Buy KEI Industries; target of Rs 5961: Prabhudas Lilladher

Moneycontrol • 9 days ago

Original source

Key Investment Pillars

  • Sanand Plant Utilization: Expected to reach 60-70%, supporting EBITDA margins of over 11.0%.
  • Export Orders: Strong overseas order book of INR9.9bn, with ~50% from the US, driving export growth.
  • Revenue Growth: Guided revenue growth of >25% in FY27 and a 20% CAGR over the next 3-4 years.
  • Margin Recovery: Margins expected to improve towards 11-12% as Sanand utilization ramps up.

Thesis Validation Checklist

  • Sanand Utilization: Monitor progress towards 60-70% utilization.
  • Export Order Book: Track changes in the overseas order book and execution.
  • Revenue Growth: Watch for quarterly revenue growth and compare to guidance.
  • Margin Expansion: Monitor EBITDA margin improvement towards 11-12%. KEI Industries is expected to benefit from the ramp-up of its Sanand plant and a strong export order book, driving revenue growth and margin recovery. Investors should monitor these key pillars to validate the investment thesis.