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KEI Industries Ltd
Earnings Call Analysis
Q1-2025 Analysis
KEI Industries Ltd
Welcome to the first quarter earnings call for KEI Industries for FY 2024-2025. The call provided an in-depth review of the company's financial performance and strategic outlook.
KEI Industries reported a strong quarter with a net sales increase of 15.72% year-over-year, reaching INR 2,060.50 crores compared to INR 1,780.53 crores in the previous year. The EBITDA grew by 24.55%, amounting to INR 232.41 crores, up from INR 186.6 crores last year. The EBITDA margin improved to 11.28% from the previous year’s 10.48%. Profit after tax saw a 23.77% increase, rounding off at INR 150.25 crores, equating to a profit margin of 7.29%.
The domestic institutional cable sales rose by 17%, totaling INR 574 crores. Extra high voltage cable sales saw the most significant boost with a 52% rise, reaching INR 79 crores. On the downside, export sales fell by 24%, attributed to logistics delays, although this shortfall is expected to be covered in the subsequent quarter. Sales through the distribution network surged by 29%, contributing 53% to the total sales.
Volume growth in cable production was reported at 18%. The company continues to strengthen its dealer network, now working with approximately 2,015 active dealers. Additionally, KEI Industries has a robust order book worth INR 3,590 crores, covering multiple segments including EPC, extra high voltage cable, and domestic cable from institutional departments.
KEI Industries maintains strong financial health with total borrowings of INR 165 crores against a cash and bank balance of INR 599 crores. External ratings are positive, with a long-term rating of AA and a stable outlook from ICRA and CARE.
The company is investing heavily in both brownfield and greenfield projects. A capital expenditure of INR 145 crores was reported for Q1, with significant investments in new projects in Sanand, Chinchpada, Bhiwadi, and Pathredi. KEI Industries is planning a major greenfield expansion in Gujarat with a projected expenditure of INR 900 to 1,000 crores this fiscal year.
Management is optimistic about the future, highlighting strong demand in both domestic and international markets, including substantial interest from the U.S. and European markets. Growth drivers include renewable energy projects, industrial expansion, and infrastructure developments.
KEI Industries expects to maintain an EBITDA margin close to 11% and achieve an overall growth rate of 16% to 17% for the current fiscal year. The company is also planning to expand its capacity to support future growth targets.
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Ladies and gentlemen, good day, and welcome to KEI Industries Q1 FY '25 Earnings Conference Call hosted by Monarch Networth Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you, and over to you, sir.
Thank you, Manav. Good afternoon, everyone. On behalf of Monarch Networth Capital, we are delighted to host the senior management of KEI Industries. We have with us Mr. Anil Gupta, Chairman and Managing Director of the company; Mr. Rajeev Gupta, CFO of the company. We will start the call with opening remarks from the management and then move to Q&A. Thank you, and over to you, sir.
Good morning, everyone. Welcome to this conference call. I'm Anil Gupta, Chairman and Managing Director, KEI Industries Limited. And along with me, Mr. Rajeev Gupta is there, who is the CFO of the company. I'll give a brief about this quarter results.
So the net sales in Q1 of FY '24, '25 is INR 2,060.50 crores against INR 1,780.53 crores last year. So the growth in the net sales is 15.72%. EBITDA in this quarter is INR 232.41 crores against INR 186.6 crores last year. Growth is 24.55%. EBITDA/net sales margin is 11.28% against 10.48% in the same period previous year. Profit after tax in this quarter is INR 150.25 crores against same quarter in the previous year, INR 121.39 crores. Growth in the profit after tax is 23.77%. Profit after tax/net sales margin is 7.29% versus 6.82% previous year same period.
Domestic institutional cable sales, wires and cables, is INR 574 crores in the first quarter against INR 493 crores in the same period in the previous year. Growth is approximately 17%. Domestic Institutional cable sales for extra high voltage cable is INR 79 crores in the first quarter against INR 49 crores in the previous year same period, the growth is approximately 52%. Export sale in this quarter is INR 233 crores against INR 307 crores previous year same period. There is a decline of 24%, which will be made up substantially because some of the substantial amount of goods could not be dispatched due to logistic reasons.
