KEI Industries Q2 FY27 Results (NSE: KEI)
Signal: Growth reaccelerated
The read
The key inflection is a break in the margin recovery: revenue growth accelerated to 38.5% YoY, but gross margin contracted 180bps to 22.2% and EBITDA margin fell 81bps to 10.6% from 13.0% in Q1FY27 as raw-material intensity rose to 85.9% of revenue; PAT still grew 29.0% to 2624.50 million, but negative H1 operating cash flow of 4889.67 million and inventory of 36044.80 million make conversion the next trajectory test.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,776.42 Cr | +38.5% | +18.6% |
| EBIT | ₹370.47 Cr | +24.5% | |
| Net profit | ₹262.45 Cr | +29.0% | |
| EPS | ₹27.45 | +28.9% | |
| EBIT margin | 10.6% |
P&L walk
Revenue grew 38.5% YoY to 37764.18 million, but gross margin compressed 180bps to 22.2% and EBITDA margin fell 81bps to 10.6%; PAT still rose 29.0% to 2624.50 million, supported by operating growth rather than other income.
Segments
Cables & Wires drove the group with revenue of 36685.22 million and segment result of 4129.12 million, while EPC Projects dragged through an 89.26 million loss versus a 51.27 million profit a year earlier.
Key positives
- Revenue grew 38.5% YoY to 37764.18 million, accelerating from 23.0% YoY growth in Q1FY27.
- Cables & Wires segment revenue rose 39.7% YoY to 36685.22 million and segment result increased 43.9% to 4129.12 million.
- Finance costs grew 21.8% YoY to 172.38 million, below revenue growth of 38.5%, while EPS rose 28.9% to 27.45.
- PPE of 13963.37 million and CWIP of 12718.76 million increased alongside depreciation of 305.78 million in the quarter, indicating an expanding investment base rather than a flat asset base.
Key concerns
- Gross margin compressed 180bps YoY to 22.2% as raw materials and purchases rose to 85.9% of revenue from 81.9%, indicating cost absorption with no disclosed driver.
- EBITDA margin fell 81bps YoY and 242bps QoQ to 10.6%, reversing the 13.0% margin delivered in Q1FY27.
- H1FY27 operating cash flow was negative 4889.67 million versus positive 3828.99 million in H1FY26, with inventory increasing to 36044.80 million from 24007.87 million.
- EPC Projects moved to an 89.26 million segment loss from a 51.27 million profit a year earlier.
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