Ladies and gentlemen, good day and welcome to the KEI Industries Limited Q1 FY 2026 earnings conference call hosted by Nuvama Institutional Equities. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Archer from Nuvama Institutional Equities. Thank you, and over to you, sir.
Yeah. Thank you, Shruti. Good afternoon everyone. On behalf of Nuvama Institutional Equities, we are glad to host the senior management of KEI Industries Limited. We have with us Mr. Anil Gupta, Chairman and Managing Director of the company, and Mr. Rajeev Gupta, Executive Director, Finance and CFO. We will start the call with the opening remarks from the management and then move to Q& A. Thank you. Over to you, sir.
Good morning. I'm Anil Gupta, CMD, KEI Industries Limited. I'll give a brief about Q1. You must have gone through the figure. The net sales in Q1 of FY 2026 is INR 2,590.32 crore. The growth in net sales is 25.44%. EBITDA in this quarter is INR 297.62 crore against INR 232 crore last year. The growth in EBITDA is 28%. EBITDA/net sales margin is 11.49% against 11.25% in the same period previous year. Profit after tax in this quarter is INR 195.75 crore against INR 150.25 crore in the same quarter last year. Growth in the PAT is 30.28%. Profit after tax/net sales margin is 7.56% versus 7.228% in the previous year. Domestic institutional cable sales bar and cable is INR 701.11 crore against INR 574 crore last year. Growth is approximately 24%.
Domestic institutional cable sale of extra-high- voltage cable is INR 116 crore against INR 79 crore last year. The growth is approximately 47%. Export sales in this quarter is INR 374 crore in which cable and wires is INR 323 crore against INR 149 crore last year. The overall growth in the export is 61%. The overall growth of cable and wire growth in this is 122% as compared to previous year. The decline in the export is because of the one contract which we have been doing last year in Gambia which is not there this year. Total cable institutional sale contribution is 45% as against 39% in the previous year and sales through distribution network i.e. B2C is INR 1,326 crore against INR 1,085 crore last year. The growth in this sales through distribution network is 22%.
B2C sale has contributed 51% in the first quarter as against 53% previous year same quarter. Overall wire and cable segment has grown in this quarter approximately 32% over previous year's same quarter. EPC sale other than cable is INR 61 crore against INR 131 crore last year. Decline is approximately 53%. I just mentioned because of the one project which we were executing last year in Gambia is not there this year. Out of the total sale of EPC, EPC sale is INR 18 crore against INR 45 crore in the same quarter previous year. Sales of stainless steel wires in first quarter is INR 51 crore against INR 53 crore previous year. Decline is approximately 4%. We have around total active working dealers of the company as on 30 June was approximately 2,094.
Order booking as on 30 June 25 is INR 3,921 crore out of which INR 540 crore are pending orders of EPC. INR 538 crore is for extra-high- voltage cables and domestic cable booking is INR 2,140 crore, export order spending is INR 703 crore, so total wire and cable segment booking is INR 3,381 crore and including EPC it is INR 3,921 crore. The company has got long-term rating from Share India Rating and Research and ICRA as AA+ and that of short-term is A1+ . The book value per equity share of the company is INR 626 as against INR 605.5 on March 31st, 2025. Company has booked an expenditure of INR 53.95 crore quarter one towards CSR activities. Total borrowings as on 30th, June is INR 203 crore.
It is mostly against channel finance and acceptance creditors as on 30th June is INR 448 crore against INR 246 crore on 31st March, 2025. Net cash is INR 1,048 crore, includes INR 1,106 crore of QIP as on 30th June. Now the QIP fund status, company has raised INR 2,000 crore through QIP on 28th November 2024 to fund our Sanand project, repayment of outstanding debt, and for general corporate purposes, out of which INR 1,450 crore was for Sanand, INR 240 crore for general corporate purposes, and INR 276 crore for repayment of term loan and working capital, [Foreign language] and INR 34 crore was QIP expenses. Company has utilized QIP fund of INR 913 crore up to 30th June 2025. Now the future outlook, the company has incurred in this financial year an expenditure of INR 410 crore, out of which Sanand INR 296 crore.
