KSHINTL

KSH International demonstrated strong financial performance in Q3 FY26, with revenue surging 59% YoY to INR 818 crores, contributing to a 47% YoY growth for the nine-month period to INR 2,089 crores. Volume sold in Q3 FY26 reached approximately 7,400 metric tons, marking a significant 24% YoY increase and the highest volume growth in many years. This robust performance was primarily driven by sustained demand from the T&D sector, with specialized winding wires, including their core CTC product, accounting for about 75% of total revenue and growing 61% YoY in Q3.

The company successfully completed Phase 1 of its Supa facility expansion by the end of September 2025, adding 12,000 metric tons of capacity and bringing the total installed capacity to 43,445 metric tons as of December 31, 2025. However, the rapid introduction of this new capacity led to short-term cost increases in Q3 FY26, including INR 1.6 crores for Labour Codes implementation, INR 2.7 crores in interest related to the Supa loan, and INR 3.8 crores in additional depreciation. These upfront costs contributed to a 9% YoY decline in Q3 PAT to INR 23 crores, and consolidated capacity utilization temporarily decreased to 68% from over 90% in the prior quarter as the new facility ramps up.

Despite the Q3 PAT decline, KSH International maintained a strong EBITDA per ton of approximately INR 66,000 for 9M FY26, a 32% increase from INR 50,000 in 9M FY25, which management considers sustainable. They reiterated that copper prices are a direct pass-through, insulating their unit economics from price volatility, although sharp increases can impact reported margins. Management expects absolute EBITDA to grow as volumes increase and operating leverage improves, balancing the initial fixed costs of new capacity with the higher profitability of specialized products.

The company significantly improved its capital structure by repaying INR 225.9 crores of long-term and short-term debt in late December 2025, utilizing proceeds from its IPO. This strategic move reduced the debt-to-equity ratio to a healthy 0.42x from approximately 1.35x in Q2 FY26. The repayment of the term loan for the Supa Phase 1 expansion will result in a saving of INR 2.7 crores in interest costs for Q4 FY26, although overall working capital interest may still be higher due to increased volumes and utilization.

KSH International continues to strategically focus on high-value-added segments such as T&D, EV motors, and exports. Export revenue demonstrated robust growth of 37% YoY in Q3 FY26, accelerating from 22% in Q2 FY26, and now accounts for approximately 27% of total revenues. The company is the sole Indian manufacturer supplying CTC for HVDC projects in India and has begun supplying specialized winding wires for 37 HVDC transformer orders, positioning itself in the highest value-added product segment with significant future growth potential.

Working capital days stood at 75-80 days in Q3 FY26, and management is actively implementing strategies to reduce this, including increasing payable days by purchasing copper on credit. The company has provided a full-year FY26 volume guidance of 28,000-29,000 metric tons and aims to achieve 80-85% capacity utilization for its 43,400 metric tons capacity over the next 2-3 years. Management expressed confidence in the strong demand environment and their expanded capacity, viewing Q3 as an inflection point for executing their long-term growth strategy.