Way2Wealth's research report on KEI IndustriesKEI has reported a strong Q1FY16 result which is mainly driven by growth in Turnkey division which grew by 84.4% YoY to Rs 97.1 crore (including cable). EHV segment revenue at Rs 32 crore also performed well. Exports grew by a healthy 66% YoY. Its dealer distribution business also performed well. Total order book currently stands at Rs 1900 crore. EHV and EPC businesses enjoy very high margins ~15% while margins of cable division stand at 10%. We expect high margin businesses to contribute a larger share to revenues going forward. There is strong visibility in these segments and are expected to take the Company to entirely new level.VALUATIONS & OUTLOOK:"The business environment for Cable industry is improving gradually. Its EHV Cables and EPC business segments are expected to contribute to the incremental growth for KEI. We expect the two segments to contribute 20% to sales in FY16E from the current levels of 14%. Its strategic focus towards expansion through dealer-distributor network is also expected to reap benefits. At the CMP of Rs 103.5, the stock quotes at a P/E of 11.9x its FY16(E) EPS of Rs 8.71. We continue to be remain positive on the Company’s growth prospects and recommend investors to HOLD the stock for a longer-term horizon", says Way2Wealth research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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