KEI Industries DCF Value Analysis April 2026
KEI Industries Limited, originally incorporated in 1968 as Krishna Electrical Industries, is India’s second-largest manufacturer of wires and cables by revenue. Headquartered in New Delhi, KEI operates five manufacturing plants in Bhiwadi, Chopanki, and Pathredi (Rajasthan), and Silvassa and Chinchpada (Dadra & Nagar Haveli). Its product portfolio spans Extra High Voltage (EHV) cables up to 400 kV, High Tension (HT), Low Tension (LT) cables, flexible wires, house wires, stainless steel wires, and winding wires — along with Engineering, Procurement & Construction (EPC) services for power projects.
KEI’s institutional and retail revenue mix has meaningfully evolved. The company has been systematically reducing its dependence on the more volatile EPC segment and growing its higher-margin retail segment, which now accounts for around 40% of revenues. Exports constitute ~15–17% of sales, with KEI supplying 330 kV cables to Australia and 220 kV to the UAE and Spain — making it the first Indian company to export EHV cables internationally.
The newly commissioned Sanand plant (Phase 1 for LT/HT cables, Ahmedabad), which commenced commercial production in December 2025, significantly bolsters KEI’s capacity headroom. Management has guided 20%+ revenue CAGR over the next 3–4 years, underpinned by robust order books and strong demand from power, data centres, real estate, and renewables.
KEI has delivered a consistent 10-year revenue CAGR of ~17% with near-flat EBITDA margins around 10%, reflecting disciplined working capital management and commodity pass-through pricing. Profit growth has outpaced revenue growth as leverage has declined — the company is now virtually debt-free at the operating level.
| Metric (₹ Cr) | FY21 | FY22 | FY23 | FY24 | FY25 | TTM (Dec25) |
|---|---|---|---|---|---|---|
| Revenue | 4,182 | 5,727 | 6,908 | 8,121 | 9,736 | 11,186 |
| YoY Growth (%) | — | 37.0% | 20.6% | 17.6% | 19.9% | ~14.9% |
| EBITDA | 456 | 589 | 702 | 854 | 991 | 1,149 |
| EBITDA Margin (%) | 10.9% | 10.3% | 10.2% | 10.5% | 10.2% | 10.3% |
| Net Profit | 270 | 376 | 477 | 581 | 696 | 861 |
| EPS (₹) | 29.9 | 41.7 | 52.9 | 64.4 | 72.9 | 90.1 |
| PAT Margin (%) | 6.5% | 6.6% | 6.9% | 7.2% | 7.1% | 7.7% |
| Interest (₹ Cr) | 57 | 40 | 35 | 44 | 56 | 59 |
| Net Profit CAGR (5yr) | 22.1% | |||||
Q3 FY26 (Dec 2025) showed strong momentum — EBITDA grew 39% YoY to ₹353.9 Cr with margin improvement to 12%, and net profit rose 42.5% YoY to ₹234.9 Cr. The Sanand plant ramp-up and export order execution are driving incremental growth.
The DCF model uses a 10-year free cash flow projection with a WACC of 12% and terminal growth rate of 5%. FCF is estimated as EBIT(1–t) + Depreciation – Capex – Change in Working Capital. FY25 FCF was impacted by heavy capex (Sanand plant ₹1,353 Cr total), which normalises from FY27 onwards.
| Year | FCF Est. (₹ Cr) | Growth | Discount Factor | PV of FCF (₹ Cr) |
|---|---|---|---|---|
| FY26E | 750 | 95%* | 0.893 | 670 |
| FY27E | 1,020 | 36% | 0.797 | 813 |
| FY28E | 1,260 | 24% | 0.712 | 897 |
| FY29E | 1,510 | 20% | 0.636 | 959 |
| FY30E | 1,770 | 17% | 0.567 | 1,004 |
| FY31E | 2,010 | 14% | 0.507 | 1,019 |
| FY32E | 2,250 | 12% | 0.452 | 1,017 |
| FY33E | 2,500 | 11% | 0.404 | 1,010 |
| FY34E | 2,740 | 10% | 0.361 | 989 |
| FY35E | 2,960 | 8% | 0.322 | 953 |
| Sum of PV (FCF) | — | — | — | 9,331 |
| Terminal Value (PV) | — | — | — | 13,640 |
| Enterprise Value | — | — | — | 22,971 |
| Less: Net Debt | — | — | — | ~(–400) |
| Equity Value | — | — | — | 23,371 |
*FY26E FCF elevated due to Sanand capex completion and improved operating leverage. DCF undervalues growth stocks — use alongside PE/EV multiples for fair value triangulation.
The stock currently trades at a significant premium to pure DCF value (~65%), which is common for quality growth companies with strong sectoral tailwinds. A blended valuation using 35x FY27E EPS (₹103) gives a fair value of ~₹3,605, while a premium growth multiple of 45x implies ₹4,635 — straddling the current price closely.
KEI is structurally positioned at the intersection of three long-duration trends: India’s power infrastructure buildout (grid modernisation, transmission capex under PM Surya Ghar and Smart Grid Mission), data centre demand surge (hyperscaler investments requiring power and cable infrastructure), and global EHV cable export opportunity (especially into Australia, the Middle East, and Southeast Asia).
Revenue Estimates:
FY26E: ₹11,700 Cr (+20% YoY)
FY27E: ₹14,040 Cr (+20%)
FY28E: ₹16,500 Cr (+18%)
EPS Estimates:
FY26E: ₹85 (full year, with H1 drag from capex)
FY27E: ₹103
FY28E: ₹125
Key Growth Levers:
| Company | Mkt Cap (Cr) | Revenue FY25 (Cr) | PAT FY25 (Cr) | PAT Margin | P/E (TTM) | P/B | ROCE | 1-Yr Return |
|---|---|---|---|---|---|---|---|---|
| KEI Industries | 38,604 | 9,736 | 696 | 7.1% | 44.8x | 6.2x | 21.3% | +14% |
| Polycab India | 1,03,029 | 22,408 | 2,020 | 9.0% | 43.5x | 9.7x | ~25% | +33% |
| Finolex Cables | ~10,000 | ~5,000 | ~450 | ~9% | ~22x | ~3x | ~18% | — |
| RR Kabel | ~7,500 | ~4,800 | ~200 | ~4.2% | ~37x | ~5x | ~12% | — |
| Sector Avg. | — | — | — | ~7–9% | ~38–45x | ~5–10x | ~18–25% | — |
KEI commands a justified premium to smaller peers given its EHV capability and export success, while trading at a slight discount to Polycab on P/B — reflecting Polycab’s larger scale, better margins, and stronger brand in retail. KEI’s faster earnings growth rate (22% CAGR vs ~18% for sector) partially justifies its current multiples.
