KEI Industries Limited (517569) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the KEI Industries Limited Q3 FY '21 Earnings Call hosted by Monarch Networth Capital Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on date of this call. The statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anubhav Rawat from Monarch Networth Capital Limited. Thank you, and over to you, sir.

Yes. Thank you, Mallika. Good afternoon, everyone. I hope everyone is safe and sound. We are pleased to host the senior management team of KEI Industries Limited. And today, we have with us Mr. Anil Gupta, Chairman and Managing Director of the company; and Mr. Rajeev Gupta, CFO of the company. Let us start this call with management's initial comments about the results, and then we will take your questions. Over to you, Anil, sir.

Good morning, good morning to everybody. I'm Anil Gupta, Chairman of KEI Industries Limited. I welcome all of you to this conference call. I'll give you brief points about this quarter performance of the company. We have achieved a net sales of INR 1,152.94 crore against INR 1,314.22 crore in the previous quarter of the previous year. So the total revenue of the company in this quarter is declined by 12.27% compared to last year. The revenue -- the lower revenue is due to reduction in the EPC turnover, EPC business. Because this, as stated in our earlier conference calls, we have -- we are gradually reducing it, the EPC business, and limiting it to a certain level. And also last year, we executed a very large export order in this period to Dangote Oil Refinery Limited of Nigeria. It was a INR 450 crore order. And a substantial portion of the order was executed in this quarter and the fourth quarter of this year. So -- and that kind of order is -- doesn't come every year. So difficult -- while difficult to replicate so that -- these are the 2 basic reasons of reduction in the sales. Though our domestic sales of wire and cable has grown by approximately 9% put together, institutional plus through dealer network, it has grown by around 9%. So the total Wire and Cable business of the company has reached approximately 90% of the Q3 and approximately 85% in 9 months period in this financial year compared to last year. EBITDA in this quarter is INR 133.59 crore against INR 143.89 crore. But however, the EBITDA margin in this quarter has improved to 11.59% as against 10.95% in the same period of the previous year. EBITDA margins have improved due to cost optimization and better product mix. The profit before tax in this quarter is INR 106.01 crore against INR 96.78 crore, so the profit before tax increased by 9.54% year-on-year this quarter, and profit after tax in this quarter is INR 79.6 crore against INR 72.27 crore in the same quarter of the previous year. Profit after tax increased by 10.14%, and profit after-tax margin improved from 5.5% to 6.9% in this quarter. Sale of -- to the institutional customers, domestic is INR 49 -- INR 499 crore in third quarter against last year same period, INR 485 crore. So the domestic institutional cable sales increased by approximately 3% as compared to previous quarter, corresponding quarter previous year. But the sales through dealer network, that means B2C is INR 410 crore in third quarter against last year same period INR 371 crore. So the B2C sales through dealer network year-on-year has increased by 10.51% as compared to corresponding period in the previous year. The sales through distribution network is now 36% in Q3 as compared to 28% in Q3 of '19/'20 financial year. The total active working dealer of the company as on December 31st was approximately 1,645. The sales of house wire in this quarter is INR 264 crore against INR 223 crore in the previous year same period. The growth achieved in this quarter is 18%. The sales of extra high-voltage cable in this quarter is INR 155 crore against INR 135 crore previous year. The growth is approximately 15%. However, the export sale achieved this INR 139 crore against INR 300 crore in the same quarter of previous year, as I have already mentioned, that it was due to a substantially large order of Dangote refinery, which was executed in this period in last year. Due to that, the export sale has declined. The EPC sale other than cable is INR 122 crore against INR 182 crore in the same quarter of the previous year. So the EPC sale declined by 33% approximately. Now I will brief a summary of around 9 months of the financial year 2020/'21. Net sales in 9 months of financial year '20/'21 is INR 2,935 crore against INR 3,625 crore. Sales declined approximately 19% compared to last year. It was due to lockdown and restrictions of business activities faced during first quarter of this year and some effect continued even in the second quarter as well. And also, the lower revenue from the EPC department and execution of the 1 large export order in the previous year. EBITDA in the 9 months is INR 336 crore against INR 389 crore over -- EBITDA is approximately 13.63% decline over corresponding 9 months previous year. EBITDA -- but however, the EBITDA over net sales in this 9 months is 11.46% versus 10.74%. So the EBITDA improvement is by 0.75% in this 9 months of this financial year. Profit after tax in 9 months is INR 184 crore against 194 crore. However, the profit after tax of this net sales is 6.27% in 9 months versus 5.36% showing an improvement of around -- by 9% on the total sales. The institutional cable sales domestic is INR 1,215 crore in 9 months as compared to INR 1,324 crore in the corresponding 3-year period previous year. So the domestic institutional cable sales achieved is around 92% of the same quarter last year. So it declined by 8% in 9 months. And sales through dealer network is INR 944 crore in 9 months against INR 1,092 crore, so that dealer sales also declined by 13.5%. The main decline was in the first and the second -- first quarter was significant, and the second quarter was also there. It was mainly due to lockdowns in the major cities, metros and in A class cities. However, dealer -- sales through dealer network is 32% of the turnover in the 9 months period as against 30% for the corresponding period previous year. The sales of extra high voltage cables in 9 months is INR 345 crore against INR 308 crore in the previous year same period. The growth is approximately 10% -- 12%. EPC sales other than cable is INR 333 crore as against INR 578 crore. So there is a decline of around INR 240 crores in that sale of EPC cable -- EPC division. The present order book position of the company is as on January 1, 2021, was INR 2,611 crore and we were L1 in an order of INR 130 crore of 220 kv extra-high voltage cable from Delhi Transco. That order has since been received last week. I'll give now some general comments. Month after month, the market production is improving, and our new order booking in the Wire and Cable segment and as well as the house wire, either through institutional business, customers or from the dealer network is improving. And we are hopeful that in Q4, we will be able to reach almost 100% level in the Wire and Cable business in the Q4. However, there will be a decline in the turnover due to EPC business because that -- we have not booked any new order in EPC division in last -- approximately 1.5 years. So it was a strategic decision to limit the EPC business to INR 400 crore to INR 500 crore in a year, mainly because of the slow recovery of money from the government customers. So we are reducing our stake in this business gradually. The -- we are receiving now a lot of pending payments from the EPC customers. And in January, we saw a good amount of receipt, and we will be able to maintain our working capital cycle to the same level of last year as on 31st March '20 to 31st March 2021. So the working capital cycle will come to the same level of the last year by end of this financial year. Company's credit rating from ICRA and CARE has been upgraded to A+ from long-term rating and reaffirmed at A1 for short-term rating. The book value for the per equity share of the company is now INR 190 as against INR 168 as on March 30 -- 31, 2020. The total net debt as on December 31, 2020, is INR 220 crores as against INR 152 crore as on 31st March 2020. However, the acceptances or creditors through letter of credit has gone down from INR 770 crore to INR 308 crore, so declined by INR 462 crore in the same period. So this is a brief. And now I will request you to raise any questions, whatever you may have. Thank you very much.

