Summary
Dynamic Cables Limited - Q3 FY26 Earnings Call Summary Tuesday, January 27, 2026 4:00 PM
Event Participants
Executives 3 Ashish Mangal (Managing Director), Govind Saboo (Investor Relations Advisor), Murari Lal Poddar (CFO)
Analysts 7 Ankur Kumar, Aryan, Balasubramanian, Kushal, Mehul, Namish Gupta, Nitin Jain, Raman K V
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (9M FY26) | ₹844.04 crores | +21% YoY; Highest ever nine-month revenue driven by institutional B2B demand. |
| EBITDA (9M FY26) | ₹92.00 crores | +29% YoY; Reflects improved operating leverage and better product mix. |
| PAT (9M FY26) | ₹60.00 crores | +46% YoY; Driven by efficient execution and prudent financial management. |
| EBITDA Margin (9M) | 10.9% | +70 bps YoY; Management maintains a long-term sustainable range of 10%-11%. |
| Volume Growth (9M) | 17% | Robust growth over nine months; however, Q3 volume growth was lower at 2-3% due to product mix. |
| Gross Margin | ~20% | Management describes the business construct as “80-10-10” (80% material, 10% overheads, 10% EBITDA). |
| Order Book | ₹787 crores | +10% QoQ; Provides strong revenue visibility and reflects post-monsoon order wins. |
Geographic & Segment Commentary
- Domestic Sales: Accounting for 90% of revenue, the mix has shifted significantly toward private/institutional clients (78%) while government direct sales have reduced to 13%. Focus remains on power distribution, smart metering, and renewable energy.
- Exports: Currently 9% of sales; entry into the US market is delayed due to unfavorable tariff announcements, despite securing UL certifications and conducting sales roadshows.
- Solar Segment: A major growth engine now contributing 15-20% of sales (up from 10-15% last year); management sees a ₹5,000 crore market opportunity with plans to double this business in 3-4 years.
- Product Mix: 9M FY26 revenue split was 60% High Voltage (HV) cables, 33% Low Voltage (LV) cables, and 7% conductors. HV cables drove the margin improvement in Q3.
Company-Specific & Strategic Commentary
- Capacity Expansion: Greenfield project for a new E-Beam facility is on track for commissioning by end of FY26; the ₹40-45 crore CAPEX is expected to generate ₹250+ crore in incremental annual revenue.
- New Product Development: Secured PGCIL approval for AL59 conductors and received AERB approval for the E-Beam facility; actively developing DC cables for solar and specialized cables for data centers.
- Operational Efficiency: Real-time price variation clauses (PVC) ensure 100% pass-through of raw material fluctuations (mostly aluminum) to B2B customers, protecting absolute margins.
- Strategic Pivot: Deliberately reduced focus on Railway signaling cables due to unfavorable competitive intensity and lower margins compared to the distribution and renewable sectors.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 18% - 20% CAGR | Long-term historical compounding target based on industry tailwinds and capacity additions. |
| EBITDA Margin | 10.0% - 11.0% | Sustainable range for B2B institutional business; fluctuations depend on quarterly product mix. |
| Capacity Utilization | 80% - 85% | Considered the “optimum” peak level given the highly customized nature of cable manufacturing. |
| Revenue Visibility | FY27 Acceleration | New Greenfield capacity (₹250cr potential) will be available from the start of FY27. |
Risks & Constraints
| Risk | Context |
|---|---|
| Export Barriers | High tariffs in the US have stalled entry into a key target market; management is waiting for geopolitical/trade resolution before scaling. |
| Concentration Risk | High reliance on the institutional/B2B segment (90% domestic) makes the company sensitive to private sector CAPEX cycles and EPC execution timelines. |
| Seasonality | Q4 typically accounts for a disproportionate share of revenue and dispatches, particularly for government-linked infrastructure projects. |
Q&A Highlights
Growth & Volume
- Question: Why was Q3 volume growth so low (2-3%) compared to competitors? (Piyush)
- Answer: Volume is measured by metal weight; Q3 had a lower proportion of conductors (4.5% vs 9% YoY), which are metal-heavy but lower margin. Also, B2B institutional business doesn’t see the “channel stuffing” found in retail-heavy competitors (Ashish Mangal).
Margins & Product Mix
- Question: What drove the gross margin improvement this year? (Namish Gupta)
- Answer: It is largely a function of executing high-margin HV orders. The core business construct remains an “80-10-10” model where 80% is material cost (Ashish Mangal).
Solar & New Tech
- Question: Will the new E-Beam facility help in the solar segment? (Balasubramanian)
- Answer: Yes, the facility allows us to produce DC cables. Currently, we only supply AC cables; adding DC cables increases our “wallet share” per solar project (Ashish Mangal).
US Exports
- Question: Will a partial reduction in US tariffs make exports viable? (Nitin Jain)
- Answer: It would be encouraging, but we must also compete with other countries’ negotiated tariffs. We are keeping our UL approvals ready to move quickly if the situation improves (Ashish Mangal).
Key Takeaway
Dynamic Cables delivered a steady Q3 FY26, characterized by its highest-ever nine-month revenue of ₹844 crores and a 46% surge in PAT. While quarterly volume growth appeared soft at 2-3% due to a shift away from low-margin conductors, the underlying 9M volume growth remains robust at 17%. The company is successfully transitioning into a private-sector-focused player, with 78% of sales now coming from private/institutional clients, particularly in the solar segment which now contributes ~20% of the top line. Looking ahead, the commissioning of the ₹45 crore Greenfield E-Beam facility by March 2026 is expected to unlock ₹250 crores in incremental revenue capacity and enable entry into the DC cable market. Despite headwinds in US exports due to tariffs, management remains confident in maintaining a long-term growth trajectory of 18-20% while sustaining EBITDA margins in the 10-11% range.
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