Ladies and gentlemen, good day and welcome to KEI Industries Limited Q3 FY23 earnings conference call hosted by Monarch Networth Capital Limited. As a reminder, all participant 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 Limited. Thank you, and over to you, sir.
Yeah. Hi. Thank you, Faizan. Good afternoon, everyone. We are pleased to host the senior management of KEI Industries today, and we have with us Mr. Anil Gupta, Chairman and Managing Director of the company, and Mr. Rajeev Gupta, CFO of the company. Let us start the call with opening remarks from the management, and then we'll move to Q&A. Thank you, and over to you, sir.
May I start?
Yeah.
Good morning. Good morning to everybody. I'm Anil Gupta, CMD, KEI Industries Limited. Welcome to this conference call for the quarter three earnings. I'll give a brief. Although you have all the data with you now, I'll give a small brief about the performance we achieved in the three months and the nine months of this financial year. Net sales in Q3 of FY23 achieved is INR 1,784 crore against same quarter in the previous year, INR 1,563.85 crore. The growth in net sales is 14.1%. EBITDA this quarter is INR 195.9995 crore against INR 158.54 crore. Growth is 23.6%.
EBITDA/net sales margin is 10.98% against 10.14% in the same period previous year. Profit after tax this quarter is INR 128.61 crore against INR 101.25 crore in the same quarter in the previous year. Growth in the profit after tax is 27.03%. Profit after tax/net sales margin is 7.21% versus 6.47% last year same period. The total cable institutional sale contribution is 48% as against 41% in the last year same quarter.
Good afternoon, sir.
Afternoon.
Mm-hmm.
Sales through dealer network achieved is INR 796 crore against INR 634 crore last year. The growth is 26%. The contribution of sale from the distribution network is 45% in the Q3 against 41% in the same period last year. The EPT sale other than cable is INR 95 crore, which is almost at par with the previous year same period of INR 93 crore. Out of the total sales of EPT, EHV-EPC sale is INR 25 crore as against INR 38 crore in the same quarter last year. The sales of stainless steel wire in Q3 is INR 54 crore against INR 65 crore in the last quarter.
The volume increase in the cable division on the basis of production, and metal consumed in Q3 of FY23 is approximately 20% compared to last year. I'll give a brief about the nine months achievement from April to December. Net sales of nine months of FY2022-2023 are INR 4,957.8 crore against INR 3,934.8 crore last year. Growth in the net sales is 26% over nine months period. EBITDA in nine months is INR 524.96 crore against INR 423.87 crore. Growth in EBITDA is 23.85%.
EBITDA/net sales margin in nine months is 10.59% against 10.77% in the same period the previous year. Profit after tax in nine months of FY23 is INR 339.27 crore against INR 260.34 crore in the previous year. Growth in the PAT is 30.31%. Profit after tax/net sales margin is 6.84% versus 6.62% achieved last year. The domestic institutional cable sales for wires and cable achieved in nine months is INR 1,678 crore against INR 1,292 crore. Growth is approximately 30%.
Domestics, domestic institutional cable sale of extra high voltage cable is INR 246 crore in nine months against INR 366 crore in the previous year same period. Export sale in nine months of FY23 is INR 530 crore against INR 408 crore achieved in the last year. Growth is approximately 30%. Total cable institutional sale contribution in nine months is 46%, as against 49% achieved last year in the same period. Sales through dealer network, dealer/distribution network achieved in nine months is INR 2,208 crore, against INR 1,601 crore in the same period last year. Growth is approximately 38%.
We are in the process of strengthening our distribution network by replacing existing weak dealers with new, stronger dealers and distribution, while also strengthening the existing dealers by helping them in sales and financially. The total active working dealer of the company as on 31st December was approximately 1,900. Sales through dealer/distribution network contributed approximately 45% in nine months, against last year same period, 41%. The EPC sales, other than cable is INR 270 crore, almost flat as against previous year, same period, INR 271 crore. The sales of stainless steel wire in nine months of FY 2022, 2023 is INR 185 crore against INR 165 crore achieved last year. Growth is approximately 12%.
