Delton Cables - Delton Cables

📊 BSE: 504240 🏢 Other Electrical Equipment 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

In H1 FY26, the EPC segment grew by 51% YoY, contributing 49% of total revenue. The Telecom and other segments grew by 86%, contributing 18%. The Railways segment de-grew by 11%, contributing 33%, due to a strategic shift toward higher-margin business. Total Operating Income (TOI) for FY25 reached INR 709.26 Cr, a 76.9% increase from INR 400.86 Cr in FY24.

Geographic Revenue Split

The company is focused on a PAN India presence and expanding into untapped domestic areas. Specific regional percentage splits are not disclosed in available documents.

Profitability Margins

FY25 PAT margin was 2.89%, a decrease of 75 bps from 3.63% in FY24, primarily due to higher finance costs and depreciation from capacity expansion. However, H1 FY26 showed a recovery with an EBITDA margin of 8.15%, up 176 bps YoY.

EBITDA Margin

EBITDA margin for FY25 was 6.43%, down 56 bps from 6.99% in FY24 due to copper price volatility. Q1 FY26 margins improved to 8.74% and H1 FY26 reached 8.15% (INR 32.43 Cr) as the company shifted toward higher-margin EPC projects.

Capital Expenditure

The company commissioned its third plant in FY25. While specific future INR Cr figures are not detailed, the company utilizes an asset-light model for capacity addition and recently increased debt to fund expansion, with total debt rising to INR 172.26 Cr in FY25.

Credit Rating & Borrowing

Re-affirmed ratings of IVR BBB/Stable for Long-term and IVR A3+ for Short-term bank facilities. The company has a total rated facility of INR 269.30 Cr. Interest coverage ratio (ISCR) improved to 1.82x in FY25 from 1.64x in FY24.

⚙️ Operational Drivers

Raw Materials

Copper is the primary raw material, alongside PVC and other plastics for cable insulation. Copper price volatility is a major driver, causing a 56 bps margin compression in FY25 when costs could not be immediately passed to customers.

Capacity Expansion

Current manufacturing capacity is valued at INR 1,500 Cr across various segments. Capacity utilization significantly improved to 81% in FY25 from 44% in FY22.

Raw Material Costs

Raw material price volatility, particularly in copper, directly impacts the EBITDA margin (6.43% in FY25). Procurement costs rose in FY25, and the company faces limited bargaining power with large clients to pass on these costs instantly.

Manufacturing Efficiency

Revenue per unit of capacity has increased, with revenue growing 4.4x from FY22 to FY25 (INR 709 Cr) while improving utilization to 81%.

📈 Strategic Growth

Expected Growth Rate

12-14%

Growth Strategy

The company is executing a 'Strategic Transformation' by shifting from low-margin Railway cables to high-margin EPC and Telecom segments (which grew 51% and 86% respectively in H1 FY26). It utilizes an asset-light model for capacity expansion, focuses on private sector Capex, and targets new sectors like Nuclear, Defense, and Smart Metering.

Products & Services

Power cables, instrumentation cables, control cables, telecommunication cables (PIJF), railway signaling cables, quad cables, structured cabling solutions, and smart meters.

Brand Portfolio

Delton

New Products/Services

Expansion into Smart Metering solutions and Structured Cabling for high-growth sectors. Entering niche segments like Nuclear and Defense to diversify the portfolio.

Market Expansion

Focusing on PAN India presence and expanding into untapped domestic areas, leveraging India's infrastructure push and 5G rollout.

🌍 External Factors

Industry Trends

The Indian wire and cable market is growing at 12-14% CAGR, driven by the expansion of power transmission, railway modernization, and 5G rollouts. The industry is shifting toward high-quality, specialized cables for smart cities and renewable energy.

Competitive Landscape

Intense competition from large integrated players (e.g., Polycab, Havells) and unorganized local manufacturers, which pressures margins.

Competitive Moat

75-year brand legacy and 50 years as a public company provide a trust-based moat. Extensive 'approval-based' certifications with major PSUs and global corporations act as a significant entry barrier for competitors.

Macro Economic Sensitivity

Highly sensitive to GDP growth and government infrastructure allocations (17% increase in FY26 budget). Industrial demand is bolstered by private sector Capex and urban development.

Consumer Behavior

Shift toward 'Demand-Pull' rather than 'Product-Push,' with customers seeking customized, high-performance cabling solutions for specific infrastructure projects.

Geopolitical Risks

Trade disruptions in West Asia and global economic slowdowns are cited as threats to export performance and supply chain stability.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to evolving regulatory frameworks, government policies on capital expenditure, and power sector reforms. Compliance with SEBI (LODR) for corporate governance is mandatory.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (copper) and intense industry competition are the primary risks, potentially impacting the current 8.15% EBITDA margin. Global economic fluctuations and West Asian trade disruptions pose supply chain risks.