Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

KEC International - Strong growth, healthy cashflow - ICICI Securities

Posted On: 2021-05-16 06:40:45 (Time Zone: UTC)


KEC International has witnessed strong growth of 18% YoY in Q4FY21, led by civil (up 189% YoY), railways (up 39% YoY) and cables (up 60% YoY), offsetting 45% YoY drop under Mexican subsidiary SAE. Rs65bn of L1 position and strong orderbook of Rs191bn (1.5x TTM sales) lend growth visibility. Increase in commodity prices have impacted margins and the company is taking correct actions to address the same. Cashflow has improved due to reduction in working capital especially due to higher creditors resulting in lower interest outgo. Factoring in muted domestic growth and impact on margins from increased commodity prices, we cut earnings by 21.5% and 16.7% for FY22E/23E, respectively, and maintain BUY with a revised target price of Rs440 (previously: Rs426).

- Rail and civil segments offset weakness in T&D: Civil, railways and cables continue with their growth momentum offsetting the weakness in T&D segment, especially from SAE. Growth from domestic T&D is likely to be impacted due to the second covid wave; however, overseas market execution will be healthy. Despite headwinds, the management is confident of a double-digit growth in FY22E.

- Higher mix in non-T&D and high commodity prices impact margins: EBIDTA margin declined 200 bps YoY to 8.1% impacted by higher mix of relatively low margin non-T&D contribution. Commodity price has increased recently and hence, overall margins are likely to be impacted, especially fixed price contracts.

- Healthy cashflow: Cashflow has recovered from December 2020 levels and the working capital has eased due to increase in creditors. Hence, KEC was able to witness healthy net cash of Rs8.4bn from operations vs Rs840mn in FY20 and free cashflow is also strong at Rs6.8bn. This has resulted in reduction in debt and interest cost.

- Maintain BUY on healthy growth prospects: Railways and civil segments are expected to be in high growth phase in near to medium term. Normalisation of margins, control on working capital and lower interest rates will support earnings growth. Given healthy growth prospects, strong balance sheet and return on capital, we maintain our BUY rating on the stock with a revised target price of Rs440 (previously: Rs426).

Shares of KEC INTERNATIONAL LTD. was last trading in BSE at Rs.388.4 as compared to the previous close of Rs. 381.8. The total number of shares traded during the day was 48732 in over 1662 trades.

The stock hit an intraday high of Rs. 402 and intraday low of 381.8. The net turnover during the day was Rs. 19067958.


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:

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct

Q4FY21 Company Update - Globus Spirits - ICICI Direct

Q4FY21 Result Update - DB Corp - ICICI Direct

Q4FY21 Result Update - Somany Ceramics - ICICI Direct

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities


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

disclaimer copyright © 2005 - 2020