stocks

The Economic Times Wealth September 23-29, 2019 11

LARSEN & TOUBRO FINOLEX CABLES POTENTIAL

BHARAT ELECTRONICS
UPSIDE
10-year Current 10-year Current 1-yr target 10-year
Current PE
average PE POTENTIAL
UPSIDE
PE
12.2
average PE
17.7
price (`)
368
price (`)
488
32.5% Current PE
average PE
POTENTIAL
UPSIDE
17.5 28.3

26.4% ANALYSTS’ FINOLEX CABLES BSE CAPITAL GOODS

15.5

Current
19.8

1-yr target
16.6%
Current 1-yr target RECOMMENDATIONS 97
100 BSE SENSEX price (`) price (`)
price (`) price (`) 18 Sept 2018
BUY 8 HOLD 2 108 126
1,314 1,661

ANALYSTS’ RECOMMENDATIONS
ANALYSTS’ RECOMMENDATIONS 92
BUY 35 HOLD 2 SELL 2 BUY 22 HOLD 1 SELL 2
SELL 0
67
17 Sept 2019 
A MANUFACTURER OF electrical and telecommunication cables, BHARAT ELECTRONICS BSE CAPITAL GOODS
LARSEN & TOUBRO BSE CAPITAL GOODS lighting products, electrical accessories, switchgear, fans and water
BSE SENSEX 124
BSE SENSEX heaters, Finolex Cables is in a sweet spot. A report by Firstcall
Research says its electrical cables segment is likely to get a boost
from the government’s rural and infrastructure push. On the other 100
97 18 Sept 2018
100 hand, government’s focus on Digital India and its ambitious Bharat
18 Sept 2018 Net initiative will improve the prospects of the communication
cables segment. 97

98 KEI INDUSTRIES POTENTIAL 92

UPSIDE
Current 10-year Current 1-yr target
92
17 Sept 2019 
PE
15.8
average PE
43.3
price (`)
467
price (`)
552
18.2% 17 Sept 2019 

A NAVRATNA PSU, it is engaged in the design,

A CONGLOMERATE WITH a presence in over
30 countries, it addresses critical needs
of key sectors, including infrastructure,
construction, defence, hydrocarbons, heavy
engineering, power and shipbuilding among
others. JP Morgan is bullish on the stock due
to the company’s strong earnings growth
track record, efficient and profitable execution
capabilities, improvement in working capital
management and RoE enhancement. The
research house feels that guidance for 2019-20
appears achievable in terms of revenue growth
and EBITDA margins. The profitability is likely
to improve due to the sale proceeds from real
estate monetisation (e.g. Hyderabad metro real
estate). Even in a tough macro environment,
L&T has won a larger share in the limited big
order opportunities. Sebi’s nod to the share
buyback proposal could be a near term catalyst.
ANALYSTS’ KEI INDUSTRIES BSE CAPITAL GOODS manufacture and supply of electronics products
RECOMMENDATIONS & systems for the defense requirements.
BSE SENSEX 119
Operational excellence, superior R&D, improved
BUY 12 HOLD 0 100 order execution, higher cash flows, and better
18 Sept 2018
97 working capital management are the key
positives for the company. In addition, the focus
on technological innovation which involves
92 upgradation of machinery and infrastructure
SELL 1 provides the much needed competitive
advantage. It reported good numbers in the June
17 Sept 2019  2019 quarter, with 16.9% year-on-year growth in
A WIRES AND cables manufacturer, Kei Industries offers a wide operating profit and 13.9% growth in net profit.
range of cabling solutions. AnandRathi is bullish on the company Analysts say the company will be the main
due to its leading position in institutional cables, strong earnings beneficiary of the government’s reforms in the
growth and improved balance sheet. Strong order book of Rs 4,530 defence sector and its healthy order book provide
crore offers robust revenue assurance in 2019-20. The brokerage strong revenue visibility going forward.
house expects that the cables segment mix of EHV cables, retail and
exports will aid margin expansion in the future and its ability to Current PE is based on future 12-month blended forward earnings.
Stock prices as on 17 September 2019.
generate free cash flows will help in the stock’s re-rating.
Source: ACE Equity & Bloomberg.

BEML POTENTIAL
KALPATARU POWER TRANSMISSION POTENTIAL
UPSIDE UPSIDE
10-year Current 1-yr target 10-year Current 1-yr target
Current PE

22.7
average PE
54.5
price (`)
814
price (`)
1,107
35.9%
Current PE

13.6
average PE
29.2
price (`)
453
price (`)
548
21.1%
THIS MINIRATNA CATEGORY-1 PSU has ANALYSTS’ RECOMMENDATIONS A DIVERSIFIED CONGLOMERATE, ANALYSTS’ RECOMMENDATIONS
three major business verticals: mining & Kalpataru is engaged in the
BUY 4 HOLD 0 SELL 0 BUY 17 HOLD 1 SELL 1
construction, defence and rail and metro. global power transmission and
According to a report by Antique Stock infrastructure EPC space. ICICI
Broking, the metro rail projects will con- Direct believes that the strong order
tinue to provide large scale opportunities BEML BSE CAPITAL GOODS BSE SENSEX book with good traction in non- KALPATARU POWER TRANSMISSION
to the company as both the Centre and T&D business (railways, pipeline),
BSE CAPITAL GOODS BSE SENSEX
the states have stepped up their efforts improved subsidiary performance 139
towards increasing the metro network 100 and operating leverage gains
18 Sept 2018 106
not just in big cities but also in tier II and are likely to support consistent 100
tier III cities. In addition, BEML’s mining growth. Moreover, diversification 18 Sept 2018
and construction business is expected to in international T&D markets
remain steady given robust Coal India would provide good opportunities. 97
capex outlook for 2019-20. The company The returns ratios are expected to
expects to drive margin expansion 92 improve because of the company’s
through operating leverage, cost cutting strategy to monetise non-core
97 92
measures and other operational excel- assets and sales proceeds from the
lence initiatives. 17 Sept 2019  transmission assets. 17 Sept 2019