Ladies and gentlemen, good day, and welcome to KEI Industries Q4 FY2024 earnings conference call, hosted by Monarch Networth Capital. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you, and over to you, sir.
Yeah. Thank you, Manuja. Good afternoon, everyone. On behalf of Monarch Networth Capital, we are delighted to host the senior management of KEI Industries. We have with us Mr. Anil Gupta, Chairman and Managing Director of the company, and Mr. Rajeev Gupta, CFO of the company. We will start the call with opening remarks from the management and then Q&A. Thank you, and over to you, sir.
Okay. So, thank you, Rahul. I'm Anil Gupta, CMD, KEI Industries Limited. I welcome all of you to this investors conference call of KEI Industries Limited. So first, I will give you a brief of the results and outlook, demand outlook of the industry and for the company. Net sales in quarter four of FY 2023-2024 is has been INR 22,319.27 crore, with a growth in the net sales is 18.76%. EBITDA is INR 259.72 crore, and the growth with, at least the last year, is 24%. EBITDA/net sales margin is 11.2%, against 10.7% in the same period previous year.
Profit after tax in this quarter is INR 168.79 crore against INR 138 crore. Growth in the profit after tax is 22.2%. So the profit after tax/net sales margin is 7.28% versus 7.07% last year. The domestic institutional sales of wire and cables is INR 676 crore against INR 692 crore last year, and the sales of extra high voltage cables is INR 220 crore in fourth quarter against INR 99 crore in the previous year same period. Export sales in this quarter is INR 257 crore. The growth in the export sales is 57%. So the total cable institutional sale contribution is 45% as against 47% in the previous year.
Sales through distribution network, that is B2C, was INR 1,056 crore in fourth quarter against INR 845 crore. The growth in this B2C sales side is 25%. The company has achieved total B2C sale of 46% of the total sales in fourth quarter as against 43% last year. Sales from EPC department, other than cable, is INR 192 crore as against INR 135 crore. Growth is approximately 42%. Out of the total sales of EPC, EHV EPC sale is INR 50 crore as against INR 65 crore in the same quarter last year. Stainless steel wire division has achieved a sale of INR 56 crore against INR 63 crore last year.
Volume increase in the cable division on the basis of production for, and for the consumption of metals in Q4 of 2023-2024, as compared to previous year, is 24%. Now, I will touch little bit on the full year results. The results summary of financial year 2023-2024. Net sales in FY 2023-2024 is INR 8,104 crore. With a... So we have achieved a growth of 17.31% over full year period. EBITDA growth is, EBITDA achieved is INR 886.55 crore with a growth of 20.81%. EBITDA/net sales margin is 10.94% against 10.62% previous year.
Profit after tax in financial year 2023-24 is INR 581.05 crore as against INR 477.38 crore in the last year. The growth in PAT is 21.72%. PAT/net sales margin is 7.17% as against 6.91% in the same year. Overall, the growth in exports achieved is 58%. The EHV, 69. EHV, 62, INR 622 crore versus-
Extra high voltage cable is INR 622 crore against INR 386 crore previous year. The growth is approximately 85%.... Sales through dealer and distribution network is INR 3,770 crore, growth is approximately 19%. The total active number working dealers of the company as on 31st March 2024 was 1,990. The B2C sales has contributed 47% in FY 2023-2024, as against 46% in the previous year. EPC sale for the full year is INR 562 crore, as against INR 405 crore last year, growth is approximately 38%.
The pending orders booked as on 30th April is approximately INR 3,531 crore, out of which EPC, INR 771 crore, EHV cables , INR 374 crore, cable from the domestic market, INR 1,865 crore, and export orders pending are INR 521 crore. So the total becomes INR 3,531 crore. India Ratings and Research has affirmed its long-term rating as AA with positive outlook. ICRA and CARE long-term rating is AA, stable. Short-term ratings on India Ratings and Research, ICRA and CARE is A1+. The book value per equity share of the company is INR 348.87, as on 31st March 2024, as against INR 287, as on 31 March 2023. Now, I'll...
