KEI - KEI Industries Ltd. Share Price

Management's outlook for KEI Industries Limited indicates a strong trajectory for growth, with a forecasted revenue increase of 18% for the financial year 2025-26. Key points emphasized by management include:

1. Sales Performance: For Q1 FY '26, net sales rose to Rs.2,590.32 crores, representing a growth of 25.44% year-over-year. Profit after tax also showed significant growth of 30.28%, reaching Rs.195.75 crores.

2. Earnings Margins: Management aims to achieve an EBITDA margin close to 11% in FY '26, with the current margin standing at 11.49%, reflecting an increase from 11.25% in the previous year.

3. Order Book: The total order book as of June 30, 2025, is Rs.3,921 crores, with a robust pipeline across segments. An important breakdown includes Rs.540 crores in pending EPC orders and Rs.2,140 crores from domestic cable bookings.

4. Capital Expenditure Plans: Management has spent Rs.410 crores on capex in the current financial year, with an additional Rs.600-700 crores projected for the next 9 months for the Sanand project. Overall capital expenditure on the Sanand facility is expected to range between Rs.1,900 crores to Rs.2,000 crores.

5. Future Projects: Commercial production from the first phase of the Sanand facility is anticipated to begin in September 2025. The full project completion is expected in the first half of FY '26-'27.

6. Long-Term Projections: Post the Sanand project, KEI Industries aims for a compounded annual growth rate (CAGR) of 20% over the next 2-3 years, driven by increasing demand in sectors such as renewable energy, data centers, and infrastructure projects.

7. Market Dynamics: KEI Industries is focused on expanding its market share while navigating competitive pressures in both domestic and export markets. The management has indicated a strategic focus on diversifying export opportunities beyond the traditional markets to mitigate risks associated with tariff fluctuations.

In summary, management has set an ambitious yet optimistic outlook, backed by strong performance metrics and strategic investment in growth areas, signaling positive momentum for KEI Industries in the upcoming financial years.

Q1 FY '26 Earnings Conference Call Q&A Summary

1. Question by Natasha Jain: "You had mentioned you aim to close this year with an 11% EBITDA margin despite a higher growth in cables that traditionally have lower margins. How do you plan to achieve this?"

   Answer: "The growth in the cable segment will indeed be higher, but wires will also grow. We include other income in our operational margins; fluctuations in exchange rates are managed effectively. We target an EBITDA margin of 10.5% to 11%, acknowledging that this range reflects the industry's unpredictability."

2. Question by Jayshree Bajaj: "With new competitors entering, how does KEI plan to maintain growth and market share?"

   Answer: "We've historically operated with margins of 10.5% to 15% while growing 17% to 20%. The industry, growing at 12% to 13%, allows us to adjust without losing margin. New entrants aren't a recent issue; we adapt and maintain our performance."

3. Question by Vidit Trivedi: "What are your export growth ambitions over the next two years, given the current 122% growth rate?"

   Answer: "The margin difference between domestic and export is about 0.5%. We aim for 17% to 20% of our revenue from exports in the next few years due to entering new markets like the USA and Europe."

4. Question by Naushad Chaudhary: "What will the utilization of the Sanand plant be post-commissioning in Q3 FY '27?"

   Answer: "We expect ramp-up to take about three years for full utilization, starting from Q3 FY '27."

5. Question by Shilpee Sharma: "How do we see demand for the EHV segment and the overall tender pipeline?"

   Answer: "The tender pipeline for EHV is strong, and we anticipate substantial growth. We estimate the EHV market size to reach Rs.6,000 crores within three years."

6. Question by Rahul Maheshwary: "Can you provide insights on solar specialty cables and related opportunities?"

   Answer: "We're focusing on cables for solar developers and expanding our production capabilities in the Sanand facility. The solar segment is growing, but we remain dedicated to our core business of wires and cables."

7. Question by Amit Agicha: "What is the execution timeline for your order book of Rs.3,921 crores?"

   Answer: "Most orders are executed within 3 to 5 months, providing visibility and a strong growth pipeline."

8. Question by Nikhil Purohit: "What is the cable share in both the institutional and B2C business?"

   Answer: "Majority of our export business is cable-focused, with 50% of B2C also in cables. The split ensures we optimize sales across channels."

9. Question by Balasubramanian: "How do you view growth potential in southern and eastern India?"

   Answer: "We are focusing on expanding our dealer network in these regions, which have long-term potential for growth due to lower saturation."

10. Question by Vidit Trivedi: "With Australia and China having a zero tariff policy, how will this impact our exports?"

    Answer: "China is already a strong competitor in Australia, but we've been successfully exporting to Australia for over a decade. Competing effectively hinges on developing our markets rather than tariffs alone."

This summary encapsulates the key inquiries and responses shared by KEI Industries during their Q1 FY '26 earnings conference.