We bought two lands in Salarpur and Sanand for INR 95 crore and other plants and locations which are existing INR 19 crore CapEx. Till 30th June , 2025. Total CapEx payment incurred for Sanand is INR 880 crore and another INR 600 crore- 700 crore will be spent in the next nine months and balance approximately INR 300 crore - 400 crore will be spent in the next financial year, f irst half. C ommercial production of first phase of LT and HT cable in Sanand will commence in quarter two of, by September 2025, and total projects will be completed in the first half of FY 2026-2027.
Company is hopeful to achieve 18% growth in this financial year or even we will definitely try, aim to achieve more and improve our operating margin during FY 2025-2026 considering phase I commercial production at Sanand and strong order book position of domestic institutional cable sales, export order for cable sales and extra-high- voltage cables as of today after completing the Sanand project and strong demand in the strong domestic and overseas markets, we are hopeful to grow by 20% in year-on-year CAGR in next two to three years. Industry demand now, the major sector where we see strong demand in India domestically is solar and renewable sector.
Solar and renewable power development and data centers, transmission and distribution projects by power companies whether in the government sector or in the private sector, electric vehicle recharging stations, infrastructures like railways, metros and tunnel ventilation projects, highways and also the manufacturing sector where you know the demand is emerging from the new manufacturing factories coming up. Even similar scenario exists in the export sector where we are catering to major demand in the renewable side, solar and wind power projects and also in the oil and gas industry in India as well as overseas. This is from my side and thank you very much for listening. I am available for answering your queries. Please go ahead with your queries. 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 touch- tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handshift 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 Natasha Jain from Phillip Capital. Please go ahead.
Thank you for the opportunity and congratulations on a vistar of numbers. My first question is, you had mentioned today in the TV interview that you are aiming to close this year with a 11% EBITDA margin. Now if I just see the highest growth category for you in the past couple of years has been wires, housing wires which is a high- margin business. Assuming that going forward the salience will be higher for cable where cables have more tailwind, the margin should adjust on the downside. From current 10% can you just walk us in a little bit of detail how will you achieve this 11% given that cables will increase more than wires. The first question is that.
Madam, definitely the growth in cable segment Should Be higher this year but even wires will also grow reasonably. So far as EBITDA margin is concerned [crosstalk] we always count even the other income also in our operational margins because ultimately any income out of exchange fluctuation or etcetera. are operational profits. I'm not talking of interest earned out of QIP gunnies, except that rest all is operational profit because exchange fluctuation is a part and parcel of our business and we in several years have seen always the earning from exchange fluctuation by better managing our order and export business, export and import business. As we are guiding, definitely we will aim to achieve 11%. We always say that there can be a range of 10%, 10.5%- 11% because nobody can exactly predict the margin profile because of the ups and downs of the industry.
Understood, sir. What I understand is 11% will be a mix of even your treasury, the hedging part of your numbers. Sir, you also mentioned logistic cost.
Natasha, whenever we say we always see the EBITDA margin of close to 11%, the MLG has already yielded 10.5%- 11%. We always maintain that kind of guideline.
Actually, foreign exchange fluctuations are not treasury income. We are not doing it for treasury. It is how we manage our export and import, you know, business.
Understood, sir. You mentioned logistic cost savings. Can you just quantify how much of logistic cost will be saved because of the farming plan?
I mean as of now I will not be able to quantify it. Let the project start and we will be able to say something about it by end of this year. See, it is a simple logic that if your plant is located within 350 km from a port and today I'm exporting from my north Indian plants which are around 1,400 kilometers. There will be saving in logistic cost in inward and outward freight.
It will be a little bit not h eavy.
But it will take time to bring it into the margins.
Got it. Just one last question. You said approximately INR 1,100 crore is what remains from your QIP proceeds. Can you just quantify how much of that will be CapEx-led?
It will all be CapEx.
It is all CapEx.
Got it. Thank you, sir. I'll get back in the queue .
