Detailed Narrative
Q2 FY26 Performance Overview
KEI Industries reported strong financial results for Q2 FY26, with net sales growing 19.38% YoY to INR 2,726 crores. The Wire and Cable segment, a key driver, saw a 22% growth, with volume contributing 15% and pricing the remainder. EBITDA increased by 31.2% to INR 311.63 crores, leading to an EBITDA margin expansion to 11.43% from 10.4% in the previous year. PAT also saw robust growth of 31.47% YoY, reaching INR 203 crores, with PAT margin improving to 7.4%.
Sanand Expansion and Capacity Outlook
The company's Sanand plant expansion is progressing, though with some delays. Phase 1, representing over 50% of the total capacity, is now expected to be operational by November '25, a 4-month delay due to heavy rains and labor shortages. Phase 2, focusing on EHV and MV cables, is delayed by 9 months due to complex vertical tower construction. Once fully operational, the Sanand project is estimated to generate INR 6,000 crores in revenue, with INR 3,000 crores expected from Phase 1 contributing from Q4 FY26 onwards. The capacity mix from Sanand is projected to be INR 1,200 crores for EHV and INR 4,800 crores for LV/MV power cables.
Segmental Performance and Growth Drivers
Domestic Institutional Cable sales in Q2 FY26 were INR 581 crores, with Extra High-Voltage Cable sales growing significantly by 76% YoY to INR 128 crores. Sales through the dealer network (B2C) increased by 17% to INR 1,475 crores, maintaining a 54% contribution to total sales. The EPC division (excluding cable) experienced a decline to INR 47 crores from INR 80 crores in the prior year, though management aims to maintain annual EPC sales between INR 400-500 crores. The company's total active dealer network stands at 2,100.
Export Strategy and Market Diversification
Exports emerged as a significant growth driver, achieving an all-time high of INR 472 crores in Q2 FY26, a 96% YoY increase. Management emphasized its strategy of diversifying into new geographies to utilize upcoming capacities, with exports primarily directed to Australia, the Middle East, and Africa. The company also noted its presence in Europe and the US, with US exports reaching INR 160 crores last year, though currently impacted by tariff uncertainties. The target for export contribution to total sales is set at around 18% for FY27.
Margin Stability and Future Outlook
KEI Industries maintained strong profitability, with Q2 FY26 EBITDA margin at 11.43% and PAT margin at 7.4%. Management stated that margins have remained stable over the last 15 years due to price variation clauses in B2B orders and regular revisions in retail pricing. They anticipate a 1% to 1.5% margin expansion once the entire Sanand capacity is commissioned, driven by economies of scale. The company reiterated its guidance for over 20% revenue growth for FY26 and a 20% plus CAGR for the next 3-5 years, driven by strong demand from the energy sector, infrastructure, and real estate.