Jefferies slashes KEI Industries price target by 11% to Rs 6,150

Shares of wire manufacturer KEI Industries dropped to Rs 4,446 on the BSE as international brokerage Jefferies cut its price target by 11%. The new target is set at Rs 6,150, down from the previous Rs 6,920. Jefferies maintains a Buy rating despite the reduction. In a research note, the firm stated that UltraTech Cement's entry into wires and low-tension cables poses a threat to KEI's future profitability. The brokerage calculated an approximate 300 basis points loss in market share for KEI in its retail segment between fiscal years 26 and 30, with no expected offset from power or export gains. Retail sales account for 54% of KEI's revenue and are heavily driven by the housing sector. KEI increased its retail market share from 7% to 21% since fiscal year 17 through branding and dealer expansion. While Jefferies expects expansion into Europe and the US to begin yielding results, it forecasts domestic power transmission capex growth of 2.6 times between fiscal years 26 and 30 compared to FY21-25. The analysis assumes KEI retains a 22% retail market share through fiscal year 27 while EBITDA margins rise by 50 basis points to reach 11.5%.