BHARATWIRE - Bharat Wire

📊 NSE: BHARATWIRE 🏢 Steel - Medium / Small 📅 Last Updated: 12/13/2025 19:27

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment: Manufacturing of wire and wire ropes. Revenue grew at a CAGR of 33.04% over three years ending FY2023, reaching INR 589.06 Cr. In FY2024, revenue grew ~5% YoY to INR 622 Cr. However, FY2025 revenue remained flat at ~INR 620 Cr despite a 10% volume growth, primarily due to a correction in steel prices affecting realizations.

Geographic Revenue Split

Not disclosed in available documents, though the company accounts for export sales based on bills of lading, indicating a presence in international markets.

Profitability Margins

Operating profit margin expanded significantly by 842 bps to 23.57% in FY2023 from 15.15% in FY2022. Net profit for FY2025 was INR 72.25 Cr, a 24.7% decrease from INR 96.03 Cr in FY2024, reflecting margin compression from higher costs.

EBITDA Margin

Adjusted PBILDT margin stood at 15% in FY2025, a moderation of ~500 bps from approximately 20% in FY2024. This decline was driven by the inability to pass on higher freight costs to customers on pre-negotiated orders, reducing core profitability per unit sold.

Capital Expenditure

The company is undergoing debottlenecking capex. Capital Work in Progress (CWIP) stood at INR 61.67 Cr as of September 30, 2025, compared to INR 46.90 Cr as of March 31, 2025, representing a 31.5% increase in investment in plant infrastructure within six months.

Credit Rating & Borrowing

Long-term bank facilities of INR 156.32 Cr are rated CARE BBB+ (Stable), upgraded from CARE BBB. Short-term facilities of INR 25.00 Cr are rated CARE A3+. Interest coverage improved to 6.28x in FY2023 from 2.68x in FY2022, indicating a stronger ability to service debt.

⚙️ Operational Drivers

Raw Materials

Steel is the primary raw material used for manufacturing wire ropes. While specific percentage of total cost is not explicitly stated, its price volatility is cited as a major constraint on margins.

Capacity Expansion

Current capacity is being enhanced through ongoing debottlenecking capex (INR 61.67 Cr in CWIP). Management expects this to aid performance in coming quarters through higher volume throughput.

Raw Material Costs

Raw material costs are susceptible to steel price volatility. In FY2025, a correction in steel prices led to flat revenue despite a 10% increase in volume sold, as the company had to lower average selling prices.

Manufacturing Efficiency

Volume growth of 10% YoY was achieved in FY2025, indicating improved capacity utilization and manufacturing throughput despite pricing headwinds.

Logistics & Distribution

Logistics costs are a significant factor; the inability to pass on higher freight costs in FY2025 led to a 5% margin compression. The company is expanding its distribution network to improve market reach.

📈 Strategic Growth

Expected Growth Rate

8-10%

Growth Strategy

Growth will be driven by a 10% volume increase, ongoing debottlenecking capex to increase throughput, and the expansion of the distribution network. The company is also focusing on high value-added products to sustain margins above 15%.

Products & Services

The company manufactures and sells wire and wire ropes used in various industrial applications.

Brand Portfolio

Bharat Wire Ropes.

New Products/Services

Focus on high value-added products is mentioned as a strategy to sustain margins, though specific new product names are not listed.

Market Expansion

The company is expanding its distribution network to increase domestic and potentially international market penetration.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward high value-added wire products. Bharat Wire is positioning itself by expanding its distribution network and focusing on specialized products to maintain a 15%+ PBILDT margin.

Competitive Landscape

The company faces competition in the wire rope segment, constrained by working capital intensity and raw material volatility common to the industry.

Competitive Moat

The moat is built on an established track record since 1986, experienced promoters (Mittal family), and a healthy financial risk profile with low gearing (0.32x in FY2023). These factors provide a stable foundation for scaling operations.

Macro Economic Sensitivity

Highly sensitive to global steel prices and industrial demand. A downturn in steel prices directly limits revenue growth regardless of operational efficiency.

Consumer Behavior

Industrial demand for wire ropes is driven by infrastructure and manufacturing sectors; shifts in these sectors' capex cycles affect demand.

Geopolitical Risks

Uncertain global demand outlook and shipping disruptions (extended periods) impact the ability to move goods efficiently and manage inventory levels.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act, 2013 and Indian Accounting Standards (Ind AS). The company maintains internal financial controls over financial reporting as per Section 143(3)(i) of the Act.

Taxation Policy Impact

The company benefits from the Maharashtra government's PSI subsidy, which provides a refund of State GST, significantly supporting cash accruals.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility and foreign exchange fluctuations are primary risks. A significant uncertainty is the sizeable pledge of promoter shareholding, which limits financial flexibility.