KEI Industries Limited Q3 FY26 Earnings Call Summary

Summary

KEI Industries Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 22, 2026, 12:00 PM

Event Participants

Executives 2 Anil Gupta (Chairman and Managing Director), Rajeev Gupta (Executive Director - Finance and CFO)

Analysts 10 Achal Lohade, Amit Agicha, Anupam Goswami, Keyur Pandya, Kunal Sheth, Nattasha Jain, Nirransh Jain, Pulkit Patni, Puneet Gulati, Praveen Sahay, Rahul Agarwal, Rohit Balakrishnan, Saket Kapoor, Saumil Mehta, Vidit Trivedi

Financials & KPIs

Geographic & Segment Commentary

• Domestic Institutional: Reported ₹592 crores in Cable/Wires and ₹127 crores in EHV for Q3. Growth was moderated at ~3% for 9M as capacity was diverted to meet high-margin export demand.
• B2C (Distribution): Achieved ₹1,612 crores in Q3 with a 29% growth rate. The network includes 2,114 active working dealers, with the top 100 dealers contributing 70-80% of sales.
• Exports: Performance surged 95% in Q3; the company is the first Indian manufacturer to supply 330 kV cables to Australia and 220 kV to Spain. US exports are currently on hold due to tariff uncertainties.
• EPC & Stainless Steel: EPC sales (excluding cables) stood at ₹80 crores, while Stainless Steel wire contributed ₹53 crores. EPC order book remains lean at ₹361 crores as the focus shifts to cable manufacturing.

Company-Specific & Strategic Commentary

• Sanand Facility Expansion: Phase 1 trial production started in Dec 2025 with an initial capacity of ₹250 crores/month. Full capitalization of the ₹2,000 crore project is expected by March 2027, targeting ₹6,000 crores incremental top-line by FY29.
• Extra High-Voltage (EHV) Leadership: KEI is the only Indian company qualified for the National Grid UK framework (up to 400 kV). Management noted strong demand for EHV in renewable energy evacuation and urban undergrounding.
• Vertical Integration: The company manufactures 3,000 tonnes of PVC and 1,000 tonnes of XLPE compound monthly. This backward integration covers requirements for LT and solar cables, though EHV compounds remain imported.
• Competitive Positioning: Management dismissed threats from new entrants using “outsourcing models,” citing that brand building in wires takes 5-7 years and in-house manufacturing is critical for margin protection.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Sanand Ramp-up & Capex

• Question: What is the timeline for Sanand’s incremental top-line? (Rahul Agarwal)
• Answer: Phase 1 LT/HT is ramping up now; Electron Beam solar wires start in April 2026. EHV facilities will be ready by March 2027. We expect ₹2,700 crores from Sanand in FY27 alone (Anil Gupta/Rajeev Gupta).

Growth vs. Competition

• Question: How will you defend against new entrants like Bajaj or Crompton in Wires? (Achal Lohade)
• Answer: New players often use outsourcing, which doesn’t work well in this competitive, low-margin segment. Brand trust takes 5-7 years to build, and KEI’s fixed overheads are lower due to scale (Anil Gupta).

Margins & Product Mix

• Question: Why did institutional sales grow only 3% in 9M? (Nirransh Jain)
• Answer: Capacity is finite; we intentionally shifted capacity to the higher-margin export segment. Furthermore, copper-heavy orders look smaller in volume but higher in value compared to aluminum (Rajeev Gupta).

EHV & Chinese Competition

• Question: Is there a threat from the government allowing Chinese players in the power segment? (Saket Kapoor)
• Answer: This applies to transformers/equipment where there are shortages. In Cables, there is no such shortage, and 4-5 Indian players are well-positioned to compete (Anil Gupta).

Key Takeaway

KEI Industries delivered a robust Q3 FY26 with a 19.5% revenue increase and 42.5% PAT growth, supported by a 95% surge in exports and a 29% growth in the B2C segment. While capacity constraints limited domestic institutional growth to approximately 10% in volume terms, the commissioning of the Sanand plant (Phase 1) provides a clear path to alleviate these bottlenecks. Management has committed to a ₹2,000 crore additional capex plan post-Sanand, targeting a 20% CAGR over the next five years. Strategic focus remains on high-margin EHV cables and international markets (Australia, UK, UAE) to offset domestic competition. Despite raw material volatility, the company maintains a positive outlook with a target of 11% EBITDA margins for FY27, backed by a strong ₹3,928 crore order book and increasing vertical integration. KEI appears well-positioned to capture the domestic energy transition and global infrastructure demand.