KEI Industries Limited (KEI) Q4 FY23 Earnings Concall Transcript

KEI Industries Limited (NSE:KEI) Q4 FY23 Earnings Concall dated May. 03, 2023.

Corporate Participants:

Anil Gupta — Chairman and Managing Director

Rajeev Gupta — Chief Financial Officer

Analysts:

Rahul Dani — Monarch Networth Capital — Analyst

Rahul Agarwal — InCred Capital — Analyst

Alok Deshpande — Nuvama — Analyst

Riya Mehta — AEQUITAS INVESTMENT — Analyst

Pranav — ASK Investment Managers — Analyst

Abhineet Anand — Emkay Global Financial Service — Analyst

Shrinidhi — HSBC — Analyst

Keyur — ICICI Prudential Life Insurance — Analyst

Praveen Sahay — Prabhudas Lilladher — Analyst

Unidentified Participant — — Analyst

Ravi Purohit — Securities Investment Management Private Limited — Analyst

Achal Lohade — JM Financial — Analyst

Shubham Agarwal — Axis Capital — Analyst

Raj — Ambit — Analyst

Hardik Rawat — IIFL Securities — Analyst

Harsh Shah — Jefferies — Analyst

Akshay Kothari — Envision Capital — Analyst

Prashant Kothari — Pictet — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to KEI Industries Limited Q4 FY23 Earnings Conference Call hosted by Monarch Networth Capital. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you and over to you, sir.

Rahul Dani — Monarch Networth Capital — Analyst

Thank you, Deepak. Good afternoon, everyone. We are pleased to host the senior management of KEI Industries today and 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 the call with opening remarks from the management and then we’ll move to Q&A. Thank you and over to you, sir.

Anil Gupta — Chairman and Managing Director

Yeah. Thank you very much. I am Anil Gupta. Welcome to this conference call of KEI Industries Limited Investor Conference Call. I welcome all of our esteemed investors on this call. We will brief you about Q4 numbers and then about annual numbers of FY23. In Q4 of FY23, the net sales achieved is INR1,954 crores against same quarter in previous year INR1,792 crores. The growth in net sales is 9.06%, however, the volume growth in this quarter is around 13% because of lower prices of metals during third quarter and having affected this quarter as well.

EBITDA in this quarter is INR208.88 crores against INR179 crores last year same quarter. The growth in EBITDA is 16.23%. EBITDA/net sales margin is 10.69% against 10.03% in the same period previous year. Profit after tax is INR138.11 crores against INR115.88 crores last year. Growth in profit after tax is 19.9%. So consequently, the profit after tax/net sales margin is 7.07% versus 6.47% achieved last year during the same period. Domestic institutional in this period is INR712 crores against INR660 crores last year with a growth of 8%. The sales of extra high-voltage cable is INR102 crores against the INR146 crores same period last year. Export sale in this quarter is INR164 crores against INR177 crores in the same period last year.

Total cable institutional sales contribution is 48% as against 52% in the last year same quarter. Dealer/distribution network, that means B2C was INR822 crores in the fourth quarter against INR717 crores. The growth is approximately 15%. So, the B2C sale contributed approximately 42% in the fourth quarter against 40% in the last year.

The sales of EPC division is INR135 crore against INR109 crores, the growth is approximately 24%. Out of the total sales of EPC, the sales of extra high voltage cable at EPC turnkey execution is INR65 crores against INR37 crores in the same– Sales of Stainless Steel Wire is INR6 crores against INR61 crores in the same quarter last year. The volume increase in the cable division on the basis of production format and consumption of metal in Q4 of ’22, ’23 is approximately 13%. Similarly, in-house wire sales the Q4 sales are of INR478 crores against INR466 crores last year, up 2.55% however the volume growth in the house wire sales is 13%. The value sales has come down because of the decrease in the copper prices by approximately and consequently the selling prices by approximately 10% in this quarter. But however the full year increase in the sales of house wire and winding wire is 23.21% over full year of ’22,’23.

Now I’ll come to the full year of ’22, ’23. The net sales achieved in full financial year FY23 is INR6,912 crores against INR5,727 crores in last year. The growth in net sales is 20.7%. EBITDA/net sales margin is 10.62% against 10.54% in the previous year. Profit after tax is INR477 crores against the previous year INR376 crores. The growth is up 26.89%. PAT/net sales margin is 6.91% versus 6.57%. Domestic institutional cable sales, wire and cable is INR2390 crores in FY23 achieving a growth of [Technical Issues] percent.

Sales through dealer network is INR3,030 crores against INR2,319 crores last year. The growth is around 31%. The export sales in FY22, ’23 is INR693 crores against INR585 crores last year. The growth is in that sales is 18%. The active working dealers of the Company as on 31st March ’23 was approximately 1910. The B2C sales through dealer network contributed approximately 44% in FY ’22 ’23 against previous year 40%. The total EPC sale other than cable is INR405 crores against INR380 crores achieved last year. The growth is around 6%. The growth in the sales is mainly due to the EHV EPC sale, the extra voltage cables turnkey sale.

The total sales of EPC and EHV EPC is INR147 crore against INR128 crores in last year. The sales of Stainless Steel Wire division is INR248 crores in the full year against INR226 crores last year. The growth is approximately 10%. Overall volume increase in the cable division, on the basis of production and consumption of metal is approximately 20%. Pending orders as on 08 April, 2023 is approximately INR3,068 crores, out of which EPC INR946 crores extra high voltage cable and EPC INR850 crore. Cables domestic INR1,440 crores and export orders of cables are INR332 crores. Total borrowings as on 31st March is INR135 crores–

Operator

Sorry to interrupt. Sir, please give me one moment.

