Good afternoon, everyone. On behalf of Nuvama Institutional Equity, we are glad to host the senior management of KEI Industries Limited to discuss the Q2 earnings.

We have with us Mr. Anil Gupta, Chairman cum Managing Director of the company, Mr.

Rajeev Gupta, Executive Director of Finance and CFO. We'll start the call with the opening remarks from the management and then move to Q&A session.

Thank you, and over to you, sir.

Thank you very much. I'm Anil Gupta, CMD, KEI Industries Limited.

Thank you for attending this conference call. I'll give a brief of quarter two of 2026-2027 financial year.

Net sales in Q2 of FY 2027 is ₹3,776 crore. We have achieved a growth by 38.52%.

However, the total wire and cable sales in Q2 has grown by 39.5% against previous year same period. During Q2 FY 2026-2027 operating margin is almost at par at 9.97% against 9.88% previous year same period.

EBITDA in this quarter is ₹401 crore against ₹311 crore last year EBITDA margin over net sales was 10.62% in this quarter. The growth in EBITDA is 28.69%.

Profit after tax this quarter is ₹262.45 crore against ₹203.51 crore in last year. Growth in the PAT is 28.96%.

Profit after tax oblique net sales margin is 6.95% versus 7.46% previous year same period. Domestic wire and cable sales is ₹3,184 crore with a growth of 46%.

Export sale in this quarter is ₹493 crore against ₹472 crore last year. We have very good order book position from overseas market, particularly United States.

We are quite hopeful that in coming quarters exports will grow substantially. Total EHV sale this quarter is ₹217 crore against ₹172 crore in the previous period last year.

EPC sale is ₹46 crore against ₹47 crore. Stainless steel wire sale is 50- ₹61 crore against ₹53 crore previous year same period.

Domestic institutional wire and cable contribution is that means B2B sale is 26% contribution in the overall sale. Sale through B2C sale is against distribution network is 59% and contribution of export is 13%, and balance 2% percent is domestic EPC and domestic stainless steel wire.

For first half of 6 months in FY 2027 net sales achieved is ₹6,961 crore. The growth in H1 is almost 31%.

However, total wire and cable sale growth is 32. 32% against previous year same period.

During H1 operating margin has improved to 11.09% and EBITDA achieved is 11.73% against 11.46% in the same period previous year. Growth in EBITDA in first half is 34%.

Profit after tax is ₹536.59 crore. Growth in the PAT is 34.4%.

Total growth in domestic wire and cable growth is 38%. Export sale is ₹834 crore as against ₹846 crore last year.

Total sale of extra high voltage cable is ₹403 crore as against ₹298 crore last year. The total active working dealers of the company as on 30th September is 2,146.

Total order book at the moment in wire and cable segment is ₹4,927 crore, EPC ₹258 crore, and out of this order book around ₹991 crore are export orders. External rating, long-term rating from CARE, India Ratings, and ICRA is AA+ and that of short-term is A1+.

Book value of the company per equity share is 753 as against 697 as on March 31, 2026. Cash and bank balances on 30th September is ₹298 crore, which includes QIP balance of ₹169 crore.

During H1 FY 2026-2027 company has incurred a capital expenditure payment of ₹402 crore out of which Sanand capex is ₹333 crore. Till 30th September '26, total capex payment incurred for Sanand is 18- ₹1,876 crore.

Another ₹200 crore approximately will be spent in balance 6 months of FY 2026-2027. Company is expected to incur capital expenditure of approximately ₹600 crore annually for next 3 to 4 years.

At present company is having total metal-consuming capacity of approximately 183,000 metric ton per annum, including both copper and aluminum, both. The planned commercial production of phase 2 of extra high voltage cable and HT cable in Sanand will commence by end of March '27.

Capacity utilized during H1 '27 is approximately 77% in cable division, 64% in house wire division, 91% in stainless steel wire division, and 43% in the communication cable capacity. Sanand capacity addition is taking time to ramp up, and in coming months capacity utilization will increase month after month.

Also, we have sufficient capacity to grow house wires production and sale for next 2 to 3 years. Now, based on the strong demand in domestic and overseas market, we are hopeful to grow in the current year by more than 25% and in next 3 to 4 years by 20% CAGR.

There is a good demand in both and demand growth of our wires and cables in data centers, power T&D, renewable energy like solar and wind, and also even the thermal power projects now coming up in a big way, electric vehicles infrastructure, railway electrification, metros, urban infrastructure as well. Also new manufacturing projects in domestic as well as in global markets are also attracting good demand.

Wire demand is strong in housing and commercial spaces. Thank you very much.

