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.