- KEI Industries expects demand momentum to continue into FY27 despite recent copper price volatility
- Retail wire sales slowed in February due to dealer inventory corrections after heavy stocking earlier
- Exports to the Middle East face short-term shipping delays but no loss of demand or sales reported
Cable and wire manufacturer KEI Industries remains confident about demand momentum heading into FY27, even as recent volatility in copper prices triggered temporary inventory corrections among dealers, according to Chairman and Managing Director Anil Gupta.
Speaking to NDTV Profit, Gupta said the company does not see any structural slowdown in demand for cables, describing the recent weakness in retail wires as largely a short-term adjustment following heavy dealer stocking earlier this year.
Gupta said the retail wire segment saw slower movement in February as dealers reduced inventories after building significant stock in December and January, when copper prices surged sharply.
Copper prices had risen 10-15% over two months, prompting distributors to aggressively stock up in anticipation of further increases. "February was more of a correction phase because dealers had already built heavy inventories," Gupta said, adding that the situation should normalize quickly.
With copper prices strengthening again in recent weeks, the company expects improved buying activity from dealers in March.
Export Shipments Temporarily Delayed
The ongoing geopolitical tensions affecting shipping routes in the Middle East have created short-term logistical challenges for exports. Gupta said shipping lines are currently not accepting containers bound for the Middle East, which accounts for roughly 30% of KEI Industries' export business.
However, he emphasized that the disruption is temporary and does not represent lost sales.
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"There is no loss of demand. If shipments don't happen this month, they will happen next month," he said, adding that consignments yet to be shipped remain at the company's factories. Exports to other international markets remain unaffected as they use different shipping routes.
Raw Material Availability Remains Stable
Despite global commodity volatility, Gupta said the company is not facing shortages of key raw materials. Copper availability remains stable as KEI sources domestically from suppliers such as Kutch Copper, Hindalco and Vedanta.
The company is also sufficiently stocked on polymers - another key input used in cable insulation - with inventory coverage of about 45 days. While natural gas supply to industries has reportedly been cut by 20-25%, Gupta said the impact on KEI's operations is limited because gas is not a major input in its manufacturing process.
Gupta added that fluctuations in copper and aluminium prices generally do not materially affect profitability because the company follows a pass-through pricing model. Although aluminium prices have risen due to smelter shutdowns in the Middle East, copper prices have remained relatively stable.
Importantly, Gupta said demand for cables remains structurally strong because infrastructure and industrial projects require them as essential components. "In cables there is no demand destruction," he said. "At most, there may be a short deferment in purchases, but projects cannot proceed without cables."
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