Technology

For 1QFY2020, KEI Industries (KEI) posted good set of results, which are largely inline
with our expectations on both top-line as well as bottom-line fronts. Revenue
grew by ~22% yoy, while the company reported a marginal improvement on
operating margins front. On the bottom-line front, KEI reported growth of ~42%
yoy to `46cr on the back of strong top-line growth.
Outlook and Valuation: We expect KEI to report net revenue CAGR of ~15% to
~`5,632cr over FY2019-21E mainly due to (a) higher order book execution in EPC
segment; (b) growth in EHV business; (c) higher B2C sales; and (d) higher exports.
On the bottom-line front, we expect CAGR of ~22% to`269cr over the same period
on the back of strong volume growth. Thus, we maintain our Buy rating on KEI
Industry with a Target Price of `556.

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