KEI Industries, Polycab India, RR Kabel are MOFSL’s top cable sector picks; here’s why
MOFSL has upgraded its earnings per share (EPS) estimates for FY26E by approximately 3–5 per cent and by 2–4 per cent for FY27E/28E for the three companies, citing robust Q2 FY25 performance.
- Sep 27, 2025,
- Updated Sep 27, 2025 4:35 PM IST
Motilal Oswal Financial Services (MOFSL) has revised its recommendations for leading cables and wires (C&W) sector stocks. The broker upgraded KEI Industries (KEII) to ‘Buy’ from Neutral, while maintaining a ‘Buy’ on Polycab India (POLYCAB) and a ‘Neutral’ rating on RR Kabel (RRKABEL). This comes amid what MOFSL describes as "a continued robust demand momentum" for the sector, supported by strong industry fundamentals.
According to MOFSL, recent discussions with industry participants indicate sustained demand momentum. Growth is driven by the power sector, infrastructure investments, emerging segments like EVs and data centres, and improving real estate demand. While some investors have raised concerns about the sustainability of this trend, MOFSL believes the underlying drivers remain intact. Key factors include:
1. Infrastructure development via investments in roads and railways 2. Expansion in the power sector, especially renewable energy and T&D capex3. Growth in new areas such as data centres and electric vehicles, along with continued traction in real estate and individual housing
Concerns about increased competition have arisen following announcements by UltraTech Cement (UTCEM) and the Adani Group. MOFSL notes that competitive intensity is unlikely to be as high as initially feared. UTCEM has clarified it does not plan to accelerate its Rs 1,800 crore investment beyond what was announced in Feb’25. No concrete plans have emerged from the Adani Group after the establishment of Praneetha Ecocables, a JV by its subsidiary Kutch Copper in Mar’25. MOFSL expects that incremental supply will be absorbed by strong sector demand.
Raw material prices, especially for copper and aluminium, continue to impact sector performance. MOFSL observes that sustained raw material price increases, which are largely passed through to consumers, have supported revenue growth for C&W companies. In the last month, copper/aluminium prices rose about 3 per cent, with average prices in 2QFY26 (QTD) up 6 per cent/9 per cent QoQ and 10 per cent/14 per cent YoY, respectively. MOFSL expects this to translate into price increases of ~3 per cent for wires and ~4-5 per cent for cables in the near term, supporting robust revenue growth in 2QFY26.
MOFSL has upgraded its earnings per share (EPS) estimates for FY26E by approximately 3–5 per cent and by 2–4 per cent for FY27E/28E for the three companies, citing robust Q2 FY25 performance. Valuations are considered reasonable at 31-32x FY28E EPS for POLYCAB and KEII, and 25x FY28E for RRKABEL.
The ratings change for KEI Industries was summarised as: "Rating upgrade to BUY for KEII, maintain on POLYCAB (BUY) and RRKABEL (Neutral)".
MOFSL explained: "Considering continued growth momentum, lower-than-expected competitive intensity, reasonable valuations, and the stock’s underperformance over the past year, MOFSL upgrades KEII to BUY from Neutral. The broker reiterates its BUY rating on POLYCAB and Neutral rating on RRKABEL, and expects sector demand tailwinds to persist for several more years."
Polycab India, KEI Industries, and RR Kabel remain the primary listed competitors. Despite new entrant announcements, MOFSL expects incremental supply to be absorbed by sustained demand, with the sector set to benefit from ongoing infrastructure, power, and real estate expansion.
Motilal Oswal Financial Services (MOFSL) has revised its recommendations for leading cables and wires (C&W) sector stocks. The broker upgraded KEI Industries (KEII) to ‘Buy’ from Neutral, while maintaining a ‘Buy’ on Polycab India (POLYCAB) and a ‘Neutral’ rating on RR Kabel (RRKABEL). This comes amid what MOFSL describes as "a continued robust demand momentum" for the sector, supported by strong industry fundamentals.
According to MOFSL, recent discussions with industry participants indicate sustained demand momentum. Growth is driven by the power sector, infrastructure investments, emerging segments like EVs and data centres, and improving real estate demand. While some investors have raised concerns about the sustainability of this trend, MOFSL believes the underlying drivers remain intact. Key factors include:
1. Infrastructure development via investments in roads and railways 2. Expansion in the power sector, especially renewable energy and T&D capex3. Growth in new areas such as data centres and electric vehicles, along with continued traction in real estate and individual housing
Concerns about increased competition have arisen following announcements by UltraTech Cement (UTCEM) and the Adani Group. MOFSL notes that competitive intensity is unlikely to be as high as initially feared. UTCEM has clarified it does not plan to accelerate its Rs 1,800 crore investment beyond what was announced in Feb’25. No concrete plans have emerged from the Adani Group after the establishment of Praneetha Ecocables, a JV by its subsidiary Kutch Copper in Mar’25. MOFSL expects that incremental supply will be absorbed by strong sector demand.
Raw material prices, especially for copper and aluminium, continue to impact sector performance. MOFSL observes that sustained raw material price increases, which are largely passed through to consumers, have supported revenue growth for C&W companies. In the last month, copper/aluminium prices rose about 3 per cent, with average prices in 2QFY26 (QTD) up 6 per cent/9 per cent QoQ and 10 per cent/14 per cent YoY, respectively. MOFSL expects this to translate into price increases of ~3 per cent for wires and ~4-5 per cent for cables in the near term, supporting robust revenue growth in 2QFY26.
MOFSL has upgraded its earnings per share (EPS) estimates for FY26E by approximately 3–5 per cent and by 2–4 per cent for FY27E/28E for the three companies, citing robust Q2 FY25 performance. Valuations are considered reasonable at 31-32x FY28E EPS for POLYCAB and KEII, and 25x FY28E for RRKABEL.
The ratings change for KEI Industries was summarised as: "Rating upgrade to BUY for KEII, maintain on POLYCAB (BUY) and RRKABEL (Neutral)".
MOFSL explained: "Considering continued growth momentum, lower-than-expected competitive intensity, reasonable valuations, and the stock’s underperformance over the past year, MOFSL upgrades KEII to BUY from Neutral. The broker reiterates its BUY rating on POLYCAB and Neutral rating on RRKABEL, and expects sector demand tailwinds to persist for several more years."
Polycab India, KEI Industries, and RR Kabel remain the primary listed competitors. Despite new entrant announcements, MOFSL expects incremental supply to be absorbed by sustained demand, with the sector set to benefit from ongoing infrastructure, power, and real estate expansion.