Hold KEI Industries; target of Rs 4800: Sharekhan

Sharekhan's research report on KEI Industries

KEI reported a 10% y-o-y growth in net earnings for Q2FY2025 led by a 17% y-o-y growth in revenues. Revenue growth was driven by a 21% growth in cables segment but compensated by 58% decline in EPC segment revenues. The management has maintained its guidance of 16-17% y-o-y revenue growth and operating margin of 11% in FY25. The company looks to raise Rs 2,000 crore via QIP majorly to fund the Sanand greenfield project.

Outlook

The company is expected to do well backed by tailwind sectors like Renewables, Transmission, Data center and thriving real estate and infrastructure sector. However, the stock is currently trading a high PE of 41x its FY27 earnings. Hence, we maintain our Hold rating on the stock with a revised PT of Rs. 4,800.