# 1. Financial Performance ## A. Key Figures * EBITDA: 12.7% margin Q3 FY26 (+34%) · 14.2% margin 9M FY26 (+47%) * **Net Cash Position:** **₹3,030 Cr** (end-Q3 FY26) ## B. Revenue Growth * **Exceptional Segment Momentum:** Wires & Cables drove robust top-line expansion, with wires benefiting from **copper price inflation** and cables delivering strong organic growth. * **Broad-Based Strength:** Fast Moving Electrical Goods contributed healthy growth, supporting record 9-month revenue performance. ## C. Profitability Trends * **Margin Pressure with Underlying Strength:** Reported EBITDA margin decline masked **~13% underlying margin** after adjusting for a **one-off gratuity charge of ~₹9 Cr**. * **Gross Margin Compression:** Incomplete pass-through of commodity cost increases weighed on margins, despite **strong operating leverage** in fixed cost management. * **Resilient Segment Profitability:** C&W segment delivered **34% EBITDA growth** despite **300 bps margin contraction**, underpinned by **59% domestic volume growth**. ## D. Balance Sheet Strength * **Robust Liquidity Position:** Maintained a strong net cash balance, providing strategic flexibility for future investments and operational scaling. --- # 2. Segment & Product Performance ## A. Key Figures * **Wires & Cables Revenue Growth:** **53%** YoY (Domestic: **59%**) * **FMEG Segment Growth:** **17%** YoY (Solar: **>2x** YoY) * EPC Revenue: ₹4,069 Mn (+4% YoY) · ₹272 Mn EBITDA (6.7% margin) * **C&W Volume Growth:** **~40%** YoY (Domestic) * **International W&C Contribution:** **6%** of consolidated revenue ## B. Wires & Cables Growth * **Market Share Gains:** Domestic C&W growth significantly outpaced industry trends, reflecting strong execution under Project Spring and share gains in both affordable and institutional segments. * **Volume & Pricing Dynamics:** Robust volume growth nearing **40%** combined with strategic pass-through of rising copper costs fueled top-line expansion while preserving operating leverage. * **Product Mix Shift:** Wires outperformed cables in growth due to copper price inflation, leading to a **marginal increase in wires' revenue share** despite stable long-term 70-30 (Cables-Wires) mix. * **Demand Drivers:** Strong capex-led demand from power T&D, utilities, real estate, and manufacturing underpinned growth, with LV/MV cables representing the largest end-market segment. ## C. FMEG Segment Expansion * **Solar-Led Growth:** Solar business more than doubled YoY and remains the **largest contributor** in FMEG, driven by government incentive schemes and new product launches. * **Profitability Trajectory:** Segment achieved **four consecutive profitable quarters**, supported by favorable mix, strong switches/switchgears performance, and high-margin solar scale-up. * **Resilient Portfolio:** Despite flattish industry demand in fans, overall FMEG grew **17%**, exceeding industry growth and progressing toward long-term margin targets of **8–10% by FY30**. ## D. EPC Business Update * **Execution Momentum:** Revenue growth supported by BharatNet project execution, with **₹450 Cr** in awarded orders over 3 years and **₹350 Cr** in long-term O&M visibility. * **Margin Profile:** EPC delivered **7% EBITDA margin**, in line with expectations, with sustainable margins projected in the **high single digits** over the medium term. ## E. Solar Product Momentum * **Product Innovation Impact:** New **350-kW inverter range** launched last quarter performed well, contributing to continued strong offtake and positioning for a **very strong Q4**. --- # 3. Volume & Pricing Trends ## A. Key Figures * **Domestic Volume Growth:** **40%** (wires & cables) * **Industry C&W Market Growth:** **15–16%** (H1 FY26) · **~20%** expected (current quarter) * **Price Pass-Through:** **75–80%** of commodity + forex impact achieved * Government Capex: ₹6.6 trillion (8 months FY26) (+28.2% YoY) · ₹1.25 trillion state capex loans released ## B. Domestic Volume Growth * **Robust Demand Environment:** Record real estate activity continues to fuel strong wires demand, supporting multi-year volume momentum. * **Outperformance vs Industry:** Domestic volumes surged at a significantly higher rate than the estimated industry growth, though market share gains await peer data confirmation. * **Healthy Underlying Demand:** Despite channel pre-stocking contribution over the past 3–4 quarters, current sales remain solid and sustainable. ## C. Price Pass-Through Timing * **Staged Inflation Offset:** Partial price hikes in January reflect majority pass-through, with further increases underway to fully recover input cost pressures. ## D. Copper Inflation Impact * **Supportive Fiscal Momentum:** Elevated central and state government capex provides strong structural tailwinds for infrastructure-linked copper demand. --- # 4. Channel & Sales Mix ## A. Key Figures * **Institutional Sales Mix:** ~**200 bps** increase in share * Export Contribution: 6% of revenue (vs. 8.3% YoY) * **Channel Inventory:** **40–45 days** for wires (vs. normal 30 days) ## B. Distributor vs Institutional * **Divergent Growth Trends:** Wires outperformed cables on **distributor restocking amid rising copper prices**, while institutional cable sales showed stronger momentum, signaling project-led demand. * **Sustained Underlying Demand:** Robust secondary and tertiary sales confirm that volume growth is not purely inventory-driven. * **Shifting Sales Mix:** Institutional segment gained **meaningful share** despite the entrenched 90:10 distributor-institutional split, reflecting increased infrastructure and project activity. ## C. Export Contribution Shift * **Geographic Reorientation:** Export growth concentrated in Middle East and Latin America, with U.S. contribution limited by persistent **tariff headwinds**. * **Margin Pressure:** Despite higher export