“Govt’s focus on housing will boost demand for HT & LT cables”
Government has announced huge investment plans in railways, housing and farm to boost overall infrastructure growth for the company. These investments are likely to propel demand for wires and cables and help companies like KEI Industries to further expand their business. In this interview, Anil Gupta, Chairman Cum Managing Director, KEI Industries, sheds light on impact of much awaited infrastructural development on wires and cables market.
Despite industrial growth slowing down in the last quarter of 2018-19, KEI Industries performed really well in the Q4 of 2018-19. What are the reasons for this performance? What are your expectations for 2019-20?
We have successfully achieved strong operational performance in the March quarter (Q4FY19). Our profit rose to 36 per cent at Rs 138 crore against Rs 101 crore in the year-ago quarter. The operating margin improved 113 basis points (bps) at 10.93 per cent due to increase in sales and better product mix. Our net sales grew 22 per cent at Rs 1,259 crore, while net profit jumped 21 per cent at Rs 60 crore over the previous year quarter. We strictly focus on customising the products basis the consumer needs and requirements which has resulted in increase in the demand. Adding to that, the cynosure of the Union budget is the Government’s investment of Rs 100 lakh crore for the infrastructural growth and electrification of all the villages which will prove to be a game changer for companies like us resulting in expansion of our house wires segment. With the growing demand we will contribute to government’s vision for affordable housing as these products are used by several developers under the affordable housing schemes”.
How is demand for cables especially when the government is increasing its focus on power generation, transmission and distribution?
The power sector has seen phenomenal growth achieving the electrification of almost 96 per cent of households in the last 5 years. To provide a further boost to the sector, the Government is consistently investing in the power generation sector. Higher budgetary allocation for affordable housing is expected to boost demand for house wires, HT (high tension) and LT (low tension) cables. The Government's ambitious agenda to develop faster, greener and smarter infrastructure has fuelled the demand for EHV (extra high voltage) cables as well.
Wires & cables being generic products, what kinds of innovations are possible in this space? Would you like to share some of KEI Industries’ R&D activities?
Over the years KEI has successfully won many rewards and recognitions. Recently we have achieved the Superbrands Title for the 7th times due to our exemplary performance throughout the year even in critical economic conditions. In our company, we focus on enhancing the product portfolio in constantly investing in R&D resulting in niche product offerings. We maintain the ability to customise product solutions in accordance with the needs and demands of the client. We also specialise in manufacturing of specialty cables including braided cables, fire survival and zero
Is rise in automation and digitalization a boon for a company like yours?
Yes. In the recent times, as a result of increasing automation and digitalization, everything seems connected. For companies, it has become easier to get every possible information at hand’s reach. The Indian government has plans to digitise over 1 lakh villages in 5 years. This phenomenal target will not only create digital infrastructures in the villages but will also improve the standards of living of the people. Increase in digitalization will enable the companies to advance their productivity which will further drive their economic growth. The world has become intensely connected with the emergence of digitalisation.