2QFY2012 Result Update | Capital Goods

October 28, 2011

KEC International
Performance Highlights
` cr Revenue EBITDA EBITDA margin (%) Adj.PAT Source: Company, Angel Research 2QFY12 1,263 90.6 7.2 21.7 2QFY11 1,001 100.8 10.1 48.5 % chg (yoy) 26.2 (10.2) (291)bp (55.2) 1QFY12 1,023 96.0 9.4 33.1 % chg (qoq) 23.5 (5.7) (222)bp (34.3)

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 1,473 0.7 109/55 200,055 2.0 17,805 5,630 KECL.BO KECI IN

`57 -

KEC Internationals (KEC) 2QFY2012 results exceeded ours and streets expectations on the top-line front, but the companys performance was very disappointing on the bottom-line front. Order inflow for the quarter totaled `1,200cr and order backlog stood at `8,450cr. We have lowered our earnings estimates by 30.0%/26.7% for FY2012E/FY2013E, respectively, to factor in the margin contraction and changed business environment. We downgrade the stocks rating to Neutral. Strong execution continues; margin contraction a surprise: Consolidated revenue grew by 26.2% yoy to `1,263cr (`1,001cr), higher than ours and streets estimates. On the EBITDAM front, KEC witnessed a steep contraction to 7.2% mainly due to high raw-material prices, problems in regions such as Egypt and Libya, and execution of low-margin orders. Further, higher interest cost and tax incidence dragged down KECs earnings (adjusted), leading to a 55.2% yoy dip to `21.7cr. Outlook and valuation: The overall slowdown in the power sector has left transmission EPC companies to reel under pressure. In addition, competition has intensified on the domestic front, thereby leading to pricing pressures. This is the first time KEC has witnessed a sharp margin contraction, which we believe is here to stay in the coming quarters as well, given its reflection of stress in the business environment, and thereby putting pressure on earnings growth. Further, lack of positive news flows (read sector related) would keep the stock rise under check. Notably, KECs stock has fallen by ~28% and underperformed the BSE Sensex by ~24% over the last three months. At the CMP of `57, the stock trades 8.4x and 6.2x, FY2012E and FY2013E, EPS, respectively. Despite attractive valuations, we downgrade the stocks rating to Neutral with a fair value of `56. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg 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 41.8 43.2 3.6 11.4

Abs. (%) Sensex KEC

3m

1yr

3yr 97.7 105.3

(2.2) (10.7) (27.7) (41.9)

FY2010
3,907 13.9 190.7 4.9 10.4 7.7 7.4 1.9 44.4 32.3 0.5 5.2

FY2011
4,473 14.5 205.3 4.6 10.3 8.0 7.2 1.6 34.7 24.1 0.6 5.9

FY2012E
5,431 21.4 176.4 3.2 8.6 6.9 8.4 1.4 25.3 17.7 0.6 6.8

FY2013E
6,385 17.6 238.1 3.7 9.0 9.3 6.2 1.2 27.4 18.8 0.5 5.6

Shailesh.kanani
+91 22 3935 7800 Ext: 6829 [email protected]

Hemang Thaker
+91 22 3935 7800 Ext: 6817 [email protected]

Please refer to important disclosures at the end of this report

KEC International | 2QFY2012 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) PAT PAT Margin (%) Extra ordinary exp/(inc) Adj PAT Adj EPS (`)
Source: Company, Angel Research

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 40.8 3.2 18.6 45.6 21.2 1.7 1.0 21.7 0.85

2QFY11 1,000 0.6 1,001 (76.5) 597.3 52.0 189.2 18.9 58.4 5.8 131.5 13.1 899.8 119.4 10.1 20.4 9.0 71.5 7.1 20.3 28.4 42.7 4.8 8.5 48.5 1.89

% chg (yoy) 26.3 26.2 17.0 22.0 84.5 19.1 30.3 (24.2) 84.6 35.0 (42.9) (8.1) (50.3)

