Dynamic Cables Limited — Q1 FY27 earnings call

Call held 20 Jul 2026

Management summary

Dynamic Cables Limited reported a strong Q1 FY27 with record revenue, significant EBITDA and PAT growth, and improved margins. The company successfully entered the US market and is progressing with its capacity expansion. However, order book growth was modest, and volume growth was impacted by raw material price volatility and customer reluctance to book orders at high prices, highlighting ongoing working capital management challenges.

Highlights

  • Revenue growing by 33% year-on-year to its highest ever first quarter level.

  • EBITDA increased by 41% to INR38 crores supported by improved operating leverage, favorable product mix, and continued cost discipline.

  • EBITDA margin improved to 10.9% reflecting enhanced operational efficiency.

  • Profit after tax grew by 37% to INR25 crores.

  • Achieved an important milestone with entry into the US markets, expanding global footprint.

Concerns

  • Order book growth was only 10% year-on-year, described as 'weak' despite sharp increase in aluminium prices.

  • Volume growth was weaker in Q1 (5-6%) due to high base effect and sudden increase in raw material prices leading to order postponement.

  • Working capital requirements remain heavy, necessitating careful management of liquidity and debt levels.

  • Raw material price volatility continues to be a challenge, with customers unwilling to book orders at elevated prices.

Key financials

  1. Revenue — +33%YoY
  2. EBITDA ₹38 Cr +41%YoY
  3. EBITDA Margin 10.9%
  4. PAT ₹25 Cr +37%YoY

What they filed

Q1 FY27: revenue up 33.2%, net profit up 38.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue234 252 331 262 282 +21%299 +19%355 +7%349 +33%
EBITDA24 26 34 27 31 +29%34 +31%38 +12%38 +41%
Net profit14 16 24 18 20 +43%22 +38%24 +0%25 +39%
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

  • Customer-wise Contribution
    16% Government Sales71% Private Sales13% Export Sales
  • Product-wise Contribution
    68% HV Cables30% LV Cables2% Conductor

Order book

high confidence

Total value

₹811 Cr

as of 2026-06-30 quantified

10% YoY

Composition

Mix 2 contract types
  • Fixed Price Contract 20%
  • Variable Price Contract 80%

Share of order book by contract type

Cancellations & deferrals

  • postponed: Some order postponement happened in Q1 due to sudden increase in raw material prices, as customers were unwilling to book orders at elevated prices.
Management noted that the order book has shortened and order cycle has shortened, with customers preferring not to lock in prices at elevated levels, but revenue booking is not expected to be significantly impacted.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex Capex disclosed
    • New plant capacity expansion ₹45 Cr
    we are doing a capex of around INR45 crores in the new plant and typically our asset turnover has been 6x to 7x.
  • Debt Debt disclosed
    Yes, sir. I wanted to understand the rise in debt on the balance sheet when I compare the numbers that are reported as of 31st March 26 and as of June 26. The revenue is largely in the same ballpark range, but the debt has actually gone up. So, I just want to understand this? ... debt has gone up as compared to March and the major contributor for the debt to grow up is the higher value of the inventory -- the inventory carrying value has gone up because of the increasing raw material prices.
  • Liquidity Liquidity disclosed Management aims to maintain strong liquidity and manage debt levels effectively, optimizing working capital cycle by controlling receivable days and improving credit ratings for better borrowing costs.
    I'm just curious to know how you're going to approach this, keeping liquidity strong, managing debt levels, and still funding the growth if receivables stretch or borrowing costs rises. How do you see the company maintaining both growth investments and shareholder returns in this case? ... we also try to optimize our working capital cycle by keeping our receivable days under control. So, we try to negotiate terms of trade and choose the right business which have favourable terms of trade with us. Fortunately, there has been enough opportunities whereby we can grow sustainably with financial discipline. So that has been a good sign for the company. Secondly, we try to manage our borrowing cost by improving our credit ratings so that we get a better borrowing cost or interest charges from our lenders and we are able to, that's how we are able to maintain our borrowing cost and working capital cycle as a whole.

Guidance & targets

Revenue

  • Long-term revenue growth rate Revenue · long-term · High confidence 18-20%
    We don't kind of give an yearly guidance, but what we always guide is that we have been growing at 18%-20% since last 10-15 years and we should be able to maintain our growth rates in long-term growth rates around this level in future also.