This is a brief from my side. I would like to glad to answer your any queries if you have.

Thank you very much.

Thank you. Good afternoon, team.

I have two questions. First, on gross margins, could you explain the YoY gross margin decline?

Now, what I understand is EPC losses, if I take that even as a percentage of gross profit, that explains 80 basis point decline, leaving another 100 basis point. Your commentary on export is bullish, EHV has grown very strongly, B2C growth has been strong.

Today morning interview on CNBC also, the MD said that UltraVolt's entry will not trigger pricing wars. In 1Q you had said that we'll maintain the gross margin guidance with a further 50 basis point improvement.

Could you please categorically explain the 100 basis point decline? Second question is on the wires and cables outlook.

If we see copper has been oscillating close to almost 14,800. How do you see this wire and cable market evolving if copper crosses the 15,000 mark?

Could there be a dent in demand itself? What are the key risks that you see standing today in the wire and cable market?

Thank you.

Thank you, Natasha. I'm Rajeev Gupta.

Natasha, in the earlier call of the first quarter, we maintained that the overall EBITDA margin will be 11% mainly because the quarter one was not the representative of the margin because of the certain valuation of inventory. If the valuation increased in the first quarter because of some reason, it has to effect in the another subsequent quarter.

Because of that, it looked like that. If we compare the whole half year position, you will find the same thing which we have said earlier also.

In the past, if you compare our 5 years number, our operating margin was close to 10.27% to 11% in H1. Slowly slowly it is increasing and it has reached to 11% now in H1.

We should not compare, as we earlier requested, for Q1 or Q2, it is a annualized basis. We always guided in the past that annualized basis the margin will be there because the growth is also on annualized basis, because in Q1 or Q2 or Q3 growth may here and there because of certain dispatches or certain inspections get delayed.

Because of that, year after year and quarter after quarter, we always guided that the growth rate will be for the full year and the margin will also be for the full year basis because of the valuation impact and everything else. With respect to the wire and cable market demand, since last 15-17 years, in spite of so many new competitors came in in last 15-20 years, company has grown almost 17%.

If we talk of the last 3 years, we have grown more than 18-19%. That kind of history we are maintaining and we are communicating, and we are guiding.

Whatever we are guiding in terms of the growth or in terms of the margin, keeping in mind the new competition, keeping in mind the geopolitical situation, everything we keep in mind. That's why we give you the guidance.

Whatever guidance this year, we have upgraded to grow by 25%. We are still maintaining that we will grow more than 25% because nobody knows in future copper price will go up or copper price will go down.

Whatever conditions at present are available, whether it's a pricing or it's a geopolitical situation or some other environmental or some other political situation, we need to consider each and everything into the aspects. That's how we are guiding.

Our guidance is still maintaining that we will be growing at a 25% plus growth rate, and our EBITDA margin will be close to 11%. In our EBITDA, mainly other income part is very small.

It is not more than it is basically the interest on our FD or some exchange gain or loss. It depend on a quarter-to-quarter.

It is not very heavy amount. If we exclude the interest or exchange gain or loss, then another 0.3 or 0.4% we may exclude.

Whatever Anil ji is saying that we will be maintaining 11% EBITDA margin, and in the past also we were saying. In the last quarter, we maintained that 11 to 12% guidance, so that was a range-bound guidance because of the Sanand.

Once the Sanand is fixed and the capacity it ramping up, and we are going to utilize to 60 to 70%, our EBITDA margin will definitely cross to 11%. That's how we have guided, and still we are firm on our guidance, whether the competition was there or the competition in future will be there.

Export is increasing robust way, and in the coming quarters, the export will also grow, but our growth rate will be depend on the geopolitical situation, competition, as we repeatedly saying that will be 25% plus, and EBITDA margin will be 11% where we grow from export or we grow from the dealer-distributor or we will grow from the domestic institutional side. As of now, the pending order position is very very strong.

Export order is also very very strong. Demand has very very strong, and the visibility of the demand is also very strong.

Yes, Natasha, from my side is over. If you have any query, please let me know.

Thank you, sir. That's comprehensive.

Thank you very much, and all the best.

Hi. Good afternoon, sir.

My first question is on the revenue growth that we saw this quarter. Historically you've always kind of maintained a very tight range of, let's say, 20-25% revenue growth, and in first quarter also you had kind of spoken about keeping revenue in a similar range irrespective of whatever happens to RM prices.

This time around, we have seen a stronger revenue growth. Should we start thinking that the focus would be on getting volume growth as opposed to anchoring ourselves to a revenue number?

