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Last Updated : Dec 18, 2015 11:53 AM IST | Source: CNBC-TV18

Strong order book, exports to aid growth in FY16, FY17: KEI

Anil Gupta, CMD of the company expects topline growth of 23-25 percent and export growth of 50-60 percent over last year in FY16.

KEI industries, which has grown constantly in the current year, expects to continue its rally in coming financial years as well. Strengthening order book and growing exports will aid growth, says Anil Gupta, CMD of the company.

Gupta expects topline growth of 23-25 percent and export growth of 50-60 percent over last year in FY16. Furthermore, FY17 will see further growth in exports on back of new markets, he adds.

The company’s order book currently stands at Rs 2,000 crore that includes Rs 150 crore of export orders. The new pipeline in engineering, procurement and construction (EPC) stands at Rs 200 crore, Gupta says.

Exports contribute eight percent to sales, which is expected to go upto 10 percent, Gupta says adding that the company has added new markets in its export basket for which permissions have been received. KEI currently exports to Middle East, Australia, Africa and Singapore.

Below is the transcript of Anil Gupta’s interview with Reema Tendulkar and Latha Venkatesh on CNBC-TV18.

Reema: In FY16, you are likely to end the year with revenues of about 21-22 percent. Is FY17 going to be better in terms of revenues and margins compared to FY16?

A: I hope so and we are working hard for improving our performance in the coming financial year as our order book is strong and the way forward, we see a good demand for our products in basically, power distribution and transmission segment and the other segments of contracting. We also see a good growth in exports of our cables going forward as we have a good pipeline of export order centre movement.

Latha: If you can put some numbers to it, what might you do full year in terms of exports and what might you do full year in terms of revenues?

A: This year, in FY16 we expect a growth of around 23-25 percent in the topline growth and we expect a good improvement in our earnings before interest, taxes, depreciation and amortisation (EBITDA) also. So, as far as exports is concerned, I expect a growth of 50-60 percent compared to the previous year.

Going forward in FY17, I see a further growth, because we have now established in many new markets in all over the world and we will exporting to many new countries where we have already received the approvals and many bits are in pipeline.

Latha: Which are your export destinations?

A: They are mostly in Middle-east, some in Asia like Singapore and we are also constantly working in Australia also. We have bidded a number of projects. Africa is also our serious destination.

We are working hard in many countries and likely to get a significant bid. We have already done good in South Africa this year and many other African countries and will continue do so in the next financial year as well.

Latha: No Argentina?

A: No, no. I said Australia.

Reema: What is the contribution of exports in your revenues? How much will it go up to and the other realisations in the export market better than domestic market since that is growing at a faster clip?

A: Approximately, our export revenues are 8 percent o our sales and I expect it to grow to around 10 percent. So far as margins are concerned, they are definitely better, but apart from margins, it gives us a wider market and in terms of growing our products and image in the worldwide markets. It also insulates us from, I mean any downturn in any economy, because our customer basket is widespread.

Reema: You also said that your order book is looking good. Can you give us some numbers of the current order book as well as the pipeline?

A: We have around Rs 2,000 crore plus order book at the moment out which Rs 1,000 crore is engineering, procurement and construction (EPC). We are constantly replenishing new orders in EPC and as well as exports.

We have around Rs 150 crore of export orders at the moment and the new pipeline in EPC is around another Rs 200 crore. We have around Rs 200 crore of extra high voltage cables at the moment in hand which is to be executed over a period of next six months.

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First Published on Dec 18, 2015 10:52 am
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