3QFY2012 Result Update | Capital Goods

February 01, 2012

KEC International
Performance Highlights
` cr Revenue EBITDA EBITDA margin (%) Adj.PAT Source: Company, Angel Research 3QFY12 1,460 112.3 7.7 43.0 3QFY11 1,071 124.6 11.6 58.0 % chg (yoy) 36.3 (9.9) (394)bp (25.9) 3QFY12 1,263 90.6 7.2 21.7 % chg (qoq) 15.6 24.0 52bp 97.8

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Capital Goods 1,418 0.7 95/32 271,737 2.0 17,301 5,236 KECL.BO KECI IN

`55 -

KEC International (KEC) posted a mixed set of numbers for 3QFY2012. The top line posted a robust growth; however, the continual stress on operating margins led to weak bottom-line (adjusted for the exceptional income). On the other hand, strong order intake for the quarter totaling `2,500cr (OB stands at `9,200cr as on 3QFY20212) and improvement in the balance sheet (easing of working capital) came as a positive surprise. The robust order book, coupled with solid execution skills provides a strong growth trajectory to the company. Given this we raise our revenues estimates by 4.5%/10.7% and lower our EBITDA margin estimate marginally for FY2012E/FY2013E. Due to sharp run up in the stock price we remain Neutral on the stock. Strong execution continues; margin contraction a surprise: Consolidated revenue grew by 36.3% yoy to `1,460cr (`1,071cr), much higher than ours and streets estimates. On the EBITDAM front, KEC witnessed a steep contraction of 394bp yoy to 7.7%, marginally higher than our estimates, mainly due execution of low margin projects. Reported PAT was aided by an extraordinary income to the tune `53.0cr, thus masking a growth of 39.0% yoy to `80.6cr (`58cr). Adjusting for this gain, the PAT de-grew by 25.9% yoy to `43.0cr, 16.6% higher than our estimates. Outlook and valuation: KEC has geographically diversified business model which insulates itself from slowdown in any particular region. Further, the company has also ventured in new businesses of railway and water, which have fared well and order inflows as well revenues have picking up at measurable pace. Amidst strong order wins the stock has witnessed a substantial rally, gaining ~50% in past few days. Further, at the CMP, the stock trades at reasonable PE multiple of 5.7x FY2013E EPS given the sector is plagued with heightened competition and company is facing margin pressures. Hence, we remain Neutral on the stock. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Adj. PAT % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 42.0 43.4 2.8 11.8

Abs. (%) Sensex KEC

3m (1.0)

1yr (4.0)

3yr (5.2) (60.7)

(1.6) (35.4)

FY2010
3,907 13.9 190.7 60.3 10.4 7.7 7.1 1.9 44.4 32.3 0.5 5.1

FY2011
4,473 14.5 205.3 7.7 10.3 8.0 6.9 1.6 34.7 24.1 0.6 5.8

FY2012E
5,648 26.3 170.3 (17.1) 8.0 6.6 8.3 1.3 23.9 17.0 0.6 6.9

FY2013E
6,865 21.6 250.1 46.9 8.5 9.7 5.7 1.1 27.6 19.0 0.5 5.5

Shailesh.kanani
+91 22 3935 7800 Ext: 6829 shailesh.kanani@angelbroking.com

Hemang Thaker
+91 22 3935 7800 Ext: 6817 hemang.thaker@angelbroking.com

Please refer to important disclosures at the end of this report

KEC International | 3QFY2012 Result Update

Exhibit 1: Quarterly performance (Consolidated)

(` cr) Net Sales Other operating income Total income Stock adjustments Raw Material (% of total income) Erection and sub cont.exp. (% of total income) Employee Cost (% of total income) Other Expenses (% of total income) Total Expenditure EBITDA (EBITDA %) Interest Depreciation Other Income PBT (% of total income) Total Tax (% of PBT) Reported PAT PAT Margin (%) Extra ordinary (exp)/inc Adj PAT Adj EPS (`)
Source: Company, Angel Research

