# 1. Financial Performance ## A. Key Figures * Net Sales: **₹2,954 Cr** Q3 FY'26 (+19.51%) · **₹8,271 Cr** 9M FY'26 (+21.26%) * **EBITDA:** **₹354 Cr** Q3 FY'26 (+39%) · **₹963 Cr** 9M FY'26 (+33%) * **EBITDA Margin:** **12%** Q3 FY'26 (+380 bps YoY) * **PAT:** **₹234.86 Cr** Q3 FY'26 (+42.5%) · **₹634 Cr** 9M FY'26 * **Capex (9M):** **₹928 Cr** (Sanand: ₹769 Cr, Land: ₹96 Cr) ## B. Revenue Growth * **Exceptional YoY Growth:** Q3 sales surged on strong demand and **sharp rise in copper prices**, with growth expected to remain above 25% in current quarter. * **Volume-Price Dynamics:** Reported growth significantly influenced by metal price volatility; **copper prices 3x aluminium**, distorting value-based growth despite volume shifts. * **Capacity Revenue Potential:** Peak revenue of **INR12,500 Cr** achievable at LME copper prices of **$9,000–$10,000/tonne**, highlighting sensitivity to commodity cycles. ## C. EBITDA & Margins * **Margin Expansion Despite Headwinds:** EBITDA margin improved sharply YoY and sequentially, aided by **low-cost legacy inventory** and operational leverage. * **Structural Margin Drivers:** Annual margin trajectory supported by **capacity ramp-up, shift to high-margin EHV products, and export growth**, outweighing short-term metal price swings. * **Depreciation Timing:** Full depreciation impact from capex delayed until **FY'28**, with **~₹100 Cr** annual run-rate expected; phased recognition smooths P&L impact. ## D. Profit After Tax * **PAT Margin Expansion:** Q3 PAT margin rose to **95%** from 67%, reflecting operating leverage and favorable cost absorption, despite modest absolute profit growth. ## E. Cash Flow & Capex * **Sanand Plant Progress:** **₹1,300 Cr** of **₹2,000 Cr** total capex spent to date, with **₹800 Cr** in current fiscal; full capitalization expected by **March 2027**. * **Staged Asset Recognition:** **₹550 Cr** capex capitalized as of Dec-25; remainder to be capitalized upon commissioning (**electron beam cables in Apr**, **MV machinery Jul-Aug**). * **Land Excluded from Turnover:** **₹140 Cr** land cost at Sanand will be excluded from operational asset turnover calculations. --- # 2. Order Book & Demand ## A. Key Figures * **Total Order Book:** **₹3,928 Cr** (as of 31 Dec '25) · **Domestic Cable Orders:** **₹2,426 Cr** · **EHV Cable Orders:** **₹717 Cr** · **EPC Orders:** **₹361 Cr** · **Export Orders:** **₹424 Cr** · **Wire & Cable Segment Orders:** **₹3,567 Cr** ## B. Domestic Orders * **Resilient Core Demand:** Strong and sustained demand for cables in the domestic market, underpinned by rising energy needs across industrial, residential, and data center segments. * **Market Expansion Tailwinds:** Overall market growing at **13–14%**, providing ample growth runway for incumbents amid limited saturation risk. * **Strategic Project Focus:** Emphasis on complex urban underground infrastructure reinforces differentiation beyond commoditized volume plays. ## C. Export Orders * **Middle East Traction:** Secured three 132 kV cable contracts in UAE, strengthening regional reputation as a leading EHV cable supplier. * **Global Export Potential:** Current export volumes described as a "peanut" globally, highlighting significant untapped opportunity in larger international markets. ## D. EHV Cable Book * **Structural EHV Growth:** Rising demand driven by renewable energy evacuation and power infrastructure expansion, though no quantified supply gap is available. ## E. Order Execution * **Execution Velocity:** Majority of order book executed within **3–4 months**, with near-term replenishment ensuring backlog continuity. * **Volume Growth Authenticity:** Quarterly volume gains reflect pure demand growth, not inventory build-up, given tight dealer inventory cycles of **15–20 days**. * **Project Resilience:** Project-based procurement remains largely immune to price volatility, with only minor decision delays (~1 month) observed. --- # 3. Capacity & Production ## A. Key Figures * **Sanand Capex:** **₹1,353 Cr** spent to date · **₹200 Cr** expected in current quarter * **Sanand Monthly Capacity:** **₹250 Cr** commissioned (50% of total) * **Sanand Revenue Target:** **₹2,700 Cr** next fiscal · **₹6,000 Cr** incremental by FY29 (LTHT-led) * **EHV Contribution:** **₹1,200 Cr** peak sales from Sanand * **Non-Sanand Peak Sales Capacity:** **₹10,000–12,500 Cr** * **Cables Utilization Rate:** **76%** current volume-based * **New Land Investment:** **₹92 Cr** project on newly acquired land * **Baroda Land Acquisition:** **~70 acres** for future expansion ## B. Sanand Ramp-up * **Phased Commissioning Underway:** First phase of Sanand facility now operational, with full ramp-up expected within **1 to 2 months**, enabling meaningful volume contribution from Q4 onward. * **LTHT-Driven Growth Trajectory:** Trial production began in December; full commissioning of **electron beam equipment for solar wires by April** will