Ladies and gentlemen, good afternoon, and welcome to the KEI Industries Q3 FY 2026 earnings conference call hosted by Nuvama Institutional Equities. As a reminder, all participant lines will remain 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 the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Achal Lohade from Nuvama Institutional Equities for opening remarks. Thank you, and over to you.
Yes, thank you, Ryan. Good afternoon, everyone. On behalf of Nuvama Institutional Equities, we are glad to host the senior management of KEI Industries Limited. To discuss the Q3 FY 2026 earnings, we have with us Mr. Anil Gupta, Chairman and Managing Director of the company. Mr. Rajeev Gupta, Executive Director of Finance and CFO. We'll start the call with the opening remarks from the management and then move to Q&A session. Thank you, and over to you, sir.
Yeah, good morning. Thank you for joining this conference call. I'm Anil Gupta, CMD of KEI Industries Limited. The brief of this quarter, the Q3, is net sales. You must have reviewed the numbers, but I'll just brief it. Net sales in Q3 is INR 2,954 crore, with a growth in net sale is 19.51%. EBITDA in this quarter is INR 354 crore against INR 254 crore last year, with a growth of 39%. EBITDA/net sales margin is around 12%, as against 10.29% in the same period last year. Profit after tax is INR 234.86 crore against INR 164 crore last year. Growth in PAT is 42.5%. Profit after tax/net sales margin is 7.95% versus 6.67%. Domestic institutional cable sale, wires and cable, is INR 592 crore, and domestic institutional cable sale, extra high voltage cable, is INR 127 crore.
Export sale in this quarter is INR 544 crore, and overall growth in the wire and cable export is 95% in this quarter. Total institutional cable sale contribution is 41%, as against 45% in previous year's same period. Sales through distribution network, that is B2C, was INR 1,612 crore, with a growth of 29%. B2C sale contribution is 55% in the third quarter, as against 50% in the previous year's same period. EPC sale other than INR 60 crore was INR 60 crore last year.
Industrial wires sale INR 53 crore against INR 64 crore last year. For nine months' period, from April to December, net sales is INR 8,271 crore. The growth of 21.26%. EBITDA nine months INR 963 crore. The growth in EBITDA in nine months is around 33%. EBITDA/net sales margin is 11.64%. Profit after tax in nine months is INR 34 crore. Profit after tax/net sales margin is 7.67%.
Domestic institutional cable sales is INR 1,884 crore, and extra-high voltage sales is INR 371 crore. Export sales in nine months is INR 1,390 crore, so overall growth in the export is 79%. Total cable institutional sales contribution in nine months is 42%, as against 41% same period last year, and B2C contribution is INR 4,413 crore, so the growth is 23%. The total active working capital of the company as of 31st December is INR 2,114.
B2C sales contribution is at par at 53% in nine-month period. EPC sales is INR 188 crore, and stainless steel wire sales is INR 157 crore, against INR 166 crore last year. Total order book position as of 31st December 2025 is INR 3,928 crore, out of which EPC is INR 361 crore, extra-high voltage cable INR 717 crore, domestic cables INR 2,426 crore, export orders INR 424 crore, and total wire and cable segment INR 3,567 crore.
Future outlook, and during nine-month period, company has incurred a total capital expenditure of INR 928 crore. Out of this, CapEx in Sanand is INR 769 crore. Salarpur for buying a land, INR 72 crore. Sanand, another land has been purchased at a cost of INR 24 crore, and other locations, other plants and locations for plant and machinery, INR 63 crore. The total CapEx payment incurred for Sanand until now is total INR 1,353 crore. Another INR 200 crore will be spent in this quarter, and balance will be spent in next financial year. Company is hopeful to achieve 20% + growth in full year period, and also will improve our operating margin in FY 2025/2026. Considering Phase I commercial production at Sanand and strong order book of domestic institutional cable sales, export orders, and extra high voltage cable as on date.
After completing the Sanand project and the strong demand in domestic and overseas markets, we are hopeful to grow more than 20% in next CAGR in next three to four years. I would like to highlight that at present, we are very strong in the institutional cable market, whether it is domestic or export. KEI is the first Indian company to supply several projects of extra high voltage cables, 330 kV cables to Australia, and also supplied a total of 220 kV cables to UAE and Spain. KEI is the only Indian company to qualify in National Grid U.K. framework agreement for maximum voltages up to 400 kV. We have expanded our reach to Caribbean islands and supplying to West Indies and many other neighboring countries. In domestic market, we are supplying to the entire solar power chain, including Reliance Polysilicon factory at Jamnagar.
In UAE, KEI has that key contract for supply of 132 kV cables and gaining acceptance as an extra-high voltage cable manufacturer in the Middle East, so this is a brief summary about the results from my side, and we're now requested to put your question back to answers.
