KEI - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.4
| Stock Code | KEI | Market Cap | 50,279 Cr. | Current Price | 5,260 ₹ | High / Low | 5,325 ₹ |
| Stock P/E | 54.8 | Book Value | 697 ₹ | Dividend Yield | 0.09 % | ROCE | 20.1 % |
| ROE | 14.8 % | Face Value | 2.00 ₹ | DMA 50 | 4,802 ₹ | DMA 200 | 4,368 ₹ |
| Chg in FII Hold | 1.78 % | Chg in DII Hold | -1.44 % | PAT Qtr | 284 Cr. | PAT Prev Qtr | 235 Cr. |
| RSI | 65.9 | MACD | 139 | Volume | 4,28,234 | Avg Vol 1Wk | 3,98,180 |
| Low price | 3,417 ₹ | High price | 5,325 ₹ | PEG Ratio | 2.25 | Debt to equity | 0.04 |
| 52w Index | 96.6 % | Qtr Profit Var | 25.5 % | EPS | 96.1 ₹ | Industry PE | 25.3 |
📊 Financials: KEI Industries shows strong fundamentals with ROCE at 20.1% and ROE at 14.8%, reflecting efficient capital use. Debt-to-equity ratio of 0.04 indicates negligible leverage. EPS stands at ₹96.1, supported by PAT growth from ₹235 Cr. to ₹284 Cr. Quarterly profit variation (+25.5%) highlights robust earnings momentum. Dividend yield at 0.09% is minimal, suggesting reinvestment of profits into growth.
💹 Valuation: Current P/E of 54.8 is significantly higher than the industry average of 25.3, indicating premium valuation. P/B ratio (~7.5, 5260/697) reflects heavy premium pricing relative to book value. PEG ratio of 2.25 suggests growth is fairly priced, not undervalued. Intrinsic value analysis indicates the stock is richly valued, with limited margin of safety.
🏢 Business Model & Health: KEI operates in cables and wires manufacturing, with strong competitive advantage in infrastructure, power, and industrial segments. Low debt, consistent profitability, and robust demand support long-term sustainability. Institutional participation is mixed, with FII holdings increasing (+1.78%) but DII holdings declining (-1.44%).
📈 Entry Zone: Technical indicators (RSI 65.9, MACD 139, DMA 50 at ₹4,802, DMA 200 at ₹4,368) suggest bullish momentum. Accumulation near ₹4,800–₹5,000 could be favorable. Long-term investors may hold, though valuations are stretched compared to industry peers.
Positive
- ✅ Strong PAT growth (+25.5%) indicates earnings resilience.
- ✅ Healthy ROCE (20.1%) and ROE (14.8%) reflect efficient capital use.
- ✅ Very low debt-to-equity ratio (0.04) ensures financial stability.
- ✅ Rising FII holdings (+1.78%) show foreign investor confidence.
Limitation
- ⚠️ High P/E (54.8) compared to industry average (25.3) suggests overvaluation.
- ⚠️ P/B ratio (~7.5) reflects significant premium pricing.
- ⚠️ PEG ratio (2.25) indicates growth is fairly priced, limiting undervaluation.
- ⚠️ Dividend yield at 0.09% offers negligible shareholder returns.
Company Negative News
- 📉 Valuations remain stretched compared to industry peers.
- 📉 Decline in DII holdings (-1.44%) reflects reduced domestic institutional confidence.
Company Positive News
- 📈 PAT growth from ₹235 Cr. to ₹284 Cr. shows strong operational performance.
- 📈 FII holding increased (+1.78%), reflecting foreign institutional support.
Industry
- 🌐 Industry P/E at 25.3 indicates moderate sector valuations.
- 🌐 Cable and wire sector benefits from infrastructure expansion and industrial demand.
Conclusion
🔎 KEI Industries is fundamentally strong with robust earnings growth, efficient capital returns, and negligible debt. However, valuations are stretched with a high P/E and PEG ratio. Entry near ₹4,800–₹5,000 offers a balanced risk-reward opportunity. Long-term holding is justified, though investors should monitor valuation risks and institutional sentiment closely.