Total borrowing of the company is INR 134 crore against mainly for channel finance, INR 97 crore, and cash and bank balances of INR 700 crore as on 31 March 2024. As against total borrowings of INR 135 crore of channel finance and channel cash balance balances of INR 537 crore as on 31 March 2023. Acceptances creditors as on 31 March 2024 is INR 506 crore, as against INR 219 crore previous year. During FY 2023-2024, finance cost was INR 43.91 crores, as against- Twenty-four. INR 34.71 crore last year. Capacity income.
Capacity utilized during financial year 2023-2024, 92% in the cable division, 71% in the housewire division, 90% in stainless steel wire division. During the year, the company has incurred a total capital expenditure of approximately INR 397 crore, in which Chinchpada, Silvassa, INR 84 crore, Pathredi in Rajasthan, INR 51 crore, Sanand, INR 197 crore, and a plot of land at Kheda in Gujarat, INR 9 crore. Other plants, existing plants and INR 58 crore, 56 crore. Company is continuing its capital expenditure for brownfield CapEx at Chinchpada to further add capacity for wires and cables. In next one to two months, we will further spend INR 65 crore.
Another greenfield brownfield expansion is going on at Pathredi, with approximate cost of INR 125 crore, which will increase the capacity for LT power cables approximately INR 800 crore-INR 900 crore per annum. It will be operational by end of June 2024. We have already spent INR 74 crore, and balance will be spent within next three to four months. This brownfield CapEx will enable us to grow by 16%-17% in the current financial year, as well as the next financial year. Apart from the brownfield CapEx in FY 2024-2025, company has planned INR 900 crore-INR 1,000 crore CapEx on greenfield expansion for LT, HT, and extra high voltage cables in Gujarat. Commercial production of this will commence by, I think, by first quarter of 2025-2026.
We have already started construction in FY 2023-2024. Further, we will be spending INR 500 crore-INR 600 crore in the next financial years to complete the projects, to maintain a CAGR of 15%-16% per annum, as in the coming next 3-4 years. Demand outlook remains strong. We are very bullish on our demand in the markets in India, as well as from our export customers. Major demand drivers from India are solar power projects, power distribution projects from this RDSS scheme , and other reforms in the government power distribution utility. A strong CapEx in the transmission and distribution, and as well as in the power generation sector.
We have noted that a substantial investment will be, is being, done in next three years on enhancing the thermal power generation capacity and also pump storage power projects coming up in various parts of the country. But addition of solar and- And real estate demand continues to be strong, and the demand from construction sector and other infra projects continues to remain strong. So thank you very much, and you can now ask any specific questions, and we'll be very glad to answer. Thank you.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.
Sir, thank you for taking my question. So my first question is, if you could talk about the export opportunity, I mean, the numbers that you are talking about in terms of order availability is very significant, 50% growth. So if you could, A, talk about, you know, where exactly is this coming from? Second, how sustainable is this, in the sense that, you know, why is it that you as a company or India as a country is getting these export orders on cables and wires? So some information related to this would be helpful. That would be the first question.
Pulkit, you know, first of all, world over, especially in the Western countries and other parts of the country, the demand in infra projects, in solar power transmission and distribution, as well as oil and gas sector, is very bullish. In Western countries, the new manufacturing capacity is not coming. In fact, the even existing capacities, whatever there are, are also not fully utilized because maybe because of the manpower or because of the high cost of inputs like power and other factors. Secondly, you know, these countries are definitely looking to add one more potential country as in their supply chain other than China. And that also is, you know...
The kind of political relationships our country has built up with many all the Western countries, that is also helping make India brand now to go in that direction. Thirdly, in last several years, we have built a strong you know you know a network of agents and marketing network to promote our products in many countries. Also, country-specific certifications in Europe and U.S.A. have been taken by our company, which includes Underwriters Laboratories approvals in U.S.A. and many construction protocol approvals in Europe, which are country-specific. And specific type tests on the cables required in several countries, we have done from our plant, which is helping us to enter into those territories. It has been a journey of several years.
