KEI Industries soars 6% as December quarter earnings beat Street estimates

Shares of KEI Industries rallied 6 per cent to Rs 551 on the BSE on Tuesday in an otherwise weak market after the company reported better-than-expected growth in Q3 net profit. The cables & wires company's net profit grew 50 per cent year-on-year (YoY) at Rs 72.54 crore in the December quarter (Q3FY20) as compared to a profit of Rs 48.21 crore in the year-ago quarter.

The company's net sales increased by 20.8 per cent to Rs 1,314 crore against Rs 1,088 crore in the corresponding quarter of the previous fiscal. EBITDA (earnings before interest, tax, depreciation, and amortization) margin improved to 10.97 per cent from 10.92 per cent in the previous year's quarter.

Brokerage firm YES Securities had expected net profit growth of 32.7 per cent and revenue growth of 14.6 per cent in Q3, driven by execution of refinery order and recovery in housing wires.

KEI Industries has current order book of Rs 4,173 crore plus L1 Rs 316 crore. The company is expected to achieve growth in the current FY20 by 18-19 per cent.

Meanwhile, on December 17, the company informed the exchanges that its board had approved raising funds in one or more tranches, by the way of qualified institutional placements (QIPs) for an amount not more than Rs 1,000 crore.

The revenue growth across the business segments within cables, pricing action, volume growth, performance of retail & industrial cable business, execution in the EPC business and key reasons for fundraising.

Since December 17, the stock has outperformed the market by surging 26 per cent, as compared to 1 per cent rise in the S&P BSE Sensex. It touched an all-time high of Rs 615 on October 30, 2019.

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