KEI Industries Reports Strong Revenue Growth Amid Positive Outlook

KEI Industries Limited has reported impressive financial results for the first quarter of FY26, showcasing a revenue increase of approximately 26% year-on-year to INR 25.9 billion. This figure exceeded analyst expectations by around 9%, largely driven by robust performance in the company’s cables and wire segment.

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) also showed strong growth, rising by nearly 20% year-on-year to INR 2.6 billion, surpassing forecasts by approximately 12%. Despite these positive outcomes, operating profit margin (OPM) contracted by 45 basis points to 10.0%, although it was 20 basis points above estimates.

Management Insights and Growth Projections

KEI Industries’ profit after tax (PAT) increased by about 30% year-on-year to INR 2.0 billion, again beating analyst expectations by 12%. Management has expressed a strong demand outlook, particularly in sectors such as power transmission and distribution (T&D), renewable energy, data centers, and manufacturing.

The company maintains its growth guidance for FY26, projecting an increase of approximately 18-19%. Over the next two to three years, KEI expects growth to accelerate to around 20%, driven by the completion of its Sanand expansion and continued strategic initiatives, including recent land acquisitions in Gujarat and Rajasthan for future development.

Furthermore, KEI aims to achieve an OPM of approximately 11%, buoyed by a strong order book for domestic institutional cables as well as export orders. The anticipated completion of Phase I of the Sanand facility is expected to further enhance profit margins.

Valuation and Market Position

Motilal Oswal’s research report values KEI Industries at 38 times the estimated earnings per share for June 2027, applying a 5% discount compared to its competitor, POLYCAB, due to KEI’s lower margins. This analysis results in a target price of INR 4,200 per share.

Following the release of these results, Motilal Oswal has reiterated a neutral stance on KEI Industries, reflecting the company’s solid performance amid a competitive landscape.

“The demand outlook remains strong, led by power T&D, renewable energy, data centers, and manufacturing sectors,” management stated.

As the company continues to expand its operations and enhance its market position, stakeholders are advised to stay informed about future developments and consult with certified financial experts before making investment decisions.