AgenciesHDFC Securities has reduce call on KEC International with a target price of Rs 375. The current market price of KEC International Ltd. is Rs 439.6. Time period given by analyst is one year when KEC International Ltd. price can reach defined target.
KEC International Ltd., incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 11311.89 Crore) operating in Power sector.
KEC International Ltd. key Products/Revenue Segments include Income from Eng.Construction Contracts, Cables, Scrap, Towers & Structurals, Sale of services, Other Operating Revenue for the year ending 31-Mar-2022.
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 3326.03 Crore, down -22.26 % from last quarter Total Income of Rs 4278.17 Crore and up 30.86 % from last year same quarter Total Income of Rs 2541.71 Crore. Company reported net profit after tax of Rs 31.02 Crore in latest quarter.
Investment Rationale
KEC reported a mixed quarter, with revenue at INR 33.2bn, driven by non-T&D segments. EBITDA margin, at 5.1%, was affected, mainly by losses in SAE (INR 0.7/1bn EBIDTA/PBT loss), and higher freight costs (+INR 0.4bn). With Q1FY23 order inflow (OI) of INR 34.7bn (vs. INR 200bn guidance for FY23 i.e. ~17.4%) and L1 on INR 80bn, the order book (OB) stands at INR 317bn (~2.3x FY22 revenue). On the other hand, collections from Afghanistan are still stalled, with net exposure increasing to INR 2.6bn. The consolidated net debt increased to INR 60.8bn (vs. INR 47.7bn at the end of Mar’22) with interest cost for the quarter rising to 3% of sales (vs. 2.2% in Q4FY22). NWC worsened further to 148 days vs. 137 days in the previous quarter. Given continued high debt build up, elevated working capital and weak profitability, the brokerage downgrades KEC rating from BUY to REDUCE, with a revised target price of INR 375/share (14x Mar- 24E EPS).
Promoter/FII Holdings
Promoters held 51.88 per cent stake in the company as of 30-Jun-2022, while FIIs owned 12.17 per cent, DIIs 26.46 per cent.
KEC International Ltd., incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 11311.89 Crore) operating in Power sector.
KEC International Ltd. key Products/Revenue Segments include Income from Eng.Construction Contracts, Cables, Scrap, Towers & Structurals, Sale of services, Other Operating Revenue for the year ending 31-Mar-2022.
Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 3326.03 Crore, down -22.26 % from last quarter Total Income of Rs 4278.17 Crore and up 30.86 % from last year same quarter Total Income of Rs 2541.71 Crore. Company reported net profit after tax of Rs 31.02 Crore in latest quarter.
Investment Rationale
KEC reported a mixed quarter, with revenue at INR 33.2bn, driven by non-T&D segments. EBITDA margin, at 5.1%, was affected, mainly by losses in SAE (INR 0.7/1bn EBIDTA/PBT loss), and higher freight costs (+INR 0.4bn). With Q1FY23 order inflow (OI) of INR 34.7bn (vs. INR 200bn guidance for FY23 i.e. ~17.4%) and L1 on INR 80bn, the order book (OB) stands at INR 317bn (~2.3x FY22 revenue). On the other hand, collections from Afghanistan are still stalled, with net exposure increasing to INR 2.6bn. The consolidated net debt increased to INR 60.8bn (vs. INR 47.7bn at the end of Mar’22) with interest cost for the quarter rising to 3% of sales (vs. 2.2% in Q4FY22). NWC worsened further to 148 days vs. 137 days in the previous quarter. Given continued high debt build up, elevated working capital and weak profitability, the brokerage downgrades KEC rating from BUY to REDUCE, with a revised target price of INR 375/share (14x Mar- 24E EPS).
Promoter/FII Holdings
Promoters held 51.88 per cent stake in the company as of 30-Jun-2022, while FIIs owned 12.17 per cent, DIIs 26.46 per cent.
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