KEI Industries: Exports, EPC orders adversely impact revenues in FY21

Revenues of KEI Industries dropped 14.4 per cent year-on-year in FY21, largely due to muted performance by the exports and EPC divisions, according to an investor presentation by the company.

Total revenues in FY21 stood at Rs.4,181 crore, 14.4 per cent lower than the Rs.4,884 crore clocked in FY20.

Exports business touched Rs.488 crore in FY21 as against Rs.796 crore. This year-on-year decline of 38.7 per cent was largely due to the fact that there was one large export order in FY20. This “high-base” effect makes the growth in FY21 appear lower.

The EPC division’s contribution to total revenues fell to 11.1 per cent in FY21, from 15.6 per cent in FY20. On the brighter side, this will reduce working capital requirements of the company, the investor presentation observed.

Domestic institutional sales of cables (across all varieties) recorded a minor 4.3 per cent decline from Rs.1,825 crore in FY20 to Rs.1,747 crore in FY21.

 

Low tension (LT) cables accounted for around 37 per cent of KEI’s total revenues in FY21. The outstanding order book of the company was Rs.2,561 crore, as of May 25, 2021.

 

Sales through the distributor/dealership network in FY21 more or less maintained its FY20 level. (see table). Nearly 34 per cent of the company’s total revenue came from this network in FY21 as against 29 per cent in FY20. As of March 31, 2021, the company had around 1,655 active dealer/distributors.

 

Interestingly, of the total dealership sales of Rs.1,408 crore in FY21 tier-3 cities contributed the highest—Rs.627 crore or 44.6 per cent of the total. Tier-1 cities had a share of 37.7 per cent followed by Tier-2 cities with 17.7 per cent. When viewed geographically, 37.4 per cent of the total dealership sales came from the northern region, followed by west (28.2 per cent), south (19.6 per cent) and east (14.8 per cent).

 

Note: FY21 is from April 1, 2020 to March 31, 2021.