For 4QFY2018, KEI Industries (KEI) posted good set of results, exceeding our expectations on both, top-line as well as bottom-line fronts. Revenues grew by ~39% yoy (above our estimate), however, the company reported flat operating margins. On the bottom-line front, KEI reported growth of ~40% yoy to `50cr on the back of strong top-line growth and lower interest cost.

Outlook and Valuation: We expect KEI to report net revenue CAGR of ~16% to ~`4,646cr over FY2018-19E mainly due to (a) higher order book execution in EPC segment; (b) growth in EHV business; (c) higher B2C sales; and (d) higher exports. On the bottom-line front, we expect a CAGR of ~19% to `207cr over the same period on the back strong revenue and lower interest costs. At the CMP of `433, the stock trades at 16.2x its FY2020E EPS of `26.8. Thus, we maintain our
Buy rating with the Target Price of `508.

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