KEI Industries hosted a conference call on Jan 28, 2022. In the conference call the company was represented by Anil Gupta, CMD and R Gupta, CFO.

Key takeaways of the call

Pending order as on Dec 31, 2021 was Rs 2994 crore of which EPC orders were Rs 1038 crore, EHV turnkey Rs 419 crore, Cables domestic was Rs 1421 crore, cables exports was Rs 108 crore.

Volume growth in q3 was 18%yoy and 22%yoy for 9mfy22.

Institutional sales accounted 50% in 9mfy22 vs 55% in 9mFY21. Dealer sales in 9mfy22 was 41% vs 32% in last year 9mFY21.

Strategy of the company continue to increase retail sales and downsize EPC business. About 50% of revenue will come from retail in next 2 years.

Capacity utilisation in 9mFY22 is about 71% in cables, 66%, house Wires, 100% in SS wire.

Setting up a new green field plant for LT, HT, EHV cables with a planned investment of Rs 700-800 crore.  OF which the company is expected to spend about Rs 60-70 core this fiscal and the company will be spending about Rs 250 crore each in next 3 years.

For FY22, the company expects a growth of more than 30% in STO on the back of strong order book and good demand from Governments, Private and RE sector.  Managing 11% EBITDA margin is not an issues.  Next year the company expects about 17-18% growth in STO.

Steel, cement, underground cabling in metros, tunnelling and ventilation project, smart city projects, metro projects are driving demand growth.

Retail – prices are readjusted every 15 days. No pending orders are at older low prices and thus the company is not expecting any margin pressure in case of new orders. 

Already have good amount of sales force in north east and east especially in the last 9 months. The focus is currently on strengthening the sales force and presence in south.

The margin of institutional sales was about 160 bps and the company saved about 60 bps due to expense related to sales. Now with copper price is stable the impact on margin will not be much.

Price variable clause is available for 10-15% of the order book especially government orders. The company have already effected about 5-7.5% of price hike in various categories of house wires and cables.

The company have already good amount of sales force in North East and East especially in the last 9 months.  The focus is currently on strengthening the sales force and presence in South.