1QFY12 1,023 1,023 (29.8) 505.5 46.5 241.9 23.7 97.2 9.5 112.0 11.0 926.9 96.0 9.4 33.2 11.7 51.1 5.0 18.1 35.3 33.1 3.2 0.0

% chg (qoq) 23.5 23.5 38.3 (4.6) 10.9 39.8

1HFY12 2,286 0.6 2,286 (51.4) 1,205 50.5 472.8 20.7 205.0 9.0 268.6 11.8 2,100

1HFY11 1,846 0.6 1,846 (105.5) 1,040 50.6 398.5 21.6 106.4 5.8 221.9 12.0 1,661 185.3 10.0 46.8 17.6 120.9 6.5 43 35.8 69.1 6.6 8.5 74.8 2.9

% chg (yoy) 23.8 23.8 15.8 18.6 92.6 21.1 26.4 0.7 51.3 35.2 (23.9) (15.3) 11.3 (21.4)

(5.7) 13.3 3.9 (20.2) 3.2 (35.9)

186.6 8.2 70.8 23.8 91.9 4.0 37 39.9 54.3 4.5 1.0

(55.2) (55.2)

33.1 1.3

(34.3) (34.3)

54.8 2.1

(26.8) (26.8)

Exhibit 2: Actual vs. estimates

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

Actual 1,263 90.6 21.7

Estimates 1,171 119.4 48.7

Var. (%) 7.9 (24.2) (55.4)

October 28, 2011

KEC International | 2QFY2012 Result Update

Top line remains robust; SAE Towers continues to aid positively:

The strong revenue growth was largely aided by SAE Towers, which delivered top line and PAT of `246cr and `18.4cr, respectively. Since a year of its acquisition, it has generated revenue of `791cr with EBITDAM of ~15%. Excluding the revenue of SAE Towers, revenue growth would have been modest 3.7% yoy to `1,017cr.

Exhibit 3: Revenue from SAE Towers

300 250 246 184 149 191

Exhibit 4: Trend in revenue (Consolidated)

1,200 960 720 480 240 0 25.1 26.2 21.1 10.1 8.5 7.0 19.5 16.4 20.9 14.3 12.9 14.9 43.2 50.0 40.0 30.0 20.0 10.0 -

(` cr)

200 150 100 50 2QFY11 3QFY11 20

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

4QFY11

1QFY12

2QFY12

Sales (` cr, LHS)

Growth (yoy %, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Margin under pressure: Consolidated EBITDAM for the quarter contracted

by 291bp yoy/222bp qoq to 7.2%. The weak operating performance can mainly be attributed to the companys standalone business, which faced increased headwinds (such as pricing pressures and high raw-material costs). In addition, new businesses of cable, telecom and water currently operate at low margins, which exerted additional pressure on the companys operating margin. This dragged down the companys standalone EBITDAM considerably. Higher MTM loss (`13cr) on commodities (aluminum and copper), forex loss (`4cr), execution of some thin margin orders and slower project execution in MENA regions (Egypt and Libya) also impacted the margin. In-line with the current business environment, management has guided a consolidated EBITDAM of 9.0% (aberration from the trend of 10-11% since the past several quarters).

Exhibit 5: Standalone EBITDA margins under pressure

15.0 12.0 9.0 6.0 3.0 9.7 9.9 9.2 9.4 9.8 8.3 9.9

Exhibit 6: Consolidated EBITDAM lowest since 2QFY09

180 144 7.0 8.2 9.8 11.8 10.4 10.3 9.8 10.0 10.1 11.6 10.5 9.4 7.2 12.0 10.0 8.0 6.0 4.0 2.0 2QFY09 3QFY09 4QFY09 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

8.6 5.3

108 72 36 0

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

EBITDA (` cr, LHS)

EBITDAM (%, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

October 28, 2011

2QFY12

KEC International | 2QFY2012 Result Update

High interest cost drags down bottom-line growth: Interest cost grew
by 13.3% qoq to 37.6cr (`33.2cr) mainly due increased working capital borrowings. High interest cost and tax incidence (45.6%) along with lower EBITDA let to a 50.3% yoy decline in PAT to 21.7cr, 55.4% below our estimate of `48.7cr.

