Buy KEC International; target of Rs 1100: Sharekhan

Buy

Sharekhan's research report on KEC International

Order book is at a record high of ~Rs. 42,500 crore (including L1 position of Rs 8412 crore), representing a 2.5x revenue potential on the base of FY24x revenues. Revenue growth of 14% was led by T&D segment (28%) which was compensated by non-T&D segment (-3%). Operating profits grew by 17%, while margins improved by 17bps to 6.3%. Margins recovery were slower due to execution of low margin legacy orders. Strong traction in T&D segment leading to order intake of Rs 9,000 crore a stellar 70% y-o-y growth leading order book to Rs 26,000 crore.

Outlook

We retain a Buy on KEC with a revised PT of Rs. 1100, (20x of FY27 EPS) backed by an improving margin trajectory, robust order book and strong earnings outlook.

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KEC International - 06112024 - khan