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Prabhudas Lilladher Report
KEI Industries Ltd. maintained its revenue growth guidance at 16-17% in cable business with volume growth of more than 20% in FY24 and expects around 11% margin in the near term, given strong demand outlook in sectors like infra/railway/real estate/renewable etc.
The company has reported strong revenue in housing/winding wire (+33.3% YoY) and guided to continue strong traction in FY24. We are positive on KEI Industries for long term given-
focus on diversification of product portfolio and de-risking business (retail accounts for 44.7% with target to reach 46-47% in FY24),
scale-up in distribution network (1,925 dealers, will grow by 7-8% per annum),
healthy balance sheet with net cash of Rs 1.75 billion (excluding acceptances) by June-23 and
strong order book of Rs 35.7 billion across domestic and export engineering, procurement and construction and cables businesses.
Management expects Rs 100 billion revenue by FY26 with Ebitda margin target of 12-12.5%.
We tweak our earnings estimates for FY24/FY25E and estimate revenue/Ebitda/profit after tax compound annual growth rate of 18.0%/23.4%/24.5%.
Maintain ‘Hold' at target price of Rs 2,319 (unchanged).
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