    — Ashish Mangal

  • Solar cable revenue contribution Revenue · full year FY27 · Medium confidence similar range as Q1 (20%)
    Our solar cable revenue has been around 20% in Q1 and on the full year basis also I think it should remain in the similar range. Especially for first half of the year, in the second half of the year with a new plant coming up, it may increase, but I mean the more notable increase will only be visible next year.

    — Ashish Mangal

  • Renewable energy segment growth Revenue · next three to four years · High confidence 25-30%
    going forward also we remain quite bullish on this entire renewable energy play in our country, specifically the solar parks and the solar orders which are coming in. So, we believe that it can it can grow at 25%-30% for at least for next three, four years.

    — Ashish Mangal

  • New plant revenue contribution Revenue · Q4 FY27 onwards · High confidence meaningful contribution
    I mean September we are kind of planning to commission the plant. So, any revenue contribution or meaningful revenue contribution one should expect only from Q4. It is fair to kind of assume any substantial or a meaningful revenue contribution from Q4 onwards only.

    — Ashish Mangal

Capacity

  • New plant commissioning Capacity · Q2 FY27 · High confidence September 2026
    Our ongoing capacity expansion project is progressing as planned and we expect commissioning to commence from September '26.

    — Ashish Mangal

  • New plant utilization Capacity · end of FY28 (18 months from commencement) · Medium confidence 80-85%
    I mean at the end of '28 you are saying. So it is basically yes, 18 months from the date of commencement. So, I mean the target is to have a optimum utilization of that plant at 80% 85% by end of FY '28.

    — Ashish Mangal

What to watch in Q2 FY27

New plant commissioning

September 2026
Current Progressing as planned
Target Commencement of commissioning

Why it matters

Crucial for future capacity and revenue growth, as it will enhance manufacturing capabilities.

Our ongoing capacity expansion project is progressing as planned and we expect commissioning to commence from September '26.

Risks & concerns

  • Raw material price volatility

    medium

    Volatile copper and aluminium prices can impact margins, though mitigated by variable price contracts and timely raw material booking for fixed-price contracts.

    Both acknowledged

  • Heavy working capital requirements

    medium

    Cable business is working capital intensive, requiring careful management of liquidity, debt, and receivable days to fund growth.

    Analyst acknowledged

  • Customer reluctance to book orders at high prices

    medium

    Sudden increases in raw material prices led to order postponement and weaker order booking in Q1, as customers wait for price correction.

    Management acknowledged

  • Competition in the cable market

    low

    Despite fragmentation and capacity expansion by many players, management views current competition as 'healthy' due to strong demand drivers.

    Analyst downplayed

Q&A highlights

8 direct
Raw material price volatility and margin protection Direct
So, in variable price contract, we have a clause built in for price variation. So, whatever is the increase or decrease in input cost for the cable, we pass it on to our customers and customers bear that volatility. And in the fixed price contract, whenever we take an order, we typically try to book the raw material at the same time so that our margins are not impacted.

Clarifies the company's strategy to mitigate raw material price risks through contract structures.

Asked by Sucrit D. Patil

Working capital management and funding growth Direct
It is a working capital-intensive business as you have rightly pointed out and we are also able to, we also try to optimize our working capital cycle by keeping our receivable days under control. So, we try to negotiate terms of trade and choose the right business which have favourable terms of trade with us.

Explains how the company manages its capital-intensive business, focusing on receivable days and credit ratings.

Asked by Sucrit D. Patil

Volume vs. realization growth in Q1 Direct
So, year-on-year basis, I mean everybody you must be aware that the input costs have gone up, especially the aluminium prices have gone up significantly. So, if we break out that volume and value growth, 5% to 6% is our volume growth and balance is large part of it is kind of derived by the price growth of aluminium and largely aluminium.

Provides a breakdown of Q1 growth drivers, indicating that price increases were a larger contributor than volume.

Asked by Piyush Sevaldasani

Weak order book growth Direct
Sir, April, May as I mean again, I'm reiterating that point that April, May was very, very weak order booking for not only for us, I think it should be a common phenomenon across because there was lot of reluctance from the customers to book orders at an elevated prices and probably as we go ahead and things stabilize, it should pick up.

