KEI Industries hosted a
conference call on Jan 24, 2024. In the conference call the company was
represented by Anil Gupta, CMD.
Key takeaways of the
call
Pending
order book as end of Dec 31, 2023 is Rs 3826 crore of which Rs 934 crore is EPC orders, Rs 594 crore is
for extra high voltage power cable, Rs 1823 crore is for domestic institution
cable orders and Rs 475 crore is for cable export orders.
C&W
volume growth for Q3FY24 and 9mFY24 was 13% and 22% respectively
Will be able to
maintain 16-17% growth in FY24 and the same level of growth rate will be
maintained for next few fiscal years as well.
Margins are expected to
be stable with 25-50 bps increase in medium terms.
Expect to end FY24
with 12% contribution from exports for 20% it will take another 2-3 years as
the company is ramping up capacity.
Expect EHV to end
550-600 crore for FY24 and expect to sustain at that level next fiscal year as
well. Current capacity will support revenue of about Rs 600 crore per
annum.
The
company is currently exporting EHV cables to Australia. Currently company does
not have capacity to grow in export market. Once new capacity comes up company
will ramp up its sales efforts and develop new export market for EHV cables.
Cables
division is running at a capacity utilization of 90-95%, whereas wires division
is running at capacity utilization of 70%.
Incurred
a capex of Rs 308 crore in 9MFY24 and planned capex for FY24 is Rs 450 crore. For
FY25 the capex planned is Rs 500 crore.
The
company is currently doing a brownfield capex in Silvassa with a capex of Rs.
110 crore for house wire and LT power cables. This new capacity is expected to
generate revenue of Rs 800-900 crore out of which Rs 240 crore capacity has
started production in October 2023. Rest of the new Silvassa capacity will be
operational by end of FY25.
Embarked
on setting up a greenfield unit at Pathredi (Rajasthan) at a capex of Rs 110 crore will increase the capacity of low-tension power
cable by approximately Rs 800-900 crore per annum. This plant will be
operational in the Q1FY25.
Another
greenfiel plant is planned at Sanand (Gujarat) at a capex of Rs 300 crore for
C&W. Phase I of new project capacity is about 15-16 months away and full
plant operation is 24 months away.
Not
witnessing any demand slowdown for C&W, hence does not expect general
elections to impact demand.
Gross debt as end of
Dec 31, 2023 stood at Rs 168 crore (of which channel finance is Rs 130 crore)
and cash& bank balance of Rs 480 crore.
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