Thank you so much for the opportunity. Good afterno on, sir. Sir, firstly, I can see from the numbers that Housing Wires is actually doing better than Cable for KEI when the industry trend is actually the reverse and the entire industry has seen low single-digit volume growth for wires last 2 to 3 quarters now. What has got KEI market share gains? Could you just give some color and understanding of how you've gone about this, please?

So it is basically improving our geographical push by having dealers in the vacant areas and also those schemes and advertising. One factor I can attribute is that maybe we are having lower base as compared to the Havells and Polycab, which you are might be talking. So that may be. I don't know, but these may be the factors.

Okay. So just to extend this question, when I look at the regional dealer sales, which you report in your presentation, it looks like North and East have grown way, way faster versus South looks like low single digits. Could you share some feedback on demand trends in these regions just so that I can tie it up based on why Wires are doing way better than Cable for KEI.

No, no, no. I don't think that Cables are not doing better.

Because the capacity...

Capacity constraint in the Cables.

In the Wire, we have capacity utilization is close to 70% wherein the Cable we have utilization at 95%. And slowly, slowly we are adding the capaci ty with the brownfield capex, so then we will be increasing the Cable space in our city. That's how our growth we are targeting of 16% to 17%.

Got it, Rajeevji. The question essentially was also on the regional side. When I look at the numbers, it looks like North and East are doing 15% to 20% and South is low single digit. West is recovering these last 3 quarters...

And here also I will explain to you that it's basic ally the leadership position from the company side. Those who are aggressive in the market, like in the North, always holding good. And now the East is also being very good now. So now our foc us and thrust will be in the southern part. So in the next year, we will see the conversion in the southern part also.

Okay. Got it, sir. Sir, on the capex, one question. I understand you gave plant-wise capex. I couldn't capture everything. What I wanted to know is if you can help me, full year numbers for consolidated capex for the company for fiscal '24, '25 and '26. That will help.

Okay. So we should assume INR450 crores for this year, INR500-plus crores for next year?

About INR500 crores or INR600 crores depending on the construction work going on in the past in extra high-voltage power cable segment.

Got it, sir. And last question on volume growth. You said 13% for third quarter. Is it possible to give 9-month number?

For 9 months, it was 22%.

and for 9 months the volume increase is 22% in Cable.

Congratulations for another consistent quarter and comeback in the queue. All the best.

Thank you Rahulji.

Thank you , t he next question is from the line of Bhavin Pande: from Athena Research. Please go ahead.

Good afternoon, everyone. I hope I'm audible.

Yes, yes. You're audible.

Sure. Sir, we could see that subcontracting expense s for EPC have gone down both on a sequential as well as Y-o-Y basis. So if you could throw some light on that?

No it is depends on the projects that are going on. Sometimes the supply portion is more, sometimes the erection portion is more.

But sir, even when we look at quarterly numbers, margins have expanded for EPC. So we were wondering if some cost initiatives are working?

So what it is we're doing for the completion becaus e most of the old orders are at completion stage. So all the provisions, etc., has been accord ingly provided. Earlier, it was reverse. So accordingly, it has been done. Because right now, we are having only 3 to 4 contracts going on. All the old contracts are getting completed now.

Okay. And sir, the numbers you gave for capex, INR4 50 crores and INR500 crores. So all of it is for EHV segment or a certain portion would be...

Oh, no. We are in our Ahmedabad, Sanand project, we are going for a greenfield project for extra high-voltage, high-voltage and low-voltage po wer cable, all the 3 segments. So the first phase that our CMD given you the figure that by fourth quarter end of next financial year, low- tension power cable and medium-voltage power cable production we'll get it started. And after the 6 to 7 months, the extra high-voltage power cable will be started over.

Thank you for giving me an opportunity. My question is in terms of we've seen that Exports have significantly increased. So in terms of the cu rrent issues, which are happening on the freight, could you help us on how are our contracts placed? And are we passing on the incremental freight costs and the impact of the current geopolitical issues?