Total cable institutional sale contribution is 39% against 44% in the previous year same period. Sales through distribution network that is B2C is INR 1,085 crores against previous year INR 842 crores. So the growth is approximately 29%.
Distribution sale contributed 53% in the first quarter as against 47% previous year same period. Sales of EPC department other than cable is INR 131 crores as against INR 111 crores. Growth in the EPC sale is 19%. Out of the total sale of EPC, EHV EPC sale is INR 45 crores as against INR 39 crores in the same quarter last year.
Stainless steel wire division sale is INR 53 crores against INR 58 crores in the same day last year. Volume increase in the cable digital on the basis of production and for consumption of metals in Q1 of FY '24, '25 as compared to previous year, same period, is approximately 18%. Total active working dealers for the company as on June 30, 2024, was approximately 2,015. We are in the process of strengthening dealer network by replacing some existing small dealers with the bigger distributors.
Pending order is INR 3,590 crores. In the net sales, EPC INR 653 crores; extra high voltage cable, INR 333 crores; domestic cable from the institutional cable department, INR 2,052 crores; and export orders of cable pending is INR 552 crores. So the total is INR 3,590 crores.
External ratings. India Ratings and Research have affirmed its long-term rating was AA with positive outlook. ICRA and CARE long-term rating is AA Stable. Short-term rating from India Ratings, ICRA and CARE is A1+. Book value per equity share of the company is INR 365.77 as on June 30, 2024, as against INR 348.87 as on March 31, 2024. The total borrowings of the company is INR 165 crores, out of which channel finance INR 98 crores, cash and bank balance is INR 599 crores as on June 30, against total borrowing of INR 134 crores last year -- so not last year, against total borrowing of INR 134 crores as on March 31, 2024.
Acceptance creditors as on June 30 is INR 504 crores against INR 506 crores as on March 31, 2024. So the net debt is INR 70 crores as on June 30 as against net cash of INR 60 crores on March 31, 2024. During Q1 of this year, finance cost was INR 14.16 crores against INR 16.51 crores in the same period last year -- in the March quarter. Interest income from bank deposits for others in Q1 is INR 8.64 crores, which is included in the other income. It was INR 6 crores in the previous year, same period.
Now I will tell you about the future outlook. Capacity utilized during Q1 FY '24, '25, approximately 87% to 88% in cable division, 80% in house wire division, and 90% in stainless steel wire division. During Q1, '24, '25, company has incurred a capital expenditure payment of INR 145 crores, in which the Sanand, a new project coming up near Ahmedabad is INR 76 crores; Chinchpada in Silvassa, INR 24 crores; Bhiwadi, INR 21 crores; Pathredi, INR 14 crores; and other plant locations, INR 10 crores.
Company has done capital expenditures for brownfield CapEx at Chinchpada to further add capacity for wires and houses wires and empty power cables. This will be completed in -- it is partially commissioned, but fully completed in Q2 of FY '24, '25. Another greenfield/brownfield expansion going on at Pathredi in Bhiwadi area with approximate cost of INR 125 crores, which will increase the capacity of LT power cables by INR 800 crores to INR 900 crores per annum. It will be operational in Q2 of this financial year '24, '25. That means by August or September. This brownfield CapEx will enable us to grow by 16% to 17% in this financial year.
Apart from the brownfield CapEx, in FY '24 '25, company has planned INR 900 crores to INR 1,000 crores CapEx on greenfield expansion for LT, HT, and EHV cables in Gujarat in Sanand, commercial production of which will commence by end of fourth quarter of FY '24, '25. We have already started construction in FY '23, '24. Further, we will spend another INR 500 crores to INR 600 crores in the next financial years to complete the project to maintain a CAGR of 15% to 16% per annum in future years as against achieved CAGR of 14% to 15% during the last 15 years.
So it gives you a brief commentary on the management side. You are requested to rise any query you may have. It will be our privilege to answer those. And I will also give you a little brief about the industry outlook. The industry outlook remains strong and with a good demand in domestic market as well as international markets. We are progressing well on our aim to increase our footprints in the various destinations internationally and getting good traction from U.S. market and European markets. And the moment our new factories start commercial production, we'll be able to see export volumes going up besides the domestic volumes. There's a good amount of CapEx coming up in India or abroad in solar power projects, wind power projects, transmission and distribution projects, and also in various industrial projects.
