Thursday, February 18, 2010

Stock Idea: KEC International Ltd.

This RPG group company, a global leader in the project management business has posted a good set of results for the third quarter ended 31st Dec 2009.
The company’s net sales were at Rs. 937.66, up 8% on a QoQ and 6% on a YoY. PBT was up at Rs.63.61 crore, up 15% on a QoQ and 66% on a YoY. Net profit QoQ grew 15% and 68% on a YoY at Rs.41.99 crore. Growth in topline was lackluster as most of the orders came in only during the end and hence did not have enough time to be executed and get reflected in the numbers.
The company’s order book is at an all time high at Rs. 6051 crore as on date, of which Rs.1800 crore came in during Q3. Of this 53% comes from the South Asia market and the balance 47% from the International market. Most of these are to be executed in FY10.
Raw material costs have started rising and we can see some this getting reflected in Q3 itself. It rose sequentially from Rs.430.97 crore to Rs.479.94 crore. And given the rate of inflation, this cost component is only expected to rise further.
For 9MFY10, net sales was at Rs.2192.25 crore and net profit was at Rs.116.57 crore. As against this, for 12MFY09, the net sales was at Rs.3427.67 crore and net profit was at Rs.116.29 crore. So the company’s net profit will surely surpass that of FY09 and that makes it a safe bet.
Source: Internet ( by S P Tulsian)

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