Anil Gupta — Chairman and Managing Director

The total borrowing is INR135 crores only for channel finance. Otherwise, the credit limit utilization is nil and cash and balance bank balances of INR537 crores as on 31st March 2023 as against total borrowing of INR331 crore and cash and bank balances INR350 crores as on 31st March ’22. The acceptances that is creditors against LC as on 31st March ’23 is INR219 crores against INR299 crores in FY22. So the net cash on the books is INR183 crores against net debt including acceptances of INR270 crores as on 31st March, ’22.

During ’22, ’23 financial year, the finance cost has decreased to INR34.71 crores as against INR40.39 crores in the last year. The percentage of financial charges of net sales has decreased this period to 0.5% from 0.71%. Interest income earned on fixed deposit is INR16.49 crores against INR1.87 crores and in financial year ’21, ’22 which is included in the other income.

Now, I will come to the future outlook of the Company. The Company has repaid all its debts including term loans and it is a debt-free company. And whatever cash accruals will be there, it will be used for capex for future growth and additional working capital. Capacity utilized during FY22, ’23 is 91% in cable division, 79% in-house wire division and 87% in stainless steel wire division.

Operator

Sorry to interrupt, sir. There seems to be a problem with the connection. I will just quickly re-connect you. Ladies and gentlemen, please stay connected. Yes sir, please go ahead.

Anil Gupta — Chairman and Managing Director

Okay, so. I repeat again the future outlook. So at present, the company has repaid all its debts and is a debt-free company. Whatever cash accruals will be there, it will be used for capex for future growth and additional working capital requirements. Capacity utilized during FY23 is 91% in the cable division, 79% in house wire division and 87% in the stainless steel wire division. During the financial year ’22, ’23, company has spent INR98 crore on capital expenditure. And during the current financial year, company is doing a brownfield capex of around INR45 crores in our Silvassa plant which will generate an additional top-line revenue of LT power cable of approximately INR500 crores. This will enable us to grow by approximately 16% to 17% in current financial year. This is apart from the brownfield. Apart from this brownfield capex in FY ’23 ’24, we have planned INR250 to INR300 crores capex on greenfield expansion for cable and wire in Gujarat. And the construction will commence somewhere in June and production of which will commence within 18 months of the commencement of construction, that is by end of September to December, ’24. We’ll be spending every year around INR250 to INR300 crores every year in next 3 years to maintaining a CAGR growth of 17% to 18% per annum as against achieved CAGR of around 15% during last 15 years.

The industry outlook. India is emerging as the fastest growing major economy in the word and due to it’s very strong infrastructure pipeline and focus by central government and state governments on infrastructure, especially, railways, metro railways, urban railway systems, highways and large buildings, hospitals and other infrastructure, we expect a very strong momentum in the cable demand in the coming financial year. And apart from that, we hope that even real estate should be doing well. There is a very strong growth seen in solar energy projects. So, we are seeing a good traction in the solar, demand from solar developers. And then the present renewed distribution strengthening scheme by various distribution companies in India, which is funded by PSP and REC. Good demand from power distribution companies are there for RDSS projects.

We are also seeing demand going up from the manufacturing sectors, and we expect that manufacturing sector and the private capex will also show a very strong demand, especially from the steel, oil and gas, petrochemicals, cement and miscellaneous industries. The government emphasis on PLI scheme will definitely boost the investments in the manufacturing sectors. So with this, I conclude my brief. Now, I am available for any possible questions. Thank you very much.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen we will wait for a moment while the question queue assembles. Our first question is from the line of Rahul Agarwal from InCred Capital. Please go ahead.

Rahul Agarwal — InCred Capital — Analyst

Yeah, hi, good afternoon. Thank you for the opportunity and congratulations for achieving the guidance for the year. But the two questions to start with. Firstly, for the next current fiscal ’24 what are the 3, 4 things you are working on to achieve your top-line target. As you are saying obviously capex is much more focused area. Could you highlight another 3,4 things you’re working on to achieve your 16% 17% growth on topline and 11% margins that you’ve guided earlier for fiscal ’24. That’s the first question.

Rajeev Gupta — Chief Financial Officer

Yeah, as you see we are already focusing on increasing our sales to the retail dealer distributor network which has already contributed around 44%, which we have guided last year to reach out to 44% to 45%, so almost we have reached to 44%./ Again, for the next financial year we are targeting for 48% to 50% through the dealer distributor sale out of the total sales. So, again, we are focusing on that. And then second part, we are more focusing on the export. So earlier we were not available in the — for the US exports, now a few of the approval from the US market. So now in this financial year even the last quarter of — last financial also we started exporting to the US market. So this year, our exports will also increase. At present, last year our export contribution is close to 10%, so now we are targeting this contribution from 10% to 12% on the total sales. So and then we are also focusing to brownfield capex in our Silvassa plant, so that the capacity will be available for the second half of the current financial year, which will enable us to again grow to 16% to 17%.

Rahul Agarwal — InCred Capital — Analyst

Got it sir, got it. Sir, one second question was for Anil-ji. There has been starting June ’21 almost 3 million shares have been sold, reported on the stock exchange about INR370 crores, 3% of equity. There have been some concern, when we interact with your shareholders and other investors regarding this. Whatever clarity if you could help us to understand and if you don’t mind sharing the purpose for this and is this now done with or should we expect something more.

Anil Gupta — Chairman and Managing Director

No. I think it is done with. We have already clarified to our holder also and again, we are clarifying here also. So whatever he was intending to sell, he has completed his sale. So no future sale will be there.

Rajeev Gupta — Chief Financial Officer

And this was basically intended for buying a house property for personal use and which was long overdue. I still didn’t have even a residential house in the city to which — for which we have invested.

