KEI Industries share price jumps 6% on strong Q3 earnings
The management maintained its guidance of 18-19 percent volume growth in FY20.
Jan 21, 2020 / 12:49 PM IST
The share price of KEI Industries gained 6.5 percent intraday on January 21 after the wires and cable manufacturer reported strong earnings in the quarter ended December 2019.
The company's consolidated net profit grew by 50.4 percent year-on-year to Rs 72.5 crore, driven by revenue and lower tax cost.
Consolidated revenue from operations increased 20.8 percent to Rs 1,314.2 crore YoY, with the cables segment registering 25 percent YoY growth and EPC 54 percent in the quarter.
At operating level, KEI's earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 18.6 percent to Rs 139.3 crore, but margin contracted 20 bps YoY to 10.6 percent in the quarter amid higher other expenses, sub-contractor expenses and employee cost.
The company had pending orders of approximately Rs 4,173 crore and L-1 orders Rs 316 crore, KEI said in its BSE filing.
Its revenue growth during the April-December period at 22 percent was ahead of the management guidance of 20 percent growth in FY20. Even EBITDA margin at 10.7 percent was more than management guidance of 10.5 percent.
While maintaining a buy call on KEI Industries, with a target of Rs 677 (implying a 30 percent potential upside from current levels), Prabhudas Lilladher said the company reported strong results.
Management maintained its guidance of 18-19 percent volume growth. The shareholders' gave their approval for raising funds through QIP.
"Growth is well diversified across various segments. We maintain our revenue and PAT estimates for FY20 and FY21. Further, we expect FY22E revenue/EBITDA/PAT to grow at 10/ 8.9/ 12.1 percent to Rs 6,320 crore/ Rs 680 crore/ Rs 370 crore. At CMP, the stock is trading at PER of 12.3x FY21E and 11.0x FY22E," the brokerage said.
The stock has gained 25 percent in the last one month. It was quoting at Rs 543.00, up Rs 26.20, or 5.07 percent, on the BSE at 1157 hours.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.