Vilas Transcore

Vilas Transcore achieved a robust 64% year-on-year volume growth in FY26, significantly outpacing its 30% revenue growth. This disparity was primarily attributed to a sharp 15-20% correction in CRGO steel prices during the year. Profitability was temporarily impacted, with EBITDA margins declining by 1.5% to 11.17% (from 12.68% in the prior year) and PAT margins falling by 1% to 8.6% (from 9.8%). This margin compression was due to initial operating and establishment costs associated with the ramp-up of the new Unit 3 facility and pricing pressures across the industry.

A major milestone in FY26 was the successful ramp-up of Unit 3, which tripled CRGO lamination capacity from 12,000 metric tons per annum (MTPA) to 36,000 MTPA. Alongside this, the company diversified its product portfolio by adding nanocrystalline cores with an installed capacity of 240 MTPA and transformer radiators with a capacity of 7,200 MTPA, with commercial sales recently commencing. These expansions are aimed at catering to the rising demand in the power and energy sector and strengthening the company's position as an integrated transformer value chain partner.

To further capitalize on market opportunities, Vilas Transcore is entering the copper conductor segment with a Phase 1 installed capacity of 1,500-1,800 MTPA. This project has an estimated cost of INR 25-30 crores. Specialized machinery has been installed, and trial production is anticipated by the end of September 2026, with revenue contribution expected from H2 FY27 onwards. The company projects this segment to generate INR 110-120 crores in revenue for FY27, leveraging existing customer relationships despite an initial lack of distinct competitive advantage.

Vilas Transcore, along with its promoters, announced the incorporation of a new entity for manufacturing high-voltage bushings (12 KV to 400 KV). Vilas Transcore will initially hold a 25% equity stake in this venture. This strategic move marks an entry into a high-entry barrier and specialized segment. The initial phase will focus on R&D and product development, with an initial capex of INR 10 crores for developing OIP bushings up to 145 kV, with commercialization planned over the next year. The separate entity structure is intended to manage R&D risks and facilitate potential technical collaborations.

The CRGO market experienced significant volatility, with prices correcting by 15-20% from peak levels due to increased supply from Chinese mills. Management noted that while this improved product availability, it also intensified price competition. The company anticipates margins to improve in the coming year as CRGO prices stabilize, with a potential increase of INR 25-30 if anti-dumping duties are imposed. The long-term average CRGO price is expected to be in the range of INR 200-220, higher than the current INR 195/kg.

The company's future growth strategy is built on three pillars: capacity utilization, product portfolio expansion, and market reach. For FY27, Vilas Transcore targets 45-50% growth in CRGO lamination volume, leading to an overall revenue growth of 30-40%. EBITDA and PAT margins are expected to remain at 10-12% and 7-8% respectively. The company aims for a total revenue of INR 750-800 crores in FY27 at current CRGO prices, with a potential to reach INR 1,000 crores if CRGO prices increase significantly or with full operationalization of the CTC conductor plant.

With increasing turnover, the company expects its working capital cycle to extend to 95-100 days end-to-end, primarily due to its 60-day credit cycle. Despite this, Vilas Transcore emphasized its disciplined inventory management and strong operational control, which helped maintain stability. The company proudly stated that it remains net debt-free, reflecting a healthy and conservative balance sheet position even amidst significant expansion activities.