PL First Cut – KEI Ind. Q2FY24

PL First Cut – KEI Ind. Q2FY24 – Praveen Sahay – Research Analyst, Prabhudas Lilladher Pvt Ltd

KEI Ind. Q2FY24 First cut: Result above expectations

(CMP: Rs2,402 | MCap: Rs 216.2bn | BUY)

➡️ Revenue grew by 21.1% YoY to Rs19.4bn (PLe: Rs18.3bn, Cons. Est. 18.6), 6% above our estimates & 5.3% above consensus. The revenue growth was driven by EHV segment, reported growth of 300% YoY (contributes 10.3% revenue) and Housing & Winding wire cables (contributes 32.3% revenue), reported 20.5% YoY growth.

➡️ Gross margins expanded by 110bps YoY to 24.1%.

➡️ EBITDA grew by 27% YoY to Rs2.0bn (PLe: Rs 1.9bn), 5.2% above consensus est. of Rs1.9bn. EBITDA margin expanded by 50bps YoY to 10.5%. (PLe:10.6% & Cons. est. 10.4%).

➡️ PAT grew by 31.2% YoY to Rs1.4bn (PLe: Rs1.3bn), 7.6% above cons. est. on account of higher other income and decrease in interest expenses.

➡️ Cables revenues grew by 22.2% YoY to Rs17.7bn. EBIT grew by 52.2% YoY to Rs1.9bn with margin expanded by 210bps YoY to 10.8%.

➡️ Stainless Steel Wires revenues decline by 19.6% YoY to Rs590mn. EBIT decline by 19% YoY to Rs36mn, with margin remaining constant at 6.1%.

➡️ EPC revenues grew by 195% YoY to Rs3.1bn. EBIT reach to Rs314mn, with margin contracted by 400bps YoY to 10%.

➡️ Revenue through Dealer/ Distribution contributed 47.4% of total revenue in Q2FY24. The revenue through Dealer/ Distribution grew by 14.2% YoY in Q2FY24. The total active working dealer was 1,950.

➡️ Order book stands at Rs33bn and net cash of Rs 4.4bn.