Sir, earlier in the past also, we repeatedly saying that value growth will be there because government makes the budget in value, corporate makes the budget in value, and individual makes the budget in value. Ultimately the value will prevail.

Whatever capital we will be having, to that extent we will be growing, because as at present, we don't have the concern for the capacity because of the Sanand phase 1 started. Capacity is not concern as long as we have the working capital availability, because at present, we are running a debt-free company.

We will be running a debt-free company. We will be maintaining and we will be increasing our top line.

Sure. Given that we still have a net cash position, will it be fair to assume that revenue growth can be far stronger than what we have seen in the next few quarters as well?

We have capacity, we have net cash position, and realization benefit is likely to persist at least for another one, 1 and 1/2 more quarters. Can we assume a much stronger revenue growth than what we've become habitual of seeing?

You see, at one side, everybody is concerning about the new competition. At the other side, everybody is also expecting to grow.

If we can grow faster and you are expecting we can grow faster, then why there is a concern for that? Basically because all the things we need to balance.

Because of the balancing, we are guiding for a 25% growth, but whatever we can add, we will be definitely adding. As I said, in the past 15-17 years, our history is available.

In past 15-17 years, so many new companies have come, but we will be able to maintain because of our large customer base position and our large export base position.

Sir, the reason why I'm asking, a 25% kind of a revenue growth essentially implies a significantly slower revenue momentum in second half versus the first half. That's why I'm kind of trying to kind of get better clarity.

Sir, for the guidance purpose, it will be 25% plus, but whatever it will be, it will be available in the balance sheet, because as you have already seen in the first half, we have grown almost 30% 31% plus.

Sure, understood, sir.

Because whenever we guide more and if we something lose, then we have to answer. We need to cautious about guiding.

Sure, that's a fair point, sir. Completely understand.

My second question is on margins wherein only in the last quarter we had spoken about 11 to 12% margins. This time around, you're speaking about 11% margins.

I know it's not a big deal. It's a small kind of a change that we've made.

Should we read anything more into this? Is it that margins are likely to be lower than what you were envisaging earlier?

What is really leading to this change?

Our guidance was close to get 11% for the current financial year because it the same call we were referring in the month of May, at that time also we have said that first we will go to 11 to 11.5%, then we will go from 11.5 to 12% because as the Sanand capacity will ramp up, the margin will get improved because of the export market, because of the EHV increase, because of the economy of scale. Our guidance is intact.

As I said that 11%, as we said, we are maintaining. As the Sanand capacity ramp up, we will be moving towards 11 to 12.

Sure, sir. Understood.

Thank you so much.

Hi. Thank you for the opportunity.

Sir, my question was similar to what was asked by previous participant, that so essentially what we are seeing is that this year's margin will be around 11% and margin will slowly move towards 12% because of the various factors that we mentioned, right?

Yes, Krunal ji, you are right because the Sanand capacity which is ramping up, the margin definitely will improve towards the more than 11% side. Because of the current year environment and competition in mind, the 11% EBITDA margin will be there.

Sure, sir. Sure.

Thank you so much.

Hi. Good morning.

One question from my side, Rajeev ji. Now, as rightly highlighted, that no one really knows how copper prices will play out.

Assuming copper prices stay stable and not believing either going up or going down meaningfully, are we still confident of maintaining a 20% revenue momentum into FY '28 for the full year?

Definitely the CAGR which we highlighted, on the basis of the working capital available and the cash flow available, we will grow at a 20% CAGR. In future.

Even if copper prices remain stable. Essentially, next year we are looking at a more volume growth and less pricing growth, given we will have incremental capacity from Sanand.

Is that the way how we should look at?

Sir, every time we all discuss about volume, but I always keep reminding you that everything sold in the value terms, sir.

No, sir. I'm just looking at pure mathematics, assuming copper prices don't really move, essentially 20% would be that volume growth.

Sir, if copper price don't, sir if copper price don't move from here, then definitely 18-20% volume growth will be there automatically. If copper price goes down from here, then the volume growth will be higher than that.

It is implied, sir. Because in the past 15 years, Sir, in past 15 years, when I was saying that 17% CAGR, few of the years were where the copper price was going down and down and down, but still we were growing at a 15-17%, even the downward trend.

Absolutely, absolutely. My second question is with respect to working capital.

Obviously first half, we saw an increase, which was industry-wide, not particularly to us. Do we believe from here on working capital number of days have peaked and we should gradually see that number going down into second half and going into FY '28?

Sir, already if you see the debtors number, it is already down. Only the inventory portion because of the new Sanand capacity is ramping up.

