Please refer to important disclosures at the end of this report
1
KEC International Limited (KEC) is a global infrastructure Engineering,
Procurement & Construction (EPC) major with presence across Powe
r
Transmission & Distribution, Cables, Railways, Water, Renewable and Civil. KEC
has guided for sales growth at 10% for FY17 with EBITDA margins around 8.5%.
The management highlighted that it has kept a buffer in the event of an increase
in commodity prices, while bidding for fresh orders and hence, does not see an
y
significant risk to the margin guidance for FY17. The union budget proposed
100% rural electrification by 1st May 2018 which is positive for the company’s
T&D business. The union budget has also proposed 3500km of railway lines to
be commissioned in FY18 which is positive for the company’s Railway business.
Recovery of margins in SAE segment, good traction in Railways & Solar segment
and healthy T&D order pipeline from select SEB’s to aid company post health
y
revenues. It seems a strong pipeline, faster execution and tight working capital
control would shore up KEC’s cash flows. Hence Buy.
BUY
CMP `170
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 50.9
MF / Banks / Indian Fls 29.0
FII / NRIs / OCBs 7.4
Indian Public / Others 12.8
Abs. (%) 3m 1yr 3yr
Sensex 8.2 17.6 32.0
KEC International 19.4 47.7 175.9
52 Week High / Low 175/111
Avg. Daily Volume 81,375
Capital Goods
Market Cap (
`
cr) 4,359
2
BSE Sensex 28,946
Nifty 8,935
Face Value (
`
)
Reuters Code KECL.BO
1.0
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
KEC International
Others | Capital Goods
March 14, 2017
KEC International | Capital Goods
March 14, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement KEC International
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
< -15
)