KEI Industries Reports 26% Revenue Growth, Maintains Outlook for FY26

KEI Industries has reported a robust performance for the first quarter of fiscal year 2026, with revenue rising approximately 26% year-on-year to INR 25.9 billion. This figure exceeded expectations by about 9%, largely driven by stronger-than-anticipated revenue in the company’s Cable and Wires (C&W) segment. The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw growth, increasing around 20% to INR 2.6 billion, surpassing estimates by 12%.

Despite the positive revenue and EBITDA growth, KEI Industries experienced a contraction in its Operating Profit Margin (OPM), which fell by 45 basis points year-on-year to 10.0%, although this represents a slight improvement of 20 basis points compared to prior estimates. The Profit After Tax (PAT) rose by approximately 30% to INR 2.0 billion, also beating expectations by 12%.

Demand Outlook and Future Growth Plans

Management at KEI Industries has expressed a positive outlook for demand, particularly in the power transmission and distribution, renewable energy, data centers, and manufacturing sectors. The company has reiterated its growth guidance for fiscal year 2026, aiming for an increase of about 18-19% and projected annual growth of around 20% over the next two to three years.

Key to this growth strategy is the expansion of operations in Sanand, Gujarat, where the company has plans to complete Phase I of its expansion project. Furthermore, KEI has acquired land in both Gujarat and Rajasthan to facilitate future expansions. The completion of the Sanand expansion is anticipated to enhance the company’s profit margins significantly.

Valuation and Market Position

Motilal Oswal has valued KEI Industries at 38 times the estimated earnings per share for June 2027, applying a 5% discount to its competitor, POLYCAB, due to KEI’s relatively lower margins. This valuation leads to a target price of INR 4,200 per share. The firm maintains a neutral rating on KEI Industries, reflecting the company’s strong performance tempered by margin concerns.

Investors are encouraged to consider this analysis while making decisions. As always, it is advisable to consult with certified financial experts before engaging in any investment activities.