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Q3-2026 Earnings Call
AI Summary
Earnings Call on Jan 22, 2026
Strong Sales Growth: Net sales grew 19.5% YoY in Q3 to INR 2,954 crores, with 9-month sales up 21.3%.
Profit & Margins: Q3 EBITDA rose 39% YoY, PAT up 42.5%, and EBITDA margin improved to 12% from 10.3%.
Export Surge: Export sales nearly doubled in Q3 (up 95% YoY); exports now 17% of 9-month sales and expected to surpass 20%.
Sanand Plant Ramp-up: Sanand facility started production; management expects full completion by FY27 and significant top-line contribution.
Growth Outlook: Management guides for 20%+ CAGR over next 3-4 years, with Q4 sales growth expected above 25%.
Margin Expansion: EBITDA margin expected to reach ~11% in the next year, supported by product mix and capacity ramp-up.
Healthy Order Book: Total order book at INR 3,928 crores, mostly executable within 3-4 months.
Demand Robustness: No signs of demand deceleration in cables despite rising input prices; capacity constraints are main growth limit.
KEI Industries reported robust revenue growth for Q3 and the nine-month period, with Q3 net sales up 19.5% and Q3 PAT up 42.5% year-on-year. EBITDA margins also improved, indicating better profitability. Management highlighted continued strong growth momentum, underpinned by expanding sales in both domestic and export markets.
The Sanand facility has begun trial production, with ramp-up planned through FY27. The plant is expected to add significant incremental sales (up to INR 6,000 crores by FY29) and relieve capacity bottlenecks that previously limited growth. CapEx for the project to date is around INR 1,353 crores, with further investments planned. Management also mentioned additional planned expansions in Bhiwadi and Baroda over the next 3-4 years.
Export sales nearly doubled year-on-year in Q3, and contributed 17% of total sales for the nine-month period. Exports are targeted to exceed 20% share in the near term, with strong demand from Europe, Australia, Middle East, and Africa. The company does not plan to cap export share and sees significant room for further growth.
EBITDA margin increased to 12% in Q3 from 10.3% last year, driven by better product mix, higher value exports, and effective price pass-through of raw material inflation. Management maintained its guidance to reach an 11% EBITDA margin for the full year, despite ongoing input cost volatility. Operating leverage from new capacity and exports is expected to support margin expansion.
The order book stood at INR 3,928 crores as of December 2025, with most orders executable within 3-4 months. The company reported quick order replacement and a healthy pipeline across EPC, domestic, export, and high-voltage cables, supporting its near-term growth visibility.
Management sees no deceleration in demand for cables, citing strong requirements from energy, infrastructure, and industrial sectors. While new entrants are entering the wires segment, KEI believes its brand strength, wide product basket, and established distribution network provide a competitive edge. There is little concern about new competition in cables, and outsourcing models by new entrants are viewed as less effective in this industry.
The B2C distribution channel grew 29% in Q3 and now accounts for 55% of sales. Domestic institutional sales were steady, while high-voltage and export segments showed strong growth. The product mix is shifting toward higher-margin segments such as EHV cables and exports. Management expects the Sanand plant to further boost volumes in HT and EHV cables.
KEI reiterated its 20%+ top-line growth guidance for the full year and expects 25%+ sales growth in Q4. Volume growth is guided at 16-18%, with further upside from price inflation. The company plans to invest an additional INR 2,000 crores over the next 3-4 years for capacity expansion beyond Sanand, aiming for sustained 20% CAGR growth.
Ladies and gentlemen, good afternoon, and welcome to the KEI Industries Q3 FY '26 Earnings Conference Call, hosted by Nuvama Institutional Equities. [Operator Instructions] 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.
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 '26 earnings, we have with us Mr. Anil Gupta, Chairman and Managing Director of the company; Mr. Rajeev Gupta, Executive Director, 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.
