KSH International IPO Opens for Expansion

“KSH continues to focus on high-value specialized magnet wires such as CTC to strengthen its margin profile versus standard products. It benefits from high entry barriers, backed by approvals from PGCIL, NTPC, NPCIL, and RDSO for supplying CTC and insulated rectangular wires used in HVDC and 765 kV systems, giving it a strong competitive moat”

“KSH International is India’s largest exporter and 3rd largest manufacturer of magnet winding wires as of FY25. Between FY23-FY25, the company has delivered strong revenue, Ebitda and PAT CAGR of 29 per cent, 32.9 per cent and 33.4 per cent respectively, demonstrating financial resilience”

“Backward integration into copper rod manufacturing and captive renewable energy deployment will enhance operating leverage and provide pricing power in a cyclical commodity business. The issue has an P/E ratio of 38.27 times, based on annualised EPS of Rs 10.03 of FY25. We assign a 'neutral' rating for this issue”

“The IPO values the company at a post-issue P/E of 28.68 times, indicating that the issue is fairly priced. However, strong earnings growth, improving return ratios, leadership in the magnet winding wires segment, and favourable demand tailwinds from power, renewables, EVs and industrial applications provide healthy long-term visibility”

“Valuation is fair but not cheap; upside may be limited initially due to higher leverage. Apply for long-term wealth creation, not for aggressive listing gains”

“The company is trading at a P/E of 32.1x based on its FY25 earnings which is at a considerable discount compared to its peers. We, thus, recommend a 'subscribe' rating to the issue from a medium-to long-term perspective”

“Despite volatility in metal prices, KSH International's robust, asset-heavy yet profitable model and its strategic position as a high-quality supplier to major global OEMs allow it to strongly capitalize on the ongoing global electrification drive and the EV manufacturing boom. We recommend a ‘subscribe’ rating for long-term investors”

“KSH International has demonstrated consistent operational performance, scale benefits, and a strong market position in a niche yet critical segment of the electrical value chain. The IPO comprises a fresh issue, aimed at supporting future growth initiatives, strengthening the balance sheet, and providing liquidity to existing shareholders while enhancing its visibility in the capital markets”

“The company will be repaying a major part of its debt which will lead to significant cost savings, boosting profitability. They are also expanding their capacity by 30000 MTPA, which is double the current capacity, in the next two years. This gives the company significant headroom for growth and a strong balance sheet for the foreseeable future. The valuations for the company are relatively cheap as compared with its peers and provide a lot of comfort given the growth potential. Therefore, it is recommended to 'subscribe' to the IPO for long-term investment”

“India’s expanding power transmission infrastructure, electric vehicle acceptance, and industrial growth support long-term demand for magnet winding wires. Companies with manufacturing scale and technical expertise are well-positioned to grow. Looking at all the factors, risks, opportunities and valuation, investors may invest with Long term horizon to the issue”