There the whole inventory will get started, because at one time, we need to fill the full factory, na? Because of that, the inventory has gone up, but at the same time, the creditor level has not gone up because our cash was available, we saved the interest cost, and we use the cash.

Working capital is the factor of inventory plus debtor minus creditor. We have not increased creditor because we are having the cash.

That is not the case our working capital has increased, actually.

Sure, understand that, sir. I'm looking from here on, do we believe inventory days have stabilized?

Sir, inventory days from here, it will go down.

Perfect. Perfect.

Rajeev ji. Thank you so much, and all the best for subsequent quarters.

Thank you, sir.

Hi. Good afternoon, sir.

Sir, my question is on how we have passed on the prices for cables and what's our strategy now, how frequent we can pass through it?

Sir, as I said, in last 15-17 years price trend was increasing or decreasing trend, we have the mechanism under the natural hedge because we are carrying 3 to 4 months institutional order book, and we are carrying 3 and 3 to 3 and 1/2 month inventory in factory and in transit. Our inventory and order book is under natural hedge.

Old order gets served with old inventory. That's how we are passing on.

Whenever we are quoting a new contract, we are quoting on a prevailing market price. That's how we are passing on month after month, quarter after quarter, these prices to institution.

In the case of retail, twice in a month, price gets revised either upside or downside, depending on the movement of the metal. Practically, prices are passed on.

Got it, sir. Sir, and next question, if you can throw some light how the consumer behavior, let's say if the copper prices stay stable from here or even slightly goes down, do we see higher traction in the volume stocking or so?

How do we see from here, both in cables and wires?

Sir, one thing is very very simple. When the prices of the copper will go down, the volume will get increase.

Prices will go up, the volume will get decrease, but the overall sale value will increase.

Got it.

In the history, like financial year '16-'17, '17-'18, '18-'19, the copper price trend was going down and down and down, but our industry was growing at 16 to 17% CAGR.

Got it, sir. Thank you.

Thank you, sir.

Sir. Thank you.

Just a couple of quick clarification. First, the EBITDA margin what you're saying is including the other income, right, just to clarify?

Achal ji, in our case, in the past also we have discussed so many times, in EBITDA versus operating profit is not much difference. It is hardly in a quarter ₹15 to ₹20 crore difference is there because of interest on FD or the exchange gain, sometime exchange loss also, sometime exchange gain also.

It is not much difference, actually. It is hardly 0.2%.

Right,

right. No, for the second quarter, sir, the difference was 60 basis point, and given

Achal ji, so many times in the past we have discussed that whenever we are guiding or always we guiding a EBITDA margin. EBITDA margin is 11%, operating margin it may be 0.2% slightly less, because in the last year only, in last 2 years when the QIP money was there, FD income was higher, actually.

Now it is not the case, interest income will be very very less, actually. Got it.

Got it. In terms of the institutional momentum, how has been the off-take?

Is there any weakness, slowdown, or how is the demand scenario in various pockets of the industrial cables? Yeah.

Achal ji, since last 7-8 years, whenever we are discussing, you say you are not seeing the demand, you are not seeing the off-take, but every year we say that we are seeing so many off-take. Look at so many projects in the private sector or government sector is on the ground.

At present, you see the energy sector is very very strong, whether it's a renewable, wind, solar, even the thermal, even the nuclear. If you go for the infrastructure projects, whether it's a road, rail, metro, airport, seaport, everything is in the attraction.

The government is investing ₹11 lakh to ₹12 lakh crore, but everything will remain in the value, not will be in the volume terms. That we need to keep in our mind that government makes the budget only in the value terms.

You see the expansion in the refinery, expansion in the steel, fertilizer, pharma, even the real estate, whether it's a commercial or it's a residential projects. In each and every city, there is a construction going on, sir.

Because of that, if the GDP is able to grow by more than 7% and there is no estimation that GDP will not grow. Unless and until the GDP is growing and there is no indication of GDP will not grow 7%, how we can say the demand will not be there?

No, no. Fair point.

I was just trying to check the current trends as to if there is any weakness, given the increase in the price of the raw material if the institutional off-take

Sir, raw material price increase or decrease, it always passes on. It has nothing to do with our margin.

If you see the latest 5-year result, you will not find much volatility in the EBITDA margin. EBITDA margin is always was 10 to 10 and 1/2%.

Now it is moving towards 11% because the new capacity and the new sale is increasing, economy of scale.

Got it. Just a quick clarification, is there any exchange loss or anything in this quarter and also in 1Q?

At present, there is exchange gain. There is no loss.

Okay. Can you quantify, sir, exchange gain for 2Q?

Just a minute. Just hold on.