The volumes increase in the cable division on the basis of production and consumption of metal in nine months, in FY23 is approximately 23%. The pending orders as on 20th January 2023 is approximately INR 3,443 crore, which includes INR 1,051 crore of EPC orders. This includes ADB funded project in Nepal, which we are executing approximately INR 130 crore, and Gambia, a World Bank funded project, INR 80 crore. The extra high voltage cable and EPC projects, INR 429 crore. Cable domestic, INR 1,679 crore, and export orders of cables, INR 284 crore. External ratings in India Ratings and Research, ICRA and CARE has upgraded the company's rating to AA from AA- for long-term bank facilities and affirmed A1+ rating for short-term bank facilities.
The book value per equity share of the company is INR 274.46 as on December 31st, 2022, as against INR 236.98 as on March 31st, 2022. Total borrowings including channel finance of INR 126 crore is INR 163 crore. Total borrowings is INR 163 crore, which includes channel financing of INR 126 crore. Acceptance creditors as on December 31st is INR 128 crore as against INR 299 crore on March 31st, 2022. The net cash is INR 85 crore as on December 31st, 2022, against net debt, including acceptances of INR 270 crore as on March 31st, 2022.
The finance cost in nine months has decreased to INR 24.62 crore, which is percentage of financial charges on net sales has decreased in this period to 0.5% from 0.77% last year. As communicated earlier, future outlook, as communicated earlier, working capital of approximately INR 100 crore is expected to be released during FY23 from EPC debtors retention payments, which will be used for increased sale of cables to institutional and dysfunctional government. The CapEx requirement of in current financial year. The company will be having sufficient cash flow to meet its working capital and both requirements of future. Capacity utilized during nine months of FY23, 87% in cable division, 78% in house wire division, and 88% in stainless steel wire division.
Company is doing brownfield CapEx of INR 40-45 crore in Silvassa plant, which will generate an additional top line revenue of LT power cables of INR 500 crore in the next financial year. This will enable us to grow by approximately 15% in the next financial year. Overall, the company is targeting a growth of 18%-19% in current year will do CapEx of approximately INR 100 crore from internal accruals in the current financial year. Further, we will be spending a capital expenditure per year, approximately INR 200-250 crore for the next three years to maintain a CAGR of 17%-18% per annum, as against achieved CAGR of 15% during last 15 years. Industry outlook.
Substantial pipeline in the increasing private and government investment in energy-intensive industries such as iron, steel, aluminum, cement, fertilizers and refineries. The government emphasis on the infrastructure development projects, which include highways, energy, railways and metro constructions, roads, ports and airports. Apart from greenfield, the modernization of the existing infrastructure projects. Increasing government attention and funding support for rural and railway electrification projects. Structural demand for higher and more efficient T&D infrastructure to improve the trans-distribution, you know, capabilities of the power distribution company. A good, you know, demand from real estate sector in the housing construction and the other construction projects. Increased renewable energy focus in, especially in the solar, with a substantial investment in the solar projects.
In addition, government initiatives on multiple fronts, including energy, housing, infrastructure, will generate a substantial amount of businesses for the industry, in addition to oil and gas, railways, metros and other specialized areas. The sector now anticipates the supply of cables for solar and wind power applications, given the government's emphasis on promoting, you know, renewable energy. Thank you very much. This is from management side. You are now requested to raise any queries. We'll be very happy to answer them. 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 one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 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. Reminder to the participants, anyone who wishes to ask a question may press star one. First question is from the line of Rahul Agrawal from InCred Capital. Please go ahead.
Yeah. Hi. Good afternoon, sir. Good afternoon, Anilji and Rajivji. Sir, four quick questions. Firstly, if you could help me with peak revenue capacity right now, if you could give it, you know, combined for LTHT, housing wire, EHV and stainless steel. Just need to understand the quarterly volatility, so maybe a full year, capacity number will really help, value-wise. That's the first question, sir.