Yes. Good morning. Thank you for joining this conference call. I'm Anil Gupta, CMD of KEI Industries Limited. The brief of this quarter is that Q3 is net sales. You must have reviewed the numbers, which we -- but I'll just brief it. Net sales in Q3 is INR 2,954 crores with a growth in net sales is 19.51%. EBITDA in this quarter is INR 354 crores against INR 254 crores 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 crores against INR 164 crores 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 crores and domestic institutional cable sale EH extra high-voltage cable is INR 127 crores. Export sale in this quarter is INR 544 crores 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 same period. Sales through distribution network that is B2C was INR 1,612 crores with a growth of 29%. B2C sale contribution is 55% in the third quarter as against 50% in the previous year same period.
EPC sale other than cable is INR 60 crores against INR 60 crores last year. Stainless steel wire INR 53 crores against INR 54 crores last year. For 9 months period from April to December, net sales is INR 8,271 crores with growth of 21.26%. EBITDA 9 months INR 963 crores. The growth in EBITDA in 9 months is around 33%. EBITDA/sales margin is 11.64%. Profit after tax in 9 months is INR 634 crores. Profit after tax/net sales margin is 7.67%.
Domestic institutional cable sale is INR 1,884 crores and extra high-voltage sale is INR 371 crores. Export sale in 9 months is INR 1,390 crores. So growth -- overall growth in the export is 79%. Total cable institutional sale contribution in 9 months is 42% as against 41% same period last year, and B2C contribution is INR 4,413 crores. So the growth is 23%. The total active working dealer of the company as on 31st December is 2,114. B2C sales contribution is at par at 53% in 9-month period.
EPC sale is INR 188 crores and stainless steel wire sale is INR 157 crores against INR 166 crores last year. Total order book position as on 31st December '25 is INR 3,928 crores, out of which EPC is INR 361 crores, extra high-voltage cables INR 717 crores, cable domestic INR 2,426 crores, export orders INR 424 crores and total Wire and Cable segment, INR 3,567 crores.
Future outlook. During 9-month period, company has incurred a total capital expenditure of INR 928 crores. Out of this CapEx in Sanand is INR 769 crores, Salarpur for buying a land INR 72 crores, Sanand another land has been purchased at a cost of INR 24 crores and other locations -- other plants and locations for plant and machinery INR 63 crores.
The total CapEx payment incurred for Sanand until now is total INR 1,353 crores. Another INR 200 crores will be spent in this quarter and balance will be spent in next financial year. Company is hopeful to achieve 20% plus growth in full year period and also will improve our operating margin in FY '25-'26.
Considering Phase 1 commercial production at Sanand and strong order book of domestic institution for cable sale, 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 3 to 4 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 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 entire solar power chain, including Reliance polysilicon factory at Jamnagar. In UAE, KEI has bagged 3 contracts for supply of 132 kV cables and gaining acceptance as a EHV, extra high-voltage cable manufacturer in Middle East.
So this is a brief summary about the results from my side. And now request to put your questions, glad to answer.
[Operator Instructions]
We take the first question from the line of Rahul Agarwal from IKIGAI Asset.
Three questions. Firstly, to understand the Sanand ramp-up plan. And if you could elaborate between the segments. I understand that LTHT is going to be a larger portion of this plant and EHV will add another INR 1,200 crores of peak sales. So over '27, '28, '29, just wanted to know next 3 years, how do you plan to ramp up Sanand sales? What products come first? What comes later? If you could just break it into 3 years, that will help. That's the first question.
Okay. So LTHT, 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 pure 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 an extra high-voltage cable facilities will come up by March '27. So this is going to be the ramp-up. So in next financial year, this project will be complete in all respects.
Got it, sir. So overall, should I assume that to achieve this, you've spent -- your plan is to spend INR 2,000 crores. This should make at least 3x, 3.5x asset turns. We were talking about INR 6,000 crores top line, should happen sometime in March '29. By FY '29, we should achieve this entire INR 6,000 crores incremental top line. Is that fair understanding?
Yes, Absolutely.
Okay. And second question was on the capitalization of the CapEx. I understand that, as you said, LTHT pile production started in December, and we have incurred a CapEx of about INR 800 crores in 9 months on Sanand, right?
Yes.
The balance INR 500 crores was last year. So about INR 1,300 crores of CapEx is done till date. How much is capitalized till December of '25?
So basically, we capitalized around INR 550 crores and balance will be capitalized when this machinery will get start as Anilji had spoken about the control cable of 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 crores, how much would be the land cost, sir? I mean, we will exclude that for capitalization, right?
