KEC International Ltd. share price target

with respect to 1) the company's domestic as well as international order pipeline both in T&D; (SEBs tendering activity) and non-T&D; segments and 2) its expansion into newer territories. Management highlighted about its strategy of increasing its revenue contribution from the non-T&D; space gradually and maintaining growth in the T&D; vertical through selective domestic bidding and...

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. Tepid execution in T&D; segment capped revenue growth to 5% YoY in Q4FY19 while non T&D; revenue grew by 24% YoY. Order inflow de-grew by 33% YoY due to domestic headwinds but order book remain strong at Rs24,000cr (incl L1)....

The revenues meagerly grew by 4.8% YoY majorly on the strong growth of non T&D; business (25%) which got impacted by degrowth of 1% in T&D; business.

Limited (KEC) showed marginal growth of 5% y-o-y to Rs. 3,841 crore, driven by multifold growth in railway (~2x revenue growth) backed by continued focus on execution. The railways and civil business continued its traction and the cables segment's growth was led by higher sales of HT cables, exports and EHV cables coupled with higher execution. The dominant...

Q4 miss; Inflow and revenue guidance strong for FY20; Maintain Buy Q4 was lower than expectations due to execution headwinds. Revenue and order inflow guidance continue to be strong in FY20, while the order pipeline in FY20 is promising with the T&D; and rail having a visibility of Rs250bn worth of orders. T&D;, railways and civil projects will drive earnings growth of 19% over FY19-21E. Post the Q4 miss, we reduce our Revenue/ EBITDA/PAT by 3%/3%/5% for FY20 yet considering strong revenue and order inflow guidance and solid return ratio profile, we...

T&D; business to move on path to recovery Muted T&D; execution owing to delays few projects impacted revenue to | 2434 crore, down 1.3% YoY while SAE revenue grew 3.9% to | 319 crore. For the quarter, KEC's order inflow came in at | 4659 crore while FY19 order inflow stood at | 14084 crore. T&D; contributed 62% while railways segment contributed 22% to order inflows. The unexecuted order book as on YTDFY19 was at ~ | 24000 crore, (including L1 position). We build in order inflow growth CAGR at 10% over FY19-21E with order inflow worth | 16100...

KEC International (KEC) has reported a muted performance in 4QFY19 with its revenue growing by 5% YoY to Rs38.4bn (vs. our estimate of Rs41bn) owing to 1% YoY decline in core T&D; segment despite 23% YoY growth in non-T&D; segment. Delay in approvals in SAE and execution challenges in a domestic private project also impacted its top-line. EBITDA margin rose by 30bps YoY to 10.4% mainly led by lower other expenses cost at 6.5% of sales (vs. 7.7% in 4QFY18). Its net profit declined by 1% YoY to Rs1.94bn led by higher interest cost (+29% YoY). While its order book stood at Rs203bn (1.8x of FY18 revenue) as of 4QFY19-end, it is favourably placed (L1) in orders worth ~Rs30bn. NWC days increased to 103 days in FY19 from 93 days in 4QFY18, which the Company...

guidance in the range of 10%-10.5%. They expect revenues from T&D; segment to grow 15%, Railway revenue to grow 25% and Brazil business to grow 30-40%. Valuation: Strong outlook for Railways & Civil segment coupled with healthy T&D; order pipeline are expected to aid company post healthy revenues going forward. At the current market price KEC is trading at a P/E of 10.6X its FY21E. We assign a P/E of 13X to its FY21 EPS to arrive at a target price of INR 351 and rate the stock a BUY. Risks: Delay in project execution, political unrests in foreign markets and worsening working capital cycle....

results was the sharp reduction in gross debt level to INR18.5b (from INR32.5b in 3QFY19), leading to net D/E improvement to 0.6x (FY18: 0.8x). Sharp debt reduction is attributed to (a) realization of INR4b of receivables from Saudi; (b) sale of BOT asset leading to net improvement of INR2.3b; and (c) strong advances from international orders in 4QFY19. While average debt for next year may be higher than current levels (as execution commences in international orders against received advances), KEC should operate in a much better macro environment compared to the liquidity...

Revenues Surge on Non T&D; Business Growth: The revenues grew by 10% on the back of non T&D; business growth. Total T&D; business (inc SAE) has fallen by 5% YoY whereas non T&D; business (cables, railways, solar and civil) has shown a growth of 64% YoY which made the overall revenues to grow by 10% YoY.