Explains the reason for the weaker order book growth, attributing it to customer reluctance due to high raw material prices.

Asked by Piyush Sevaldasani

US market entry and business model Direct
Yes, US is a completely distribution-led model and so we also have to engage with the distributors out there and they in turn supply those materials to the distribution utility companies in US.

Clarifies the company's go-to-market strategy for the newly entered US market.

Asked by Vidit Trivedi

HTLS conductor and data center cables strategy Direct
both these areas, the HTLS conductors as well as data center cables, both are futuristic investment and we believe that in next three, four years, five years, they should be a good market. ... we believe that most of the capex in these two areas is going to be fungible. So, there would not be a need of a substantial capex per se to address these two markets.

Outlines the company's strategic focus on high-growth segments and how it plans to leverage existing capex.

Asked by Balasubramanian

Debt increase explanation Direct
debt has gone up as compared to March and the major contributor for the debt to grow up is the higher value of the inventory -- the inventory carrying value has gone up because of the increasing raw material prices. So, though the quantity of inventory is same, but the value of the inventory has gone up by 25%, 30% as compared -- whatever 20%, 25% as compared to March.

Provides a clear explanation for the increase in debt, linking it to higher inventory valuation due to rising raw material prices.

Asked by Sonal Minhas

Competition in the cable market Direct
So, there is lot of expansion which is going on amongst ourselves, amongst all the players and we are also expanding, so we are no exception to that. But fortunately, the demand scenario has picked up pace and is picking up pace with the expansion -- with the on-going expansion. And that is why whatever competition we are seeing in the market it's a healthy competition up till now.

Addresses concerns about increasing competition and explains why management views it as 'healthy' due to robust demand.

Asked by Neha Garg

2 min read 6 chapters

Detailed narrative

Q1 FY27 Performance Overview

Dynamic Cables Limited delivered its highest ever first quarter revenue in Q1 FY27, with a 33% year-on-year growth. EBITDA saw a 41% increase, reaching INR38 crores, and the EBITDA margin improved to 10.9%. Profit after tax also demonstrated strong growth, rising by 37% to INR25 crores, driven by disciplined execution, improved product mix, and sustained demand across sectors.

Capacity Expansion and Future Growth

The company's ongoing capacity expansion project is progressing as planned, with commissioning expected to commence from September 2026. This expansion, involving a capex of approximately INR45 crores for the new plant, is anticipated to enhance manufacturing capabilities and support future growth. Management expects meaningful revenue contribution from the new plant starting Q4 FY27 and aims for 80-85% utilization by the end of FY28.

Raw Material Volatility and Margin Management

Raw material costs, particularly for copper and aluminium, remained volatile during the quarter. The company manages this volatility through a mix of fixed and variable price contracts, with price variation clauses in the latter. For fixed-price contracts, raw materials are typically booked concurrently with order placement to protect margins. However, the sudden increase in prices led to some order postponements as customers were reluctant to book at elevated rates.

Order Book Dynamics and Export Market Entry

The order book stood at INR811 crores as of June 30, 2026, showing a 10% year-on-year growth, which management described as 'weak' due to customer reluctance to book orders at high raw material prices. Despite this, the company achieved a significant milestone by entering the US market, with initial supplies dispatched. The US market is seen as a large, distribution-led opportunity for long-term growth, with expectations of reordering and cross-referencing.

Strategic Focus on High-Growth Segments

Dynamic Cables is strategically focusing on high-growth areas such as HTLS conductors and data center cables, viewing them as futuristic investments with significant market potential in the next 3-5 years. The company believes it can address these markets with minimal additional capex, leveraging its fungible existing machinery. The renewable energy segment, particularly solar parks, is expected to grow at 25-30% for the next three to four years, contributing significantly to revenue.

Working Capital and Debt Management

The cable business is inherently working capital intensive. Management emphasized efforts to optimize the working capital cycle by controlling receivable days and negotiating favorable terms of trade. Debt increased compared to March 2026, primarily due to the higher valuation of inventory resulting from increased raw material prices, rather than an increase in inventory quantity.

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