further boost HT cable output and revenue. * **Scalable Incremental Potential:** Sanand to deliver **strong double-digit revenue growth** over FY27–FY29, led by LTHT segment with EHV as a key contributor. ## C. Utilization Rates * **Capacity, Not Demand, is Growth Constraint:** Despite **76% utilization**, current capacity (ex-Sanand) can support up to **₹12,500 Cr** in peak sales—highlighting headroom, but growth remains bottlenecked by physical capacity limits. * **Copper Pricing Distorts Utilization Metrics:** Revenue-based capacity usage is inflated due to **copper’s 3x premium over aluminium**, making volume-based utilization a more accurate gauge of operational intensity. ## D. Brownfield Expansion * **Post-Sanand Growth Pipeline:** Bhiwadi expansion confirmed for next fiscal, currently in planning stage, signaling continued capital allocation toward de-risking supply constraints. * **Strategic Land Banking:** Acquisition of **70 acres in Baroda** and a **₹92 Cr greenfield project** on new land underscore long-term capacity scalability beyond current footprint. ## E. VCV Tower Timeline * **Low-Barrier EHV Scale-Up:** VCV tower commissioning in FY27 will require only **limited type testing**, leveraging 15 years of proven EHV expertise—enabling faster ramp and lower regulatory friction. --- # 4. Segment & Product Mix ## A. Key Figures * **Domestic Institutional Sales:** ₹1,884 Cr (cables) · ₹371 Cr (EHV) * **Export Sales:** ₹544 Cr Q3 FY26 (+95% YoY) · ₹1,390 Cr 9M FY26 (+79% YoY) * **EPC & Specialty Sales:** ₹80 Cr Q3 (+33% YoY) · ₹188 Cr 9M (EPC) · ₹157 Cr 9M (stainless steel wire) ## B. Wires & Cables * **Robust Wiring Growth:** Wires segment posted strong double-digit growth (~22–23% YoY), outpacing cables due to near-peak capacity constraints limiting cable volume expansion to ~10%. * **Capacity Utilization & Barriers:** High asset turnover (1:5–1:7 in Wires, 1:4 in Cables) reflects efficient use of brownfield capex; entrenched position supported by broad product approvals and **no new entrants** in cables. * **Backward Integration Strength:** In-house manufacturing of **medium and low-voltage XLPE and PVC compounds** enhances cost control and supply security, reinforcing competitive advantage. ## C. EHV Performance * **EHV Demand Recovery:** Shift back to dedicated EHV production lines amid strong order inflows, reversing prior HT cable-related revenue dip. * **Balanced Competitive Landscape:** EHV segment remains consolidated with **4–5 major players**, including KEI and Universal Cables; KEI holds ~25% of total capacity, on par with peers. ## D. Export Sales * **Export Surge & Diversification:** Exceptional export momentum with **95% YoY growth in Q3**, now representing a strategic pillar; expected to exceed **20% of total sales** within two years. * **Geographic Constraints:** Active in Europe, Australia, Middle East, and Africa; **US exports paused due to tariffs**, limiting near-term expansion in that market. * **Capacity Allocation Trade-off:** Strong export demand has led to reallocation of limited capacity, partially dampening domestic institutional growth. ## E. EPC & Specialty * **Selective Project Execution:** Proven track record in urban underground cabling with **30–40 large-scale EPC projects executed over 10 years**, including ongoing work in Mumbai and Karnataka. * **Stable Niche Revenue:** Specialty businesses (EPC, stainless steel wire) contribute meaningful revenue, though stainless steel wire sales show slight YoY decline. --- # 5. Channel & Distribution ## A. Key Figures * **Active Dealers:** **2,114** as of 31st December * **B2C Sales:** **₹1,612 Cr** (+29% YoY), **55%** of total sales (↑ from 50%) * **Total B2C Sales:** **₹4,413 Cr** (+23% YoY), **53%** of total sales * **Institutional Cable Sales:** **41%** of total sales in Q3 FY'26 (↓ from 45% YoY) * **Domestic Institutional Sales:** **₹1,880 Cr** (Cable & Wires) and **₹370 Cr** (EHV), +3% YoY ## B. Dealer Network * **Concentrated Distribution Power:** Top ~100 large-scale dealers generate **70% to 80%** of sales, highlighting a highly skewed yet efficient network. * **Strategic Maturity Advantage:** Building a competitive dealer network and skilled workforce takes **4 to 5 years**, creating a durable moat for incumbents. * **Productivity Over Expansion:** Focus has shifted from increasing dealer count to enhancing output per key dealer to optimize efficiency. ## C. B2C Contribution * **B2C Momentum Accelerates:** B2C channel demonstrated strong double-digit growth and expanded its share to **55% of total sales**, now the dominant segment. * **Branding Investment:** Advertising and branding spend set at **₹75–80 Cr** this fiscal to deepen retail penetration and support B2C growth. ## D. Institutional Sales * **Institutional Growth Lagging:** Despite healthy cable utilization (~75%), institutional sales grew only **3% YoY**, reflecting muted demand in