Thank you. The next question is from the line of Jayshree Bajaj from Trinetra Asset Managers. Please go ahead. May I request you to unmute your line and say the questions?
Hello. Yeah, thanks for the opportunity. As you said sir, that EBITDA margin will remain free for the FY 2026. We can see that very new competitors are entering in the market. How does KEI intend to sustain its current growth trajectory and defend the market share across its diverse segments and sustain the growth which currently it has achieved?
Madam, in the past in so many years we were operating in EBITDA margin of 10.5%- 15% with a growth rate of 17%- 20% year- afte- year and every year or within two years the small, small manufacturer has already come for the manufacturing of iron cable. It is not the new case when the new players are coming, their name are big. That's why most of the investor was buried initially. Now everybody has understood that the business of the wire and cable because of this approval process going on and the industry itself is growing close to 12%- 13%. It gets automatically adjusted. It will not impact any kind of margin here.
Okay. As you can see, there is a remarkable growth in the export institutional cable. Is it sustainable in the next three quarters of FY 2026?
Ultimately, our purpose is to sell our capacity, what we have. Whether we will be selling to export market, to retail market, or to domestic institution market, it does not matter to us because ultimately we have to fully utilize our capacity. We need to take care of all the markets so that we don't know which market will be weak in future, which market will go strong. That's why our focus will be in a diversified geographical range, that all we were maintaining in the past also.
Okay sir, got it. Thank you .
Thank you. The next question is from the line of Vidit Trivedi from Asian Market Securities. Please go ahead.
Yeah. Hi sir. Thanks for the opportunity and pretty strong set of numbers. First question is with respect to the exports. We have just had close to 122% yearly growth. I wanted to know what's your vision for exports for the coming next two years down the line and what's the spread in margins between domestic and exports?
Normally in domestic and export the margin difference is only 0.5%. As Anil G] has spoken earlier also that his vision is to go with the export range of 17% - 20% in the next two to three years mainly because of addition of the close to new geography like U.S.A. and Europe. Because of that these are the new geography and the earlier base was not there. That's why the export is growing like this way.
What is the volume growth during the quarter? Yeah, that's the other question.
Prices are stable since last year, even in the whatever the copper price and aluminum price was lasting, the same bug continuing in this quarter. All the relevant volume will be close to same.
Any number on that, like 15%, 20%, anything like that?
I think the volume growth is close to 28%- 30%. We have not been able to quantify so far.
Got it. Thanks a lot. All the best.
Thank you. The next question is from the line of Naushad Chaudhary from Aditya Birla Mutual Funds. Please go ahead.
Yeah. Hi. Thanks for the opportunity and context on a good setup. Number two, clarification sir. Firstly, on Sanand plant, if I heard it correctly, this will start contributing from 2Q FY 2027, right?
Exactly. Actually from Q3, because the likely operationalization will be end of September 2025. The actual contribution should come from quarter Q3 .
Okay. Ramp- up outlook remains same. Three years should require to reach full utilization.
Correct.
Second, on the export business, what is the mix of the business through distributor versus direct to client? In terms of nature of the business, are these short-term contractual business or long-term contractual business?
We are mostly targeting projects overseas. Our 90% of the business is coming directly with the EPC contracting companies or the utilities. Only 10- 15% come through distributors. In exports, our business through distributors is there only in the U.S.A. Otherwise, we are using agents network too Target direct customers
Contacts are typically short term in nature for these business or long term?
They are mostly short term in nature.
We are supplying the project. Whenever the project is there, we are bidding and we are getting the contract.
We are there as a regular vendor for many, many large EPC companies and utilities. They have regular requirements, regular projects like in India. New inquiries are being quoted every month and every day.
And average length of contract? Four, five maybe.
Normally, most orders are completed maximum within four to five months.
Four to five months. Okay. The payment cycle are same as the domestic market or better?
Two and a h alf, only in the case of few customers overseas where we get the letter of credit.
Okay.
Or vendor financing.
Thanks for the clarification and all the best for the future. Thank you.
Thank you.
Thank you. The next question is from the line of Shilpee Sharma from Prabhudas Lilladher Capital. Please go ahead.