Rahul Agarwal — InCred Capital — Analyst

Got it, sir. I appreciate that reply. Thank you so much. And lastly on the Gujarat plant that you are saying the construction will pick up speed now. We should expect the first output from there sometime in September, December of next year. Is that correct?

Rajeev Gupta — Chief Financial Officer

Yes, yes.

Rahul Agarwal — InCred Capital — Analyst

Okay, okay. Perfect, sir. Thank you so much. I’ll come back in the queue.

Operator

Thank you. Our next question is from the line of Alok Deshpande from Nuvama. Please go ahead.

Alok Deshpande — Nuvama — Analyst

Good afternoon, everyone. Congratulations to the entire KEI team for the great performance. So two questions from my side. One, if you could give us some sense on the volume growth for Q4 in cable and wires and also for the entire year. So that’s my first question.

Rajeev Gupta — Chief Financial Officer

Sir, volume growth in the cable is close to 13% in Q4 and 20% for the full year.

Alok Deshpande — Nuvama — Analyst

Okay, and this is only for cables or cables and wires, I mean the house wire–

Rajeev Gupta — Chief Financial Officer

Cables and wire, yeah, wire and cable put together.

Alok Deshpande — Nuvama — Analyst

So 13% for Q4 and 20% for the entire year, right?

Rajeev Gupta — Chief Financial Officer

Entire year, yes.

Alok Deshpande — Nuvama — Analyst

And sir my second question was, when we look at your raw material cost or your gross margin, sir, when you look at spot prices of, let’s say, aluminum or copper, does this affect you with a lag in the sense that the prices which were there for Q3 of FY23, would that would have had an impact on how your margins were in Q4 or how should we or is it like an immediate basis.

Rajeev Gupta — Chief Financial Officer

Actually it is basically the lag effect for 15 to 25 days because in the institutional sale, we are having inventory of two-and-half months, but we are having the pending order position for three to four months. Same case with the retail. Every 15 days, we are revising the prices. So there is a lag effect of 15 to 25 days.

Alok Deshpande — Nuvama — Analyst

Okay, okay. So, on a blended basis, it is fair to assume 20-25 days is the lag effect, right?

Rajeev Gupta — Chief Financial Officer

On an average when you average out for a year, it will not impact actually.

Alok Deshpande — Nuvama — Analyst

Okay, okay. And, sir, if I may just ask this one question, last one question. Now as you mentioned in the start that INR250 to INR300 crores annual capex for the next two-three years. Given that the prices are currently I’m sure compared to last year’s prices, the prices currently would be lower given that the aluminum and copper prices are now lower. On this additional capex for the next two or three years, what sort of asset turn can we expect in terms of revenue addition on the current base.

Rajeev Gupta — Chief Financial Officer

See, the upper term in our industry is in the initial year is 1:4, then it goes to 1:5. That is in the upper term section. But if you include the buyer then it is 1:6.

Alok Deshpande — Nuvama — Analyst

Okay, so 1:6 is at the highest potential, you mean

Rajeev Gupta — Chief Financial Officer

Yes, but for the cable division product fair reasonable assessment is 1:5.

Alok Deshpande — Nuvama — Analyst

Sure, sir, understood. Thank you very much, sir. I’ll get back in queue. And all the very best.

Operator

Thank you. Our next question is from the line of Riya Mehta from Aequitas Investments. Please go ahead.

Riya Mehta — AEQUITAS INVESTMENT — Analyst

Hello, sir. thank you for giving me the opportunity. My one question is in regards to the EHV cable. What kind of demand are we seeing and how is the export market for the same.

Rajeev Gupta — Chief Financial Officer

See, in the EHV cable the last year because of the adequation [Phonetic] delay, it was little bit low as compared to the ’21 ’22 but as of now, we have the strong order book position of more than INR850 crores. So it is a very good position now and the demand is also very good. So in this financial year we will be doing close to INR550 to INR600 crores, say for that side.

Riya Mehta — AEQUITAS INVESTMENT — Analyst

Okay, and where is the demand. So is it domestic and International also for the same.

Rajeev Gupta — Chief Financial Officer

Domestic as well as International also.

Riya Mehta — AEQUITAS INVESTMENT — Analyst

Okay, and in terms of housing wire, what kind of inventory is there at the distributor level and how do we see the entire scenario.

Rajeev Gupta — Chief Financial Officer

At any given point of time, whenever we were discussing the inventory of dealer distributor, they will not be having more than 15 to 25 days inventory.

Riya Mehta — AEQUITAS INVESTMENT — Analyst

Okay. And in terms of raw material, so basically, what kind of decrease in costs are we seeing on a QoQ basis and going forward, what will be your guidance.

Rajeev Gupta — Chief Financial Officer

Because we cannot guide for the raw material price for the future because that is the international LME rate, but if we compare for Q4 of this current year versus last year Q4, so the copper was decreased by 10% as the LME rate.

Riya Mehta — AEQUITAS INVESTMENT — Analyst

Okay, thank you.

Operator

Thank you. Our next question is from the line of Mr. Pranav from ASK Investment Managers. Please go ahead.

Pranav — ASK Investment Managers — Analyst

Thank you for the opportunity, sir. Just one question regarding the volume growth that you pointed out at 13%. Considering the copper prices declined by 1% 1.5% on a Year-over-Year basis.

Rajeev Gupta — Chief Financial Officer

Sir, you are talking of the volume then we are talking only for the volume. We cannot correlate with the price because price is separate and the volume is people.

Pranav — ASK Investment Managers — Analyst

So if you could give a breakup of what the volume and price, volume is up 13% and price, what kind of decline, you would have seen year-on year.

Rajeev Gupta — Chief Financial Officer

The LME 10% price decline.