[Operator Instructions] The first question is from the line of Lavina Quadros from Jefferies.

So firstly, congrats on the good set of results. Just 2 questions. One is, sir, any comments you'd like to give on the export outlook? Generally there is a lack of orders on the export side, but anything on the outlook for the next 6, 9, 12 months? Any market particularly, you think you'll get orders from?

See we are able to maintain our export orders from our existing markets, especially in Australia as well as in Middle East, but the -- and some parts of Africa. But export orders are -- definitely in these countries other than Australia are under pressure mainly because of lockdowns and slowdown in the economic activity, so -- and moreover, there is not -- due to lack of travel by the marketing people, the new business development is also not taking place. So the export outlook will be -- will remain a little weak in next 6 months. But we will be able to maintain the business turnover from the domestic business to compensate the fall of exports, but we are quite hopeful that after 6 months, after June onwards, the export will also pick up. Because once the normal travel starts -- and we are also working on many new countries to develop the business activity, as I mentioned 1 year back also. But this 1 year is practically lost because of nonbusiness activity in any of these countries and lack of travel.

So when you say maintain, I mean, is there like a base orders that -- of maybe INR 300 crore, INR 400 crore that you would get anywhere irrespective?

Yes. We are -- domestic business is -- even institutional business, we are growing. And we will -- we have already grown in last -- in the quarter 3, maybe by 3%. But now the order booking is improving every month. So we -- there are substantial business coming from metro projects and other infrastructure projects, which have been now boosted for execution, and we will be able to maintain this -- the turnover from the domestic business to compensate the lesser exports. And -- but export is our focus, and it will start coming back maybe in 6 months onwards because we are very well placed in a lot of countries.

Understood. Sir, sorry, just trying to understand is there a base export order. Like you said, you'll get your recurring orders on the export side. Is there like a base that even if no big order comes, at least INR 300, INR 400 crores or...