You see the full year number will be close to INR 8,000 crore numbers, wherein we are utilizing the full capacity. As Anilji has just talked about, at present 87% we have utilized in our LT, HT and Extra High Voltage combined together. If we talk, and house wire division is 78% and stainless steel wire division is 88%. As we are increasing the capacity in our Silvassa plant by investing another INR 40-45 crore, which will enable us another INR 500 crore, plus the house wire capacity is available and balance is close to 13%-14% capacity available for LT, HT. Put together all we can go for next financial year, we will be available capacity up to INR 8,000 crore.
The capacity utilization number you have given is value capacity, right?
Yeah, yeah. Value capacity.
Okay, got it. Sir, second question on EHV. you know, largely I thought we will be doing INR 550, you know, INR 500-550 crores this year. Just in terms of your understanding, you know, how should we look at this year and next year in terms of EHV capacity?
This year this number will be close to INR 400 crore. Now the order book is strong and, so the next financial year we will be doing close to INR 550 crore again. Because sometimes the projects are delayed in extra high voltage because these are the underground cabling projects. Some projects are delayed because of the ROW issues, so it could not be executed.
These are India or export orders?
No, Indian. Indian orders.
Indian orders. Okay. Sir, lastly on CapEx, you mentioned you do about INR 100 crores this year. If you could provide some update on what is happening with Baroda plant and fiscal 2024 CapEx needs. I understand you'll do INR 250 crores on an average, but will there be a catch-up from this year? Because this year CapEx is low, right?
Yes, this year we are catching up now because now the land filling has already started over there. Now from April onward the construction will be in full swing. This year we are adding the CapEx and adding the land of the Baroda. This is the investment for INR 100 crore rupees, just Anilji has highlighted.
Next year it should be like INR 300 crores to catch up for this year?
Next year it will be close to INR 250 crore investment in the same plant. It may be more also, but it will depend on the delivery of the machines and the construction going on.
Got it, sir. One small question, sir. Other income is INR 14 crores for the quarter. Any reason why this is high?
No, this is mainly, one is the INR 6 crore is the exchange fluctuation income. INR 6 crore is the interest on fixed deposit, whatever cash approval we have generated. We have the cash balances of INR 376 crore approximately, right now. This is the INR 6 crore in the interest on fixed deposit, which is showing in the other income.
Perfect, sir. Thank you so much. Best wishes for 2023. I'll come back in the queue, sir.
Thank you, Rahul.
Thank you. The next question is from the line of Sudeep Jain from ASK Group. Please go ahead.
Yeah, thank you, Rajeev Gupta and Anil Gupta. Sir, just one question. In this volatile environment of raw material prices, of copper, et cetera, you've been able to, you know, maintain margin in a narrow band, whereas some other listed players, their margins have fluctuated wildly. How has this been achieved by the company? Is it safe to assume that irrespective of your environment, your margins will be in a band going forward?
I think we have been maintaining for quite long that we are really, you know, balancing our, you know, raw materials versus the orders booked. You know, meticulously matching the, you know, raw materials in the factory and in pipeline and the orders. That is how we have been able to maintain margins in a very, very narrow band. I think the same policy is being followed continuously, and we will be able to maintain our margins irrespective of the environment.
Do you book your RM back to back when you book an order?
It's basically, as we have earlier communicated, we are working under the natural hedge because we are having three to four months pending order position, and we are having 2.5-3 months inventory in our shop floors. In that way, it is under natural hedge. Just little bit, 15-20 days order book is open, that is 0.5%-1% fluctuation in our EBITDA margin is also there. That will remain there, but not the volatility beyond 1%.
Another question is on receivable days. There's a substantial improvement. In this quarter, your EHV revenues have come off, export revenues are down. Is it a function of the mix that the receivable days have come off? What would be the normalized receivable days in the business?
You see, the normalized business mix is basically we do LTSC domestic institution, we do LTSC export, we do extra high voltage, we do EPC business, and we are having some stainless steel wire division also, and we do the retail dealer distributor. Sometimes the retail is giving the force, sometimes EHV, sometimes export. It is basically a combination of all the products. It is not the case in each and every quarter we will grow in the same way in each and every project. It's basically a basket. That's how we are growing. With regards to the receivable, you see in 2021, our receivable was 3.87 months, which went down last year in financial year 2021-2022 to 2.92 months.