So this is a brief commentary from our side. Thank you very much.
[Operator Instructions] We have our first question from the line of Praveen Sahay from Prabhudas Lilladher Capital.
Many congratulations for a good set of numbers for Q1. So the first question, sir, is related to the export. What exactly happened in the export for a decline for the quarter?
We had around INR 65 crore worth of cables lying for export, but the logistics was in -- the container placement was in customer's scope and they delayed the placement of containers due to which a substantial amount of cables, around INR 65 crores could not be dispatched, which is now being dispatched in July. So we'll be able to make up the shortfall in the Q2. We have explained that there is a substantial order books in the export itself, more than INR 550 crores at the moment.
So container delay or availability has sorted as per you, now we will see in the Q3 -- Q2 those numbers?
The container placement was not in our scope. It was in the customer's scope, and they delayed the placement.
Okay. Okay. Got it. Second thing is related to the dealer-distributor based revenue, which has increased 29% and also leads to a 50% to 53% contribution of overall. So is that including the export number? And also, it includes the cable business of ours?
Yes, it's a dealer-distributor business, the wire and cable, both.
And we are not exporting any cables through dealers, so it is all -- the dealer's business is all domestic. The export business, we are doing directly.
Okay. Okay. Got it, sir. And the second -- the third clarification is related to the housing wire and winding wire. From the last several quarters, observing that's a very good growth in this segment, you are reporting. So if you can give some color of like is it from the housing wire you are getting a growth or the winding wire, which has bring the growth in that segment?
It's basically the wire and flexibles used in the real estate and the rental market, et cetera.
So it's largely real estate based what the growth you are reporting?
Yes, sir. Many real estate.
Okay. And lastly, sir, can you give some volume growth number for wire and cable, how you had a growth for the quarter?
In volume terms, we have done a growth of 18% on the basis of consumption of metal in the field.
Okay. Okay. And lastly, sir, on the EHV. Last quarter call, you had given that the EHV FY '25 would be flat on the Y-o-Y side. But this quarter also, you had given a very good growth. So is that the guidance for last quarter of a flat EHV for this...
It is flat because the first quarter number last year was very low because of the non-clearances from the customers due to ROW issues. That is why we are seeing a growth compared to last year. But otherwise, on a quarterly capacity basis, it is flat.
Okay. So your guidance related to flat EHV stands, it holds?
Praveen-ji, one thing is, we have given the guidance of 16%, 17% growth for overall for all the products with all the segments for the full financial year. It is in the normal course, sometimes EHV sales goes up, sometimes goes down also. Sometimes export goes up, goes down also. Sometimes retail goes up, goes down. So it does not matter to us. What matter to us is how we are utilizing our capacity and, ultimately, we are achieving the growth of 16% to 17%. It is not on individual segment or individual product.
[Operator Instructions] We have our next question from the line of Natasha Jain from Nirmal Bang Equity.
My question is a follow-up on the previous question. So you said that there was container unavailability in the export market. Can you also just throw some light as to how the U.S. market performs for you? And is there an inherent slowdown in that market?
Madam, first of all, there was -- this was not a problem of container's availability from our side. I said that container placement was in the scope of the customer, the overseas customer. And they delayed the placement of the container due to the reasons known to them. So we can't comment on it. But all that material is being dispatched in the month of July. Your second question was?
Sir, in terms of the export market, especially the U.S. market, how does the outlook look like there in the short term?
Yes. The customers, we are dealing with in the U.S., the outlook is very good and we are going to substantially grow business in U.S. in this financial year. Because the base was -- last year, base was very low, so we expect that a ballpark figure of INR 200 crores to INR 300 crores coming up from U.S. markets.
Understood, sir. Sir, can you just give us some sense in terms of your geographical split in your export market?
Exact I cannot give, but our -- we have substantial exports in Australia and Middle East. Some countries in Africa and U.S. U.S. and Europe have started only last year, but Australia is our very big market for last 10 years.
Understood, sir. And one last question. Can you just call out what kind of cables are we exporting in these markets?