Land cost was originally INR 140 crore.
Right. The balance will get depreciated on a full CapEx basis from fiscal '28. Is that correct?
'28. Yes. So the depreciation load will not come in 1 year actually, next financial year because it is in the phased manner. So it will be -- completely will come only in '28.
And that would be about 5% of INR 2,000 crores, right? About INR 100 crores is that fair?
But in '28, the top line will also be from there -- alone will be close to INR 5,000 crores.
Yes, I understand that. Yes.
Yes.
Sir, third question was just to go back to the Anilji's commentary, we're expecting 20% growth for top line full year. I think we've done like similar 21% in 9 months, and we've seen very sharp rise in copper in December. So just to understand why are we conservative here?
No, I think the growth in this quarter should be anywhere between -- around 25% plus. 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 2 years' time, you should see about 100 bps adding up at EBITDA level. Do you retain that guidance?
Yes, yes. I think we have already given a guidance that next year, we expect to achieve EBITDA margins of around 11% overall for the full year.
We take the next question from the line of Natasha Jain from PhillipCapital.
Sir, my first question is on the hedging side. So assuming that 50% or rather 40% of your entire raw material 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 at spot or do we hedge the entire exposure?
No, we don't hedge. We are working under natural hedge. We are carrying 3 to 4 months inventory -- 3 to 4 months pending order from the institution side. And we are carrying 2.5 months plus inventory in our floor and 1 month inventory in -- during the transit period because we are importing.
And also, we are mainly 85% of our metals, we are buying from Hindalco and Vedanta domestically. So it is -- the purchase is in rupees. So here, the foreign exchange exposure doesn't come into picture.
So we are working under natural hedge as we were guiding you in the past also.
Got it. Sir, 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?
Madam, 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% to 1%. But for a full year basis, as we have earlier guided that we will improve our operating margin, which you 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 in growth for wires?
Year after year, in the wiring segment also, we are growing more than 22%, 23%. So that will remain continue for a full year basis.
We take the next question from the line of Saumil Mehta from Kotak Mutual Fund.
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 2.5 month inventory in floor and 1 month inventory in transit as against that 3 to 4 months pending order position from the institution side, either from domestic or export. So practically, old orders served with the old inventory. But with the retail market, in every 15 days, the retail price goes 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, Jan, Feb, 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.
This is a 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.
Rajeev ji, that I understand. Just want to understand [Foreign Language]. I'm not worried about the price hike pass on [Foreign Language]. I'm just trying to understand [Foreign Language].
House wire [Foreign Language] in the selling prices. And in Cable, effective December, actually, major price increases have started from December. So December or January, overall, I can see that 10% rise [Foreign Language] prices.
Cable price [Foreign Language] 10%. Wire [Foreign Language]. And sir, my last question is, in terms of when you're giving the 20% plus guidance for next year and a 25% plus 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 between -- anywhere between 16% to 18%. And plus the price inflation in the inputs will be added. So the actual growth should come more than that.
We take the next question from the line of Anupam Goswami from SUD Life Insurance.
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 inventory -- industry and volume growth and value breakup, how it looks like, sir, in this quarter?
Sir, our capacities in Cables was almost at the peak level. So whatever -- so we could not grow much in Cable segment. We just -- 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 9 months or 1 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 is around INR 250 crores a month in Sanand, half of the capacity has been commissioned. And this capacity will come into production gradually as we are doing the ramp-up with the induction of manpower in all the departments and also one by one machines are being commissioned and put into production. Secondly, initial 1 or 2 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...
Ladies and gentlemen, we have lost the line of the management. Please stay connected while I reconnect the management. Thank you. Ladies and gentlemen, we have reconnected the management. Sir, you may proceed.
Some question was there.
Anupam, if you can please repeat your question?
Sir, capacity, what we have added, you were saying about INR 250 crores a month and BIS certification what is required and would be ramped up gradually as you were saying?
Yes, yes. 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 last around 50 years, it will be ramped up very shortly. It is just we need some basic approvals, which are bare essential to sell.