By end of this year, this receivable will be close to 2.4 months in this financial. As of December, this receivable has come down to 2.37 months. The fourth quarter sale is always higher, so the receivable will be close to 2.4-2.5 months level. Practically half month receivable has already gone down because of the EPC sale has gone down and the collection of retention money and the retail sale has gone up substantially. These are the combinations.
This is likely to continue?
Yeah, yeah. Next year again, the data level will come down further from point, two months at least. Next year, our prediction for receivable will be 2.2 months.
One last question on exports. Is the business completely order driven or is it also through distribution? If not through distribution, will it be volatile and episodic?
No. Our business in export is completely order driven. We are not doing any distribution at the moment. definitely. I don't think that there will be any volatility in that because we are growing our export markets product-wise and geographically also. I think our export and imports will be grow better every year. This is. I think we gave a projection of around INR 700 crores of exports in this financial year, and we will definitely surpass it.
Sure. Thank you and all the best.
Thank you. The next question is from the line of Harsh Shah from Jefferies. Please go ahead.
Yeah, hi, Thank you for the opportunity. Can you just provide the.
Harsh Shah, sorry to interrupt you. The audio is very low from your line. Please increase the volume of your device.
Is it better now?
Yeah, please go ahead.
Yeah, yeah. Just one thing. Can you please provide the interest cost breakup for the quarter?
For in this quarter, the term loan interest is INR 0.08 crore. The working capital interest is close to INR 3.5 crore. The bank charges is on LC and BG is close to INR 1.23 crore. The other bank charges is INR 2.85 crore, that is the processing fee, et cetera. Put together all is INR 7.7 crore.
Okay. Thank you so much.
Thank you.
Thank you.
The next question is from the line of Praveen Sahay from Prabhudas Lilladher. Please go ahead.
Yeah. Hi, sir. Thank you for taking my questions. First is related to the wire and winding wire, where we have seen sequentially there is a degrowth. If I look at the peers, they had done a little better in that segment. Can you give some highlights what happening there?
No, in our dealer distributor business, it is basically growing. If you talk of the nine-month sale of our buyer, we have grown by 32%.
For this quarter, basically. Just comparing to the peers, it looks like on some lower side.
No, no. I don't know, because we can compare only from the our sales. Our sale in this quarter has also as compared to the previous year, same quarter by 17%. Like last year, same quarter, we did around INR 356 crore sale. In this quarter for the buyers.
Previous quarter.
Previous quarter we did around INR 406 crore sale, and in this quarter we did around INR 418 crore sale for the buyers.
Yes. Okay. Next question, sir, is on volume. Can you able to give the volume numbers for cable and wire? How much is the volume growth for a quarter?
Harmeet, overall the 20% was the growth. If you talk of the wire, the volume growth in this quarter for us was close to 29%. In nine months time, the volume growth was 40%. Of the wire.
Of the wire. Okay, sir. Next is related to the. See, you had given the cable domestic order book. How much is that? Just, can you give again?
Domestic order book is also very strong. We have the INR 1,679 crore order book from the domestic, low tension and high tension power cable business. Extra high voltage also, we are having order book position of INR 429 crore. The cable export order, which was low in the last quarter, now it has also improved to INR 284 crore because in the last year, because of the COVID, we were not able to acquire the new customers. Now this process has complete, and now we are having a good order book position in the export also. Close to INR 284 crore.
Okay, great, sir. Thank you for that. In the EHV segment, last quarter you had given a commentary like 18% down, so that is because of some non-clearance on the certain orders from the utility. This quarter also we had seen on the lower side. Definitely the distance, sir, as a given, there is a reason for that's ROW issue. Do we have any target for a year for this EHV?
You see, EHV for this year it may go to INR 350 crore-INR 400 crore as compared to last year, INR 515 crore sales. It always will be happening, sometimes EHV will be higher, sometimes port will higher, sometimes dealer distributor higher. Ultimately, we have to grow in volume. Like Anindya said that in the metal case we have, we have consumed in a nine-month basis 23% higher as compared to last year.
