Dynamic Cables Limited — Q2 FY26 earnings call

Call held 28 Oct 2025

Management summary

Dynamic Cables reported a strong Q2 & H1 FY26, achieving its highest-ever revenue and profitability with H1 sales up 23% YoY and PAT up 49%. Operating margin improved to 10.6% due to cost management. The order book stands at INR 721 crores, though its growth has been flattish recently due to monsoon-related execution delays and US market tariff uncertainties. The company is progressing with a new Greenfield plant expected to commission by H2 FY26.

Highlights

  • H1 FY26 sales increased by 23% year-on-year, marking the highest-ever revenue for the period.

  • H1 FY26 operating profit rose by 27% to Rs.57.8 crores, reflecting strong profitability.

  • H1 FY26 Profit after tax grew by 49% to Rs.38 crores, underscoring continuous focus on operational excellence.

  • Operating margin stood at 10.6%, driven by effective cost-management initiatives and favorable product/customer mix.

  • Order book stands at INR 721 crores as of September 30, 2025, providing strong revenue visibility.

Concerns

  • Order book growth has been flattish over the past three quarters, remaining around Rs.720-730 crores.

  • Demand slowdown and execution delays in H1 FY26 were attributed to an 'extraordinary monsoon period' and festival season.

  • Entry into the US market is currently on hold due to uncertainty regarding recent 50% tariffs on Indian products.

Key financials

2 periods

Headline

  • Operating Margin
    10.6%

H1

  • FY26 Sales Growth
    —
    YoY +23%
  • FY26 Operating Profit
    ₹57.8 Cr
    YoY +27%
  • FY26 PAT
    ₹38 Cr
    YoY +49%
  • FY26 Volume Growth
    —
    YoY +20%

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 (H1 FY26)
    12% Government Sales78% Private Sales10% Exports
  • Product-wise Contribution (H1 FY26)
    55% HV Sales37% LV Cable8% Conductors

Order book

high confidence

Total value

₹721 Cr

as of 2025-09-30 quantified

Execution

Execution cycle is anywhere between three to nine months.

Composition

  • Exports (geography) 14.5%
  • Power Distribution (segment)
  • Smart Metering (segment)
  • Renewable Energy (segment)
  • Specialty Cables (segment)

Cancellations & deferrals

  • deferred: Order placements delayed due to EPC players' execution slowdown caused by extraordinary monsoon period and festival season.
  • deferred: Cable inventory stuck with the company and customers due to execution slowdown.
The demand scenario has been consistent, but order book growth has been flattish due to monsoon-related execution delays and customer inventory issues. Project execution is expected to pick up aggressively in Q3 and Q4.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹50 Cr New plan — new Greenfield plant
    • Debottlenecking initiatives (majority incurred last year, some in H1 FY26) ₹15 Cr
    • New Greenfield plant (including E-beam curing facility for solar DC cables) ₹45 Cr
    The total CAPEX which we have incurred is around Rs.15 crores and majority of it was incurred last year and some of it was incurred in the current first six months also. ... Around Rs.40 crores to 50 crores. So, in H1, we have done around Rs.25 crores and I think in H2, we will be doing an additional Rs.15, 20 crores. ... If we are putting around Rs.40-45 crores in the new plant, we would be able to achieve whatever number it comes.
  • Debt Debt disclosed
    • Repayment All term liabilities are completely paid off.
    • Other Shifted from issuing LCs to direct payments to creditors, leading to a dip in overall borrowing.
    if you look at the overall borrowing, it has dipped, because we were earlier issuing LC to our creditors which we are now kind of making direct payments. So, that is how if you look at, if you combine both LC and on-balance sheet borrowing, you will be able to understand that what is our debt position, Secondly, I would like to say that all our term liabilities are completely paid off. So, whatever borrowings which we look at is the working capital borrowing which keep on changing on an everyday basis.

Guidance & targets

Revenue Growth

  • Annual Revenue Growth Revenue Growth · Long-term · Medium confidence 20% (if industry grows 12-13%), 13-14% (if industry grows 8-9%)
    We intend to grow at 1.5x the industry growth. So, if industry growth is around 12-13%, we should grow at 20%. If industry growth is at 8-9%, we would be targeting to grow at 13-14%.