It is not that suddenly this demand has come up. We have been on this track, which I've been explaining in my several conference calls in earlier years, to our investors.
No, very, very, very encouraged to hear what you just said, sir. So second thing, we've seen a very, very significant increase in copper prices in a very short period of time. I mean, while they were inching up slowly, gradually, the last sort of two weeks, the price increases are pretty significant. How should we look at that from the perspective of the near term, i.e., does it destroy demand a little bit? How do we handle that with the channel? If you could just talk about the significant increase in copper prices and its impact in the immediate term.
See, I mean, demand, this is an essential sector of the economy and the projects which are being constructed or nobody can stall it for the want of raw materials for more than a month or so. So, and we have not seen any stalling of demand even till today, because all the projects are time bound. Government infra projects are time bound. Any delays in execution leads to penalties and LDs to the contractors, so maximum they can delay the purchase by 15 days, 20 days or a month, but not beyond that. So and we have seen a healthy order booking even in the month of April also. So, these fears are not right.
Secondly, we are keeping adequate metal booking and stocks in our plants to take care of our you know existing orders booked. All the raw material increases, we are passing on to the customers in the new tendering. Many of the orders in our order book are already having inbuilt price variation clause. So if you recall, this cycle had come in 2020 to end of 2020, as well as 2021, and we had not, it had not impacted our margins even at that time.
Sure, sir. Thank you so much for those answers.
Thank you. The next question is from the line of Bharat Shah from ASK Investment Managers. Please go ahead.
Yeah. Good morning, Anil, Rajeev.
Good morning, sir. Good morning, sir.
Good morning. Just one question. Given the kind of macro scenario that exists as a backdrop, infra, power projects, constant buildup of the new power projects in conventional, renewable energy, real estate, construction activity, and in general, almost rebuilding India's industrial and manufacturing kind of a setup, that is what kind of a picture we are undergoing. So given that backdrop, what is the picture you would visualize for five years ahead in terms of growth rate for the overall industry opportunity and for KEI in particular, both in the industrial as well as household, and kind of improvement in capital efficiency or otherwise, led by margins or otherwise? If you can draw up a picture as to how do you see the coming five years.
Secondly, would you describe the period ahead probably as one of the most significant ones in the history of KEI? Or is it that I'm putting words in your mouth? I want to hear whether you as one of the industry leaders do you believe that the period ahead is probably the most defining one for this industry in the longest time, or it is just my imagination?
Thank you, Bharat. I think you have asked a very significant question. First of all, I see a very strong and a good future for our industry. It is mainly because the way economy is growing and the way government is pumping in, you know, CapEx in the economy, and resulting into large amount of private CapEx, which is now coming up in the manufacturing plants like semiconductors, like many building industries like steel, cement, and miscellaneous industries packaging industry. Everything will lead to more and more demand for wires and cables. Because for any manufacturing projects or infra projects power is needed, and this power can be carried only by insulated cables.
And more and more houses are built, more and more buildings and structures are built, lighting drives the demand of wires. I think, next five years will be very, strong defining period for our manufacturing sector and will establish the country in, you know, becoming a huge manufacturing hub. We are all building up. And also for our company, the kind of CapEx we have embarked upon, we have spent INR 400 crore in 2023-2024 on CapEx, and expected to spend around INR 1,000 crore in this financial year, 2024-2025, and another INR 500 crore-INR 600 crore in next financial year in our existing plant, greenfield project coming up at Sanand, near Ahmedabad.