share, performance remained soft due to **unfavorable regional mix and structural challenges**, weighing on overall profitability. ## D. Regional Demand Drivers * **Urban Real Estate Momentum:** Top 8 Indian cities show sustained launch and sales activity into 2025, supporting continued **residential infrastructure demand**. * **Broadening Affordability Pull:** Rising traction in affordable housing complements premium segment strength, expanding the addressable market. ## E. Inventory Positioning * **Selective Restocking:** Elevated channel inventory observed only in wires, with levels **10–15 days above normal**, driven by pre-buying ahead of copper cost increases. * **Fans Business Drag:** Slow offtake in Oct–Nov due to **mild summer weather** and prior-year inventory overhang, leading to temporary weakness. --- # 5. Capacity & Supply Chain ## A. Key Figures * **Inventory:** **₹6,000 Cr** (raw material and finished goods) * **Working Capital Cycle:** **27 days** (vs. long-term range of 50–55 days) ## B. Capacity Utilization * **Solid Utilization:** Capacity utilization in the early 80% range reflects strong operational momentum and effective demand capture. * **Growth Engine:** Expansion driven by **Project Spring**, targeting whitespaces across geographies and product lines, supported by intensive distributor engagement to increase wallet share. ## C. Inventory Build-Up * **Strategic Stocking:** Elevated inventory levels positioned to meet anticipated Q4 demand surge, replicating prior successful seasonal scaling. * **Margin Protection:** Inventory hedging at order fulfillment—rather than procurement—shields margins from commodity volatility and eliminates inventory P&L noise. ## D. Working Capital Cycle * **Temporary Compression:** Working capital cycle compressed to 27 days due to higher inventory and extended payables via letters of credit. * **Normalization Expected:** Cycle set to revert to **50–55 days** in coming quarters as inventory and payables return to steady-state levels. --- # 6. Risks & Commodity Exposure ## A. Key Figures * **Margin Impact:** **300 bps decline** driven by cost pass-through delays, mix shift, and lower export contribution ## B. Copper Price Volatility * **Unprecedented Inflation:** Copper prices surged **50% year-on-year**, with extreme near-term volatility—**22% quarter-on-quarter** and **11 percentage points in December alone**—creating severe cost headwinds. * **Demand Resilience:** Despite record commodity inflation, demand remains robust, supported by government and private capex, real estate, and infrastructure spending. * **Forward Risk:** Copper and aluminium prices expected to rise **40–50% YoY** over the next 2–3 quarters, threatening customer budgets and demand sustainability. ## C. Tariff-Related Challenges * **Global Trade Disruption:** Elevated U.S. tariffs and shifting trade dynamics in 2025 have disrupted supply chains and moderated global growth, despite stable labour markets and easing inflation. ## D. Distributor Capital Constraints * **Channel Liquidity Pressure:** Distributors face capital constraints, limiting inventory builds for high-cost cables amid uncertain near-term project demand. ## E. Input Cost Pass-Through Risk * **Staggered Pricing Strategy:** Company passed on **75–80%** of prior-quarter commodity inflation, with remaining **20–25%** to be implemented gradually, prioritizing volume protection and channel stability over margin preservation. * **Near-Term Margin Pressure:** Delayed pass-through of rising copper costs contributed to a **300 bps margin contraction**, compounded by unfavourable business mix and lower export leverage. * **Q4 Margin Uncertainty:** Gross margins hinge on ability to fully pass through cost increases, particularly for copper, without dampening demand—outcome remains uncertain. --- # 7. Guidance & Outlook ## A. Key Figures * **Capex:** **₹340 Cr** Q3 FY26 · **₹1,090 Cr** 9M FY26 (vs. **₹1,200–1,600 Cr** annual guidance through FY30) * **Macroeconomic Indicators:** **3.2%** global growth projected for 2025 · **7.3%** RBI FY26 growth forecast · **2%** inflation projection · **125 bps** cumulative policy easing in 2025 * **Government Capex Spend:** **59%** of FY26 outlay spent by Nov-25 (**28% YoY increase** in pace) ## B. Q4 Revenue Expectations * **Strong Seasonal Momentum:** Q4 expected to be robust, supported by peak execution season and progress on both government and private sector targets. * **Export Revenue Pipeline:** Healthy export order book in place, with U.S. contribution pending resolution of tariff-related matters. * **Summer-Driven Demand:** Fans segment performance in Q4 and Q1 FY27 hinges on summer intensity, with **modest industry-wide price hikes** anticipated due to new BEE regulations. ## C. Margin Recovery Path * **Sequential Margin Expansion:** Q4 profitability expected to improve over Q3 on better operating leverage and higher volumes. * **Inflation Pass-Through:** Company on track to pass through **75–80% of commodity cost increases** this quarter, mirroring FY22 recovery pattern after sharp copper and aluminium inflation. * **Structural Leverage:** FMEG profitability set to expand with scale and execution of **Project Spring**, targeting long-term margins of **11–13%** (currently in 12–14% range). ## D. Full-Year Growth View * **Resilient Demand Outlook:** Strong demand visibility for next two quarters despite commodity volatility, with no demand-side slowdown expected in Q4. * **Macroeconomic Tailwinds:** Broad-based recovery evident in rising capacity utilization, credit offtake, and job creation, supported by monetary easing and CST rate cuts. * **Real Estate & Infrastructure Strength:** Real estate remains healthy with decade-high sales; affordable housing gains momentum, while government capex accelerates, supporting cable demand.