Brokerage firm Morgan Stanley has initiated coverage on cables and wires manufacturer KEI Industries Ltd. with an “overweight” rating on Friday, February 21.

Morgan Stanley has a price target of ₹4,391 on KEI Industries, which has a potential upside of 18% from Thursday’s closing levels.

The brokerage cites multiple growth drivers for KEI Industries behind its bullish stance, calling the company a strong cables & wires franchise with a continuing-to-improve business model. Most important among the multiple growth drivers is the “future of energy” theme, according to the brokerage.

KEI Industries’ earnings can grow at a compounded annual growth rate (CAGR) of 23% over financial year 2025-2028.

Exports also should aid improvement in KEI Industries’ earnings, according to Morgan Stanley, given the multi-polar manufacturing dynamics.

The brokerage said the company’s exports should also aid earnings progression, given the present multi-polar manufacturing dynamics.

A step-up in capex will meet domestic and export demand, the Morgan Stanley note said.

Last month, chairman and managing director Anil Gupta discussed the company’s expansion plans, capex push to fuel growth and others in an interaction with CNBC-TV18.

“Currently, the company is undergoing massive expansion in terms of capex. We are putting up a project at Sanand in Ahmedabad with an investment of nearly ₹2,000 crore. Its first phase is expected to be commissioned by June 2025 and the overall project will be commissioned by March 2026. That will increase our production capacities by 65-70%. We are also considering further capex,” he had said back then.

KEI Industries reported a 9.4% increase in its net profit in the December quarter at ₹164.8 crore against ₹150.6 crore. Its revenue from operations increased 19.8% to ₹2,467.2 crore compared to the previous year’s ₹2,059.3 crore.

Out of the 18 analysts that have coverage on KEI Industries, 15 have a ‘buy’ rating and three have a ‘hold’ rating.

Shares of KEI Industries ended 4.4% higher on Thursday at ₹3,725.

KEI Industries shares gained for the third day in a row on Friday, February 21. The stock was up 3.08% at 3,874.4 apiece at 10.15 am. It has gained 19.77% in the past year. The stock is down 23.6% from its recent peak of ₹5,039.

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