Siddharth Sadani
KEI Industries had yet another stellar quarter , key segments (cables, EPC) grew at a healthy pace in FY18; Key growth drivers (a strong order book, expanding dealer network and brand promotion) would drive retail sales, and augur wells for the company. The rising revenue share of EHV cables and retail sales would aid margin expansion.
Q4 FY18 revenue, EBITDA and PAT grew a strong 39 percent, 37 percent and 57 percent YoY respectively, powered by cables (up 23 percent YoY) and EPC (up 42 percent YoY).
EHV cable sales to double in FY19. FY18 EHV cable revenue grew a strong 65 percent YoY to Rs 168 crore. Sales of EHV cables are expected to double in FY19 supported by the strong, Rs 327 crore, order book, aiding overall revenue growth and margin expansion.
The huge, Rs 257 crore, order book and the L1 tender offer strong revenue assurance. We expect revenue, EBITDA and PAT to clock respectively 20 percent, 26 percent and 34 percent CAGRs over FY17-20. Hence, we retain our buy rating with target of Rs 527.
Disclaimer: The author is Vice-President - Head Equity Advisory at Anand Rathi Financial Services. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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