Hi sir. Praveen Sahay from PL Capital. Thank you for taking my question. The first question is related to the housing wire and winding wire segment which Were the contribution in the last three. Years has reached to around 30% of your total number. If you can give some color separately. Like a housing wire and the winding wire which has outpaced in terms of the growth in the last couple of years. Because if I look at both the. Business is quite different margin profile.
One reason is the higher growth is because our base in this housewire was very low earlier, and hence we have got substantial growth. I think now the growth in the wires and cables will be normalized, and I think we should be growing at the similar pace.
Winding wire also did very well for you Sir?
Winding wire is a very side business. It means it's only related to agriculture. It is being mixed with the house wire, but it is a very small segment.
Okay, got it sir. My next question is related to the order book. If I look at order book. Related to the SI voltage which is on the sequential side, if I look at that as little down, do you believe this numbers to improve in the later in the quarter? Come [year].
Sir, on full year basis, we will achieve the top line of close to INR 550 crore- 600 crore in extra-high- voltage power cable s as we have the capacity.
Okay. These numbers to improve with the Commissioning of the Sanand facility. Is it fair understanding?
That will be only next year?
Yeah, right. Thank you, sir, and a ll the best.
Thank you. The next question is from the line of Raman KV from Sequent Investments. Please go ahead.
Hello sir, can you hear me?
Yes .
Yes, you' re audible.
Sir, I have two questions. One is on the export front. You said the export margin. The difference between export margin and domestic margin is 45%. As the Sanand plant operates in Q3, starts operating in Q3 coming to FY 2027, do we expect this margin between domestic and export to increase?
It will increase a little bit. As Anil earlier told, it will take some time, especially one year time, to ramp up the capacity and utilize the capacity to absorb the depreciation over there. It will take time. By the 2027-2028 financial year, when we will be utilizing almost 50%-60% capacity or for [may] plus, then a little bit EBITDA margin will get improved.
Okay sir. My second question is with respect to the Sanand facility. What was the total CapEx spend on this f acility? W hat was the target asset? [audio distortion]
Total CapEx will be close to INR 1,900 crore-2,000 crore in Sanand. In that, initially we will be having the top line capacity of INR 6,000 crore over there because of extra-high- voltage power. Cable will be close to INR 1,200 crore and INR 4,800 crore will be for low-tension and medium voltage power cable capacity over there.
Sir, you said INR 6,000 crore of revenue y ou will be able to generate. I didn't get the second part of.
O ut of INR 6,000 crore, INR 1,200 crore will be for EHV cable capacity and INR 4,800 crore will be for low voltage and medium voltage capacity.
You will be able to generate this in FY 2027?
It will take three years to ramp-up. Yeah. Because whatever capacity we [put in] it will take not for one year. It will take at least [fifty] and a half years. Increase the capacity it takes two years now.
Yes, hello. Hello. Anyone? Yes sir, also I have noticed that in May. You put out a notice that you purchased around 74,000 square meter land in Rajasthan. Can you give any development with respect to that? Is it for the expansion capacity?
That CAPEX will start only after the completion of the Sanand. We bought the two lands recently. One is in Rajasthan, another [audio distortion] also. Chemical land we bought in Sanand also for better integration. The CapEx will start only after the completion of the Sanand project.
Sir, you said by September 2025. Phase I will be started. In phase I, h ow much are you expecting to utilize the capacity?
By September, Anil G just has spoken that by September we will start phase I, so from the third quarter the sales reflection will be there, and extra-high- voltage will start only end of Q1 of the next financial year.
Okay, thank you.
Thank you. The next question is from the line of Akash Jha from [KJ Bell]. Please go ahead.
Hi sir. Congratulations for the greatest settlement. I want to know our CapEx plan, sir. Given the strong cash position, what extension are we looking over the n ext three to five years. Will the majority of CapEx directed towards cables or wires?
We will begin in the wire and cable. Every year we need to invest another INR 600 crore- 700 crore to increase to maintain the 20% offline. We will be completing the Sanand project, and after that we will be starting another project because we are buying the land for that also. A few parcels of land we have already in the [Vadodara]. We will be continuing focusing on the addition of the capacity to enable us to grow at least 19%- 20% year- after- year.
