Buy KEI Industries; target Rs 20: Firstcall Research

“KEI Industries Limited, known for its unique product range across the world is one of the leading players in the wires and cables industry. KEI Industries Limited (KEI) was established in 1968 as a partnership firm under the name Krishna Electrical Industries, with prime business activity of manufacturing house wiring rubber cables. The firm was converted into public limited with the corporate name KEI industries Limited in December 1992. In 1996, KEI acquired Matchless, a company under same management, which was engaged in manufacture of stainless steel wires. Currently, KEI Manufactures variety of cables namely High Tension (HT) and Low tension (LT) power cables, Control and Instrumentation Cables, other specialty cables, rubber insulated power, control & instrumentation cables.”

“KEI Industries Ltd is among leading players in Electrical Cable industry that enable industrial & domestic customers with one stop shop for electrical cabling solutions, reported its financial results for the quarter ended 30th June, 2012. The first quarter witness a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.70.18 million against Rs.26.33 million in the corresponding quarter ending of previous year, an increase of 166.54%. Revenue for the quarter rose 26.21% to Rs.4220.51 million from Rs.3344.10 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.1.05 a share during the quarter, registering 166.54% increase over previous year period. Profit before interest, depreciation and tax is Rs.432.85 millions as against Rs.283.12 millions in the corresponding period of the previous year.”

“The electrical equipment industry has an annual turnover of Rs 1 lakh crore, but due to its heterogeneous character, the industry has not received the focused attention of policymakers. The sector has a negative trade balance, which has been increasing in recent times. Its annual exports amount to Rs 20,000 crore, but India imports electrical items worth Rs 32,000 crore. The Indian electrical equipment manufacturing industry registered a growth of 16.6% during Q1 of FY 2011- 2012, maintaining almost the same growth as Q1 of 2010-2011. This stood at 16.73%. Indian Electrical and Electronics Manufacturers’ Association (IEEMA), the apex Indian industry association of manufacturers of electrical, We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend buy in this particular scrip with a target price of Rs.20.00 for Medium to Long term investment,” says Firstcall Research report.

Public holding more than 90% in Indian cos

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