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KEI Industries to Raise ₹2,000 Crore via QIP for Growth

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Synopsis:

KEI Industries plans to raise ₹2,000 crore through QIPs, following a 10.3% YoY profit increase in Q2 FY25. Revenue rose 17.2% to ₹2,279.6 crore.

KEI Industries news today

KEI Industries Ltd, a leading cable manufacturer, has announced plans to raise up to ₹2,000 crore through a Qualified Institutional Placement (QIP). The proposal, pending approval from shareholders via a postal ballot and other regulatory clearances, aims to issue equity shares or other eligible securities to institutional investors. The QIP is intended to bolster KEI Industries’ capital base, supporting its expansion plans and strengthening its financial position.

KEI INDUSTRIES LTD.

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4448.35-95.19 (-2.09 %)

Updated - 13 December 2024
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Financial performance in Q2 FY25

The announcement of the QIP follows a robust financial performance in the second quarter of FY25. KEI Industries reported a 10.3% year-on-year (YoY) increase in net profit, reaching ₹154.8 crore for the quarter ending September 30, 2024. In comparison, the company posted a net profit of ₹140.3 crore in the corresponding quarter of the previous fiscal.

The company’s revenue from operations surged by 17.2%, totalling ₹2,279.6 crore against ₹1,945 crore in the same quarter last year. This growth highlights KEI Industries' ability to scale operations and maintain a steady revenue stream despite fluctuating market conditions.

Operating margins and financial charges

At the operating level, the company recorded an Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) of ₹220.5 crore, marking a 9.1% increase compared to ₹202.2 crore in the previous year’s corresponding quarter. However, the EBITDA margin slightly declined to 9.7% from 10.4% in the previous fiscal’s corresponding period, reflecting tighter market conditions and increased expenses.

Financial charges also saw a notable rise, with the company incurring ₹13.33 crore in Q2 FY25, up from ₹7.53 crore in the same period last year. These charges represented 0.58% of net sales, up from 0.39% previously. For the first half of FY25, financial charges stood at ₹27.49 crore, compared to ₹16.47 crore in H1 FY24, showing an increase to 0.63% of net sales from 0.44%.

Pending order book and future outlook

KEI Industries reported a strong order book valued at approximately ₹3,847 crore, providing a robust pipeline of projects for future revenue generation. The funds raised through the planned QIP are expected to support the company in executing these orders, expanding production capabilities, and exploring new growth opportunities in the cable manufacturing sector.

KEI Industries' share price movement

Following the announcement of its Q2 results, shares of KEI Industries closed at ₹4,697.75 on October 15, 2024, registering a gain of ₹122.75, or 2.68%, on the Bombay Stock Exchange (BSE). The rise in the KEI Industries share price indicates positive investor sentiment towards the company's growth prospects and its planned QIP.

The ₹2,000 crore QIP plan by KEI Industries aligns with its growth strategy, aiming to enhance capital availability for expansion and operational needs. With a solid order book and strong financial performance, the company is positioned for continued growth in the competitive cable manufacturing market.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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