Thank you. Ladies and gentlemen, 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 their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Rahul Agarwal from Ikigai Asset Management. Please go ahead.
Hi sir, very good afternoon. Thanks for the opportunity. Sir, three questions. Firstly, to understand the Sanand ramp-up plan, and if you could elaborate between the segments. I understand that LT/HT is going to be a larger portion of this plant, and EHV will add another INR 1,200 crore of peak sales. So over 2027, 2028, 2029, just wanted to know next three years, how do you plan to ramp up Sanand sales? What products come first? What comes later? If we just break it into three years, that will help. That's the first question.
Okay. So LT/HT, we have just started trial production in December, and gradually in this quarter, January, February, March, we ramped up. By April, we expect that our electron beam equipment to manufacture electron beam cured solar wires will be commissioned, and that will add another boost to this plant. So far as extra high voltage cable is concerned, and we will also be ramping up our medium voltage cable capacities further by July or August, but extra high voltage cable facilities will come up by March 2027. So this is going to be the ramp-up. So in next financial year, the project will be complete in all respects.
Got it, sir. So overall, should I assume that to achieve this, your plan is to spend INR 2,000 crore? This should make at least 3x-3.5x asset turns. We were talking about INR 6,000 crore top line. Should happen sometime in March 2029? By FY 2029, we should achieve this entire INR 6,000 crore incremental top line. Is that fair understanding?
Yes, yes. Absolutely.
Okay. And second question was on the capitalization of the CapEx. I understand that, as you said, LT/HT trial production started in December, and we have incurred a CapEx of about INR 800 crore in nine months on Sanand, right? The balance, INR 500 crore was last year. So about INR 1,300 crore of CapEx is done till date. How much is capitalized till December of 2025?
Basically, we capitalize around INR 550 crore, and balance will be capitalized when this machinery will get started, as Anil G had spoken about, the control cables and the electron beam in April, and then more machinery in medium voltage in the month of July or August. So accordingly, it will be capitalized in the books of account. But the whole plant will be capitalized by March 2027.
Okay. So out of the entire INR 2,000 crore, how much would be the land cost, sir? I mean, we will exclude that for capitalization.
Land cost was originally INR 140 crore.
Right. The balance will get depreciated on a full CapEx basis from fiscal 2028. Is that correct?
28. Yes, yes.
Okay. Perfect, sir.
The depreciation load will not come in one year, actually, next financial year, because it is in the phased manner, so it will completely come only in 2028.
That would be about 5% of INR 2,000 crore, right? About INR 100 crores. Is that fair?
But in 2028, the top line will also be from there. Alone will be close to INR 5,000 crore.
Yes, I understand that. Yeah, yeah.
Yes.
The third question was just to go back to Anil G's commentary. We're expecting 20% growth for top line full year. I think we've done similar 21% in nine months, and we've seen very sharp rise in copper in December. So just to understand, why are we conservative here?
So I think the growth this quarter should be anywhere between around 25% +. So we are trying to quantify it in a better manner. But definitely, because of the increase in the copper prices, it will be anywhere more than 25% in this quarter.
Right, right. Got it, sir. Got it, and margins, you've already mentioned that in two years' time, you should see about 100 basis points adding up at EBITDA level. Do you retain that guidance?
Yes, yes. I think we have already given a guidance, and next year, we expect to achieve EBITDA margins of around 11% overall for the full year.
Got it, sir. Thank you so much, and wish you all the luck for the next year. I'll come back in the queue.
Thank you, Rahul.
Thank you. We take the next question from the line of Natasha Jain from PhillipCapital. Please go ahead.
Thank you for the opportunity, sir. Sir, my first question is on the hedging side. So assuming that 50% or rather 40% of your entire raw metal cost is metal cost, and you are exporting approximately 20%, so that's naturally hedged. For the remaining 20%, I would like to know, do we purchase it spot or do we hedge the entire exposure?
We don't hedge. We are working at a natural hedge. We are carrying three to four months inventory, three to four months pending order from the institution side, and we are carrying two and a half months plus inventory in our floor and one month inventory during the transit period because we are importing.
Also, we are mainly 85% of our metals we are buying from Hindalco and Vedanta domestically. The purchase is in rupees. Here, the foreign exchange exposure doesn't come into the picture. We are working under natural hedge as we were guiding you in the past also.
Got it. So now, if I sequentially see your number, the growth has been moderate. I understand there has been a volume constraint. But then if I see your EBIT margin sequentially also, there's a sharp increase. Now, you have historically mentioned your EBITDA margin is usually in a range across your categories. So if I then calculate the EBITDA just sequentially, the growth is still very high. So could it be possible that because you just said that you have inventory for a longer period of time, so did we also get a benefit of low-cost inventory in this quarter?
