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Hold KEC International; target of Rs 260: ICICI Securities

Hold KEC International; target of Rs 260: ICICI Securities
June 02
18:24 2020

ICICI Securities recommended hold rating on KEC International with a target price of Rs 260 in its research report dated May 31, 2020.

ICICI Securities research report on KEC International

Led by 39% growth in revenues from overseas subsidiary SAE Towers and 36% growth under railways, KEC reported better than expected execution in Q4FY20 at Rs36.7bn. Lockdown-related headwinds are likely to hit H1FY21E execution while migrant labour exodus will increase costs. However, reduction in commodity prices is likely to offset the higher labour costs and thereby limit any major impact on overall margins. Order prospects continue to be strong in SAARC region, Middle East and the domestic market despite an unfavourable environment.

Outlook

Factoring-in the better than expected execution and margins in Q4FY20, we raise FY21E/FY22E earnings by 41% and 26% respectively. Upgrade to BUY (from Hold) with a revised target price of Rs260 (previously: Rs199).


For all recommendations report, click here

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First Published on Jun 2, 2020 12:14 pm

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