Detailed Narrative
Q4 and FY25 Financial Performance Overview
KEI Industries reported strong financial results for Q4 FY25, with net sales reaching ₹2,914.8 crores, marking a 25.1% year-on-year growth. EBITDA for the quarter grew by 30.3%, with an EBITDA margin of 11.61%, up from 11.15% in the prior year. Profit after tax (PAT) for Q4 stood at ₹226 crores, a significant 34.2% increase, resulting in a PAT margin of 7.77%. For the full fiscal year 2024-25, net sales were ₹9,736 crores (up 19.9%), EBITDA was ₹1,062 crores (up 19.9%), and PAT was ₹696 crores (up 19.85%), with an EBITDA margin of 10.92%.
Order Book and Future Growth Outlook
As of April 30, 2025, KEI Industries boasts a robust total pending order book of approximately ₹3,839 crores, which includes ₹423 crores for EPC orders, ₹603 crores for extra high voltage cable orders, ₹2,112 crores for domestic cable orders, and ₹701 crores for cable export orders. The total cable and wire segment order book stands at ₹3,416 crores. Management has guided for a 17-18% growth rate for FY25-26, anticipating a more aggressive 19-20% growth in the subsequent two to three years following the full commissioning of the Sanand project.
Capacity Expansion and Sanand Project Progress
The company incurred a total capital expenditure payment of ₹618 crores in FY24-25, with ₹384 crores specifically allocated to the Sanand project. The remaining unutilized QIP funds of ₹1,300 crores will be invested in Sanand during FY25-26 to complete the project. Commercial production for the first phase of low tension and HT cables at Sanand is expected to commence by the end of Q1 FY25-26, with the entire project slated for completion by the end of FY25-26. The EHV segment of the Sanand project (phase two) is expected to be operational by FY26-27.
Segmental Performance and Export Strategy
The Wire and Cable segment demonstrated strong performance with approximately 35% growth in Q4 FY25, and overall metal consumption volume increased by 20% for FY25. However, the EPC sale (other than cable) declined by 63% to ₹72 crores in Q4, and EHV cable sales dropped by 48%, which impacted the company's operating margin by about 0.5%. Exports, a key focus area, grew significantly by 92% in Q4 to ₹492 crores and 15% for the full year, with cable exports alone growing 40%.
Distribution Network and Working Capital Management
Sales through the distribution network (B2C) were a major growth driver, increasing by 42% in Q4 to ₹1,498 crores and contributing 51% of total sales. The company has expanded its channel financing coverage to 70% of dealer distributor sales, which helps in reducing receivable days. Management clarified that a reduction in payables and operating cash flow was a deliberate strategy to utilize available cash, including ₹1,385 crores from the QIP, to pay suppliers faster and save on interest costs, rather than indicating any financial stress.
Margin Outlook and Raw Material Cost Management
KEI Industries operates on a pass-through model for raw material costs, ensuring that fluctuations in LME prices do not significantly impact margins. While Q4 margins were affected by lower EHV sales, management expects overall EBITDA margins to remain stable around 10.5-11% in the near term. A 0.5-1% improvement in EBITDA margins is anticipated from FY27-28 onwards, driven by the economy of scale achieved once the Sanand project is fully operational and capacity is optimally utilized.