Buy KEC International; target of Rs 362: Geojit

Geojit's research report on  NCC

Q1FY21 revenue de-grew by 8.5% due to impact on execution in April 20. However, during May & June execution witnessed a healthy improvement led by Railway and Civil segment. EBITDA margin declined by 159bps YoY to 8.83% despite 83bps YoY improvement in gross margin at 30.1%. Order book (incl. L1) stands at Rs.24,500cr supported by 73% rise in order inflow, provide strong visibility. Better order pipeline in Railway, International T&D & Civil to add positivity on order book. We believe near term headwinds has been factored in stock prices and execution to pick up from H2FY21.

Outlook

We maintain our Buy rating owing to healthy order book & recovery in execution and value KEC at a P/E of 14x on FY22E EPS .

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