KEI Industries Q2 profit rises 29% to Rs 262 crore; margins narrow

KEI Industries, a listed Indian maker of wires and cables, reported a 29% rise in net profit to about Rs 262 crore for the July-September quarter of 2026, as revenue grew close to 39% on strong domestic demand. The company's board approved the unaudited results for the quarter and half-year ended September 30, 2026, at a meeting on Wednesday, October 21, 2026. Despite the growth, the company's shares fell more than 8% in trading after the results, as profit came in below what market analysts had expected and operating margins narrowed.

Wires and cables are a quiet but useful signal of how much India is building. Every new house, office tower, factory, metro line, data centre, solar park and power transmission line needs them. When a large cable maker reports revenue growth of nearly 39% in a single quarter, it points to strong spending on construction and power infrastructure across the country, by both governments and private companies.

KEI's numbers show that demand is not the problem. Its sales grew much faster than its profit, which means the company earned less on each rupee of sales than it did a year ago. The EBITDA margin, which measures how much of revenue is left as operating profit, fell by about 0.8 percentage points. Market reports linked the share fall to this squeeze and to profit coming in below analysts' consensus estimate, which one report put at about Rs 275 crore. For investors, a business growing quickly but with thinner margins raises questions about raw material costs, pricing power and competition. Copper and aluminium, the main inputs for cables, are traded globally and their prices move sharply, and makers do not always pass on increases to customers immediately.

The outstanding income tax search is a second point readers should note. The company has said that the financial impact cannot be ascertained at this stage. That means there is no figure yet, and no finding has been announced. It remains an open item that the company will need to update investors on.

For India's wider economy, cable demand also supports jobs in manufacturing, distribution and installation, from factory floors to electricians and contractors in smaller towns.

Short-term: The fall in the share price shows that the market had priced in faster profit growth. Analysts and investors are likely to focus on whether margins recover in the October-December quarter, and on any further disclosures about the income tax search.

Long-term: If construction, power transmission and renewable energy projects continue at the current pace, demand for cables should remain strong. The key question for KEI, and for the sector, is whether companies can protect margins as they expand capacity and as raw material prices move.

Who is affected: The company's shareholders; contractors, builders and power utilities that buy cables; dealers and electricians who sell and install them; and workers in the cable manufacturing industry.

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