Drop In EPC Revenue Planned Activity Will Not Affect Topline In Coming Quarters: KEI Industries CEO

The dip in KEI Industries’ revenue from the engineering procurement and construction (EPC) business is a “planned activity” and won’t impact the overall topline in the upcoming quarters, according to the company’s Chairman and Managing Director, Anil Gupta.

The EPC revenue of KEI Industries plunged around 58.94% year-on-year in the October-December quarter of FY25 to Rs 60 crore as compared to Rs 146 crore in the same quarter last year. 

“We are aiming for reduction (of dependence in EPC business). We have not taken on new projects. We have not bid for new projects. That is the reason it has come down. So it is a planned activity,” he told NDTV Profit. 

The top executive mentioned that this revenue drop is in line with the company’s guidance from three years back.

“Three years back, we had given you guidance that we are gradually reducing this business because of longer working capital. And hence, in line with that guidance, we are gradually reducing the business,” he said.

Anil Gupta emphasised that the changes in the EPC business will not impact the company’s overall revenue as it is increasing its volumes and capacities in the wire and cables business.

“As far as its impact on our total revenues is concerned, it will not be there because we are steadily increasing our wire and cable volumes and wire and cable business capacities,” Gupta said.

With the increased focus on the cables and wires business, the overall turnover of KEI Industries will also grow, the company’s CEO explained.

“So, we will see a growth in our overall turnover in the coming quarters and the year,” he said.

However, even with marginal revenues, the EPC business will continue to remain in the profit and loss statements of the company going forward as KEI Industries is not planning to make a complete exit from the segment, Gupta revealed.

“Our EPC revenues are hardly 400 crore, which is just 5% of our turnover. Secondly, we do not plan to completely exit. We will continue to maintain Rs 400-500 crore of business in the EPC segment,” he said.

“We are just taking one project maximum in a year to maintain our presence in this business. Although our focus is not there,” the top executive added.

Shares of KEI Industries dropped 3% to touch an intraday low of Rs 3,910.40 apiece on the NSE on Wednesday. The stock was flat at Rs 4,000 per share at 1:22 pm. The benchmark Nifty 50 was also flat at the time at 23,023.95 points.