What is the revenue growth target f or this year and EBITDA margin?
This year revenue target growth. We have already given that 18%- 19% growth will be there because the capacity is there according to the capacity. The next year onwards we will be growing 20%+.
And margins outlook sir? .
EBITDA margin will be close to 11%. We'll always talk of EBITDA margin.
Okay. Last one on depreciation, sir. I mean as a Sanand facility begins commissioning, I think from September. So.
Full [depreciation] will only come next year, and by that time the [audio distortion].
In FY 2027.
Because the EHV project will get commissioned only in Q1 next year.
Okay. Got it. Thank you.
Thank you.
Next question. Okay, the next question is from the line of Keyur Pandya from ICICI Prudential Life Insurance Corporation Limited. Please go ahead.
Thank you. Sir, two questions. First, on the capacity side. Till the time our Sanand facility gets commissioned and ramps up, do you see any challenge on the growth side for next two quarters? I'm not talking on de-growth but self or growth because of the capacity constraints. That is first question. Second, in your medium to long- term target of the 20% revenue growth, how do you see export contribution? What would be the growth from the exports? That is second question.
Last year we have spent the amount on the brownfield CapEx in our Silvassa plant and facility plant. As of now we are having our cable capacity implies 74%, 75% only. Every quarter we will grow. That's why we will be growing in the current year 18%- 19%. Since the Sanand capacity will be in place by September, month after month it will be ramping up. In the second half the capacity utilization will start from the tunnel. Also by the next year the whole plant will be ready. We will be easily growing 20% from there.
On the exports?
A s we have already mentioned that our aim is to reach 17% - 18% of our top sales coming to exports in the next two years. Unless we are able to, you know, create this new capacity at Sanand , we will try to ramp- up that.
Okay, just one follow-up. 30% and upwards of 25% growth, 30% growth in cables this quarter and no capacity constraint, plus new plant coming up. Despite that, any reason why you are concerning your guidance to 17%-18% this year?
First of all, quarterly number does not reflect the full year growth. Always we say neither the profit, neither the growth. Because sometimes the quarterly base is low in the second half, always third quarter and fourth quarter base is very, very high. In the cable industry, always we maintain the full year guidance. We as KEI always mention the full year guidance.
Definitely. We are little conservative in giving guidance. Our performance will be far better, I am sure about it.
Okay, thank's a lot, and all the best.
Thank you. The next question is from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead. Sir.
Yeah. Sir, two questions from my end as well. One, you know, just to clarify, when you talk about the revenue growth, I presume you're talking about the overall company growth and not cable and wires. Given we are.
We're always talking company as a whole.
Understood. Given we are descaling in the EPC business, does that mean it's upwards of 24%, 25% growth for the full year for cable and wire segment? That is seeing a 30%, 40% kind of a decline.
Ultimately we are giving the full balance sheet. On full year, full year balance sheet, whatever sale we will be doing, it will be growing 18%- 19% for current EBITDA margin will be close to 11%. These two numbers we are always communicating.
See, as a guidance, it is only a guidance. We have always, you must have seen that we have always performed better than the guidance.
That's correct. That's a fair point. Sir, the second question I had pertaining to the exports, I know the situation is pretty evolving, but as of now, if we were to ask actually, you know, how do we stack up against the competing countries? Specifically for U.S., given that is the new geography we have added, how do we stack up in terms of the tariff vis-à-vis, say, Mexico or China or South Korea, s ir?
U.S. is at the moment a little slow because of this uncertainty of tariffs. You know, our dependence on U.S. is very small at this moment. Our exports to other countries is substantially high, especially Middle East, Australia, Africa, and also Europe now, which we are doing. We are not so much worried about U.S. impact at the moment. We will have to watch out what happens in this quarter. I think something should settle down and that will be beneficial for the company. Our last year exports to U.S. was only, I think, INR 160 crore. It is not that we are highly dependent on U.S.
