This article first appeared on GuruFocus .
Release Date: January 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
KEI Industries Ltd ( BOM:517569 ) reported a significant growth in net sales, achieving a 19.51% increase in Q3.
-
The company experienced a 39% growth in EBITDA, with margins improving from 10.29% to 12%.
-
Profit after tax saw a substantial increase of 42.5%, with margins rising to 7.95% from 6.67%.
-
Export sales grew impressively by 95% in the quarter, contributing to the overall growth.
-
The company is optimistic about achieving a 20% plus growth in the full year and improving operating margins further.
Negative Points
-
The total institutional cable sale contribution decreased to 41% from 45% in the previous year.
-
There is a high capital expenditure planned, with INR 1,353 crore already spent and more to be incurred, which could impact cash flow.
-
The company faces competition from new entrants in the wires segment, which could affect market share.
-
There is a dependency on copper prices, which have been volatile, potentially impacting margins.
-
The company's capacity constraints have limited growth in certain segments, such as cables, where volume growth was only 10%.
Q & A Highlights
-
Warning! GuruFocus has detected 4 Warning Signs with BOM:517569.
-
Is BOM:517569 fairly valued? Test your thesis with our free DCF calculator.
Q: Can you elaborate on the ramp-up plan for the Sanand plant and the expected sales over the next three years? A: Anil Gupta, CMD: We have started trial production for LTHT in December and expect to ramp up by April with the commissioning of electron beam equipment. The extra high voltage cable facilities will be ready by March 2027. We anticipate achieving 6,000 crores in incremental top-line by FY 29, with the full project completion expected in the next financial year.
Q: How much of the CapEx has been capitalized till December 2025, and what is the land cost? A: Rajiv Gupta, CFO: Approximately 550 crore has been capitalized, with the balance to be capitalized as machinery starts. The land cost is around 140 crore, and the full plant will be capitalized by March 2027.
Q: Why is the company conservative about the 20% growth guidance despite a 21% growth in nine months and rising copper prices? A: Anil Gupta, CMD: We expect growth this quarter to be around 25% due to increased copper prices. We aim to achieve EBITDA margins of around 11% for the full year.
Q: How does KEI Industries manage its hedging strategy for metal costs? A: Rajiv Gupta, CFO: We operate with a natural hedge, maintaining 3-4 months of inventory and sourcing 85% of metals domestically from Malco and Vedanta, minimizing foreign exchange exposure.
Q: What is the company's strategy to handle new competition in the wires and cables market? A: Anil Gupta, CMD: Despite new entrants, our strength lies in product performance and brand image. We offer a full product basket and have a strong distribution network, which takes years to build. We remain competitive and expect to maintain our market position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