Yes, yes, yes. Around INR 500 crore export will -- in a year, is being maintained even at the current which was the level in the last year also other than Dangote, which was an exceptionally big order of INR 450 crore. Other than that, we are in line with -- in our business. So that much export will -- it's being maintained and will be maintained.

Okay. And last question for Mr. Rajeev. Sir, could you just give you -- give the interest mix, sir, for the quarter? Interest cost breakup.

So interest is basically close to INR 13 crores. So you want the breakup of the interest?

Yes, sir. The LTE and other charges.

Yes, just I'm giving you. Just a minute. So interest in this quarter is close to INR 4 crores on the term loan. Sorry, INR 0.6 crore, INR 0.7 crore is on the term loan and working capital interest is close to INR 5 crores. And LC insurance is close to INR 1.7 crore. And bank charges on LC is INR 1 crore and bank charges on bank Guaranty is close to INR 2.3 crore, and balance is the INR 2.5 crores is the processing charges for all the banks.

The next question is from the line of [ Rahul Agarwal ] from [indiscernible] Research.

There were 3, 4 questions I had. Firstly, I understand when you say A, B and C class of cities for retail network, essentially how do you classify that? Is it based on population? Or is it some other metros?

No. It is basically depending on the metros and the non-metro city, large cities actually.

Okay. So A class and B class and C class, so the A class refers to the metro and B and C would be Tier 2 and Tier 3 markets? Is that right to understand?

Yes. Right. Yes. Right.

Okay. Okay. Got it. Secondly, could you quantify what was the Dangote quantum for third quarter of last year in terms of revenue?

Yes, so that was close to INR 122 crore.

And what was it for fourth quarter of last year? Will that number be available?

So fourth quarter is not now, but I will inform you.

Okay. Okay. Okay. And last question was on CapEx. Could you help me understand how was the utilization for products in terms of their capacity? And how are you planning for capital expenditure in line with your growth projections for revenue in fiscal '21/'22?

Utilization of the -- on a 9-month basis, cable division was utilized at close to 57% to 60%. And House Wire division is close to 51% to 52%. And the stainless steel wire division is 87%.

Okay. And how are you planning the CapEx for the balance of the year? How much did you do in 9 months and in -- what's the plan for [ the rest ] of the year?

Well, 9 months, there was -- 9 months, there was major CapEx because we have already implemented last year in Silvassa plant. Only the balance CapEx was INR 15 crores that we have built in this current financial year. But none of these -- now we will have the new CapEx in the new area, the greenfield project, wherein we are searching for the land. And hopefully, within this quarter, we will add the land and we will go for the expansion in the next financial year. Close to INR 175 crore will be the plan for investment in the next financial year for expansion of low tension, high tension and extra high voltage power cable because house wire capacity, we have already doubled in our Silvassa plant, which we be available for next 2 years at least.

The next question is from the line of Sangeeta Purushottam from Cogito Advisors.

I just wanted to check 2 things. One is that in quarter 4, how do you see the outlook compared to quarter 3? Then moving on from there, what is your -- I know it's a little early, but what is your overall sense of the kind of growth you're likely to see next year? And also in terms of our CapEx plans for the greenfield expansion, if you could just tell us how much we are likely to spend next year?

In quarter 4, our expectation is that the domestic business will reach at par compared to the last year. But in export, also, we'll be at par with the last year mine, except the exceptional export done to Dangote refinery. Other exports will be at par because that is from our regular customers. So -- and so far as growth prospects are concerned, I think we should be reaching to close to 86% to 87% of the last financial year level in the whole year. Secondly, the next year, our growth expectation will be and guidance will be close to 20% from this year level. And so far as CapEx is concerned, we expect to spend INR 175 crore in the capital expenditure in the next financial year on the land and the construction of the new budget.

Right. And plus we should be able to fund from our internal accruals also, right, partly from the money we had raised and partly from internal accruals? Or will we be taking debt?

Correct. We will not be taking any debt for this.

No debt for this. Okay. And in terms -- we've done a very good job of maintaining profitability. For the full year roughly, although sales will be 86%, 87%, you said as compared to last year, would it be fair to say our profits will end up being close to last year as they are in the first 9 months also?

Yes. Hopefully, it is looking that -- nearer to that figure will be there because our EBITDA margin has improved, and the PAT margin has also improved. Because of that, we can be to this close.

The next question is from the line of [ Rahul ] [indiscernible] Limited.