We are exporting medium-voltage HT cables, like up to 33 kv to 66 kv. And also cables for oil and gas industry in Middle East and U.S.
Understood. And lastly, sir, EHV that we manufacture is completely used in India?
EHV, some EHV cables we are exporting to Australia also, but mostly, we are selling in India. But we are working on developing exports of EHV cables, which may start from next year.
[Operator Instructions]
We have our next question from the line of Venkatesh from Axis Capital.
Just one very simple question. I mean, one of your most important competitors in India and who also exports a lot of cables outside India, has been telling the broader market that they have been actually rejigging the distribution network. Just like you, they used to also sell all their cables directly to customers, now they are trying to sell it via distributors. Now -- but you do continue to sell through -- directly to the customers and you are not trying to set up a distribution network. So can you kind of tell us what are the pros and cons of each of them and why you are not attempting to do it? And why what you're trying to do is better for KEI, some kind of perspective.
Our export model is -- has always been direct business. We are not developing any distributor in overseas markets. And because we feel that access to the end user and the end customer and the contractor gives us better margin and better sustainability and regularity in the business as compared to distribution.
Now while you are at current levels, let's say, 2 to 3 years down the line when your size is significantly bigger on the export side. Will the fact that you're only going directly impact your reach to how many customers you can reach? So any particular thought on that?
I think we will definitely review that strategy maybe in the next 6 months to 1 year. At the moment, we are not working on that strategy of developing distributors, but we may review it.
Okay. And one last question from my side. When we actually see the exports of cables and wires from India to the U.S., we are actually seeing that one is calendar year -- for calendar year '23. Because the data is available on a calendar year rather than on a financial year, there is a deceleration in terms of exports from India to U.S., in terms of exports of wire. What was 30% to 35% for the past 2 years, in calendar year '23, the growth is only 6% for the full year, exports of wires from India.
And especially in the U.S., we are seeing last 2 to 3 quarters, exports have started declining. Now what I'm trying to dive at is, is this something related to there is some issue with the end market? Or it is just that amongst the people supplying, one of your key competitors is a large exporter and they themselves are having a problem, that is why these numbers are showing to be weak? Or is there a problem with the end market?
I don't think there is a problem with the end market. Maybe they have problem with their individual company exporting from India. Secondly, our export to U.S. was very small last year because we just started last year. And we are only selling cables. We are not selling conductors or any other materials. So we will be comparing our exports compared to very small numbers of last year. But our export into U.S. should be substantial this year as per the order availability with us.
We are not exporting wire to any company?
We are not exporting wires. We are only exporting cables. That, too, for power cables and for oil and gas industry.
We have our next question from the line of Amit Mahawar from UBS.
Congratulations on a very stable growth and profitability. Sir, you have multiple expansions. By 2027 most of the capacity that you're planning will be normalized and available for full year, right, first full year, so roughly around by that time, if you do INR 13,500 crores turnover, your exports should be mostly around INR 2,000 crores by then. Is that a right assessment?
Yes, yes. Maybe more than that.
Okay. Okay. And broadly on the branded house wire turnover, what is that you have in mind in, say, by '27, sir?
Amit-ji, house wire business in our company is growing close to 20% plus year after year because our base is also low. But still, we are focusing to grow at 20% to 22%. Because in all the respect, we are adopting a disciplined approach so that overall growth of the company should be 16%, 17% plus. Accordingly, we are creating the capacity either for wire or for cable. And continuously, we are increasing the capacity in our existing factories for the wire also. That's how we are growing in a disciplined manner.
Great, sir. One last question, so in the next 2, 3 years, the kind of growth we have, your cash flow will still be maybe much better than what you had in the last 3, 4 years. So Anil-ji, beyond the current capacity, and I am more talking about the next progression in business beyond just cables, how should we think about the next 4 to 5 years on this company in terms of more B2C businesses, if you have in mind around adjacent segments.
At the moment, we have no plan to add any new products in the B2C business. If something comes up in our mind, we will definitely let you know in advance. At the moment, there is no plans.
We have our next question from the line of Manoj Gori from Equirus Capital.
