Bansal Wire Industries Limited — Q1 FY26 earnings call

Call held 22 Jul 2025

Management summary

Bansal Wire Industries Limited reported a strong Q1 FY26, achieving its highest ever Q1 sales volume of 104,000 tons and robust growth in revenue, EBITDA, and net profit. The company generated over INR 100 crores in free cash flow, significantly improving its working capital. Strategic focus on market share and specialty wire segments is expected to drive future growth, though it may lead to a temporary margin decline until FY27, with recovery anticipated from FY28 as backward integration and specialty products ramp up.

Highlights

  • Sales volume of 104,000 tons, highest ever for a Q1, despite it being a lean period, achieved at 74% capacity utilization.

  • Revenue grew 15% YoY to INR 939 crores.

  • EBITDA surged 20% YoY to INR 75 crores.

  • Net Profit increased 24% YoY to INR 39 crores.

  • Generated over INR 100 crores in free cash flow from operating activities, driven by tighter management and improved operational efficiency.

  • Significant improvement in working capital, with debtor days reduced and inventories tightened.

Concerns

  • Anticipated small decline in overall margins until FY27 due to strategic focus on capturing market share.

  • LRPC wire segment currently faces sluggish demand and excess capacity, leading to low EBITDA margins of INR 2.50-3.00/kg.

  • Dadri capacity addition of 120,000 tons is delayed by 2-3 months, now expected to be fully added by Q3 FY26.

Key financials

  1. Revenue ₹939 Cr +15%YoY
  2. EBITDA ₹75 Cr +20%YoY
  3. Net Profit ₹39 Cr +24%YoY
  4. Sales Volume 1,04,000 tons
  5. Operating Cash Flow ₹100 Cr
  6. EBITDA per ton ₹7,200
  7. Realization per ton ₹90,500

What they filed

Q1 FY27: revenue up 24.4%, net profit down 48.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue825 925 940 939 1,055 +28%1,029 +11%1,136 +21%1,168 +24%
EBITDA64 72 70 72 77 +20%85 +18%76 +9%56 −22%
Net profit40 42 33 39 38 −5%43 +2%40 +21%20 −49%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • BSPL
    23,000 tons Sales Volume
  • Dadri Facility
    25% Production Growth35% Exit Run Rate Utilization

Order book

low confidence
The company focuses on capturing more market share and continuous volume growth, indicating strong demand for its products, but does not report a formal order book.

Source: Inferred

Capital allocation

high confidence
  • Capex ₹700 Cr Raised — additional 60,000 tons wire facility for stainless steel and low carbon wire, and equipment selection for future debottlenecking · Majority through internal accruals, some through debt
    • Sanand project (backward integration for steel and stainless steel wire) ₹650 Cr
    • Regular maintenance and upgradation ₹100 Cr
    • Adding 60,000 tons capacity within Q2 and another 60,000 tons in Q3

    Previously planned ₹600 Cr

    Sir, our major capex has been the Sanand project, which is about INR600 crores and maybe another INR100 crores, INR150 crores on our regular maintenance and upgradation capex and how we will keep on adding volumes capacities to meet the growing demand. So I think it's safe to say about INR700 crores, INR750 crores of capex that we're looking at this year. ... We would fund some of it through debt as well because we do not have much leverage on our balance sheet today.
  • Debt Debt disclosed
    We would fund some of it through debt as well because we do not have much leverage on our balance sheet today. So we are comfortable with some amount of debt because this will -- this is for backward integration, which will really -- this is a project which will start utilization very quickly once it is up and running. So we are quite comfortable with taking some amount of debt for this.
  • Liquidity Liquidity disclosed Strong cash flow generation of over INR 100 crores from operating activities, expected to fund majority of capex through internal accruals.
    A major highlight this quarter has been our strong cash flow generation. We delivered over INR100 crores in free cash flow from operating activities, driven by tighter management, better working capital discipline and improved operational efficiency. This performance marks a turning point, and we expect it to only strengthens in the coming quarters. ... We anticipate the situation to only continue and further facilitate us in ramping our production in the coming years by funding majority of our capex through internal accruals.

