Prabhudas Lilladher's research report on KEI Industries
KEI Industries (KEII) maintained its revenue growth guidance at 16-17% in cable business with volume growth of >20% in FY24 and expects around 10.5- 11% margin in the near term, given strong demand outlook in sectors like Infra/Railway/Real estate/Renewable etc. The company has reported strong revenue in housing/winding wire (+20.5% YoY) & guided to continue with strong traction in FY24. We are positive for long term given 1) focus on diversification of product portfolio and de-risking business (retail accounts for ~47% with target to reach 48-50% in FY24) 2) scale-up in distribution network (1,950 dealers, will grow by 7-8% p.a), 3) healthy balance sheet with net cash of Rs 4.5bn (excluding acceptances) by Sep-23 and 4) strong order book of Rs33.6bn across domestic & export EPC and cables businesses.
Outlook
We expect Revenue/EBITDA/ PAT CAGR of 16.7%/20.3%/21.3% over FY23-26E. Maintain ‘BUY’ at TP of Rs2,908 (unchanged).
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