Accumulate KEC International; target of Rs 390: Dolat Capital
Dolat Capital’s research report on KEC International
FY18 was a strong year despite facing challenges regarding GST implementation in 1HFY18 with revenue at ` 100.9bn grew by 15.3% YoY as EBIDTA grew by 23% to ~ ` 10bn and PAT grew by 1.5x to ` 4.6bn. Overall order book was up 37% given the strong capex environment in power transmission and rail electrification projects.
The management expects to double its revenues from railway segment with margins moving closer to T&D. There is focus on reducing interest cost and debt along with better W.C management. We see 16% revenue CAGR over FY18-20E. We maintain our Accumulate rating with TP ` 390 based on target multiple of 15xFY20E.
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