Sir, ₹8 crore exchange gain is there. Hello?

Achal, ₹8 crore.

What is it for 1Q also, sir, if you have it handy?

Q1

Or first half? Yeah.

Q1 also is what close to Hello?

Yes, yes. Q1 also similar, sir?

Sir, Q1 was very less, actually. Less than ₹1 crore.

Less than ₹1 crore. Okay.

Got it. Got it.

Thank you, and Swapnali, we can

Actually, interest cost was higher earlier because of the QIP money. Now that's not the case.

Interest cost nahi, interest

Interest income.

income. Got it,

got it. Thank you.

Hey, sir. Thanks for the opportunity.

Sir, on exports, you were targeting 17-18% salience this year. The first half, we are flat because of the war.

You mentioned about a very strong order book. My two questions there.

One is how much is US in your order book of ₹1,000 crore? Second is how do you see exports growth for the full year as of now?

Sir, export growth this almost it is a flat because ₹493 crore versus ₹472 crore in this quarter. The export order, which is ₹991 crore, it is from the Middle East, from Australia, from America.

America order is almost 50% of the order book.

50%. Okay.

Got it. Thank you.

At the current timing, the America is very very strong demand, whether it's industry or it is from energy side. From both the side, the demand is very strong from USA.

Understood. Sir, from a full-year perspective, any guidance you can share in terms of absolute export revenues or growth versus last year?

Sir, first of all, everything if the export increase so much, then little bit decrease in the domestic institution, because if the overall growth will remain the same na, sir? Because we need to be subpart of the export, retail, or institution, na?

Overall growth either from here or from there.

Sure, sir. Thank you so much, and all the best.

Hi, sir. Thank you for the opportunity here.

Just quick question on the capex-related side. Our CWIP has increased to almost ₹1,300 odd crore as of September.

Could you please provide an update on the key projects driving this increase and their commissioning timeline and [unclear]? This is the Sanand project.

Basically, the Sanand project is only the driving. By March 2027, our phase 2 of EHV and HT cable will commence.

Then almost all the CWIP will go towards capitalize.

Got it, sir. Just wanted some clarification on the inventory side.

We have seen an almost ₹1,200 odd crore of increase in the inventory in first half, significantly impacting our operating cash flows. Could you please elaborate on the key drivers of this build-up?

Additionally, when can we expect the inventory to

Mainly inventory increase in the Sanand because it's a new plant. As the capacity is increasing, at one time we need to fill the full factory.

Almost more than ₹600-₹700 crore inventory increase only in the Sanand, and balance because of the valuation from the existing factory. Because of that only.

Sir, and when can we expect it to normalize post H2?

It is by the end of the year it will get normalized to the earlier level. The holding level will remain same by the March '27.

Got it, sir. Can you please call out the volume growth for this quarter?

Volume growth, as I earlier said repeatedly, that everything we sold in the value. The government budget is always in the value.

We have the capital constraint, we can sell only in the value terms, na, sir? That's why the value growth is always prevail because balance sheet we make only in the value terms.

Got it, sir. Thanks a lot.

Good afternoon, sir. Just a few clarifications.

You said balance sheet inventory should go back to 90 days of COGS by March '27. Is that correct?

Yes, is it correct.

Okay. I joined the call a bit

By that time the sale will also increase, na, Rahul ji? Again the holding level will remain same.

Yes, sir. I understand that.

I joined the call a bit late. I just wanted to understand the reason for the EPC segment, whatever small EBIT loss we've reported.

What is the reason for that? Sir,

EPC, since we are closing down, now whatever leftover job is there because the new job in EPC is not there. Small-small closure issues will be there.

It will be like in the first quarter also there was a ₹5 crore loss, in second quarter ₹8 crore. In next one or two quarter, ₹5 to ₹7 crore loss will be there because we are almost closing down the EPC.

Okay. Full year, we should budget about a ₹20 crore kind of EBIT loss for the full year and then from next year there is no EPC, is that correct?

EPC revenue is close to 1, 1 and 1/2% as of now.

Got it, sir. Got it.

Just one clarification on exports to the previous participant's question. First half flat, I understand full year we'll grow 25%.

It doesn't matter whether it's domestic, export. This ₹990 crore order book, we have a finite timeline, right?

Right, it will be sold within 3 to 4 months. Sir, whatever pending order book is almost 3 to 4 months, not more than that.

Achha, you're saying this entire ₹1,000 crore of export order book will get fulfilled in next 4 months?

Sir, har mahine order aate hain, har mahine order bikte hain. Order book will be there, but it will be sold within 3 to 4 months.

Okay. Got it.

