💰 Financial Performance

Revenue Growth by Segment

The Wire and Cables segment grew 32.0% YoY in H1 FY26, reaching INR 878.44 Cr compared to INR 665.42 Cr in H1 FY25. The Pipes segment, while smaller, contributed INR 4.21 Cr in H1 FY26. Overall consolidated revenue for FY 2024-25 reached INR 1,586.6 Cr, a 47.1% increase from INR 1,078.6 Cr in FY 2023-24, driven by robust demand across all product segments.

Geographic Revenue Split

Export revenue contribution saw significant shifts, dropping from 50% of total revenue in FY 2022-23 to approximately 35% in FY 2023-24 due to a weak US market. However, domestic sales doubled from INR 400 Cr to INR 800 Cr in the same period to compensate. As of Q4 FY24, exports accounted for 19.4% of the revenue mix.

Profitability Margins

Net Profit Margin decreased to 5.54% in FY 2024-25 from 8.03% in FY 2023-24, a 31% decline primarily due to increased tax implications. Profit After Tax (PAT) for FY 2024-25 was INR 87 Cr, a marginal 1.6% increase over INR 85.6 Cr in FY 2023-24. The company is currently prioritizing volume growth over margin retention to capture market share.

EBITDA Margin

Consolidated EBITDA margin stood at 8.5% in FY 2024-25, down from 9.0% in FY 2023-24. In Q2 FY26, the EBITDA margin further compressed to 5.8% from 9.4% in Q2 FY25. This 3.6 percentage point drop resulted from a conscious strategy to sacrifice margins for a 20.3% YoY jump in revenue (INR 428 Cr vs INR 355.9 Cr).

Capital Expenditure

The company is planning incremental capacity additions and incurring expenses for plant repair and maintenance to support its 30% CAGR target. While specific INR values for future capex are not disclosed, the company has liquidated its ARC debt as of August 2024 to improve financial flexibility for expansion.

Credit Rating & Borrowing

The company maintains a 'Stable' outlook from CRISIL and ICRA. Gearing is exceptionally low, expected to remain below 0.05 times as of March 31, 2025. Interest coverage was healthy at 16.2 times in FY 2024 and is projected to remain above 3 times in FY 2025 despite plans to avail new fund-based working capital limits.

⚙️ Operational Drivers

Raw Materials

Key raw materials include copper and aluminum (commodities), though specific percentage breakdowns per material are not disclosed. The company's profitability is highly sensitive to the volatility of these commodity prices and foreign exchange rates.

Capacity Expansion

The company is currently implementing incremental capacity additions to meet a long-term revenue target of INR 5,000 Cr by 2030. Current utilization metrics are being leveraged to increase productivity for higher margins and better volumes.

Raw Material Costs

Raw material costs are a significant portion of the cost structure, with margins historically fluctuating between 3-4% (FY21-22) and 8.5-9% (FY25) based on commodity price cycles. The company employs hedging strategies via long-term and forward contracts to mitigate these costs.

Manufacturing Efficiency

The company is focusing on capacity utilization and enhancement to drive higher margins. Return on Equity (ROE) stood at 12.95% in FY 2024-25, down from 18.59% in FY 2023-24 due to an increase in average shareholder equity.

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

The company aims to achieve a 30% CAGR over the next 5 years by focusing on five levers: expanding the export footprint, growing B2B relationships, continuous R&D for new product development, enhancing the retail distribution channel, and maximizing capacity utilization. Management has set a conservative revenue target of INR 5,000 Cr by the year 2030.

Products & Services

The company sells Power Cables, Railway Cables, Export-grade cables, House wires, and Pipes. It also executes turnkey projects, which contributed INR 6.7 Cr in FY 2024-25.

Brand Portfolio

Paramount Cables

New Products/Services

The company is continuously expanding its product range through innovation and R&D, though specific new product revenue contributions are not yet quantified.

Market Expansion

Targeting a mix of international markets (Exports) and domestic retail expansion to minimize dependency on government policies and diversify industry exposure.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward organized players, though unorganized competition remains high. Demand is currently robust across power and infrastructure segments, supporting the company's 39.5% revenue CAGR over the FY22-FY25 period.

Competitive Landscape

The market is intensely competitive with several organized and unorganized participants, creating constant pressure on operating margins and pricing.

Competitive Moat

The company's moat is built on the extensive experience of its promoters and established long-term relationships with clients. This is sustained through a diverse product portfolio and a shift toward high-margin B2B and export segments.

Macro Economic Sensitivity

The business is susceptible to fluctuations in monetary policy and government legislation, which can impact borrowing terms and the overall margin profile.

Consumer Behavior

There is an increasing demand for high-quality, technologically upgraded products, prompting the company to invest in R&D and innovation.

Geopolitical Risks

Exposure to international markets like the US makes the company vulnerable to global economic slowdowns and trade policy changes.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to government legislation and environmental/manufacturing standards, which the company manages by diversifying into retail and export markets to mitigate policy-shift risks.

Taxation Policy Impact

The company faced higher tax implications in FY 2024-25, which contributed to a 31% decline in net profit margins. Current tax liabilities stood at INR 9.3 Cr in Q2 FY26.

Legal Contingencies

The company previously underwent debt restructuring under the Corporate Debt Restructuring (CDR) program in 2010, but successfully liquidated its ARC debt in August 2024.

⚠️ Risk Analysis

Key Uncertainties

Key risks include commodity price volatility (copper/aluminum), which can impact margins by several hundred basis points, and the ability to secure incremental working capital lines to support the 30% growth target.

Geographic Concentration Risk

Historically high at 50% for US exports, now diversified with domestic sales doubling to reduce geographic risk.

Third Party Dependencies

The company relies on commodity suppliers; while specific names aren't listed, the 'Stable' rating factors in established relationships with these vendors.

Technology Obsolescence Risk

The company mitigates technology risk through consistent investment in R&D and stringent process control systems to meet evolving client specifications.

Credit & Counterparty Risk

Receivables are high at 92 days, indicating a long credit period extended to customers, which is a monitorable factor for liquidity.