Buy KEC International, target price Rs 530: Emkay Global

Emkay Global has buy call on KEC International with a target price of Rs 530. The current market price of KEC International is Rs 480.35.
Time period given by analyst is one year when KEC International Ltd. price can reach defined target.

KEC International Ltd., incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 12360.81 Crore) operating in Power sector.


KEC International Ltd. key Products/Revenue Segments include Income from Eng.Construction Contracts, Cables, Towers & Structurals, Scrap, Sale of services, Other Operating Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 3590.75 Crore, up 41.27 % from last quarter Total Income of Rs 2541.71 Crore and up 10.00 % from last year same quarter Total Income of Rs 3264.44 Crore. Company reported net profit after tax of Rs 80.29 Crore in latest quarter.

Investment Rationale
The brokerage cuts FY22E EPS by 7% to factor in delays in execution in Q3 (due to construction ban in Delhi and floods in Chennai) and delay in margin recovery in SAE. Given SAE is expected to turn positive in FY23, it estimates FY23/FY24 margins at 8.7%/10%. Average margins during FY17 to FY20 stood at 10.1% and, hence, it believes this is achievable. Its FY23E/FY24E EPS stands at Rs28.8/37.7. It maintains Buy with a TP of Rs530

Promoter/FII Holdings
Promoters held 51.82 per cent stake in the company as of 30-Sep-2021, while FIIs owned 11.11 per cent, DIIs 26.99 per cent.