Sharekhan's research report on KEI Industries
Pick up in government infrastructure spending, particularly in the power sector as well as expansion in the core sector’s capacity will help KEI in achieving its revenue growth guidance of 15-16% growth over next few years. Focus on capacity addition will maintain the growth momentum, as KEI plans to add new greenfield capacity, which is expected to come online in a phased manner by FY2026 and can generate revenue of Rs. 4,500 crore at full utilisation. Export is expected to provide another growth lever as China +1 policy, lack of production capacity, and increased spending in power distribution infrastructure in the developed market will help KEI to increase its export to developed market.
Outlook
We retain Buy rating on KEI Industries Limited (KEI) with a revised PT of Rs. 3,600. The increase in PT reflects higher PE multiple given strong earnings outlooks supported by tailwinds from power sector.
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