KEI Industries Share Price Falls After Goldman Sachs Initiates Coverage With ‘Neutral’

Acceleration Of Global Corporates’ China +1 Strategy

While India has become a net exporter of cables and wires since 2020, it has taken away market share from China. The acceleration of global corporates’ China +1 strategy could benefit Indian cable and wire manufacturers, according to Goldman Sachs. KEI has all the requisite approvals to export to markets such as the U.S. and Europe.

Unorganised To Organised Shift

The unorganised share in the overall cables and wires market has reduced from 43% before FY15 to 30% in FY22, due to technological innovations, increasing complexity in use cases, especially in sunrise industries like renewables, EVs, etc., and a longer reach, especially in rural areas, through branded players’ distribution network. Any improvement in this would benefit KEI, as it is the second-largest branded player in the Indian cables and wires market, according to the note.

Improved Regulatory Compliance

Currently, the regulations and technical standards in developed markets, such as the U.S. and Europe, are quite stringent, resulting in low levels of approval by Indian players. Any elevation in the standards required in the domestic market would benefit players like KEI, as it has one of the highest number of certifications in the industry.

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