KEI Industries Initiating Coverage Report By Karvy

Multiple growth levers kicking in; initiating, with a Buy We initiate coverage on KEI Industries with a Buy and a target price of `128. We are upbeat about the company given the greater demand for its products (reflected in its `17bn order-book). With its better product-mix (due to high-margin EHV), higher exports and retail sales, we expect robust 18%/82% revenue/PAT CAGRs over FY15-17. Operating leverage and the better product-mix could improve margins by 180bps, in our view. With no major capex until FY17, FCF generation would strengthen the balance sheet, resulting in higher return ratios.

Download KEI Industries IC 17 April 2015