KEI Industries shares drop 7% on reporting lower Q2 profit, Ebitda margins

Even as KEI Industries reported annual growth in its top- and bottomline in Q2, the wires and cable company's profit and operating margins contracted

KEI Industries shares lost 6.8 per cent in trade on Wednesday and registered an intraday low of Rs 4,365.55 per share after the company reported lower profit margins in its second quarter (Q2FY25) numbers.

At around 9:52 AM, KEI Industries' share price was down 5.48 per cent at Rs 4,430.2 per share. In comparison, the BSE Sensex was up 0.05 per cent at 81,861.02, around the same time. 

KEI Industries reported its September 30-ended quarter's results after market hours on Tuesday. The company's second quarter numbers showed mixed performance on a year-on-year (Y-o-Y) basis. Its net profit rose, but the profit margin dipped.

The wires and cables company's revenue and earnings before interest, tax, depreciation, and amortisation (Ebitda) also increased, but the Ebitda margin saw a decline. 

In Q2FY25, KEI reported profit after tax (PAT) of Rs 155 crore, compared to Rs 140 crore in the year ago period, implyng an increase of 10.71 per cent Y-o-Y. The company's PAT margin, however, dipped 0.42 per cent as per its filing, to 6.79 per cent, from 7.21 per cent in the year ago period. 

The company revenue for the quarter under review stood at Rs 2,280 crore, compared to Rs 1,945 crore in the year ago period. 

KEI's Ebitda gained 9.2 per cent Y-o-Y to Rs 238 crore, compared to Rs 211 crore in the corresponding quarter of the previous year.

Meanwhile, its Ebitda margin slipped 71 basis points to 10.42 per cent in the September quarter, compared to 10.88 per cent in the year ago period. 

KEI Industries' board also approved raising Rs 2,000 crore through a qualified institutional placement (QIP) issue. 

"This is to inform you that the Board of Directors of the Company at their meeting held on Tuesday, the 15th day of October 2024, has approved... raising of funds by way of issuance of equity shares or other eligible securities for an aggregate amount of up to 20,000 million, through Qualified Institutions Placement (QIP), subject to the receipt of the approval of the shareholders of the Company through postal ballot and any other regulatory / statutory approvals (if any)," the company's exchange filing stated.

KEI Industries manufactures and supplies electrical wires and cables in India.

In the past one year, shares of KEI Industries have gained 74.4 per cent, compared to BSE Sensex's rise of 23 per cent during the same period.