Investec has initiated coverage on Bansal Wire with a ‘Buy’ rating and set a target price of Rs 440 per share, implying a 25% upside from the current market price of Rs 351. The brokerage firm highlights Bansal Wire’s unique position in the commoditized steel and stainless steel wire market, noting that the company has carved out a niche for itself by offering the widest range of products and successfully reducing customer and industry concentration.
Investec points to two major initiatives that Bansal Wire is currently undertaking, which are expected to significantly enhance profitability. The company is expanding into the production of steel cords and backward integrating into stainless steel rods, moves that are projected to drive substantial growth.
According to Investec, Bansal Wire is poised for a strong financial performance, with an expected EBITDA compound annual growth rate (CAGR) of over 40% from FY24 to FY27. The company’s post-tax return on capital employed (RoCE) is also anticipated to remain in the high teens during this period.
In terms of valuations, Investec believes the stock is attractively priced, with a price-to-earnings (PE) ratio of 24x for FY26e and 17x for FY27e, making it an appealing investment opportunity at current levels.
