Detailed Narrative
Strong Q4 and Full Year FY26 Financial Performance
KEI Industries reported robust Q4 FY26 net sales of INR 3,476 crores, marking a 19.27% YoY increase. EBITDA margin expanded to 12.21% from 11.6% in the prior year, while PAT grew 25.5% to INR 284.31 crores. For the full FY26, net sales reached INR 11,746 crores, up 20.66% YoY from INR 9,735 crores, with EBITDA growing 30.56% to INR 1,387 crores, and PAT at INR 918 crores, reflecting a PAT margin of 7.82%.
Volume Growth and Capacity Expansion Outlook
The company achieved a 6.21% net volume increase in FY26, with copper cables growing 15% in volume. Despite Q4 FY26 volume growth being limited to 2% due to capacity constraints, KEI anticipates a 17-18% volume growth in FY27, primarily driven by the Sanand plant and Chinchpada wire capacity. For FY28, volume growth is projected to be around 20%, indicating sustained expansion from new facilities.
Strategic Business Mix and Distribution Focus
KEI is strategically reducing its reliance on the EPC business, aiming for its contribution to fall to 2-3% of total revenue due to long working capital cycles. The focus is shifting towards the retail (B2C) segment, which contributed 56% of Q4 sales (up from 51%) and 54% for the full FY26. The company maintains a network of approximately 2,125 active dealers, with an annual churn rate of 10-12%.
Re-engagement in US Export Market and Data Center Focus
After a period of lull due to tariffs, KEI has restarted exports to the United States, with a target to achieve approximately 20% of total sales from exports in the current financial year. The company aims to reach INR 40 crores/month in US sales within three months, focusing on supplying HT cables and copper flexible for data centers, despite facing competition from domestic US manufacturers. As of March 31, 2026, the US market order book stood at INR 50-60 crores.
Capital Allocation and Working Capital Efficiency
KEI plans an annual capital expenditure of INR 600-700 crores for the next 2-3 years, funded entirely through internal accruals, with 60-70% allocated to capacity expansion and 30-40% to working capital. The unutilized INR 385 crores from the QIP will be deployed in the current fiscal year for Sanand Phase 2. The company is actively managing its working capital, reducing receivable days from 2.2 months to 1.88 months, with a target of 1.75 months, and aims to remain debt-free for the next 4-5 years while achieving a 20% CAGR in topline.
Raw Material Price Volatility and Freight Cost Management
Average copper prices increased by 16.85% and aluminum by 9.91% in FY26. While freight costs, particularly for Middle East exports, increased significantly in April 2026, management stated the overall impact on margins was minimal as these costs are partially borne by customers (50%) or offset by favorable exchange rate fluctuations. Shipping problems in March led to INR 50-60 crores in lost export sales to the Middle East due to unavailability of shipping lines.