Domestic demand for C&W products remains robust, fuelled by rapid electrification, infrastructure development, and growth in sectors such as power transmission and distribution (T&D), real estate, and transportation. This demand is projected to drive an 11-13% CAGR in the domestic market from FY24 to FY27.
Simultaneously, exports have shown significant traction, growing 25% YoY in October 2024 and 8% YoY during April-October 2024. Notable markets like Saudi Arabia and Oman have reported strong growth, with India benefiting from competitive pricing, international compliance, and diversified offerings.
Indiaโs position as a net exporter of C&W since FY20 underscores its capability to meet global demand. Key drivers in international markets include the push for renewable energy, electric vehicle adoption, and modernization of power grids.
Despite apprehensions regarding potential U.S. import duties, the sector remains well-insulated due to Americaโs dependency on cable imports, where India has established a strong foothold with a 44% CAGR in exports to the U.S. between FY17 and FY24.
Leading companies like Polycab, KEI Industries, and RR Kabel are positioned to benefit from the rebound in exports. While export revenues faced temporary setbacks in 1HFY25 due to logistical issues and demand slowdowns, a recovery is underway, with mid-teens growth anticipated for 3QFY25.Margins are expected to improve sequentially, aided by moderating raw material costs, strategic price adjustments, and a favorable product mix.The C&W segment remains pivotal to Indiaโs industrial growth story. Continued investments in power infrastructure, real estate, and private capital expenditures are expected to sustain demand momentum.
On the global front, Indiaโs growing prominence as a reliable exporter, supported by favorable policies like the China+1 strategy and production-linked incentives, ensures a bright future.
With increasing traction in both domestic and international markets, the C&W industry is set to remain a high-growth segment, offering robust opportunities for players and investors alike.
KEI Industries: Buy| Target Rs 5150| LTP Rs 4103| Upside 25%
KEI Industries (KEII) is a leading player in Indiaโs Cable and Wire (C&W) industry, poised for strong growth driven by capacity expansion, retail focus, and export opportunities.
With a planned capex of INR18-19b for greenfield expansion, KEII aims to significantly boost its cable capacity by 137%. The companyโs retail share has risen to 54% in 1HFY25, enhancing cash flow stability.
Exports, contributing 13% of revenue, are targeted to reach 15-18% in three years. We estimate a 17%/24%/22% revenue/EBITDA/EPS CAGR over FY25-27.
Polycab India: Buy| Target Rs 8810| LTP Rs 6666| Upside 32%
Polycabโs Cables & Wires segment is set to benefit from the strong demand expected from power Transmission & Distribution (T&D), growth in private capex and real estate sector. Polycab is expanding its Gujarat EHV plant by FY26-end, aligned with Indiaโs โน9.2t power transmission push.
It also secured โน56.5b BharatNet initiative Phase-III contracts for initial period of 3 years. FMEG seg saw strong festive growth, while strategic changes will further support future expansion.
Polycab aims to grow in HVDC, deep-sea cables by FY27E, and is expanding presence in EV charging space. We project 15% earnings CAGR over FY24-27.
(The author is Head โ Research, Wealth Management, Motilal Oswal Financial Services Ltd.)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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