KEC International: Entering a new growth cycle

Attractive valuations and improving earnings visibility to support stock

September 16, 2022 / 11:38 AM IST

KEC International: Entering a new growth cycle

With the expectations of shorter working capital cycle and higher cash conversion rates, overall concerns about the health of balance sheet and cash flows would ease

PRO Only Highlights
– Quarterly performance largely backed by improved realisations
– Medium-term triggers China plus and protectionist measures for tyre industry
– Valuations not inexpensive; but improved medium-term outlook

· Strong revival across segments, supported by better execution· Robust order book, expected inflow to support growth· Margins to improve and balance sheet to be better with higher operating cash· Earnings to receive a boost, thanks to operating leverage· Stock trading 14 times its fiscal 2024 estimated earningsMarred by worries over higher commodity prices and working capital, KEC International underperformed the broader markets in the last one year. In March this year, we had recommended the stock around the…

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