3QFY12 1,459 0.8 1,460 (3.4) 769.5 52.5 317.1 21.7 111.0 7.6 153.1 10.5 1,347 112.3 7.7 37.2 12.6 53.8 116.3 8.0 35.7 30.7 80.6 2.9 37.6 43.0 1.7

3QFY11 1,071 0.3 1,071 (19.8) 553.1 49.8 211.2 19.7 86.3 8.1 115.6 10.8 946.4 124.6 11.6 28.7 11.3 0.0 84.6 7.9 26.7 31.5 58.0 5.4 58.0 2.3

% chg (yoy) 36.3 159.4 36.3 39.1 50.1 28.7 32.5 42.4 (9.9) 29.7 11.0 37.4 33.8 39.0

2QFY12 1,263 1,263 (21.6) 699.0 53.6 230.8 18.3 107.8 8.5 156.6 12.4 1,173 90.6 7.2 37.6 12.1 0 40.8 3.2 18.6 45.6 21.2 1.7 (1.0)

% chg (qoq) 15.5 15.6 10.1 37.4 3.0 (2.2)

9MFY12 9MHFY11 3,744 1.4 3,746 (54.7) 1,974 51.2 789.9 21.1 316.0 8.4 421.7 11.3 3,447 2,917 1.0 2,918 (125.3) 1,593 50.3 609.8 20.9 192.7 6.6 337.4 11.6 2,608 309.9 10.6 75.5 28.9 0.0 205.5 7.0 70 34.0 127.1 8.0 (8.5) 132.8 5.2

% chg (yoy) 28.4 28.4 23.9 29.5 64.0 25.0 32.2 (3.6) 43.1 25.7 1.3 3.4 2.1 6.2

24.0 (1.1) 3.5 184.9 91.5 280.0

298.9 8.0 108.0 36.4 53.8 208.2 5.6 72 34.7 134.9 6.8 36.6

(25.9) (25.9)

21.7 0.8

97.8 97.8

97.8 3.8

(26.4) (26.4)

Exhibit 2: Actual vs. estimates

(` cr) Revenue EBITDA Interest Tax PAT
Source: Company, Angel Research

Actual 1,460 112.3 37.2 35.7 43.0

Estimates 1,266 107.6 40.3 17.7 36.9

Var (%) 15.3 4.3 (7.6) 100.9 16.6

February 01, 2012

KEC International | 3QFY2012 Result Update

Execution picks up but remains under pressure: Consolidated revenue

grew by 36.3% yoy to `1,460cr (`1,071cr). The upside in growth was largely aided by strong revenues in the domestic transmission business of 57.6% yoy to `402.0cr. SAE towers also posted a robust 76.5% yoy to `263.0cr. In addition, the Cables segment also reported a healthy growth of 30.0% yoy to `156.0cr. Nonetheless, margins continued to remain under pressure consolidated EBITDAM for the quarter contracted by 394 yoy to 7.2% mainly due to execution of some thin margin orders and slower project execution in MENA regions (Egypt and Libya). In addition, new businesses of cable, telecom and water currently operate at low margins, which exerted additional pressure on the companys operating margin. As indicated by the management, high margins of SAE towers (~13%), which has cushioned the EBITDAM since last one year, is also expected to compress as competition is high in all the geographies and it is not expected to cool down in the near future. In-line of competitive pressures, management has guided a consolidated EBITDAM of 9.0%.

Exhibit 3: Top line remains buoyant...

1,200 960 720 480 240 0
3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

Exhibit 4: ...but margin pressures continue

36.3 26.2 40.0 30.0 108 20.0 10.0 72 36 0
3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

180 144 8.2

11.8 9.8

10.4 10.3 9.8 10.0 10.1

11.6 10.5

9.4 7.2 7.7

12.0 10.0 8.0 6.0 4.0 2.0 -

25.1 21.1 10.1

20.9 19.5 16.4 14.312.914.9 8.5 7.0

Sales (` cr, LHS)

Growth (yoy %, RHS)

EBITDA (` cr, LHS)

EBITDAM (%, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Bottom line largely remains weak: PAT during the quarter was aided by an extraordinary income to the tune of `53.0cr, thus masking a growth of 39.0% yoy to `80.6cr (`58.0cr). Adjusting for this gain, the PAT de-grew by 25.9% yoy to `43.0cr, 16.6% higher than our estimates estimate of `36.9cr.

