Shares of the world’s leading suppliers of pumps, valves and systems, KSB Limited jumped 4.63 per cent to hit an intraday high of 1106.70 on BSE in an otherwise weak market.
The stock has been gaining for the last two trading sessions. It has delivered 35 per cent return in the last one year. At 12:39 hours, the shares were trading 3.99 per cent higher at Rs 1099.95. Market cap of the firm rose to Rs 3,828.69 crore.
The shares stand higher than 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.
Anand Rathi believes that KSB is well placed to benefit from strong opportunities in FGD, nuclear power, O&G and exports. Such prospects would also boost its after-market and services (15 per cent of its sales) due to increased installed base and expansion in dealer network and service centres.
The brokerage firm said that the Q4CY21 results were a mixed bag with revenue ahead of estimates due to strong execution. However, increased raw material cost impacted the profitability. CY21 order inflows were of Rs 1500 crore (Rs 13 crore in CY20) and the management targets Rs 25 crore order intake in CY24.
“The favourable demand environment, execution abilities and attractive valuations keep us upbeat. However, due to raw material volatility, we have tweaked our estimates. We expect 13 per cent/12 per cent revenue/PAT CAGRs over CY21-23e. The stock trades at an attractive 23x/20x CY22e/ CY23e P/E. We maintain our Buy rating with a lower target price of Rs 1,352 (earlier Rs1,494), 25x CY23e P/E,” it added.
The net profit of the company rose 23 per cent YoY to Rs 39.4 crore in Q3 and revenue climbed 20 per cent to Rs 444.6 crore in the same quarter.
Commenting on the yearly performance Mr. Farrokh Bhathena, Director Sales and Marketing, KSB Limited said, “This year we have achieved ground-breaking sales of Rs 14,97.3 crore despite the hindrance from the pandemic. We have registered a sales growth of 24 per cent over last year and a growth of 20 per cent over the corresponding quarter of the year.”
“I believe demand trends are gravitating back to pre-Covid times, it is evident from our all-time high figures. With the ease of restriction from government our supply chain remained intact and I am sure we will continue to achieve exponential growth in sales in coming quarters too,” he added.
The company informed that it is further strategising its solar business and resultantly observing an increased inflow of orders in this segment.
Also, the additional factory shed at Sinner Plant is nearing its completion, the company said.