Pranav — ASK Investment Managers — Analyst

For Q4, year-on year basis.

Rajeev Gupta — Chief Financial Officer

For full year, the LME decreased by 12%.

Pranav — ASK Investment Managers — Analyst

Okay. Thank you.

Rajeev Gupta — Chief Financial Officer

And the aluminum LME has also squeezed by 12% to 9% for the full-year basis. So basically for full-year basis, the copper LME decreased by 12% and aluminium decreased by 9%.

Operator

Thank you. We move to our next question. Our next question is from the line of Abhineet Anand from Emkay Global Financial Service. Please go ahead.

Abhineet Anand — Emkay Global Financial Service — Analyst

Yeah, thanks for the opportunity. Sir, just wanted to understand in over last five-six years we have had a very decent growth of anywhere between 15% to 18%. On the margin side, it has ranged at 10.5% plus-minus certain basis points. So when is the security leverage [Technical Issues] 11% 11.5%. Can you please guide on that.

Rajeev Gupta — Chief Financial Officer

In future, greenfield capex will be done and the commercial production from there will be started. So our administrative overhead and this overhead will not increase and the marketing expenses also will not increase to that extent. So that in next five years’ time by ’26, ’27, our EBITDA margin will improve by at least 1.5%.

Abhineet Anand — Emkay Global Financial Service — Analyst

So currently we are at 10.5%. You are saying that on an absolute basis you are saying this or–

Rajeev Gupta — Chief Financial Officer

Currently, we are having close to 10.5% to 11%. Actually, it depends on the volatility of the raw material price, but otherwise it is — sometime it is 11% sometimes it is 10.75% like this.

Abhineet Anand — Emkay Global Financial Service — Analyst

So you are basically saying this 1.5% increase, so this is for the incremental supply you’re seeing from Gujarat or as a whole.

Rajeev Gupta — Chief Financial Officer

As a whole because company is seeing a legal entity.

Abhineet Anand — Emkay Global Financial Service — Analyst

Okay, so in next 5 years this 10.5, 11 can go to 12, 12.5.

Rajeev Gupta — Chief Financial Officer

Yes. But you see, we are more focusing on the absolute number, because we don’t want that we should not increase in terms of the value and we increased the margin but absolute number will not be there. So we are focusing that we should grow at least 15% to 17% kind of range in terms of the value, even though we can increase little bit in that EBITDA and the PAT, because our interest cost is not increasing, even though our sale is increasing. So ultimately, our PAT is increasing year-on-year basis. So ultimately, the cash profit available to the company is more year-on-year basis.

Abhineet Anand — Emkay Global Financial Service — Analyst

But it is fair to assume that with the new large plant coming up and I assume sir told that around INR250, INR300 crores for the next year, so it is slightly INR800 to INR1,000 crore investment, right, for the next three years

Rajeev Gupta — Chief Financial Officer

Yes. And all will be internal accrual because right now we are having close to INR400 to INR500 crore balance available with the company and every year we are accruing close to INR600 crores cash profits.

Abhineet Anand — Emkay Global Financial Service — Analyst

Okay, and just on the current capacity-wise, you did mention in terms of the utilized will be at 91%. Even if we were the Silvassa plant 45 crore I suppose the benefits will probably come in H2 of this year, not in H1.

Rajeev Gupta — Chief Financial Officer

No, in H1 also. Last year we invested around INR98 crore, so close to INR45 crores we invested in Silvassa alone. So that capacity has already increased because of that, that has already come. So from April onwards we are taking the sales from there. So we did actually 2 brownfield capex in Silvassa. One has completed and one will complete in September.

Abhineet Anand — Emkay Global Financial Service — Analyst

Okay, so the one that we have done was INR90 crores, the second will be of INR45 crores. Correct to understand that?

Rajeev Gupta — Chief Financial Officer

That is how we are targeting the growth of 16% 17% on the basis of the capacity at the level of the wire and the cable and the brownfield capex.

Operator

Thank you. Mr Abhineet Anand, may we request you to join the question queue for follow-up questions as there are several participants waiting for their turn. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. Our next question is from the line of Shrinidhi from HSBC. Please go ahead.

Shrinidhi — HSBC — Analyst

Yeah, hi. Thank you for the opportunity and congratulations on good set of numbers. Just one clarification on capex. We are guiding for INR250 to INR300 crores this year. Does that include INR45 crores brownfield capex at Silvassa.

Rajeev Gupta — Chief Financial Officer

No. That is in addition to that.

Shrinidhi — HSBC — Analyst

Okay, so probably then INR300 crores to INR350 crores FY ’24 capex, right?

Rajeev Gupta — Chief Financial Officer

Yes.

Shrinidhi — HSBC — Analyst

And secondly, sir. I think you gave overall volume growth for the cable and wire business. Is it possible to break that into wires business, like how much is it for housing wire and for quarter and the full year.

Rajeev Gupta — Chief Financial Officer

Wire is 13%.

Shrinidhi — HSBC — Analyst

That is for Q4, we said, right?

Rajeev Gupta — Chief Financial Officer

Q4 and for full year the wire is 31%.

Shrinidhi — HSBC — Analyst

And last sir, we had a very good improvement in the working capital in last couple of years. Do you see there is scope to improve working capital intensity further on both inventory as well as receivable days.

Rajeev Gupta — Chief Financial Officer

Inventory will remain the same levels but the receivable days, which right now is 2.4 months, so in the current financial year it will be 2.2 months because our retail will increase.

Shrinidhi — HSBC — Analyst

Right. Inventories particularly has come down a lot. Am wondering can these levels be sustainable.

Rajeev Gupta — Chief Financial Officer

Yeah, this level is sustainable.

