₹ 10.85 to ₹ 1690: Multibagger stock turns ₹ 1 lakh to ₹ 1.55 Cr in just ten years

With a market capitalization of ₹ 15,347 crores, KEI Industries is a small-cap stock which proved to be a safe long term investment for investors. The company was established in 1968 and manufactures cables and wires. Its product portfolio ranges from housing wires to extra high voltage (EHV) cables. Moreover, it has diversified into Engineering, Procurement, and Construction (EPC) services for power and transmission projects. 

The stock has risen by a whopping 15476% in the past ten years, as its share price increased from ₹10.85 to ₹ 1690.00 apiece. To put this into perspective, if an investor would have invested in ₹ 1 lakh in the company’s shares ten years ago, the value of their holdings would have been ₹ 1,55,76,000 (~₹1.55 crores) today! 

Recently, CARE Ratings revised the credit rating of its long term bank facilities from AA- to AA, with a stable outlook. CARE ratings reaffirmed the credit rating of its short-term bank facilities and commercial papers to A1+. This indicates that its instruments have a very strong degree of safety regarding timely payment of financial obligations. 

In the past five years, the KEI Industries’s share price has increased by 310.00%. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares five years ago, the value of their holdings would have been ₹ 4.1 lakhs today! 

During the above period of five years, the company’s revenue increased from ₹ 3,465.5 crores to ₹ 5,726.55 crores, at a CAGR of 13.38%. Meanwhile, its profit grew from ₹ 144.8 crores in 2018 to ₹ 375.98 crores in 2022, at a CAGR of 26.94%. 

In a recent research report, BOB Capital Markets noted that the government’s emphasis on infrastructure coupled with rural and rail electrification is boosting demand prospects for KEI. Moreover, power distribution-led capex and real estate construction are a few other areas of opportunity. 

KEI Industries has an ideal return on equity (ROE) of 19.33% and an ideal return on capital employed (ROCE) of 24.1%. Moreover it has a dividend yield of 0.21% and an ideal debt to equity ratio 0.08. 

Written by Simran Bafna 

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