KEI Industries, Polycab shares surge up to 4% as UBS sees upside potential of up to 41%
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Shares of wire and cable makers KEI Industries rose 4% to its day’s high of Rs 4,550 while those of Polycab rose 3.7% to Rs 6,881 on BSE after the global brokerage firm UBS initiated coverage on the stocks with a buy rating and a target price of Rs 6,150 and Rs 8,550 respectively. Stating that both companies are best plays on electrification, UBS stated that the favourable supply-demand dynamics are likely to benefit the industry leaders. The current $8 billion segment is estimated to be worth $20 billion in FY30 while the market share of the top five companies is expected to rise. Shifting global supply chain and incumbents' sizeable capacity should lift export revenue and the global brokerage firm sees a 16% and 24% earnings CAGR over FY24-27 for Polycab and KEI respectively. UBS also believes that compounding earnings are likely to support expensive valuations and thinks that consensus has underappreciated potential ramp-up of expo...