KEC International Limited – Empowering Performance
KEC International Limited is one of the Multibagger Shares, identified by Dynamic Research based on technical and fundamental research.
KEC share price has touched a 52 week high of Rs. 164.80 on 01-Jan-2016 and a 52 week low of Rs. 97.50 on 12-Feb -2016.
As per our estimate, the stock at CMP of 137 is trading at P/E of 18.26, The Debt Equity ratio is 1.54. The Interest coverage ratio is of 2.13 which indicate that the Company has been generating sufficient for the shareholders after servicing its debt obligations. The return on equity is 12.10%. The company’s promoter holding pledge is Nil.
At the end of the year 2015 the order book of the company stood at Rs.95.10 bn, we expect that order book of Kec to grow to Rs.109.30 by the end of the year 2016 and to Rs. 114.8 bn in 2017 due to strong domestic demand and large geographical diversification
On quarterly basis the company’s net revenue from operations reached to Rs.2558.64 crore in Q4FY16 compared to Rs. 2521.09 crore in Q4FY2015 an increase of 1.48%. The operating profit for the quarter stood at Rs 201.16 crore compared to Rs 162.37 crore same period last year. Net profit for the quarter stood at Rs.79.85 crore compared to Rs. 62.89 crore.
For the year ended March 31, 2016 KEC International on consolidated basis reported net profit of Rs. 191.52 crore compared to Rs.160.99 crore FY2015 registering growth of 18.96%YOY.
About the company
KEC, the flagship company of RPG Group is global infrastructure Engineering, Procurement and Construction (EPC) major.
It has presence in the verticals of
• Power Transmission & Distribution
• Cables, mostly into Waters and power.
KEC has powered infrastructure development in more than 61+ countries across Central Asia, Middle East, America, Africa, South East Asia and South Asia.
Indian Transmission & distribution sector remained less invested compared to power generation sector. However, twelfth plan and thirteen plan has set a investment target of Rs.1.8tn and Rs.2.0tn in power transmission sector (Vs Rs 1.2tn in Eleventh Plan) in order to keep tempo with power generation capacity addition.
KEC has a current robust order book of Rs.105.37 bn at the end of 1Q FY 16.The Company has seen healthy uptick in order booking in 1Q FY 16 and expects the same to continue going forward.
In Domestic markets, the company is seeing increased activity from PGCIL, (now 50% of KEC’s domestic order book v/s 10-15 % earlier).
In the International market, KEC is seeing increased bid tenders in markets like Oman, Abu Dhabi and SAARC countries as well.
On the basis of above factors we recommend a buy in KEC International Limited at around Rs.130 for medium term with a target of Rs.160.
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