Normally, whenever we talk of a particular quarter, in the past also, when the sudden movement of the price of the copper either upside or downside, there may be increase or decrease by 0.5%-1%. But for a full year basis, as we have earlier guided that we will improve our operating margin, which we are seeing from the last year, and year after year, we are going to improve because of the capacity we are getting increased, and the product mix like extra high voltage and the segment like export is increasing, so it is helping us to improve our EBITDA margin.
Understood, and sir, one last question. In terms of wires, how do you see the channel right now? Is it stuffed to more than which is required, or do you think that fourth quarter will continue to see margin growth for wires?
Year- after- year, in the wiring segment also, we are growing more than 22%-23%. So that will remain continued for a full year basis.
Understood. Thank you so much, sir. All the best.
Thank you. We take the next question from the line of Somil Mehta from Kotak Mutual Fund. Please go ahead.
Yeah, sir, thanks for the opportunity. So first thing, what is the total inflation what we saw on the raw material side for the last quarter, and how much was already passed on to the cables and wires clients? If you can just broadly quantify.
Sir, as we said that we always carry two and a half months inventory on floor and one month inventory in transit, as against that three to four months pending order position from the institution side, either from domestic or export. So practically, old order served with the old inventory. But with the retail market, in every 15 days, the retail price will up or down depending on the price movement. So practically, everything is passed on.
Okay. And if you can just tell in the quarter which is currently going on, January, February, March, what are the kind of price hikes you've taken in the retail markets, given copper is on an inflationary trend?
The required increase in the list prices of cables and wires has already been done, and now, effectively, the sale is happening at the current average prices of copper and aluminum prevailing in January.
It is the normal routine, actually. Whenever copper goes up, price goes up. Copper goes down, price goes down. It's a normal practice adopted by all the industry players.
No, no, Rajeev ji, that I understand. I just want to understand kitna price hike ho chuka hai. I'm not worried about ki price hike pass on hoga ki nahi hoga. I'm just trying to understand ki prices kitne badh chuke hain retail markets mein.
[Foreign language] wire के जो अगर price में देखूं, तो पिछले दो महीने में around 15% के करीब price rise हुआ है in the selling prices. And in cables, effective December, actually, major price increases have started from December. So December or January में overall, I can see that 10% rise हुआ है cable के prices में.
[Foreign language] Cable ke price mein 10, wire mein jyada hai. Sir, my last question is in terms of when you're giving a 20% + guidance for next year and a 25%+ for Q4, is this more of a volume guidance or a value? And broadly, what is the copper price increase what we are building?
See, I can say that volume guidance will be there anywhere between 16%-18%. And plus the price inflation due to input price inflation in the inputs will be added. So the actual growth should come more than that.
Perfect, perfect. [Foreign language] ठीक है, sir. Thank you so much, and all the best for subsequent quarters.
Thank you. We take the next question from the line of Anupam Goswami from SUD Life Insurance. Please go ahead.
Hi, sir. Good morning. Sir, just one overall, what we've seen in the industry of a growth of more than 20%-30%, while our growth has been 20%. How do we see this versus the entire industry and volume growth and value breakup, how it looks like, sir, in this quarter?
Sir, our capacity in cables was almost at the peak level. So whatever, so we could not grow much in cable segment. We grew our volumes by around 10% in cables and in wires more than that. Maybe in the other piece, like Havells, they commissioned their Tumkur new cable factory around nine months or one year back. So they could increase their volumes from there. We have been able to commission our Sanand facility, and the contribution from that will come in this quarter into our Q4.
Okay. Sir, if you can just quantify how much capacity has been added by the Sanand?
The capacity what we have commissioned is around, at the moment, INR 250 crore a month in Sanand. The half of the capacity has been commissioned. This capacity will come into production gradually as we are doing the ramp-up with the induction of manpower in all the departments. Also, one by one machines are being commissioned and put into production. Secondly, initial one or two months in any cable factory goes into the obtaining a lot of type tests conducted on cables by different agencies, visits by the customers, and also obtaining BIS license. So that.
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Ladies and gentlemen, we have reconnected the management. Sir, you may proceed.
Yeah, sorry. Some question was there.
Anupam, if you can please repeat your question.
Hi, sir. Sir, capacity, what we have added, you were saying about INR 250 crores a month, and BIS certification, what is required, and it would be ramped up gradually as you were saying?
Yeah, yeah. So we have already obtained the BIS license for low-tension cables already, which have come. And for HT cable, it is expected to be received by end of January. So we are doing all possible things to bring the contribution from new facility. And I can assure you that with our experience of running a cable industry for the last around 50 years, it will be ramped up very shortly. It is just we need some basic approvals, which are essential to sell.
