Buy KEC International, target price Rs 610: ICICI Direct

ICICI Direct has buy call on KEC International with a target price of Rs 610. The current market price of KEC International is Rs 513. Time period given by analyst is 12-15 months when KEC International price can reach defined target.

KEC International, incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 13222.05 Crore) operating in Power sector.

KEC International key Products/Revenue Segments include Income from Eng.Construction Contracts, Cables, Scrap, Towers & Structurals, Sale of services, Other Operating Revenue for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 5530.53 Crore, up 26.37 % from last quarter Total Income of Rs 4376.34 Crore and up 29.27 % from last year same quarter Total Income of Rs 4278.17 Crore. Company has reported net profit after tax of Rs 72.17 Crore in latest quarter.

The company’s top management includes Mr.H V Goenka, Mr.M S Unnikrishnan, Mr.Vikram Gandhi, Mr.Ramesh Chandak, Mr.S M Trehan, Ms.Nirupama Rao, Mr.G L Mirchandani, Mr.Dilip G Piramal, Mr.A T Vaswani, Mr.Vimal Kejriwal, Mr.Vinayak Chatterjee. Company has Price Waterhouse Chartered Accountants LLP as its auditors. As on 31-03-2023, the company has a total of 26 Crore shares outstanding.

Investment Rationale
The brokerage remains long term positive and retains its BUY rating on the stock Further, it values KEC at Rs 610 i.e. 17x P/E on FY25E EPS. The brokerage expects revenue to grow at ~14.9% CAGR in FY23-25E owing to strong order book worth around Rs 28981 crore and L1 orders worth around Rs 6000 crore. Strong order pipeline for FY24E to also ensure decent order inflow growth.

Promoter/FII Holdings
Promoters held 51.88 per cent stake in the company as of 31-Mar-2023, while FIIs owned 12.6 per cent, DIIs 25.76 per cent.