KEC International Ltd. share price target

Commodity prices dent margin; strong order inflow outlook Motilal Oswal values your support in the Asiamoney Brokers Poll 2021 for India Research, Sales, Corporate Access and...

Execution delay in Brazil owing to pandemic and rise in commodity price resulted into EBITDAM contraction of 254bps YoY to 6.3%. KEC International (KECI) reported Q1FY22 performance above expectation, led by strong execution in its Non T&D; business with revenue growth of 15% YoY led by strong growth of 191%/109%/14% YoY in Civil/Cables/Railways, while T&D; segment declined 4% YoY mainly due to execution delay in Brazil caused by Covid second wave. Rise in commodity price and cost overrun in...

Moving from strength to strength; outlook improving Aims to expand margin by providing higher engineering offerings Order inflow environment improving, with a robust pipeline The momentum in order wins continued into 1QFY22, with KECI winning ~INR30b worth orders in FY22 YTD (v/s INR7b YoY). This clearly indicates that the impact of the second COVID wave has been minimal on ordering intensity, albeit for Railways, which has witnessed some delays. Tenders under evaluation and in the pipeline stood over INR650b, thus indicating healthy potential order...

We expect Revenues/EBIDTA/APAT to grow at a CAGR of 14%/19%/26% respectively over FY21-23E and value KEC International at 13x(12.5x earlier) FY23E EPS of Rs 34 to arrive at a target price of Rs 445/share, implying an upside of 11% from CMP.

remains strong with Rs650bn plus bid pipeline across segments. In international markets, management is seeing good traction in orders from MENA, Africa, SAARC and South East Asia regions. For domestic segment, although ordering pipeline remains healthy, yet some delay in order finalization has been witnessed. Key segments such as Railways (Metros), Civil, urban infra, T&D; space, water and Solar would be on focus going ahead. We believe KEC is well poised to gain from upcoming opportunity in...

KEC International at 12x FY23E EPS of Rs.35.4 to arrive at a target price of Rs.424 implying an upside of 13% from CMP.

Average borrowing level continues to be in line with target of ~| 2500 crore. KEC's net debt (excluding acceptances) has remained at | 1679 vs. | 2216 crore YoY. Consequently, interest cost as percentage of sales reduced by 60 bps to 2% for FY21 and is expected to remain in this range amid increased execution, going forward. The average net working capital days came down to 112 days vs. 119 days in Q4FY21. Working capital is at manageable levels...

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. Q3FY21 revenue grew by 7% supported by pick-up in non T&D; segment execution, while T&D; revenue got impacted by slower execution in international SAE business. EBITDA margin declined by 128bps YoY to 9.1% due to higher...

KEC's 3QFY21 revenues came in at 32.8bn, up 7% YoY and 1% QoQ, aided by the growth in nonT&D; business and normalization of supply chains/ and labour levels. While T&D; business declined by 12%, non-T&D; Civil and Railways business grew by 206% and 44% YoY. During 3QFY21, the overall T&D; business (including SAE Tower) revenue declined 12% YoY to 1.8bn. Non-T&D; business (railways, civil, cables, other) registered robust growth of 51% to 1.5bn, on YoY basis led by better execution. The railways business revenue came in at 866mn, up 44% while civil business segment revenue multifold to 267mn, registering a growth of 206% YoY on low base. Cables business grew 22% to 305mn YoY. KEC has submitted tenders to the tune of 30.bn....

We expect Revenues/EBIDTA/PAT to grow at CAGR of 11%/10%/21% respectively over FY20-22E and value KEC International at 13X FY22E EPS of Rs 32 to arrive at a target price of Rs 415.