Yes, yes. We are passing on the incremental freight to the customers. So freight is not an issue.

And are you seeing any decrease in demand because of that or any delay and inventory clogging?

No. On cable, it's a high-value item and the increa se in the freight element may increase the prices of cable by maximum 1% to 1.5%, which is ins ignificant and the companies who are doing the projects or the capex, they can't afford to delay the projects just because of 1% to 2% increase in the cable prices.

Got it. And in terms of our capacity expansion of E HV compared to the current capacity, how much will we be increasing?

We can do around 600 crores worth of it.

No. EHV which will come in, the sanand will be equal or even more than this for at least 2 years from now. Because the EHV project take more time th an the low-tension or medium-voltage cables.

So we will be producing almost 2x the capacity we are currently producing, am I right?

We are almost operating at 95% capacity utilization.

Right. Got it. And in terms of margins, do we see a ny -- are we maintaining the margins going forward?

I think we are definitely going to maintain the mar gin, which we have achieved around 11%. And I think we'll try to improve by 0.25% or 0.5%, but the margins will remain in this vicinity.

Got it. And any guidance in terms of where their export demand is coming from in cases? Export as well as EHV, where is it coming from?

So it is coming from at the moment, we are exporting EHV cables only in Australia, But we will develop new export markets for EHV cables once the n ew capacity comes up. Because at the moment, we are constrained with that capacity. There is no point in doing sales effort when we cannot produce and deliver.

Ok got it, thank you so much sir.

The next question is from the line of Praveen Sahay from PL India. Please go ahead.

It is not. Basically - the degrowth is basically allocation of the capacity because once we got the export orders, so we have allocated that capacity to export. Otherwise, the demand is very strong. So whatever capacity we are having as and when we c an sell to the domestic Institutional or to the export Institutional. So if the order has come from exports, so we have to serve first to the export. We are going by the order's buyer entry.

Okay. Okay. Allocation.

Where we can allocate the capacity, that is the issue.

Right. And you are making a higher margin in the ex ports, so there you are allocating. Fair to understand this, right?

Yes. Yes.

Second question, sir, on the EHV cable. There also, there is a very strong growth we have seen for a quarter and even for a 9-month. So can you guide for the way forward how you are seeing the EHV numbers to improve from here onwards? And also to add on, the capacity allocation also i s the function over the year, like more of the EHV you are producing in place of the other cable a nd the growth is there and the demand is high?

No, EHV numbers will remain similar next year also because, here, EHV capacity cannot be reallocated from medium-voltage or LT side. It has a separate set of machines where EHV can be manufactured. However, on this capacity, we can manufacture medium-voltage cable. But on medium-voltage machines, EHV cable cannot be manufactured.

Okay. And what utilization in EHV you are at?

Almost 90% to 95%. Actually, in EHV, we can produce up to INR500 crores to INR600 crores worth of business in a year.

Cable.

The next question is from the line of Alok Deshpand e from Nuvama Institutional Equities. Please go ahead.

Yes good afternoon, Anil sir and good afternoon Rajeev sir. Sir, my question is on Exports. Sir, what is the kind of working capital cycle that we should look at on the Exports business?

See, either in an Export domestic institution or domestic institution, the receivables cycle is, on an average, 2.5 months.

Okay. So similar to the domestic Institutional business is what we should...

Okay. And sir, last time, you mentioned that the margins should sort of start going up towards - - more towards 11% kind of zone. So with all the ne w capacities coming up, especially the brownfield ones, is there more certainty of that ha ppening moving towards 11% EBITDA margin? 11% of -- I mean...

So our CMD has already said that in the next year a lso, we will be maintaining close to 11% EBITDA margin. In this quarter also, EBITDA percentage is almost 11%.

Okay. So I was, sir, looking more from excluding the other income part. So from the...

