For 3QFY2019, KEI Industries (KEI) posted good set of results, which are largely
in-line 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 ~24% yoy to `48cr on the back of strong top-line growth.
Outlook and Valuation: We expect KEI to report net revenue CAGR of ~19% to
~`4,878cr over FY2018-20E 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 ~27% to`233cr 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 `486.
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