KEI Industries Limited

KEI Industries reported robust Q3 FY26 results, with net sales growing 19.51% YoY to INR 2,954 crores. This growth was significantly supported by a 95% YoY increase in export sales, reaching INR 544 crores, and a 29% YoY rise in B2C sales to INR 1,612 crores. The B2C segment's contribution to total sales increased to 55% from 50% in the prior year, highlighting a successful shift in sales mix. For the nine-month period, net sales grew 21.26% to INR 8,271 crores.

The company achieved substantial margin improvement in Q3 FY26, with EBITDA growing 39% YoY to INR 354 crores, and the EBITDA margin expanding to 12% from 10.29% in the same period last year. Profit after tax (PAT) also saw a 42.5% YoY increase to INR 234.86 crores, with the PAT margin improving to 7.95% from 6.67%. For the nine-month period, EBITDA margin stood at 11.64% and PAT margin at 7.67%, demonstrating consistent operational efficiency gains.

The Sanand facility, a key capacity expansion project, has seen INR 1,353 crores in capex incurred to date, with an additional INR 200 crores planned for Q4 FY26 and the balance in the next financial year. Trial production for LTHT cables commenced in December 2025, and electron beam equipment for pure solar wires is expected to be commissioned by April 2026. The BIS license for low tension cables has been secured, and the HT cable license is anticipated by end of January 2026, with full capitalization of the plant expected by March 2027.

Management expressed confidence in achieving over 20% growth for the full FY26, with Q4 expected to exceed 25% due to rising copper prices. The company targets a 20% plus CAGR over the next 3-4 years, supported by the Sanand project's incremental top-line potential of INR 6,000 crores by FY29. Beyond Sanand, KEI plans an additional INR 2,000 crores in capex over the next 3-4 years, including new land acquisitions in Salarpur (INR 72 crores) and Baroda, to sustain its growth trajectory.

KEI maintains a strong position in a competitive market, leveraging its product performance, brand image, and extensive distribution network of 2,114 active dealers. While new entrants are observed in the wires segment, management believes their outsourcing models will not pose a long-term threat, citing the need for brand building and competitive pricing. The company's strategy includes offering a full basket of products and securing approvals from leading consultants, giving it a competitive edge in both domestic and export markets.

The company employs a natural hedging strategy, maintaining 3-4 months of inventory for institutional orders and 2.5 months for retail, plus 1 month for transit. This approach, combined with domestic sourcing of 85% of metals (copper, aluminum), helps manage raw material price volatility. Price increases are typically passed on to retail markets within 15 days, ensuring margin protection, while institutional orders are served with existing inventory.