The 50% is exchange fluctuation. So that is part of the operational actually. But you are seeing separate than that, actually.

Yes, yes, yes. Okay. Sir, no problem. Congratulations on a good set of numbers, and good luck to the entire team.

Thank you. The next question is from the line of Mahek Talati f rom YellowJersey Investments Advisors. Please go ahead.

Am I audible?

Yes.

Thank you for the opportunity. Congratulations on a good set of numbers. There are a couple of questions. First is a clarification. So are we doubling our capacity in the EHV segment?

Yes. We are adding the capacity by financial year 2 006, almost 1.5x more than the existing facility.

Okay. And in terms of the volume growth, so you men tioned that the 9-month volume growth is 22%. Is this for the Cables or it includes both Cables and Wires?

This includes the metal consumption for Wire and Cable, both.

Okay. So if I check the revenue growth for the 9 mo nths, it's close to 17%. So realization is a decrease in this quarter or in these 9 months?

No. It was basically the pricing effect, no? The copper and volume pricing effect.

Okay. Okay. And in terms of the demand for the EHV, so you mentioned a few quarters back that the capacity -- the current capacity can generate...

We can produce up to 550 crores to 600 crores, then only we can sell up to that figure only.

Thank you. The next question is from the line of Shrinidhi from HSBC. Please go ahead.

Can you repeat the question, please?

Sir, just want to understand, there's a lot of dema nd coming from the HVDC projects. So I just want to understand, does cable go in some of the sections of these HVDC projects, high-voltage direct current transmission?

See, at the moment, in overhead transmission projec ts, we are supplying cables for HVDC project. But that is mostly medium-voltage and cont rol cables for the substations and that kind of applications. But in HVDC segment, in the times to come, EHV cabl e -- will be coming. And for that, we are developing our capabilities and the -- in our new c apex, which is coming up at Sanand in that direction. So that -- once that project is commissioned, we are able to supply extra high-voltage cable -- extra high-voltage DC cables also, high-vo ltage DC cables also which are meant for underground transmission.

Right. And just similarly, want to understand how i s the demand intensity for a conventional coal-based thermal power plant. Like how much demand comes from a typical 1-gigawatt, or let's say, 800-megawatt thermal power plant? How has the demand come?

At the moment, I think government of India has again started developing some 30,000 to 40,000 megawatt of new coal-based thermal generation capacity and -- for which, demand will surface in the next financial year. Although in next -- las t 2, 3 years, we have supplied substantial quantity of cables to thermal power plants set up by various state governments. Although it was not on the radar, but some projects were coming up and we have always utilized those opportunities in supplying -- continuing our cable supplies to thermal power plants. And in the next 5 years, a lot will come up because of the additional thermal capacities coming up.

Great. So sir, I wanted to understand, is there a way to generalize like for a 800-megawatt, how much worth crores of cable typically grows at the current pricing?

I think it should be around INR15 crores to INR20 crores for 800-megawatt capacity.

The next question is from the line of Swati Jhunjhunwala: from BOB Capital. Please go ahead.

Thank you for taking my question. Most of my questions have been answered. Just one, could you just give the breakup of the order book?

Order book is not down. The EPC order book is INR934 crores. Extra high-voltage power cable order book is INR594 crores. Cable from domestic Institutional order book is INR1,823 crores. And cable export order is INR475 crores. Put together, all is INR3,826 crores.

Congratulations for great set of numbers. What I wa nted to ask, sir, given the capacity addition by us and the peers, how do you see -- and the kind of demand what you're seeing and this question is more on the cable front, how do you see the demand/supply for the cables in each of the segments? If you could talk a little bit on that.

