KSH International Q1 FY27 earnings call

KSH International Limited delivered robust financial results in Q1 FY27, with revenue from operations surging 108% year-over-year to INR1,164 crores. This growth was driven by a 113% YoY increase in specialized wire revenue and an 83% YoY rise in standard wire revenue. Profitability also saw significant improvement, with PAT growing 86% YoY to INR42.2 crores, and EBITDA reaching INR74.4 crores, up 84.6% YoY.

The company reported a strong EBITDA per metric ton of approximately INR93,000 in Q1 FY27, a substantial increase from INR66,000 a year ago and INR74,000 in Q4 FY26. This improvement was attributed to a record contribution from CTC products, higher export volumes, favorable value addition rates from new OEM customers, increased utilization, and a weaker rupee. Management expressed confidence in sustaining an EBITDA per ton of approximately INR75,000 for the full FY27.

KSH International's installed capacity remained at 43,445 metric tons in Q1 FY27, with consolidated utilization improving to 73.5% from 70% in Q4 FY26. The company is on track to reach approximately 59,000 metric tons by the end of FY27 with the completion of Phase 2 of the Supa expansion, of which 14,400 metric tons out of 30,000 metric tons have already been completed. A new 5,000 metric ton copper scrap recycling facility in Chakan was also commissioned, enhancing operational efficiency and sustainability.

A significant development in the quarter was the signing of a five-year supply framework agreement with Hitachi Energy Global for winding wires to their Indian and global plants. This agreement is expected to improve visibility for capacity utilization. The company noted strong demand from the T&D sector, with customers having 3-5 year order books, and is actively pursuing similar long-term agreements with other OEMs to secure future supply.

KSH International demonstrated continued improvement in working capital management, with average working capital days reducing to 60 days in Q1 FY27, down from 71 days a year ago and 65 days in Q4 FY26. This was driven by improvements in both payables (5-day reduction) and receivables (2-day reduction). The company aims to further optimize this to an industry standard of 30-35 net working capital days over the next few quarters.

The demand environment remains strong, particularly for specialized wires, with CTC contribution reaching record levels. Export revenue grew 76% YoY, contributing 27% to total revenue, with a long-term target to reach 40%. While some transformer OEM customers experienced short-term delays in order pick-up, management expects this to normalize. The company is also seeing strong demand from EV, AC compressors, and DG sets for data centers, supported by BIS implementation driving localization.

Beyond the current expansion, the board authorized evaluating the acquisition of an additional 10 acres of land in Supa MIDC for long-term growth. The remaining Phase 2 capex for FY27 is expected to be more than INR50 crores, funded primarily through IPO proceeds. The company's strategy focuses on growing volumes in ultra-precision, higher value-added products, expanding international presence, increasing wallet share with existing clients, and driving operating efficiencies.