Exhibit 5: Trend in PAT (Consolidated)

90 75 60 45 30 15 0
3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

5.3 4.8 4.3 2.8

5.4 4.9 4.6 3.1 4.8

5.0

6.0 5.0 3.2 1.7 2.9 4.0 3.0 2.0 1.0 -

Adj. PAT (` cr, LHS)

PATM (%, RHS)

Source: Company, Angel Research

February 01, 2012

KEC International | 3QFY2012 Result Update

Robust order book: Order intake during the quarter totaled `2,500cr, the highestever for last many quarters. The orders were diversified across all of its operating segments (transmission, power systems, water, cables, and railways) as well as geographies (Philippines, Americas, Middle East, Kenya etc.)
Key orders during the quarter include: `616cr of order from Saudi Arabia consists of two large orders `340 cr of order from Sterlite Technologies `328cr orders from PGCIL

The strong order accretion led to a robust order backlog of 9,200cr (2.0x FY2011 revenues) split across transmission (67.2%), power systems (22.9%), railways (4.4%), cables (1.5%) and telecom and waters (4.1%). Geographically, order backlog is spread across South Asia (43.2%), MENA (17.8%), Americas, (17.3%) and Central Asia and Africa (18.6%) and others 3.1%. Apart from international orders, we expect a healthy ordering from the domestic markets in coming months, especially from PGCIL (4Q has been the seasonally strongest quarter). Coupled with management guidance, we estimate order inflows and backlog to the tune of `6,735cr and `9,150cr, respectively for FY2012E.

Exhibit 6: Order inflow (` cr)

2,300 2,500
3,000

Exhibit 7: Order backlog Segment wise (` cr)

1,754

1,852

1,499

2,500

138

405 Transmission Power Systems 2,107 6,182 Cables Railways

377

1,300

1,226

1,300

1,017

1,000 500 0
3QFY09 4QFY09

743

1,500

950

1,000

2,000

1,200

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

3QFY12

Telecom & Water

Source: Company, Angel Research

Key takeaways from the conference call: Net working capital as on 3QFY2012 is `1,511cr, decreasing from `1,587cr as on 1HFY2012. Work on Baroda plant is progressing on track and will start trial production during 1QFY2013. The capacity of the plant is 3000 cable km/annum of HT Cable/EHV cables upt 220 kv & 400 kv.

February 01, 2012

KEC International | 3QFY2012 Result Update

Investment arguments: Growth opportunity on cards: Globally the thumb rule entails that for every rupee invested in generation, an equivalent amount is to be invested in T&D; however, India has spent only 50%, thus creating a huge opportunity for players in the T&D space. PGCIL has envisaged T&D capex of ~`1 lakh cr for the 12th plan, 55% of which is estimated to be transmission and sub-station capex, thus providing a number of opportunities to the company, given its strong presence in the domestic T&D market. Outlook and valuation: KEC has geographically diversified business model which insulates itself from slowdown in any particular region. Further, the company has also ventured in new businesses of railway and water, which have fared well and order inflows as well revenues have picking up at measurable pace. Amidst strong order wins the stock has witnessed a substantial rally, gaining ~50% in past few days. Further, at the CMP, the stock trades at reasonable PE multiple of 5.7x FY2013E EPS given the sector is plagued with heightened competition and company is facing margin pressures. Hence, we remain Neutral on the stock. Change in estimates: We raise our revenue growth estimates by 4.5%/10.7% for FY2012E and FY2013E, respectively, factoring in strong execution and strong order intake. This has lead to earnings revision of 9.2% for FY2013E (despite factoring in margin contraction of ~50bps).

