Buy KEC International, target price Rs 506: ICICI Direct

ICICI Direct has buy call on KEC International with a target price of Rs 506. The current market price of KEC International is Rs 442.5.

KEC International, incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 11349.17 crore) operating in power sector.

Its key products/revenue segments include income from eng. construction contracts, cables, scrap, towers & structurals, sale of services, other operating revenue for the year ended March 31, 2022.

Financials
For the quarter ended June 30, 2022, the company has reported a consolidated total income of Rs 3326.03 crore, down 22.26 per cent from last quarter total income of Rs 4278.17 crore and up 30.86 per cent from last year same quarter total income of Rs 2541.71 crore. Company has reported net profit after tax of Rs 31.02 crore in latest quarter.

The company’s top management includes Mr.H V Goenka, Mr.M S Unnikrishnan, Mr.Vikram Gandhi, Mr.Ramesh Chandak, Mr.S M Trehan, Ms.Nirupama Rao, Mr.G L Mirchandani, Mr.Dilip G Piramal, Mr.A T Vaswani, Mr.Vimal Kejriwal, Mr.Vinayak Chatterjee. Company has Price Waterhouse Chartered Accountants LLP as its auditors. As on June 30, 2022, the company has a total of 26 crore shares outstanding.

Investment Rationale
Structurally, as per change of polarity concept stock has retested recent major breakout area of Rs 350-370 and has formed a higher base, highlighting strength.

In the smaller time frame the stock has witnessed a shallow retracement as it has already taken nine weeks to retrace just 61.8 per cent of the preceding four weeks up move (Rs 352-479) signalling a higher base formation.

The brokerage expects the stock to maintain positive bias and head towards Rs 506 levels in the coming months being the 80% retracement entire decline of Feb-May 2022 (Rs 549-352).

Promoter/FII Holdings
Promoters held 51.88 per cent stake in the company as of Jun 30, 2022, while FIIs owned 12.17 per cent, DIIs 26.46 per cent.