CD Equisearch is bullish on KEC International has recommended buy rating on the stock with a target price of Rs 404 in its research report dated October 22, 2020.
CD Equisearch 's research report on KEC International
According to a recent report published by oilandgas360.com, the global market for power transmission and distribution equipment is projected to exceed US$200 billion by 2024, driven by the ever-present demand for energy, growing trend towards distributed energy generation and rising investments in smart grids. Other major factors also poised to drive growth in the market include improvements in the design and architecture of transformers, rising prominence of ultra-high-voltage (UHV) transmission systems etc. Rising demand for long-distance energy transmission is forecast to fuel demand for high-voltage direct current (HVDC) technology given its ability to connect power grids from remote places and allow delivery of power without energy losses or outages.
Though, pick up in execution of orders is expected from Q2FY21, we have revised our earnings estimates for FY21 not least due to impact of the pandemic (EPS of Rs 24.11 vs earlier estimate of Rs 28.06). Weighing odds, we recommend buying the stock with target price of Rs 404 (previous target Rs 393) based on 14x FY22e EPS of Rs 28.83 over a period of 9-12 months.
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