KEI Industries hosted a
conference call on Jan 22, 2025. In the conference call the company was
represented by Anil Gupta, CMD of the company.
Key takeaways of the call
Order book as end of Dec 2024
stood at Rs 3871 crore with EPC Export being
Rs 554 crore, EHV Rs 598 crore, domestic Cables Rs 2148 crore, cable exports Rs
571 crore. EPC order book is executable
over a time period of 2 years.
Sales through Dealer/
Distribution market increased by 31.35% YoY in Q3 FY25 and 32.26% YoY in 9M FY25. Sales through Dealer/ Distribution
contributed approx. 50.55% of overall sale in Q3 FY25 and 52.73% of overall
sale in 9MFY25.
Total Institutional sale
including export increased by approx. 18.22% YoY in Q3 FY25 and 8.32% in
9mFY25. Total Institutional Cable Sale including
export contributed 44.82% in Q3 FY25 (against 45.42% in Q3 FY 24) and 41.03% in
9M FY25 (against 44.57% in 9M FY 24).
EHV revenue declined 78% in
Q3FY25 to Rs 41 crore with non receipt of ROW (right of way) permission and
clearance. This has offset the growth in HT/LT/HW segment. However the company
used EHV capacity to manufacture HT power cables during this period.
Revenue of W&C excluding EPC
component grew. The EPC revenue declined due to Zambia project whose sales was
RS 13 crore in Q3FY25 against Rs 69 crore in Q3FY24.
Expect a revenue growth of 19-20%
for FY26 as brownfield capacity expansion projects have completed. And it
expects an EBITDA margin of about 11% for FY26. The company with benefits of operating leverage
and product mix expects the EBITDA margin to improve to a band of 11-12.5% starting FY27 & FY28.
For FY25 (full year) the company
expects to maintain the EBITDA margin achieved in FY24 full year.
Expect 30% growth in retail
W&C for FY25 and 30-35% growth from FY25 level is expected for
FY26.
Incurred a capex of Rs 426 crore
in 9mFY25. The company expected to incur a capex of around Rs 400-500 crore in
Q4FY25. Further it has planned a capex
of Rs 800-1000 crore in Sanand Gujarat Greenfield project. The company has
started construction of Sanad project last year and expects to incur a capex of
Rs 700 crore towards this project in FY26.
Capacity utilization (post
brownfield expansion) for cables stood
at 85%, 69% in wires and 91% in SS Wires.
Bullish on demand for its
products in domestic and international markets. Able to grow both domestic and
exports business.
EHV - Order book is start building up close to RS
598 crore of EHV orders. Next fiscal expect to maintain normal range of
production of EHV cables. Sales of Rs 550-600
crore is expected from EHV segment in next
fiscal. As the company has used the EHV
capacity to manufacture HT cables the loss of revenue/profit are only to that
certain extent on product mix. Due to change in mix in production (EHV to HT)
the loss of profit (EBITDA) is about 4% (or about Rs 8 crore).
HVDC cable capacity will be part
of Sanand Greenfield facility phase 2.
Australia, USA, Middle East and
Africa in the order are the biggest market for C&W business of the company.
HT order booking and order book
is very strong at about 3-4 months in last 2 quarters.
Completed and ongoing capex will
help the company to get 19-20% CAGR growth in next five years as against 14-16% in last 15 years.
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