More important to utilize the capacity, whether we are utilizing the capacity for export or for retail or for domestic institutions.
Right. No, I was coming from the fact that we have the land parcels. If the massive opportunity actually comes up for exports, could there be a possibility for us to participate in that? Obviously, I understand given whatever capacity we have, we'll utilize that. I was just more curious to get the tariff rate on India vis-à-vis Mexico or China or South Korea in the U.S.
As of t oday.
Whatever tariffs have been announced, they have not been actually operationalized or implemented. They are just on paper. I don't think that even any notifications are issued by U.S. government. These are only in the media.
Right, right. How about the customers ex of U.S., how's the demand situation? From the competitive pricing perspective, have you seen anything changing out there as well? or things remain as business as usual?
We are always competitive because our production costs are in the best way as compared to our international fees. If competition is not a problem, it is only a matter of developing that market. The issue is not the competition, the issue is d eveloping the market and getting the product certifications in different categories and acquisition of customers.
Fair point. That's great. Thank you. I'll fall back in the queue, sir. Thank you.
Thank you. The next question is from the line of Shirom Kapur from Jefferies. Please go ahead.
Hi, thanks for the question. Just wanted to focus on exports again, this 17%- 20% contribution that you are referring to. If currently the U.S. market, as you're saying, is a little slow, what is exactly the roadmap that you're looking at to go up to this 20%, which would be the geographies that will drive this, and this high 120% growth that you got in IQ, of course on a low base right now because of the new markets that are added. Once that base settles, what kind of growth could you be looking at in these new markets like U.S. and Europe? Thanks.
As we are continually reminding you that we are not totally dependent on the U.S. or Europe. Our main object is to utilize the capacity, whether we are selling to the domestic market or to the export market. All the fronts we need to open up, because we don't know which geography will be weak or which geography will be strong. Our focus to go towards the export, that is the reason. If that is not there, INR 100 crore, INR 200 crore, [sales] will be less. It will not impact to the company.
Moreover, you know. Even at the moment, you. There is an uncertainty in the U.S. market. It will not remain just be patient maybe two to three months. Then all these things get settled and ultimately, customers over there need material, and there is a strong demand in U.S. Only thing is that they are also waiting because of the uncertainty of the tariff. The projects are slow here because of this uncertainty.
Okay, understood. Thank you, sir.
Thank you. The next question is from the line of Charanjit Singh from DSP. Please go ahead.
Hello sir. Thanks for the opportunity and congratulations on great set of numbers. My question is first on the EHV side on the extra-high- voltage, what is the kind of tender pipeline you're looking like? In terms of the competition from the imports, how that is and how the new capacity is scaling up, how you see that the timelines for those? That's my first question, especially on the EHV side.
There is a tender pipeline. What was the question? I don't know.
New Capacity.
Will come up only after one year. There is a good tender pipeline. I think this sector segment will see a good substantial growth in the coming years. The capacity is being created keeping a vision of next three to five years in the Indian market as well as overseas market.
From the Indian market perspective, can you give some numbers in terms of how large is the EHV market? What's the kind of size it could become in the next three to five years, like you are envisioning and creating the capacities accordingly.
I think at this moment the market size in the EHV segment should be close to INR 3,000 crore. I think in the next three to five years it should, in three years' time, I think it should reach around INR 6,000 crore. It should be growing faster, actually, in my opinion. I don't have any real data to support it.
Got it, sir. My other question is on the wiring side if you can touch upon, you know, the.
One more thing I want to mention is that all our EHV capacity, whatever we are creating, we always, in case EHV orders are not enough, use the capacity for manufacturing HT cables. None of the capacity is idle at any given point.
Got it, sir. The wiring side. Hello. [audio distortion] On the house wires in that market, in terms of our market share currently, and what is our aspiration going forward, and in terms of the distribution network, where we are versus where we had once we started the journey on the house wire side?
[Foreign language] Number of dealer/distributors at [Foreign language] to strengthening of the dealer/distributor team. [Foreign language] That's how this growth is coming. [Foreign language] so overall of north, east [Foreign language] .