Sir, 2 questions from my side. As you said previous that the strategy you are limiting your exposure to the EPC business. So going forward, how you are going to compensate this lossy revenue from your other business? And secondly, if you can...

Yes. We're targeting the -- aggressively the retail business, as first step within the last 3 years also. We have grown our retail business more than 25% to 30% year-on-year basis. The same kind of aggression in terms of marketing and in terms of sale will be, you will see. So that's why our CMD has said, even after reducing the EPC division, to the level of 50% to 60%, still we will be growing 20% plus from the current year level to next year level.

Okay. And if you can provide more details on the receivables currently you have in the EPC business?

Currently, the receivable is -- we have given the balance sheet also. So receivable figure is as comparable to the last year figure, but by another INR 100 crores, INR 150 crores, which is overdue in the EPC division will come by March or maybe next by April. Because now we are getting the old retention money from the government side because sorts of the payment are coming every month. So the working capital cycle as well as the debt as on March '21, will be comparable to the March '20 level also.

The next question is from the line of Saurabh Patwa from HDFC Mutual Funds.

I just wanted to have your thoughts on what the market -- how the overall market doing for the wire segment? I believe, I think other companies which have reported numbers, so all of them have shown good growth. So in that context, we've been relatively smaller. How -- what's the scope you see for market share gains? And how would we have done in this quarter with respect to market share gain?

In my commentary, I have already said that we -- in House Wire segment, we have grown by 18% in this quarter. And we hope to grow by close to 25% in the fourth quarter. And we are now present in every area of the country or in all the regions. And we are increasing our sales -- retail sales team in our branches to have more -- better penetration in every nook and corner of the country. And in the -- even in the smaller cities and through smaller cities to the rural areas. So we will be definitely taking this business substantially forward. And next year, we expect to grow by 30% to 40% approximately in House Wire business.

No. So my question was slightly in case how we would have -- in the last post-COVID, like, last 6 months, this pent-up demand has been...

The line for the management is disconnected. Kindly stay on the line till I reconnect them. [Technical Difficulty] Ladies and gentlemen, we have the management line reconnected to the call. Thank you, and over to you, sir.

Yes. So have you got my answer or your guess is...

So I was -- my question was likely like last 6 months, how is the market for the house wire doing? The overall market, our numbers have been pretty strong, sir. So I just wanted to understand how the overall market has been growing there.

Overall market has been growing at this pace only that by around 15%. So we grow -- we grew by 18% in this third quarter. And we hope to grow by approximately 20% to 25% in the fourth quarter. And -- but next year, our target will be to grow by approximately 30% to 35% in the next financial year in the House Wire segment. We are now present in each and every nook and corner of the country, and we are taking the market share in even smaller cities and through the smaller cities' dealers to the rural areas as well. We have increased our below the line branding activities as well as other branding activities to improve our brand.

So this year, so far, how much would have been A&P expenditure?

It will be close -- how much?

Our 12-month expenditure as compared to last year is less almost to a 50% level, actually.

Okay, great. So just can I add one more question, if you -- hello?

[Foreign Language].

So we have decided to curtail our turnkey business, but -- so we would -- as per the numbers which we see, we will be having a pretty decent balance sheet, and we were doing pretty okay in terms of the PSU business -- sorry, in the turnkey business as well. So -- and we were able to grow with -- even after having that turnkey business with us, we were able to grow pretty well in the domestic wire which we want to focus more. So what led us to just decide that and actually implement that?

It is because of the slow recovery of payments from the government departments and the long chain and uncertainties of the payment. So to compensate that, we want to grow the retail business.

So we want to focus more on the cable side and...

And our wire side...

Sorry, on the wire side and over time reduce the dependence on cables.

Not cables, the turnkey.

Turnkey part, yes. So we'll continue to supply to the vendors who would be doing those projects.

Yes, yes, yes. That is our strength.

Yes. Right. So just one -- what would be our market share in EHV cable sir, in India?

Our market share in EHV cables is close to 35% at the moment.

The next question is from the line of Rita Tahilramani from Invesco.

Just an extension to the previous participant question. In terms of the wire growth where we mentioned is 18%, of this how much is value-led and how much is volume-led, considering the increase in the raw materials?

Almost 50% is the price led and 50% is the volume led.

Okay. Okay. Secondly, could you give us a similar number for pure domestic cable growth? And of that, how much is value and volume?

I think there will be close to also a 60-40 ratio because there the copper content is less as compared to wire.

So you're saying 60% is volume led?

Yes.

Okay. Okay. And how much has been the total growth in terms of the pure domestic cable, excluding turnkey, excluding EHV?

