Bansal Wire Industries Limited — Q3 FY25 earnings call

Call held 30 Jan 2025

Management summary

Bansal Wire Industries Limited reported a strong Q3 FY25, driven by robust demand and the consolidation of group companies. The company saw significant growth in revenue, EBITDA, and net profit, alongside margin expansion. Strategic initiatives like the commencement of the specialty wire vertical and expansion of the Dadri facility are progressing ahead of schedule, positioning the company for continued growth and market leadership.

Highlights

  • Q3 FY25 Revenue grew 53% YoY to ₹925 crores.

  • Q3 FY25 EBITDA surged 99% YoY to ₹73 crore.

  • Q3 FY25 Net Profit increased 172% YoY to ₹42 crore.

  • 9M FY25 Revenue reached approximately ₹1,799.6 crores, up 46% YoY.

  • 9M FY25 EBITDA grew 99% to ₹203 crores, and Net Profit jumped 123% to ₹113 crores.

  • EBITDA margin expanded by 184 basis points and Net Profit margin by 198 basis points YoY in Q3 FY25.

  • Specialty wire vertical production commenced with a pilot project capacity of 50,000 tonnes.

  • Dadri facility achieved 30% capacity utilization by December 2024 and is on track for full commissioning of 3.5 lakh tonnes by end of FY25.

Key financials

2 periods

Q3 FY25

  • Revenue
    ₹925 Cr
    YoY +53%
  • EBITDA
    ₹73 Cr
    YoY +99%
  • Net Profit
    ₹42 Cr
    YoY +172%

9M FY25

  • Revenue
    ₹1,799.61 Cr
    YoY +46%
  • EBITDA
    ₹203 Cr
    YoY +99%
  • Net Profit
    ₹113 Cr
    YoY +123%

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.

Guidance & targets

Capacity

  • Dadri Capacity Expansion Capacity · Next 6 months · High confidence 4.2 lakh tonnes

    Previously 3.5 lakh tonnes → 4.2 lakh tonnes

    we have already planned another phase of expansion in Dadri to take the capacity from 3.5 lakh tonnes to 4.2 lakh tonnes

    — Pranav Bansal

Capex

  • Incremental Capex for Dadri Expansion Capex · Within first two quarters of next year (FY26) · High confidence ₹70-80 crores

    Previously ₹500-550 crores (initial total) → ₹70-80 crores

    our investment will also increase by about 70 to 80 crores in total. ... We will be able to do this within the first two quarters of next year.

    — Pranav Bansal

  • Stainless Steel Rod Backward Integration Equipment Orders Capex · Within next two months · High confidence Finalize orders
    we should be able to finalize some orders within the next two months.

    — Pranav Bansal

Revenue

  • Revenue from 4.2 lakh tonne Dadri capacity Revenue · Upon full utilization · High confidence ₹3,500 crores
    against that 4,20,000 tonnes, we could be able to do a revenue of about 3,500 crores.

    — Pranav Bansal

  • Revenue from Specialty Wire Vertical (20,000 tonnes pilot) Revenue · Upon full utilization · Medium confidence ₹300 crores
    the pilot project is of a capacity of 20,000 tonnes. Looking at the current market prices, it should give us about 300 crores of revenue.

    — Pranav Bansal

Company Growth

  • Average Growth Rate Company Growth · Going ahead · High confidence 20-25%
    as a company, even in the last 10 years we have grown at 20% to25% on an average, which is what we want to continue going ahead.

    — Pranav Bansal

Margin

  • EBITDA Margin for Steel Cord Margin · Implied for this product · High confidence 20-25%
    it has been about 20% to25% kind of an EBITDA that we look at, which is fairly different from our current numbers.

    — Pranav Bansal

Production

  • Stainless Steel Rod Backward Integration Production Start Production · Mid-FY27 · High confidence Start production
    after 18 months, we should be able to start so anywhere in the middle of FY27 or even if there is a couple of months here and there, within FY27 at least we should be able to start production in full swing.

    — Pranav Bansal

Capacity Utilization

  • Dadri Capacity Utilization Capacity Utilization · By December 2024 (achieved) · High confidence 30%
    The Dadri facility has achieved 30% capacity utilization already by December

    — Pranav Bansal

Capacity Commissioning

  • Dadri 3.5 lakh tonne capacity commissioning Capacity Commissioning · End of FY25 · High confidence 100%
    the balance is also being commissioning within the next two months, we should be able to commission the complete 3.5 lakh tonne of capacity.

    — Pranav Bansal

Investment

  • IHT Wire Investment Start Investment · Within first quarter (FY26) · High confidence Start investment
    we were supposed to start investment in IHT wire by mid of next year, but we have already placed some orders, and we will hopefully do something within the first quarter.

    — Pranav Bansal

Risks & concerns

  • Fluctuating raw material prices

    medium

    Management acknowledges fluctuating raw material prices but states they manage this through a natural hedge model and passing costs to customers.

    Management acknowledged

  • Long approval process for new specialty wire products

    medium

    The approval process for products like steel cord can take 9 months to 2 years, which could delay revenue realization from new capacities.

