Synopsis:
KEI Industries is in focus after guiding for 18–20% FY26 revenue growth, margin expansion, and stronger export profitability. Management expects surging cable demand from data centres to drive future growth despite mixed stock performance.
This company manufactures wires and cables (W&C) like EHV cables, HT cables, LT cables, and sells them in India and overseas is now in the focus after it guided revenue, margin guidance and strong cable demand.
With market capitalization of Rs. 39,628 cr, the shares of KEI Industries Ltd closed at Rs. 4,145 per share, from its previous close of Rs. 4,139 per share. The stock has delivered a negative 3.5 % return over the past year. In the last six months, it gained 14%, while year-to-date performance remains negative at 7%.
Revenue and Margin Guidance
The company expects near-term EBITDA margins to remain steady at around 10–11.5% despite mix variability, continuing the margins seen in FY24–FY26, with growth exceeding 20%. In the medium term, margins are projected to expand by 1–1.5% once the Sanand plant is fully stabilized and scaled by FY28, supported by economies of scale and a richer EHV/export mix.
FY26 revenue growth guidance has been upgraded to surpass 20% (from 17–18%), while FY27 growth is maintained at approximately 20%, with potential upside as market development aligns with capacity expansion.
Management highlighted that strong cable demand especially from the rapidly increasing power requirements of data centres is likely to be a key growth driver going forward.
The company expects exports to account for nearly 13%–14% of total sales in FY26, with a further increase projected for FY27, where exports are anticipated to contribute around 18% of overall sales.
The data centre boom is powering significant growth in the wire and cable industry globally. Data centres, critical to the digital economy, are expanding rapidly, driven by artificial intelligence, cloud computing, and increased digital consumption. According to industry experts, the demand for metallic cables used in data centres is expected to nearly triple from 264.8 kilotonnes in 2024 to 727 kilotonnes by 2029.
This surge is fueled by the growth of colocation facilities and the rise of AI-specific infrastructure, which is growing at a much faster rate of 33% CAGR compared to overall colocation growth at 6.6%.
The expanding digital infrastructure demand is also driving investments in renewable power, further boosting cable consumption. India’s copper power cable market alone is projected to grow at a 12.1% CAGR from 2025 to 2029, reflecting strong domestic opportunities alongside global growth.
However, the rapid scale-up of data centres comes with significant environmental challenges. Data centres consumed approximately 340 TWh of electricity in 2022 and are projected to exceed 1,000 TWh by 2026, comparable to the energy demand of a G20 nation. The industry acknowledges that renewable sourcing and heat reuse will be insufficient alone for sustainability.
About the company
KEI Industries Ltd is one of India’s leading manufacturers of wires and cables, offering a wide portfolio spanning power cables, stainless steel wires, turnkey EPC solutions, and extra-high voltage (EHV) cables. The company caters to sectors such as infrastructure, real estate, power, telecom, oil & gas, and industrial manufacturing. With a strong domestic presence and a growing export footprint, KEI is recognized for its engineering capabilities, large-scale manufacturing, and consistent focus on quality and technology-led growth.
The company posts a solid financial profile with a ROCE of 21.3%, ROE of 15.6%, and a very low debt-to-equity ratio of 0.04. Over the past five years, it has also achieved an impressive 22.1% CAGR in profits.
The company reported strong year-on-year performance in Q2 FY25, with sales rising 19% to Rs. 2,726 crore and EBITDA increasing 20% to Rs. 269 crore. Net profit grew a robust 31% to Rs. 204 crore, reflecting improved operational efficiency. EPS also improved 24%, reaching Rs. 21.29 compared to Rs. 17.15 a year earlier.
Written by Manideep Appana
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Cable stock with revenue growth guidance of up to 20% for FY27 to keep an eye on appeared first on Trade Brains.