Got it, sir. Thank you.
Yeah.
Thank you. We take the next question from the line of Keyur Pandya from ICICI Prudential Life Insurance Company Limited. Please go ahead.
Thank you for the opportunity. Sir, two questions. First, on this INR 250 crore a month kind of capacity, and that would get added gradually, and there will be some addition during FY 2027. Now, just based on this INR 250 crore capacity, when do you think that you would be able to utilize a significant proportion by what time? That is the first question. And second, since the plant has come or the OpEx may be upfront and ramp-up may be gradual, do you think at the segment EBIT level, that is cable and wire segment level, our EBIT margin can come down because of the depreciation and some OpEx during FY 2027?
Next year also, from the Sanand itself, we will have the turnover close to INR 2,700 crore from the Sanand itself. And whatever depreciation will be there, it will be absorbed. So we don't guide or we don't think that our EBIT margin will go down.
Understood. And just last question on the demand side, are you seeing any deceleration in T&D or any other large consumer industry CapEx? I'm not talking about degrowth, but deceleration from either because of the high base of past few years or because of the high prices of commodity, not only cables, but even otherwise all the other raw materials. Thank you.
See, as of now, we don't see any deceleration in the demand for cables. You see, prices really do not affect the project. The project is going on. It's coming in. I mean, maybe for a month or so, the decision-making may stop, but ultimately, that product has to be purchased to complete the project. And I don't think that energy sector will see slowdown because of the exceptional energy demand required by industries, households, and data centers, and other consumers. So I mean, we don't expect any letdown in the demand.
Noted. All the best. Thank you.
Thank you. We take the next question from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Yeah, sir, just a quick clarification. If you could talk a little bit about the competition like we have seen, some of the new entrants in wires. You also mentioned competition in your media interview in the morning. So if you could a little bit give us some more sense on the competition for both cables and wires from the new competition.
Yeah. Okay, so I'll just brief you about that. You see, in the last one year, we have seen a few new entrants on an India basis like Torrent, Surya Roshni, V-Guard, etc., and a few other small companies entering wire segment, but our present growth is in spite of all these competitions. Our major strength is product performance and brand image. Any newcomer takes around five to seven years to build up that brand image and product performance. We are also price competitive, so we are already operating in a very, very competitive market. We are already having substantial capacity and good, hence we have good purchasing power, and our fixed overheads are very, very low because of the large volumes as compared to the new players. The demand itself is growing by around 13%-14%.
So the new players will also get adjusted in the next few years apart from giving existing players a growth. Secondly, in this, we are offering a full basket of products like cables, flexible wires, telephone cables for residential buildings, LAN cables, solar wires, and we are approved with leading consultants and architects. So this kind of complete basket, whosoever new entrant is coming, for them to conceptualize all this will take a long time. So we will always have an edge over them, and we will be able to deal with this competition. The creation of a network required to reach reasonable scale is at least four to five years. Even the distribution network, what you need, and the manpower you need to create this network, that also takes adequate time. And the market is also growing.
The rest, what is in store in the future, nobody can see. The last 13-14 years, even the KEI has reached only towards INR 3,500 crore-INR 4,000 crore wire sales. So it took us almost more than a decade to reach this level.
Fair point. Any comment on the cable front as well, sir, apart from wires?
Cables front, I mean, I don't see there is any new player coming into the cable segment, and with our strong presence with the projects and the exports, I don't see any deceleration in that.
Whether pre-qualification is required by anyone coming in for the cable? Not for approval.
Sorry, just to hop on this wire thing. We also have recently Bajaj announced foray into wires. So is probably Crompton also could is what there is speculation. So given these are electrical companies, appliances companies, they have an element of distribution already in place. So how do you defend or how do you see that playing out in terms of volume or pricing for the industry and us as well?
Sir, they are coming up with, I think, in my opinion, with the outsourcing model, and so far as my experience is concerned, in wires and cables, outsourcing model will not work, and already there are three, four companies those who have already come, even though all the existing companies have grown very well, even after this competition.
Understood. Okay. I'll fall back in the queue, sir. Thank you so much.
Thank you. We take the next question from the line of Pulkit Patni from Goldman Sachs. Please go ahead.
Sir, thank you for taking my questions. Sir, two of them. So first is in continuation of Achal's question, and you did allude to it. Why do you think the outsourcing model in wires will not work? That would be the first question, sir.
