Categories

10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Please note

Note: The artciles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that I might have the dkiscussed companies in my portfolio and hence my point of view can be biased.Readers should consult registered consultants before making any investments
.

Archives : Old artciles

Thursday, October 29, 2009

KEI Industries Ltd:Future growth prospects and outlook

Scripscan:KEI Industries Ltd
cmp:29
Code:517569

Story:KEI's FY09 profits were marred by sudden drop in demand in H2FY09, sharp erosion in the value of inventories and excessive volatility in both raw material prices and currency exchange rates. We expect these concerns to abate with demand picking up from H2FY10, low raw material prices and stable dollar-rupee, leading the company on a strong growth path. We expect the company's revenues to grow at CAGR 17.0% through FY09-FY11E.Benefit of expansion to accrue from FY10E KEI completed setting up of HT (High-Tension) capacity of 2600 km at Chopanki and upgrading upto 132 kV) its existing facility (upto 33kV) at Bhiwadi in March 2009. The benefits of these expanded and upgraded capacities will accrue from FY10E. We expect the volumes (cables) to grow by 10.0% YoY and 18.8% YoY in FY10E and FY11E respectively.The expansion towards HT cables coupled with upgrading of Bhiwadi facility to manufacture EHV (Extra High Voltage) cables (132 kV) will change the product mix towards high value added cables where the margins are higher. Also, with raw material cost expected to come down, we believe that the EBITDA margins of the company will increase to 9.7% in FY11E from 3.4% in FY09.The company has made inroads into the EPC space by executing two turnkey projects for 400 kV power sub-stations. We expect the company to consolidate its pre-qualifications to winlarger EPC projects enabling the company to diversify its business model going forward. We expect the contribution from this segment to grow from 0.2% in FY09 to 0.3% in FY11E.With exports constituting almost 16.7% of the company's revenues, KEI is putting a greater thrust on exports to further expand its global footprint. With the commissioning of 100% Export Oriented Unit (EOU) in Chopanki, we expect the export revenue to touch INR 2.5 billion in FY11E, contributing 19.0% to the total revenue of the company.The company witnessed a 43.6% YoY fall in realisations in House-wires segment in FY09 on account of fall in demand in the realty space. KEI has embarked upon an aggressive brandbuilding exercise to make its house-wires brand a credible name in the domestic market. With housing segment witnessing a pick-up in demand, we expect the realisations and consequently revenues to improve by 20.7% and 50.7% in FY10E and FY11E respectively.The overall growth for cable industry was mere 4.5% in FY09 against the growth of 16% in FY08. Reduction in growth was mainly due to liquidity crunch and reduced demand due to delay in implementation of both ongoing and new projects. However, considering back-ended orders from power segment to achieve 11th Plan targets coupled with a broader pick-up in the economic activity, we expect the cable industry to grow by ~20% in FY11.With capacity expansion in place, growth in infrastructure investments, we expect KEI to returnon a strong growth path. We expect the EPS of the company to be at INR 6.1 in FY11E from INR 0.2 in FY09. The company is currently trading at 4.9x and 4.6x its FY11E PE and EV/EBITDA respectively. We rate the stock as BUY with a target price of INR 49.0.

Important Disclaimer&Privacy policy

This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
 
x

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner