KEI Industries Q1 FY27 Results (NSE: KEI)
Signal: Margin expansion
The read
KEI delivered a standout Q1 with EBITDA margin expanding ~170bps to 13%, the highest in at least five quarters, driven by operating leverage from other expenses (+12.3% vs revenue +23%) and subcontractor cost reduction. PAT grew 40% YoY, in line with EBITDA, with no one-offs. The core cables & wires business showed strong momentum, while the EPC segment remains a drag. Management faces pending uncertainty from an income tax search conducted in May 2026 — outcome not yet known.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,185.34 Cr | 23.0% | -8.37% |
| EBIT | ₹386.84 Cr | 39.3% | |
| Net profit | ₹274.14 Cr | 40.0% | |
| EPS | ₹28.68 | 40.0% | |
| EBIT margin | 13% |
P&L walk
Revenue growth of 23% YoY, with EBITDA growing 39.6% (gap of +16.6pp) — margin expanded ~170bps to 13%. Leverage came from other expenses (+12.3% vs revenue +23%) and subcontractor costs (-18.1% YoY). Employee costs (+22.3%) and depreciation (+43.6%) were not the primary leverage drivers. Net profit growth of 40% tracked EBITDA, with clean other income (5.9% of PBT). EPS grew in line with PAT, no dilution.
Segments
Cables & Wires segment drove consolidated results with revenue ₹3,088 Cr (+24.7% YoY) and PBIT ₹419 Cr (+57.2% YoY). EPC projects segment swung to a loss of ₹5.1 Cr vs profit ₹7.9 Cr in Q1FY26, dragging overall performance.
Key positives
- Revenue growth of 23% YoY to ₹3,185 Cr, accelerating from 19% in Q4FY26.
- EBITDA margin expanded ~170bps YoY to 13% — operating leverage from other expenses and subcontractor cost control.
- PAT grew 40% YoY to ₹274 Cr, with EPS tracking at ₹28.68 (also +40%).
- Cables & Wires segment PBIT surged 57% YoY to ₹419 Cr, demonstrating pricing power and volume growth.
- Balance sheet remains strong with low leverage (D/E 0.04) and ₹280 Cr unutilised QIP proceeds.
Key concerns
- EPC projects segment slipped to a loss of ₹5.1 Cr vs profit ₹7.9 Cr in Q1FY26 — needs monitoring.
- Income tax search in May 2026 adds regulatory uncertainty; auditors have drawn attention to the pending outcome.
- Gross margin expanded only 137bps despite EBITDA margin expansion — the improvement was more from cost control than material cost tailwind.
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