1. At a Glance
This is a company that makes cables—but what really shocks the market is not the voltage, it’s the valuation gap. With investment holdings worth more than its market cap and cash flows that fluctuate like a Delhi summer, Vindhya is either an undervalued gem or a balance-sheet masquerade.
2. Introduction with Hook
Imagine owning a warehouse full of gold bars but renting out your apartment to survive. That’s Vindhya Telelinks for you—a company with over ₹3,950 Cr in investments while its market cap sulks at ₹2,047 Cr.
- Stock trades at just 0.5x its book value.
- ROE? Meh… at 5.03%, it’s the corporate equivalent of doing just enough to not get fired.
And yet, this is a potential holding company in disguise, not just a cable manufacturer. Let’s dive deep into this EPC + Cables + Investment buffet.
3. Business Model (WTF Do They Even Do?)
Vindhya Telelinks operates in two major segments:
- Cables: Fiber optic, jelly-filled, FRP rods, etc.
- EPC: Power infra, telecom infra, broadband rollouts.
But the real kicker? Vindhya holds juicy investments in group companies—like Universal Cables, Birla Cable, and Hindustan Gum. One might argue the operating business is a glorified smoke screen for an investment holding structure.
4. Financials Overview
| FY | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) | EPS (₹) | ROCE (%) | ROE (%) |
|---|---|---|---|---|---|---|
| FY21 | 1,502 | 209 | 270 | 227.90 | 12% | 9% |
| FY22 | 1,324 | 160 | 193 | 163.09 | 8% | 6% |
| FY23 | 2,900 | 281 | 185 | 156.37 | 8% | 5% |
| FY24 | 4,087 | 295 | 283 | 238.54 | 11% | 7% |
| FY25 | 4,054 | 259 | 203 | 171.16 | 8% | 5% |
Observation:
- Revenue doubled in 2 years—but margins dropped like 2008 real estate.
- Other income (₹136 Cr in FY25) continues to hold up profitability like a car jack under a rusted sedan.
5. Valuation
Current Price: ₹1,722
Book Value: ₹3,448
Market Cap: ₹2,047 Cr
Investments: ₹3,953 Cr
Let’s break it down:
- Holdco NAV Method: Investments worth ~₹3,953 Cr → applying a 30% holdco discount = ₹2,767 Cr
- Operating Biz Multiple: Avg PAT (ex-other income) ~₹100 Cr x 10 P/E = ₹1,000 Cr
- Fair Value Range: ₹3,500 Cr to ₹3,800 Cr (implied stock price: ₹2,900 – ₹3,150)
Upside potential: ~70% from CMP, if Mr. Market stops being so pessimistic and the company doesn’t sit on its treasure chest like a corporate Smaug.
6. What’s Cooking – News, Triggers, Drama
- CARE Ratings: A+ Negative outlook (Jul 2025) due to “liquidity pressures”—translation: “we see your cash flow, and we are not impressed.”
- Postal Ballot: Approval for MD reappointment and remuneration—just FYI, the CEO is probably making more than the company’s ROE.
- Q1 FY26 Coming Soon: Trading window closed; results incoming.
Triggers to watch:
- Monetization of investments
- Debt reduction
- Any attempt to unlock holding value (split? listing of investment arm? Special dividend?)
7. Balance Sheet
| Particulars (₹ Cr) | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Reserves | 2,869 | 3,225 | 3,400 | 3,961 | 4,074 |
| Borrowings | 733 | 571 | 668 | 493 | 1,168 |
| Investments | 2,645 | 3,013 | 3,060 | 3,618 | 3,650 |
| Net Worth | 2,881 | 3,237 | 3,412 | 3,973 | 4,086 |
Key Takeaways:
- Strong reserves, rising investments.
- Borrowing spike in FY25 might indicate EPC working capital stress.
- They’re rich… just not liquid.
8. Cash Flow – Sab Number Game Hai
| Particulars (₹ Cr) | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| CFO | 247 | 183 | 34 | 441 | -590 |
| CFI | 3 | 38 | -30 | -41 | 6 |
| CFF | -249 | -223 | 28 | -284 | 528 |
| Net Cash | 0 | -1 | 32 | 116 | -57 |
Red Flags:
- FY25 CFO at -₹590 Cr is alarming. What’s going on in EPC working capital land?
- Massive positive CFF (₹528 Cr) = debt-funded something. Someone check their cheque book.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE (%) | 5% | 7% | 5% |
| ROCE (%) | 8% | 11% | 8% |
| OPM (%) | 10% | 7% | 6% |
| Debtor Days | 129 | 83 | 153 |
| Inventory Days | 907 | 2000 | 137 |
| Cash Conv. Cycle | 196 | 763 | 162 |
Analysis:
- ROCE & ROE remain below cost of capital.
- Working capital cycle is unstable—EPC biz causing erratic swings.
- Margin compression is a trend now, not an exception.
10. P&L Breakdown – Show Me the Money
| Year | Sales | EBITDA | OI | Interest | Depreciation | PAT |
|---|---|---|---|---|---|---|
| FY23 | 2,900 | 281 | 57 | 73 | 18 | 185 |
| FY24 | 4,087 | 295 | 194 | 88 | 24 | 283 |
| FY25 | 4,054 | 259 | 136 | 102 | 23 | 203 |
Callout: Without that other income cushion, EPS would’ve needed crutches.
11. Peer Comparison
| Company | CMP | P/E | ROE (%) | Debt/Equity | CMP/BV | OPM (%) |
|---|---|---|---|---|---|---|
| Vindhya Telelink | 1,722 | 10.1 | 5.03 | Moderate | 0.50 | 6% |
| Indus Towers | 405 | 10.9 | 33.4 | Low | 3.36 | 69% |
| HFCL | 83 | 69.5 | 4.3 | Low | 2.95 | 11% |
| Bondada Engg. | 447 | 44 | 36.8 | Medium | 11.0 | 11% |
Vindhya’s valuation is super cheap. But so is the growth outlook. It’s the classic “cheap for a reason” case… or is it?
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 43.55% (unchanged forever)
- Public: 46.76% – includes retail hoping for value unlocking
- FII + DII: ~10% combined
- No. of Shareholders: 23,812 (up from 13k in 2022 = retail interest rising)
13. EduInvesting Verdict™
Vindhya Telelinks is like that friend with ₹1 crore in FD but borrowing ₹10k from you to order biryani. The fundamentals are alright, but the value lies in the investments, not in the cables or EPC business. Operating metrics are mid-tier, but if the company decides to unlock value from its investment pile, the rerating could be significant.
Until then, it remains a “value trap with vibes”—but one that’s quietly compounding under the radar.
Metadata
– Written by EduInvesting Research | 17 July 2025
– Tags: Vindhya Telelinks, Cable Stocks, Investment Holding, EPC, Value Unlocking, BSE Smallcap, Hidden Value Stocks
