Buy KEI Industries; target of Rs 443: Dolat Capital
Dolat Capital’s research report on KEI Industries
KEI Industries (KEI) numbers were ahead of estimates driven by strong sales in retail segment and expected growth in EPC and institutional orders. KEI has been focusing on expanding its dealer network as this sales channel offers higher brad stickiness with better margins and lower working capital requirement. Institutional sale growth has been encouraging and management expect this division to grow in double digits. EHV sales has been another growth engine and is expected to pick up further considering the government push for underground electrification and Metro transport. Brand development and distribution expansion will propel growth in retail segment. Increase in proportion of the retail segment will keep working capital in control.
The improving balance sheet is a result of the strong macro demand and getting the product mix right. We rollover valuations to FY21 E earnings. We reiterate Buy rating with a target price of ` 443.
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