Shrinidhi — HSBC — Analyst

Okay. And last, sir, may I ask order backlog breakup. I couldn’t note it down.

Rajeev Gupta — Chief Financial Officer

Our order backlog is INR3,568 crore, out of which EPC is INR946 crores. Extra high voltage power cable, which includes the cable as well as the EPC that is INR850 crore rupees. And domestic cable institutional order booking is INR1,4440 crores and export order for the cable is INR332 crores.

Shrinidhi — HSBC — Analyst

Okay, thank you very much.

Operator

Thank you. Our next question is from the line of Keyur from ICICI Prudential Life Insurance. Please go ahead.

Keyur — ICICI Prudential Life Insurance — Analyst

Thank you. Two questions. First is on the EHV cable, we have seen de-growth for FY ’23 and now I think you are guiding for much higher number for FY ’24. So, what transpired in FY ’23 and why it will come back in ’24, that is first question. And second question, when you talk about 16% 17% overall revenue growth, what segments will grow above company average and what will drag the overall revenue growth. Just breakup of this. Thank you.

Rajeev Gupta — Chief Financial Officer

See, in extra high voltage cable, we had orders in FY ’23, but lot of large orders could not be executed because the clearances from the transmission utility and right of the way permissions were not there. So hence, it could not be converted to the sale. Presently the order book of extra high voltage cable is INR850 crores and even the new orders will be pouring in further. So, we are absolutely confident of achieving around INR600 crores sales in this financial year. And second question was–

Keyur — ICICI Prudential Life Insurance — Analyst

Second question was in growth 17%–

Rajeev Gupta — Chief Financial Officer

It will be majorly coming from low tension cables and house wire sections and also we have the capacities in ST and EHV also. So overall. we have projected a growth of around 16% to 17% in FY ’24.

Keyur — ICICI Prudential Life Insurance — Analyst

Okay, so just one follow-up on this. When you say 91% capacity utilization in cables overall and while B2B segment is growing but B2C real estate has seen some kind of slowdown, an overall slowdown. Plus we have reached a certain scale, so in that context, how practical is it to grow retail/wires, house wires segment above company level average.

Rajeev Gupta — Chief Financial Officer

See, for company whether we grow in extra high voltage, we grow in export, we grow in low tension high voltage, because as of now, we are only just projection, but overall, in the past also, sometimes we have grown in exports, sometimes we are more grown in the retail, sometimes we have more grown in the institutional wire and cable. So these kind of things will remain as it is. But we don’t know which sector will grow more, which sector will not grow more. But overall, because you see as an institutional sale in a year we are we are serving more than 2000 clients institutional clients in a year. We are having more than 1900 dealer distributor all across the country. We are having our sales and export market, more than 60 countries and the US has been added. So that’s very diversified customer base, which we are having. On that basis in the last 15 years also, we have grown by 14% to 15% CAGR. So now we are projecting a 16%, 17% growth which we are already doing in last so many years.

Keyur — ICICI Prudential Life Insurance — Analyst

Noted. Thanks a lot and all the best.

Operator

Thank you. Our next question is from the line of Praveen Sahay from Prabhudas Lilladher. Please go ahead.

Praveen Sahay — Prabhudas Lilladher — Analyst

Yeah, thank you sir. So my question is how much of the revenue for the full year for the EHV EPC revenue.

Rajeev Gupta — Chief Financial Officer

For the EHV EPC revenue, please note down. INR147 crores as against INR128 crores last year, EHV EPC.

Praveen Sahay — Prabhudas Lilladher — Analyst

Okay, and regarding clarification on the EHV order book that is, how much is that, that’s 350 or 850.

Rajeev Gupta — Chief Financial Officer

INR850 crores.

Praveen Sahay — Prabhudas Lilladher — Analyst

Okay. And lastly, sir, you had earlier guided for the housing wire growth of 17% to 18% for ’24. So is it largely–

Rajeev Gupta — Chief Financial Officer

No, no. In ’24 we have guided overall sale of 16%, 17% percent.

Praveen Sahay — Prabhudas Lilladher — Analyst

Overall, so in earlier call, actually you had given some housing wire number for 17%, 18%. So you are revising to lower numbers, that is largely on the volume side only you are guiding for or–

Rajeev Gupta — Chief Financial Officer

There are some queries about the guidelines. We be growing more than the average company sale. In the past also, we have grown more than in the house wire segment. Like in the current year, we have grown 20% but the house wire sale grown by 23%. In future also, that trend will remain same.

Praveen Sahay — Prabhudas Lilladher — Analyst

Okay, and that’s largely on a volume growth.

Rajeev Gupta — Chief Financial Officer

At present you are talking about the value. So I told you to the value.

Keyur — ICICI Prudential Life Insurance — Analyst

Okay, thank you sir.

Operator

Thank you. Our next question is from the line of Nevansh Mugodio [Phonetic] from SI NPS. Please go ahead.

Unidentified Participant — — Analyst

Thanks for the opportunity. Can you elaborate a bit more on the export opportunity that you mentioned especially [Indecipherable] and what are the sectors which are giving significant traction in exports.

Rajeev Gupta — Chief Financial Officer

In export, because we are dealing in so many countries, earlier we were not approved in the US market. So now our few of the projects low tension power cable and the solar cable has been approved and the ST cable also approved by the US markets. So we will be exporting to US market.

Anil Gupta — Chairman and Managing Director

Basically, we need to take certain approval from the Underwriters Laboratory in US. To sell in US, you need new approval for specified products which we have obtained after around 2 years and become eligible to sell in the market and hence the distributors over there are approaching us now and we have already commenced sales from January ’23 onwards and will continue.