For next 4 to 5 years, we have given the guidance f or a growth of 16% to 17%. In the last 15 years, we have grown by 14%-plus. So in the same range, we have given you the guidelines, and accordingly, we are adding the capacity. We are not adding the capacity where we are saying that 30% growth we will do, we are not doing that. So the kind of industry is growing -- industry is growing 12% to 13%. And we are giving the guidance to grow 16% to 17% because we are the -- among the top 2 companies in the country. We have exports. We have extra high-voltage power c able. So put together on, we have given guidance for 16% to 17%. So sale was never a challenge to KEI because of the entry barrier. So lots of institutional customers we are serving in a year. More than 2,000 institutional customers we are serving in a year. More than 60 countries we are exporting our p roducts. That's why our growth target will be maintained. So we are not seeing any ceiling from the supply part.

Demand part.

He was asking the other companies are also suppliers.

Yes. So sir, actually, I completely get your point. What I was trying to ask is that what we hear in the market is that given the capacity shortage, obviously, there is a slight element of price premium, which is being charged. Given the kind of capacity additions are happening, could there be a risk to the pricing? I get your visibili ty on the demand and the growth, what you are factoring is obviously very realistic. But I'm just curious to understand, from an overal l industry perspective, could there be a case of excess capacity, and hence, if at all, any price pr emium going away or normalization of the prices?

First of all, there is no price premium. There is no excess capacity. Whatever capacity is coming up, that will be saturated with the continuous incr eased demand. So at the moment, I can only say that our production is just 10% of what China is producing in a year. So I don't think that the capacity will be overcap acity. And -- our products, wires and cables, are used in every sector of economy. So what -- even if there is a slowdown in any particular sector, some -- other 10 sectors are always open.

The next question is from the line of Rahul Maheshwary from Ambit Asset Management. Please go ahead.

Yes, yes. Please.

Yes. First of all, congratulations to entire KEI Ind ustries management team for consistent performance. Two questions, sir. One, can you help us to understand the total opportunity size for the specialty segments like solar, EV and how your R&D and the process in terms of talking with the OEMs and how much time it will take to replicate or the revenue to slow down for this specialty segment? I'm not talking from an infrastructure and power se ctor point of view, but the new emerging sector where the government just recently talked about the rooftop solar. So can you give some color on that, that will be very helpful.

See, we are already supplying to the various OEMs and customers in rooftop solar segment and also the solar power developers who are executing mega projects in -- locations. So I mean there is a question of starting the dialogue with the OEMs. We are already there.

Can you quantify, I mean, how big it can become if currently you are supplying to the data centers and EV, etc. I don't want an absolute number , but even if you can give a ballpark range that how big it can contribute to your sales.

For any capex, as we have already explained, the ca ble demand is 3.5% to 4%. So whatever segment, whether it's a solar or data center, or say, EV, anywhere, the consumption of the cable is close to 3.5% to 4% of the cost of the project. So one can calculate in this way only.

I think exact data cannot be given, but the demand from the solar developers or rooftop solar OEMs is significant. At the moment, we don't have the exact data or quantifiable data to answer your question.

And the second question. As you maintained that KEI is building capacity because they are envisaging the growth, the growth which you have gu ided for 16% to 17%, is it a conservative growth when you are looking from a -- sitting from a Board point of view?

It depends on the capacity we are creating, whatever capacity we are creating year-on-year basis. On that basis, we have given this number actually. In the future, it may increase also. But right now, whatever capex we have taken for the Sanand pr oject and the brownfield projects, from there, for next 2 to 3 years, the growth will be like 16% to 17%.

The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.

Thank you for taking my question . Sir, couple of questions. First one is we recently heard this announcement on INR1 crores rooftop solar projects likely to be put. Any rough sense on what is the kind of cable opportunity that this could cr eate assuming that entire INR1 crores was to be installed? That's question number one.

Yes. Please go ahead.

Yes, yes.

So my second question is the number one player in t he industry, obviously, recently had these tax issues. My question is, one, does it change any thing in the industry structure in terms of industry practices? Secondly, you being the second largest player, is there a possibility of rebenefiting in terms of market share, etc., more dealers wanting to work with us? Just -- I mean to whatever extent you can share about -- I mean, I don't intend seeing how it benefits us, but just that we are the second largest player, does it change the industry dynamic in any way in our favor?