Our low tension power cable has grown -- see our low tension power cable was in the quarter-to-quarter, if you were talking?

No, year-on-year, Q3 versus Q3 previous year.

Q3-to-Q3, cable business for domestic institution was INR 283 crore. As compared to last year, it was INR 251 crore.

Okay. Okay. Okay. So -- but if we see the overall competitors, we've seen at least a marginal level of growth or a marginal to mid-level kind of growth in that. But for us, the growth has been a little curtailed. So is there like...

See in the case of wire and cable, as regards to the domestic side, we have grown in terms of the institution side in terms of the retail side. Both these sides, our growth was there. Because we were operating very high base last year because as CMD sir explained, the Dangote order of INR 450 crores we executed last year. And our EPC sales was close to INR 1,000 crores last year. So against the INR 450 crore sale, there is almost negligible sale in this year. And the EPC sale of INR 1,000 crores, we will be touching around INR 600 crores here. So INR 400 crores sales is foregone from EPC division and as well as more than INR 350 crores sales forgone from the export side. But in spite of that, we will be able to achieve 86% to 87%. As we had projected in the month of May itself, we will achieve 85% at that time also. So now we will be closing to 87% achievement. And in future also, because now the base is there, if we exclude the Dangote, our growth in the last 15 years, if you compare our balance sheet in the -- on the turnover side, there is a 15% [indiscernible] was available in the last 15 years. In the last 5 years, the growth was close to 20%. So same kind of momentum you will see in the next 4, 5 years in that KEI.

The next question is from the line of [ Ankit ] from [indiscernible].

Sir, a few questions. Sir, if you could explain the math behind your debt and the payables, I mean your payables have declined a lot, but your net debt has increased. Still, your interest cost is down. So if you could just explain because optically, it looks like your working capital has increased. But still, the interest cost is down. So if you could just the math behind your...

So because the LC interest is down.

Because LC interest is down, our acceptances has gone down from INR 770 crores to INR 308 crore level. So out of INR 460 crore, we are not purchasing through LC, so we are not paying the interest. That's why we are purchasing on cash. That's why the payable has gone down.

And LC charges are also less.

And the LC charge, once we are not opening the LC, the LC charges are also less. So there's a reduction in the cash cost, actually.

Okay. So basically, the money which you borrow from banks is cheaper as compared to the LC cost, I mean, the LC interest rate and the processing charges. Is it the right way to understand?

That is one way. Second way is we have the money. So why we should open the LC. We are buying on cash. You see -- if you see the liability side balance sheet, our liability is reduced by more than INR 450 crores. This means the cash is available with the company. So we are purchasing on cash. We are not opening the LC. Why we should pay the interest to against the LC if we are having the cash.

Okay. I got your point. So considering this, now, can we assume that your interest cost from hereon would be in the range of INR 50 crores to INR 55 crores on an annualized basis.

Interest costs will be close to INR 15 crore in the quarter because [Foreign Language] interest rate [Foreign Language] still we will be able to restrict our financial cost to the level of INR 60 crore in a year.

So even -- I mean, you have a plan of around INR 10,000 crores sales in, say, next 4, 5 years. So even at that level of sales, I mean, would we achieve some internal accruals and the interest costs, should we assume will be in the range of INR 60 crores only even at that level of sales?

Yes, yes. Because now -- because of this 1-year cushion, now we are able to fund our CapEx from the internal accrual itself. So once the debt is not growing, so the interest cost will remain in this level.

Okay. And sir, what kind of revenue you are targeting in FY '22, given the fact that the EPC business would be down?

Close to 20% incremental.

20%. Okay. But approximately like what INR 5,000 crore, INR 5,100 crore.

More than INR 5,000 crores. Close to INR 5,100 crores, we can say.

Okay. Okay. And sir, lastly, you did mention that in next year, you are expecting a 30% to 40% growth in your Housing Wire segment. Now -- which is -- this growth you're expecting in value terms or volume terms?

This in the value terms because now what is the rate that is available with us, so now whatever financial projection will be made, will be made only on the basis of the current prevailing price.

Okay. Okay. Next year, CapEx...

If you see the -- if you talk of the 9-month average, so 9-month average of LME copper has not moved so much. So only 7%, 8% range. And in the copper, it is always fluctuating, whether sometimes goes up, sometimes goes down. But if you see our balance sheet in the last 5 years, over last 15 years, we are always growing. So it is not the -- we are dependent on the copper increase [Foreign Language] copper decrease [Foreign Language].