Unidentified Participant — — Analyst

So the question is because your exporting cables have been significant traction in last three to six months. So, is it like for us it is only the company acceptances that we have received or overall for India, there has been some significant change in — the trends towards the Indian suppliers in exports of cables. Has anything of that played out, any perspective if you can share over here?

Anil Gupta — Chairman and Managing Director

Of course. I mean good acceptability of Indian products has come in the developed countries and hence we are able, we are having the opportunity for that.

Unidentified Participant — — Analyst

And which are giving traction in export cable as that is a significant sector.

Anil Gupta — Chairman and Managing Director

Basically power cables and solar cables.

Unidentified Participant — — Analyst

Okay, and in case of EHV cables, you mentioned the order backlog of INR850 crores. On execution also, and can you elaborate a bit more on the demand environment which is mainly domestic demand or it also includes export.

Anil Gupta — Chairman and Managing Director

See, at the moment, we are already talking about domestic demand.

Operator

Thank you. Mr. Devansh, may we request you to join the queue as there are other participants waiting for their turn. Thank you. Our next question is from the line of Ravi Purohit from Securities Investment Management Private Limited. Please go ahead.

Ravi Purohit — Securities Investment Management Private Limited — Analyst

Yes, hi, thanks for the opportunity and congratulations on good set of numbers. Most of my questions have been answered, just wanted to kind of know if we understand between 2019 and now, what would have been like our overall aggregate volume growth versus price, because I mean, prices are like still 50% higher in terms of underlying commodity like copper and all. So if you have like a 3-year or 4-year view between volume and value, how much do they account for.

Rajeev Gupta — Chief Financial Officer

See, every year close to 13% to 15% volume growth is there, like in the last financial year, if the prices are stable, so like our volume growth is also 20% last year. And then the value growth in also 205. So if the price in a particular year got — then there is something different. but otherwise on average pricing is almost similar.

Ravi Purohit — Securities Investment Management Private Limited — Analyst

Because, see if we look at ’19, our overall revenue was about a little over INR4,000 crores. We are right now a little less than INR7,000 crores. That is about 65% jump overall 4-year period. Commodity prices are also like 40% higher, 45% higher. So, let’s say per kilo price of copper and aluminium four years back, it is probably 40% higher even today. So in that sense, does it make. Would you say volume growth would have been slower and much lower over a 4-year period average.

Rajeev Gupta — Chief Financial Officer

See, in ’17, ’18 versus ’18, ’19, copper was going down. ’18, ’19 versus ’19, ’20 again copper going down. Only then, ’19 ’20 versus ’20 ’21 it started copper going up. So it is on an average. Sometimes copper goes down also, sometimes copper goes up also. But we need to have both in terms of the value. So as a company, we are always focusing on the value whether copper has gone down or copper has gone up we are maintaining the growth of 16% 17% year-on-year basis. You talk of this ’18, ’19 more than 20%. In ’19, ’20, again, we’ve grown more than 18%, 19%, 20% even though both the years the copper prices was going down. Because we need to have the balance sheet in terms of rupee. So we need to maintain the profit and we need to maintain the sale in terms of value. How we are increasing our customer base including increasing our geography for the products to market whether it’s exports or in domestic market or in retail markets, that’s all.

Ravi Purohit — Securities Investment Management Private Limited — Analyst

Okay, thank you, all the best sir.

Operator

Thank you. Our next question is from the line of Mr. Achal Lohade from JM Financial. Please go ahead.

Achal Lohade — JM Financial — Analyst

Yeah, good afternoon, sir. Thank you for the opportunity. Just two questions. One is a clarification on the recent comments you just made with respect to the value growth. Now if I were to ask you, sir, if the copper price were to be down say 20% in FY ’24 but when you’re talking about focusing on value growth, does that mean that the volume growth you will try to grow at 25%, how do we understand the pricing part.

Rajeev Gupta — Chief Financial Officer

If anything goes exceptional, nobody can control. If it is in the range of normal fluctuation, then it will be controlled. If your share market crashes, then how you will control the portfolio profit.

Achal Lohade — JM Financial — Analyst

Got it, but sir, in terms of the pricing when you are–

Rajeev Gupta — Chief Financial Officer

Normally, see, last year the correction what 10% range, then it is manageable. But if it is 20% correction, then it will not be manageable because then in terms of value also we we will be hit. Maybe from 16, 17, we may go to to 11, 12 percent but it will not be the case we will be flat because in last 15 years, it was 2009 also, 2013 also, 2020 also, every year was there and we have grown average CAGR growth of 14% to 15% in last 15 years. We have seen all kinds of fluctuations. The numbers are available with you for 15 years for our balance sheet.

Achal Lohade — JM Financial — Analyst

Understood. Sir, just a clarification on the pricing, you work on your prices or the margin on a rupees per meter or rupees per unit or–

Rajeev Gupta — Chief Financial Officer

We maintain our EBITDA margin in terms of percentage. We calculate the cost of material and expenses then we load our margins. That’s how it is going on in the industry.

Achal Lohade — JM Financial — Analyst

Even for the industry. Understood. And just one clarification on the exports. Which are the top five countries and what’s their contribution and how much of our total exports is under own brand.

Rajeev Gupta — Chief Financial Officer

All our exports are under our own brand. We don’t — we have not exported any product in somebody’s else brand and our top export markets are Australia, Middle-East. In Middle-East basically Abu Dhabi and Kuwait. And thirdly a few African countries in which Nigeria and Ghana are the main.

Achal Lohade — JM Financial — Analyst

And the total contribution of these countries in the total exports, would that be 60% 70%.

Rajeev Gupta — Chief Financial Officer

Yeah around 60%.

Achal Lohade — JM Financial — Analyst

Got it, thank you so much for the clarification, sir. Wish you all the best.

