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BofA initiates coverage on Polycab, KEI with buy ratings; sees up to 22% upside

By Sohail Khan 28 August 2026, 6:00 am

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BofA initiates coverage on Polycab, KEI with buy ratings; sees up to 22% upside
Synopsis

BofA expects India's wires and cables industry to grow at a 14% compound annual rate between FY26 and FY29, supported by spending on infrastructure, renewable energy and power grids, as well as exports.

Mumbai: BofA Securities initiated coverage on Polycab India and KEI Industries with Buy ratings, betting that strong demand for wires and cables and the companies' competitive positions will help them sustain faster growth despite rising competition.

The brokerage set a price target of ₹11,000 for Polycab, implying 22% upside, and ₹6,300 for KEI, suggesting 14% upside.

Polycab shares fell 0.4% to ₹9,035 on Thursday, while KEI gained 0.1% to ₹5,538.90.

The brokerage values both stocks at 40 times two-year forward earnings, or 1.5 standard deviations above their historical averages. It prefers Polycab and KEI over Havells.

Read more: Close to clearing NSE IPO: Sebi Chief Tuhin Kanta Pandey

BofA expects India's wires and cables industry to grow at a 14% compound annual rate between FY26 and FY29, supported by spending on infrastructure, renewable energy and power grids, as well as exports.

Polycab, which leads the industry with a 24% market share, is BofA's preferred play on franchise quality. The brokerage expects its revenue to grow at a 19% CAGR through FY29, helped by market-share gains and higher exports. It expects earnings to grow at an 18% CAGR over the period.

KEI, with a 9% market share, offers a faster growth profile. BofA expects revenue and earnings to grow at 22% and 20% CAGRs, respectively, through FY29, supported by capacity expansion and an improving product mix. Its Sanand plant is expected to drive the next leg of growth as capacity ramps up.

A key investor concern has been the risk of excess capacity as new competitors enter the industry. BofA estimates oversupply at just 2% by FY28-29.

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