Exhibit 7: Trend in PAT (Consolidated)

90 75 60 45 30 15 0 2.2 2.8 4.3 5.3 4.8 4.9 4.6 3.1 4.8 5.4 5.0 3.2 1.7 6.0 5.0 4.0 3.0 2.0 1.0 -

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Adj. PAT (` cr, LHS)

Source: Company, Angel Research

PATM (%, RHS)

Order book remains strong: Despite a tough environment, KEC has registered
decent order inflow, mainly advantaged by its diversified presence. Order intake for the quarter totaled `1,200cr. Key orders received include: 1) Two transmission line orders from private sector customers (`108cr) 2) Transmission line order from Ethiopia (`200cr) 3) Tower supply orders through SAE Towers (`180cr) 4) Power and telecom cables supply orders (`186cr) Order backlog at the end of the quarter stood at `8,450cr, split across transmission (68.8%), power systems (23.4%), railways (4.4%), cables (1.8%) and telecom and waters (1.3%). Geographically, order backlog was spread across South Asia (42.4%), MENA (13.9%), Americas, (19.4%) and Central Asia and Africa (24%).

Exhibit 8: Order inflow

2,500 2,000
1,852 1,499 1,100 1,017 818 1,226 743 1,000 950 2,300 1,754 1,3001,300 1,200

Exhibit 9: Order backlog Segment wise (` cr)

177 372 110

(` cr)

1,500 1,000 500 -

Transmission 1,977 5,814 Power Systems Cables Railways Telecom & Water

1QFY09

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Source: Company, Angel Research

2QFY12

Source: Company, Angel Research

October 28, 2011

2QFY12

KEC International | 2QFY2012 Result Update

Investment arguments
Outlook and valuation: The overall slowdown in the power sector has left transmission EPC companies to reel under pressure. In addition, competition has intensified on the domestic front, thereby leading to pricing pressures. This is the first time KEC has witnessed a sharp margin contraction, which we believe is here to stay in the coming quarters as well, given its reflection of stress in the business environment, and thereby putting pressure on earnings growth. Further, lack of positive news flows (read sector related) would keep the stock rise under check. Notably, KECc stock has fallen by ~28% and underperformed the BSE Sensex by ~24% over the last three months. At the CMP of `57, the stock trades 8.4x and 6.2x, FY2012E and FY2013E, EPS, respectively. Despite attractive valuations, we downgrade the stocks rating to Neutral with a fair value of `56. Change in estimates: We slightly tweak our FY2012E and FY2013E, factoring in the companys strong project execution. However, we have lowered our earnings estimates by 30.0%/26.7% for FY2012E/FY2013E, respectively, to factor in the margin contraction amid a changed business environment.

Exhibit 10: Revised estimates

FY2012E Earlier estimates Revenue EBITDA PAT
Source: Company, Angel Research

FY2013E Var. (%) 3.1 (17.2) (30.0) Earlier estimates 6,293 692.0 325.0 Revised estimates 6,385 574.7 238.1 Var. (%) 1.5 (17.0) (26.7) 5,431 467.1 176.4

Revised estimates

5,269 564.0 252.0

Exhibit 11: Angel EPS forecast vs. consensus

Y/E March FY2012E FY2013E
Source: Company, Angel Research

Angel forecast 6.9 9.3

Bloomberg consensus 7.6 9.0

Var. (%) (9.7) 2.9

October 28, 2011

KEC International | 2QFY2012 Result Update

Exhibit 12: One-year forward P/E band

250 200 150 100 50 0
Jun-07 Jun-08 Jun-09 Jun-10 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Jun-11 Oct-11
15.7 21.6 27.7 23.4 20.7 17.2 27.4 24.2

Share Price (`)

