KEI Industries Powers Ahead with Strong Q2 FY26 Performance Amidst Strategic Expansions

KEI Industries Limited, a prominent player in the wires and cables sector, has reported a robust financial performance for the second quarter and first half of Fiscal Year 2026. The company's consolidated net sales for Q2 FY26 stood at INR 2,726.35 crore, marking a significant 19.38% year-on-year growth. This strong top-line expansion was complemented by impressive profitability, with EBITDA increasing by 31.20% to INR 311.63 crore and Profit After Tax (PAT) surging by 31.47% to INR 203.51 crore. The EBITDA margin improved to 11.43% from 10.40% in the previous year, while the PAT margin rose to 7.46% from 6.78%, reflecting enhanced operational efficiency.

The first half of FY26 also showcased strong momentum, with net sales reaching INR 5,316.67 crore, a 22.25% increase year-on-year. H1 EBITDA grew by 29.65% to INR 609.26 crore, and H1 PAT increased by 30.88% to INR 399.26 crore. The management attributed this performance to strong demand across segments and successful market diversification strategies, particularly in exports.

Segmental Performance and Market Dynamics

The wires and cables segment, the core of KEI's business, demonstrated a 22% growth over the previous year. A key highlight was the exceptional performance in the export market, which saw sales increase by 116.19% year-on-year in Q2 FY26, reaching an all-time high of INR 472 crore. This robust export growth was a result of the company's strategic expansion into new geographies, including the U.S.A., European countries, Australia, the Middle East, and Africa. The management emphasized that this diversification is crucial for utilizing new capacities and sustaining growth.

Domestic sales through the dealer network (B2C) also contributed significantly, growing by approximately 17% in Q2 FY26 to INR 1,475 crore. However, domestic institutional cable sales experienced a slight decline, which the management explained was due to a conscious decision to allocate capacity towards the high-growth export market. The Extra High-Voltage (EHV) cable segment within domestic institutional sales, however, showed strong growth of 76%, reaching INR 128 crore in Q2 FY26.

In contrast, the EPC (Engineering, Procurement, and Construction) division, excluding cables, saw a decrease in sales by 41.12% year-on-year in Q2 FY26, contributing only 2.03% to H1 FY26 revenue. Similarly, Stainless Steel Wire sales declined by 10.58% year-on-year in Q2 FY26. The company aims to maintain annual EPC sales between INR 400-500 crore.

Here is a financial summary of KEI Industries Limited's performance:

Strategic Initiatives and Future Outlook

KEI Industries is in the midst of a significant capacity expansion with its Sanand plant. Phase 1 of the plant, which will contribute over 50% of the new capacity, is now expected to be operational by November 2025, with commercial production commencing shortly thereafter. This phase is projected to generate approximately INR 3,000 crore in revenue. However, Phase 1 experienced a four-month delay due to heavy rains and labor shortages. Phase 2, focusing on extra high-voltage and medium-voltage cables, is delayed by approximately nine months due to the complex construction of a 158-meter vertical tower.

Despite these delays, the management remains optimistic about future growth. They have reiterated a guidance of more than 20% growth for FY26 and aim to maintain a 20% plus Compound Annual Growth Rate (CAGR) for the next 3-5 years. The total Sanand project, once fully completed, is estimated to generate around INR 6,000 crore in revenue. The company also anticipates a margin expansion of 1% to 1.5% once the entire Sanand capacity is fully commissioned, primarily due to economies of scale.

KEI is also strategically targeting new growth drivers such as the energy sector, including solar and wind projects, transmission and distribution, and data centers. The company is actively pursuing tie-ups with solar developers for long-term renewable energy agreements to reduce power costs. The current order book stands strong at INR 3,824 crore as of September 30, 2025, providing good revenue visibility for the coming quarters.

Concluding Thoughts

KEI Industries Limited's Q2 FY26 performance underscores its resilience and strategic agility. While facing some delays in its critical Sanand expansion, the company has successfully leveraged export markets to drive growth and maintain healthy profitability. The management's clear vision for capacity expansion, market diversification, and focus on high-growth sectors like renewable energy and data centers positions KEI for sustained long-term growth. The commitment to a 20% plus CAGR and anticipated margin expansion from new capacities reflect a confident outlook for the future.