Guidance & targets

Volume

  • Volume Growth Volume · FY26 · High confidence 30%
    We are targeting a 30% increase in volume this year, and we are on track for that.

    — Pranav Bansal

Profitability

  • EBITDA Growth Profitability · FY26 · High confidence 10%
    On EBITDA front, also, we've guided for a 10% increase of EBITDA this year.

    — Pranav Bansal

  • EBITDA per ton (overall) Profitability · FY26 · Medium confidence INR 6.5/kg
    So maybe INR6.5 a kg is the EBITDA per ton that we are looking at. We are at about INR7.2 a kg already in quarter 1.

    — Pranav Bansal

  • ROCE Profitability · Near future · Medium confidence 25%
    The 25% kind of a range is what we are targeting in the very near future.

    — Pranav Bansal

Margin

  • Overall Margins Margin · FY27-FY28 · Medium confidence Small decline until FY27, normalize/increase from FY28
    In order to achieve this, we might take a small decline in our margins until FY '27, but this should normalize or, in fact, increase further from FY '28 once the backward integration and specialty wire initiatives kick in.

    — Pranav Bansal

Specialty Wire

  • Operationalization of Specialty Wire Products Specialty Wire · FY27 · High confidence Within FY27
    We expect operationalization of these products within FY '27 as and when customers approval come through, followed by a phased ramp-up between FY '28 to FY '30.

    — Pranav Bansal

  • IHT Wire EBITDA per ton Specialty Wire · High confidence INR 15-20/kg
    We would be looking at about INR15 to INR20 a kg kind of an EBITDA per ton.

    — Pranav Bansal

Capacity

  • Capacity Addition Capacity · Q2 FY26, Q3 FY26 · High confidence 60,000 tons in Q2, another 60,000 tons in Q3
    About 60,000 tons is scheduled to be added within the second quarter. ... Sir, 60 kt is something that we are adding within this quarter, and another 60 kt will be added by the third quarter. So we were supposed to add 120 kt within the first half. Now it is delayed by about 2 to 3 months. So second and third quarter is when we will add complete 120 kt.

    — Pranav Bansal

Utilization

  • Dadri Utilization Level Utilization · FY26-FY27 · Medium confidence 35-40% this year, 50%+ next year
    This year also, we are looking at about 35%, 40% kind of a capacity utilization. ... We are looking at about 50 plus percentage of utilization next year.

    — Pranav Bansal

Sanand Project

  • EBITDA per ton benefit from backward integration Sanand Project · High confidence INR 7,000-8,000/ton
    Sir, for the steel and stainless steel project alone, we are looking at maybe INR7,000 to INR8,000 of EBITDA per ton, that will be added.

    — Pranav Bansal

What to watch in Q2 FY26

Dadri Capacity Utilization and Contribution

Next quarter (Q2 FY26)
Current 35% exit run rate utilization in Q1 FY26
Target Increased utilization and material contribution to EBITDA

Why it matters

Dadri facility's ramp-up is key to overall volume growth and profitability, especially with planned capacity additions.

Sir, the exit run rate for Dadri was at about 35%. ... Maybe in the second and third quarter, we will see better results from Dadri.

Risks & concerns

  • Margin pressure due to market share focus

    medium

    The company anticipates a small decline in margins until FY27 as it prioritizes capturing market share, with normalization expected from FY28.

    Management acknowledged

  • Sluggish demand and excess capacity in LRPC wire segment

    medium

    The LRPC wire market currently faces sluggish demand and excess capacity, leading to lower EBITDA margins of INR 2.50-3.00/kg.

