Global investment banking firm JPMorgan has upgraded KEI Industries to 'overweight' from its earlier rating of 'neutral' in its latest note on Tuesday, October 27. However, the firm has slashed its price target on the stock to ₹4,650, from ₹5,650 earlier. The revised price target from JPMorgan implies a upside potential of nearly 20% from current levels, as reported by CNBC TV18. JPMorgan believes that the recent 35% correction seen in the KEI Industries share price from the recent peak has made its risk-reward more attractive. The firm also cited a potential improvement in the company's underlying growth and a shift in mix to protect margins as two other reasons for the upgrade.
According to CNBC TV18, KEI Industries has underperformed both its peer Polycab and the Nifty 50 index since September 3, when UltraTech announced the launch of its Cables & Wires business. KEI Industries shares are down 27% since then, compared to a 12% drop in Polycab and a 5% fall on the Nifty 50. The firm attributed this underperformance to the two negative catalysts: UltraTech's entry into the space and a reset in margin expectations from the company.
As reported by CNBC TV18, KEI Industries now has more 'buy' recommendations than it had since December 2022, with 23 out of the 27 analysts tracking the stock turning bullish. Three others have a 'hold' recommendation, while one has a 'sell' rating. The consensus estimate of price targets implies an upside potential of 30% from current levels. The stock ended 4.7% higher on Monday at ₹3,899.5, though it is still down 13% on a year-to-date basis.
According to JPMorgan, the firm believes that the recent 35% correction seen in the KEI Industries share price from the recent peak has made its risk-reward more attractive. The company cited a potential improvement in the company's underlying growth and a shift in mix to protect margins as two other reasons for the upgrade. JPMorgan has cited a steep correction in copper prices as a key downside risk for the stock from hereon, as reported by CNBC TV18.
As reported by CNBC TV18, KEI Industries has received at least eight upgrades in recent times after its second quarter results, following which, the stock had seen a steep correction. The firm has cited a steep correction in copper prices as a key downside risk for the stock from hereon. JPMorgan believes KEI Industries continues to offer exposure to the structural theme of electrification/energy transition, with applications across power T&D, renewables, infrastructure, data centers, mobility electrification and exports.