So this will enhance our capacities to take care of, you know, coming up demand from these sectors: infra, power, manufacturing, and construction, including real estate. And we also wish to build up our huge customer base from overseas geographies, so that, you know, we are not, we want to diversify our geographies to insulate the demand and our company from, you know, any twist in the demand cycle in any particular geography. So this has been the idea, and I think that scalability is very high. We even till now, India's manufacturing capacity for wire and cables is not more than 10 or 12 or 15% of China.
So I think, we have much bigger population, and we have, you know, much better, you know, approach towards international markets. So there will be a substantial opportunity in next 5-10 years in India, as well as for our industry for export markets.
And on capital efficiency in business, as you mentioned, that scale-up would occur, opportunities to do so are already visible. You're preparing yourselves for it. You earlier mentioned about copper price, that it really doesn't change anything on a longer term because it's a bit of a pass-through. In keeping in mind all of these, how do you see the capital efficiency improving or otherwise over time? Will it be margin-led, will it be scale-led, or both, or any other factor?
No, it will be both. You know, as the scale goes up, capital efficiency improves, the money turnover improves and also, you know, it leads to little bit reduction in overheads also, because we are allocating same overheads on a larger production. Capital efficiency, I think, we have ROC.
27.4%.
27.4% is return on capital employed, and I think more than 20% on return on capital. So I think year-on-year we are improving this capital efficiency and as our scales are going up.
As we have earlier guided, Bharat, that by, after the implementation of the new projects and increase in the retail prices, retail sales and exports, we will be adding another 1%-1.5% in EBITDA also, by financial year 2027 and 2028.
All right. Thank you, and all the very best.
Thank you, Bharat.
Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Nidhi Shah from ICICI Securities. Please go ahead.
Hello. First of all, I would like to congratulate you on the great set of numbers. Most of my questions are regarding, say, market, market share of KEI and industrials, and basically, what do you think of exports? So, in terms of exports, what geographies are you mostly targeting? Where do you see maximum growth for cables, especially for industrial cables? And currently, what is the market size of industrial cables in our country, and how do you see that growing over the next five to seven years?
Our major export markets are Australia. And now we have started significant exports to United States as well as Europe. And already we have been doing good amount of exports in Africa and Middle East. Middle East is our substantial market for last 15 years. We are very much entrenched in their oil and gas projects, especially in Abu Dhabi, Qatar, Kuwait, and Oman, where their major oil is there. And also we are doing exports in adjoining countries like Bangladesh and Nepal, also. What was your other question?
Market size of the-
Market size of the...
More of export.
So market size at the moment is around, wire and cable industry is around INR 75,000 crore. And, we think that it will keep on growing by 15%, year after year, the market size.
This is a combination of, like, household and industrial cables, both together.
Right.
Would you have, say, a bifurcation in mind of where that could be, in the years to come? Like, which one would outweigh?
I think, both will grow, equally, but I think, in my opinion, the cable, cables will grow faster.
Okay. Okay.
So that's-
Thank you so much.
Production, uh?
Mm-hmm. Thank you.
Thank you. The next question is from the line of Naman Parmar from Niveshaay Investment Advisors . Please go ahead. Mr. Naman? His line got disconnected. ... The next question is from the line of Rishi Kothari from Pi Square Investments. Please go ahead.
Yeah, hi. Thank you for the opportunity, and congratulations on the good numbers, once again. So my question is related to the dealer distribution that we generally operate in. So, if we see, we have seen a good growth amount in the dealer and distribution market. So how exactly are we, you know, targeting the dealer distribution? We know that more or less the market is fixed state, but the only way to, you know, increase the market share is to take from the competitors in, in a way, more or less. So how exactly are we giving, giving them unique team that comes, that makes us a good dealer distributor compared to any other player?
Basically, for the dealer distributor market, we are targeting a growth of approximately 20% with respect to wire as well as the cable, because more and more geographies we are strengthening now, and more and more new manpower we are deploying in the southern part and the eastern part of the country. That's how we are able to grow our dealer distributor business. We are strengthening our existing dealer strength also, because we are appointing as well as we are exchanging from the weak hands to the stronger hands in the areas wherever it is required. As Anuj has said, the industry is growing well because of all these factors in our favor, so that's why the growth is out there. That's how we are taking the market also.
