1. At a Glance
Universal Cables Ltd just dropped its Q3 FY26 numbers, and at first glance, it looks like a solid Diwali bonus came early. Quarterly revenue jumped 26.4% YoY to ₹768 crore, PAT surged 71.8% YoY to ₹27.2 crore, and the stock trades around ₹758, giving it a market cap of ~₹2,630 crore.
Sounds exciting? Hold that thought.
Despite the strong quarterly bounce, ROCE is still a sleepy 8.58%, ROE barely crawls at ~5%, and debt sits at a chunky ₹1,014 crore. This is a company that builds cables up to 400–500 kV, but shareholder returns are still stuck at household voltage.
Over the last 3 months, the stock is up ~6.9%, 6 months ~3.25%, and 1 year ~20% — decent, but hardly Polycab-level fireworks. Valuation-wise, P/E of ~16.7x looks reasonable, but reasonable only works if returns eventually wake up.
So the big question:
Is Universal Cables finally warming up… or just enjoying a one-quarter heater effect?
2. Introduction – Old Group, Old Business, Old Problems?
Universal Cables is not some startup discovered by Telegram gurus last Tuesday. This is a M.P. Birla Group company — pedigree, legacy, and all the boardroom seriousness you’d expect.
The business is simple to explain but hard to master:
- Manufacture LV, MV, HV, and EHV power cables
- Make LT & HT capacitors
- Execute EPC projects for underground power transmission
On paper, this should be a dream setup. India is adding transmission lines like Instagram reels. Renewable energy, grid upgrades, metro rail, underground cabling — cables should be printing money.
Yet Universal Cables has spent most of the last decade delivering single-digit ROE, mediocre margins, and a balance sheet that keeps getting heavier.
Q3 FY26 looks
better. Much better.
But one good quarter doesn’t erase ten years of underwhelming capital efficiency.
So… is this a genuine turnaround or just a good patch of copper pricing?
3. Business Model – WTF Do They Even Do?
Let’s break it down without pretending this is rocket science.
Cable Division (The Real Boss – ~92% Revenue)
- LV, MV, HV & EHV XLPE cables up to 500 kV
- PVC, rubber insulated cables
- Control & instrumentation cables
These go into:
- Power transmission
- Renewables
- Infrastructure
- Utilities
- Heavy industry
Basically, if electricity moves, Universal wants to be in between.
Capacitor Division (The Forgotten Middle Child)
- LT & HT capacitors up to 132 kV
- Fixed shunt & automatic switched capacitors
- Originally built with Toshiba collaboration
Important but not exciting. Steady, niche, low glamour.
EPC Division (Execution = Stress)
- Underground power transmission
- Design → supply → laying → installation → commissioning
EPC improves revenue visibility but kills margins if execution slips even slightly. One bad project and the entire quarter needs therapy.
Brand
Everything is sold under “UNISTAR” — strong recall in utilities, zero recall on Instagram.
Question:
If cables are in such demand, why is ROCE still under 9% after all these years?
