KEI Industries Ltd Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Pulkit Patni - Goldman Sachs (Asia) L.L.C - Analyst : So thank you for taking my question. So my first question is if you could talk about the export opportunity, I mean, the numbers that you are talking about in terms of order stability, but it is very significant, 50% growth. So if you could, A, talk about, you know where exactly is this coming from? Second, how sustainable is this in the sense that, you know, why is it that you as a company or India as a country is getting these export orders on cables and wires. So some information related to this would be helpful, that would be the first question.

Question: Pulkit Patni - Goldman Sachs (Asia) L.L.C - Analyst : Very, very encouraged to hear what you just said, sir. That's the second thing of it's been a very, very significant increase in copper prices in a very short period of time. I mean, while they were inching up slowly gradually, the last two weeks, the price increases are pretty significant. How should we look at that from the perspective of the near term, i.e., does it destroy demand a little bit? How do we handle that with the channel? If you could just talk about the significant increase in copper prices and its impact in the immediate term?

Question: Pulkit Patni - Goldman Sachs (Asia) L.L.C - Analyst : Sure, sir. Thank you so much for those answers.

Question: Bharat Shah - ASK Investment Managers - Analyst :

Question: Bharat Shah - ASK Investment Managers - Analyst : Just one question, given the kind of macro scenario that exists is a big drop infra, power projects, constant the buildup of the new power projects in conventional renewable energy, real estate, construction activity in general, almost rebuilding India industrial manufacturing setup for that is what kind of picture we are undergoing. So given that backdrop, what is the picture you would visualize for five years ahead in terms of growth rate for the overall industry opportunity and for KEI, in particular, both in the industry and as well as household. And into maintain capital efficiency or database laid by margins or otherwise. If you can draw a picture as to how do you see the coming five years? And secondly, would you describe the period ahead, probably is one of the most significant ones in the history of KEI or it is that I'm putting words in your mouth. So I want to hear whether you may have on of the industry leaders. I do believe that the period is probably the most defining moment for this industry in the longest time? Or it is just my imagination.

Question: Bharat Shah - ASK Investment Managers - Analyst : And on capital efficiency is -- as you mentioned, that scale-up would occur. Opportunities to do so had already visible. You're preparing yourselves for that. And you earlier mentioned about copper price that it really doesn't change anything on a longer term because it's a bit of a pass through. Keeping in mind all of these have do you see the capital efficiency improving or otherwise over time. Will it be margin leverage? Will it be scale lead or both or any other factor.

Question: Bharat Shah - ASK Investment Managers - Analyst : All right. Thank you. All the very best.

Question: Nidhi Shah - ICICI Securities Ltd - Analyst : Hello. First of all, I would like to congratulate you on a great set of numbers. Most of my questions are regarding say market share of KEI and industrial? And basically, what do you think of experts who are in in terms of exports? What geographies are you mostly targeting? Where do you see maximum growth for cable, especially for industrial cables? And currently, what is the market size of industrial cables in our country? And how do you see that going over the next five to seven years?

Question: Nidhi Shah - ICICI Securities Ltd - Analyst : This is a combination of -- obviously, like household and industrial cable [looks] together. Would you have see a bifurcation in mind of where that could be in the years to come, like which one would outweigh.

Question: Nidhi Shah - ICICI Securities Ltd - Analyst : Okay.

Question: Nidhi Shah - ICICI Securities Ltd - Analyst : Thank you.

Question: Rishi Kothari - Pi Square Investments - Analyst : Yeah. Thank you for the opportunity and congratulations on [the good number posted]. So my question related to the [bill of] distribution that we generally operate in. So [15], we have seen a good amount in the dealer and distribution market. So how exactly, how we know targeting the dealer distribution. We know that [more than] the market is taking, but although it will increase the market share has to take on the (inaudible) the [game] more or less. So how [say] are we giving them. You [going to be] that comes -- that makes that a bulk dealer distributor come back to the [year] supply.

Question: Rishi Kothari - Pi Square Investments - Analyst : But also what differentiates you from any other competitor by year? Is there something in terms of margins that you provide them that makes you stick with that dealer or something else [dolopathi]

Question: Rishi Kothari - Pi Square Investments - Analyst : Okay. So in terms of the [coupon] towards our customers [in terms of] deals is quite strong [compare to] our compotators.

Question: Manoj Gori - Equirus Securities - Analyst : Yeah, thanks for the opportunity [first]. And so my question is with regards to your B2C business. So if we look at probably over last few quarters of probably last six to seven quarters we were seen industry was seeing largely some pressure from the real estate LED demand. Are we seeing any signs of revival. One of the players was [Anil-ji] quoted that number, the indicated over the call that we are seeing some signs of [revival] that the real estate [makes] demand. Any insights over there?

Question: Manoj Gori - Equirus Securities - Analyst : So my question was more specific view on the industry side because obviously of VA has been doing extremely well and probably this is not limited to a year or two have been looking up the company for last year, but I just wanted a sense on the industry front probably. How we are looking --

Question: Manoj Gori - Equirus Securities - Analyst : Okay, thank you. Sir, my second question would be on the capacity. So probably last day of the quarter, we did see some capacity constraints. For this year, given the visibility that KEI having on the demand front, we have [simple] capacity is probably we don't see any [communities] over there.

Question: Manoj Gori - Equirus Securities - Analyst : And the 17%,18% would be in the [new project] right?

Question: Manoj Gori - Equirus Securities - Analyst : Right. So how we see the margin versus FY24 level?