But also, what differentiates you from any other competitor by, you know, is there something in terms of margins that you provide them that makes you stick with that dealer or something else, sort of a thing?
Sir, it is the approvals with the various end users, and also the, you know, our brand strategy, the stocking of wires and cables in our depots. We are stocking at around 26 locations, and also our strong sales team across the country, which are reaching out to the customers. And business development activity we carry out.
Okay. So in terms of the footfall towards our customers, in terms of dealers, is quite strong compared to our competitors?
Yes.
Okay. Okay. Yes. Thank you, thank you for the opportunity.
Thank you. Ladies and gentlemen, you may press Star and One to ask a question. The next question is from the line of Sangeeta from Cogito Advisors. Please go ahead.
Hi, this is Andre Purushotham her husband and partner. First of all, Gupta and Gupta , congratulations for the great set of results. You are making this a habit. Thank you, sir.
Thank you.
One is that your PAT growth has been slightly slower than your EBITDA growth. So can you understand why that is happening, and how do we see this in the next year going forward?
So actually, year-on-year basis, our EBITDA percentage will also grow as well as the PAT percentage will also grow, because this year also, the PAT has grown by close to. It was 7.28% versus 7.087%.
Right.
The PAT is also growing. Sometimes the finance charges little bit increases because of the bank guarantees we are providing on large orders.
Right.
That expense is booked in the same quarter, actually.
Okay. So it's just a minor variation here and there? There's no-
Yeah. So in future, as we earlier guided, that we will now towards crossing the 11% EBITDA margin and crossing the EBITDA margin of, PAT margin is more than 7%. So now we will be marching towards the 7.28%-7.4% kind of thing percentage. Like, in year-on-year basis, we will be improving in our EBITDA as well as in our PAT margin.
Right. My second question, second question was, was this China Plus One play, which you referred to in on your answer to another person who was on the call. Can you give me some flavor as to what is happening? Are you getting inquiries from companies which who never dealt with you before and dealt with Chinese suppliers before? Or is it happening that you are dealing and competing with Chinese suppliers, and despite the fact that you're not the lowest cost, you're getting the orders? Can you give us a flavor of the kind of conversations that is happening? And, you know, going a little bit behind the surface to understand the psyche of your buyers, and how is it that you are actually getting advantage of the China Plus One strategy?
See, especially, one factor is that we have been working on this approvals from certification bodies in U.S.A. and Europe for last several, many, 3, 4 years. So that has come on board. Secondly, you know, definitely we are, the customers are wishing that they want to develop one country apart from China, whom they think is a significant one in for, in their supply chain. You know, you already know that, the political relationship of China with many, with U.S.A. and other many countries are not very good.
Ultimately, that position is reflected in the large companies which are procuring products from China, and they definitely wants to secure their supply chain and don't want to risk themselves due to any political uncertainty.
What is happening? Are you getting inquiries from people whom you didn't deal with before, or are you handling them?
Yes, we are getting inquiries, but inquiries, inquiries can be converted into orders only if we are having, you know, technical certifications in those countries and sales network in that country. So these two things are very important. Even if, we are getting an inquiry, there is an, an existing supplier of, of that country.
My last question was, your B2C component of sales has been increasing, but now it is increasing at a slower rate. Should we assume that it will saturate somewhere around 50%, 55%, or do you think it can go for more than that?
Oh, we—I think our aim is to, you know, reach it to 50% of the total sales, and beyond that, we also would like to maintain our, you know, direct sales to the customers as well. So our company believes in maintaining large customers to drive directly.
Okay. Thank you. Thank you, sir, and congratulations once again, sir.
Thank you.
Thank you. The next question is from the line of Manoj Gori from Equirus Securities. Please go ahead.
