One of the most important sources of revenue for IPL franchises is sponsorship deals. The teams sign agreements with various brands such as mobile phone brands, apparel companies, and beverage manufacturers. These deals provide the franchises with adequate money to cover their expenses.

But what is the benefit for the sponsors? A brand can reap marketing benefits from a sports team, athlete, or event. These sponsorship options are highly visible and provide exposure to millions of consumers. Brands may drive marketing by instilling the brand name, logo, and mission in supporters while they are most engaged in sports.

This cable manufacturer, KEI Industries, had entered into a strategic association with one of the most prominent Indian Premier League (IPL) franchises, Royal Challengers Bangalore (RCB) as a principal partner for IPL for three years. This will provide the company with good brand recognition.

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The stock of this company has been an extraordinary performer in the history of the stock market. The stock has almost soared 112 percent over the past year. When looked at the period of three years, the stock has given a multi-bagger return of almost 560 percent !

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So, does this company still have a runway ahead given the past performance? Well, let’s understand the business model of the company and the future outlook to see if there is an investment opportunity present in this cable manufacturer.

Corporate Overview Of KEI Industries

Since 1968, KEI has been a top manufacturer of wires and cables (W&C) in India, with a strong presence in domestic and international markets. They are among the top three organized companies in the Indian W&C market.

KEI’s extensive product line serves a wide range of industry applications. They are one of the few Indian companies capable of generating extra high voltage (EHV) cables above 220kV, as well as one of the small number of global manufacturers capable of creating EHV 400kV cables. 

The company also provides Engineering, Procurement, and Construction (EPC) services for utility projects that require substantial cabling solutions. KEI’s success is driven by a diverse business model that includes goods, customers, and geographies.

They serve consumers in both the retail and institutional segments, as well as public and private institutions. The company’s operations are supported by strong production and R&D skills, which ensure the supply of high-quality solutions.

Business Segments Of KEI Industries

The company has the following three business segments: Retail, Institutional and Exports.


KEI’s retail section includes residential wires, LT and HT cables. Because of its top-quality products and strong brand positioning, the company is able to carve out large profits in this industry category. Furthermore, speedier product offtake reduces working capital requirements, resulting in higher return ratios.

Given these characteristics, KEI continues to strategically expand its retail segment by actively participating in different marketing and sponsoring events and strengthening its dealership network. This segment accounted for 44 percent of the total revenue in the financial year 2023.


The company’s institutional business offers high-quality EHV cables, HT and LT cables, stainless steel wires, and turnkey EPC projects. The segment faces significant entry obstacles due to high capital intensity, technological know-how, a strong track record, and stringent compliance requirements to obtain projects.

The company has created a strong institutional business over the years by focusing on high-quality products, cutting-edge manufacturing facilities, steady R&D investment, and appropriate marketing efforts.

The oil and gas, refinery, railway, metro rail, gearbox, solar, cement, steel, and real estate industries all place a high value on the institutional market. This segment contributed most in terms of revenue accounting for 46 percent of the total sales in FY2023.


KEI’s export business has grown over the years because of its highly advanced product line that fulfills stringent international standards. It is present in over 60 countries, with offices in five of them.

It supplies EHV, MV, and LV cables to international customers in the oil and gas, renewable energy, and utility industries. The Company’s key export markets include Australia, Kuwait, and Abu Dhabi (in the Middle East), as well as Nigeria and Ghana (in Africa).

In FY 2022-23, exports accounted for 10% of total sales. KEI plans to boost its export contribution in FY 2023-24 and develop a firm footing in US markets after receiving export approval for its product.

Financials Of KEI Industries

Revenue (in ₹crore)6,912.335,726.994,181.494,884.27
Net Profit (in ₹crore)477.38376.22269.55255.1

In the fiscal year 2023, KEI Industries saw an increase in revenue, surging by 20.6% to reach ₹6,912.33 crore as opposed to ₹5,726.99 crore in FY2022. Analyzing a span of four years, encompassing FY2020 to FY2023, the company displayed a  Compound Annual Growth Rate (CAGR) of 12.27% in revenue.

Simultaneously, there was a noteworthy upturn in net profit, experiencing a 27% increase from ₹376.22 crore in FY2022 to ₹477.38 crore in FY2023. Over the cumulative four-year period from FY2020 to FY2023, the net profit showcased a 23.23% CAGR.

In FY23, KEI Industries maintained favourable financial metrics with a Return on Equity (ROE) of 20.21% and a Return on Capital Employed (ROCE) of 25.71%.

Future Plans Of KEI Industries

Increase in Greenfield Capex

KEI plans to invest approximately Rs10 billion in Gujarat to develop a manufacturing facility for LT, HT, and EHV cables within the next 3-4 years. In FY24, the business has planned ~Rs2.5-3bn capex for the greenfield development of C&W in Gujarat, with commercial production slated to begin in Q4 FY25.

In FY24, KEI plans to invest approximately Rs450 million in Silvassa, resulting in an additional income of Rs5 billion from LT Power Cables. Additionally, the company plans to invest approximately Rs1-1.1 billion in Bhiwadi.

Another greenfield and brownfield capex project is underway at Pathredi, with an estimated cost of INR110 crores, which will enhance the capacity for LT power cables by 800 crores to 900 crores per year.

It will be operational in the first quarter of Fiscal Year ’24-’25. This brownfield capex will allow the company to grow by about 16% to 17% in the current fiscal year and 15% to 16% in the following fiscal year.

Strong Export Demand

In FY23, export income accounted for around 10% of total revenue, with the US leading the way, followed by the Middle East, Europe, and Africa. Oil & Gas, Infrastructure, and Renewable Energy were the primary drivers.

The corporation is also seeing the benefits of the ‘China +1’ strategy in the form of fresh inquiries from overseas geographies that were previously sourcing from China. Currently, export sales are made directly rather than through distributors.

KEI does, however, intend to expand its distributor network in the United States. Finally, the export margin in Cables is around 1% higher than the domestic margin, making any further exports potentially profitable.


In summary, KEI Industries has demonstrated impressive growth, profitability, and a diversified business model. With significant planned investments in capacity expansion and a growing export presence, the company appears well-positioned for future growth. 

However, what do you think about KEI Industries’ prospects? Does the company’s strong financial performance and future outlook make it an attractive investment opportunity? Share your thoughts on whether you would consider investing in this cable manufacturing giant.

Written by Nalin Suriya

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