Synopsis
A recent report indicates the Indian cables and wires industry is projected to achieve a revenue growth of 15-16% in fiscal year 2026, following a 16% rise in FY25. Factors include increased investments and a global shift towards alternative suppliers.Key Takeaways
- Projected revenue growth of **15-16%** in FY26.
- **16%** increase anticipated in FY25.
- Exports expected to rise **20-22%**.
- Industry's capacity utilization at **80-85%**.
- Stable operating margin of **10-11%**.
- **Return on Capital Employed (RoCE)** above **20%**.
Mumbai, March 26 (NationPress) The cables and wires sector in India is poised for strong growth, anticipating a revenue boost of 15-16 percent in fiscal 2026, according to a recent report released on Wednesday.
The Crisil report indicates that this follows an estimated 16 percent growth in fiscal 2025, fueled by heightened investments in power generation, transmission, railways, and real estate.
This industry is also reaping the benefits of the global transition towards the China+1 strategy, with Western nations seeking alternative suppliers.
The China+1 strategy entails companies diversifying their manufacturing and supply chains beyond China to decrease dependence and minimize risks.
India is among the primary nations projected to gain from this strategy.
The report notes that organized players, who represent nearly two-thirds of the sector's total demand, are forecasted to witness domestic revenue growth of 15 percent.
Exports are predicted to surge at an even faster rate of 20-22 percent, as countries such as the United States and those in Europe favor Indian manufacturers over their Chinese counterparts due to superior product quality and broader offerings.
With demand remaining robust, the industry's capacity utilization has reached 80-85 percent in fiscal 2024.
This has resulted in a significant 70 percent increase in capital expenditure (capex) in fiscal 2025, a trend expected to persist into fiscal 2026.
Despite the uptick in investments, the financial health of organized players remains solid, with a stable operating margin ranging from 10-11 percent.
A critical factor contributing to the sector's robust performance is its capability to manage fluctuations in raw material prices.
Since raw materials such as copper and aluminum constitute about 70 percent of total sales, the industry has adeptly passed on cost increases to consumers, ensuring consistent profitability.
Moreover, the sector operates with a low fixed cost structure, which further safeguards its margins.
Crisil's analysis reveals that the financial stability of the industry will continue to be strong, with debt-to-EBITDA and interest coverage ratios expected to stabilize at 0.7-0.8 times and 15-16 times, respectively, during fiscals 2025-2026.
Additionally, the Return on Capital Employed (RoCE) is anticipated to remain above 20 percent, making the sector appealing to new investors, including those from related industries.