Yeah, thank you for the opportunity, sir. Sir, my question is, with regards to your B2C business. If you look at probably over last few quarters or probably last 6-7 quarters, we were seeing, industry was seeing largely some pressure from the real estate-led demand. Are we seeing any signs of revival? One of the players who has already reported the numbers, they indicated over the call that we are seeing some signs of revival with the real estate-led demand. Any insights over there?
So with revival, I think our numbers are very clear that we have, we are having good sales to the real estate sector.
Right.
I don't know when, but revival comes. There was a dullness.
So, so my question was more specifically on the industry side, because obviously, KEI has been doing extremely well, and probably, this is not limited to a year or two. I've been looking after this, the company for last 8, 9 years. But, but just wanted a sense on the industry front, probably, how we are looking at the sales.
You see, the real estate sector is growing, and as we all are hearing and we are witnessing that all the metro cities, wherever are there, that two years before, the real estate demand was not there. So now these demands are there, and new projects are coming in these metro cities, and they are being sold out also. So this kind of demand is already there in the on the ground.
Okay, sir. Thank you. Sir, my second question would be on the capacity. So probably last year for few quarters, we did see some capacity constraints. So for this year, given the visibility that KEI is having on the demand front, we have ample capacity, and probably we don't see any challenges over there.
Manoj, we have added the capacity last year, which will be resulted last year also, and in the current year also, we are still adding, and we are going ahead with the new. If you go by the volume number, we have grown by more than 22% in the last financial year in terms of volume. Because prices may go up, prices may go down. That's why whenever we guided you about the top line, we always are the conservative numbers, so that we have guided only a 16%-17%, but finally, we have grown by 17%-18%. In the current year also, our growth rate will be close to 17%, and that can. And by the time, for the next financial year, our the new capacity of the Sanand project will be available.
Our overall target to grow year-over-year basis, 17%-18%. That's how we are increasing the capacity.
This 17%-18% would be in value terms, right?
Yeah, yeah, in value terms, definitely.
How do you see the margin?
You see, volume may go up, volume may go down, prices may go up, prices may go down, so we have to discount for that actually.
Right. Right. And so how we see the margin versus FY 2024 level?
Yeah, margin is close to 11%, and we will be maintaining close to 11% margin in this year also.
Right, sir. Thanks a lot, sir, and wish you all the best.
Thank you, Manoj.
Thank you. The next question is from the line of Gaurav from IIFL Securities. Please go ahead.
Thank you for the opportunity, sir. So specifically question on the EHV cable side. So, what sort of demand we are seeing on the domestic and international side? And what sort of influence we can expect in next 2-3 years, specifically on the EHV side?
See, our present capacity is at close to INR 600 crore per year of the cable, EHV cables, and we are... I think we had fully utilized it last year, sir. So, this year also it will remain the same. We are not, we are... Because the new capacity is coming up only at Sanand, and it will take close to 24 months to from now, by end of FY 2025-2026, that new capacity will come up. So it, it will.
...we will be able to grow this only after two years. One, because this is a heavy project and it takes time to bring the capacity. The construction is already started.
And so specifically, sir, if you could talk about the demand, like, is it more likely driven by the domestic or the international side?
I think we have seen the growth in both the sides. Of course, because export base was low, so the percentage growth in exports last year has been 58%, and this year also it looks to be strong. But domestic also grew by 19%. So I think that... And it is, it more depends on where we are allocating our capacity. Demand is there at both fronts.
Okay. And sir, you mentioned about foraying into U.S. market with these cables and wires. So are we in any progress with like, do we have a tie-up with local EPC player there, where we can actually supply? Is there any development on that side?
Yeah. You know, first of all, let me tell, we are only selling cables over there. We are not selling any wires. And it's not a tie-up. These are the customers which we have developed who are, you know, placing their orders on us. So, I mean, I don't think there's a... I don't know, what, what do you—how do I define tie-up?
Actually, we are serving directly customer in our export market all over the world.
They are mainly EPC contractors or direct users.
