This is the first time since initiating coverage on the stock in November 2023, that Goldman Sachs has a “buy” recommendation on KEI Industries. It cited attractive risk-reward as a key factor behind its upgrade
However, the brokerage has cut its price target on the stock to ₹2,980 from ₹3,130 earlier, which does not imply any significant upside from current levels.
Goldman Sachs sees new factory capex to see deferrals, which could result in lower orders, but that could be partially offset by lower commodity prices as well as lower finance costs.
The brokerage expects Cable & Wire companies to continue to benefit from the ongoing power and infra capex in the near-term, but that could see some moderation in financial year 2027.
Export opportunities also remain large for these companies, with India currently comprising of only 2% to 3% of overall cable and wire exports globally.
However, the brokerage has downgraded infrastructure and engineering conglomerate Larsen & Toubro to “neutral” from its earlier rating of “buy”, and cut its price target to ₹3,330 from ₹3,640 earlier due to expectations of capex deferral.
Goldman Sachs has cut multiples for multiple capital goods and building material companies under their coverage.
Out of the 19 analysts that have coverage on KEI Industries, 15 of them have a “buy” rating, while four others have a “neutral” recommendation.
Shares of KEI Industries are trading 3.4% higher on Thursday at ₹2,848.5. The stock is down 43% from its peak of ₹5,039.
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