UBS Securities has started coverage on cable and wire companies KEI Industries and Polycab India, giving both a “buy” rating. The brokerage predicts that these stocks could see a 26-31% increase over the next year. Analysts Akshay Gattani and Amit Mahawar explained that the cable and wire industry is expected to grow at twice the rate of GDP from FY24 to FY30, thanks to factors like expanding capacity, strong domestic demand, and investments in transmission, distribution, and real estate.
On Tuesday, KEI Industries’ shares jumped 7.6%, while Polycab’s shares rose by 2.2%.
UBS noted that the cable and wire segment has been re-rated due to rising sales and expanding profit margins. They believe that current valuations are in line with the broader market and see little risk of a drop in the near term.
The analysts also highlighted the strong potential in untapped global markets, which makes them think that oversupply in the cable segment is unlikely anytime soon. They expect power cables, driven by transmission investments, to grow faster than other segments in the cable and wire industry.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