Sir, congratulations on a good set of numbers. So my question here, if you look at -- if we go back in FY '24 and then we see that we grew by roughly around 17% on top line front. So can you bifurcate like probably what was growth for government-related orders or probably private orders, and probably how you are expecting this shape up in the coming years? Any qualitative answer over there, that would be helpful.
Sir, private orders are mainly coming from solar power developers and industrial projects in the domain of cement, steel and other miscellaneous industrial projects like pharma or any type of industry, which is coming up. So far, as government orders are -- even a lot of transmission and distribution project orders are now coming from private discoms. A lot of private distribution companies -- a lot of distribution companies in various parts in India are privatized. And like CESC, like Torrent Power and like that. So a lot of orders are from such companies also. At the moment, we don't have any quantification of -- and dealers, when they buy, I mean we have to collate that whether they are selling to a private sector or to a -- they may be selling to a contractor who's end customer is may be government. We don't have available data at the moment.
Most of the government contracts are taken by the EPC contractor, so we supply to EPC contractors.
Correct, sir. So secondly, if you -- the sectors that you just mentioned, anything you see in the coming years probably you're getting incrementally positive demand drivers from these sectors or probably in some of the sectors, you are seeing some headwinds. Any read over there?
I think if we talk of any individual sector at the moment, I think, solar has, as an individual sector, has substantial demand in this year. But otherwise, all sectors are doing well. And we hope that from next year, a good demand should come from the newly started extensions in thermal power projects and even pump storage projects for generating power.
Correct, sir. Sir, lastly, on the margin side, obviously, you have been very kind in highlighting the top line guidance. Can you throw some light like where we see ourselves at the end of FY '25 on the margin trajectory?
Close to 11%. We have earlier also guided the same.
You'll maintain that. Yes. And sir, what would be the price hike at the end of June month versus, let's say, February of FY '24?
Price hike?
Yes.
Depends on the copper movement. See if we say as compared to February and June, average price hike might be 7.5% to 8%. But we keep on adjusting our prices depending on the input cost and the metal prices like copper and [ LT. ]
We have our next question from the line of Ananya Purushottam from Cogito Advisors.
This is Andrey Purushottam. Congratulations once again for giving such consistent and great numbers. I just heard you say about the margin guidance for FY '27. If you look at the various years, you've delivered between 10% and 11% consistently. Is there a possibility and the promise of upping this margin aspiration from 11% to 12% or somewhere between 11% to 12%. Is it possible? Is it aspirational?
See earlier also commented on this topic. As our capacity get in place, then because of economy of scale, we will be achieving higher margins. That is possible. Next 3 to 4 years, we will be adding into the margin at least by 1% plus mainly because of economy of scale.
In the 3, 4 years' time period, you are saying?
Pardon?
And what time frame are you saying, sir, Rajeev-ji?
Maybe '26, '27. Because by '26, our capacity will be in place of extra high voltage.
Right. Okay. And one more clarification I had. You have shown this amount of channel financing that you are doing has reduced. That actually means that the amount of channel financing availed by dealer...
Channel financing is reduced mainly because of the first loss -- basically, the FLDG amount increased by the bank. Earlier it was used to be 50%. Now all the banks have reduced to the level of 15% to 25% FLDG. So the recourse has basically reduced.
Sorry, what is the FLDG?
It's basically First Loss Default Guarantee. We need to give to the bank. It's basically a recourse. So the recourse percentage has decreased.
So our risk for channel financing has reduced by 50%.
So therefore, the amount of channel financing by the -- availed by the dealer has increased. Am I right?
Yes, that has increased.
It has increased.
That is increasing because our sale is also increasing.
Right. No, also the proportion of dealers who are availing for channel financing, what [Foreign Language]?
Close to more -- close to 550-plus dealers are under channel financing, and close to 70% of our total dealer distributor sales are covered under the channel financing scheme.
Okay. And can that move further or since you have...
It is improving further. Because as the dealer is getting old by 7 to 8 months, we are covering under channel financing because we are making a new dealer distributor also.
Okay. And just one comment...
And apart from the channel finance or the recourse reduction, we have taken the receivable insurance for all the receivables, whether it's an export receivable or it's a domestic receivable or it's a retail distributor receivables.
