Consumer Electricals Q4 Preview - Cables Demand Stays Strong; Low Base To Support FMEG Growth: Systematix

Systematix Report

The consolidated revenue/Ebitda/profit after tax of the nine consumer electrical companies under our focus are expected to report a healthy 13%/12%/11% YoY and 15%/26% /23% QoQ growth in Q4 FY24, driven by cables and wires segment (on continued traction in cables) and fast-moving electric goods segment. (low base; demand soft though).

We remain structurally positive on robust prospects of C&W. Strong and visible earnings growth has driven significant re-rating in KEI Industries Ltd. and Polycab India Ltd.'s valuation which we believe is justified and to sustain.

Scrips of FMEG names have seen significant price and time correction in last two years and can be re-rated on signs of healthy recovery in demand and earnings trajectory.

Preferred picks: Polycab India Ltd., Finolex Cables Ltd. (Upgraded to 'Buy'), Bajaj Electricals and KEI Industries Ltd.

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