Prabhudas Lilladher recommended hold rating on KEI Industries with a target price of Rs 1811 in its research report dated May 03, 2023.
KEI Industries (KEII) maintained its healthy revenue growth guidance at 16- 17% and expects 10.5-11%+ margins in the near term, given strong demand outlook in sectors like Infra/Railway/Data Centres etc. We are positive on the company for long term given 1) focus on diversification of product portfolio and de-risking business (retail accounts for ~44% with target to reach 48-50% in FY24) 2) scale-up in distribution network (1,910 dealers, will grow by 7-8% p.a), 3) healthy balance sheet with net cash of Rs 4bn (including acceptances) by Mar-23 and 4) strong order book of Rs35.7bn across domestic & export EPC & cables businesses. Management expects Rs100bn revenue by FY26 with EBITDA margin target of 11+%.