Mm-hmm.
The volume growth almost you see a 20%-23% in this environment is a good growth.
Yeah. Yeah. Exactly, sir.
Yeah.
There is no competition or peer, you know, pressure on that.
No.
the EHV. Okay. Thank you, sir. Thank you.
In EHV, the only competitor is Universal Cable in India or the other companies from the import side.
Okay. Okay. Thank you, sir.
Actually, we are not dependent on any one product because that is our beauty of the sales. We are into the different segments with complete basket, any one product which not impact on our sales.
Mm-hmm. Got it. That's all, sir. Yeah.
Thank you. Reminder to the participants, anyone who wishes to ask a question may press star and one. The next question is from the line of Bobby J. from Falcon Investment. Please go ahead.
Yeah. Hello. Regarding the EHV cables, are they all EPC?
Please repeat your question.
Yeah.
I think around 80% is we do it on turnkey basis and 20% is the sales of extra high voltage cables to contracting companies.
Right. When you say that you wanna get the EPC volumes down, that indirectly means your EHV volumes would come down too, right?
No.
No, no. They.
It's not our target is not to reduce the extra high voltage cables turnkey projects. We are bringing down the EPC projects on the distribution side, not on the extra high voltage cable, which is predominantly 80% of the value in a EHV cable project is cables only. Which is our own product.
You don't face payment issues with EHV EPC projects?
We do face cash flow issues, but this is a
Very small portion of our business and, we are able to, you know, maintain the profitability in spite of the, you know, delayed cash flows.
I understand.
Nature of the turnkey projects, especially with the utilities, it remains the same.
Okay. Regarding the competitive scenario there, you mentioned there was just Universal Cables, right? It's a major player here. You also have the foreign cable companies like LS Cables competing on a tender basis.
Yes, yes. LS Cable is a foreign company, and they have set up a manufacturing plant in India. They are also there in this segment. You know, to a very small extent, KEC also competes some in some areas.
Right. We just heard, you know, this result season that Polycab is also setting up a EHV plant.
Yeah. They will take four, five years to, you know, really come up with the after they start meeting the prequalification requirements. It's a journey.
Right. They're also doing it with your joint venture partner, Brugg Kabel AG, right? It's the same one that you're doing it with.
Yeah. Our, now our, you know, cooperation with Brugg Kabel remains in 400 kV segment. In rest of the segments, we have already completed 12 years with them. There was no logic of continuing that, you know, paying continuous fees to them for beyond 12 years when we ourselves qualify everywhere and we are technically absolutely strong in that direct, in that three segment.
I see. You're not a joint venture partner currently with them. You're doing it alone.
No, no. We are joint venture partners with them for 400 kV voltage segment, but up to 220 kV, we have discontinued very recently.
I see. Okay. Understand. Also, regarding your dealer count, right? It hasn't changed from last quarter. Was that intentional?
Dealer counts, you know, our sales has grown substantially. So we are strengthening the existing dealers. It is not necessary that we keep on increasing the counts of the dealer. It is important to increase each dealer, and, you know, performance wise. Their sales has to grow.
I know. Yeah, I know. That makes perfect sense. I was asking because you had a target of doubling your dealer count over three years, right? You had mentioned that before.
That cannot happen like in a year. We are gradually increasing our dealers by around 20% every year. That is our goal.
Okay. In terms of the infrastructure cycle that the country is going through, where do you think we are in this stage? Because this has been going on for since 2014 almost, right? The railways, the, you know, bridges, the road projects and all that. Where do you think, at what stage of this cycle are we in now?
I think, we are still in the early stages only. It is infrastructure pipeline will continue. India is a large country and our infrastructure has always been weak, so it will continue for decades now. I, this is our perception. Also, after some time, the need comes for revamping the old infrastructure.
Right. No, I understand. Obviously, it'll go on for decades, but there are, you know, very, there are times when it really accelerates, right? Then it kind of slows down a bit.
