Competition in the wires and cables space just got a lot more interesting. When a large, cash-rich company from outside the industry decides to jump in, it naturally raises questions about pricing, dealer networks, and who ends up gaining or losing ground over the next few years. A leading brokerage has now shared its take on exactly this, looking closely at what it could mean for one of the established players in the segment.
Stock Falls, Target Price Cut
Jefferies has cut KEI Industries target price by 11%, bringing it down to ₹6,150 from ₹6,920 earlier. Even with the cut, the brokerage says there’s still a 33% upside from current levels, and it hasn’t changed its Buy rating on the stock.
So what’s driving this reassessment? Jefferies says the launch by UltraTech Cement into wires and low-tension cables has raised concerns among investors about how profitable KEI’s business will stay going forward.
According to the brokerage, the current stock price already factors in a market share loss of roughly 300 basis points for KEI in its retail segment over FY26-30E, with no cushion coming in from its power or exports business to make up for it. A basis point, in case you’re wondering, is just one-hundredth of a percentage point, so 300 basis points works out to 3%.
Retail Is Where the Risk Lies
Jefferies has also built in a margin compression of 50 basis points for KEI over the FY26-30 period. The brokerage points out that the retail segment is where the real risk from UltraTech’s entry lies, since this segment brings in 54% of KEI’s total revenue and is largely powered by demand from housing.
It’s worth remembering how KEI got here in the first place. The company has spent years building up its retail presence through branding and by expanding its dealer network. Back in FY17, retail made up just 7% of KEI’s sales. By FY26, that number had climbed to 21%. Over that same stretch, the unorganised part of the industry, meaning smaller, local, unbranded players, shrank from around 35-40% share down to about 25%. So a good chunk of KEI’s growth story has actually come from taking share away from these unorganised players, not just from its listed peers.
Where the Offsets Could Come From
Jefferies isn’t entirely pessimistic though. The brokerage expects KEI’s push into Europe and the US, which has been building for the past 2-3 years, to start showing results now. It’s also betting on domestic power transmission capital spending rising 2.6 times over FY26-30 compared to the FY21-25 period, which could give KEI’s power cable business a real boost.
The brokerage’s revised target price assumes KEI holds on to a 22% retail market share through FY27-30, with EBITDA margin improving by 50 basis points to reach 11.5%. EBITDA, simply put, is the company’s operating profit before accounting for interest, tax, and other non-cash items. Even in a scenario where KEI does lose some retail share, Jefferies thinks the company can make up for it through stronger sales in domestic power transmission cables and exports.
Valuation and Growth Outlook
On valuation, KEI Industries is currently trading at 36 times its price-to-earnings ratio based on September 2027 expected earnings, which is roughly in line with its five-year average. Jefferies’ new target price values the stock at 40 times earnings for September 2028, down from 45 times earlier, reflecting some caution after UltraTech’s launch turned out more aggressive than expected.
Even so, this valuation still sits at a premium to the five-year average of 36 times, supported by better visibility on exports and power transmission demand. Jefferies expects KEI’s earnings per share to grow at a 20% CAGR (compound annual growth rate) between FY26 and FY29. The main risk it flags is the possibility of sharp price-based competition in the cables business.
Company Sticks to Its Guidance
For its part, KEI’s management has said it can defend its retail market share, pointing to its established brand and a loyal dealer base, along with prices that remain 3-4% lower than competitors. The company has maintained its FY27 guidance of 25% revenue growth and an 11-12% EBITDA margin, which, if achieved, could mean 3-13% upside to Jefferies’ current FY27 earnings estimates.
Within the power transmission and distribution space, extra high-voltage cables remain a particularly profitable niche, and only two domestic players, KEI and Universal Cables, currently operate in this segment.