Question: Manoj Gori - Equirus Securities - Analyst : Right, sir. Thanks a lot and wish you all the best.

Question: Gourav - IIFL Securities - Analyst : Thank you for the opportunities, sir. Sir, specifically question on the [EHV] cable side. So what demand we are seeing on the domestic and the international side? And what influence we can expect in next two to three years. Specifically on the EHV side?

Question: Gourav - IIFL Securities - Analyst : And sir, specifically, sir, if you could talk about the demand, make it even more likely driven by the domestic or the international side.

Question: Gourav - IIFL Securities - Analyst : Okay. And you mentioned about [foranium] into US market with these cables and wires to are we and any progress with like a do we have a tie-up with local EPC player there with where we can actually supply? Is there any development on that side?

Question: Gourav - IIFL Securities - Analyst : Okay. Sir, lastly, one or two bookkeeping questions. I may still order book verification, if you can just please highlight the (inaudible)

Question: Gourav - IIFL Securities - Analyst : Okay, sir. And sir, if you could just highlight the [ANP] during the year like what was the percentage and what trajectory we excepting going forward?

Question: Gourav - IIFL Securities - Analyst : Okay, sir. So thank you for the opportunity. Thank you, sir.

Question: Harshit Kapadia - Elara Capital - Analyst : Yeah, hi, thanks for the opportunity and many congratulations for good set of numbers. Sir, few question, just to understand on the demand per [say], are you seeing any sector emissions, which has been something new sector, which you can highlight, which you have started applying your cables to. Is there anything new in that will be helpful?

Question: Harshit Kapadia - Elara Capital - Analyst : Yeah, I was referring from the point that could be new things like EV charging cable or --

Question: Bharat Shah - ASK Investment Managers - Analyst : Okay. And there was also a plan that you want to diversify into other consumer electrical segment? And given the current demand scenario, both on domestic and export side, do you think you would want to continue at this point in time or you may want to relook at it [probably] full-year --

Question: Harshit Kapadia - Elara Capital - Analyst : Understood. And sir, last question is on the EPC side. We have seen earlier there was an EPC cycle boom and then we had refrained [comment] getting into EPC projects now again in power demand is rising. We are seeing a lot of transmission substation orders being coming out, do you think you want to again reenter that particularly --

Question: Harshit Kapadia - Elara Capital - Analyst : That we will maintain --

Question: Harshit Kapadia - Elara Capital - Analyst : Right. But you won't enter into as an EPC player, right?

Question: Harshit Kapadia - Elara Capital - Analyst : Understood, sir. Fair enough, sir. All the best sir, thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2024 / 6:30AM, KEIN.NS - Q4 2024 KEI Industries Ltd Earnings Call

Question: Praveen Shay - PL, India - Analyst : Yeah, thank you for the opportunity and many congratulations on a good set of numbers. So sir, my question is for a full-year last year. If I look at your housing wire and welding wire segment has delivered a very strong number. And also, if I look at incremental revenue, you had [generated] maximum out of that actually. So as compared of your the [LTSC] cable actually. So for the view forward you believe this percentage of incremental sales to continue because this is largely in the cable versus wiring. So where you will see [intensifying] (inaudible)

Question: Praveen Shay - PL, India - Analyst : So just to clarify further to that, your capacity, especially in the cable is coming in for '25 and '26, would you able to maintain your wire contribution of 30% around in your total pie or it will --

Question: Praveen Shay - PL, India - Analyst : Okay. And the next portion for your guidance that it will related to that [force] to grow at 50% and the overall growth of 17%, 18%, that's [50%] or lower growth at the domestic number actually. So as a domestic industry also, you said a 15% growth rate. So would you match this to a 14% or 15% of industry growth or would be a lower?

Question: Praveen Shay - PL, India - Analyst : Okay, got it. And that is a mix of export and domestic development long-term --

Question: Praveen Shay - PL, India - Analyst : Got it, sir. Thank you and all the best.

Question: Koundinya Nimmagadda - Jefferies - Analyst : Yeah, hi, sir. Thanks for the opportunity. Sir, I just wanted to reconcile the CapEx numbers you spoke about [things what purchased] that [INR65 cores about INR50-odd crores] for FY25, what is the expected CapEx for (inaudible) and total CapEx sir? That you're --

Question: Koundinya Nimmagadda - Jefferies - Analyst : And that we -- and solitary commission by FY25 or FY26 first quarter or last quarter. So a little --

Question: Koundinya Nimmagadda - Jefferies - Analyst : Okay. So next year, we'll be spending close to INR1,000 crores of CapEx. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2024 / 6:30AM, KEIN.NS - Q4 2024 KEI Industries Ltd Earnings Call

Question: Koundinya Nimmagadda - Jefferies - Analyst : Okay, understood. And sir, sorry my line got disconnected. Can you repeat the capacity utilization number please?

Question: Koundinya Nimmagadda - Jefferies - Analyst : Got it, sir. Those are my questions. Thank you very much and all the best.

Question: Sandesh Narayan - HSBC - Analyst : Hello sir. Can you -- am I audible.

Question: Sandesh Narayan - HSBC - Analyst : Hello, hi, sir. Thank you for the opportunity. Sir, I wanted to ask how has been the volume growth for the quarter and the full-year? How can the entire group be attributed to volume or there has been some price hikes also in this.

Question: Sandesh Narayan - HSBC - Analyst : Okay. That's it, sir. Thank you so much, sir. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2024 / 6:30AM, KEIN.NS - Q4 2024 KEI Industries Ltd Earnings Call