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    Buy KEC International, target price Rs 598: ICICI Direct

    Synopsis

    KEC International, incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 12318.39 Crore) operating in Power sector.

    KEC InternationalANI
    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.
    ICICI Direct has buy call on KEC International with a target price of Rs 598. The current market price of KEC International is Rs 479.

    KEC International, incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 12318.39 Crore) operating in Power sector.

    KEC International key Products/Revenue Segments include Income from Engineering Construction Contracts, Cables, Scrap, Towers & Structurals, Sale of services, Other Operating Revenue for the year ending 31-Mar-2022.

    Financials
    For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 4080.14 Crore, up 22.67 % from last quarter Total Income of Rs 3326.03 Crore and up 13.63 % from last year same quarter Total Income of Rs 3590.75 Crore. Company has reported net profit after tax of Rs 55.24 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 30-06-2022, the company has a total of 26 Crore shares outstanding.

    Investment Rationale
    KEC’s SAE business’ legacy EPC projects will get executed by Q3FY23, which will arrest losses and help to improve margin. Also, execution of new orders with good margins will come into play in H2FY23. KEC over the past years has significantly de-risked its business from a core T&D player to an all-round infra player with sizeable scalability happening in the railways and the civil segment. Non T&D business is now almost 50% of the overall revenue pie.

    With strong backlog of Rs 27569 crore with L1 orders worth~Rs 6500 crore and execution low margins orders behind us, the brokerage is of the belief that KEC is entering a strong growth trajectory. With PAT CAGR of 53.2% over FY22-24E and reducing interest cost intensity, the brokerage expects rerating to happen for the stock.

    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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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

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