Sharekhan has given Buy recommendation for KEI Industries with a target price of Rs. 1410 in its research report issued on Jul 27, 2022

Sharekhan’s research report on KEI Industries

KEI Industries reported strong numbers for Q1Y2023 helped by low base and registered ~27%/~61% volume/value growth in cables and wires segment. Higher input cost continued to weigh on gross/operating margin which reduced by ~612/~100 bps and came in at ~24.9%/10.2%. The management expects a 17-18% revenue CAGR in the next two-three years with 30-35% y-o-y growth in the retail business. It also eyes an operating margin of 10.5-11% and PAT margin of 6.5% in FY23. De-bottlenecking in existing capacities and greenfield expansion in cables and wires at ~ Rs. 800 crore investment (first phase by 2024E) would help sustain its high-growth trajectory.

Outlook

We retain Buy rating on KEI with a revised PT of Rs. 1,410, factoring in a promising growth outlook and reasonable valuation.

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