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

KEI Industries - Power Packed for the Future

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.   

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/6711" target="_blank" data-smartkarma-citation="entities:6711:1">Kei Industries (KEII IN)</a> reported that in 1QFY19 revenues grew 7.3% YoY to Rs. 8,839 Mn, EBITDA grew 12.1% YoY to Rs 862 Mn, EBITDA margins for 1QFY19 improved by 50 bps to 9.8% and PAT grew 17.1% YoY to Rs 322 Mn.</li>
<li>We expect revenues to grow at CAGR 20% (FY18-20E), EBITDA to grow at CAGR 24% (FY18-20E), EBITDA margins to reach to 11.0% in FY20E and PAT to grow at CAGR 33% (FY18-20E).</li>
<li>We revise KEI Industries fair value estimate to Rs. 580 (was Rs 558 previously). This represents a potential upside of 43% from the CMP of Rs. 407 (As on 17/08/2018). At the CMP of Rs. 407, the stock is trading at 18x and 12x its estimated earnings for FY19E and FY20E. We have maintained our PE multiple of 16x for the year ending June-20E EPS of Rs. 36.3/- to arrive at the fair value estimate. </li>
</ul>



Kei Industries (KEII IN) reported that in 1QFY19 revenues grew 7.3% YoY to Rs. 8,839 Mn, EBITDA grew 12.1% YoY to Rs 862 Mn, EBITDA margins for 1QFY19 improved by 50 bps to 9.8% and PAT grew 17.1% YoY to Rs 322 Mn.
We expect revenues to grow at CAGR 20% (FY18-20E), EBITDA to grow at CAGR 24% (FY18-20E), EBITDA margins to reach to 11.0% in FY20E and PAT to grow at CAGR 33% (FY18-20E).
We revise KEI Industries fair value estimate to Rs. 580 (was Rs 558 previously). This represents a potential upside of 43% from the CMP of Rs. 407 (As on 17/08/2018). At the CMP of Rs. 407, the stock is trading at 18x and 12x its estimated earnings for FY19E and FY20E. We have maintained our PE multiple of 16x for the year ending June-20E EPS of Rs. 36.3/- to arrive at the fair value estimate. 


KEI Industries- 1QFY19 Result Update - Powering Through