KEC Int'l trades higher for fourth straight day, stock nears 52-week high

Shares of KEC International were trading higher for the fourth straight day, up 5 per cent at Rs 349 on the BSE on Tuesday. The stock of the heavy electrical equipment company was trading close to its 52-week high level of Rs 359 touched on September 15, 2020. In the past four days, it has rallied 14 per cent on the BSE, data show.

In the past six months, the market price of KEC International has zoomed 85 per cent, as against 27 per cent rise in the S&P BSE Sensex.

Earlier this month, the company had secured new orders of Rs 1,401 crore across its various businesses. The company's transmission and distribution (T&D) business including SAE Towers secured orders of Rs 1,143 crore for various T&D projects from Oman Electricity Transmission Company (OETC), Power Grid Corporation of India (PGCIL) and other customers.

"Given its Rs 25,000 crore well-diversified (region-, segment-wise) OB, strong bid pipeline with ability to bag orders despite tough times, proven execution track record and healthy balance sheet, we are positive on KEC and maintain our Buy rating. Its domestic T&D could see minor hiccup in ordering, likely to be balanced by strong traction overseas. We expect it to surprise in full-year execution due to its strong Q1 and ramp-up in inflow compared to peers," analysts at Anand Rathi said in company update with target price of Rs 398 per share.

KEC is one of the leaders in railway electrification, which is one of its biggest growth drivers. Over FY16-20, its railway business clocked an 87 per cent CAGR in revenue. Analysts at the brokerage expect the momentum to continue supported by the government's focus on 100 per cent railway electrification by December 2023, up-grading existing lines (for speed) and rolling out semi-high speed tracks to connect cities within a state.