Exhibit 8: Change in estimates

FY2012E (` cr) Revenue EBITDA EBITDA (%) Adj. PAT EPS (`) Order Inflows
Source: Company, Angel Research

FY2013E Var. (%) 4.5 (2.0) (53)bp (1.6) (1.1) 22.5 Earlier estimates 6,204 561.0 9.0 229.0 8.9 6,500 Revised estimates 6,865 586.3 8.5 250.1 9.7 7,072 Var. (%) 10.7 4.5 (50)bp 9.2 9.3 8.8

Earlier estimates 5,407 462.0 8.5 173.0 6.7 5,500

Revised estimates 5,648 452.6 8.0 170.3 6.6 6,735

Exhibit 9: Angel EPS forecast

Angel FY2012E FY2013E
Source: Company, Angel Research

B'berg 7.0 8.9

Var (4.7) 9.3

6.6 9.7

February 01, 2012

KEC International | 3QFY2012 Result Update

Exhibit 10: One-year forward P/E band

250 200 150 100 50 0
May-07 May-08 May-09 May-10 May-11 Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Jan-11 Sep-11
20x

Share Price (`) Source: Company, Angel Research

6x

10x

14x

Exhibit 11: Peer comparison

Company ABB* BHEL BGR Energy Crompton Greaves JSL KEC International Thermax Reco. Sell Neutral Neutral Accum. Buy Neutral Neutral CMP Tgt. price (`) 820 255 238 144 48 55 488 427 152 54 Upside/ (47.9) 5.6 12.9 P/BV(x) 6.8 2.5 1.5 2.6 0.6 1.3 3.6 6.0 2.1 1.3 2.3 0.5 1.1 3.0 P/E(x) 92.3 9.0 6.6 21.8 4.0 8.3 14.1 46.1 10.8 7.1 13.3 4.4 5.7 15.0 FY2011-13E 144.2 (2.4) (13.4) (13.3) (5.3) 10.4 0.9 RoCE (%) 11.4 39.5 14.2 13.7 21.7 17.0 32.8 20.2 26.5 10.6 19.5 18.2 19.0 26.0 RoE (%) 7.6 30.6 25.0 12.5 15.8 23.9 28.0 13.9 21.1 23.4 20.1 12.7 27.6 21.9 (`) (Downside) (%) FY12E FY13E FY12E FY13E EPS CAGR FY12E FY13E FY12E FY13E

Source: Company, Angel Research. Note: *December year ending

Jan-12

February 01, 2012

KEC International | 3QFY2012 Result Update

Profit & Loss Statement (Consolidated)

Y/E March (` cr) Operating income % chg Total Expenditure Raw Materials Mfg costs Personnel Costs Other Costs EBITDA % chg (% of Net Sales) Depreciation& Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: Share of earnings of asso. Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E 2,818 38.0 2,460 1,415 618 121 306 358 41.2 12.7 25 333 51.2 11.8 68 0.1 266 64.3 266 90 33.8 176 176 176 65.3 6.2 7.1 7.1 26.2 3,430 21.7 3,128 1,976 575 142 435 302 (15.7) 8.8 23 279 (16.3) 8.1 100 2 1.1 181 (31.9) 181 62 34.2 119 119 119 (32.4) 3.5 4.8 4.8 (32.4) 3,907 13.9 3,501 2,013 958 169 362 406 34.6 10.4 27 379 36.0 9.7 86 2 0.6 294 62.9 294 104 35.2 191 191 191 60.3 4.9 7.7 7.7 60.3 4,473 14.5 4,011 2,255 981 283 493 462 13.8 10.3 41 421 11.2 9.4 108 3 0.8 316 7.5 316 111 35.1 205 205 205 7.7 4.6 8.0 8.0 3.3 5,648 26.3 5,195 2,881 1,285 386 643 453 (2.1) 8.0 50 403 (4.4) 7.1 147 57 18.3 314 (0.9) 0 314 107 34.0 207 0 0 0 207 170 (17.1) 3.0 6.6 6.6 (17.1) 6,865 21.6 6,279 3,576 1,513 446 744 586 29.5 8.5 58 528 31.1 7.7 158 4 0.9 373 19.1 0 373 123 33.0 250 0 0 0 250 250 46.9 3.6 9.7 9.7 46.9