To answer your first question about the solar requirement, the rooftop solar, which government has announced they will put INR1 crores rooftop sol ar, there, the requirements of small wires will be there, because you are not -- you are conne cting the rooftops with the house, which is beneath it. So there's no distance that the cable is required t o connect the electricity system of that house with the rooftop. So it will generate the small dem and for the small wires, 4 square mm or 6 square mm wires, but it will not generate any demand for the cables. So regarding your second question about the -- ben efiting out of it, I think we don't see opportunities out of anyone else's problems. So we are working on our own path and I would not -- we would not like to comment on that.

The next question is from the line of Rahul Agarwal from InCred Equities. Please go ahead.

Thank you for the follow-up sir. First question on the price gap between KEI wire an d the leaders, what is that right now?

As earlier explained also, basically 3% to 5%. Right now, slowly, slowly we are improving 1% price year-on-year basis. Our target, to catch up within 4 years' time.

Right. So that was my next question, essentially to understand how far are we to basically be at similar pricing. I think that was the intention?

As I said that every year, our target is to increase by 1% only.

Okay. Got it. Secondly, Rajeevji, I think we have r eached to pretty optimized level of working capital. It shows 90 days now of sales, excluding c ash. Henceforth, this is where the company stabilizes organically?

We are stabilizing. And whatever cash we are having, we are utilizing either to pay creditors or to -- for the capex. So that way, we are very, very comfortable with respect to inventory holding and receivable holding.

A little bit receivable holding will go down year-o n-year basis because our sales through the dealer/distributor will get increased further to 50 %. Our same vision is there, to maintain 50%. So by that time, our receivable holding right now, which is 2.3 months, which was earlier 2.4 months, which may go down to 2.2 months by next year or 2.1 months by next year. So there is a little bit of scope here.

Okay. Got it. And lastly, an easy one question to y ou. Interim budget is next week. Your sense of what could influence cable and wire sector? Of course, we know that higher capex allocation is a known factor. But from a change perspective, a nything in your mind, which could help business trends or sustain current business trends?

I think you have answered the question yourself, that the demand creation is done only by higher capex spend. Because our industry is capex-oriented, so more is the capex in the economy, either in that from the government side or from the manufa cturing industry, the more will be the demand for cables and wires.

Anything from a raw material perspective? Let's say, any duties or PVC supplies which you use for protection of cables, anything from that perspective could change?

No, no, no. Nowadays, budget -- hardly any duty cha nges are affected in the budgets. Budgets are more of the revenue and expenditure statement.

I agree, sir. I agree. Just trying to understand it.

We need to pass on also, Rahul. Whatever changes in the raw material prices is always in the pass-on mode actually. So it does not affect any profitability of the company.

The next question is from the line of Bhavin Pande from Athena Research. Please go ahead.

First, just wanted to check on the trend of advertisement and promotion expenses, how they have sort of been for this quarter?

Close to 0.5% in a year, we are expanding actually. Sometime in one particular year, they're a little bit higher. In one particular year, this -- the first quarter, a little bit lower. But in the c ase of the first quarter we have the IPL matches are th ere, so they are maybe higher for like this only. But for a year basis, we are spending around 0.5% of the sale.

Okay. And sir, coming to the IPL. So last year, I th ink we switched our franchisee because we wanted more sort of reach and discovery in the Sout hern market. So given the -- looking at the payback that has come, so are we sort of looking to renew it? Or maybe we'll choose a different route this time?

It is already renewed. So you will see us again in the IPL with the Royal Challengers Bangalore team.

Congrats on the consistent set of results. I think I just got dropped off while you were talking about capex in the opening remarks. If you could repeat, that will be great?

Overall capex for the current year on the payment b asis, we have done for INR308 crores. Out of which, close to -- you want unit wise now?

