Best Cable Stocks – KEI Industries Ltd Vs Finolex Cables Ltd

Company Overview of KEI Industries Limited

KEI Industries Limited, located in India, is a manufacturer of wires and cables. The company is divided into segments including Cables and Wires, Stainless Steel Wire, Engineering, Procurement and Construction (EPC) Projects. 

The Cables and Wires segment focuses on producing and selling a wide range of power cables such as low tension (LT), high tension (HT) and extra high voltage (EHV), as well as control and instrumentation cables, speciality cables, elastomeric/rubber cables, flexible and house wires and winding wires. The Stainless Steel Wire segment involves the manufacturing, sale and job work associated with stainless steel wires.  

Company Overview of Finolex Cables Ltd

Finolex Cables Limited, an India-based company, offers comprehensive cable solutions. The company focuses on manufacturing various types of cables including electrical and communication cables. Its business segments comprise Electrical cables, Communication cables, Copper rods and other products. 

The “Others” segment involves the trading of different electrical and related items. The company’s product range consists of a variety of cables such as industrial cables, flexible cables, high voltage power cables, telephone cables, LAN cables and fibre optic cables. Additionally, it produces lighting products, electrical accessories, switchgear, fans and water heaters.

The stock performance of KEI Industries Ltd

The table below shows the stock performance of KEI Industries Ltd over the past 1 year.

The stock performance of Finolex Cables Limited

The table below shows the stock performance of Finolex Cables Ltd over the past 1 year.

Fundamental Analysis of KEI Industries Ltd

KEI Industries Ltd is a prominent player in the Indian electrical sector, specializing in the manufacturing of a wide range of cables and wires. Established in 1968, the company has grown to become a trusted name, renowned for its high-quality products that cater to various industries, including power, telecommunications and construction.  

The stock is trading at ₹3,994.85 with a market cap of ₹36,069.28 crore. It offers a modest dividend yield of 0.09% and a strong book value of ₹3,148.27. Over five years, it has achieved an impressive CAGR of 50.88%, with a one-year return of 33.13%, though recent trends show a decline of 3.98% over six months and 6.96% in the last month.  

• Close Price ( ₹ ): 3994.85
• Market Cap ( Cr ): 36069.28
• Dividend Yield %: 0.09
• Book Value (₹): 3148.27 
• 1Y Return %: 33.13
• 6M Return %: -3.98
• 1M Return %: -6.96
• 5Y CAGR %: 50.88
• % Away From 52W High: 26.15
• 5Y Avg Net Profit Margin %: 6.44  

Fundamental Analysis of Finolex Cables Ltd

Finolex Cables Ltd is a leading company specializing in manufacturing high-quality cables and wiring solutions. With a commitment to innovation and excellence, they serve various industries including telecommunications, energy and construction. Their extensive product range includes power cables, fibre optic cables and speciality wires, ensuring that they meet the diverse needs of their clients.   

The stock is priced at ₹1,116.75 with a market capitalization of ₹17,079.50 crore and a dividend yield of 0.72%. Its book value is a robust ₹4,945.86. Over five years, it has achieved a CAGR of 24.99%, with a one-year return of 23.90%. Recent trends show declines of 3.70% over six months and 14.66% in the past month. 

• Close Price ( ₹ ): 1116.75
• Market Cap ( Cr ): 17079.50
• Dividend Yield %: 0.72
• Book Value (₹): 4945.86 
• 1Y Return %: 23.90
• 6M Return %: -3.70
• 1M Return %: -14.66
• 5Y CAGR %: 24.99
• % Away From 52W High: 52.23
• 5Y Avg Net Profit Margin %: 13.05 

Financial Comparison of KEI Industries and Finolex Cables

The table below shows a financial comparison of KEI Industries Ltd and Finolex Cables Ltd.

Points to be noted:

• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): Measures a company’s profitability before accounting for financial and non-cash expenses.
• PBIT (Profit Before Interest and Tax): Reflects operating profit by excluding interest and taxes from total revenue.
• PBT (Profit Before Tax): Indicates profit after deducting operating costs and interest but before taxes.
• Net Income: Represents the company’s total profit after all expenses, including taxes and interest, are deducted.
• EPS (Earnings Per Share): Shows the portion of a company’s profit allocated to each outstanding share of stock.
• DPS (Dividend Per Share): Reflects the total dividend paid out per share over a specific period.
• Payout Ratio: Measures the proportion of earnings distributed as dividends to shareholders.

Dividend of KEI Industries Ltd and Finolex Cables Ltd

The table below shows a dividend paid by the company.

Advantages and Disadvantages of Investing in KEI Industries Ltd

KEI Industries Ltd

The primary advantage of KEI Industries Ltd lies in its integrated approach to electrical cables and wires, catering to diverse sectors with high-quality products. Its innovative strategies and strong market presence make it a prominent industry leader.

1. Comprehensive Product Range: KEI Industries offers a vast array of electrical cables, including low, medium and high-voltage solutions. This diversity meets the requirements of industrial, commercial and residential projects, ensuring its relevance across varied markets.
2. Robust Manufacturing Capabilities: The company operates state-of-the-art manufacturing facilities, ensuring high production efficiency. Advanced technologies and strict quality control measures enhance the durability and performance of its products, building customer trust and industry reputation.
3. Sustainable Practices: KEI emphasizes eco-friendly manufacturing with initiatives to reduce waste and energy consumption. Its commitment to sustainability aligns with global standards, reinforcing its role as a responsible corporate entity while attracting environmentally conscious clients.
4. Global Market Presence: With a strong export portfolio, KEI Industries has established a significant presence in international markets. This global reach supports revenue growth and provides resilience against domestic economic fluctuations, ensuring consistent business performance.

