Detailed Narrative
Q1 FY27 Performance Overview
Paramount Communications Limited reported a strong start to FY27, with revenue from operations growing 17.4% YoY to INR 529.4 crores, despite a 7.7% QoQ decline which management attributed to seasonal trends. Operating profit, excluding other income, saw a significant 129.2% YoY increase to INR 34.7 crores, with the operating margin expanding by 320 basis points YoY and 136 basis points QoQ to 6.6%. PAT for the quarter stood at INR 19.7 crores, up 3.7% YoY but down 4% QoQ, with an EPS of INR 0.64.
Domestic and Export Business Momentum
The company experienced broad-based growth, with domestic business contributing over 70% of revenue (INR 374 crores), led by the power cable segment (57.2% of Q1 revenues). B2B industrial business grew 92% YoY to INR 296 crores, and B2C retail/distribution grew 15% to INR 44 crores. Exports saw a strong recovery, surging 77% QoQ to INR 155 crores and contributing over 29% of total revenue, primarily driven by the normalization of the US market after the resolution of IEEPA tariffs. Management expects US exports to reach INR 700-800 crores for the full year.
Narmadapuram Greenfield Project Update
Progress on the Narmadapuram greenfield project is on track, with critical plant and machinery ordered and civil construction commenced. The company has spent over INR 30 crores on the project to date, with INR 65 crores earmarked from the recent equity raise. Operations are expected to partly commence in Q1 FY28, targeting approximately INR 500 crores in revenue for FY28, scaling up to INR 1,200 crores by FY29 at 75% capacity utilization. The project will be funded through equity, internal accruals, and modest debt, with a target debt-equity ratio below 0.3x.
Margin Improvement and Working Capital Efficiency
Management expressed confidence in achieving FY25 margin levels by Q4 FY27, citing the normalization of US exports and a favorable domestic product mix as key drivers for the 300+ basis points improvement. The working capital cycle improved to 96 days in Q1 FY27 from 101 days in Q4 FY26, with receivable days improving to 64 days from 79 days. The company aims to maintain its working capital cycle within the 90-100 day range. The recent equity raise of INR 122 crores has also provided a significant liquidity buffer.
Product Development and Market Expansion
Paramount is expanding its product offerings, particularly in the US market, with new solar cables (higher than 600 volts) and data center products. For EHV cables, approvals for 132 KV are expected within approximately one year of manufacturing commencement, and the company is exploring 220 KV and 400 KV. E-Beam cables, part of the Phase 1 capex, are identified as a new, higher-margin accretive product, with major certifications targeted by the end of FY29 for niche applications like defense and railways.
Order Book Strategy and Risk Management
The order book stood at INR 615 crores as of June 30, 2026, with INR 518 crores from domestic orders and INR 97 crores from exports. Power cable orders accounted for 74% of the total, growing 27% YoY. Management maintains a strategy of not accepting firm-price orders beyond three to four months and booking metal immediately to mitigate raw material price volatility. This cautious approach to the order book, post-tariff disruption🌐s, allows for flexibility and better margin management.