Motilal Oswal Stays 'Neutral' On KEC International — Here's Why

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Motilal Oswal Report

KEC Internationa Ltd. in our recent meeting highlighted a continued strong addressable market for transmission and distribution and improving opportunities in the civil segment for residential buildings, petrochemicals, hospitals, etc. while, industrials has been witnessing slow momentum.

The company is continuously focusing on improving return metrics and targeting a reduction in net working capital cycle on improved collections.

We expect KEC International to continue to benefit from the prospect pipeline in T&D, and thus, maintain our estimates.

We retain our Neutral rating on the stock with a target price of Rs 940, based on 21 times two-year forward earnings.

Key risks and concerns

A slowdown in order inflows, higher commodity prices, an increase in receivables and working capital, and heightened competition are some of the key risks that could potentially affect our estimates.

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