Okay. Okay. So a fall in prices will be compensated by our volume, I mean, somewhere in that. Okay. And that's just as you mentioned...

Yes, that you can witness from the last year's balance sheet since last 4, 5 years, the copper was operating at 6,000 to 6,500 level. But in spite of that, we were growing more than 20%.

Okay, okay. And sir next year, CapEx you mentioned would be INR 175 crores, right?

Yes, close to INR 175 crore. But it will be finally in the net forfaiting because once we finalize the land, then we will put up to the Board. And that number will be known to you all by -- within 2, 3 months' time.

Okay. Okay. Okay. And sir, lastly, I mean, the new normal for your EBITDA margins would be 11%, 11.5%. Is it the right assumption?

Yes, it will be more than 11%.

[Operator Instructions] The next question is from the line of Manish Agarwall from Edelweiss.

2 questions from my side. I think you've mentioned it, but I've missed out the data. Sir what was our capacity utilization for Q3 9-month for both cables and wires separately? And secondly, sir, if you could give us the Dangote order booking for Q3 9-month this year and Q3 9-month last year?

First, capacity utilization, in the Q3 was 67% in cable, 76% in house wire and close to 100% in SS wire. But if you talk of the 9 months, then the capacity utilization is 57% in Cable division, 61% in house wire division and 87% in SS wire division. That is mainly because of the first quarter lagging. And 9 months, the Dangote sale was INR 147 crore in this financial year versus INR 193 crore last year. But in the third quarter itself, the Dangote sale was more than INR 120 crores, actually. So that's why the export fallen in this quarter itself is here. So that's the major sale -- so that's the -- major sale was in third and fourth quarter.

Okay. Okay. Okay. Sir, this year, this quarter, we did not have any sale from Dangote, right?

No, fourth quarter will be because last year also fourth quarter will be close to INR 100 crores sale.

Yes. But no -- so Q3, FY '21, it will be this quarter, December quarter in this year.

Yes. In this quarter, now we don't have the Dangote sales.

That already finished.

Except the normal...

Okay. Okay. And...

Because we are operating with the Dangote sales for many years, so one is that their normal maintenance CapEx requirement that we are fulfilling and another is that, that was the large order. So normal in Dangote in a year close to INR 40 crore, INR 50 crore. Every year, we are supplying to them.

Okay. Okay. That is a normal thing, sir.

Yes, yes, that is a normal thing. We do business with the Dangote every year.

Yes. So sir, out of the big orders is -- one last thing, out of the big order, did we book anything in December? Or we are done with that just with the December quarter?

Please repeat your question.

In December quarter, sir, was there any leftover booking in that order? Or we are already done with that?

No, no. We're already done. That order completed.

That order was finished in May itself because, what to say, some material could not be dispatched due to lockdowns. So that was dispatched in May.

[Operator Instructions] The next question is from the line of Sparsh from Mirabilis Investment.

So first of all, could you provide the breakup of the order book as per EPC, cable export, EHV and others?

In EPC, domestic order is INR 647 crore and EPC export is close to INR 355 crore. In extra, I would say, power cable order book is INR 460 crore plus L 1 order is INR 130 crore, which we have already received in the month of January. And cable domestic order is close to INR 1,050 crore, and cable export order is close to INR 90 crore. So put together all, your order book is INR 2,611 crores plus INR 130 crore as well of extra high voltage.

Okay. Sir, my second question would be considering the working capital has -- if the receivables have increased and savings have gone down overall, but we have seen that our retail sales have improved, right, the contribution. So why has the working capital not increased or...

Because of the retention money of EPC, which is now overdue. So INR 150 crore to INR 200 crore, we will be collecting by March or maybe by April.

Okay. Okay, sir. Sir, and third question would be this 20% guidance for FY '22, which has been stated. Is it including EPC business overall? Or is it excluding EPC that gives us the 20%.

No, it's overall.

It's overall.

It's KEI as a whole. You see, other than EPC, we are still growing in the wire and cable. Presently also, we are growing.

The next question is from the line of Devansh Nigotia from SIMPL.

Just have 2 questions. Sir, one is how are we responding to the copper price increases that have happened in last quarter as well? And even if we look at this month, Jan also, they have significantly increased by 7%, 8%. So your commentary on retail wiring as well as domestic cable, how the industry is responding and how we are reacting to this. And sir, secondly, on retail wiring, since we mentioned that we are looking at really aggressive volume growth as well, can you just throw some more light? So since some things that you mentioned were that in rural channel, we are trying to focus, if you can just elaborate more on that? Or how we are trying to penetrate in this market?

