Synopsis:- Even as KEI Industries reported a 26 percent jump in quarterly net profit with EBITDA margins at multi-year highs, its shares fell nearly 3.5 percent on May 7, 2026, after reports emerged of Income Tax Department search operations across approximately six locations including the company’s Delhi offices casting a regulatory shadow over an otherwise clean earnings season.
A leading manufacturer of wires, cables, and EPC solutions found itself at the intersection of strong earnings and regulatory uncertainty on Thursday, after sources cited by CNBC-TV18 reported that the Income Tax Department was conducting search operations at roughly six of its locations, including its Delhi offices. The disclosure, coming a day after the company’s Q4 FY26 results drove the stock down close to 3.5 percent in morning trade.
With a market capitalisation of Rs. 48,357.65 crore, the shares of KEI Industries were last trading at Rs. 5,068 per share, though they reached 3.5 percent lower intraday on May 7 at Rs.4,966.3. It is trading at a P/E of 53.59.
The Income Tax Department is reported to be conducting search operations across around six locations belonging to KEI Industries, including its offices in Delhi. No official reason for the searches has been disclosed by either the company or the department. Under standard procedure, such operations involve examination of financial records, tax filings, and compliance documentation. The company had not issued a formal exchange filing on the matter as of the time of reporting. Regulatory searches of this nature typically create near-term overhang on the stock regardless of the eventual outcome.
The searches arrived immediately after KEI Industries reported its quarterly numbers. Revenue for Q4 FY26 rose 19 per cent year-on-year to Rs. 3,476 crore, driven primarily by the wires and cables segment. EBITDA came in at Rs. 381 crore, up 27 per cent, with margins expanding to 11 per cent. Net profit grew 26 per cent to Rs. 284 crore.
At the segment level, wires and cables revenue grew 18 per cent with margins reaching a multi-year high of 12.4 per cent. Stainless steel wires delivered 22 per cent revenue growth with margin expansion to 9 per cent. The EPC business, however, remained broadly flat with ongoing margin pressure, a recurring drag that continues to weigh on the blended margin profile.
One analytic flag from Equirus Securities is worth noting: the 19 per cent revenue growth may be largely value-led rather than volume-led, with higher raw material costs passed through to customers potentially flattering the topline. If underlying volumes declined on a year-on-year basis as suggested, then the margin improvement, while real, reflects operating leverage on pricing rather than genuine demand acceleration. Order book at quarter-end stood at Rs. 3,585 crore, down 9 percent sequentially, a trend that analysts flagged as a caution signal for the near-term revenue pipeline alongside rising competition in the wires segment.
Business Overview
KEI Industries, incorporated in 1968, manufactures extra-high voltage, medium voltage, and low voltage power cables along with wires, and provides EPC services to institutional and infrastructure clients across India and select export markets. The company is considered nearly debt-free with a ROCE of 21.3 percent over the trailing period.
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