KEI Industries Q2 profit rises 29 per cent as domestic cable demand offsets margin pressure

KEI Industries reported consolidated net sales growth of 38.52 per cent year-on-year to Rs 3,776.42 crore in the September quarter of FY27, supported by broad-based domestic demand for wires and cables and a larger contribution from its dealer and distributor network.

Profit after Tax rose 28.96 per cent to Rs 262.45 crore in Q2 FY27 from Rs 203.51 crore a year earlier. EBITDA increased 28.69 per cent to Rs 401.05 crore. However, the pace of profit growth trailed revenue expansion, resulting in a contraction in operating margins.

EBITDA margin fell to 10.62 per cent from 11.43 per cent in the corresponding quarter last year, while PAT margin declined to 6.95 per cent from 7.46 per cent. On a sequential basis, revenue rose 18.56 per cent from Rs 3,185 crore in Q1 FY27, but EBITDA declined 3.46 per cent and PAT fell 4.26 per cent.

The quarterly numbers therefore reflect a familiar trade-off for the cable maker. Demand and sales momentum remain robust, particularly in the domestic market, but profitability did not keep pace with the sharp quarterly rise in turnover. The margin moderation will remain an important metric as KEI ramps up capacity and manages volatile input costs, especially copper and aluminium.

Wires and cables continued to dominate the business, contributing Rs 3,639 crore in Q2, or 96.35 per cent of total revenue. Domestic wires and cables sales jumped 45.76 per cent year-on-year to Rs 3,184 crore, while export sales increased 7.27 per cent to Rs 455 crore.

The domestic channel expansion was particularly notable. Sales through dealers and distributors increased 50.46 per cent during the quarter and accounted for 58.79 per cent of overall sales, compared with 54.12 per cent a year earlier. KEI had 2,146 active working dealers as of September 30, 2026.

This rising dealer-led contribution aligns with the company’s longer-term strategy of increasing retail participation and expanding distribution reach. In FY26, retail sales had contributed 54 per cent of revenue, according to the company’s annual report. A larger retail and distribution mix can support margins and working-capital efficiency, although quarterly profitability can still fluctuate with product mix and metal-price movements.

Extra-high-voltage cable sales rose 26.20 per cent to Rs 217 crore in the quarter. The segment is strategically relevant because KEI is expanding its EHV manufacturing capability at its Sanand facility, where the EHV project is expected to be commissioned by March 2027. Management has previously indicated that the completed Sanand complex could support up to Rs 6,000 crore of annual revenue potential, subject to ramp-up and market conditions.

For the first half of FY27, KEI reported net sales of Rs 6,961.76 crore, up 30.94 per cent year-on-year. EBITDA grew 34.01 per cent to Rs 816.46 crore, with margin improving to 11.73 per cent from 11.46 per cent. PAT rose 34.40 per cent to Rs 536.59 crore and PAT margin improved to 7.71 per cent.

The company ended September with pending orders of around Rs 5,185 crore. Its balance sheet remained comfortable, with gross debt of Rs 285 crore and cash and Bank balances of Rs 698 crore, resulting in net cash of Rs 413 crore. Including acceptances, total debt and cash stood at Rs 314 crore.

As of 11.25 am on October 22, 2026, KEI Industries shares were trading at Rs 3,907.00, down 7.85 per cent from the previous close. The stock was about 33.4 per cent below its 52-week high of Rs 5,865.00 and only about 2.6 per cent above its 52-week low of Rs 3,806.85. Over the past year, the stock declined 0.47 per cent, compared with an 8.25 per cent fall in the BSE 500.

Disclaimer: The article is for informational purposes only and not investment advice.