Buy KEC International; target Rs 542: FinQuest Securities

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FinQuest Securities has come out with a report on KEC International' Q2FY10 earnings. The research firm recommended a buy rating on the stock with a target price of Rs 542.

" KEC International announced its 2Q FY10 results in line with our full year estimates. We maintain our earnings estimates for FY10E and FY11E. We believe the strong order pipeline will continue to drive KEC's top line over the next 2 years. We maintain our earnings estimates of INR 37.7 and INR 46.2 for FY10E and FY11E respectively. The stock currently trades at 11.4x FY11E earnings. However, we have not considered the BSNL order in our revenue estimates. Assuming the BSNL order is awarded in 2H FY10 and KEC emerges as L1 bidder, we estimate the company to report an EPS of INR 54.2 in FY11E. On assigning a PE multiple of 10x we arrive at a target price of INR 542.", says FinQuest Securities.

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