Bansal Wire Inds

Bansal Wire Industries Limited reported robust financial results for Q4 and FY26. For the full year FY26, volumes grew by 33% to 4.58 lakh metric tons, marking the highest annual sales volume. Revenues for FY26 stood at INR 4,160 crore, a 19% increase over FY25, while EBITDA grew 17% to INR 325 crore, and net profit rose 10% to INR 161 crore. In Q4 FY26, the company delivered a sale of 1.17 lakh metric tons, reflecting a 20% year-on-year increase, with revenues of INR 1,136 crore and a net profit of INR 40 crore.

The company emphasized its improved focus on ROCE and cash flow generation, deferring its backward integration project to realign strategy towards core competencies. This approach resulted in a cash flow of INR 333 crores, exceeding the initial target of INR 250 crores. Bansal Wire Industries remains on track to achieve a total cash flow target of INR 600 crores by 2027, positioning it to fund growth ambitions while maintaining financial discipline.

Bansal Wire Industries' installed capacity now stands at approximately 6,80,000 metric tons. The Dadari facility saw an addition of 1,20,000 tons of capacity, completing its first phase of expansion, which supports volume growth and enhances operational efficiency. The company also made meaningful progress in its speciality and value-added wire portfolio, with IHT Wire showing strong momentum and the LRPC wire product (18,000 tons capacity) starting to generate positive EBITDA.

Management anticipates a relatively subdued start to Q1 FY27, primarily due to geopolitical tensions involving Iran and Israel, which caused volatility in global energy markets and supply chain challenges. A temporary disruption in natural gas supply also led to a production cut to 35% in March, impacting Q4 production and EBITDA per ton. Despite these headwinds, the company is proactively taking measures to mitigate impacts and remains confident in its ability to navigate near-term challenges and return to a targeted 20% growth trajectory.

The Steel Cords segment achieved a major breakthrough, with the company expecting its very first trial order soon from one of the top four companies in India. Management highlighted significant barriers to entry in this product, including technology, specialized personnel, exclusive collaborations, and a lengthy approval process, which provide a competitive advantage. Regular supply for one customer is expected by H2 FY27, with other customers potentially coming online by the end of FY27.

The company's CAPEX strategy for FY27 is focused on utilizing cash flows, with an estimated INR 150-200 crores allocated to generate sufficient capacity for 20% growth. Current capital work-in-progress (INR 213 crores) includes 60,000 tons installed but not yet commissioned (expected April) and ongoing investments at Dadari to add another 1.2 lakh tons this year. Total installed capacity is projected to reach 8-8.6 lakh metric tons by the end of FY27, with an overall capacity utilization target of 80-85%.

The company observed a spike in payables, which was attributed to the implementation of discounting limits for purchases. This strategy allows vendors to receive advance payments while Bansal Wire Industries benefits from extended credit terms. Management acknowledged that this could lead to a non-disproportionate increase in interest expense but is part of an effort to reduce total working capital days.