Accumulate KEC International; target of Rs 703: Geojit

Geojit recommended accumulate rating on KEC International with a target price of Rs 703 in its research report dated August 16, 2023.

Broker Research

August 16, 2023 / 13:29 IST

Accumulate

Geojit's research report on KEC International

KEC International Ltd. (KEC) is a global infrastructure Engineering, Procurement and Construction major. It has presence in the verticals of Power T&D (Transmission & Distribution), Cables, Railways and Water & Renewable. In Q1FY24, KEC reported a healthy revenue growth of 28% YoY led by strong execution in T&D segment by 71% YoY, and the civil segment by 60% YoY EBITDA margin expanded by 68bps YoY to 5.8% in Q1FY24 owing to benign raw material prices and moderation in employee costs. The company expects margins to improve to 6% in H1FY24 and 8% in H2FY24 supported by strong execution and moderation in commodity prices. The order book, including L1 orders, stands at a record level of over Rs.35,000cr, (2x TTM revenue), and KEC is targeting an inflow of around Rs 25,000cr for FY24.

Outlook

With the improvement in T&D execution and a healthy order book, we remain positive on KEC on a long term basis. We reiterate, Accumulate rating and value the stock at a P/E of 20x with a TP of Rs.703.

For all recommendations report, click here