Earnings effect: KEI Industries shares rise 13% in two days, check price targets

Cable maker KEI Industries Ltd have surged over 13% in two sessions after the wire maker on Tuesday (January 21) reported its Q3 earnings. Profit climbed 9.4% year-on-year (YoY) to Rs 164.8 crore against a net profit of Rs 150.6 crore in the corresponding quarter of the previous fiscal. 

The stock surged 11% to Rs 4574.65 today against the  previous close of Rs 4127.20 on BSE. Market cap of the firm rose to Rs 43,505 crore. 

Systematix Research has assigned a price target of Rs 3,950 with a buy call. 

"We maintain our earnings estimates and expect 19%/21%/22% CAGR in revenue/EBITDA/PAT over FY24-27E (FY19-24: 14%/14%/26% CAGR) with a healthy 20% RoCE and 26% RoIC in FY27E. We remain sanguine about KEII’s promising prospects and maintain BUY rating with an unchanged target price of Rs 4,943 (45x FY27E P/E). Strong growth prospect, OCFs (Rs 6bn+ annually) and return profile will keep investor’s interest high in KEII and should sustain its premium valuation," said the brokerage. 

Motilal Oswal has a price target of Rs 4780. 

"We cut our FY25-27 EPS estimates by 6-7% as we factor in lower EPC revenue and reduced margin in the C&W/EPC segment. We estimate an EPS CAGR of 21% over FY25-27. We value KEII at 50x Dec’26E EPS to arrive at our revised TP of Rs 4,780 (against Rs 5,150 earlier). Reiterate BUY," said the brokerage. 
 
Revenue from operations rose 19.8% to Rs 2,467.2 crore in the last quarter against Rs 2,059.3 crore in the year-ago quarter.

EBITDA climbed 12.3% to Rs 240.7 crore in the third quarter of this fiscal against Rs 214.4 crore in Q3 of FY24.

The board also approved the declaration of an interim dividend of Rs 4 (200%) per equity share of face value of Rs 2 each for the financial year 2024-25. 

The record date for determining the equity shareholders entitled to receive the interim dividend for the financial year 2024-25, has been fixed as Monday, January 27, 2025.

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