Yes.

So in our Silvassa Chinchpada plant, we have spent around INR65 crores. In Pathredi, we spent around INR30 crores. And in Sanand, Ahmedabad we spent around INR167 crores in part of the land. And another INR46 crores is in the balancing of equipment in our existing plants.

And the capex going forward, I think you were also...

Going forward, another INR150 crores will be spent in this quarter. So close to -- and next year, it will be close to INR500 crores-plus expenditure. That will be mainly for the Sanand project.

The next question is from the line of Kalpit Manish Narvekar from EFG. Please go ahead.

Congratulations on a good set of numbers. So my first question is basically on industry growth. So you spoke about 12% to 13% kind of industry grow th. But some of the other building materials like cement are seeing some kind of slowdown in the near term. So do you actually -- and I do understand medium-t erm growth being like around that level because of capex and etc., But do you expect some kind of a slowdown maybe for -- in the near term for a few quarters or so because of election o r also on the [insti side]? That would be my first question.

Sir, election will be there only -- elections may a ffect anything maximum for 3 months. But in our business, projects are going on and the work never stops. So I don't think that elections will have any impact on our business and the growth. We are not seeing any slowdown.

Great. And my second question is more on the Retail side, which, I guess, used to be like, while you're still selling to dealers, it should be 45%, 50% of total sales, right? So in this piece, I just want to get some sense around how you think the dea lers behave in situations of copper price movement. So basically, I mean, recently, copper pr ice has corrected a little bit in December. And -- so do you -- how does destocking and restocking kind of work on the dealer side?

See, we are -- first of all, the movement of copper anywhere between 3% to 5% is always there. And in House Wire segment, the companies are very c autious that we increase or decrease the prices in a systematic manner on a 15 days average. Secondly, in case of Cables, the prices are given to a project or through -- to a dealer on a firm price basis, either for stocking or this time for a project. So it does not matter whether the, right, copper p rices are going down or up. So both sides honor their commitment. We have not seen any such things in the industry that, because of the movement of copper prices, dealers are backing out from their cable orders. And in the Wire segment, sometimes it impacts a li ttle bit in stocking and destocking, but those issues are separately handled with the dealers. It is only for the House Wire segment.

The next question is from the line of Mudit Kabra from Elara Capital. Please go ahead.

Just one question, sir. Is there any impact on expo rts in the Europe region or somewhere else because of the Red Sea crisis, the geopolitical impact over that area? Any deferment during the quarter?

Mudit, so far as our customers are concerned, we ha ve not seen any deferment of any orders so far. There is a small impact on the cost due to increased rates, but that is hardly -- because cable is really a high-value item, the impact is not more than 1%, either to us or to the customer.

Okay. So there are no impact on orders as the price impact is there?

Price impact is very small, so there is no impact on the orders.

The next question is from the line of Raj Shah from Ambit. Please go ahead.

Sir, congratulations for the good set of numbers. So I have a long-term question. So now we are close to around $1 billion of revenues. So just wan ted to understand that going forward, say, in the next 4 to 5 years, do we want to become more of a consumer company, so our advertising expenses still are less than 1% of our sales? So do you want to take the shift from an industrial company to a consumer company? Or still want to remain focused on cables and wires and not foray into the other segments -- other consumer segments like appliances or other segments?

No. At the moment, our focus is only on the wires a nd cables. And at the moment, there is no plan to add any consumer products.

As that was the last question, I would now like to hand the conference over to management for closing comments.

So thank you very much for participating in this conference call. And I hope that we are able to satisfy you with our answers. If still you have any queries, you can write to us and we'll be glad to answer. And I reassure our investors that the company is d oing all -- everything to boost our growth -- the company's growth in sales and margins. And we'l l keep our investors apprised of anything what we do. Thank you.

On behalf of Monarch Networth Capital, that conclud es this conference. Thank you for joining us, and you may now disconnect your lines.