core infrastructure segments. * **Channel Shift Confirmed:** Institutional cable sales share declined meaningfully to **41% in Q3**, down from 45% a year ago, confirming structural shift toward B2C. ## E. Geographic Reach * **International Footprint Expanding:** Presence now extends to the **Caribbean islands and West Indies**, with supply to neighboring countries underway. --- # 6. Input Cost & Regulatory Risks ## A. Key Figures * **Metal Sourcing:** **85%** domestic (Hindalco, Vedanta), **15%** import-dependent * **Price Adjustments:** **~15%** increase in house wire prices, **10%** rise in cable prices over two months ## B. Copper Price Impact * **Natural Hedge Strategy:** Company avoids active hedging, relying on export-linked revenues and **bi-weekly price resets** to pass through raw material inflation. * **Timely Price Pass-Through:** List prices updated for January’s copper and aluminium levels; adjustments are **standard industry practice**, ensuring margin stability. * **Sustained Inflation Response:** Recent double-digit price hikes reflect consistent cost pass-through, with no evidence of restocking-driven demand distortion. ## C. Import Dependence * **Limited FX Risk:** Majority of metal purchases in rupees from domestic suppliers, insulating against currency volatility. * **Critical Import Vulnerability:** **Special EHV compounds** remain fully imported (Borealis, Dow Chemicals) due to absence of domestic production. * **Domestic Supply Chain Strength:** Medium-voltage compounds sourced reliably from **DDev Plastiks**, supporting scale-up in higher kV segments. ## D. Chinese Entry Risk * **Competitive Resilience:** Incumbent advantages—**brand strength, scale, purchasing power, low fixed costs**—create high barriers for new entrants. * **Outsourcing Model Skepticism:** Management doubts viability of Bajaj-style outsourcing in wires, citing **thin margins and 5–7 year brand-building horizon**. * **Market Entry Watch:** Potential policy shift may allow Chinese players into **transformer and HV equipment projects** due to supply shortages, though **no such gap exists in cables**. * **Capacity Expansion Caution:** No new dedicated EHV plants underway; competitor additions likely **dual-purpose (EHV + HT)**, with scale implications to follow. ## E. Certification Delays * **BIS Certification on Track:** Low-tension certification secured; high-tension (HT) certification expected by **end-January**, removing near-term regulatory overhang. --- # 7. Guidance & Outlook ## A. Key Figures * **Volume Growth Guidance:** **16–18%** forward · aligned with Q3 performance * **Export Contribution:** **~17%** in first 9 months · targeted **20%** in 1–2 years * **Margin Target:** **11% EBITDA margin** for next fiscal * **Capex Plan:** **₹2,000 Cr** planned over 3–4 years · **₹12,500 Cr** total investment including Sanand * **Long-Term CAGR Target:** **20%** over 4–5 years · supported by Sanand ramp-up and demand strength ## B. Revenue Forecast * **Robust Growth Trajectory:** Full-year top-line expansion driven by **strong order book** across domestic institutional, export, and EHV segments, with Phase 1 commercial production at Sanand providing incremental momentum. * **Inflation-Linked Upside:** Over 20% growth includes benefit from **input price inflation**, particularly rising copper costs, supplementing volume gains. * **Execution Momentum:** A significant portion of current order book set to convert into **FY '27 revenues**, underpinned by rapid project execution and sustained order inflow. ## C. Margin Target * **Confidence in Margin Expansion:** Management affirms **11% EBITDA margin guidance** as realistic, incorporating impacts of new capacity ramp-up and export mix, with combined domestic-export performance providing balance. * **Offsetting Pressures:** Guidance accounts for potential negative operating leverage from capacity expansion, mitigated by operational efficiency and higher-margin export contribution. ## D. Capex Plan * **Strategic Capacity Buildout:** Next-phase **₹2,000 Cr capex** planned over 3–4 years, focused on brownfield expansions; finalization expected within 6 months. * **Demand-Driven Deployment:** Specific segments for expansion remain under review, with investment pacing tied to evolving **demand-supply dynamics**. ## E. Growth CAGR * **Sustained High-Growth Path:** Targets **20% CAGR over 4–5 years**, backed by incremental machine commissioning at cable factory and underpenetrated global export opportunities. * **Resilient Track Record:** Long-term growth discipline demonstrated by **17% CAGR over 15 years** and consistent performance even during metal price downturns, with only one negative growth year (2021). * **Export Scalability:** Despite geopolitical uncertainty limiting long-term visibility, exports have grown for **four consecutive quarters**, with strong multi-year potential in large international markets.