Prabhudas Lilladher: Outperformer - KEI Industries

According to the brokerage house, KEI Industries is trading at 9.9x FY07E and 8.1x FY08E earnings estimates at the CMP. Given the recent rise in the stock price and current valuations we revise our rating on the stock to Outperformer with a 12-month price target of Rs.530.

"Both RoE and RoCE are expected to drop sharply in FY08E due to high debt and equity infusion but will bounce back in FY09E once benefits from the new capacity start flowing in."

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