The main disadvantages associated with KEI Industries Ltd lie in the competitive nature of the electrical cables and wires market. Intense competition and pricing pressures can impact profit margins and hinder the company’s growth potential.

1. Economic Dependency: KEI’s performance is influenced by economic conditions and industrial growth. A slowdown in infrastructure development or reduced spending in key sectors could adversely affect demand for its products and weaken revenue streams.
2. Raw Material Price Volatility: The fluctuating prices of copper and aluminium, critical raw materials, pose a significant risk. Sudden cost increases can reduce profit margins unless effectively managed through strategic procurement and pricing adjustments.
3. Currency Fluctuations: With a substantial export portfolio, KEI is exposed to currency exchange rate fluctuations. Volatility in foreign exchange markets can impact profitability and create financial uncertainty, particularly during periods of global economic instability.
4. Regulatory Compliance Challenges: The company must comply with evolving industry regulations and standards. Non-compliance or delays in adapting to regulatory changes could lead to penalties, legal issues, or loss of market credibility, affecting overall operations.
5. Technological Disruption: Rapid advancements in technology could render existing products or processes obsolete. KEI faces the challenge of continuously innovating to stay competitive and maintain relevance in a fast-evolving electrical solutions market.

Advantages and Disadvantages of Investing Finolex Cables Ltd

Finolex Cables Ltd

The primary advantage of Finolex Cables Ltd lies in its leadership in the electrical and telecommunication cables industry, backed by a strong reputation for quality, diverse product offerings and a robust distribution network across India.

1. Extensive Product Portfolio: Finolex Cables offers a wide range of products, including electrical wires, power cables and communication cables. This comprehensive selection caters to residential, commercial and industrial needs, ensuring broad market coverage and customer satisfaction.
2. Strong Brand Equity: The company enjoys a well-established brand reputation for quality and reliability. Decades of consistent performance and customer trust have positioned Finolex as a preferred choice in the highly competitive cable market.
3. Robust Distribution Network: Finolex benefits from a vast and efficient distribution network, ensuring its products are accessible nationwide. This extensive reach supports steady revenue growth and enhances the company’s presence in both urban and rural markets.
4. Technological Advancement: Continuous investment in cutting-edge manufacturing technologies enhances product quality and efficiency. This focus on innovation helps the company stay ahead in a dynamic market, meeting the evolving demands of its customers.
5. Commitment to Sustainability: Finolex prioritizes eco-friendly practices, reducing environmental impact through efficient resource use and green manufacturing processes. Its sustainability efforts align with global trends, appealing to environmentally conscious consumers and promoting long-term growth.

The main disadvantages for Finolex Cables Ltd arise from its dependence on the infrastructure and real estate sectors. Economic downturns or reduced activity in these key areas could significantly impact demand for its products and profitability.

1. Raw Material Price Fluctuations: Finolex faces risks from volatility in the prices of copper and PVC, key raw materials. Sharp cost increases can erode profit margins unless mitigated through efficient procurement strategies or pricing adjustments.
2. Competitive Pressure: The cable market is highly competitive, with multiple players vying for market share. Aggressive pricing strategies by competitors could impact Finolex’s revenue and necessitate cost management to maintain profitability.
3. Economic Slowdowns: Economic downturns or slow growth in infrastructure and real estate sectors may lead to reduced demand for electrical cables. This dependency on external market conditions poses a risk to consistent revenue generation.
4. Regulatory Compliance Challenges: Adapting to stringent and evolving regulations in the electrical and communication sectors requires significant effort. Non-compliance could result in penalties, legal actions, or loss of market credibility, impacting business operations.

How to Invest in KEI Industries Ltd and Finolex Cables Ltd Stocks?

Investing in KEI Industries Ltd and Finolex Cables Ltd requires a systematic approach, including selecting a reliable stockbroker, which offers comprehensive trading services across major Indian exchanges.

1. Open a Demat and Trading Account: Begin by opening a Demat and trading account with a reputable stockbroker such as Alice Blue. They provide services across NSE, BSE and MCX, facilitating seamless transactions in equity and commodity markets.
2. Complete KYC Formalities: Fulfil Know Your Customer (KYC) requirements by submitting necessary documents like PAN card, Aadhaar card and bank statements. This process ensures compliance with regulatory standards and activates your trading account.
3. Fund Your Trading Account: Deposit funds into your trading account through net banking, UPI, or other supported methods. Adequate funding enables you to execute buy orders for KEI Industries and Finolex Cables shares.
4. Place Your Buy Orders: Utilize the trading platform provided by your broker to search for KEI Industries Ltd and Finolex Cables Ltd stocks. Enter the desired quantity and specify the order type (market or limit) to place your buy orders.
5. Monitor Your Investments: Regularly review your investment portfolio and stay informed about market trends and company performance. This proactive approach helps in making informed decisions regarding holding or selling your stocks.  

KEI Industries Ltd vs. Finolex Cables Ltd – Conclusion

KEI Industries excels with its diversified product portfolio, global market presence and robust manufacturing capabilities. Its focus on sustainability and innovation ensures competitiveness, making it a reliable choice for investors seeking growth in the electrical cables and wires industry.

Finolex Cables stands out for its strong brand equity, comprehensive distribution network and high-quality products. Its emphasis on technological advancements and eco-friendly practices positions it as a trusted leader, appealing to both domestic and international markets for sustainable growth.

Best Cable Stocks – KEI Industries Ltd vs. Finolex Cables Ltd – FAQ

Here are some of the Best Stock Research Articles listed based on Top Sectors (Industries), Market Cap, and Fundamental Analysis Factors:

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.