stable working-capital cycle give us the required assurance of strong future execution and earnings. We roll over our estimates to FY23 and expect 12%/17% revenue/PAT growth y/y. We value KEC at 13x FY23e EPS, with...

We retain Buy on KEC International Limited (KEC) with a revised PT of Rs. 435, taking into account improving operations and reasonable valuations. Execution run-rate and labour availability pick-up to ensure higher y-o-y revenue for Q2FY2021 and FY2021. Strong order inflows YTD along with Rs. 30,000 crore-35,000 crore bidding pipeline visibility over the next three months. Expect 1.2x and 2.5x y-o-y rise in revenue for rail and civil in FY2021. Rail division continues faster execution, while order tendering is likely to gain traction. YTD collections better than last year. Interest outgo contained with lower rate debt....

KEC International is a global leader in the power transmission and distribution space, offering integrated solutions across the T&D; value chain.

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KEC International reported a very good performance for Q1FY21 despite being the lockdown quarter; revenue for Apr'20 impacted significantly due to COVID-19 disruption, however revenues for May'20 and June'20 were better than corresponding months of last year

KEC International Limited (KEC) is a global infrastructure Engineering Procurement and Construction major. It has presence in the verticals of Power T&D; (Transmission & Distribution), Cables, Railways and Water & Renewable. Q1FY21 revenue de-grew by 8.5% due to impact on execution in April 20. However, during May & June execution witnessed a healthy improvement led by Railway and Civil segment. EBITDA margin declined by 159bps YoY to 8.83% despite...

Strong backlog, execution ramp-up to ensure sustained growth Q1FY21 YTD order inflow came in at | 1931 crore, up 73%. We believe an L1 of | 4800 crore, mostly in international T&D;, combined with strong order pipeline in railways (conventional railway, new track lines, electrification), Green Energy Corridor (GEC), and new opportunities in Saarc, MENA, Africa, Middle East Region should help KEC have reasonable order inflow in FY21E. The company expects good traction in order inflows from international T&D;, railways, civil & GEC. It expects margins to sustain owing to commodity price...

Better than expected execution; valuations undemanding; Maintain Buy KEC has reported better revenue, EBIDTA and PAT better than estimates (Refer Exhibit 1). This was mainly due to improved operational capacity at 80% as compared to 50% earlier and a...

We recommend a BUY on KEC International with a Target Price of Rs 300 an upside of 9.5% from CMP of Rs. 274 and Stop Loss Rs 260.

Strong execution and healthy margins in a lockdown quarter KEC Internationals (KEC) execution in 1QFY21 was better than expected as revenue declined only 9% YoY to Rs22.1bn in a lockdown quarter, 17%/26% above our/consensus estimates. T&D;/SAE towers sales fell 9% YoY each to Rs11.8bn/Rs2.8bn, while Railways was flat YoY at Rs5.2bn. Cables fell 40% YoY to Rs1.6bn while Civil grew 59% YoY to Rs1bn on a low base. EBITDA fell 23% YoY to Rs1.9bn, leading to EBITDA margin of 8.8%, down 160bps YoY, but above our/consensus estimates of 6.5%/5.2%. Aided by lower tax rate at 26.6% (v/s 35.7% YoY), the decline in PAT was restricted to 20% YoY to Rs708mn, much above our/consensus estimates...

We roll forward 12x P/E based valuation to Jun-22E and maintain BUY with an increased target price of Rs 322/sh. The key risks to our call: (1) adverse currency/commodity movement, (2) further delay in capex recovery, (3) slowdown in government T&D spend, and (4) labour shortage. The key takeaways from KECs FY20 AR are as follows: (1) a geographically well-diversified order book and robust pipeline; International T&D; (SAARC/MENA, ex-SAE) and Civil & Railways would continue to drive growth in FY21E; (2) moderate profitability, dipped in FY20; (3) incremental borrowing cost (current interest rate <7%) has come down (FY20 finance cost at 2.8%; -20 bps YoY); ~55% debt is in forex; (4) sustained increase in WC intensity has led to lower CFO/EBITDA over past two years, but NWC is stable. Our channel checks for capital goods suggest that well-diversified companies are witnessing accelerated recovery in execution as international operations remain mostly unaffected while the labour situation is improving locally. We have increased FY21/22E revenue/PAT by 8/10.3% and 22.9/17.2% respectively.