In the, in the foreseeable-
Are we in the peak of the... Yeah.
In the foreseeable future, we don't foresee that. What happens after five years, I don't know.
Right. When you talk about exports, right, what is the advantage that you and Indian companies really have? Because you import copper, you import aluminum, you import PVC mostly. What is the cost advantage really for companies like you when you export to the West?
We are importing very less copper now because the copper is, you know, refined in India. The copper is available domestically. Although these companies are pricing the copper and aluminum at, you know, landing price of imports. That is only the pricing thing which is being done. Physically, these materials are available within the country and we have a cost advantage in terms of manufacturing costs and, you know, and lower overhead as compared to Western countries. Also in many of the countries, we are, now India is getting some preference and advantage compared to China.
Right. Okay. The PVC, do you make that in-house?
Yes. PVC compounds we make in-house. We purchase PVC resin from resin manufacturing companies and, the other chemicals and but compounding we do ourselves.
Right. Okay. Thank you so much.
Thank you. The next question is from the line of Smitesh Sheth from Redan Securities. Please go ahead.
Hello.
Yes. You are audible.
Yeah. Yeah. sir, with continuing with regard to the previous participants, which are the dominant region which we cater in export?
The maximum exports at the moment are going to Australia, Middle East, some of the African countries, there are a few. Also, is very, until one year back, we had been exporting a lot to Sri Lanka, but that is not happening now as for last one year. We have exported substantially to Nepal as well as Bangladesh also. Now we are targeting our exports towards US, and there will be a good number of exports envisaged in this quarter to even United States.
Okay. Okay. Fair enough, sir. Thank you. My next question is, sir, could you please suggest how big is the unorganized market in India? The difference between the unorganized market and the organized market.
Well, I don't think that our unorganized market is very big now at the moment.
Right.
It may be maximum, in my opinion, 15%-20% of the total industry size.
Okay.
I don't... It is shrinking year after year because of, you know, after implementation of GST and also, you know, because of the working capital stress these unorganized sector has.
Fair enough, sir. Fair enough, sir. Thank you very much, sir.
Thank you.
Thank you. The next question is from the line of Shubham Agarwal from Axis Capital. Please go ahead.
Hi. Thank you for the opportunity, sir. Just one question on the trade channel inventory. Could you give us some color on the inventory as on December end, and how does it look right now in January end?
You see in the trade, it's a average inventory is 15-20 days. Every distributor dealer is competing with themselves. Sometimes it may go to further 10 days, sometimes it may go to 25 days. On an average, it is a 15-20 days inventory.
On December, did you see any uptick? I mean, any upstocking because the copper prices were going up? I mean, that's what I was trying to understand.
That is the normal tendency. If you go for averaging, it does not impact whether copper goes up or copper goes down. In a three-month cycle for a quarter, it does not impact.
Okay, sir. That's all I wanted to check. Thanks.
Thank you. The next question is from the line of Akshay Kothari from Envision Capital. The audio is unclear from the line. We'll move on to the next question. Mr. Kothari, please rejoin the conference call. Next question is from the line of Abhishek Agarwal from Naredi Investments. Please go ahead.
Good afternoon, sir. Hello. I'm Abhishek.
Yeah. Good afternoon.
Yeah. As I compare with one of your competitor, your EBITDA margin is not increased accordingly. Do you want to say something?
Sir, our EBITDA margin is close to 10.5%-11%, as we have earlier communicated. Because of the first half, the EBITDA margin because of the volatility of raw material, there was less. Now in the nine-month average, we have close to 10.59%. On a year-on-year average also we will be moving from 10.5%-11% range.
What is guidance for EBITDA margin for next year?
Pardon?
Sir, what is EBITDA margin in next year? What kind of.
EBITDA will be close to 11%. 11% EBITDA margin will be there.
Okay. Thank you so much, sir.
Thank you. The next question is from the line of Rahul Agarwal from InCred Capital. Please go ahead.
Thank you for the follow-up. Sir, first question I had was on the gross margin. The way I'm calculating it is basically sales minus material cost. Pre-COVID, the company, you know, used to average about 30%. Obviously, last two years that number has come down because of lot of raw material volatility.
