KEI Industries, leading manufacturer of wires and cables (W&C) is among the top three organized players in the Indian W&C industry. The company manufactures low tension (LT) cables, high tension (HT) cables, extra high voltage (EHV) cables and house wires. KEI Industries reported its third quarter FY23 results yesterday on January 23, 2023. The company reported revenues of Rs 1,784 crore in Q3FY23 against Rs 1,564 crore in the same period previous year, a rise of 14% YoY. Topline growth was supported by cables and wires business which constitutes 90% of the total revenue basket. Cables and wires business is segmented into domestic institutional and dealer distribution business which grew 37% YoY and 26% YoY respectively in December Quarter 2022. Exports contributed roughly 22% of total revenues in Q3FY23. Exports in 9MFY23 are roughly Rs 393 crore.
According to the management, revenues are expected to grow by 20% YoY in FY23. And between 17-18% for FY24 supported by a strong capex cycle witnessed in the Industrial and infrastructure sector in India. The company has a pending order book of Rs 3,443 crore in Q3FY23.
Operating margins came in at 10.21% in December Quarter 2022, up 18 basis points (bps) YoY. The management expects operating margins to be maintained around 11% in Q4FY23. Net profit came in at Rs 129 crore in Q3FY23 compared to Rs 101 crore corresponding quarter previous year. Net Profit grew 27% YoY in Q3FY23. Close peer Polycab has recently entered the EHV cable segment. KEI Industries EHV cable segment contributed 9% to total revenues in FY22. According to the management, there would be no major impact on KEI Industries due to Polycab’s entry into the EHV cable segment in the near to medium term.