Okay. Sir, lastly, one or two bookkeeping question. I missed the order book bifurcation, if you can just please highlight the same.
We have order book is EPC division is INR 771 crore,INR 771 crore rupees. Extra high voltage power cable order book is INR 374 crore, and our domestic market cable order book is INR 1,865 crore, and our export cable order is INR 521 crore. Overall order book is INR 3,531 crore.
Okay. Okay, sir, and sir, if you could just highlight the A&P spending billion, like, what was the percentage and what trajectory we are expecting going forward?
Every year we are spending around INR 50 crore-INR 60 crore. So last year we spent around INR 49 crore. Again, this year we will be increasing little bit, INR 4 crore-INR 5 crore extra. So year-on-year basis, little bit we are increasing upon depending on the sale, which we are increasing.
Okay. So thank you for the opportunity.
Thank you, sir.
Thank you. The next question is from the line of Harshit Kapadia from Elara Capital. Please go ahead.
Yeah, hi. Thank you for the opportunity and many congratulations for good set of numbers, sir. Few questions. Just to understand, you know, on the demand per se, are you seeing any sector additions which has been something new in the sector, which you can highlight, which we have started supplying your cables to? Is there anything new in that, that will be helpful?
Let me show you actually. Sector additions are basically, although we have been... I don't think that-
All the sectors we have already-
Yeah, we are covering all the sectors, even in, for many years now. So oil and gas, industry, steel, cement.
Power generation.
Power generation, transmission and distribution. At the moment, I'm not able to make out any, if any, specific sector addition we have.
These sectors are already there, because whether you talk of infrastructure effects or real estate sector or the other power sector, it is already there, actually.
Yeah, I was referring from the point that there could be, you know, new things like EV charging cable or-
Yes, yes, yes. Yes, you are, you are right, sir. This I forgot. We have added EV Charging Cables in our portfolio, and this is a sector addition in this, in the last financial year. We have already started production and commercial sales of EV Charging Cables.
Okay, okay. There was also a plan that you want to then diversify into other consumer electrical segment. Given with the current demand scenario, both on domestic and export side, do you think you would want to continue at this point in time? Or you may want to relook at it probably four years from now?
As of now, because we are doing the heavy capital expenditure, so we are not planning any diversification, rather than we are strict to our product range. But we are adding the markets over there, new geographies over there.
Understood.
Whatever addition of the product in the cable, that will remain the same. That we will be continuing.
Understood. And sir, last question is on the EPC side. We have seen, you know, earlier there was an EPC cycle boom, and then we had refrained from getting into EPC projects. Now, again, you know, power demand is rising. We are seeing a lot of transmission substation orders coming out. Do you think you want to again reenter that particular?
No, EPC project we have already reduced to the level of 5%-6% of our total business. That we will be maintaining, actually.
That you will be maintaining.
Whatever new orders are coming in on EPC side, we will be gained by supplying our cables to those EPC contractors.
Right. Right. But you won't enter into an, as an EPC player, right?
No, not in a significant way.
Understood, sir. Fair enough, sir. All the best, sir. Thank you.
Thank you. The next question is from the line of Praveen Sahay from PL India. Please go ahead.
... Yeah, thank you for the opportunity and, many congratulations for a good set of numbers. So sir, my question is, for a full year, last year, if I look at your housewire and welding wire segment, has delivered a very strong number, and, also if I look at incremental revenue, you have generated a maximum out of that, actually. So, as compared to your, you know, the LT/HT cables, actually. So, for the way forward, do you believe this of incremental sales to continue? Because, this is largely, you know, in the cable versus the wiring. So where you will see in 2025, 2026, if it's the incremental sales.
See, we have delivered higher numbers in wire, because first, we had the capacity. Secondly, our base numbers were lower than compared to our, you know, immediate big industry peers, peer group. Thirdly, we have tapped into a lot of newer areas in the country, where our dealers were not present, by expanding our dealer base. And fourthly, because LT, there was a capacity constraint in the cables, in the LT industry side, so the chances of higher growth was limited because of the capacity. I think these were the major reasons that we have seen higher growth in our wire segment.
