Company was incorporated in the year 1968 as a partnership firm under the name Krishna Electrical Industries and later converted into a public limited company in 1992. Some of its associate companies include KEI Cables Pvt Ltd, Matchless Engineers, etc. Its product range include control cables, LT power cables, instrumentation cables, telecom cables and non-ferrous alloy wires and rods, and are registered with engineering consultants, State Electricity Boards and other organizations both in private and public sectors.

Company has received ISO 9002 certificate from M/s. DNV, Netherlands for its Stainless Steel Wire division. This recognizes its quality consciousness and strict quality control procedures. Company has received ISO 9002 certificate for its cable division at Bhiwadi (Rajasthan) also. CARE has revised the rating assigned to the STD/CP program (carved out of working capital limits and including current STD/CP outstanding) and Short-term Bank Facilities of KEI from PR1 to PR2+. This rating is applicable for instruments/facilities having tenure up to one year. Instruments/Facilities with this rating would have adequate capacity for timely payment of short-term debt obligations and carry higher credit risk as compared to instruments rated higher. In addition, CARE has also revised the rating assigned to the Long-term Bank Facilities of KEI from A to BBB+. Facilities with this rating are considered to offer moderate safety for timely servicing of debt obligations. The rating also reflects KEI’s strong growth in operating income, good order book and moderate liquidity position.

Products & Services—

Company is an established player in the power cable segment and among the largest cable manufacturing companies in India. KEI industries limited manufactures high and low tension cables (EHT, HT & LT), control and instrumentation cables, house wires and stainless steel wires. KEI is one of the few companies in country to manufacture specialty cables including braided cables, fire survival and Zero halogen cables. KEI is mainly in the manufacture of electrical cables and has been one of the largest suppliers of cables to department of telecommunication (DoT), government of India. It has established its position in the core sector projects in India and plants are located in bhiwadi (Rajasthan), silvasaa (Union Territory of D&NH) and Chopanki (Rajasthan) (100% EOU). Its customer base consists of BHEL, Siemens, ABB, Alstom, L&T, BPCL, ONGC, GAIL, IOCL, Tata Chemicals, ACC, Gujarat Ambuja, Tata Steel and SAIL etc. Company has made a capital expenditure of over Rs 2.75 billion in the last three years for production capacity expansion. Company increased their production capacity to over 58,000 km long wires and cables already. Company has also decided to expand its product range to very high-tension power cables. Company is also looking for strong revival in export demand due to better global economy scenario.

KEI Industries has signed a foreign technical collaboration agreement and trademark license agreement with Brugg Kabel, Switzerland based 110 year old group. The agreement is aimed to manufacture extra high voltage cables ranging from 66kV / 110 kV / 132kV / 220kV at KEI’s manufacturing facilities located at Bhiwandi (Rajasthan). Brugg Kabel is a pioneer in manufacturing high voltage/extra high voltage cables – along with jointing and cable accessories up to 500 kV voltage grade.

At current market price, stock is trading at 9.79 P/E multiple of its FY2011 estimated EPS. We recommend investors to “BUY” KEI Industries Limited” for medium to long-term investment horizon.