* We expect revenue to grow 19% YoY, supported by growth in the industrial (23%) and automotive (12%) segments. Industrial segment growth would be driven by a pick-up in infrastructure (roads and metros) and data center segments.
* Pick-up in the domestic demand environment and various pricing actions taken by KKC would help it to regain lost market share post CPCB-2 compliance.
* Domestic revenue should grow 11% YoY in 4QFY17.
* We expect export revenue to improve 24% YoY to INR4.1b in 4QFY17 given low base of 4QFY16.
* EBITDA margin is expected to remain stable YoY at 16.6%; net profit should grow 13% YoY to INR1.9b. Maintain Neutral.
Key issues to watch
* Cost optimization possibilities in power gen business, given increased localization due to a significant decline in imports post CPCB-2 implementation.
* Performance of export segment, as exports which remained weak, led by poor demand in LatAm, Europe and China have shown some signs of picking up from 3QFY17.
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