KEC International Limited (KEC) is a global infrastructure Engineering Procurement and Construction major. It has presence in the verticals of Power T&D; (Transmission & Distribution), Cables, Railways and Water & Renewable. Q4FY20 revenue witnessed a marginal de-growth of 4% despite...

Steady quarter amid challenging times, healthy order book & execution capabilities to support top-line growth, pressure on margins likely In 4QFY20, KEC's consolidated revenue declined by 4.4% YoY to 36.7bn; COVID-19 impact towards end of Mar-20 resulted in 5-6bn revenue miss. The execution across Railways (+36% YoY) and SAE (+39% YoY) remain strong, though transmission (-17% YoY) and cables business (-38% YoY) suffered impact of Covid led disruption. The SAE business remained operational throughout the quarter while railways demonstrated quick ramp-up post initial hiccups. During 4QFY20, overall T&D; business revenue declined by 11% YoY to 24.6 bn, while the revenues...

KEC International reported a strong set of numbers despite widespread expectations of disruption in execution due to lockdown from mid of Mar.'20. KEC reported Revenues/EBITDA/PAT for Q4FY20 at Rs. 3671cr/371cr/193cr lower by 4%/7%/3% on YoY basis.

KEC International (KEC) reported consolidated revenue of Rs36.7bn, down 4% YoY and 8% above our estimate. Railways/SAE towers sales grew 36%/39% YoY to Rs8.6bn/Rs4.4bn. T&D;/Cables sales fell 17%/38% YoY to Rs20.2bn/Rs2.2bn. EBITDA fell 7% YoY to Rs3.7bn, leading to EBITDA margin of 10.1% (down 30bps YoY), exactly in line with our/consensus estimate. Aided by lower tax rate at 28.3% (versus 34.2% YoY), decline in PAT was restricted to 3% YoY to Rs1.9bn, 12%/3% above our/consensus estimate. FY20 order inflow was at Rs113bn, down 20% YoY while order book was flat YoY at Rs205bn. FY20 revenue grew 9% YoY to Rs120bn, while the COVID-19 lockdown led to sales disruption of Rs5bn-Rs6bn in March 2020. Lockdown challenges have...

Strong backlog, execution ramp-up to help sustain growth On the order inflow front, KEC's FY20 order inflow was at | 11331 crore, down 19.5%. Also, it has already received orders worth | 739 crore for YTD FY21E. We believe with an L1 of | 3500 crore combined with strong order pipeline in railways (conventional railway, new track lines, overhead electrification), Green Energy Corridor (GEC) as well as new opportunities in Saarc, MENA, Africa and Middle East Region should help KEC see reasonable order inflow in FY21E. KEC expects good traction in order...

Strong promoter parentage and focus on the balance sheet should help KEC emerge stronger post the COVID-19 crisis v/s Revenue came in at INR36.7b, down 4.4% YoY (9% below est.). Management believes that there is no wage inflation risk to EBITDA margins due migration of laborers; however, KEC is planning to use automation increasingly to bring Order book stood at INR205b (excl. Order inflows were lower by 20% YoY at INR113b, owing to delayed tendering activity due to the COVID-19 led shutdown. Of all segments, Railways order book stood at ~INR60b, with management confident of growing it ~30% YoY in FY21E. rating on the stock with a reduced TP of INR230 given (a) the strong order book position (INR205b; 1.7x its TTM revenue + L1 position of INR40b), (b) the declining business concentration risk due to foray into railways, civil, etc. and (c) reasonable valuations.

majority of orders from agencies like PGCIL, Indian railways (RVNL/RITES),metrocorp,andmultilateralbanks,whichinour viewwouldberelativelylessimpactedbythepandemic.KECI tobenefitfromupgradationofrailinfra,risingelectrification, DFCCprojects,metroprojects&smartinfra.Orderpipelineis lookingstrongat~Rs400bn(DomesticT&D;:Rs200bn,MENA region:Rs80bn,Railways:Rs100bn) Though management refrained from giving any guidance,we...

The pandemic and subsequent nationwide lockdown in the country impacted KEC's ongoing projects. We therefore, lower our revenue estimates for FY20-21E by 3.7% and...