Not Rated KSH International Ltd for the Target NA by Emkay Global Financial Services Ltd
We visited the newly incorporated manufacturing facility of KSH International in Supa, Maharashtra.
Key takeaways are:
1) Supa doubles installed capacity to ~60,000mt, with room for an additional ~12,000mt expansion within the existing land parcel
2) KSH remains uniquely positioned to benefit from India's transformer manufacturing upcycle, driven by its leadership in CTC and sole domestic qualification in 400kV HVDC applications
3) the management expects domestic CTC demand to grow from ~40,000mt currently to ~120,000mt by FY29, supported by transformer capacity additions and renewable energy evacuation projects
4) the management reiterated FY27 EBITDA/tonne guidance of Rs67,000-74,000
5) long qualification cycles and technical complexity continue to create meaningful entry barriers; 6) emerging opportunities in EV motor wires, compressor localization, and PEEK products provide additional growth avenues beyond the CTC business.
Higher share of high-voltage transformers to support EBITDA/tonne expansion
The management highlighted that specialized products generate EBITDA/tonne roughly 3x that of standard round wires, with HVDC and 765kV products at the top of this specialized tier. Blended EBITDA/tonne is guided at Rs67,000–74,000 for FY27, aided by a rising HVDC/765kV contribution within the mix. 765kV AC alone has scaled from single digits to ~30% of CTC revenue over the past three years, while EBITDA/tonne increased from Rs33,244 in FY24 to Rs67,625 in FY26, reflecting the shift. The management expects this contribution to increase further as the HVDC project pipeline matures over the next decade.
Lengthy qualification cycles create a durable competitive moat
Product approvals follow a strict sequential path, requiring suppliers to progress through lower voltage classes and then 765kV before qualifying for HVDC, making it structurally difficult for new entrants to leapfrog the approval pathway. KSH is currently the only Indian manufacturer qualified to supply at the 400kV HVDC level, and 800kV qualification remains underway, with no Indian competitor yet approved at that level. Moreover, the management highlighted that the machinery is highly specialized and non-fungible, sourced globally and customized to meet specific customer requirements.
Beyond CTC: compressor, EV, and PEEK
The management indicated that standard round wires are riding two key demand vectors: AC compressors and EV motors. Compressors are witnessing strong demand on the back of ongoing localization efforts. Meanwhile, EVs and premium vehicles are incorporating a higher number of motors across electronic systems, increasing wire intensity per vehicle. KSH is already supplying to top OEMs in India, with particularly strong traction in the two-wheeler space. Separately, at a nascent stage, KSH holds an exclusive PEEK license, with no domestic competitor, targeting premium EV traction motors above 800V.
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