Summary
KSH International Limited - Q2 FY 2026 Earnings Call Summary Tuesday, January 06, 2026 11:00 AM
Event Participants
Executives 4 Amod Joshi, Dhruv Chopra, Nakul Patil, Rajesh Hegde
Analysts 7 Archit Joshi, Ashutosh Chaubey, Bhavin Chheda, Kushal Kasliwal, Mahesh Bendre, Nidhi Shah, Nilesh Jain, Shrinarayan Ramkishor Mishra
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹712 crores | +50.7% YoY; Driven by strong volume growth in specialized winding wires. |
| Specialized Wires Revenue | 77% of total | +20% YoY volume growth; Higher mix of high-voltage T&D orders. |
| Export Revenue | 29.5% of total | +21.7% YoY; Servicing transformer manufacturers across 24 countries. |
| EBITDA | ₹46.1 crores | +74.2% YoY; Margin expanded by +90 bps to 6.5%. |
| EBITDA per Ton | ₹65,500/MT | +42.1% YoY (from ₹46,000/MT); Driven by higher CTC volumes and better fixed cost absorption. |
| Profit After Tax (PAT) | ₹29.6 crores | +128.9% YoY; PAT margin improved +140 bps to 4.1%. |
| Installed Capacity | 41,045 MT | Increased from 29,000 MT following Phase I Supa expansion in Oct 2025. |
| Working Capital | 75 Days | Higher than peers due to advance copper purchases; target to reduce through credit lines. |
Geographic & Segment Commentary
- Specialized Winding Wires: This segment represents 77% of revenue and is primarily driven by Continuously Transposed Conductors (CTC) for the Power T&D sector. Management noted a shift toward higher voltage (765 kV and HVDC) transformers, which offer 3x the EBITDA per ton compared to standard wires.
- Exports: Contributing ~30% of revenue, exports are exclusively focused on transformer OEMs globally. The company sees a “China Plus One” benefit in Europe and the US, where local specialized capacity is limited, effectively mitigating potential tariff risks.
- Standard Wires: Focused on high-volume applications like AC/refrigeration compressors and EV traction motors. While lower margin than specialized wires, they provide a diversified portfolio; management plans to bring more EV-specific machines online in FY27.
Company-Specific & Strategic Commentary
- Supa Expansion: Phase I (12,000 MT) is operational as of Q3 FY26; Phase II expansion targets a total capacity of 59,045 MT by FY27. The expansion includes targeted machines for CTC, standard, and EV wires to double total capacity from FY24 levels.
- HVDC Approval: KSH is the only Indian company approved for HVDC 400 kV transformers. Recent receipt of a BHEL order for 11 HVDC transformers validates its technical lead in the most profitable segment of the transformer market.
- EV Technology Licensing: Partnered with HPW for exclusive licensing of patented PEEK wires for 800V EV traction motors. This is a long-term strategic move to indigenize high-voltage EV components for programs expected to mature post-FY27.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Capacity | 59,045 MT by FY27 | Driven by ₹97 crore IPO-funded capex at Supa and Chakan plants. |
| Product Mix | 60% Specialized / 40% Standard | Long-term target mix to balance high margins with volume growth. |
| Utilization | 85% at peak | Standard industry ceiling; new plants typically take 2-3 years to reach this level. |
| EBITDA per Ton | Sustainable at current levels | Management aims to maintain ₹65,000/MT+ levels through high-kV utility mix and exports. |
Risks & Constraints
| Risk | Context |
|---|---|
| Working Capital Intensive | High reliance on advance payments for copper impacts cash flow; management is transitioning to credit lines to align with peers. |
| Backward Integration by Clients | Some major OEMs (e.g., Transformers & Rectifiers) are exploring in-house CTC manufacturing. Management believes technical complexity and utility approval hurdles protect KSH’s market share. |
| Raw Material Concentration | Reliance on a few domestic copper suppliers (Hindalco, Adani, Vedanta). While copper is a pass-through cost, any supply disruption in India would affect production volumes. |
Q&A Highlights
High-Voltage Opportunities
- Question: What is the significance of the BHEL HVDC order? (Mahesh Bendre)
- Answer: It validates KSH as the sole Indian supplier qualified for HVDC 400 kV; while initial volumes are small (11 transformers), it signals a shift toward the highest-margin segment (Rajesh Hegde).
Margin Drivers
- Question: Why is EBITDA per ton significantly higher than listed peers? (Kushal Kasliwal)
- Answer: Peer portfolios are often 75% standard wires; KSH is 77% specialized. Specialized products, especially for 765 kV, offer a 3:1 EBITDA ratio compared to standard products (Rajesh Hegde).
Working Capital Improvement
- Question: How will the company address higher working capital days vs peers? (Nishant Sharma)
- Answer: KSH historically paid 100% advance for copper. Using IPO strength and increased scale, the company is shifting to credit-based procurement to increase payable days and improve ROCE (Amod Joshi).
Export Tariffs
- Question: Do US tariffs pose a risk to export volumes? (Mahesh Bendre)
- Answer: US demand far exceeds local supply for specialized wires. Customers currently absorb the 10% duty and pass it to end-users as few non-Chinese alternatives exist (Rajesh Hegde).
Key Takeaway
KSH International delivered a record Q2 FY26, characterized by a 50.7% YoY revenue surge and a 74.2% jump in EBITDA, largely driven by its leadership in specialized CTC wires for the Power T&D sector. The company successfully expanded its capacity to 41,045 MT and is on track to reach ~59,000 MT by FY27. Strategic focus remains on high-value segments, evidenced by the 42% YoY increase in EBITDA per ton to ₹65,500, supported by a shift toward 765 kV/HVDC transformer components and high-margin exports. While working capital remains high due to legacy copper procurement practices, management is actively transitioning to credit-based sourcing to improve cash flows and ROCE. Looking ahead, KSH is well-positioned to capitalize on global grid modernization and the EV transition, with technical approvals and capacity expansions serving as significant competitive moats.
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