This is my opinion. It is not. It has not so far been tested by anyone. So let's see whether it will work or not. I mean, it is my opinion that because this market is very competitive, and after paying the manufacturing cost, etc., and other profits to a contract manufacturer, I don't think that just by brand, you can earn too much of margin. And even a newcomer will have to build up the brand in the wire segment, which is a good case scenario for at least five-to-seven years. You can't build up brand overnight.
Sure, sir. So my second question is on your margin guidance. So just to sort of break it down, you have a large capacity that is coming on stream. I'm guessing there'll be some negative operating leverage because of that. Plus, you have a big focus on export, which is higher margin. As a combination of all these, you are guiding for margins to improve. Is that a fair assessment, or is that underlying assumption something wrong?
No, no. It is a fair assessment, and we are giving a margin guidance based on the combination of domestic as well as export market.
Very clear, sir. Thank you.
Thank you. We take the next question from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah, thank you so much for the opportunity. My first question is, in your overall volume growth for this quarter, is there any bit of inventory destocking that has happened, or is it all pure growth?
It is normally pure growth because quarter on quarter, we are giving the numbers, and quarter on quarter, we are guiding. But inventory in the channel by a dealer distributor does not cap more than 15-20 days. So that is for them also, it is a routine nature of work.
But because the raw material prices went up exceptionally, do you think there has been some inventory stocking?
Sorry, it is applicable to all the quarters because in the second quarter also, it was increased. In the first quarter, it has also increased. In the third quarter, it has also increased. So the continuous pricing is increasing. So this means it is automatically set up in the system.
Okay. My second question is on the export side. You've done now four quarters of very, very strong growth. Is there room to do similar sort of very, very high growth for the next few quarters, or do you think you've reached a base and you've tapped more or less the opportunities to do more 20% kind of growth that you're guiding for the full business? Or should we still expect growth to be very, very fast like you've delivered over the last four quarters?
Sir, world markets are very, very big. I mean, from India, what we are exporting is just a peanut. It depends on how much we are able to explore and exert ourselves into large economies.
Yeah. So in your trained mind, that number can continue into the next few cycles?
But I don't say that every year we can double, but we still see a strong growth for the next few years until we reach a reasonable level of market.
Understood. That's very helpful. And lastly, if you can give some sense of what is the existing capacity utilization for your various units?
The utilization of capacity is close to 76% in the cable division.
Okay. That's all from my side. Thank you so much.
Thank you. We take the next question from the line of Praveen Sahay from Prabhudas Lilladher Capital. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Sir, you said related to the volume growth, 16%-18%. For a way forward, you are looking at as a volume growth? And how has it been in the third quarter?
The third quarter, Anilji has said that close to 10%-11% was the growth. Because if you see, sometimes this volume gets exchanged between the copper and aluminum. The price of the copper is three times more than the aluminum cable. So exactly reflection, replica, it cannot be quarter to quarter can be guessed because in some quarter, aluminum cable orders are more. So then the volume may see more. But in terms of value, it is 1/3. In terms of the copper, when we get the copper most, like from export market, the copper is more. So then the value will be high, but the volume will not look like aluminum.
Right, right, sir. Got it, got it. Sir, second, related to the LT cable, because the LT cable for a quarter, a couple of quarters, we are seeing there is a dip in the revenue. So is that the I can understand there is a fungibility in the capacities, but is there a demand impact, or is that the capacity impact in the LT cable?
Last year, extra high-voltage power cable capacity was utilized for LT power cable. So that's why comparatively, the reflection is like that. So now the extra high-voltage order is very high nowadays. So extra high-voltage power cable is being manufactured on extra high-voltage. So no high voltage is manufactured on extra high voltage now. So that's why that is there. Because the capacity is very common.
But with the southern capacity, which is up and running, first phase, is there a possibility of HT cable to improve from here?
Yes, yes. Absolutely. Absolutely. It will be substantially improved. Sir, you see, we are always talking about the growth of 20% + CAGR growth, not for one quarter or for one year. Even in the 2021, 2022, 2023, when the prices of copper were not increasing, rather decreasing, or aluminum price decreasing, at that time also, we were growing by 19%. So we are not related to the price increase or decrease. Rather than we are more focused towards the value growth so that a disciplined growth we can maintain actually.
Right, sir. Lastly, on the order book bifurcation, if you can give an EPC extra-high voltage domestic cable, how is it?
Order book, just Anilji has told, I will repeat that. It's a total order book is INR 3,928 crore, out of which EPC order book is INR 361 crore, and extra-high voltage power cable is INR 717 crore. Domestic cable order is INR 2,426 crore. Export cable order is INR 424 crore. Total is INR 3,928 crore.
Thank you, sir, and all the best.
Thank you. We take the next question from the line of Kunal Sheth from B&K Securities. Please go ahead.