    — Ashish Mangal

Capacity

  • New Plant Commissioning Capacity · H2 FY26 · High confidence End of H2 FY26
    our ongoing capacity expansion plan is progressing well and remains on schedule for commissioning in second half of FY26.

    — Ashish Mangal, Management

Revenue from New Plant

  • Incremental Revenue from New Plant Revenue from New Plant · Next financial year onwards · Medium confidence Rs.200 to 250 crores (analyst estimate), 6x gross block investment (management target)
    Generally, we do around six times our gross block investment, that is the asset turn which we target to do in the new plant as well.

    — Balasubramanian, Management

Product Mix

  • Solar Cable Contribution to Revenue Product Mix · Post-expansion · Low confidence 20%

    Previously 12% → 20%

    Currently, solar cable mix is around 12%. Can we expect this can be touched 20%? It can. I mean, there is a huge potential for that. But let us see post-expansion, what best can we do with our renewable energy segment.

    — Subhanu Bangal, Management

What to watch in Q3 FY26

Order Book Growth

Next quarter (Q3 FY26)
Current INR 721 crores (flat for 3 quarters)
Target Growth beyond current levels, reflecting recovery from monsoon impact

Why it matters

Order book is a key leading indicator for future revenue in the capital goods sector.

order book has not really grown over the past three quarters; it is around Rs.720-730 crores marks only.

Risks & concerns

  • Uncertainty regarding US market entry due to new tariffs

    high

    Planned US exports are on hold pending clarification on recent 50% tariffs, making it difficult to enter the US distribution market currently.

    Analyst acknowledged

  • Demand slowdown and execution delays due to monsoon and festival season

    medium

    Extraordinary monsoon period and festival season impacted EPC players' project execution, leading to slower order placement and execution for Dynamic Cables in H1 FY26.

    Management acknowledged

  • Cable inventory stuck with company and customers

    medium

    Execution slowdown has resulted in cable inventory being held by both Dynamic Cables and its customers.

    Analyst acknowledged

Q&A highlights

7 direct
Demand Slowdown and Order Book Growth Direct
on the demand scenario, this year actually has been some extraordinary monsoon period was there and due to which our customers, which are typically the EPC players, who kind of do the project execution work on the ground, they were not able to work properly and there were some delays in their execution process and that is why back-to-back impact came on our order book also, because they were not able to place further orders as there was some execution slowdown on the ground.

Addresses the flat order book growth, attributing it to external factors (monsoon, festivals) and execution delays, providing context for future expectations.

Asked by Piyush Sevaldasani

Gross Margin Jump in Q2 Direct
it is a slight increase of I think around 50 to 60 basis points in this quarter and that was largely attributable to the customer mix and the product mix. So, fortunately for us, there were some good orders which got executed during the quarter. And we hope that this margin traction should continue as we are developing new projects, we are getting into new customers, these private utilities have come up, smart meeting projects are coming up and all those new areas which are coming up for us, they are helping us in margin expansion.

Clarifies the reason for margin expansion and indicates it's sustainable due to strategic initiatives.

Asked by Piyush Sevaldasani

Increase in Employee and Admin Costs Direct
what we generally keep is that our admin cost, our employee cost are around 10% of our revenue. And on quarter-on-quarter basis, there are some 10, 20 basis points here and there. And that is largely because of some incentive bookings and other things which keep on going. Plus also, there were some new joinees in this half as we are venturing into the new areas, we are seeding new technical tie-ups and all those things.

Explains the cost increase, linking it to growth initiatives and providing a long-term perspective on cost ratios.

Asked by Piyush Sevaldasani

EHV Market Entry and Product Roadmap Direct
EHV as a segment is a completely different ballgame, because it requires specific technology and it has a very niche market in the overall wire and cable space if you talk about. ... In the long-term, of course, being a cable company, EHV is also in our long-term expansion strategy. But as of now, we are not considering EHV for our near-term growth.

Clarifies strategic focus, indicating a preference for existing segments and solar DC cables over EHV for near-term growth due to its high CAPEX and long gestation.

Asked by Jai Chauhan

Borrowings Jump and Debt Structure Direct
if you look at the overall borrowing, it has dipped, because we were earlier issuing LC to our creditors which we are now kind of making direct payments. ... all our term liabilities are completely paid off. So, whatever borrowings which we look at is the working capital borrowing which keep on changing on an everyday basis.