So, just to clarify further to that, your capacity, especially in the cable, is coming in for 2025 and 2026. So would you able to maintain your wire contribution of a 30% around in your total pie, or it will be-
No, it is not like this. It is basically whatever capacity we are adding and we are having, we will be utilizing that capacity, whether in wire or in cable. And accordingly, put together all, we will grow 17%-18%. You see, sometimes the wire grow more, sometimes HV grow more, sometimes export grow more, sometimes domestic grow more, so it is always the allocation of the capacity, depending on the order we are, which we are having.
Okay. And, next question for your guidance, sir, related to the export to grow at a 50% and the overall growth of a 17%-18%. That seems me a lower growth at the, domestic, number, actually. So as the domestic industry, also you had said a 15% growth rate. So would you match this, 14% or 15% of industry growth, or would be a lower?
No, no, we are not talking of the... We are talking of the industry, but we are also talking of the company also. Because whatever capacity we have created or we are in the creation of capacity, only to that extent we will be growing. So whatever we are growing, our future growth target is growth to at least 17% CAGR for next 5-10 years, because in the last 15 years, we have grown at a pace of 14%, and our peer group also has grown to the level of 14%-15%. So we are talking of the longer term horizon, not for one year or two year.
Okay, okay, got it. And that is a mix of export and domestic you are talking about? It's long term.
For us, whether sale comes from domestic, sale comes from export, sale comes from the retail, it is not the matter. The matter is how, how we are utilizing the capacity, and we are improving our working capital cycle. So that is the main, main thing for us.
Got it, sir. Got it. Thank you, and all the best.
Thank you to you.
Thank you. The next question is from the line of Koundinya Nimmagadda from Jefferies. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. Sir, I just want to reconcile the CapEx numbers. You spoke about Chinchpada and Pathredi are INR 65 crore and about INR 50 crore for FY 2025. What is the expected CapEx for Sanand and total CapEx, sir, that you are looking for?
Close to INR 900 crore plus CapEx will be for the Sanand project in the current year, because we need to complete the phase one for that project.
And the project will be commissioned by FY 2025 or FY 2025's first quarter or last quarter, sir? I was a little confused.
Maybe in the April, April in the... So basically, the first quarter of 2025.
Okay. So next year you will be spending close to INR 1,000 crore of CapEx, is that right?
No, no. Current year, we will be spending around INR 900 crore-INR 1,000 crore. Next year will be remaining portion of INR 500 crore-INR 600 crore only.
Okay. Understood. And, sir, sorry, my line got disconnected. Can you repeat the capacity utilization numbers, please?
Capacity utilization was 92% in close to 75% in the wire division.
Got it, sir. Those were my questions. Thank you very much, and all the best.
Thank you. The next question is from the line of Naman Parmar from Nivesha Investment Advisors. Please go ahead. Yes, Mr. Naman? The line from Mr. Naman is not appropriate. The next question is from the line of Sandesh from HSBC Mutual Fund. Please go ahead.
Hello, sir, can you hear? Am I audible?
Yes.
Yes.
Hello, hi, sir. Thank you for the opportunity. Sir, I wanted to ask, how has been the volume growth for the quarter and the full year? Can the entire growth be attributed to volume, or there has been some price hikes also in this full year and for the quarter?
Price was less. So the volume growth in the Q4 was 24%, but volume growth for the full year was 22%.
Okay. That's it, sir. Thank you. Thank you so much, sir.
Thank you.
Thank you. That will be the last question for the day. I will now like to hand the conference over to management for closing comments.
I thank you very much to all our investors for participating in this conference call, and if you have any further questions, you may reach out to us. Thank you very much.
Yeah. Thank you very much to all.
On behalf of Monarch Networth Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.