About The Company
A part of the RPG group, KEC International, a leader in power transmission, engineering, procurement and construction (EPC) business, the stock was in the limelight yesterday on the back of having received huge orders.
The company won an order worth Rs 255 crore for rural electrification from West Bengal State Electricity Distribution Company and another worth Rs 67 crore from Power Grid Corp. It also won a third order worth Rs 43 crore for a turnkey transmission project from Transmission Corporation of Andhra Pradesh.
About The Results
The company has posted results for the third quarter ended December 31, 2008 it posted a revenue of Rs.886.31 crore as against Rs 708.91 crore during the corresponding period last year, a growth of 25%. During the quarter, the operating margin of the company declined to 8.21% compared with the previous year period. Interest cost increased 67.06% to Rs.29.72 crore while depreciation cost rose 4.82%. Net profit for the third quarter was at Rs.24.97 crore, down 52% on a YoY.
Its order book was at Rs.5000 crore as on Dec 31, 2008. Despite this fall in the Q3 bottomline, KEC remains a good stock. Its biggest strength is that it has insulated itself, to some extent with a focus on international as well as domestic market. 65% of its revenue comes from international markets including 25% from the Middle East region. It is is catering to about 20 countries globally of which majority are underdeveloped in terms of power infrastructure, meaning big business opportunity. KEC is also nearly doubling its combined (outsourced and own) manufacturing capacity from 110,000 tonne to 200,000 tonne per year.
About The Stock
Existing holders are suggested to remain in the position and for fresh buying we could keep a shrewd eye on the market before buying.
Disclaimer : I do not have any personal holding in this stock.
