# 1. Financial Performance ## A. Key Figures * Net Sales: **₹2,726 Cr** Q2 FY26 (+19.38%) · **₹5,316 Cr** H1 FY26 (+22.25%) * EBITDA: ₹609 Cr H1 FY26 (+29.65%) · ₹311.63 Cr Q2 FY26 (+31.2%) * **PAT:** **₹203 Cr** Q2 FY26 (+47%) ## B. Revenue Growth * **Strong Segment Momentum:** Wire and Cable segment delivered solid double-digit growth, contributing to robust overall sales expansion. * **Production & Pricing Dynamics:** Production value rose 22% on favorable copper price tailwinds, which are **3x higher than aluminum prices**, boosting revenue per unit. ## C. Profit Margins * **Margin Recovery Underway:** EBITDA margin improved significantly year-on-year despite current run rate of **10% to 5%**, which management expects to stabilize near-term. * **Brand Investment Discipline:** Branding expenses to remain at **~5% of revenue**, with **₹50 Cr spent last year**, supporting long-term equity without margin dilution. ## D. Cash Flow & Capex * **Cost-Led Green Transition:** Long-term hybrid solar-wind power deal in final stages, expected to yield material power cost savings over **15–20 years**. --- # 2. Order Book & Demand ## A. Key Figures * **Total Order Book:** **₹3,824 Cr** (as of 30-Sep-25) · **₹636 Cr** EHV cables · **₹484 Cr** EPC · **₹2,068 Cr** domestic institutional · **₹636 Cr** export * **Sales Mix:** **42%** B2B institutional (incl. exports) · **54%** B2C dealer network * **B2C Sales:** **₹1,475 Cr** (+17% YoY) · **₹2,800 Cr** via dealer network (+20%) ## B. Order Book Dynamics * **Strong Underlying Demand:** Robust order book reflects sustained momentum across domestic institutional and export markets, with domestic capacity partially reallocated to support export growth. * **Execution Timelines:** Cable orders fulfilled within **4 months**, while EPC projects span ~18 months, contributing to longer-term revenue visibility. * **Future Growth Levers:** Order book poised for incremental expansion with Sanand plant ramp-up, led by B2B institutional and EHV cable demand. ## C. B2B vs B2C Demand Trends * **B2B Share Rising:** Institutional segment gaining share (up from 39%), signaling strategic traction in high-value, project-based markets. * **B2C Resilience:** Dealer network remains a core engine, with **2,100 active dealers** and strong double-digit sales growth despite flat reported order book due to near-term execution. * **Structural Demand Drivers:** Long-term cable demand anchored in energy transition (solar, wind, BESS), T&D infrastructure, data centers, and real estate development. --- # 3. Capacity & Production ## A. Key Figures * **Sanand Plant Revenue (Full Capacity):** **₹6,000 Cr** (est. upon completion) · **₹3,000 Cr** (50% capacity by Nov 2025) * **Current EHV Capacity:** **₹650 Cr** * **Capacity Utilization:** **78%** Cable · **65%** House Wire · **85%** SS Wire · **46%** Communication Cables * **Sanand Phase 1 Capex:** **₹1,000 Cr** (FY26) * **Sanand FY27 Revenue Target:** **₹2,000–2,500 Cr** ## B. Sanand Plant Ramp-up * **Phased Commissioning:** First phase of Sanand plant to become operational by November 2025, with over 50% capacity online by December 2025, enabling significant revenue contribution from Q4 FY26 onward. * **Technology Shift:** Sanand facility will use vertical tower production for EHV cables, a shift from current catenary systems, supporting higher efficiency and scalability. * **Margin Expansion Potential:** EBITDA margin expected to improve by **100–500 bps** at full run-rate due to economies of scale and favorable product mix with higher EHV output. * **Certification & Ramp-up:** Certification processes underway, leveraging Chopanki experience to ensure swift ramp-up and stabilization in FY27. * **Export-Focused Growth:** New capacity will prioritize export market development, with increased allocation to international orders ahead of Sanand’s commissioning. ## C. Current Utilization * **Near-Full Cable Utilization:** Cable division operating at 78%, SS Wire at 85%, indicating tight capacity in key segments; domestic volume growth limited by supply, not demand. * **Value-Weighted Output Distortion:** Reported utilization in km does not reflect value—EHV cables generate **6–10x revenue per km** vs. LV/MV, meaning financial capacity absorption is stronger than volume metrics suggest. * **Cost Discipline:** Manpower additions tied directly to utilization; no preemptive hiring, keeping employee costs stable despite expansion. ## D. Voltage-wise Capacity * **Strategic EHV Scaling:** Post-Sanand, EHV capacity to grow to **₹1,200 Cr**, doubling current levels, while LV/MV capacity reaches **₹4,800 Cr**, reshaping product mix toward higher-margin segments. --- # 4. Export & Geography Mix ## A. Key Figures * **Export Sales:** **₹472 Cr** Q2 (+96% YoY) · **₹846 Cr** H1 (+79% YoY) **B. S. Exports:** **₹150–160 Cr** current exposure · **₹160 Cr** last year * **New Dealer Additions:** **250** in recent quarter (vs. typical 30–40) ## B. Export Sales Growth * **Record Export Performance:** Export sales surged to all-time highs in Q2 and H1, reflecting strong global demand and successful market penetration. * **Product & Sector Focus:** Growth driven by EHV, HT, and control/instrumentation cables, primarily serving oil & gas, fertilizer, and chemical process sectors. * **Geographic