See, we are continuously revising our selling prices of copper cables every 15 days in last 4, 5 months. Since then, it started increasing. And as far as cables are concerned, whatever orders we are booking, we are -- we cover the copper content of that order immediately, and we are either booked the LME or we are having inventory in pipeline for that much of orders. So -- and that -- what was your other question?

Sir, in case of retail wiring essence, we are an emerging player. And I mean we have created some scale, good scale. So going forward, since you mentioned that you are looking at very aggressive growth in this segment, and there are really established players, so how are we doing things differently? Let's say, if you are trying to penetrate the rural network, if you can just throw some more light on the ground level activities that we are doing.

Yes. We are mapping out each and every place by population. We are positioning in every region. And in all the branches, the salespeople who sell deals with the retail dealers are separated from the salespeople who deals with the institutional cable sales and project sales to the housing developers. So -- and it is being monitored by -- at zonal level and the head office level that how -- what are the below the line activities being conducted -- promotional activities being conducted by the retail team, with the electricians, with the influencers and with other middlemen who do the influencing activity, like architects and electrical consultants. So all these activities, we are mapping and like mapping out the bids activity of the salesperson, how many dealers he covered. And so we are mapping out and -- the performance of each and every sales personnel to improve the penetration.

[Operator Instructions] The next question is from the line of [ Ojasvi Agarwal ], an individual investor.

Yes, sir. Sir, I have 2 questions. My first question is on the working capital again. You had earlier mentioned in the call that your working capital will basically come to the FY '20 level. Now in FY '20, if I'm not wrong, your working capital days were about 80 days. Currently, it's about 125 days. So when you're saying it comes down to the last year level, we are talking about a huge recovery in your receivables. So can you give us some details in the receivable number, which is about INR 1,400 crores now and where do you see at the end of March 31, '21?

You see the EPC division, INR 150 crores odd figures are there to recover, which is overdue. Because of that, these debtors are looking in terms of number is high. Our overall working capital cycle is as far as our receivable side is close to 3 months. So again, it will come down to 3 months' level once we receive this EPC pending money of INR 150 crores.

See to add it further in this financial year into 2021, due to a reduction in the GST revenue and the central and state government's revenue, there was a pressure of the payments from the government companies to the contractors. That is the major reason that this debtors have increased. But with the improvement in the tax collection, the payments have improved from this, and we expect substantial amount of payments within -- we have received good amount of payments in January and similar pattern will continue in February and March as per our expectation.

Okay. Okay. Okay, sir. I'll just move on. My second question is more towards a futuristic opportunity for wires and cables as a sector. So you know now that most of the global auto majors and all the economies are talking about complete electrification of transportation in the next 10, 15 years. Now when we talk about electrification of transportation, we're talking about a huge opportunity in charging infrastructure. Now even if I think about charging at home, which is about 1.5 kilowatt to -- which is AC charging to fast charging, which is about 7.5 kilowatt, we're talking about a huge, a humongous opportunity. I mean just imagine, for a 7.5 kilowatt for fast charging, we need 11,000 feeder line. So when we're talking about in the next 10, 15 years in the entire electrification, we are talking some crazy opportunity in this space. So where do you see KEI fit into that opportunity? Have you started evaluating this wave of electrification and charging infrastructure already?

I'll answer your question. As a company, we are present in all sectors of economy, and we -- our penetration to -- of supplies to solar power developer. And then the power distribution companies by whether private or government, and related contractor who work in this area of electric vehicle charging infrastructure or the telecom operators, who are building up these towers for signals, which also consumes a lot of cables because each telecom tower consumes a certain amount of cables. Similarly, all these related activities, we are present. We have a strong presence in metro. We have a strong presence in all the infrastructure industry, in the construction sector of every nature, be it hospitals, hotels, real estate. And so EV infrastructure, which is related to wind power or solar power is not different. So we will be able to tap all these opportunities wherever it is coming and that will drive the growth. So far as capacities are concerned, our capacity of wires and flexibles, which goes into this EV infrastructure sector is already built up substantially. And we have already doubled the capacity of our wires and flexible by setting up a new power plant in Chinchpada of Silvassa, Dadra and Nagar Haveli, which has been operational since last 1 year. So we have the capacity to do this, and we are also going to do the CapEx for doubling our cable production capacity in the next 2 to 3 years, the project we will start building up from next financial year. So I hope that I have been able to answer your question.