We take the next question from the line of Keyur Pandya from ICICI Prudential Life Insurance Company Limited.
Sir, 2 questions. First, on this INR 250 crores a month kind of capacity and that would get added gradually. I mean there will be some addition during FY '27. 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 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 '27?
So next year also from the Sanand itself, we will have the turnover close to INR 2,700 crores from the Sanand itself. And whatever deficient 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 consumption industry CapEx? I'm not talking about degrowth, but deceleration from either because of the past -- I mean, 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.
As of now, we don't see any deceleration in the demand for cables. See, prices really do not affect the project. If the project is going on, it is coming in, I mean, maybe for a one 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.
We take the next question from the line of Achal Lohade from Nuvama Institutional Equities.
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?
Okay. So I'll just brief you about that. You see in last 1 year, we have seen a few new entrants on pan-India basis like Torrent, Surya, Roshni, Luker, et cetera, and a few other small companies entering Wire segment. But our present growth is in spite of all these competition. Our major strength is product performance and brand image. Any newcomer takes around 5 to 7 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 capacities 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% to 14%. So new players will also get adjusted in 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, land 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 I can -- we will always have an edge over them, and we will have -- we will be able to deal with this competition. The creation of network required to reach a reasonable scale is at least 4 to 5 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. Rest what is in the store in future, nobody can see.
The last 13, 14 years, even that KEI has reached only towards INR 3,500 crores to INR 4,000 crores 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 exports, I don't see any deceleration in that.
And whether pre-qualification is required by anyone coming for that Cable.
Sorry, just to hop on this Wire thing. We also like 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 outsourcing model. And so far as my experience is concerned, in Wires and Cables, outsourcing model will not work.
And already, there are 3, 4 companies, those who have already come, even though all the existing companies has grown very well even after this competition.
We take the next question from the line of Pulkit Patni from Goldman Sachs.
Thank you for taking my questions. Two of them. Sir, first is in continuation of Achal's question, and you did allude 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 has not so far been tested by anyone. So we'll see whether it will work or not. I mean, it is my opinion that -- and because this market is very competitive and after paying the manufacturing cost, et cetera, and other call profits to a contract manufacturer, I don't think that just by brand, you can earn too much on 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 5 to 7 years. You can't build a brand overnight.
Sure, sir. Sir, 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 will be some negative operating leverage because of that, plus you have a big focus on export, which is higher margin. Has 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.
We take the next question from the line of Puneet Gulati from HSBC.
My first question is, in your overall volume growth for this quarter, is there any bit of inventory stocking to your mind 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 just you know inventory in the channel by a dealer distributor does not cap more than 15 to 20 days. So 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 inventory restocking?
Sorry. It is applicable to all the quarter because in the second quarter also it was increased. In first quarter, it has also increased. In third quarter, it has also increased. 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 4 quarters of very, very strong growth. Is there room to do similar sort of very, very high growth for the next few quarters? Do you think you've reached a base and you've had tapped 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 4 quarters.
Sir, world markets are very, very good. 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.
So in your own trend -- mind, that number can continue into next few...
Yes, yes, it can. But I don't see 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 existing capacity utilization for your various units?
See, utilization of capacity is close to 76% in the Cables division.
We take the next question from the line of Praveen Sahay from Prabhudas Liladar Capital.
Sir, you said related to the volume growth, 16% to 18% for a way forward you are looking at as a volume growth. And how it has been in the third quarter?
For 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 3x more than the aluminum cable. So exactly reflection replica, it cannot be quarter-to-quarter can be gauged because in some quarters, 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 more, like some export markets, the copper is more. So then the value will be high, but the volume will not be looked like aluminum.
Right, sir. Got it. Second, related to the HT cable because the ST cable for quite a couple of quarters, we are seeing there's a dip in the revenue. So if that -- I can understand there is a fungibility in the capacities, but is there a demand impact? Or is there a capacity impact in the HT cable?
Last year, extra-high voltage power cable capacity was utilized for HT 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.
But with the Sanand 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 1 quarter or for 1 year. Even in the '21-'22, '22-'23 when the prices of copper was 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 disciplined growth we can maintain actually.
