Buy KEI Industries; target of Rs 15: Firstcall Research

Firstcall Research is bullish on KEI Industries and has recommended buy rating on the stock with a target price of Rs 15 in its February 16, 2013 research report.

“KEI Industries Ltd, known for unique product range across the world is one of the leading players in the wires and cables industry. KEI Industries was established in the year 1968 as partnership firm under name Krishna Electrical Industries, with prime business activity of manufacturing house wiring rubber cables. The firm was converted into public ltd 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 and instrumentation cables.”

“The company’s net profit jumps to Rs.58.18 million against Rs.56.28 million in the corresponding quarter ending of previous year, an increase of 3.38%. Revenue for the quarter fell 19.28percent to Rs.3690.18 million from Rs.4571.44 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.0.83 a share during the quarter, registering 1.48% decrease over previous year period. Profit before interest, depreciation and tax is Rs.413.81 millions as against Rs.399.59 millions in the corresponding period of the previous year.”

“At the current market price of Rs.13.55, the stock P/E ratio is at 3.34 x FY13E and 2.98 x FY14E respectively. Earnings per share (EPS) of the company for the earnings for FY13E and FY14E are seen at Rs.4.05 and Rs.4.55 respectively.  Net Sales and PAT of the company are expected to grow at a CAGR of 12% and 45% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 3.03 x for FY13E and 2.90 x for FY14E. Price to Book Value of the stock is expected to be at 0.37 x and 0.33 x respectively for FY13E and FY14E.  We recommend buy in this particular scrip with a target price of Rs.15 for medium to long term investment,” says Firstcall Research report.

FIIs holding more than 30% in Indian cos

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