Yeah. Hi. Thank you for the opportunity, sir. Most of my questions have been answered. Just one clarification. As an export, do we have any particular benchmark in mind in terms of we want to restrict it to, say, 15%-20% of sale, or it will be based on opportunity? Do we have any such number in mind?
Sir, we are growing depending on the capacity. As our capacity is increasing, we are growing. That's how we have given the guidance originally, 20% CAGR. But if some prices are increased, definitely that impact will come in the future.
Sir, referring more to export as a percentage, I'm sorry. Is there a number that we are looking at that we want to restrict export to a certain percentage, or?
Export, Anilji has earlier said.
No, no, no. There is no restriction that will stop at that level. We will see where the sky is the limit where we can go.
But ultimately, the capacity we need to utilize. Whatever capacity will be there, either we can utilize in export or in retail or in domestic. It cannot be that export should also increase or domestic also increase and retail increase, because we have to grow ultimately with the capacity.
Right, sir. But sir, realistically, what could be the share of export, say, in two years?
Close to more than 20%, Anilji has already visualized, and
but we will definitely be aiming for more. But as soon as we get more visibility, we can give better guidance. This year, we are hit by exports to the U.S., which was started last year. So ultimately, in these uncertain times of geopolitics, it is very difficult to comment on what a leader is thinking in other countries.
Of course. And sir, this quarter, which were the major countries that we have exported to?
We have been exporting to Europe now. We are exporting to Australia. We are exporting to the Middle East and Africa. The U.S. at the moment is on hold because of the tariff.
Thank you. We take the next question from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Thank you for the follow-up. Sir, just one question. If I exclude Sanand, could you please help me understand the existing capacity in terms of sale value for LT, HT, EHV, and house wire? How much peak sales can we achieve out of the existing capacity?
No, no. It is already we have already reached peak. So there's no more. INR 12,000 crore-INR 12,500 crore capacity other than the Sanand.
Sorry, sir, I missed that number. INR 12,500 crores?
Yeah. So that is the capacity total. Other than Sanand.
Other than Sanand, right? And any expansion brownfields, are you planning apart from Sanand over the next two to three years?
Yeah. That has already been planned. And after the Sanand, even the next financial year, we will be going to start in our Bhiwadi. But that will be in the planning stage as of now.
A new project on a new land?
New land, which we bought in the current financial year with an investment of INR 92 crore. And after that, we are already acquiring the land in Baroda, around close to 70-acre land. We are accumulating there. So in the next three to four years, our planning is to invest another INR 2,000 crore apart from Sanand.
Okay. Got it. So this.
That's all.
Right. So in terms of.
So this, we are targeting close to a 20% CAGR growth for the next four to five years.
I understand that. So this 12,500 is existing capacity plus the brownfield whenever they start and plus Sanand. Is that correct?
Yes.
Okay. Thank you so much, sir. All the best.
Thank you. We take the next question from the line of Vidit Trivedi from Asian Market Securities. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Most of the questions have been answered. Just wanted to know, what's the asset turn in wires and what's the asset turn in cables?
So in cable, asset turn is close to 1:4, and in wire, maybe asset turn is close to 1:5 or 1:6.
It will be more than 1:6. It's 1:7.
1:6 or maybe 1:7 when the brownfield CapEx is going on there. That's when I've been calling around. Conference calls are going.
Got it, sir. Thanks a lot.
Thank you. We take the next question from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Yeah. No, sir.
Sakeet?
Yeah. No, sir. You can hear me?
No, sir.
Yeah. No, sir.
Yes, yes. Sir.
Yeah, yeah, sir. Just to summarize, sir, if you could just give us some color on the landscape, especially for the EHV cable segment in terms of the current demand with respect to the renewable segment growth is propelling in the segment and the capacity in the country and the key players who are participating in this journey, including KEI. If you could just give us some more color. And then there were some talks of some easing by the Government of India in allowing Chinese players to participate in government projects and in power utilities also because of some shortages in the power segment, especially in putting up this renewable infrastructure. So how do we stand there? And any update you would like to share on these two aspects, sir?
Government has been talking of allowing Chinese in some segments like transformers or some high-voltage equipment where there is a real shortage and delivery periods from existing manufacturers are very long, maybe two years or three years. In cable segment, there is no such issue, and there are four or five significant players now in the EHV segment also, like KEI, Universal Cables, Sterlite, LS Cable, and with the bulk of this product, I don't think that Chinese cable manufacturers can compete with us in the Indian market because of the disadvantages there.
[Foreign language] Sir, agar hum demand aur capacity ke vishay par agar dhyan dein to abhi kya demand hai on the anvil and jo aap expect bhi kar rahe hain going ahead? And currently, if we take you mentioned four players name, capacity-wise, sir, how do we rank? And abhi further aap ke jo competitors hain, un ki capacity additions kya aa rahi hain aage?
