KEI Industries Q1 FY27: Margin expansion, retail push, and a big Sanand ramp-up

KEI Industries opened FY27 with a strong quarter, led by broad-based demand in wires and cables and a visible improvement in operating profitability. Net sales for Q1 FY27 were INR3,185 crore, up from INR2,590 crore in Q1 FY26. EBITDA came in at INR415 crore versus INR298 crore last year, and EBITDA margin expanded to 13.04% from 11.49%. PAT rose to INR274 crore from INR196 crore, with PAT margin at 8.61%.

The company attributed the margin improvement to a mix of product and channel shift and operating leverage. Management highlighted that dealer and distributor sales grew sharply and contributed 59.09% of overall sales in Q1 FY27 versus 51.18% in Q1 FY26. Extra high-voltage cable sales also increased to INR186 crore from INR126 crore, adding a higher-margin element to the mix.

Wires and cables dominated the quarter, exports were the weak patch

Wires and cables remained the core engine. Total wires and cables sales including exports were INR3,092 crore in Q1 FY27, contributing 97.08% of revenue. Within that, domestic wires and cables revenue was INR2,784 crore in Q1 FY27, while export wires and cables declined year-on-year. Management cited non-execution and non-dispatch of several Middle East orders due to war-related disruptions and challenges in the United States related to custom duty issues.

Even with export pressure in the first quarter, management reiterated that exports are expected to grow substantially during the full year, supported by a strong order book and improving execution conditions. The stated target is to have exports contribute 17% to 18% of sales in FY27, compared with about 16% in the prior year as referenced on the call.

Outside wires and cables, EPC and stainless steel wire were small contributors. EPC (other than cable) revenue was INR43 crore in Q1 FY27 and stainless steel wire revenue was INR53 crore.

Metric (Standalone)	Q1 FY27	Q1 FY26
Revenue from operations (INR crore)	3,185	2,590
EBITDA (INR crore)	415	298
EBITDA margin (%)	13.04	11.49
PAT (INR crore)	274	196
PAT margin (%)	8.61	7.56

What is changing in the business mix

Management repeatedly described the margin uptrend as a combination of multiple levers. First, product mix: extra high-voltage (EHV) power cables are increasing and were cited as a meaningfully higher-margin category. On the call, the CFO stated that EHV operating margin is close to 15%, compared with about 10.5% on institutional low and medium voltage sales, about 11% in retail, and more than 11% for exports.

Second, market mix: retail and distribution contribution has risen to 59%. Management also said the retail focus helps working capital requirements. Third, operating leverage: as incremental sales rise, fixed costs do not scale proportionately, lowering operating expenses as a percentage of sales.

There were also questions around inventory movement and whether there was an inventory gain. Management clarified that inventory changes can reflect metal price movements quarter to quarter, but the major increase in inventory was linked to the Sanand plant ramp-up where a new factory requires creation of raw material, work-in-process, and finished goods inventory. They also noted that at quarter end, some dispatches get reversed under Ind AS if goods have not reached customers, which can temporarily inflate inventory.

Sanand expansion and capex runway

Sanand remains the main strategic project. Management stated that the total cost of the Sanand project is INR2,000 crore. Capex done in Sanand up to 30 June 2026 was INR1,722 crore, and another about INR300 crore is expected to be spent in the current financial year to complete the project.

The Sanand facility covers multiple product lines. Phase 1 is for low-voltage and medium-voltage power cables. Management said machinery for electron beam cable is operational in the second quarter. The EHV power cable project is under execution and requires a 152-meter tall tower, with commissioning expected by March 2027.

On revenue potential, management reiterated that the INR2,000 crore Sanand investment is designed for about INR6,000 crore of revenue capacity. They also added that after commissioning, there is typically scope for balancing equipment, which can lift plant capacity further. They stated that this can take the total revenue potential to around INR7,000 crore within two years.

For FY27, management clarified that the Sanand plant is expected to contribute about INR1,500 to INR2,000 crore of revenue. They also shared that Sanand Phase 1 capacity had reached around 50% utilisation as of the call date and that utilisation is expected to ramp up month by month.

Beyond Sanand, management discussed an additional capex plan at Bhiwadi (Salarpur). They clarified that the total capex for Salarpur is INR700 crore, with around INR300 to INR350 crore to be deployed in the current financial year. This is intended for low-voltage and medium-voltage power cable. Separately, management guided that the company is expected to incur capex of around INR600 to INR700 crore annually for the next 3 to 4 years.

Balance sheet and order book

As of 30 June 2026, cash and bank balances were INR1,054 crore. Gross debt was INR204 crore, resulting in a net cash position. Management noted that the cash balance includes unutilised QIP proceeds, with the QIP fund utilisation at INR1,785 crore as of 30 June 2026 and an unutilised amount of INR303 crore.

The company also provided order book visibility. Pending order book was stated at about INR4,292 crore. Management gave the split as EPC orders of INR271 crore, EHV cable orders of INR793 crore, domestic cable orders of INR2,400 crore, and export orders pending of INR822 crore.

Takeaways

KEI Industries delivered a strong Q1 FY27 on both growth and profitability. The quarter shows a clear mix shift towards higher retail contribution and increasing EHV participation, both of which management linked to margin expansion. Exports were impacted by external disruptions, but management reiterated confidence in a recovery across the year.

The bigger story remains capacity and execution. Sanand is still ramping, and the EHV commissioning by March 2027 is a key milestone. Along with the announced Salarpur capex and the multi-year annual capex guidance, the company is positioning for sustained growth while maintaining its stated discipline on capital allocation and leverage.