Right. Sir, lastly, on the order book bifurcation, if you can give, like a EPC, extra high-voltage, domestic cable, how it has been?
So order book just Anilji has told, I will repeat that. Total order book is INR 3,928 crores, out of which EPC order book is INR 361 crores and extra high-voltage power cable is INR 717 crores. Domestic cable order is 2,426 crores, export cable order is INR 424 crores. So total is INR 3,928 crore order book.
We take the next question from the line of Kunal Sheth from B&K 360 ONE Wealth Asset Management.
Most of my questions have been answered. Just one clarification. As far as export is concerned, do we have particular benchmark in mind in terms of if we want to restrict to, say, 15% to 18% of sales or it will be an opportunity? Do you 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 future.
Sir, I was referring more to export as a contingency. Is there a number that we are looking at that we want to restrict export to a certain percentage or...
Export, Anilji has earlier...
No, no. There is no restriction that we'll stop at that level. We will see where -- sky is the limit, where we can go.
But ultimately, the capacity we need to utilize. Whichever capacity will be there, either we can utilize in export or in retail or in domestic. It cannot be that exports should also increase, our domestic also increase and retail increase because we will -- we have to grow ultimately with the capacity.
Right, sir. But sir, realistically, what could be the share of export, say, in 2 years?
Close to more than 20% Anilji has already visualized.
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 U.S., which started last year. So ultimately, in this uncertain times of geopolitics, it is very difficult to comment what a leader is thinking in other country.
And sir, this quarter, which was the major country that we have exported to?
We have been exporting to now Europe. We are exporting to Australia. We are exporting to Middle East and Africa. U.S. at the moment is on hold because of that tariff.
We take the next question from the line of Rahul Agarwal from IKIGAI Asset.
First 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 housing 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 is no more...
INR 10,000 crores to INR 12,500 crores capacity other than the Sanand.
Sorry, sir, I missed that number. INR 12,500 crores?
Yes. So that is the capacity, total, other than Sanand.
Right. And any expansion brownfields are we planning apart from Sanand over the next 2 to 3 years?
Sir, that has already been planned. And after 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 crores. And after that, we are already acquiring the land in Baroda around close to 70 acres land. We are accumulating there. So in next 3 to 4 years, our planning is to invest another INR 2,000 crores apart from Sanand. We are targeting close to 20% CAGR growth for the next 4 to 5 years.
I understand that. So this INR 12,500 crores is existing capacity plus the brownfield whenever they start and plus Sanand. Is that correct?
Yes.
We take the next question from the line of Vidit Trivedi from Asian Market Securities.
Most of my 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, assets turn is close to 1:4. And in Wires, maybe asset turn is close to 1:5 or 1:6.
It will be more than that. It will be 1:6.
1:7.
1:6 or maybe 1:7 when the brownfield CapEx is going on there.
We take the next question from the line of Saket Kapur from Kapur & Co.
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 the 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 reverse infrastructure. So how do we stand there? And any update you would like to share on these two aspects?
Government has been talking of allowing Chinese in some segments like transformer for some high-voltage equipment where there is a real shortage and delivery period from existing manufacturers are very long, maybe 2 years or 3 years. In Cable segment, there is no such issue. And there are 4 or 5 significant players now in the EHV segment also like KIE, 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 Indian market because of the disadvantages there.
Sir, [Foreign Language] and currently, if we take -- you mentioned four player names. Capacity-wise sir, how do we rank and [Foreign Language].
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 that players 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. And then secondly, sir, in terms of the compounding part, the sioplas compound or the PVC compounds which are required, are we sourcing it domestically or are these imported, sir? especially in terms of the higher kV?
Some special high-voltage compounds we are importing because nobody manufacture 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 tonnes of PVC every month and close to 1,000 tonnes of XLPE compound, which is used in LT cables and solar wires and low-tension control cables within our plant.
Okay. Because they are also dominant players like DDev Plastiks 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?
Yes, yes. We are buying from DDev Plastiks our requirements for medium voltage cables up to -- from 11 kV to 66 kV, but beyond these voltages, all the compounds are imported from Borealis or Dow chemicals.
Right. And lastly, sir, on the further CapEx which you just outlined, for the INR 2,000 crores, 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 2 years down the line also?