Source: Company, Angel Research

6x

10x

14x

20x

Exhibit 13: Peer comparison

Company ABB* Areva T&D* BHEL BGR Energy Crompton Greaves JSL KEC International Thermax Reco. Sell Neutral Neutral Neutral Accum. Buy Neutral Neutral CMP Tgt. price (`) 715 218 327 327 141 61 57 462 578 153 78 56 Upside/ (19.1) 8.7 26.8 (3.0) P/BV(x) 5.6 4.6 3.2 2.0 2.5 0.7 1.4 3.4 4.9 3.8 2.6 1.7 2.1 0.6 1.2 2.8 P/E(x) 48.7 27.1 11.6 7.2 16.8 4.4 8.4 13.6 33.5 19.2 10.2 7.9 11.0 3.9 6.2 12.7 FY2011-13E 166.8 20.6 13.7 (3.6) (5.9) 13.0 7.7 6.6 RoCE (%) 15.0 24.0 41.2 19.7 16.6 23.0 17.7 32.6 20.6 26.9 37.6 16.1 21.6 22.4 18.8 30.4 RoE (%) 12.2 17.9 30.3 30.6 15.6 18.3 25.3 27.5 (`) (Downside) (%) FY12E FY13E FY12E FY13E EPS CAGR FY12E FY13E FY12E FY13E

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

October 28, 2011

KEC International | 2QFY2012 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 5,431 21.4 4,964 2,849 1,243 327 546 467 1.1 8.6 50 417 (0.9) 7.7 149 4 1.3 271 (14.2) 271 95 35.0 176 176 176 (14.1) 3.2 6.9 6.9 (14.1) 6,385 17.6 5,810 3,269 1,488 384 669 575 23.0 9.0 58 517 23.8 8.1 165 4 1.0 355 30.9 355 117 33.0 238 238 238 35.0 3.7 9.3 9.3 35.0

October 28, 2011

KEC International | 2QFY2012 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 4,459 88 727 520 3,125 2,789 1,671 2,919 1,413 344 1,069 35 281 5,019 159 681 541 3,639 3,183 1,836 3,221 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 1,035 1,087 0 1,782 50 2,919 51 1,237 1,289 0 1,882 50 3,221 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

October 28, 2011

KEC International | 2QFY2012 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 73 161 271 50 (438) (4) (95) (215) (176) 4 (172) 350 (36) 314 (74) 161 88 355 58 (94) (4) (117) 199 (195) 4 (192) 100 (36) 64 71 88 159

October 28, 2011

KEC International | 2QFY2012 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 2.5 1.5 4.9 1.6 1.6 2.8 1.3 1.8 4.4 2.0 2.7 3.9 2.2 3.6 2.8 1.8 3.0 3.1 5.7 23 151 164 53 6.0 23 175 181 58 5.3 22 179 186 62 5.6 24 187 180 81 6.4 29 193 179 92 6.2 30 193 178 93 51.3 53.8 142.7 31.3 34.1 46.7 32.3 35.2 44.4 24.1 25.7 34.7 17.7 18.7 25.3 18.8 19.7 27.4 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 7.7 65.0 2.4 18.4 12.0 6.0 2.1 24.5 8.1 67.0 2.4 19.4 13.0 6.0 2.0 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 6.9 6.9 8.8 1.2 40.8 9.3 9.3 11.5 1.2 48.7 8.0 7.0 3.4 1.7 0.7 5.4 2.4 1.5 11.9 10.0 2.8 1.7 0.6 6.3 2.0 1.5 7.4 6.5 1.9 2.1 0.5 5.2 1.5 1.4 7.2 6.0 1.6 2.1 0.6 5.9 1.3 1.7 8.4 6.5 1.4 2.1 0.6 6.8 1.2 1.5 6.2 5.0 1.2 2.1 0.5 5.6 1.1 1.4 FY2008 FY2009 FY2010 FY2011E FY2012E FY2013E

October 28, 2011

10

KEC International | 2QFY2012 Result Update

Research Team Tel: 022 3935 7800

E-mail: [email protected]

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%)

October 28, 2011

11