Okay sir, thanks for taking my questions. That's all from my side. Thank you.
Thank you Charanjit.
Thank you. The next question is from the line of Rahul Maheshwari from Dolat Asset Management. Please go ahead.
Hello. Am I audible?
Yes, you're now audible..
Good afternoon sir and congratulations on the best set of numbers. Sir, one question. Can you give some highlights and types on the solar speciality cables, which what kind of numbers are we clocking? Also, we had earlier told that the Sanand facility will be used also for the HVDC opportunity which would be coming. Can you give some opportunity file numbers or TAM that will be very helpful. Thank you.
I'll reply t his. Solar, we are already catering to all the major solar developers all over the country and even we are exporting solar wires n ow. I n Sanand facility, we are also creating a new process to manufacture solar wire, which is electron beam process, radiation process. That also we are creating so that our size of scale in this segment grows up because many customers ask for that kind of process to be adopted during manufacturing. Secondly, regarding HVDC cables, HVDC cables is an upcoming segment in Indian transmission sector. It will take a little bit time to get a substantial growth in this segment. What facilities, what we are creating in Sanand, that is common for HVAC and HVDC cables. HVAC, which we are presently manufacturing for last 15 years and selling in Indian market and also exporting. HVDC is in prevalence in many European and [U.K.] countries.
In India also, a number of HVDC projects has been executed but with imported cables. What I can say is our facility will be fully used for HVAC and HVDC high-voltage cables. It is difficult to quantify because HVDC will take a little time, maybe around two years for us to develop our pre-qualification and type tests, etcetera, which are long duration tests. At this moment, it is difficult to give any projections for HVDC.
Sure. Sir, just want to know, can you give some growth, what kind of growth rate we are growing in this specialty solar specialty cables and etcetera? Also, going forward, will we just stick with the wires and cables or will we be coming with the solar related products also because the entire industry is moving towards that chain. What's your proposition for KEI?
We will remain focused on wire and cable business whether for solar or for other industries. We don't intend to, you know, diversify other item chains of solar industry. I think in solar the growth rate is very high, but I don't have the exact data that how much is the solar. Definitely, the growth rate in solar with the solar developers is very, very high.
Thank you so much sir. Best [wishes].
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Thanks for the opportunity. My first question is on the domestic institutional cable business. We've seen KEI's been very well in this. Just want some color on which sectors have contributed to growth, and even from an FY 2026 perspective, from a technical activity, which sectors you know are likely to drive growth for KEI? That's [audio distortion]
The major institutional sale of cable is coming from power transmission and distribution companies and related EPC contractors. Secondly, EPC solar power developing companies who are creating and developing solar power projects and related power evacuation infrastructure. The majority of and also the other institutional customers who execute or EPC contractors who execute projects in power generation projects whether it is thermal, hydel, or projects like thermal ventilation and other projects. Cables always go into some project. Only thing is how they are selling. Sometimes we sell it directly, our B2B, that means business to business, where we sell directly to the end customer. Sometimes same sales we are doing through the dealers who are, but ultimately the user will be some project. I think I am clear.
Yes. Yes. T his point, is your sense that these sectors are doing [very well] ? Power has been historically also one of the key.
All segments of the energy sector, whether power transmission, generation, distribution in power, whether it is thermal power projects which are now again coming up in a big way, solar power is now at the peak at this moment, and related infrastructure of solar power like battery energy storage projects. I think in one to two years we will see a substantial segment of pump storage projects which will be in an advanced stage. Data centers, which consume a good amount of, and then this building construction, commercial, hospital, and other infrastructure buildings, they also consume a substantial amount of wires and cable, and new manufacturing plant infrastructure plants like metro, rails, and railways.
Got it sir, the second question is on the housing wire side. Over the last few years KEI has been outperforming the market given that you were late entrants , but now that this has become a substantially large, you know, player in the housing wire market, just wanted to get your thoughts, like, say, you know, how, you know, when does this growth start to normalize? Do you still have that, say, the next two or three years? You still believe that in the housing side you can grow at 20%- 25% rate, or if you start normalizing towards, you know, the company level 18%- 20% sort of growth in the next, say, one or two years.
