IGI Logo

Soft quarter though core growth trajectory remains intact  

Quick Pointers

* Reported low single-digit volume growth in Q4FY26, while FY26 volume growth stood at 18%

* EBITDAM further contracted by 160bps YoY; W&C EBIT margin contract by 200bps YoY

The Wires & Cables (W&C) segment delivered moderate growth in Q4FY26, with domestic W&C revenue growing 30.3% YoY and exports grew by 17.8% driven by strong cable demand and execution despite softer trade sentiment and Middle East disruptions. Cables outperformed wires during the quarter, while institutional sales grew faster than channel sales. Volume growth remained in low single digits due to temporary construction halts in North & West India, geopolitical disruptions and softer secondary sales, although cumulative price hikes of 18-19% from Jan-Mar’26 supported realizations. The international business contributed 4.4% to consolidated revenue. EBIT margin for the W&C segment stood at 13.1%, impacted by lower export contribution, higher institutional mix & operating deleverage. Employee expenses declined by 5.2% YoY, primarily due to reduced incentive payouts.

The FMEG segment delivered another strong quarter with 47.4% YoY growth and EBIT margin improving to 4.1%(+370bps), supported by operating leverage and favorable product mix. Solar products emerged as the fastest growing category with nearly 2x YoY growth and became the largest category within the FMEG portfolio.

Management highlighted that demand outlook remains robust over the medium term, supported by strong investments in utilities, renewables, data centers, manufacturing, railways and infrastructure, while exports are expected to become a key growth lever going ahead, with contribution targeted to exceed 10% of total revenue by FY30. We expect revenue/EBITDA/PAT CAGR of 20.1%/20.6%/20.2% over FY26-28E. We upward revise our FY27/FY28 earnings estimates by 3.2%/7.0% factoring margin improvement and stronger sales growth. We assign SOTP-based target price of INR10,282 (INR 9,611 earlier), implying PE of 40x FY28E.

Q4FY26 financial performance: Sales grew 26.9% YoY to INR 88.6bn (PLe: INR 84.3bn). W&C business grew 29.6% YoY to INR76.7bn. Export revenue grew by 17.8% YoY and contributed 6.0% to total sales. Gross margins contracted by 200bps YoY to 23.4% (PLe: 24.8%). EBITDA grew by 13.3% YoY to INR11.6bn (PLe: INR 11.3bn). EBITDA margin contracted by 160bps YoY to 13.1% (PLe: 13.5%). PAT grew by 6.3% YoY to INR 7.7bn (PLe: INR 7.9bn). W&C EBIT grew by 12.8% YoY to INR 10.0bn and margins contracted by 200bps YoY to 13.1%. FMEG revenue grew by 47.4% YoY to INR 6.9bn (PLe: INR 5.0bn) and reported EBIT of INR 286mn vs INR 23mn in Q4FY25.

Conference Call Highlights

• W&C volume grew by low single digits in Q4FY26, while FY26 volume growth stood at ~18%; cables outpaced wires and institutional sales growth exceeded channel sales growth in Q4FY26.

• Fans segment delivered healthy growth driven by premiumization, with premium fans contributing ~25% of fan segment revenue in FY26.

• Solar products delivered ~2x YoY growth and emerged as the largest category within the FMEG portfolio.

• Company plans to incur INR 60-80bn capex over the next five years under Project Spring, with ~90% allocated towards W&C, ~5% towards backward integration, and the balance towards the FMEG segment.

• Company expanded its export footprint to 94 countries in FY26 from 84 countries in FY25, reflecting continued strengthening of its international distribution network.

• Middle East contributed ~15-16% of export revenue in FY26, though demand was temporarily impacted by geopolitical disruptions.

• Management reiterated its target of exports contributing >10% of total revenue by FY30.

• North America contributed ~40% of exports in FY26, followed by South America at ~20%, while Europe remained another key growth market.

• Company implemented cumulative price hikes of 18-19% between Jan’26 and Mar’26 to pass on the increase in commodity costs.

• Capacity utilization in the W&C segment stood at ~75-76% in FY26 with ongoing capacity additions.

• Management reiterated long-term EBITDA margin guidance of 11-13%, while near-term margins are expected to remain within 12-14%.

• EHV capacity expansion is expected to be commissioned by Q3FY27.

Please refer disclaimer at https://www.plindia.com/disclaimer/

SEBI Registration No. INH000000271