See, we have almost 25% of the total capacity in line with other four. And new capacity, which is coming up, I don't think that anybody is putting up an EHV plant, especially only for EHV. There might be a dual purpose of manufacturing EHV and HT cable. So it's quantification we will do and we'll let you know.
Okay. Because what is there in the public domain is that player like which you mentioned, Universal Cables, is also coming up with CapEx and setting up new capacity for EHV. That was the reason I asked you the question. Sir, and then secondly, sir, in terms of the compounding part, the Sioplas compound or the PVC compound which are required, are we sourcing it domestically or are these imported, sir?
Sir.
Especially in terms of the higher cables?
Some special high-voltage compounds we are importing because nobody manufactures it in India. But for medium voltage, for low voltage, XLPE and PVC compound, we are manufacturing ourselves. We have already done a lot of backward integration in our company. We are almost manufacturing 3,000 tons of PVC every month and close to 1,000 tons of XLPE compound, which is used in LT cables and solar wires and low-tension control cables within our plant.
Okay. Because there are also dominant players like Payal Plastics and are seeking impediment from various players in the higher KV segment. So are we a customer to them? And thereby also, as we ramp up to the higher KV in the EHV segment, they can be a prominent or a trusted supplier?
Yeah, yeah. We are buying from Payal Plastic. Our requirements for medium voltage cables are up to from 11 kV to 66 kV. But beyond these voltages, all the compounds are imported from Borealis or Dow Chemicals.
Right, right, sir. And lastly, sir, on the further CapEx, which you just outlined, further INR 2,000 crore, can you give us some color which segments are you articulating the expansion? And sir, if you could give me one pending point was, sir, how is the demand supply currently for the EHV capacity, whichever you are ramping up and other players also? How is the demand supply gap currently and two years down the line also?
Sir, the demand for EHV cable is continuously rising for evacuation of power from renewable sources and new projects which are coming up in the power generation side and improving the transmission infrastructure. We really don't have at the moment any quantification of that, but we will try to compile the data and come back to you.
[Foreign language] ठीक है, Sir. और वो वाला जो next CapEx है, उसका breakup अगर बताते हैं INR 2,000 crore का?
It is on a drawing board. It will be cleared in the next. It will be finalized in the next six months.
[Foreign language] बहुत धन्यवाद, sir, आपका, and all the best to the team. Thank you, sir.
Thank you.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. We take the next question from the line of Amit Agicha from H.G. Hawa & Co. Please go ahead.
Yeah. Good afternoon, sir, and congratulations for a good set of numbers. And thank you for the opportunity. Sir, with over 2,100 dealers, what is the optimal dealer count, and how do you ensure dealer productivity rather than just expansion?
Sir, we are definitely not expanding the dealers too much. In these 2,500 dealers, 2,100 dealers, I think around 100 dealers are very big. But the rest of the dealers, they operate in the small towns and small B2C, B and C types cities. There, the dealer sizes are anywhere between INR 1 crore to INR 3 crore or INR 5 crore. So that is why the number of dealers looks like. But the significant dealers, which contributes 70% or 80% of the sale, is within 100. And we are trying to ramp up those dealers so that our distribution chain is improved.
Sir, how much incremental branding or advertising spend is planned to strengthen the retail pool?
I think anywhere between INR 75 crore- INR 80 crore is our ad spend in this financial year.
Sir, last question from my side. The order book, I think, sir, you said is INR 3,928 crore. What is the expected execution timeline, and how much will be converted that in FY 2027 revenues?
So within three to four months is the timeline to execute these orders. This order is quickly replaceable. I mean, we just execute most of the orders in three to four months period, and only a few of it goes up to five months. But most of it is over in maximum four months. And these are replaced every month by new orders.
I appreciate you answering my question, sir. Thank you, and all the best for the future.
Thank you.
Thank you. We take the next question from the line of Nirransh Jain from BNP Paribas. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, my first question is on the domestic institutional sales for nine months, which includes those for HT and LT of EHV, so when I'm looking at.
Nirransh, I do apologize to interrupt you, but your audio is not clear.
Hello. Sorry. Is it clear now?
Yes. Please go ahead.
Yeah, so, sir, when I'm looking at this domestic institutional sales number, which includes INR 1,880 crores for cable and wires and INR 370 crores for EHV in nine months, I'm looking at a 3% growth on a year-on-year basis. So just wanted to understand that why are we seeing this low number for the domestic institutional sales, especially when our utilizations are also at around 75% for cables? So what explains the 3% growth on the institutional side?
