Cords Cable FY26: Profit Grows 41%, Margins Erode

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1. At a Glance

Cords Cable closed FY26 with ₹954 Cr revenue—a 20% jump on the prior year. The net profit surged 41% to ₹20.6 Cr, yet the earnings margin compressed from 1.85% to 2.16%. The engine runs faster; the efficiency sputters.

A ₹260 Cr order book sits in hand. Capacity utilisation inched above 50%. The company holds ₹77 Cr net debt against a ₹279 Cr market cap.

The central tension: growth in scale has clashed with pricing power. Management traded margin for volume. The question surfaces now—does profit acceleration outrun the capital consumed?

2. Introduction

Cords Cable Industries, registered in 1991, manufactures power cables (to 3.3 kV), control cables, and instrumentation cables from two Rajasthan-based facilities. The founder-promoter, Naveen Sawhney, has spent five decades in the cable sector and retains a 52.4% stake.

The company supplies Larsen & Toubro, Indian Oil, hydrocarbon refineries, metro rail projects, and solar farms. Top 10 customers accounted for 51% of FY25 sales.

In May 2026, the Board approved audited FY26 results and recommended a ₹1.20 per share final dividend. GST demands totalling several crores landed in the past year—company disputes them and appeals.

The credit rating agency CARE reaffirmed a BBB (Stable) rating on long-term facilities in October 2025, citing “growing scale of operations” offset by “working capital intensity” and “moderate profitability margins.”

3. Business Model: WTF Do They Even Do?

Cable manufacturing is an input-cost game. Raw materials—copper, aluminium, steel, polymers—comprise 90% of the cost of goods sold. Prices for these gyrate on geopolitical winds and supply-chain shocks. The firm has little pricing power over captive PSU and large multinational clients.

The portfolio splits into three segments: power cables (46% of FY25 revenue), instrumentation cables (33%), and control cables (21%). Power cables carry lower margins; instrumentation cables are stickier and more profitable.

The company ships domestically (97% of FY25 sales) and abroad to the Middle East, Australia, and Europe. It secured a BIS licence for 1.9/3.3 kV power cables in FY25, enabling plays in solar and renewable energy.

But the distribution is concentrated. Top 10 customers represent half of sales. A handful of tier-1 infrastructure and energy players dictate order rhythm and price. Margins bend to keep these customers locked.

Capacity: ~65,000 km per year across both units. FY26 utilisation hovered at 50%—the runway exists to double output without fresh capex.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Q4FY26 snapshot: Sales touched ₹267 Cr (up 14.4% YoY). Net profit swelled to ₹8.28 Cr, a 84% jump on the prior year Q4. The acceleration is visible—but lumpy. Q3FY26 profit sat at ₹3.58 Cr.

EBITDA margin: 6.63% in FY26 (FY25: 6.68%). Essentially flat. The company’s finance costs—₹25.8 Cr of annual interest—erode the operating beat. Interest coverage stands at 1.96x (FY25: 1.69x). This is tight.

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market pays 13.5x earnings here versus a peer median of 27.1x—a 50% discount. Cords’ own 5-year average P/E sits at 14.2x, suggesting the current multiple sits near the company’s own norms.

EV/EBITDA at 5.6x lies below the peer band of 9.2x. The gap reflects investor caution on working capital intensity (the company stretches its cash cycle to 77 days, tying capital) and the cyclical cable sector where margin compression strikes fast.

ROCE at 17.7% exceeds the historical average (15.1%) but trails the peer median (20.7%). The return per rupee of capital is modest. ROE at 10.7% lags both history and peers, signalling that equity is underproductive.

The market appears to price in a margin-constrained, capital-intensive cable firm with proven execution but limited pricing moats. No speculation on re-rating is embedded.

6. What’s Cooking

Order book expansion: ₹260 Cr in hand as of June 2025—roughly 2.7 months of FY26 revenue. The book expanded from ₹179 Cr (end FY25), signalling demand momentum from solar, renewable energy, oil refineries, and metro rail segments.

BIS & NABL approvals: The company locked BIS certification for 1.9/3.3 kV power cables and NABL lab accreditation, unlocking entry into high-margin solar and state-sector hydro projects.

GST disputes: Multiple CGST orders hit between November 2025 and June 2026, totalling demands