KEI Industries wins order worth Rs 384 crore from Power Grid

Prominent wires and cables maker KEI Industries has bagged a Notification of Awards valuing Rs 384 crores from the Power Grid Corporation of India for the supply and service contracts for package A & B under the Integrated Power Development Scheme (IPDS) works in Varanasi, Uttar Pradesh, as per the company's regulatory filing.

The Integrated Power Development Scheme (IPDS) is one of the flagship schemes of the Ministry of Power which has its major aim as ensuring round the clock power for all. The receipt of the above orders would further strengthen the company’s position for supply of a variety of high quality cables and will boost its service commitments in the engineering, procurement and construction (EPC) contracts.

Reacting to the news the stock climbed up 5 per cent to hit an intra-day high of Rs 112. For the past one month the stock has been moving in a range with almost no gains, but the company has been a rank out-performer in the markets as it has given returns in excess of 122 per cent on a YTD basis owing to a stellar financial performance of the company and strong order book position.

With the grant of this order the company’s current order book stands at close to Rs 2,400 crore that includes Rs 150 crore of export orders. The new pipeline in EPC stands at Rs 584 crore. Exports contribute to about eight percent to their total sales, which is expected to soar in the coming months, as the company has added new markets to its export basket for which permissions have been received. KEI currently exports to Middle East, Australia, Africa and Singapore, which is a revelation of the fact that the company has been aggressively positioning itself as a serious player by actively bidding for number of big ticket projects.

A well-diversified geographical presence helps the company to widen its market, which further helps in terms of growing products and brand image in the worldwide markets. It also insulates the company from a downturn in any particular economy, as the customer basket is widespread.

With the domestic market growing and investments in the transmission and the distribution side increasing, in addition demand for underground cables given the smart city projects, KEI is well positioned to grab the opportunity in this space. Initiatives at the state government level too could raise the demand for its products.