Diversification:** Exports span key regions including the Middle East, Australia, Africa, Europe, and the U.S., with rising strategic emphasis on non-U.S. markets. ## C. U.S. & New Markets * **D. S. Market Pause with Recovery Outlook:** Exports to the U.S. remain at elevated levels but are constrained by tariff uncertainties; resumption of growth expected post-resolution. * **New Markets Driving Export Mix:** Recent geographies, including the U.S., contributed **25% of total export revenue**, underscoring successful diversification. * **Capacity & Certification Readiness:** Sanand plant is export-competitive up to 500 kV; Chopanki EHV facility holds multiple international pre-qualifications. * **Distribution Network Expansion:** Aggressive dealer onboarding (250 new in quarter) supports global capacity rollout, despite stable overall active dealer count. ## D. Regional Contribution * **Sustainability Integration:** All manufacturing plants, including Sanand, operate with rooftop solar energy, aligning with ESG goals and reducing operational carbon footprint. --- # 5. Product & Segment Performance ## A. Key Figures * **EPC Division Sales:** ₹47 Cr Q2 (-42% YoY) · **Stainless Steel Wire Sales:** ₹53 Cr Q2 (-10% YoY) * **Domestic Institutional Cable Sales:** ₹581 Cr Q2 (-6% YoY) · **EHV Cable Sales:** ₹128 Cr Q2 (+76% YoY) * **H1 Domestic Institutional Cable Sales:** ₹1,292 Cr (+9%) · **H1 EHV Cable Sales:** ₹244 Cr (+61%) * **Copper Usage:** +18% · **Aluminum Usage:** +3% (Shift to 45% copper, 55% aluminum mix) * **First-Half Volume Growth:** ~15% · **Q1 Volume Growth:** 28–30% ## B. Wire & Cable Segment Dynamics * **Volume-Price Mix:** Strong first-half volume growth driven by **15% volume contribution**, with pricing adjustments every 15 days supporting revenue resilience. * **Product Mix Shift:** Housing and Winding Wires now represent **33–34%** of output, while B2C sales split at **~55% wires, 45% cables**, reflecting stable demand patterns. * **Domestic Demand Softness:** Underlying domestic volume likely flat to down despite value growth, indicating reliance on price pass-through rather than volume expansion. * **Strategic EPC Retention:** EPC division scaled down with intent to maintain **₹400–500 Cr annual run rate**, signaling minimal but deliberate continued presence. ## C. EHV & HT Performance * **EHV Surge, HT Drag:** Extra High-Voltage cable sales show **robust double-digit growth** on strong infrastructure demand, while HT declines stem from **dispatch delays due to customer-side issues**, not weak demand. * **Capacity & Outlook:** Sanand plant delays may constrain near-term ramp-up, but **multi-year growth trajectory remains intact** for EHV/MHV/LT cables amid energy and infrastructure tailwinds. ## D. Data Center & Channel Growth * **Data Centers as Growth Engine:** Identified as **key strategic driver** with **substantial revenue contribution**; KEI supplies full suite of EHV, MV, and copper cables across data center projects. * **Channel Momentum:** Institutional B2B and export channels growing **above 30%**, outpacing B2C (~20%), with **retail margins only 5% higher**—supporting push for balanced 50-50 sales mix. * **Cost Significance:** Wire and cable account for **8–9% of total data center project costs**, reinforcing KEI’s value-chain relevance and scope for bundled offerings. --- # 6. Risks & Execution Challenges ## A. Project Delays * **Four-Month Delay in Phase 1:** Project timeline pushed back due to **prolonged rainfall in Gujarat** and **contractor labor shortages**. * **Capacity Reallocation Impact:** Shift from EHV to HT power cables last year weighed on performance amid weak EHV demand. * **HVTC Market Entry Process:** 2-year prequalification for high-voltage cables is viewed as a standard, manageable hurdle in new market expansion. ## B. Commodity Volatility * **Input Volume Fluctuations:** Copper and aluminum order variability is driven by customer demand dynamics across segments and **export vs. domestic exposure**. --- # 7. Guidance & Outlook ## A. Key Figures * **Revenue Growth Guidance:** **20%** for FY26 · **20%+ CAGR** expected over 3–5 years * **Margin Expansion Target:** **1% to 1.5%** by FY28 * **Current FY Growth Target:** **17–18%**, now surpassed ## B. Revenue Growth Target * **Growth Resilience:** Full-year FY26 revenue guidance reaffirmed at 20% despite project delays, underpinned by strong H1 performance and long-term execution track record. * **Strategic Focus:** Management prioritizes **18–20% growth** and **full capacity utilization**, agnostic to end-market mix due to minimal **5% margin differential** across segments. * **Long-Term Trajectory:** Confidence in sustaining **20%+ CAGR** beyond FY27, with upside potential once new plants reach full operation and markets mature. ## C. Margin Expansion * **Stable Margins Ahead:** Despite over 20% revenue growth, margins expected to remain flat in FY26–FY27 versus prior years, pressured by unfavorable base effects. * **Path to Expansion:** **1–5% margin uplift** anticipated by FY28, driven by full ramp-up of the Sanand facility and scale benefits. ## D. Capacity Contribution * **Supply-Demand Timing Mismatch:** New capacity additions in FY27 may not immediately accelerate growth due to lagging market development relative to production ramp-up.