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Published: Aug 29, 2019
Updated: Aug 29, 2019

KEI Industries: 17-18% sales growth expected this year

“The outlook for KEI Industries, a leading cable company, is positive for the current as well as the next year. The company’s order book amounts to around Rs. 4,500 crore, ensuring revenue visibility for one full year. Reflecting this positive trend, the company has started fiscal 2020 on a buoyant note with a gratifying financial show during the quarter ended June 2019,” maintains Anil Gupta, Chairman and Managing Director. He adds, “Projects ahead are all the more encouraging. The company is setting up a greenfield project at Chinchpada in Silvasa. The first phase of this Rs. 95-crore project has already gone on stream and phase two will be operational by March 2020. This plant will add Rs. 1,300 crore in revenues for the company.”

Reviewing the performance in Q1 FY 2020, Mr. Gupta says that sales for the quarter grew by 22% to Rs. 1,081.36 crore, with operating profit inching up 32% to Rs. 113.94 crore and the profit at net level shooting up by 42% to Rs. 45.81 crore. For the quarter, while sales from the cables segment stood at Rs. 854.89 crore, up by 23% and accounted for 72% of sales, PBIT from the same was higher by 23% at Rs 89.10 crore and accounted for 66% of the total. Sales from the stainless steel wire segment stood at Rs. 31.79 crore, up 2%, and accounted for 3% of sales. PBIT from the same was down 39% to Rs. 1.92 crore and accounted for 1% of the total. Sales from the turnkey division stood at Rs 307.38 crore and accounted for 26% of sales. PBIT from the same was up 72% to Rs 44.30 crore and accounted for 33% of the total.

While institutional sales – both domestic as well as exports – stood at Rs. 530 crore compared to Rs. 437 crore, registering a growth of around 21%, sales through the dealer/distributor network (over 1,500 dealers) stood at Rs. 366 crore against Rs. 298 crore, up 23%, he adds.

ROBUST ORDERS

According to him, while EHV sales stood at Rs. 78 crore against Rs. 39 crore (up 100%), EPC sales (other than cables) amounted to Rs. 195 crore against Rs 158 crore, up 23%. As far as pending orders (around Rs. 4,500 crore) are concerned, the EPC order book stands at Rs. 2,210 crore. The EHV cable order book is at Rs. 532 crore and the cable order book is Rs. 1029 crore. The export order book stands at Rs. 643 crore. The management expects sales to grow by 17-18 % in FY 2020.

Pointing out that the company is doing well on the export front, Mr. Gupta adds that in February 2019, the company received a Rs 450- crore EPC order from Nepal for underground cabling of Kathmandu city. This project is funded by the Asian Development Bank. The payment terms of the ADB are very attractive and so this project will have a better working capital cycle. The order will give the company good mileage in the nearby region. It has now become aggressive on the export front and is exploring more business from Africa and Middle East.