Prabhudas Lilladher has given Accumulate recommendation for KEI Industries with a target price of Rs. 1273 in its research report issued on May 10, 2022
Prabhudas Lilladher’s research report on KEI Industries
We increase our FY23/FY24 earnings by 4%/5% and maintain ‘Accumulate’ rating on KEI Industries (KEI). With strong demand outlook despite inflationary environment, management predicted 18-20% topline growth in FY23, while maintained LT CAGR at 17-18%. Margin will be maintained in 10.5-11% range. We remain structurally positive on KEI for long term and believe the company is well placed to capture on wires & cables demand given 1) its increased Infra, Industrial, Railways, Housing & Solar activity 2) wide product portfolio 3) is amongst very few players having EHV cable capabilities 4) has sustained momentum in dealer network sales (40% of sales, targeted to reach 50% in next couple of years) and 5) tapped into rising export opportunities.
Outlook
We estimate Sales/PAT CAGR of 16%/ 23% over FY22-24E and value the stock at 20x FY24 EPS, then arrive at target price of Rs1,273 (vs Rs1,154 before).