Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>The Indian Market (~$4 trillion) has now overtaken Hong Kong as the 4th most-valued stock market after the US, China, and Japan. </li>
<li>We recently concluded an exploratory trip to Patna, the capital, and also the largest city of the state of Bihar, Summarized thoughts on companies focused in this insight. </li>
<li>Multiple stocks covered in the Insight. The future of <a href="https://www.smartkarma.com/entities/easy-trip-planners-ltd" target="_blank" data-smartkarma-citation="entities:34149:1" rel="noopener">Easy Trip Planners (EASEMYTR IN)</a>, especially if it's banking on franchisee expansion, could go the other way around.</li>
</ul>


The Indian Market (~$4 trillion) has now overtaken Hong Kong as the 4th most-valued stock market after the US, China, and Japan. 
We recently concluded an exploratory trip to Patna, the capital, and also the largest city of the state of Bihar, Summarized thoughts on companies focused in this insight. 
Multiple stocks covered in the Insight. The future of Easy Trip Planners (EASEMYTR IN), especially if it's banking on franchisee expansion, could go the other way around.


[Week 14] Namaste India 🙏 | EASEMYTR IN | Easy Trip's Ghost Franchise?

India Equity Value investor, Trivikram Consultants

Prashant Vaishampayan

India Equity Value investor

Picking Long Term Multi-bagger stocks

Trivikram Consultants

Trivikram Consultants is an equity research service founded by Prashant Vaishampayan, a registered Research Analyst with SEBI in India. Prashant has done equity research since 1992.  He worked with Jardine Fleming, SG Securities, UBS and Kotak Securities. Since 2010, he is managing his portfolio and doing outsourced equity research for institutional clients. A team of six professionals helps him in equity research. We focus on pharma, agro-chemicals, auto and auto components, banks and financial services, specialty chemicals and niche manufacturing sectors.   

<ul class="">
<li>
<a href="https://www.smartkarma.com/entities/6711" target="_blank" data-smartkarma-citation="entities:6711:1">Kei Industries (KEII IN)</a> reported 2QFY19 revenues of Rs 9,968 mn, better than our estimate of Rs 8,669 mn. This revenue growth was driven by better than expected performance from Low tension (LT) cables, High Tenion (HT) cables and house wires.</li>
<li>EBITDA was Rs 1,009 mn, higher than our estimates of Rs 867 mn and reported EBITDA margins were at 10.1%, 10 bps higher than our estimates.</li>
<li>Over FY18-21E, we expect revenues to grow at CAGR 20%. We expect this growth to largely come from LT and HT cables because of capacity expansion. Management maintained its guidance of doubling Extra High Voltage (EHV) cables revenues in FY19E to Rs.2,814 mn. Management is planning capex of ~Rs 400 mn for house wires business. We expect revenues from this capex to start in FY20E.</li>
<li>We expect EBITDA margins to expand 130 bps to 11.0% in FY21E from 9.7% in FY18. Over FY18-21E, we expect EBITDA and PAT to grow at CAGR 25% and 36% respectively.</li>
<li>We assume no change to the current PE multiple of 16x, and apply it to our EPS estimate of Rs 39 per share for the year ending September-20E to arrive at the fair value estimate of Rs 625 over the next 12 months. This represents potential upside of 75% from the market price of Rs 356 (as on 27/11/2018).</li>
</ul>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 190px;">
Particulars (Rs mn)
</td>
<td style="text-align: right; width: 106px;">
Net sales
</td>
<td style="text-align: right; width: 92px;">
EBITDA
</td>
<td style="text-align: right; width: 90px;">
PAT
</td>
<td style="text-align: right; width: 102.05px;">
EPS Rs
</td>
<td style="text-align: right; width: 103.94px;">
ROE(%)
</td>
<td style="text-align: right; width: 100px;">
ROCE(%)
</td>
<td style="text-align: right; width: 91px;">
PE(x)
</td>
</tr>
<tr>
<td style="width: 190px;">
FY18
</td>
<td style="text-align: right; width: 106px;">
34,964
</td>
<td style="text-align: right; width: 92px;">
3,386
</td>
<td style="text-align: right; width: 90px;">
1,447
</td>
<td style="text-align: right; width: 102.05px;">
       18.6
</td>
<td style="text-align: right; width: 103.94px;">
26.9%
</td>
<td style="text-align: right; width: 100px;">
28.0%
</td>
<td style="text-align: right; width: 91px;">
         19
</td>
</tr>
<tr>
<td style="width: 190px;">
FY19E
</td>
<td style="text-align: right; width: 106px;">
42,081
</td>
<td style="text-align: right; width: 92px;">
4,082
</td>
<td style="text-align: right; width: 90px;">
1,762
</td>
<td style="text-align: right; width: 102.05px;">
       22.3
</td>
<td style="text-align: right; width: 103.94px;">
25.6%
</td>
<td style="text-align: right; width: 100px;">
27.8%
</td>
<td style="text-align: right; width: 91px;">
         16
</td>
</tr>
<tr>
<td style="width: 190px;">
FY20E
</td>
<td style="text-align: right; width: 106px;">
50,557
</td>
<td style="text-align: right; width: 92px;">
5,157
</td>
<td style="text-align: right; width: 90px;">
2,564
</td>
<td style="text-align: right; width: 102.05px;">
       32.5
</td>
<td style="text-align: right; width: 103.94px;">
28.4%
</td>
<td style="text-align: right; width: 100px;">
35.0%
</td>
<td style="text-align: right; width: 91px;">
         11
</td>
</tr>
<tr>
<td style="width: 190px;">
FY21E
</td>
<td style="text-align: right; width: 106px;">
60,689
</td>
<td style="text-align: right; width: 92px;">
6,676
</td>
<td style="text-align: right; width: 90px;">
3,642
</td>
<td style="text-align: right; width: 102.05px;">
       46.1
</td>
<td style="text-align: right; width: 103.94px;">
30.1%
</td>
<td style="text-align: right; width: 100px;">
47.4%
</td>
<td style="text-align: right; width: 91px;">
           8
</td>
</tr>
</tbody>
</table>
<div class="content-caption">
 Source- KEI Annual Report FY18, Trivikram Consultants Research as on 27/11/2018
</div>