[Operator Instructions] The next question is from the line of [ Sriram Rajaram from Ratnatraya Capital ].

Sir, just need one data point. What is the value of overall domestic and export sales for the quarter?

You want the sale number of exports sales?

Yes, export and domestic.

So export sale in the current quarter was INR 139 crore, which includes the cable of INR 90 crore and -- sorry, INR 100 crore and the EPC portion was INR 21 crore, and we have 1 product still where that is INR 18 crore. So put together, that is INR 139 crore, which was INR 300 crore last year. So the major difference in the basically the Dangote wire, which is close to INR 120 crore.

The domestic figure?

And the rest figure are the domestic figures. So institutional LTHT cable, domestic is INR 344 crore. Through the dealer/distributor sale, wire and cable is INR 410 crore. And extra high voltage power cable sale domestic is INR 155 crore. The stainless steel wire sale is INR 23 crore, and EPC other than cable is INR 100 crore.

The last question is from the line of Rahul Jain from Credence Wealth.

Sir, just to understand, just 2 questions. One is cables and house wire. So how do we look at KEI and how do we look at the industry growth for next, say, 3 to 5 years to come?

See there will be substantial industry growth. And mainly people who are well organized, who have capacities and who can fund a good amount of working capital, those companies will be able to grow. And also who have good market across the country, they will be able to grow. So we are among the top 2, 3 companies in India who have the infrastructure at production level as well as the marketing level and accruals at every -- in every type of projects from the consultants, from the utilities. So with the growth of economy and with the opportunities coming up, we will be equally benefited. Now the question of how we see our growth in terms of vis–à–vis the industry. So the growth of an individual company can be a few points higher by its strategy, by its aggression and by its marketing strategy. Rest, every company works. And so it is difficult to comment that how different we will be, but we will definitely be different and more aggressive and better placed as we have demonstrated in the last 5 years.

Sure. So sir cable [Foreign Language], as we speak today, what is the total capacity or cable and wire today in terms of revenue? And then you mentioned about CapEx of INR 175 crores in cables. House wire [Foreign Language] CapEx already [Foreign Language], so total capacity, say, after 1 year would be how much?

[Foreign Language] our present capacity [Foreign Language] approximately INR 5,700 crore, INR 5,800 crore [Foreign Language] annual basis [Foreign Language].

And for that, how much CapEx will be done?

[Foreign Language] CapEx requirement [Foreign Language].

And [Foreign Language] total cable and wire put together, or only cable?

[Foreign Language] Maybe. [Foreign Language] put together [Foreign Language].

Okay. So if I'm right, in next 3, 4 years, you will do a total CapEx of [Foreign Language], which will take your total capacity of cable cum wire put together to INR 10,000 crores.

Correct.

[Foreign Language] INR 175 crores of CapEx [Foreign Language].

Yes. Yes.

And sir, any plans to enter FMEG segment?

Yes, we are having discussions on that, and we are exploring that possibility. I think will -- something will be decided in the next 2 to 3 months' time.

Okay. And last question, sir, [Foreign Language]. Sir, CapEx activity cables [Foreign Language] it is -- so it's suggesting last 9 months, but if I speak about 1 year back, and today, as you see the environment, do you see some change in the environment in terms of the CapEx activity, which whereby gives you confidence in next year, we can have a much higher growth?

Yes. In fact, the projects which were stuck and which were not -- and due to pandemic and which were stuck due to many -- some other reasons, they have been cleared, and we are seeing growing activity. You have seen that a lot of metro projects are under construction now, high-speed rail project between Bombay and Ahmedabad, the contracts have been awarded. Lot of [indiscernible] projects of railways at various locations in Jammu and Kashmir as well as in Northeast area are operative. There -- a lot of express ways are built where a lot of overhead lines will be converted into underground lines. So all these activities are -- and smart number of smart city projects are under construction now, which has been awarded now. And the real activity at sites are there. So all these things will lead to substantial demand of cables and which we are already witnessing.

Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for the closing comments.

So thank you very much for joining our conference call. And we have tried to give you the best possible outlook whatever we could give, but if you still have any specific questions you may reach to us and we'll definitely reply, specifically on those points. Thank you very much for your -- for sparing your valuable time for joining us this afternoon. Thank you.

Thank you, everybody.

Thank you. On behalf of Monarch Networth Capital Limited, that concludes KEI's Q3 FY '21 earnings call. Thank you for joining us, and you may now disconnect your lines.