Bansal Wire Industries Limited

Bansal Wire Industries Limited reported a strong start to FY26, achieving its highest ever Q1 sales volume of 104,000 tons, representing 74% capacity utilization. The company's revenue grew 15% year-on-year to INR 939 crores, with EBITDA surging 20% to INR 75 crores. Net profit also saw a significant increase of 24% year-on-year, reaching INR 39 crores. This performance was driven by integrated operations and a customer-first mindset.

The company aims to capture more market share and achieve continuous volume growth, targeting a 30% increase in volume for FY26. This aggressive growth strategy may lead to a small decline in overall margins until FY27. However, margins are expected to normalize^📎 and increase from FY28, driven by backward integration and specialty wire initiatives. The current economic scale in India presents unparalleled opportunities for the steel wire industry, fueled by infrastructure and manufacturing growth.

Bansal Wire is focusing on growing its specialty wire segment, including products like hose wire, IHT (Industrial High Tensile), and steel cord. These import substitute products have received positive customer responses, reinforcing the company's industry leadership. Operationalization of these products is expected within FY27, with a phased ramp-up between FY28 and FY30. The IHT wire market alone is estimated at 15,000-20,000 tons and is growing rapidly, with Tata being the only other Indian producer.

The Sanand project, with a revised capex of INR 650 crores, is progressing steadily with major equipment orders finalized. This facility will enable backward integration for steel and stainless steel wire requirements, securing raw material supply and reducing input costs. The project is expected to add INR 7,000-8,000 of EBITDA per ton from the steel and stainless steel segment alone, significantly strengthening overall margins from FY28. The project also incorporates ESG commitments through solar energy and rainwater harvesting.

A major highlight of the quarter was the strong cash flow generation, with over INR 100 crores in free cash flow from operating activities. This was achieved through tighter management, better working capital discipline, and improved operational efficiency. The company has implemented initiatives to reduce inventories and debtor days, with dedicated teams focusing on these areas. Channel financing is also being utilized to further reduce debtor days in coming quarters.

The company achieved 74% capacity utilization in Q1 FY26 with 104,000 tons of sales, leaving room for future growth. An additional 60,000 tons of capacity is scheduled to be added within Q2 FY26, with another 60,000 tons in Q3 FY26, totaling 120,000 tons. The Dadri facility, which contributed 20-25% of revenue, saw a 25% year-on-year production increase, with an exit run rate utilization of 35%.

Exports accounted for INR 72 crores, representing about 7.5% of total revenue. The company targets mature markets like the U.S. and Europe, where customers prioritize better service and quality, aligning with a 'China plus 1' strategy. The raw material cost being less than 50% of the total pricing helps mitigate competitive disadvantages against countries like China.