Buy KEC International stock For A Potential Upside Of More Than 26%: ICICI Securities

ICICI Securities, a leading brokerage firm in India, has given a buy call on the infrastructure company. The brokerage firm is highly bullish on the stock and believes it can cross its all-time high from the current market price.

The stock has been on an uptrend for the past months; however, in the past few weeks, the price of the stock has shown a sharp correction, but now it is moving to the upside with good volume.

Here is a detailed breakdown of the latest report of ICICI Securities on KEC International.

Outlook of KEC International Ltd.

The company is primarily engaged in the engineering, Procurement, and Construction business related to infrastructure interalia projects, products, and systems. The company also provides related activities for power transmission, railway, distribution, and many other EPC services.

The stock's current market price is Rs. 443 with a market capitalization of Rs. 11,393 Crores. The stock's all-time high is Rs. 550, and the all-time low is Rs. 345. The stock can cross its all-time high in the upcoming trading sessions, as per the latest report of ICICI Securities.

Buy Call Of ICICI Securities On KEC International

As per the latest report of ICICI Securities, 'Domestic T&D ordering has picked momentum and is likely to continue for the company. Management reiterated a strong order pipeline at Rs1.1trn across the businesses, of which the company has already participated in tenders worth Rs350bn. FY23-YTD order inflow stands at Rs60bn, with major orders coming from PGCIL. The current consolidated order book (including L1) stands at Rs300b. Maintain BUY on the stock with a target price of Rs566.'

ICICI Securities mentioned 'Robust order book, NWC to improve by Q4FY23' to summarise the report in one line.

Valuation and Company Outlook

'Supported by strong order backlog, pickup in execution, and softening commodity prices, we expect KECI's earnings to grow at a CAGR of 47% over FY22-FY24E. We maintain our BUY rating on the stock, assigning a multiple of 18x on FY24E EPS and arrive at a target price of Rs. 566.' said the latest reports of ICICI Securities.

Key Risks On Buy Call Of ICICI Securities

There can be many factors for the stock not reaching its target prices, such as global markets, inflation, bearish sentiments, and many others.

As per the latest report, the key risk is 'Any further increase in commodity prices and any incremental challenges at SAE Towers.' said ICICI Securities.