Sir, last question on EHV, after the plant commissions for Sanand, by March, the peak revenue for EHVs would be how much? What should be the capacity?

New capacity additional will be more than ₹1,500 to ₹1,700 crore in terms of value or maybe more depending on the metal valuation. It will take some time to reach peak, but quarter after quarter from the September quarter of next year, the EHV sale will get increased.

Because March we will start the commercial production, 3 months' time it will take to settle down and for the approval process. Then from the second quarter, the sale will heading of EHV from the Sanand plant.

This is over and above the existing ₹700 crore of capacity, is that correct?

Yeah. Existing is now ₹700 crore sale.

Okay. Sir, full year capex, you said ₹600 crore every year for the next 3 years.

That is what we should budget?

Sir, because we need to increase the capacity to grow by 20% CAGR. Now we have just started the Salarpur, it will take another 2 years' time, their investment will be going.

That's how we are targeting and allocating the budget for capital

expenditure. This includes the maintenance capex for existing factories?

Maintenance capex is ₹100 to ₹150 crore, not more than that.

Got it, sir.

in all the plant.

Got it, sir. Thank you so much, and festive greetings to KEI.

Thank you so much.

Thank you. Aapko bhi, sir.

Yeah. Hi, sir.

Thank you for the opportunity. My first question is on the volume front.

In the interview today morning, you mentioned that volume for FY '27 will be somewhere around 10% So, and which is more a bit conservative than your earlier guidance of 16% to 17%. Can you throw some light why is that conservative?

How much

Sir, if you see the volume growth 16% to 17% and price has increased by 50%, this means you are talking of a 67% to 70% sale value growth. Is it right or wrong?

Yes.

Hello?

Yes, yes, Rajeev ji.

So, 70% growth is not possible at all, sir, because for growing any company, it's needs the working capital, and working capital does not support more than 25% to 30% growth rate. It is a very very clear, sir.

Whatever we will grow, we will grow in a value terms. That's why we are again and again emphasizing on the value terms because of the capital requirement to grow.

Right. How much of this will be coming from Sanand contribution?

What is the current utilization at Sanand?

Sanand, as of now, until last month, it reached to ₹100 crore per month level. Within this quarter, we are targeting ₹150 to ₹200 crore per month.

Third quarter will be close to ₹250 crore to ₹300 crore, some that type of scene in the monthly basis.

Understood. Secondly, on the margins, if we compare the QoQ margin decline, in Q1, you mentioned that the operating efficiencies, EHV, and the retail contribution must be key levers for the solid margin trajectory.

If we see even in this quarter, those three levers are intact. Could you help understand the key reasons for the sharp decline in QoQ margins?

Actually, there is no decline. When there was a last quarter call, at that time also, I clarified, because of the valuation, inventory is high.

Because of that, the margin was looking like improving. If the closing stock somewhere at the high value, again it has to adjusted in the subsequent quarter, so that it has adjusted.

If you combine for two quarter, it is average out. It always happen because of the current price fluctuation.

There is a no decline. Practically, annualized basis if you see, there will not be decline, rather it will be increased.

Whether it's a operating profit which we are talking.

Yes, sir. Lastly, to get a sense on your strategy in the dealer channel, if we are seeing additional capacity, the new entrants coming in the retail channels, what are you looking at a strategy to channelize your mix between the retail and insti?

Can we see the retail mix going down from here due to that, or is there a deliberate approach to that, or will you be taking as it goes on?

Sir, dealer-distributor contribution is already 55% to 60% range, and we will be operating in this range. Because those dealer-distributor are working for us, they will be working for us.

Have you seen any pricing changes or any dealer incentive change in the dealer channel?

Pricing, it is a continuous process. It's increasing or decreasing, because depending on the metal price, as I said, that twice a month price gets revised for the retail.

Twice a month. It's a continuous, regular, normal process.

Nothing new, nothing abnormal.

Yeah. Good afternoon, sir.

I have two questions. First, if we see from past 2-3 years, your active dealer count if we look at this time we have disclosed at 2 2,146 and last year same period it was at 2,340-something.

Why the active dealer count has been remained steady-state? Have we reached to our full potential in terms of distributor count or the penetration, etc.?

Sir, dealer-distributor count is normally in the range of 2,100, and our existing dealer-distributor are few of them, those who are not working, we are closing down. Few of the new potential dealer-distributor, we are increasing.

That's how the number is in the range. Our existing dealer-distributor are working hard for the company.

That's how our overall retail dealer-distributor sale in last 5 years has grown from 40% contribution to now 59% contribution. We are quite satisfied with our existing dealer-distributor, and they are also very loyal to the company, those who are working for us.