    Management acknowledged

  • Delay in Dadri capacity addition

    low

    The addition of 120,000 tons capacity at Dadri, initially planned for H1 FY26, is delayed by 2-3 months and is now expected to be fully added by Q3 FY26.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Breakup of sales volume (high carbon, low carbon, stainless) Evasive
Yes, sorry, but we do not disclose segment-wise revenue on our quarterly call.

Management declined to provide a detailed product mix breakdown, which could offer insights into margin drivers.

Asked by Prateek Singh

Drivers for working capital reduction and future outlook Direct
We've taken a lot of initiatives in this regard. Of course, we have tightened our inventories quite a lot. ... we will see further tightening up of inventories as and when we go. Even after an increase of about 18%, 20%, we have still not increased our overall debtors by that much. So we have actually taken our overall debtor days down as compared to last year.

Management detailed specific operational improvements and initiatives like channel financing that led to significant cash flow generation and are expected to continue.

Asked by Prateek Singh

Status of bead wire production Partial
So although the capacity is installed as of now in the other, we are not utilizing it because right now, we're getting better margins in other products. And as you might remember, generally, the capacity that we always produce is fungible. So we have actually tried to shift that capacity to other high-carbon wire products, which are giving us better realization today.

Revealed that capacity is fungible and production is currently prioritized for higher-margin products, indicating flexibility in manufacturing.

Asked by Prateek Singh

Contribution of consolidation vs. organic growth to volume increase Direct
Sir, I would say majority of the volume growth that you see have happened on an organic basis. As you might remember, we have consolidated most of the sales from those two entities also in the first quarter of last year. Whatever was remaining has been consolidated within quarter 2 and quarter 3. So majority of it today is organical.

Clarified that the strong volume growth is primarily organic, indicating underlying business strength rather than just M&A effects.

Asked by Aditya Bhartia

Market size and competitive landscape for IHT wires Direct
Now looking at today, the market size would be at about 15,000 tons to 20,000 tons, but it is growing very rapidly. As of now, there is only one producer of this product in India, which is Tata. Otherwise, everything is still being imported.

Provided specific market insights for a key specialty product, highlighting import substitution opportunity and competitive advantage.

Asked by Mayank Bhandari

Competitiveness of exports against China and Vietnam in stainless steel wire Direct
So for exports, sir, we have only targeted very all mature markets here wherein the customer is ready to pay more for a better service and a better quality. And also China plus 1 has been something that has worked for us along the way. ... our raw material cost is less than 50% of the total pricing. Therefore, our disadvantage to China is in less than 50% of the value.

Explained the export strategy focusing on quality and mature markets, and how their cost structure mitigates direct competition from China.

Asked by Rehan Saiyyed

Impact of Sanand backward integration on EBITDA per ton Direct
Sir, for the steel and stainless steel project alone, we are looking at maybe INR7,000 to INR8,000 of EBITDA per ton, that will be added. On a consolidated basis also, if you look at it, we are reducing our EBITDA as per our guidance by 20% in '26 and '27. But this 20% will come back again from the Sanand project alone.

Quantified the significant margin benefit expected from the Sanand backward integration project, offsetting near-term margin pressures.

Asked by Jay Patel

Clarification on 20% EBITDA margin decline guidance Direct
No, ma'am. There is no change here in Q1 in the last quarter also, I guided you for a 10% increase in EBITDA, which is the current guidance that I am giving you today as well. In terms of EBITDA per ton, there will be a 10% decrease straightaway in margin, and 10% decrease because of product mix that you might see on a blended basis.

Clarified the margin guidance, distinguishing between a direct margin decrease and the impact of product mix, which is crucial for understanding profitability trends.

Asked by Shweta Dikshit

3 min read 7 chapters

Detailed narrative

Q1 FY26 Performance Highlights

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.

Strategic Growth and Market Share Focus

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.

Specialty Wire Segment Development

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.

Sanand Project and Backward Integration

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.

Working Capital Management and Cash Flow

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.

Capacity Expansion and Utilization

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%.

Export Strategy and Competitiveness

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.

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