Detailed Narrative
Strong Financial Performance in Q3 FY26 and Nine Months
Dynamic Cables delivered a strong and consistent performance in Q3 FY26, meeting its guided revenue and profitability targets. For the nine months ended December 31, 2025, the company reported a 21% year-on-year increase in sales. Operating profit for this period rose by 29% to ₹92 crores, achieving an operating margin of 10.9%. Profit after tax also saw significant growth, increasing by 46% to ₹60 crores, reflecting effective execution and financial management.
Robust Order Book and Revenue Visibility
As of December 31, 2025, Dynamic Cables maintained a healthy order book of ₹787 crores, ensuring strong revenue visibility for future periods. This represents a 10% quarter-on-quarter growth from the previous quarter's ₹721 crores. Management indicated that the order book is carefully managed to align with the company's deliverable capacity, which has been enhanced through de-bottlenecking and brownfield CAPEX initiatives.
Strategic Growth Initiatives and Capacity Expansion
The company is actively pursuing growth opportunities in power distribution, smart metering, and renewable energy sectors. A significant milestone was achieved with the receipt of AERB approval for its new E-Beam facility. This facility is on track for commissioning by the end of FY26, which will enable the company to expand into new product lines, such as DC cables for solar applications, further diversifying its offerings.
Product Mix and Margin Management
For the nine months, HV cables constituted 60% of product-wise contribution, LV cables 33%, and conductors 7%. Management clarified that quarterly fluctuations in gross margins are primarily driven by the sales mix of high-margin versus low-margin orders executed, rather than raw material price volatility. The company's B2B model ensures 100% pass-through of raw material price variations, maintaining a long-term gross margin of 20% and operating margin of 10-11%.
Solar Cable Business and US Export Challenges
The solar cable business is a key growth area, contributing over 15% to current sales and 16-17% to the order book. Dynamic Cables aims to double this segment's business within the next three to four years. However, the company's plans for US exports have been hampered by unfavorable tariff announcements, leading to delays in market entry despite obtaining necessary UL standard approvals.
Volume Growth Dynamics and Capacity Utilization
While nine-month volume growth stood at 17%, Q3 experienced a lower year-on-year volume growth of 2-3%. Management attributed this to the complex nature of volume measurement in the customized cable industry, where metal content is only 60-70% of total cost, and product mix variations. Capacity utilization remained stable at 75-80%, with an optimal range of 80-85% depending on specific cable specifications and seasonal demand.