Sir, Rahulji, gross margin you cannot calculate directly on the result because these are the combination of the various product mix like EPC. In EPC there is a very less raw material. That is not the way. That's why we are always talking of the EBITDA margin. My request to follow the EBITDA margin or operating profit.
Okay, sir. Basically, given the nine-month performance, we should assume material margin, yes. Little bit improvement will be there as it was down by half percent because of the volatility of raw materials. Now it is again improving.
Yeah, little bit it has improved in this quarter, Q3, and balance it will be improved in the fourth quarter also, so that we can reach to the 11% EBITDA margin.
I understand, sir. Where I was coming from was improving revenue share for housing wire. Does that change that number or no?
A little bit it is changing because the EBITDA margin is higher there because it is, there is 11% and in the normal domestic institution it is close to 10.5%. While it is improving the dealer distributor sales, EBITDA margin is also improving.
I understand that, sir. I understand. Okay. One, you know, question was essentially on the earlier participant. I think he was trying to ask that the housing wire sale, which was INR 466 crores this quarter, has grown about 13% YOY. The same quarter last year was INR 412. Any specific reason for this growth rate to be down to 13% or it's just one-off and it will catch up? I understand nine months is 32% is amazing, but, you know.
As we earlier also communicated, quarter to quarter is not important. Rather year to number is more important. For whole year we have given a target of 30%-35% growth. Already in nine months, numbers we have grown by 32%. Our overall target to grow by 35% through our dealer distributor business of the wires. We are on our target.
Perfect, sir. Thank you so much. All the best. Thanks.
Thank you. The next question is from the line of Akshay Kothari from Envision Capital. Please go ahead.
Thanks for the opportunity. Am I audible now?
Yes. Yes, you are audible.
Yeah, just wanted to know, what was the fees which we used to pay to Brugg Kabel AG, in, up to 220 kV?
Sir, this is a commercial information. I mean, at the moment we don't have that data, but I don't think that this kind of information should be given.
Okay. There was no royalty arrangement, right, on this?
There were, but royalty was very, very low.
Okay, understood. In 440 kV, do we have an exclusive tie-up with Brugg Kabel or it's not exclusive?
No, it is completely exclusive.
Okay, understood. Yeah, that's it from myself. All the best. Thank you.
Thank you. The next question is from the line of Manoj Gori from Equirus Securities. Please go ahead.
Thanks for the opportunity. I'm sorry. Just one question. If you look at housing wires, we have been doing very well over last few years, in fact many years now. When do we expect the base to normalize? Because when we talk about 17%-18% growth, roughly when we do some of the like as for mats or probably for cables, we're expecting roughly around 14%-15% growth. EPC should be flattish and then housing wire business should be the key driver for that incremental 2%-3% at the company level. When do you expect like the low base should normalize probably FY24 or FY25, and then we expect roughly around 14%-15% kind of volume growth?
By 2026, 2027. At least for next five years our focus will be there because in market share we are having at present only close to 5%. Our target to reach by 9%-10% market share of house wire overall.
Right. Right. In that case if you look at probably the 30%-35% growth should continue during FY24-26 period as well, and probably from 2027 we might see normalization.
We can't say exactly 30%-35%, but definitely it will be higher compared to the normal growth of the company.
Right. Right. Right. Right.
It's really very difficult to predict.
Yeah, yeah, completely agree.
Every number.
Yeah. Sir, with regards to cables, in the domestic business, how do you see the overall environment? Probably if you look at cables for us during the quarter has grown faster. What's actually driving the growth, whether it's maintenance led CapEx that the industries are doing, it's new CapEx or government spending has increased. Can you throw some color over there?
It is basically, you know, brownfield extensions by the companies, then some new projects and a lot in the infrastructure pipeline spending by the government.
Okay. probably even for next two years we can expect the similar momentum, at least from the government side.
Oh, yes.
Right. Right, sir. Sir, one thing. We had obviously delayed our plans to enter into new categories. Any update over there, probably, in FY25 or probably, still we are not sure?