February 01, 2012

KEC International | 3QFY2012 Result Update

Balance Sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves & Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Deferred Tax Asset Current Assets Cash Loans & Advances Inventories Debtors Others Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 521 90 431 19 1,973 68 270 205 1,430 1,317 656 1,107 632 125 507 51 2,539 144 303 226 1,866 1,888 651 1,210 836 157 679 38 2,680 73 396 250 1,962 1,778 903 1,620 1,038 237 802 39 281 3,587 161 472 336 2,618 2,281 1,306 2,428 1,213 286 927 40 281 4,594 63 757 524 3,249 2,893 1,701 2,949 1,413 344 1,069 35 281 5,335 104 725 575 3,932 3,457 1,878 3,263 60 10 435 506 592 20 1,107 49 509 558 622 30 1,210 49 736 785 787 46 1,620 51 895 947 1,432 50 2,428 51 1,066 1,117 1,782 50 2,949 51 1,280 1,331 1,882 50 3,263 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

February 01, 2012

KEC International | 3QFY2012 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation (Inc)/Dec in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec.in Fixed Assets (Inc.)/Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2008 FY2009 FY2010 266 25 (353) (0.3) (90) (152) (75) 20 0.3 (55) 9.1 205 (29) 68 186 47 21 68 181 23 81 (2) (62) 221 (147) 2 (144) (10.4) 30 (29) 9 (9) 76 68 144 294 27 (323) (2) (104) (107) (201) 2 (199) 165 (36) 106 129 (71) 144 73 FY2011 FY2012E FY2013E 316 41 (315) (3) (111) (71) (211) 3 (208) 2.1 645 (36) (243) 611 89 73 161 314 50 (493) (57) (107) (293) (176) 57 (118) 350 (36) 314 (98) 161 63 373 58 (136) (4) (123) 168 (195) 4 (192) 100 (36) 64 41 63 104

February 01, 2012

KEC International | 3QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets OB/Sales Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis (%) EBIT margin Tax retention ratio (%) Asset turnover (x) RoIC (Pre-tax) RoIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover (Gross Block) (X) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to Equity Net debt to EBITDA Interest Coverage 5.7 23 151 164 53 7.7 6.8 3.3 1.8 6.0 23 175 181 58 11.4 9.6 2.7 1.8 5.3 22 179 186 62 7.1 6.2 1.9 2.2 5.6 24 187 180 81 6.9 5.8 1.6 2.2 6.7 28 190 174 90 8.3 6.4 1.3 2.2 6.7 29 191 175 91 5.7 4.6 1.1 2.2 51.3 53.8 142.7 31.3 34.1 46.7 32.3 35.2 44.4 24.1 25.7 34.7 17.0 17.9 23.9 19.0 19.5 27.6 11.8 66.2 4.5 52.8 35.0 9.2 3.6 128.1 8.1 65.8 4.0 32.7 21.5 10.8 2.0 42.4 9.7 64.8 3.5 33.8 21.9 8.0 1.4 41.3 9.4 64.9 2.7 25.1 16.3 6.3 1.7 33.1 7.1 66.0 2.5 17.6 11.6 6.0 2.1 23.2 7.7 67.0 2.5 19.3 12.9 5.8 1.9 26.7 7.1 7.1 8.1 1.0 16.7 4.8 4.8 5.8 1.0 20.1 7.7 7.7 8.8 1.2 29.8 8.0 8.0 9.6 1.2 35.4 6.6 6.6 8.6 1.2 42.0 9.7 9.7 12.0 1.2 50.3 7.7 6.8 3.3 1.8 0.7 5.3 2.3 1.5 11.4 9.6 2.7 1.8 0.5 6.1 1.9 1.5 7.1 6.2 1.9 2.2 0.5 5.1 1.5 1.4 6.9 5.8 1.6 2.2 0.6 5.8 1.3 1.7 8.3 6.4 1.3 2.2 0.6 6.9 1.2 1.7 5.7 4.6 1.1 2.2 0.5 5.5 1.1 1.4 FY2008 FY2009 FY2010 FY2011E FY2012E FY2013E

February 01, 2012

10

KEC International | 3QFY2012 Result Update

Research Team Tel: 022 3935 7800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

KEC International No No No No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 01, 2012

11