Driven by strong sales in the retail segment
and growth in EPC and institutional orders, results were more than the
estimates. The Company is focusing on expanding its dealer network, as this
sales channel offers higher brand stickiness as well as better margins and
lower working capital requirement. The institutional sale growth was a positive
and management expects this division to grow in double digits. The EHV sale was
another growth engine and is expected to rise further, considering the
government push for underground electrification and metro transport. Brand
development and distribution expansion will propel growth in the retail
segment. We also believe the increase in proportion of the retail segment will
control the need for working capital. It is reaping the fruits of its thrust on
the retail segment, with a strong growth and higher margin profile. It currently
has more than 1,450 dealers and is expected to grow this by at least 10% every
year.
·
Company has reduced
debt.
·
Company has a good
return on equity (ROE) track record: 3 Years ROE 25.67%
·
Company has good
consistent profit growth of 73.09% over 5 years
The improvement in the balance sheet is a
result of the strong macro demand and the optimal product mix. We reiterate a
Buy rating, with a target price of ₹ 648. (21.52 x 30.12 FY21E).
STOCK RETURNS
|
Time Period
|
Price Return
|
CAGR
|
|
6 Months
|
27.31%
|
62.08%
|
|
1 Year
|
77.07%
|
77.07%
|
|
3 Year
|
356.04%
|
65.83%
|
|
5 year
|
1560.70%
|
75.41%
|
|
10 Year
|
1311.69%
|
30.31%
|
Image Source: Screener
KEI Industries Ltd
COMPANY DETAILS
Ø
KEI Industries Ltd was
incorporated in the year 1968.
Ø
The Company is engaged
in the business of manufacturing sale and marketing of all range of power
cables up to 400kv - Low Tension (LT) cables High Tension (HT) and Extra High Voltage
(EHV) control and instrumentation cables specialty cables elastomeric / rubber
cables submersible cables flexible & house wires winding wires which
address the cabling requirements of a wide spectrum of sectors such as power
oil refineries railways automobiles cement steel fertilizers textile and real
estate amongst others.
Ø The Company is also
engaged in execution of Engineering Procurement and Construction (EPC) projects
for survey supply of materials design erection testing & commissioning on a
turnkey basis.
Ø
The Company has four
manufacturing facilities / plants located at New Delhi Bhiwadi Chopanki &
Pathredi in Rajasthan and Silvassa in Dadra & Nagar Haveli.
MARKET CAPITAL
KEI Industries Ltd is a Mid Cap Company having
a market cap of ₹ 4,207 Crore.
SECTOR
The Company is engaged in the manufacture and
supply of power and other industrial cables.
FINANCIAL ANALYSIS
SALES
For the year ended 31-03-2019, the company has
reported a Consolidated Sales of ₹ 4,227 Crore, up 22% from last year Sales of ₹ 3,459 Crore.
For the quarter ended 30-06-2019, the company has reported a
Consolidated Sales of ₹ 1081.36 Crore, up 22% from last year same
quarter Sales of ₹ 883.90 Crore and the last quarter Sales was ₹ 1258.79 Crore
NET PROFIT
Company has reported net profit after tax of ₹
181.87 Crore for the year ended 31-March-2019, up 26% from last year Net Profit of ₹ 144.56 Crore.
It has reported net profit after tax of ₹ 45.81
Crore in latest Quarter, up 42% from last year same quarter Net Profit of ₹ 32.18 Crore and the
last quarter Net Profit was ₹ 59.93 Crore.
STOCK PRICE DETAILS
CMP – ₹ 529.90
Book Value – ₹ 97.97
Face Value - ₹ 2
PRICE HISTORY
1-Year Beta – 1.34
52 Week High – ₹ 562
52 Week Low - ₹ 248
SHAREHOLDING
|
Category
|
Percentage
|
|
Promoter Group
|
46.26%
|
|
Foreign Institution
|
9.90%
|
|
Financial Institutions
|
18.24%
|
|
General Public
|
25.59%
|
VALUATION
Stock P/E – 21.52
Price to book value – 5.45
PEG Ratio – 0.30
Dividend yield – 0.22 %
Debt to equity – 0.77
SALES GROWTH CAGR
|
Category
|
Percentage
|
|
10 Years
|
15.81%
|
|
5 Years
|
21.16%
|
|
3 Years
|
22.04%
|
|
TTM
|
24.57
|
PROFIT GROWTH CAGR
|
Category
|
Percentage
|
|
10 Years
|
36.88%
|
|
5 Years
|
73.09%
|
|
3 Years
|
43.02%
|
|
TTM
|
30.97%
|
RETURN ON EQUITY CAGR
|
Category
|
Percentage
|
|
10 Years
|
17.59%
|
|
5 Years
|
22.80%
|
|
3 Years
|
25.67%
|
|
Last Year
|
26.30%
|
This is NOT a recommendation.
Please consult a qualified SEBI registered investment advisor before investing.
FINVESTEDGE is made to educate the fellow
investors about the market and how the market works. This is made purely for
education purpose which contains simple ideas on investing and how investors
must behave while dealing with their money.
Email – finvestedge.in@gmail.com
Happy Investing!
FINVESTEDGE
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