Accumulate KEI Industries; target of Rs 1273: Prabhudas Lilladher

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Prabhudas Lilladher's research report on KEI Industries

We have not made any changes to estimates and maintain Accumulate rating. Given the strong demand outlook despite inflationary environment, management has maintained LT CAGR of 17-18%. Management also highlighted that margin will be maintained in the range of 10.5-11%. We remain structurally positive on KEI for longer term & believe it is well placed to capture demand for wires & cables given 1) increased Infra, Industrial, Railways, Housing & Solar activity 2) wide product portfolio 3) amongst very few players having EHV cable capabilities 4) sustained momentum in dealer network sales (40% of sales, targeted to reach 50% in next couple of years) and 5) tapping into rising export opportunities.

Outlook

We estimate Sales/ PAT CAGR of 16%/ 23% over FY22-24E. We value the stock at 20x FY24 EPS and arrive at target price of Rs1,273 (unchanged).

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KEI Industries - 270722 - prabhu