Operator

Thank you. Our next question is from the line of Shubham Agarwal from Axis Capital. Please go ahead.

Shubham Agarwal — Axis Capital — Analyst

Hi sir, thanks for the opportunity. I was just listening to the call, a rough calculation shows that the incremental sales from the increased capex that we need to generate at 13.5% EBITDA margin for the overall company. We need to lift the margin for the company by 1%, right, at overall level. So we need a 13.5% margin on the incremental revenue if we we get from the Greenfield capex. I just wanted to understand what will help us generate this 13.5% EBITDA on the incremental sales from the greenfield. The products are going to be the same, which had already been getting 11% margin at the most.

Rajeev Gupta — Chief Financial Officer

See, when we will be doing this capex, we will not be increasing the fixed overhead like head office people or the [Indecipherable] and the marketing. So there is because of that the EBITDA expansion will be there, number one. Number two, our retail will be increasing further and export will increase further. So little bit EBITDA margin will be expansion will be from there. So we are targeting not EBITDA expansion but we are targeting only 1.5% EBITDA margin in next four to five years.

Shubham Agarwal — Axis Capital — Analyst

Okay, sir, can you give me the volume of copper and aluminum consumed in FY23 by the company.

Rajeev Gupta — Chief Financial Officer

Just a minute. It’s — the total metal consumed is 81,800 metric ton in ’22 ’23 as compared to 68,000 metal consumed in ’21’ 22.

Shubham Agarwal — Axis Capital — Analyst

This includes copper and aluminium total, right?

Rajeev Gupta — Chief Financial Officer

Total.

Shubham Agarwal — Axis Capital — Analyst

Thank you. That’s all from my side.

Operator

Thank you. Our next question is from the line of Mr. Raj from Ambit. Please go ahead.

Raj — Ambit — Analyst

Hello, sir, and thank you for the opportunity. Two questions from my side. First is, if you can give any color on the active dealer. So what has been the expansion for this year and what is your guidance for the next two to three years as you are increasing the retail mix as a percentage of April.

Rajeev Gupta — Chief Financial Officer

Last year, our dealer expansion was close to 6% because we were having 1500 number and 1900, and this year also we are targeting at least 100, 250 dealer distributor to be adding in this financial year.

Raj — Ambit — Analyst

So as a percentage that would be?

Rajeev Gupta — Chief Financial Officer

Close to 7% 8% our target to increase number of dealer distributor. That is the net. Strengthening the existing dealer actually because we are more focusing to strengthening the dealer. Wherever the weak dealers are there, we are replacing with the new dealer.

Raj — Ambit — Analyst

Okay, thank you. And the second question is that when you see the gross margin or the raw material mix as a percentage of the sales that used to be around 70% pre-COVID or up to ’19, ’20, but now we have seen that increase to 73% to 74%. So how do you see this going forward.

Rajeev Gupta — Chief Financial Officer

Because you’ll see that EBITDA margin in our case, because earlier the EPC steel was higher. So, in EPC the material was less and manpower cost and the contracting cost was more.

Raj — Ambit — Analyst

Okay, so going forward, these types of raw material costs–

Rajeev Gupta — Chief Financial Officer

Will be on an EBITDA basis actually.

Raj — Ambit — Analyst

Okay, thank you. So, just to get through this, so the percentage would remain same going forward or as it has been delivered.

Rajeev Gupta — Chief Financial Officer

Depends on product to product basis like next, I will take if something different, wire is something different, the cable is something different. It’s like that.

Raj — Ambit — Analyst

Okay, and also if you could say in which pockets are we seeing more increasing demand from solar or from the data centers or where has been the demand been very strong going forward or is currently quite strong.

Anil Gupta — Chairman and Managing Director

Yeah, that demand is very strong from the data centers. You know this 5G network, which is being, which is coming up. Then. metro rails, urban rail transportation systems, and the railway as a whole and then the highway construction, where there were lot of overhead lines are removed to make them underground. That is also a big opportunity and lot of thermal ventilation projects are coming up in the railways and new railway lines and also the highways, which consumes substantial amount of cables. Apart from that, solar power is a big opportunity. Then power distribution and transmission companies are buying a lot. And the next is, you know, the solar and that industry like steel and expansion in steel, cement, petrochemical, oil and gas capex by all the oil companies. So these are the major opportunities which drives us actually.

Operator

Thank you. Mr Raj, may we request you to join the question queue for follow-up questions. Thank you. Our next question is from the line of Mr. Hardik Rawat from IIFL Securities, please go ahead.

Hardik Rawat — IIFL Securities — Analyst

Good afternoon. So my question was with regards to the metal consumption that you just stated that you stated that roughly consumed about 81,800 metric tons of metal. And I presume that aluminum and copper are the two main metals that you source. So, I just wanted to understand if you could give me a rough breakup of what percentage of it would be aluminum and copper.

Rajeev Gupta — Chief Financial Officer

That is not available right now, we will give you later but the total metal consumption is available. It is 81,800 and versus 67,900.

Hardik Rawat — IIFL Securities — Analyst

All right, and basis the estimates that we’ve given you expect the EHV segment to grow roughly by about 60% in terms of sales value. So do you see that mix of sourcing changing.

Rajeev Gupta — Chief Financial Officer

No, nothing changes. Actually we are having the capacity to produce close to INR650 crore worth of net of EPC wherein we were having the order last year also but the issue was the clearances from the companies, those who are buying from us, that is the transmission companies that was not available. Either their site was not ready or something that. So at present we are having order book of INR850 crores as against, we cannot produce more than INR650 crores. And this is the year beginning. So lots of new orders will also come. So we will be easily selling INR600 crores worth of material for extra high voltage power cables this year.

