Shares of KEI Industries declined sharply by over 5% on May 5, 2026, after global brokerage Morgan Stanley downgraded the stock to “Equal Weight.” The brokerage, however, raised its price target to ₹5,213, reflecting a more balanced risk-reward outlook following the stock’s recent rally.
The downgrade comes after a strong run in the stock, which has outperformed the BSE Sensex by around 35% over the past six months. Analysts indicated that much of the near-term optimism is already priced in, prompting a more cautious stance despite steady business fundamentals.
In its latest Q4FY26 update, KEI Industries reported revenue growth of 19% year-on-year to ₹3,476 crore, slightly ahead of market expectations. The performance was driven largely by the core wires and cables segment, which grew 18%, along with a 22% rise in stainless steel wires. Meanwhile, the EPC segment remained largely flat, continuing to lag behind other business verticals.
The company’s topline growth was primarily value-led, supported by the pass-through of higher raw material costs rather than strong underlying volume expansion. This aligns with observations from brokerage Equirus Securities, which noted that volume growth may have declined on a year-on-year basis despite the robust revenue numbers.
Profitability, however, remained a key highlight. EBITDA rose 27% to ₹381 crore, exceeding estimates, while EBITDA margins expanded by 70 basis points to 11%. Gross margins improved by 150 basis points to 25.2%, and profit after tax increased 26% to ₹284 crore, also coming in ahead of expectations.
Segment-wise, margins in the wires and cables business improved by 140 basis points to 12.4%, marking one of the strongest performances in recent quarters. Stainless steel wires margins saw a sharp expansion of 400 basis points to 9%. However, the EPC segment continued to face margin pressure, weighing on the overall mix.
Looking ahead, management remains optimistic and is targeting revenue growth of around 20% year-on-year. However, the outlook is not without challenges. Rising competition in the wires segment, along with external factors such as elevated commodity prices and a weaker rupee, could act as headwinds for margins going forward.