Buy KEI Industries; target of Rs 4527: Prabhudas Lilladher

Prabhudas Lilladher's research report on KEI Industries

KEII has reported W&C revenue growth of 31.8% driven by strong domestic and export demand. KEII has guided for revenue growth of 18%/20%+ for FY26/FY27 driven by strong demand in domestic & export markets, and EBITDA margin of 11% in FY26 supported by commencement of commercial production at Sanand plant in H1FY26 and completion of the plant by end-H1FY27. Expansion of export markets beyond the Middle East, Australia, and Africa, particularly in the USA and Europe, is expected to help achieve the export contribution guidance of 17–18%. The company aims to improve its EBITDA margin once Sanand plant becomes operational. KEII reported strong revenue growth in HT cables (+50.5% YoY), EHV cables (+55.6% YoY), and housing/winding wires (+29.9% YoY) in Q1FY26. Exports saw a significant increase of 60.5%, while institutional cable exports surged by 122%. We tweak our earnings estimates for FY26/FY27.

Outlook

We estimate revenue/EBITDA/PAT CAGR of 20.8%/25.0%/23.9% for FY25-27E. Maintain ‘BUY’ at TP of Rs4,527, valuing at 40x FY27 earnings.