Clarifies the nature of borrowings, indicating a reduction in overall debt and a shift to working capital financing, which is less concerning.

Asked by Nitin Jain

US Market Entry and Tariff Impact Direct
this US exports starting in Q2, Q3, that was kind of the plan in the pre-tariff regime. But I think we will have to wait for this clarification on the tariff side before we get into the US market. ... in the current tariff scenario, it is very difficult to market or enter the distribution market in the US.

Highlights a significant external risk (US tariffs) impacting a planned growth avenue and current lack of US orders.

Asked by Raman KV

Data Center Market Opportunity Direct
Data center is a huge opportunity, because I think you must have also gone through the reports and all those things which people are talking about, and we are also targeting that area which in our earlier calls also we have discussed about trying to be a relevant player in this entire data center ecosystem, for which we have started taking steps like vendor registration and all those things. ... So, probably two quarters down the line, we would have more clarity on this entire business ecosystem which has huge potential.

Reveals a new strategic focus area with high growth potential, outlining current efforts and future expectations for market penetration.

Asked by Naman Parmar

H2 Performance Expectation Partial
Our order book is a testimony of how the H2 will be performed. Our execution cycle, you know that it is anywhere between three to nine months kind of cycle. So, that is all I can say about it. We typically avoid giving guidance as you know.

Addresses investor concern about H2 outlook, linking it to the order book and execution cycle, while maintaining a cautious stance on specific guidance.

Asked by Naman Parmar

2 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Performance Overview

Dynamic Cables reported a strong Q2 and H1 FY26, achieving its highest-ever revenue and profitability for the period. H1 sales increased by 23% year-on-year, with operating profit rising 27% to Rs.57.8 crores. Profit after tax for H1 FY26 grew by 49% to Rs.38 crores, while the operating margin stood at 10.6%, driven by effective cost management and a favorable customer and product mix. H1 volume growth was in the range of 20% to 23%.

Order Book Dynamics and Execution Challenges

As of September 30, 2025, the company's order book stands at INR 721 crores, providing strong revenue visibility. However, the order book has remained relatively flat over the past three quarters, hovering around Rs.720-730 crores. This flat growth is attributed to an 'extraordinary monsoon period' and festival season, which caused execution delays for EPC customers, leading to slower order placements. Consequently, some cable inventory is currently stuck with both the company and its customers.

Strategic Focus and Growth Initiatives

Dynamic Cables remains optimistic about long-term opportunities in India's power infrastructure, supported by tailwinds from renewable energy, rural electrification, and higher voltage lines. The company aims to grow at 1.5x the industry growth, targeting 20% annual growth if the industry grows 12-13%. Strategic focus areas include solar DC cables, leveraging existing plant fungibility for other specialty cables, and exploring the high-potential data center market, for which vendor registration has begun.

Capacity Expansion and Capex Plans

The debottlenecking initiatives, which involved approximately Rs.15 crores in CAPEX (mostly in the previous year), are now complete. For FY26, the company plans a total CAPEX of Rs.40-50 crores, with Rs.25 crores already spent in H1 and an additional Rs.15-20 crores planned for H2. This CAPEX is primarily allocated towards a new Greenfield plant, which will feature an E-beam curing facility to enhance penetration in the renewable energy segment, particularly for solar DC cables. This new plant is expected to be commissioned by the end of H2 FY26.

Borrowing Structure and Financial Discipline

The company has demonstrated strong financial discipline, leading to a dip in overall borrowing. All term liabilities have been completely paid off. Current borrowings are primarily working capital in nature, which fluctuates daily. Dynamic Cables has also shifted from issuing Letters of Credit to making direct payments to its creditors, indicating improved cash flow management and a healthier balance sheet.

US Market Entry and Data Center Exploration

Planned US exports for Q2/Q3 FY26 are currently on hold due to uncertainty surrounding recent 50% US tariffs on Indian products. The company is awaiting clarification on these tariffs but is actively pursuing product approvals in the US market. Separately, Dynamic Cables is exploring the data center market, recognizing it as a significant opportunity. They are undertaking vendor registration and developing specific cables for this segment, expecting more clarity on this ecosystem within the next two quarters.

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