No, we are not still not sure because we have not made up any plans in that direction.
Right, sir. Right, sir. That's all from my end, sir. Thanks a lot and wish you all the best, sir.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The next question is from the line of Mahek Talati from Yellow Jersey Investment Advisors. Please go ahead.
. My question was what is the peak revenue which we can achieve from the EHV capacity?
Close to INR 550 crores-INR 600 crores.
INR 550-INR 600. At present, we are having a INR 400, we achieved around INR 520 crores of revenue FY22. Due to delay in some order, what to say? Due to delay, we will be achieving around INR 400 crores. Are we planning any CapEx expansion in this capacity expansion going forward?
In the greenfield CapEx, we have planned.
You see, I will explain you. The capacity what we have created for Extra-High Voltage cable, the same plant and the equipment are also used for manufacturing medium voltage cables of 33 kV and 11 kV. At no point of time these capacities remains idle, even if there is a lower production of Extra-High Voltage cables.
Thank you.
Because the facilities can be tweaked.
Thank you, Mr. Talati. May we request that you return to the question queue for follow-up questions. We'll take the next question from the line of Satish Kapoor from Kapoor and Company. Please go ahead.
Namaskar, sir, and thank you for this opportunity. Sir, firstly, sir, if you could give some more color on the EHV segment in terms of our order booking and our market share, and how is the order pipeline currently shaping for the EHV segment?
See the extra high voltage cables are normally procured by transmission utilities. Now a lot of industries, large industries which are coming up, they are drawing, you know, drawing their own lines to draw large power for their plants, including some data centers. They have to install these lines under supervision of the local transmission utility of that state because they are all interlinked transmission infrastructure. There will be a good pipeline of these projects. Quantification at the moment is not there, but we can definitely answer it separately to you. At the moment, I don't have that data.
sir, our market share, in this segment?
Our market share in this segment is close to around 25%.
Okay. number of players, sir, which are dominant players present in this segment?
The number of players at the moment are around, three are, you know, significant players like KEI, Universal Cable, and LS Cables, which is a Korean company and set up a plant around eight years back in, eight or nine years back in the country. Little bit of KEI, KEC International and some, sectors are also supplied by Sterlite Cable also.
Thank you, Mr. Kapoor. May we request that you return to the question queue for follow-up questions. The next question is from the line of Hitanshu Bhatia, an individual investor. Please go ahead.
Hi. Thank you for taking my question. Just a follow-up on the market share front.
Sorry to interrupt you, Mr. Bhatia. There's a disturbance coming from the line.
Am I audible now?
Yes, sir. Yes.
Yeah. On the market share front, I just wanted to confirm, I mean, could you break up the market share with the leading players? Like, what would be the share, commanded by Universal Cable if you are 25%? What would be your strategy to, you know, take the market share from other players?
It is very easy to gain the market share by, you know, because in utility business you have to be relevant. You reduce your price and gain market share. Our aim is to maximize the, you know, revenue based on the profitability. We have a reasonable market share.
The reasonable margin definitely would be... Yeah. Yeah. Sorry. Please go on.
We have a reasonable market share with good margins. We don't want to, you know, go into, you know, unwanted competition.
Sir, just one thing. We are having Extra-High Voltage power cable, but like you are asking the market share, how much sale we can improve? INR 100 crore-INR 150 crore on a turnover of INR 8,000 crore company in future, whether it is a matter of INR 100 crore-INR 200 crore sale, I think it is not matter to us. We are driving from other business also. This INR 100 crore-INR 100 crore sale, crore sale in a company where the INR 8,000 crore company is like this. It is not the matter for any one product.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Anil Gupta here. Thank you very much for joining this earning call. I hope that we are able to answer most of your queries. If still something is left over, you can always reach out to us. We assure you that company is having very good prospects in terms of market, products, and our strategy. We'll continue to grow and take care of the investors very well. Thank you very much.
Thank you very much, everybody. If still you have any question, please let us know.
Thank you. Ladies and gentlemen, on behalf of Monarch Networth Capital Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.