Key takeaways of the call

Order backlog as end of March 31, 2020 was 3244 crore (EPC Rs 1233 crore; EPC EHV 731 crore; cables Rs 1116 crore; Exports 164 crore). In addition the company have an L1 order of Rs 16 crore (EPC EHV) taking the total orders to Rs 3260 crore. EPC portion of the order book is executable over 18 months.

The company expects to close the fiscal with either flat or marginally lower sales compared to last fiscal. Considering strong order book the company believe in turning in better topline growth numbers than industry average. For any guidance, has to watch for another couple of months.

Cable business volume up 18% in FY20 and it was up 9% in Q4FY20.

Cables & Wires: Due to Covid pandemic lockdown, the April 2020 was nearly Zero sales with some sale in last 4-5 days. Even in May 2020 the despatches to institutional clients and dealers was slow as dealers were mostly closed in May 2020. However the company achieve a decent sale in dealer network in last 15 days of May 2020.

Cables & Wires: Cables will do better than wires this fiscal as the civil projects such as hospitals, colleges etc., metro projects there will be no slowdown in execution. However the subdued real-estate will have an impact on demand for wires. But the offtake for wires is good in B&C city dealers compared to A class cities which are under severe lockdown.

In EPC there is a significant improvement in May 2020. All sites where the work is on, the company is able to achieve significant physical progress in May.

The company decided to go slow as far as new manufacturing unit in Western Region of the country. Currently the company has deferred the matter and will reconsider after Oct 2020. No land has been acquired yet.

Dealer network as end of March 31, 2020 stood at 1650 and it grew by 13% in FY20. Annually the company is expanding its dealer net

Dangote Order: The company executed orders worth Rs 340 crore in FY20 and pending portion of this order is about Rs 110 crore which will be executed in Q1FY21.

Export sales of the company was about Rs 531 crore in FY19 and that increased to about Rs 900 crore in FY20. This year also the company expects strong export sales even though it does not have any Dongote kind of large order yet. The company has substantial export market in Australia and Middle East and it has presence in Africa and LATAM through various EPC contractors. So the company has never been dependent on large one off order such as Dangote.

The company has bagged a milestone order for 400 KV EHV cable from TNEB worth Rs 150 crore.

Only two local manufacturers in 400 KV EHV cable segment i.e. KEI Industries and Universal Cables. Substantial large portion of the EHV order of TNEB had gone to South Korean Company.

EHV business will register substantial growth this year as well.