I don't know what happens after two years, but as of today, I believe that we should grow around 20%- 25% in this segment.
Got it. Thank you so much, and all the best.
Thank you. The next question is from the line of Amit Agicha from HG Hawa. Please go ahead.
Good afternoon sir, and congratulations for good set of numbers YoY. Most of the questions have been answered. I will be asking this last question: the strong cash position, are there any plans for dividend, buyback, or M&A?
As of now we are doing the CapEx expansion mode, and we need to spend another INR 500 crore- 700 crore after year. Once we will do this completion, the expansion, and then after two, three years we can think, but as of now, that is a no.
Sir, the second question related to the order book, pending order book, which is INR 3,921 crore, what is the execution pipeline and visibility across the quarters?
Normally, whenever we have the institutional order, whether domestic or from export, it has to be executed within three to four months time. Sometimes it may take five months also, but normally every pending order situation is three to four months only.
I appreciate you answering my questions all the best for future.
Thank you.
The next question is from the line of Nikhil Purohit from Fident Asset Management. Please go ahead.
Hi, thanks for the opportunity. J ust one question. What was the cable share inclusive of exports in the institution business and the cable share in the distribution, the B2C business?
In the domestic, in the export, we are selling mainly wire and cable only because the skill list will vary very little amount, and in export market, major share is for cable and wire. There is a little bit share for EPC project going on in the Gambia and Nepal. The major share is belong to cable itself.
The major share is cable in the export business?
Yes.
Okay. In just B2C, what is the cable share?
It will be almost B2C [crosstalk] a lot , sometimes little bit higher, little bit lower, but almost fifty-fifty.
Okay, got it. Thank you.
The next question is from the line of Balas ubramaniam from Arihant Capital. Please go ahead.
Good afternoon, sir. I think we have a dealer/distribution network of more than 2,000. We could share the mix of south, west, north, and east side. Right now we have a channel financing coverage of 70%. Is there any timeline, is there any target to increase and how h the timeline?
There is no timeline. Whenever we add new dealer/distributor. [audio distortion] has been covered. Slowly, slowly, whenever there are new dealer disputes which are getting added, they will be also included in external financing scheme. [audio distortion]
Sir, on that network side, you can share like a [percentage] terms, like where we have penetrated more and where we are targeting.
Please repeat your question.
Out of 2,000 + dealer/distribution channel side, if you could share costly [chance] like south, west, north, and east, where we have penetrated more and.
To increase our dealer/distribution network in the southern and eastern part, but long miles to go, so it will take longer time to reach out to every market.
The next question is from the line of Vidit Prayedi from Asian Market Securities. Please go ahead.
Thanks for the follow-up question. You just mentioned that Middle Eastern and the Australian geographies are a stronghold for you. Recently, I think China and Australia have entered into a geo- tariff policy. Do you think there will be a headwind for us when we compete with China and Australian markets?
Australia. China is already a strong player in the Australian market for many years, and they have better proximity compared to India. In spite of that, we have been exporting our cables to Australia for more than 11 years now. I don't think China is anything new; they are already there.
What are the three top destinations for us?
Middle East, Australia, and Africa? First on this, the Europe and U.S.A.
Thanks a lot. Sir, second on the EBITDA margin guidance, you have been guiding that close to 11% is quite doable. My question is that you know you guys are eyeing a top line, sorry, EBITDA, sorry, exports contribution of close to 18% in the coming few years. Don't you think that our guidance can inch up from here? Let's say 11.5% or 12%-ish kind of a number.
When it will reach to 18%, it will automatically come up to 11.5 or maybe more. It automatically will come.
Thanks a lot, sir.
Thank you. Ladies and gentlemen, this was the last question for today. I hand the conference over to the management for closing comments. Over to you, sir.
I thank you, our respected investors, to be on this conference call. We are always available to answer any of your queries. You may feel free to reach out to us. Thank you very much.
Thank you, everyone.
On behalf of Nuvama Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.