Okay. And just one comment I wanted to make that Anil-ji just now clarified that you have no intention of getting into B2C enterprises at this point of time. That actually is very reassuring to us because it means that you are sticking to your core strength and businesses, and that is reassuring to investors.
Yes, Purushottam-ji, we are focusing in our strength, and we are focusing in our product domain, where we are having the specialization.
We have our next question from the line of Keyur Pandya from ICICI Prudential Life.
Sir, a couple of questions. So first, on the capacity side. Just to get clarified, so Silvassa INR 100 crores of CapEx and Bhiwadi INR 110 crores of CapEx for LT cable, these 2 are the CapEx, which would be available for FY '25? And am I missing any other CapEx, which got commissioned or is about to commission in near term?
In FY '25, a little bit CapEx will go into the Silvassa plant because that plant since last 2 years, we are adding the capacity because we are adding the capacity of cable, we are adding the capacity now into the wire also. So now even every inch of land is completing by [indiscernible] quarters. So nothing will be available for us to further expand in those places. Only now expansion will go on for the new greenfield projects of the Sanand, which is Ahmedabad. So as Anil-ji said that in the current year, INR 900 crores to INR 1,000 crores. And next year, INR 500 crores to INR 600 crores will go into the same place for all the greenfield expansion completion.
No sir, what I was asking is, I mean, we were supposed to start Silvassa expansion around INR 100 crores in March '24 and Bhiwadi expansion for LT power cable for exports from June '24, which you mentioned that which will start in July, August. So these 2 are the additional capacities available for 2Q in FY '25? Or is there anything else also or rest of the capacities are fully utilized?
It will be available for capacity addition and that's how we are growing in the current financial year 16% to 17% kind of things.
Okay. One follow-up is on the EHV side. Now EHV is fully utilized and the next EHV expansion would come in Gujarat greenfield. So till that time, saying, including FY '26, the EHV would remain more or less flattish, is that a correct understanding?
Yes, sir. Product wise, it sometimes grows or sometimes goes down also. But the capacity utilized not only for EHVs, capacity utilized for the basically medium voltage power cable also, the same capacity.
Okay. Understood. Understood. And just last question. You mentioned about some rejig in the user distribution network replacing smaller one with larger dealer distributors. Now do you see any impact in near term on the dealer-based sales in our revenue?
No, he was saying, it's a continuous process to add more strength in dealers and to increase the geography also to reach increase. So just a continued process actually. It is not a one time, it's a continuing process.
We have our next question from the line of Achal Lohade from Nuvama Institutional Equities.
I just wanted to check in terms of our categories in cables and wires, is it possible to get what kind of market share? And is there any white space, is there any particular [ FTU, ] which we can still look at adding over medium term?
We have already covered, I think.
I think we have already covered market share. I mean, close to 12% in the cable. And -- what do you mean by white space? Means, you mean to say that where the capacities are, demand is more and capacities are less. That is -- what do you mean by white space?
No, I mean like you mentioned about the oil and gas industry, right, the exports for the oil and gas industry sector, something on those lines, whether it is railways, whether it is solar, wind, et cetera.
Yes, we are mostly exporting cables for solar projects, wind projects, oil and gas projects, and transmission and distribution projects. These are the main -- and in some areas, we are even exporting to some industrial projects.
Got it. And just to clarify, you said the metal consumption growth is 18% Y-o-Y for the quarter. Have I understood right, sir?
Yes.
Actually, this 18% for the production. So we have produced more, actually. Like Anil-ji explained some of the export materials which we'll be selling to in this financial year -- in the second quarter, it is like this one.
Understood. Apart from exports, is there any increase in the inventory days, in terms of finished goods?
No, inventory -- because almost about 50% sale is to the institution and close to 50% to the retail. So in that 50% institutional sale, it is a normal figure. Sometimes material get delayed because of the inspection or something else. But overall, ultimately, the growth rate will be 16% to 17% for full year basis.
Absolutely, absolutely. Understood, sir. And just to clarify, you said 11% margin for the current year, right, FY '25, for the margin expansion of 100 basis points in FY '26, '27? Have I understood right with operating leverage?
Yes.
We have our next question from the line of Arshia Khosla from BOB Capital Markets.
