KEI Industries Q3FY22 concall.
Net sales for the company in Q3 is INR 1,563.85 crore
and we have grown in net sales by 35.64% in this quarter year-on-year
basis. The company has achieved highest ever quarterly sales in this
quarter
EBIDTA in Q3 was 158.54 cr increase YOY 22.93 %
EBITDA/net sales margin is 10.14% as against 11.19% in the same
period previous year because of some expenses normalized back to pre-COVID level and sharp fluctuations in the input costs
PAT in Q3 was 101.25 increase YOY 32.996%.
PAT/net sales margin is 6.47% versus 6.6% last year same period.
cable sales through dealer network is 55%
the pending orders as on today is -- as on 31st December is INR
2,994 crore, EPC → 1038 cr, EHV cable and EPC EHV cable → 419 cr, cable domestic business → 1429 cr, cable export order → 108 cr
The book value per equity share of the company is INR
226.48 as on 31st December 2021 as against INR 197.38 as on March
31st, 2021.
The company has used operating cash flows for cash purchases
resulting into reduction of trade payables
Future outlook of the company: Our strategy is to increase
continuously the retail sale and downsizing EPC business which is
working well, and in future within two years time our retail sales will
reach around 50% of the total sales of the company with annual growth
in the retail by 30 to 35% per annum.
Capacity utilized during nine months of FY’22 is 71% in the cable
division, 66% in the house wire division and around 100% in stainless
steel wire division. So, the company already has the capacity to
achieve growth in the next financial year which is already in place.
Company is on line to do Capex of 7 to 800 crores will be incurred in three to four years’ time to maintain a CAGR of 17 to 18% for coming years. Last 15 years CAGR is 15% and last five years, CAGR is 20%, except 2021 financial year.
Exports have grown by approximately 35% compared to last year
On passing the price hikes to consumers. → They are taken into consideration whenever new offers are made, and so far as retail is concerned, prices
are practically priced or readjusted every 15 days
whatever orders are now there in the system, they are all booked from the copper and aluminum level which are presently prevailing. sustains the margins.
Capex plan: Process of acquiring land for green field capex going on, current year capex 60 -70 cr. next year more than 200 cr.
At present we are more focusing on the wires. So, we are at present, suppose in house wires segment, we want to grab the market share up close to 10%. So that is a focus. We want to increase our sale through retail whether it is from new products or from existing products. So existing product sales increase is better because it is giving us the good profit and good cash flow.
Serving in a year close to 1500 customers, 1700 dealer distributor, then 50 countries to export. So, very wide diversified customer base. Expected to grow at least 17, 18%.
Anil Gupta: we can just say that next from FY’23, the company will
be able to generate strong cash flows for the -- in the company. We have already in this board meeting we have already declared an interim dividend of INR 2.5 per share, which is corresponding to 125% of the equity capital. So, as the cash generation will improve, the dividend may also improve.
In Q3, the volume growth was 18% YoY, nine months it was close to
22%.
PAT level has already reached 6.5%, and we’ll take this PAT level to 8% in two
to three years.
Guidance for sales growth 17% to 18%, EBIDTA growth 11 to 11.5%, PAT growth 6.5% to 7%.