Hardik Rawat — IIFL Securities — Analyst

Absolutely, absolutely. And one last question, if you’ll allow me. What are the major countries that you source your metals from like top two-three countries if you could mention.

Rajeev Gupta — Chief Financial Officer

Can you repeat your question?

Hardik Rawat — IIFL Securities — Analyst

Top two to three countries from which you’re sourcing the metals that you consume.

Rajeev Gupta — Chief Financial Officer

The raw materials we are sourcing or what we are exporting.

Hardik Rawat — IIFL Securities — Analyst

Raw materials, the metals.

Anil Gupta — Chairman and Managing Director

So we are majorly sourcing our metal requirement from India especially copper from Hindalco and Vedanta and aluminum also from Hindalco and Vedanta and NALCO. Small quantity is being imported which is against advanced licenses or against exports. But we are definitely importing XLPE compounds and some other specialized materials for special cables and extra high voltage cables.

Operator

Thank you. Mr. Hardik, we move to the next question. Our next question is from the line of Harsh Shah from Jefferies. Please go ahead.

Harsh Shah — Jefferies — Analyst

Hi, can you give, provide the interest breakup for the quarter.

Rajeev Gupta — Chief Financial Officer

Please note down. For this quarter, the working capital interest is close to INR7.77 crore and the bank charges is close to INR2.5 crores.

Harsh Shah — Jefferies — Analyst

Okay, thank you.

Operator

The next question is from the line of Akshay Kothari from Envision Capital. Please go ahead.

Akshay Kothari — Envision Capital — Analyst

Yeah, thanks for the opportunity, sir. My question is on the supply side. Apart from the major players on the organized side which are also doing a lot of capex on the wires and cables. Are we seeing any supply from the unorganized/unbranded players also coming up.

Rajeev Gupta — Chief Financial Officer

See, in the cable, there is a no unbranded because cable is approval based project.

Akshay Kothari — Envision Capital — Analyst

No, we are not aware of any unorganized player coming up significantly in the capex for further expansion of their capacity.

Rajeev Gupta — Chief Financial Officer

Okay, and based on your experience in this industry or whenever there is a supplier, so supply actually comes out at a point of time and then demand will come over a period of time. So do we see any downward pressure on the margins in the initial phase of the utilization.

Anil Gupta — Chairman and Managing Director

So far we have not seen that but we don’t know the future market.

Akshay Kothari — Envision Capital — Analyst

Understood. Lastly, sir, if we are the sponsors for RCB and how has been the response from the Southern market post this.

Anil Gupta — Chairman and Managing Director

Actually that it has been good but basically this sponsorships in RCB are typically not region specific, it is for all-India basis. Ultimately, the spectators who see cricket, they see all over the country and the major medium is either TV or digital. How many people goes into the stadium to watch the matches. So it is a — the major asset comes from TV or digital media but OTT based on media where therefore nowadays people are watching these cricket or matches, etc. on digital or TV.

Akshay Kothari — Envision Capital — Analyst

So can you just tell me advertisement expense as a percentage of sale. How much is it?

Rajeev Gupta — Chief Financial Officer

On a yearly basis we do around INR35 crores, INR38 crore.

Anil Gupta — Chairman and Managing Director

Which is around [Indecipherable] turnover sales.

Akshay Kothari — Envision Capital — Analyst

Okay, understood. Thanks a lot and all the best.

Operator

Thank you. Next question is from the line of Prashant Kothari from Pictet. Please go ahead.

Prashant Kothari — Pictet — Analyst

Thank you for the opportunity. Just two questions. One is that the dealer distribution channel revenues quarterly what’s happening. The growth was about 37% in the second quarter, 25% in the third quarter and now just 15%. Is there a slowdown in that channel.

Rajeev Gupta — Chief Financial Officer

Can you repeat your question what you said.

Prashant Kothari — Pictet — Analyst

You said that in Q4 it was 15%, that is what your question is. Yeah, and it used to be much higher earlier on, so is there a slowdown in that segment.

Anil Gupta — Chairman and Managing Director

What happened because of the continuous decrease in the copper prices so there was a little bit of de-stocking at the distribution level. So hence the primary sales went down in the fourth quarter, but I’m sure that the stock levels in distribution shelves is very-very low. So it will pick up.

Prashant Kothari — Pictet — Analyst

So can we expect higher growth rate in the future also?

Rajeev Gupta — Chief Financial Officer

Yeah, always it will be higher because in the last year also overall growth in the dealer distributor business is higher as compared to the total Increase in the sales. So in the future also the same kind of, the trend will remain same. For a particular quarter, we cannot say, but for a full-year basis, our dealer distributor sales will be higher for the growth.

Prashant Kothari — Pictet — Analyst

Understood, sir. And on the working capital you said management working capital you also said that the future cash equivalents in the let’s say [Phonetic] working capital. Are you thinking that the working capital days might expand going forward.

Rajeev Gupta — Chief Financial Officer

You see only the inventory will remain, only the receivable cycle, which is right now has reduced to 2.4 months, which will further reduce to 2.2 months.

Operator

Thank you. That was the last question for the question-and-answer session. I would now like to hand the conference over to the management for closing comments.

Anil Gupta — Chairman and Managing Director

So thank you very much, dear friends, for patiently listening to this investor call. I again reassure you that we are on the right track. We are very focused on our business and with the growth in the economy and demand in the international markets, the company will continue to grow as guided and there may be some deviation in the growth rate in different product lines but overall growth will be maintained as guided. And if you still have any further questions you can always reach out to us. Thank you very much for your patient listening. Thank you.

Rajeev Gupta — Chief Financial Officer

Thank you very much.

Operator

[Operator Closing Remarks]