Actually, once the export is increased, so the capacity is limited. So this capacity has gone to the export market, actually.
But, sir, utilization still looks like.
Utilization comes on the basis of the volume. As I said, when we take the order of the copper, so copper is three times priced than the aluminum price. So that's why it does not reflect the true picture, actually.
Okay, okay. Understood, sir. And sir, secondly, just wanted to check, when we say the peak revenue potential of INR 12,500 crores on our existing capacity, this is based on the spot prices of copper and aluminum?
Sir, copper price is close to INR 9,000. LME base price was there at that time, INR 9,000-INR 10,000 . But see, copper price does not stay at one place, actually. Sometime it goes up, sometime it goes down also. We understand your concern, and we are also using our maximum capacity in volume terms. And whatever reflection on the turnover comes by way of the prices, it will be reflected in our results also in the coming quarter.
Right. No, no, sir. That is understandable, but I just wanted to check that what is the risk to this INR 12,500 on either side? So as you mentioned that this is on the basis of INR 10,000 LME, this is INR 12,000.
Sir, first of all, I would highlight, since last five years, every quarterly or yearly con call, we are always giving the guidance of a 20% CAGR based on the capacity. Prices, whether it goes up or even that goes down also. As I highlighted that in 2021 and 2023, the prices were going down. Still, we were growing by 19%, 18%. So in future also, it does not matter to KEI. In the last 15 years, our growth was close to 17% CAGR. In the last 15 years, number of times prices have gone down, number of times the prices have gone up, but none of the years where we have not grown except the COVID year of 2020-2021. That's where we are maintaining a disciplined approach, irrespective of the price down also, we were growing in the past also.
In future, whenever we are talking of a CAGR growth, we are talking of a 20% CAGR growth, irrespective of the copper going down, irrespective of anything. Because whatever capacity we are creating, whatever new market we are creating, like management at the start of the year has visualized that we should reach to our 20% export within one to two years' time. We have already reached close to 17% in this nine-month period. We are working on our strategy. We are not working on somebody else's strategy. You see, it is not possible to grow quarter after quarter. If you see, if somebody has grown in this quarter 50%, can he grow in the next year, third quarter, 50%, or even he can maintain a 20% growth? It will not be possible, sir, because we are an industry since last 50 years.
So we are growing, this copper going up and down. We are continuously working towards the growth of the company, and we are participating in the industry. We are the topmost company from the country, those who are exporting more in so many countries. So we will remain focused. We will remain focused with a growth rate of 20% CAGR, not for one year, but for five years. That is from our side. Demand has no issue in the country, and neither demand has issue in the overseas market.
Sure, sir. That's helpful. Thank you so much and all the best.
Thank you, sir.
Thank you. We take the next question from the line of Rohit Balakrishnan from ithought PMS. Please go ahead.
Sir, thank you for the opportunity. Hi, sir. And my question is on EHV segment. Once the VCV tower is commissioned in FY 2027, there will still be the pre-qualification period, right?
Very, very less because we are already having experience of last 15 years in extra high-voltage cable. So it will be only a type test required to be carried out in the new plant, new facility.
Okay. Just a follow-up. I'm seeing a shift towards the complex urban underground projects, like Universal Cables is doing that, and currently, KEI is focusing on this segment or only in high-volume exports?
Can you repeat this question, please?
Like Universal Cables is competing on urban underground projects currently.
Yeah.
Underground cables, 400 kV cables.
Yeah.
Now, KEI is focusing on these cables or just?
Yes, yes. We have already executed more than, I mean, 30- 40 such large projects all over India in the last 10 years, and still executing in Mumbai, in Karnataka, in various states, so we are very well there, and we are already focusing on this, and it's not that our focus on domestic market is not there or urban underground is not there. We are executing a lot of such projects.
Okay, okay. Thank you. Thank you.
Thank you. Ladies and gentlemen, we take that as the last question and conclude the question and answer session. I now hand the conference over to Mr. Anil Gupta for his closing comments.
Yeah. So thank you very much, our investors, for participating in this conference call. I can reassure you that with the kind of business KEI has built up in terms of product approvals, product capabilities, and our strength of our management in terms of production, quality control, marketing, and our worldwide network, we will be growing substantially. It was only the capacity constraint which was hampering our growth for the last two years, maybe as compared to our peers. But with the Sanand facility now getting commissioned and getting ramped up, we will see substantially good results in the fourth quarter and in the next financial year. As each machine is commissioned one by one in a cable factory, so it may take another one to two months to really ramp up the capacities.
But we are on the track and will be giving a very strong growth in this business in coming next three to four years with these new capacities coming up. Thank you very much for your participation.
Thank you. On behalf of Nuvama Institutional Equities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.