Sir, I got that dealer distribution mix is improving. I'm just asking from a penetration perspective that if in India XYZ is the number of dealer count, have you reached to that potential?

That is why on a net basis, it's not on an increasing trend? Is my Slowly

slowly, it is increasing also, but few of the dealers, those who are not selling our product, they are also decreasing also. Because of that, the net number is not increasing, but ultimately the valuable dealer-distributor is increasing.

Okay. Sir, these would be your exclusive dealers, 2,146?

Sir, normally 15% to 20% of the total dealer count are the exclusive, but balance are the multi-brand dealer-distributor. They must be selling two or three brands.

That's

the normal practice of the industry. Right,

right. In terms of serviceability, can we say that how many pin codes are we able to map through these dealer retail touchpoints, how many we have been able to clock?

Almost in each and every city we are available, sir. Each and every city of the country, we are here.

Okay. Sir, just a second question

We are the second largest company of the country for the wire and cable business.

No, that's known, sir, been tracking for more than 12-13 years. Just from a perspective from the peer or the new entrant who is being able to start its business, just wanted from a reach point perspective.

Sir, second question from Sanand wanted to

Sir, one thing I would answer for the reach point, more than 25,000 retailers are working all across the country, and more than 2 lakh electricians we have been connected so far. Sir, you are asking something?

This you have reached. Can you give on a industry basis, sir?

That will be really helpful that how much more potential is there for KEI to grow

It may be double also, sir, in next 5 to 10 years, because the potential is huge, and the country is so big.

Okay. Sir, just last question on Sanand, as you in your initial remarks, you said that ramping up is taking time, but last year, you mentioned that it might take 2 to 3 years for full ramp-up.

Can you give at what year we can see the peak utilization for Sanand? And

'28-'29. Sir, that guidance is still intact, in '28-'29, you will see the peak revenue from there.

How much asset turn in the range of 2 to 3 or better?

More than 3.

Any more than 3 means should we take 4x, or what kind of, because EHV will also

As of now, more than 3, sir, less than 4.

Sir. Best wishes, sir.

Thank you so much.

Thank you, sir.

Namaskar, Anil ji. Namaskar, Rajeev ji.

Namaskar, Bharat ji.

Namaskar. One long-range question.

We aim to grow at about 20% plus over next 4 to 5 years. Should I assume that our operating profit pool growth would be ahead of that top line number?

Sir, that was always in the past also. Sir, if you compare past 15 years, our CAGR growth was 16% to 17%, but our profit growth were close to 24% in the past also, sir.

Right. For a 20% value growth in turnover for next 4-5 years, what kind of operating profit pool growth one should probably be able to assume?

Sir, at least 3% to 4% higher than the top line.

All right. Profit after tax, will it be fair to assume will be little higher than the operating profit growth?

Overall, sir, profit after tax will be higher 3% to 4% because of the interest and our operating margin will also be higher little bit because of some operational efficiency and economy of scale. Overall profit after tax, you can count that 3% to 4% will be higher than the top-line growth.

Than the top line.

Yeah.

So, 20% top-line growth will mean 23-24% operating profit growth, and profit after tax would mean probably about 25

Because there is a tax payment also, na? The growth below the line, I am talking of the below-the-line growth, basically.

I'm not talking of the operating growth, I am talking of the final profit after tax, because in the past history when even the interest was there, we were growing 17%, and our profit after tax was growing 24%. There the difference was higher because of interest, but now the interest cost is less.

If we grow by 20%, at least profit after tax will grow by 24% to 25%.

Operating profit growth should we assume 23-24% compared to 20%? Sir,

operating profit, I cannot comment, sir, as of now because I have not calculated, because in the history, I have calculated on the top line and the bottom line. Accordingly, I have given you the answer.

Okay. What should happen to return on capital employed, which was last year obviously reduced to

Sir, return on capital and return on equity, as it was in the history, ROE was 19% to 20% and ROCE was close to 23-24%. From the next year onward, you will see that kind of ROCE and ROE.

Fantastic.

Because when the Sanand will get completed and the top line will be from there, so that same will get reversal, sir.

Perfect. The capex you mentioned, but I couldn't really get that number, regular maintenance capex will be 100 to 250, and what is the growth

capex over next 4-5 years? ₹100 to ₹150, and another ₹450 to ₹500 will be for the new capex.

Over next 4-5 years.

Yes, sir, because we need to continue growth, and we need to continue capex also, sir, because we need to invest 2 and 1/2 year advance.

