ICICI Securities Initiates Coverage on KSH International with a Buy Recommendation, Target Price of Rs 600.
KSH International: A BUY Recommendation
Company Overview KSH International, a leading supplier of transformer conductors to Indian and global majors, is poised to capitalize on the surging demand for specialized conductors in the transformer market.
Market Trends The demand for transformers, particularly power transformers, is increasing in both domestic and global markets. As a result, transformer manufacturers are expanding their manufacturing footprint, driving up demand for specialized conductors. However, the supply of these conductors is limited due to manufacturing complexity and an elongated approval process.
Capacity Expansion To meet the increasing demand, KSH International is doubling its capacity to 59kt.
Read also: Oshea Herbals Aims for Rs 650 Crore Revenue Amidst Expansion Efforts
Estimates and Recommendations We estimate the following compound annual growth rates (CAGR) for KSH International:
- Volume: 24% over FY25-28E
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): 36% over FY25-28E
- Earnings: 43% over FY25-28E
Valuation At its current market price (CMP), KSH International is trading at 12x FY28E earnings, which represents a 40% discount to its peers.
Initiation of Coverage We initiate coverage on KSH International with a BUY recommendation and set a target price (TP) of INR 600 (20x FY28E earnings).
Investor Takeaway
Investors should consider buying KSH International stock due to its growing demand and expanding capacity.
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