Can KEI keep its spark after another power-packed quarter? Analysts answer

KEI Industries delivered yet another solid quarter, reaffirming its position as a top performer in the cables and wires space. 

 

The company’s September quarter of financial year 2026 (Q2FY26) results showed revenue, earnings before interest, tax, depreciation and amortisation (Ebitda), and profit after tax (PAT) growth of 20 per cent, 22 per cent, and 31 per cent year-on-year (Y-o-Y), respectively, with profit beating analysts’ estimates by 9 per cent on the back of higher other income, likely boosted by foreign currency gains.

 

“KEI continues to be our top pick in the coverage universe,” noted Achal Lohade, Harshit Sarawagi and Pranav Tella of Nuvama, reiterating a ‘Buy’ rating with a target price (TP) of ₹4,450. They added that peers, too, are likely to post healthy numbers amid strong tailwinds for the cable segment.

 

 

Segment performance and margins

 

The Cables & Wires (C&W) segment, which is KEI Industries’ growth engine, saw revenues rise 23 per cent Y-o-Y, marking a six-year compound annual growth rate (CAGR) of 17 per cent. Earnings before interest and taxes (Ebit) margins expanded by 50 basis points (bps) Y-o-Y to 10.9 per cent, aided by operating leverage. Domestic C&W sales rose 10 per cent Y-o-Y, while exports surged 93 per cent Y-o-Y (albeit on a low base), contributing 22 per cent to total revenues. The company aims to sustain export contribution in the 17-20 per cent range over the long term.

 

In the product mix, LT cables grew a robust 34 per cent Y-o-Y, while HT cables dipped 25 per cent Y-o-Y due to capacity reallocation. The EHV cables segment continued to impress with an 83 per cent Y-o-Y jump. Meanwhile, the EPC business contracted 23 per cent Y-o-Y, aligning with management’s strategy to scale it down.

 

Ebitda for the quarter was up 22 per cent Y-o-Y, in line with expectations, with margins expanding by 20bps to 9.9 per cent. However, analysts pointed out that “PAT growth outpaced revenue due to a sharp 150 per cent Y-o-Y increase in other income.”

 

Strong H1, balance sheet comfort

 

For the first half of FY26, KEI Industries reported revenue, Ebitda, and PAT growth of 22 per cent, 21 per cent, and 31 per cent Y-o-Y, respectively. Operating cash flow turned positive at ₹382 crore compared to a negative ₹308 crore in H1FY25. Working capital efficiency improved, with days reducing to 92 versus 101 a year ago.

 

The company remains comfortably placed with net cash of ₹730 crore, supported by proceeds from a recent QIP of ₹770 crore. Capex of ₹750 crore was largely directed toward the upcoming Sanand plant, which is expected to bolster growth momentum once operational.

 

Following the results, analysts are keen to understand the company’s volume growth and margin outlook in the C&W segment, as well as the commissioning timeline for the Sanand plant and its potential impact on growth and margins in FY27.

 

That said, KEI’s Q2FY26 results underscore the company’s consistent execution and margin discipline. With robust export growth, operational efficiency gains, and capacity expansion on track, analysts believe KEI remains well-wired for continued outperformance.