One last thing, since we conceive our business plan in terms of the top line and as you have many times articulated that there may be underlying raw material price fluctuations, volume growth also may reflect synergistic effect. The best way to conceive overall business model is in terms of the top line.

If that be the case, should we really focus on operating margins that we talk about, that it is likely to be 11% current year and over time it will improve to maybe say 12%, because that operating profit is really an outcome of this model. Therefore, will it not be better to focus on top line as one number and operating profit growth as a percentage growth is another number rather than focusing unduly on margin percentage?

Sir, you are right. As we said that even in the current year, earlier guidance was 20%.

Because of the capacity available and capital available, we reached to the line where we have said the target of 25% plus, and in first half, we have already grown by 30%. In the margin, we have guided that because of the economy of scale, because of the current scenario, and the mix of the retail has increased and export has increased, our EBITDA margin earlier was close to 10 and 1/2%, which we have guided for 11%.

The both the things are intact. In future also, 11% margin will go towards the higher range.

Ultimately, for us as a company, the availability of the cash profit, profit after tax plus depreciation. Profit after tax will be in the range of 7% to 7 and 1/2%, so that will be available for our future growth.

That's how we measure our growth, actually, sir.

No, because I appreciate, my simple question is for value creation in a business, what is important on a long term is how the overall business is growing, how our profits are growing, and how our cash flows are growing, and along with that, whether return on capital employed, capital efficiency is improving or not. Margin is just an outcome in that number, and it's not

Margin is improving, sir. Because earlier margin was 10 and 1/2%, it has improved to 11%.

Nahi, nahi, wo main samajhta hoon.

We are guiding also for future once the Sanand is get commissioned fully, in the next year, another 1/2% margin will get improved.

Nahi, nahi, main wo samajhta hoon.

No, no, I need to complete this question, please.

Ek minute

hold kijiye. Bharat ji kuch pooch rahe hain.

Haan, Bharat ji, please. Haan, main keh raha tha ki basically margin percentage is not a particularly important factor in value creation.

Value creation resides in top line, profit, and cash flow growth along with the capital efficiency improvement. To margin is merely a noise rather than any meaningful signal.

Therefore, unnecessarily too much discussion, too much focus goes on margin.

Sir, you are right. Haan, sir, you are right.

You are right. Sir, kya hai ki most of the analysts, they are always talking of the margin, that increase margin or decrease margin.

That's why we need to focus, and because they are focusing on the margin. Otherwise, you are right, because as a company, we finally need the cash flow and the efficiency of the capital.

That's why we always focus, whenever we make our business plan, we always make that how much cash is available with us. That is profit after tax plus depreciation, after paying dividend, that cash is available to us.

We as a company always focus on that only, sir, which you are guiding us.

Theek hai. Thank you, Rajeev ji.

Thank you, Anil ji.

Thank you, Bharat Sahab. Thank you.

Aur aapse zyada is company ko kisi ne dekha nahi, sir. Aap pichhle 25 saal se hamare witness ho ki whatever we are saying, we are trying to deliver more than that.

Hello, am I audible now?

Thanks for the opportunity. I just had one clarification regarding the margins.

Earlier, we were guiding for 11% to 12%. Now we are guiding for 11%.

Is it that we are being conservative and guiding towards the lower end of our previous guidance? How do we read this?

Sir, there is no confusion. The guidance is 11% to 12%.

11% to 12% was also for the next financial year. In the last call also, if you read our call, we said that first we will go from 11% to 11 and 1/2%, then we will move to 11 and 1/2% to 12%.

Guidance is intact. Sometimes there is a little bit confusion with the understanding or whatever we want to communicate may be it's a little bit difficult.

Again, I am saying that our guidance for growth will be 25% in value terms. For the margin, EBITDA-level margin will be 11%, 11% to 11 and 1/2%, because when the Sanand is going to complete by March '27, it will move first from 11% to 11 and 1/2%, then 11 and 1/2% to 12%.

Because until 2024-2025, our margin was 10% to 10 and 1/2%. '25-'26 even the margin was 20 10 to close to 10 and 1/2% operating margin.

Now this margin is improving, and it will improve. Guidance is intact.

Please take note that the guidance of EBITDA margin 11% to 12% will be completing in '27 and '28, two financial year. Got it, sir.

Got it. Thank you.

It will not be, sir, quarter-to-quarter. Whatever we are saying, it is a annualized basis.

Once again, I am requesting to all of you, sir.

Got it, sir. Thank you.

Thank you so much for the clarification. There's no guidance cut.

Got it.

Thank you very much, friends, for this interactive conference call. Still have any further questions, please reach out to us.

Thank you.

Thank you very much to all.