Analyst Meet / AGM     23-Jan-25
Conference Call
KEI Industries
Expect a revenue growth of 19-20% for FY26

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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