Buy KEI Industries; target of Rs 5180: Motilal Oswal

Moneycontrol • 9 days ago

Original source

Key Investment Pillars

  • KEI Industries' revenue growth is expected to be driven by strong demand from data centers, power T&D, renewable energy, and EV infrastructure.
  • The company's margin expansion is expected to be supported by higher sales and economies of scale from new capacity additions, with a guided EBITDA margin of ~11% in FY27.
  • The Sanand facility is expected to drive growth, with a revenue potential of INR15-17b, and the company's export order book provides healthy demand visibility.

Thesis Validation Checklist

  • Investors should watch for revenue growth of ~25% in FY27 and ~20% CAGR over the medium term.
  • Margin expansion toward 11.5-12.0% in FY28, driven by the ramp-up of Sanand capacity and higher EHV cable contribution.
  • The company's ability to maintain its debt-free status and improve its working capital cycle.