Shares of wire and cable manufacturers KEI Industries and Polycab saw significant gains today after UBS, a global brokerage firm, gave both stocks a “buy” rating. KEI Industries shares rose by 4% to a high of ₹4,550, while Polycab shares increased by 3.7% to ₹6,881 on the BSE. UBS set target prices of ₹6,150 for KEI Industries and ₹8,550 for Polycab, highlighting strong growth potential.
UBS believes that both companies are well-positioned to benefit from increasing electrification efforts. The current market size of $8 billion is expected to grow to $20 billion by FY30, with the top five companies in the sector likely to increase their market share. UBS also anticipates a 16% annual earnings growth for Polycab and 24% for KEI over the next few years (FY24-27).
The firm notes that rising export revenues, driven by shifts in the global supply chain and the companies’ significant production capacities, could support these companies’ high valuations. UBS also thinks that the market has underestimated the potential for export growth.
For Polycab, UBS points out that the company is a key player in the electrification market, controlling 40% of the domestic market. Polycab is expected to benefit from strong, long-term growth in the cable and wire segment due to increased low-voltage infrastructure development in India.
Additionally, Polycab’s dominance is supported by its large-scale production capacity, a focus on expanding distribution, and investment in marketing and sales efforts, particularly in institutional and B2B markets.
Earlier in July, another global brokerage firm, Macquarie, also recommended Polycab with an “outperform” rating and set a target price of ₹7,576. Macquarie cited the company’s timely expansion and strong positioning in the FMEG segment as key growth drivers.
Over the past year, KEI Industries’ stock has delivered an 86% return, while Polycab’s stock has increased by 41%. In the current financial year, KEI’s stock has risen by 43%, and Polycab’s by 23%.
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