Prabhudas Lilladher has upgraded KEI Industries to 'Accumulate' rating with a target price of ₹5,660 in its research report dated May 05, 2026, as reported by Moneycontrol. The brokerage's revised target price represents an increase from the earlier ₹5,545, valuing the stock at 40x FY28 earnings. This positive recommendation comes despite Morgan Stanley's recent downgrade to Equal Weight citing balanced risk-reward concerns after the stock's significant rally.
KEI Industries delivered strong revenue growth of 19.3% in Q4FY26, though volume growth remained muted at approximately 2% due to capacity constraints. As per Prabhudas Lilladher's research, existing plants in Rajasthan were operating at peak utilization while the Sanand plant ramp-up was delayed. Export performance showed mixed results with a 10% decline in Q4FY26, with Middle East exports impacted by shipping disruptions in March 2026 but resuming in April 2026 at higher freight costs via Fujairah port. The company targets export contribution at ~20% of revenue in FY27 with improving traction in the US market.
The Sanand last phase is expected to be commissioned by Q4FY27, supporting scale-led margin expansion and maintaining the company's EBITDA margin guidance at 10.5%-11% for FY27. Prabhudas Lilladher estimates revenue/EBITDA/PAT CAGR of 22.5%/24.1%/19.9% for FY26-28E, reflecting strong growth prospects despite current capacity constraints. The brokerage has tweaked its earnings estimates for FY27/FY28 based on the latest operational data and market conditions.
The contrasting recommendations from different brokerages highlight the selective nature of current market sentiment toward KEI Industries. While Prabhudas Lilladher sees value in the stock with its 'Accumulate' rating and ₹5,660 target, Morgan Stanley maintains a more cautious stance due to balanced risk-reward profile concerns. This divergence reflects the selective investment approach being adopted by major brokerages, with some focusing on the company's long-term growth prospects while others remain concerned about near-term margin pressures and valuation levels.