Sir, demand for EHV Cable is continuously rising for evacuation power 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 and quantification of that, but we'll try to compile the data and come back to you.
[Foreign Language]
It is on drawing board. It will be cleared in next -- it will be finalized in the next 6 months.
We take the next question from the line of Amit Agicha from HG Hawa & Company.
Sir, with over 2,100 dealers, what is the optimal dealer count? And like how do you ensure leader productivity rather than just expansion?
We are definitely not expanding the dealers too much. In this 2,500 dealers -- 2,100 dealers, I think around 100 dealers are very big. But rest of the dealers, they operate in small towns and small market -- B2C -- B and C type cities. There, the dealer sizes are anywhere between INR 1 crore to INR 3 crore, INR 5 crores. So that is why the number of dealers looks like. But the significant dealers, which contributes 80% -- 70% or 80% of the sales within 100. And we are trying to ramp up those dealers so that our distribution chain is improved.
And sir, how much incremental branding or advertising spend is planned to strengthen the retail footprint?
I think anywhere between INR 75 crores to INR 80 crores is our ad spend in this financial year.
And sir, last question for my side. The order book I think you said is INR 3,928 crores. Like what's the execution time line and how much will be converted that in FY '27 revenues?
So within 3 to 4 months is the time line to execute these orders.
These orders are quickly replaceable. I mean, we just execute them, most of the orders in 3 to 4 months period. And only a few, it goes up to 5 months. But most of it is are over in maximum 4 months. And these are replaced every month by new orders.
We take the next question from the line of Nirransh Jain from BNP Paribas.
Sir, my first question is on the domestic institutional sales for 9 months, which includes...
Nirransh, I do apologize to interrupt you, but your audio is not clear.
So sir, when I'm looking at the domestic institutional sales numbers, which includes INR 1,880 crores for cable and wires and INR 370 crores for EHV in 9 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?
See, once the export is increased, so the capacity is limited. So this capacity has gone to the export market actually.
But sir, utilization is lower...
Utilization comes on the basis of the volume. As I said, when we take the order of the copper, so copper is 3x priced than the aluminum price. So that's why it does not reflect the true picture actually.
Okay. Understood, sir. And sir, secondly, I 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?
The copper price is close to $9,000 LME-based price was there -- at $9,000 to $10,000. But see copper price does not stay at one place actually. Sometimes it goes up, sometimes it goes down also.
We understand your concern, and we are also trying to -- 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 quarters.
No sir, that is understandable, but I just wanted to check like what is the risk to the INR 12,500 crores on either side as in like -- so as you mentioned that this is on the basis of $10,000 LME-based prices...
Sir, first of all, I would highlight since last 5 years every quarterly or yearly con call, we are always giving the guidance of a 20% CAGR based on the capacity. Prices whether goes up or even goes down also, as I highlighted that in '21 and '23, the prices were going down. Still, we were growing by 19%, 18%. So in future also, it does not matter to KEI, in last 15 years, our growth was close to 17% CAGR. In last 15 years, number of time 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 2021.
So that said, we are maintaining a disciplined approach. Irrespective of the price down also, we were growing in the past also. So in future, whenever we are talking of 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 Anilji to the start of the year has visualized that we should reach to the 20% export within 1 to 2 years' time. So we have already reached close to 17% in this 9-month period.
So 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 20% growth? It will not be possible, sir, because we are in the industry since 50 years. So we are growing, the 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 top most 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 1 year but for 5 years. That is on our side. Demand has no issue in the country and neither demand has issue in the overseas market.
We take the next question from the line of Rohit Balakrishnan from ithoughtpms.
My question is on EHV segment. Once the VCV tower is commissioned in FY '27, there will still be the precalibration 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 in 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 high-voltage cables, 400 kilowatt cables, now KEI is focusing on these cables or just...
Yes, yes. We have already executed more than, I mean, 30 to 40 such large projects all over India in 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.
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.
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 and 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 in -- it was only the capacity constraint, which was hampering our growth for last 2 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 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 1 to 2 months to really ramp up the capacities, but we are on track. And we'll be giving a very strong growth in this business in coming next 3 to 4 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.