KEI Industries hosted a conference call on May 3, 2023.  In the conference call the company was represented by Anil  Gupta, CMD and   Rajeev Gupta, Executive Director (Finance) & CFO

Key takeaways of the call

Cables and wires volume sales growth in Q4FY23 and FY23 was 13% and 20% respectively.  For fy23 at LME  the  copper price declined by 12%  and aluminum price decreased by 9%.   

Active dealers count as end of March 2023 was 1910.

For FY23, EPC revenue excluding cables sales was Rs 405 crore ( vs 380 crore)  driven by EHV turnkey project revenue.  

Domestic Institutional EHV cable sale for Q4FY23 and FY23 stood lower at Rs 102 crore (against Rs 146 crore in Q4FY22) and RS 348 crore (against Rs 512 crore in FY22).   Last fiscal EHV business of the company was hit by execution delay despite Right of Way and other client side issues or delay in clearance.   As of now it have strong EHV order book. Demand is also good so the company is confident of Rs 500-600 crore sales of EHV will be there for FY24.  

Incurred a capex of Rs 98 crore in FY23  and the company is currently embarked on brownfield expansion of its C&W capacity at Silvasa plant at a cost of Rs 45 crore. The additional capacity will come on stream in H2FY24 and will result in annual incremental revenue of Rs 500 crore on full capacity. 

Capacity Utilisation of SS wires was 87% and that of Cables and Wires was 91%. 

In addition to brown field capex at Silvasa plant the company is also embarked on setting a greenfield capacity in Gujarat for Cables at a capex of Rs 250-300 crore  and the production out of this Greenfield plant is expected to commence by Sep 2024.   

The company is a debt free company. Cash accruals will be used for future capex and additional Working Capital needs.

Expect a revenue growth of 16-17% in topline for FY24 and an EBITDA margin in the range of 10-11%. 

Targets    retail (Sales through Dealer/ Distribution) share in topline of about 48-50% share in FY24.  Share of retail sales to topline stood at 43.83% and 42.04% in Q4FY23 and FY23 respectively.  

Few products got approval from US market and exports will increase to US. Export contribution to increase to 10-12% in FY24.

LT/HT and solar cable are approved in US now unlike earlier and this is expected to boost exports to US going forward. The company started exports from Jan 2023 onwards to exports.

Pending order book as end of April 2023 stood at Rs 3568 crore with EHV/EPC order being Rs 850 crore, Cables domestic being Rs 1440 crore and exports of Rs 332 crore. 

Strong momentum in cable demand in coming quarters driven by infra push.

Strong momentum in cable demand in coming quarters driven by infra push.

House wire reported a volume growth of 23%  in FY23 and this trend of HW growing at higher rate than the overall company growth in FY24 is expected to sustain going forward.

No future sale of shares by large shareholder who earlier sold for personal  fund requirement.