review - Kotak Securities Limited
Views on Wipro Limited 4QFY2017 Results: Angel Broking
Axis Bank - Q4FY17 - Worst for the bank could get over in near term, better days ahead: Angel Broking
Ultratech Cement - Q4FY17 Result Review - Kotak Securities Limited
HDFC Bank back on growth trajectory: Angel Broking
Sun Pharmaceutical US Update: Angel Broking
Global ambiguity sizzles; Base metals' rally fizzles: Angel Broking
Asset quality a negative surprise form Yes Bank: Angel Broking
Heavy weight banks look a good bet: Angel Broking
Banks: Tightening the screws - Kotak
Utilities: The supply glut - Kotak
Insurance: Ending a strong year on a stronger note - Kotak
TCS - Q4FY17 result review - Kotak
Views on Tata Consultancy Services Limited 4QFY2017 Results: Angel Broking
Strategy: Small need not be beautiful - Kotak
Indiabulls Real Estate restructures to create value: Angel Broking
Infosys Q4 2017 results - Dipen Shah, Sr. Vice President - PCG Research, Kotak Securities Limited
Views on Infosys Ltd 4QFY2017 Results: Angel Broking
Infosys - 4QFY2017 Result Preview: Angel Broking
Metals & Mining (Attractive): 4QFY17 preview-when it shines the most - Kotak
Energy: Weaker end to a subdued year - Kotak
Apex court disallows rise in imported coal tariff, though awards compensation for lack of domestic coal
Utilities: Supreme Court-denies compensation, but with a rider - Kotak
Strategy: The curious case of the Indian market - Kotak Institutional Equities
Economy: INR: Appreciate, for now, but be cautious - Kotak Institutional Equities
Energy: OMCs Refining - marketing - Kotak Institutional Equities
Cement: Earnings weakness persists - Kotak Institutional Equities
Fall in IT conglomerates evened out by Banking counters: Angel Broking
Shankara Building Products lists at a healthy premium to issue price: Angel Broking
USFDA action on Indoco Plants: Angel Broking
Karur Vysya Bank - Easing troubles to pave way for growth: Angel Broking
Navin Fluorine International - The unique chemistry of growth: Angel Broking
Dr Reddy's inks distribution pact with Integra Life Sciences: Angel Broking
BS-IV rollout expected be neutral on the automobile sector: Angel Broking
Shankara Building Products Ltd - IPO Note - Sushil Finance
'R' for RERA - for Realty coming to Reality soon: Angel Broking
Reliance Capital - Refurbishing core; monetisation crucial; company update; Buy - Edelweiss
D-Mart delights its investors: Angel Broking
Shankara Building Products Limited - Thrust on retail to boost potential: Angel Broking
Impact of Rupee Strength on IT and Pharma: Angel Broking
Idea Surges 12% on the back of positive news flows: Angel Broking
Sun Pharmaceutical - USFDA to Lift Import Alert Regulator to permit supply of products from Mohali: Angel Broking
IT Update - Ban on premium processing of H1-B visas: Angel Broking
Tech Mahindra - Acquires CJS Solutions in US: Angel Broking
Dr. Reddy's Laboratories - Gets USFDA observation for Duvvada oncology formulation Facility: Angel Broking
VIP Industries - Travelling smart on the luggage track: Angel Broking
Avenue Supermarts - IPO Note - Numero Uno! - Reliance Securities
IT Update: Ban on premium processing of H1-B visas: Angel Broking
DATA WARS BEGIN... AND THE WINNER IS: THE DATA CONSUMER: Angel Broking


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2017