Monday, June 27, 2011

KEC - Buy around 75 levels - Target 100

KEC International: The flagship company of the RPG group, KEC International is a diversified infrastructure player with presence in business verticals of power transmission and distribution, cables, railways, telecom and water.

More than half its revenues come from overseas markets. It has a presence in over 45 countries. The company posted a decent performance in the last financial quarter, becoming a billion dollar company in the process. Its turnover increased by 15% to Rs1,557 crore in Q4 while the net profit surged 25% to Rs79 crore.

The company's order book now stands at around Rs7,800 crore, with 53% coming from foreign markets. The order book has grown by a healthy 42% over the previous year. It also recently secured new orders to the tune of Rs1,044 crore, including turnkey transmission line orders (from Saudi Arabia, Kuwait and Ghana), tower supply orders (from North America and South America), additional orders for existing projects (from Saudi Arabia and Abu Dhabi), apart from other domestic orders.

Anand Vyas , research analyst with Nirmal Bang says : "The company has witnessed huge order inflows of late, most of which are expected to get executed in this fiscal. It has also reduced the risk by diversifying into the water and railway segments."

Our Recommendation :

Buy this share at 75 for a target price of 125 ; holding period 6-7 months

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