Buy KSH International; target of Rs 600: ICICI Securities

Buy

ICICI Securities research report on KSH International

Demand for transformers is surging in domestic and global markets, especially that for power transformers. As a result, transformer manufacturers are expanding their manufacturing footprint. India’s leading transformers have been increasing their capacity by threefold over FY26-28E (details inside). Thus, demand for specialised conductors, which form the core of transformers, is accelerating. However, supply is limited due to manufacturing complexity and an elongated approval process. KSH International (KSH) is a leading supplier of transformer conductors to Indian and global majors. It is doubling capacity to 59kt to meet the increase in demand.

Outlook

We estimate volume/EBITDA/earnings CAGR of 24%/ 36%/ 43% over FY25-28E. At CMP, the stock is trading at ~12x FY28E earnings, at a 40% discount to peers. Initiate coverage with BUY. We initiate coverage with BUY at a TP of INR 600 (20x FY28E earnings).

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KSH International - 1103026 - icici