Net Profit Jumps 40%, Revenue Crosses ₹3,185 Crore; Brokerages Turn More Bullish as EHV Expansion and Export Recovery Strengthen Long-Term Growth Story

KEI Industries Ltd witnessed strong buying interest on Tuesday after the company reported better-than-expected financial results for the June quarter of FY27. The electrical cables and wires manufacturer posted healthy growth across revenue, operating profit and net profit, supported by robust domestic demand, improved operating efficiency and expanding margins.

The impressive quarterly performance prompted investors to accumulate the stock, sending it over 7% higher during intraday trade. Leading brokerages, including JM Financial and Motilal Oswal Financial Services, reaffirmed their positive outlook on the company, citing its improving profitability, healthy demand environment and strong long-term growth prospects.

The rally also reflects growing investor confidence in India's electrical equipment and infrastructure sectors, where KEI Industries remains one of the leading organized players.

Stock Extends Winning Streak

KEI Industries opened the trading session nearly 3.5% higher at ₹5,201 on the National Stock Exchange (NSE) before extending gains to an intraday high of ₹5,375, representing an increase of approximately 7.5%.

At around 9:50 AM, the stock was trading near ₹5,364, outperforming the broader market despite weakness in benchmark indices.

The latest surge marked the third consecutive session of gains, with the stock appreciating nearly 12% during this period, indicating renewed buying interest from institutional and retail investors following the earnings announcement.

Strong Financial Performance Drives Investor Confidence

KEI Industries reported another quarter of healthy earnings growth, with both revenue and profitability improving significantly compared to the same period last year.

Q1FY27 Financial Highlights

Revenue from operations increased to ₹3,185 crore, reflecting strong demand across key product categories.

Operating profit (EBITDA) rose nearly 40%, while EBITDA margin expanded to 13.04%, driven by better product mix, operating leverage and improved manufacturing efficiency.

Net profit climbed to ₹274 crore, significantly exceeding market expectations and reinforcing confidence in the company's earnings trajectory.

Domestic Wires & Cables Business Continues to Power Growth

The company's flagship Wires & Cables (W&C) business remained the primary growth engine during the quarter.

KEI reported 29.31% year-on-year growth in its domestic wires and cables segment, supported by:

• Strong infrastructure investments.

• Rising demand from residential and commercial construction.

• Continued industrial capital expenditure.

• Expansion of the company's dealer and distribution network.

• Healthy order execution.

The management highlighted that demand remained broad-based across multiple customer categories, enabling the company to maintain strong revenue momentum despite a challenging global environment.

Margin Expansion Reflects Improved Operating Efficiency

One of the biggest positives from the quarterly results was the sharp improvement in profitability.

The company's EBITDA margin expanded by 155 basis points, reflecting:

• Improved operating leverage.

• Better product mix.

• Higher contribution from value-added products.

• Effective cost management.

• Efficient utilization of manufacturing capacity.

Analysts believe sustained margin expansion could support further earnings upgrades over the coming quarters.

Export Business Faces Temporary Slowdown

While domestic demand remained robust, exports witnessed a relatively weaker quarter.

Export revenue declined approximately 7% year-on-year, mainly due to softer international demand and execution timing.

However, the company remains optimistic regarding its overseas business.

Management indicated that:

• Export order books remain healthy.

• Demand is improving across several international markets.

• Sales activities in the United States have resumed.

• Export contribution is expected to increase steadily over the next few years.

The company aims to raise exports to nearly 20% of overall revenue over the medium term.

EHV Cable Capacity Expansion to Unlock Next Phase of Growth

A major long-term growth catalyst for KEI Industries is its investment in Extra High Voltage (EHV) cable manufacturing facilities.

The new facilities are expected to become operational by the end of FY27.

The expansion is expected to enable the company to:

• Participate in larger transmission projects.

• Expand into premium cable segments.

• Improve operating margins.

• Increase market share.

• Strengthen its position in infrastructure-related businesses.

Industry experts believe the EHV segment could become a meaningful contributor to earnings beginning FY28.

Brokerages Maintain Positive Outlook

JM Financial Reiterates 'Buy'

Following the quarterly earnings announcement, JM Financial maintained its 'Buy' recommendation on KEI Industries with a target price of ₹5,800, implying nearly 15% upside from the previous closing price.

The brokerage noted:

• Revenue growth remained healthy.

• Profit after tax exceeded estimates by around 14%.

• Margin expansion was stronger than anticipated.

• Margin guidance may witness an upward revision if the current trend continues.

JM Financial also believes the commissioning of the EHV facility will provide an additional growth driver from FY28 onward.

Motilal Oswal Sees Structural Growth Opportunity

Motilal Oswal Financial Services also retained its positive stance on KEI Industries after the quarterly results.

The brokerage highlighted:

• Better-than-expected earnings.

• Strong growth in the Cables & Wires segment.

• Continued structural demand across the industry.

Although the Engineering, Procurement and Construction (EPC) business reported a quarterly loss, analysts believe the long-term outlook remains favourable due to India's accelerating infrastructure investments.

Industry Tailwinds Continue to Support Growth

The Indian cables and wires industry is entering a multi-year growth cycle, supported by several structural drivers.

These include:

• Massive government infrastructure spending.

• Expansion of the national power transmission network.

• Renewable energy capacity additions.

• Urbanization and housing demand.

• Industrial manufacturing growth.

• Data centre expansion.

• Railways, metros and smart city projects.

Organized manufacturers such as KEI Industries are expected to benefit as customers increasingly shift towards branded, high-quality electrical products.

Valuation and Investment Perspective

Despite the sharp rally in recent trading sessions, analysts believe KEI Industries continues to offer attractive long-term growth potential.

Its strengths include:

• Strong brand recognition.

• Healthy balance sheet.

• Consistent cash generation.

• Expanding manufacturing capacity.

• Diversified customer base.

• Leadership in organized cables and wires.

However, investors should continue monitoring raw material prices, copper and aluminium costs, competitive intensity and export demand, as these factors could influence margins in future quarters.

Market Outlook

KEI Industries has delivered another strong quarter, reaffirming its position as one of India's fastest-growing electrical equipment companies. Healthy revenue growth, expanding operating margins and robust profitability demonstrate that demand across the infrastructure, industrial and real estate sectors remains resilient.

The upcoming commissioning of the Extra High Voltage cable facility, improving export opportunities and sustained government infrastructure spending are expected to provide additional growth momentum over the next two financial years.

Market Outlook

The outlook for the Indian cables and wires industry remains constructive as large-scale investments in power infrastructure, renewable energy, manufacturing and urban development continue to accelerate. KEI Industries appears well-positioned to capitalize on these long-term structural trends.

While short-term stock movements may remain influenced by broader market volatility and commodity prices, the company's improving earnings profile, expanding margins and capacity additions support a positive medium- to long-term investment outlook. Investors should watch upcoming quarterly performance, EHV project execution and export growth as key indicators of sustained value creation.