Sir, can I just get the order book bifurcation?
Order book costs close to EPC -- in the EPC side, the order book is INR 653 crores. Extra high voltage power cables, INR 333 crores. Institutional order for the cable and domestic market, this is INR 2,052 crores. And export market order is INR 552 crores, total is INR 3,590 crores.
Also, I just wanted to understand the [indiscernible] for quarter 1 and what will be the trajectory going forward?
It is close to in the range of INR 10 crores and the same kind of expenditure will be on a quarterly basis.
We have our next question from the line of Praveen Sahay from Prabhudas Lilladher Capital.
It's related to the increase in the debt and reduction in the cash as well. So these are because of expansion, so around INR 100 crore cash has been reduced, if I look at March...
Yes, for the CapEx, it will go on increase because we are taking the term loan of close to INR 300 crores to INR 400 crores for the new project, wherein we will be investing around INR 1,700 crores to INR 1,800 crores of the total cost of the project. Close to -- as per the need, maybe INR 300 crores to INR 500 crores, we will avail term loan and balance we will be from the internal accruals. As of now, working capital utilization is not there because we are having the cash. But for the term loan, we will start availing.
Okay. Okay. Great. And the second question, sir, related to the branded housing wire. As you have mentioned that the growth has been very good and the way forward also around 15% of the growth you are expecting. So can you give some geographical presence where you are largely present and how much of the market share you are holding in this segment?
Our sales close to 36% plus from the Northern region and close to 27% to 30% on the Western region. And 17% to 19%, we are in the Southern region and balance is from the Eastern region. That is for our geographical breakup of the dealer distributor.
Okay. Okay. And one clarification. On the solar, as you had mentioned that demand is huge, how much is your contribution right now in your wire and cable right now?
Because we are selling to EPC contractors, in our books, the customer is EPC contractor actually. So that's -- the EPC contractor is buying for the other projects also, not only for solar, but the other projects also.
We have a follow-up question from the line of Keyur Pandya from ICICI Prudential Life Insurance.
Sir, just one question. So we have seen strong house wire, winding wire sales. I mean just if you can give some idea on how the end industry or our industry is growing and probably we're growing faster than that. So just color on how industry is growing. The end demand, and the primary sales also, I mean, we have seen with other players that they have seen some impact of destocking on their primary sales. So at the industry level, has the destocking because of the copper prices stop decelerated. So some color on the industry in the house wire.
First of all, these are the normal things because every time copper will go -- copper will increase, copper will decrease. Depending on the behavior of copper increase, the distributor also wait and some time they buy extra. So these are the normal picture related to this industry, actually. Industry directly belongs to the consumer side for the individual houses and on term loans. And for all the larger cities, industry belongs to the real estate projects, which are the multi-storey buildings are coming up. So these things are continuing going up. But the nature of the industry will remain as it is actually because of the copper.
So -- but what has been the growth in the end-user demand that is secondary or tertiary sales? Are we seeing any pickup based on real estate deliveries in larger cities? So any color on the end industry demand at the secondary level?
I think end industry demand is growing. It's only that sometimes due to fluctuations in the copper prices, dealers delays the lifting of material for maybe 15 days, 20 days. But beyond that they don't -- they cannot delay. Ultimately, there the end user is requiring the material. So I think that any offtake due to the copper may be temporary.
It is part of the nature of the industry. It's going on every time.
No sir, I basically just wanted to understand that the industry will -- the consumer demand is growing into the single digit or high double digit? I mean, any idea on growth rate of -- I mean, we have seen that cables are growing faster than house wires.
It is basically higher double demand -- higher double digit because lots of individual bungalows are being made in all over the country. And the real estate projects, which was not -- which was earlier not there in the larger city, since last 1.5, 2 years, these projects getting announced and they had started the projects. So this demand, they are coming up now.
[Operator Instructions] As there are no further questions, I would now like to hand the conference back to the management for closing comments.
So thank you very much for interacting with us on this conference call. And we assure you that company is on the right path and will be growing as per the guidance. And if you still have any further questions, you may reach out to us. Thank you very much.
Thank you, everyone. .
Thank you very much.
On behalf of Monarch Networth Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.