    Management acknowledged

  • Competition from Chinese manufacturers in specialty wire

    medium

    Analysts raised concerns about aggressive Chinese pricing, but management outlined competitive advantages in logistics, duties, and service to command better pricing.

    Analyst acknowledged

  • Geopolitical risk

    low

    Mentioned generally as a challenge alongside raw material prices, but no specific impact or mitigation strategy detailed.

    Management acknowledged

Areas of evasion (3)

  • Segment-wise contribution from different sectors
  • Exact split of high carbon, low carbon, and stainless steel volumes
  • Detailed breakdown of volume increase due to consolidation vs. organic growth

Q&A highlights

3 direct
Q3 FY25 Volume and YoY Comparison Direct
The volume numbers for this quarter was about 90,000 to 92,000 tonnes, including low carbon mild steel as well as stainless steel. For the corresponding year, last year Mr. Gujrati, will you be able to give us the numbers? ... Yes, sir it was around 60,000 tonnes actually last year.

Provides key operational metrics and highlights significant volume growth, indicating strong market demand and/or the impact of consolidation.

Asked by Deep Mehta

Dadri Capacity Expansion CAPEX, Timeline, and Product Mix Direct
So, the total expansion that was already planned was about 500 to 550 crores, wherein we were installing the capacity of about 3.5 lakh tonnes. Now we have increased that by about 20% to 4.2 lakh tonnes. ... Therefore our investment will also increase by about 70 to 80 crores in total. ... We will be able to do this within the first two quarters of next year.

Details the scale, cost, and timeline of a major strategic expansion, which is crucial for the company's future growth trajectory and operational capabilities.

Asked by Deep Mehta

Competition from Chinese manufacturers in specialty wire and pricing strategy Direct
Sir, here another challenge in imports is, this product comes on basically a steel packaging or steel reel. ... So first, when we compete with China, we will have this advantage of logistics cost, because we are a domestic producer. Second, even after that, we have a 10% kind of a duty on this product... Third thing, we are honestly not looking at selling this product at the Chinese price, or competing with China directly. We are an alternate to China. So we are giving a better service, we are closer to the customer that is why we would be able to charge a better price than the Chinese price in India.

Reveals the company's competitive strategy, pricing power, and market positioning for its new high-margin specialty wire products against established import competition.

Asked by Jay Patel

2 min read 6 chapters

Detailed narrative

Strong Q3 FY25 Financial Performance

Bansal Wire Industries Limited delivered a robust performance in Q3 FY25, with revenue growing 53% year-on-year to ₹925 crores. This strong top-line growth translated into exceptional profitability, as EBITDA surged 99% to ₹73 crore and net profit increased by 172% to ₹42 crore. The company also reported significant margin expansion, with EBITDA margin expanding by 184 basis points and net profit margin by 198 basis points on a year-on-year basis, reflecting operational efficiencies and a favorable product mix.

Dadri Capacity Expansion and Utilization Progress

The Dadri facility is a key growth driver, having achieved 30% capacity utilization by December 2024, ahead of schedule. The company is on track to fully commission its initial 3.5 lakh tonne capacity by the end of FY25. Due to strong demand, plans are already in motion to further expand Dadri's capacity from 3.5 lakh tonnes to 4.2 lakh tonnes within the first two quarters of FY26, requiring an additional CAPEX of ₹70-80 crores. This expanded capacity is projected to generate approximately ₹3,500 crores in revenue upon full utilization.

Specialty Wire Vertical Launch and Outlook

The company has successfully commenced production in its specialty wire vertical, focusing on high-value-added products like bead wire, hose wire, and steel tyre cord. A pilot project with an initial capacity of 20,000 tonnes is expected to generate around ₹300 crores in revenue. Management indicated that EBITDA margins for steel cord are anticipated to be in the 20-25% range, significantly higher than existing product lines. Initial market feedback has been positive, with sales of 100-120 tonnes in January, and product approvals are progressing ahead of schedule.

Stainless Steel Rod Backward Integration

Bansal Wire is advancing its plans for stainless steel rod backward integration in Sanand, Gujarat. Land acquisition is in process, with possession expected within a week. The company aims to finalize equipment orders within the next two months and expects to commence production by mid-FY27. This strategic move, managed by the newly created subsidiary BWI Steel Private Limited, is intended to enhance control over raw material costs and improve processing advantages.

Competitive Strategy in Specialty Wire

Addressing concerns about competition from Chinese manufacturers in specialty wire, management outlined a clear strategy. They highlighted advantages such as lower logistics costs as a domestic producer, a 10% import duty benefit, and a focus on providing superior service and proximity to customers. This approach allows the company to position itself as an alternative to imports and command a higher price than Chinese competitors, as evidenced by current order books for hose wire.

Demand Trends and Operational Focus

The company experienced strong demand across all sectors, including automotive, in Q3 FY25, despite a typical slowdown in December. Management noted that sales are not a challenge, and the focus remains on increasing production to meet customer demand. Exports also showed robust growth, reaching approximately ₹250 crores by Q3 FY25 compared to ₹219 crores in the corresponding period last year, underscoring strong international demand for their products.

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