Kei Industries (KEII IN) reported 2QFY19 revenues of Rs 9,968 mn, better than our estimate of Rs 8,669 mn. This revenue growth was driven by better than expected performance from Low tension (LT) cables, High Tenion (HT) cables and house wires.
EBITDA was Rs 1,009 mn, higher than our estimates of Rs 867 mn and reported EBITDA margins were at 10.1%, 10 bps higher than our estimates.
Over FY18-21E, we expect revenues to grow at CAGR 20%. We expect this growth to largely come from LT and HT cables because of capacity expansion. Management maintained its guidance of doubling Extra High Voltage (EHV) cables revenues in FY19E to Rs.2,814 mn. Management is planning capex of ~Rs 400 mn for house wires business. We expect revenues from this capex to start in FY20E.
We expect EBITDA margins to expand 130 bps to 11.0% in FY21E from 9.7% in FY18. Over FY18-21E, we expect EBITDA and PAT to grow at CAGR 25% and 36% respectively.
We assume no change to the current PE multiple of 16x, and apply it to our EPS estimate of Rs 39 per share for the year ending September-20E to arrive at the fair value estimate of Rs 625 over the next 12 months. This represents potential upside of 75% from the market price of Rs 356 (as on 27/11/2018).





Particulars (Rs mn)


Net sales


EBITDA


PAT


EPS Rs


ROE(%)


ROCE(%)


PE(x)




FY18


34,964


3,386


1,447


       18.6


26.9%


28.0%


         19




FY19E


42,081


4,082


1,762


       22.3


25.6%


27.8%


         16




FY20E


50,557


5,157


2,564


       32.5


28.4%


35.0%


         11




FY21E


60,689


6,676


3,642


       46.1


30.1%


47.4%


           8





 Source- KEI Annual Report FY18, Trivikram Consultants Research as on 27/11/2018


KEI Industries - 2QFY19 – Results In- Line, Benefits From Capex to Start in FY20E

India

Universal Cables Ltd. manufactures a wide range of wire and cable products. The Company's products include power cables, AAC/ACSR cables, aluminum rods, capacitors, cross linked polyethylene compound wires, semi-conducting, and other special grades of wires. Universal Cables also manufactures CATV cables, LAN cables, telephone switching cables, and aerial bunched cables.

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Universal Cables (UVC IN)

[Week 14] Namaste India 🙏 | EASEMYTR IN | Easy Trip's Ghost Franchise?

Indian stock market surpasses Hong Kong to become the 4th most valuable market. Insight on Easy Trip Planners suggests franchisee expansion may...

Pranav Bhavsar

KEI Industries - 2QFY19 – Results In- Line, Benefits From Capex to Start in FY20E

Kei Industries (KEII IN) reported 2QFY19 revenues of Rs 9,968 mn, better than our estimate of Rs 8,669 mn. This revenue growth was driven by...

Trivikram Consultants

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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[Week 14] Namaste India 🙏 | EASEMYTR IN | Easy Trip's Ghost Franchise?

​Indian stock market surpasses Hong Kong to become the 4th most valuable market. Insight on Easy Trip Planners suggests franchisee expansion may...

Pranav Bhavsar

KEI Industries - 2QFY19 – Results In- Line, Benefits From Capex to Start in FY20E

Kei Industries (KEII IN) reported 2QFY19 revenues of Rs 9,968 mn, better than our estimate of Rs 8,669 mn. This revenue growth was driven by...

Trivikram Consultants

Indian stock market surpasses Hong Kong to become the 4th most valuable market. Insight on Easy Trip Planners suggests franchisee expansion may...