Detailed Narrative
Q1 FY26 Financial Performance Highlights
KEI Industries delivered a strong financial performance in Q1 FY26, with net sales reaching ₹2,590.32 crores, marking a 25.44% year-on-year growth. EBITDA increased by 28% to ₹297.62 crores, and the EBITDA margin improved to 11.49% from 11.25% in the prior year. Profit After Tax (PAT) also saw a significant rise of 30.28% to ₹195.75 crores, with the PAT margin expanding to 7.56% from 7.28%.
Sanand Project Progress and Capacity Expansion
The Sanand project is progressing as planned, with Phase 1 commercial production of LT and HT cables expected to commence in Q3 FY26 (September '25). The total project is slated for completion in H1 FY27, and the EHV project within Sanand is targeted for commissioning in Q1 FY27. The total capex for Sanand is estimated at ₹1,900-2,000 crores, which will add a capacity of ₹6,000 crores, comprising ₹1,200 crores for EHV and ₹4,800 crores for LV/MV cables. The company expects to utilize 50-60% of this capacity by FY28.
Segmental Growth and Product Mix
The Wire and Cable segment grew approximately 32% YoY in Q1 FY26. Domestic institutional cable sales (wire and cable) increased by 24% to ₹711 crores, while extra high-voltage cable sales surged by 47% to ₹116 crores. Sales through the distribution network (B2C) grew by 22% to ₹1,326 crores, contributing 51% to total sales. However, EPC sales (other than cable) declined by 53% to ₹61 crores due to the completion of a project in Gambia, and stainless steel wire sales saw a 4% decline to ₹51 crores.
Export Market Performance and Strategy
Export sales demonstrated robust growth, increasing by 61% overall to ₹374 crores, with cable and wire exports alone growing by 122% to ₹323 crores. The company aims to achieve an export contribution of 17-18% of its top sales in the next two years, driven by expansion into new geographies like the USA and Europe. While acknowledging some uncertainty in the US market due to tariffs, management noted that KEI's dependence on the US is currently small, and its focus remains on diversified markets and cost competitiveness.
Capital Allocation and Liquidity Position
The company utilized ₹913 crores of its QIP funds up to June 30, 2025, with ₹410 crores spent on capex in Q1 FY26, including ₹296 crores for Sanand and ₹95 crores for land acquisition. Total capex for Sanand till June 30, 2025, stands at ₹880 crores, with an additional ₹600-700 crores planned for the next nine months. Total borrowings as of June 30, 2025, were ₹203 crores, primarily for channel finance. The company reported a net cash position of ₹1,048 crores, which includes ₹1,106 crores from QIP proceeds.