Ladies and gentlemen, good day and welcome to the Q4 and FY25 conference call of Bansal Wire Industries Limited. From the management, we have Mr. Pranav Bansal, MD and CEO, and Mr. Ghanshyam Gujrati, CFO, to take the discussion forward. We also have an investor relations team from Adfactors PR. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Darshan Mankad from Adfactors PR for opening remarks. Thank you, and over to you, sir.
Thank you, Rhea. Good morning, everyone. We welcome you to the fourth quarter and full financial year ended March 31, 2025, earnings call of Bansal Wire Industries Limited. Before we begin, please note that certain remarks made today may constitute forward-looking statements subject to inherent risk and uncertainties concerning our future financial and operational performance.
We thank you for your patience in the event of any technical disruptions, and we assure you we will endeavor to restore the connections we've made. I will now hand over the call to Mr. Pranav Bansal, MD and CEO, for his opening comments. Over to you, sir.
Thank you, Darshan. Good morning, everyone, and welcome to the earnings call for the fourth quarter and the full year ended March 31, 2025. I am delighted to connect with you all again to share and discuss our operational and financial performance for January to March quarter. The results, earnings release, and investor presentations are available on our website and stock exchanges.
We believe you've had a chance to go through it. I'm joined by Mr. Ghanshyam Gujrati , our CFO, who will take you through the financials in detail post my remarks. So the last year has been a landmark period for us, showcasing exceptional performance driven by strong demand across core sectors such as automotive, construction, and engineering. This year also marked the commencement of production in our specialty wire vertical, featuring high-value-added products like Bead Wire, Hose Wire, and Steel Tyre Cord.
With a robust market opportunity ahead, we now have a total installed capacity of five and a half lakh tons per annum. This strategic expansion positions us to capitalize on the growing demand while continuing to deliver superior quality solutions to our customers.
We are confident that this enhanced capability will further strengthen our market presence and unlock new growth opportunities, especially with an additional one lakh twenty thousand tons of capacity, which is scheduled to be commissioned by the end of second quarter of FY26.
Following the introduction of our new products, the company has achieved a 69% overall capacity utilization for the year. This includes the Dadri facility and remains on track to reach an even higher utilization by the end of this fiscal year, with our total production capacity set to reach 6.8 lakh tons.
We also improved our product mix, contributing to better margins and reinforcing our commitment to value-driven sustainable growth. As we begin the next year, we remain optimistic about our growth trajectory and are confident in continued progress of Bansal Wire Industries, as well as the broader advancement of our nation.
While challenges such as fluctuating raw material prices and geopolitical uncertainties persist, we see immense opportunity in both domestic and the international market. Our unwavering focus on operational excellence, quality, and sustainability continues to position us as a trusted partner in India's journey towards modernized infrastructure and global competitiveness. With that, I would like to now hand over the call to our CFO, Mr. Ghanshyam. Thank you.
Thank you, sir. Thank you, Pranav sir. Good morning, everyone. Now I shall share the summary of fourth quarter and full year financial performance with you. For quarter four, FY25, our revenue grew 33% year-on-year to INR 940 crores. EBITDA surged 59% YoY to INR 75 crore. And net profit for the quarter stood at 33 crores, up by 36% year-on-year basis.
For FY25, revenue stood at INR 3,507 crores, higher by 42%. EBITDA grew 86% to INR 278 crores, while net profit jumped 95% to INR 146 crores. I'm happy to report that EBITDA and net profit margin for the quarter four expanded by 130 basis points and 10 basis points on year-on-year terms. We will now open the floor for Q&A.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Pratik Singh from DAM Capital. Please go ahead.
Hey, hi Pranav. Congrats for a good set of numbers. Just the first question is largely on volume. So if you can guide us as to what kind of volumes we did in Q4 and full year of this year, and if you can also help us with the breakup for both these numbers in low carbon, high carbon, and stainless? That's the first question.
Yeah, hi. Good morning, Prateek. So for the full year, we did about 344,000 tons of volume, whereas in the fourth quarter, we did about 97,000-98,000 tons in total. As far as the segment-wise breakup is concerned, we do not disclose those numbers today, but we will try and fetch you some details later.
Sure. And any guidance on the next year volumes? How would we do?
So I think right now where we stand, the demand looks good. We have a good capacity installed and more coming our way. So I do not believe that there is any reason we should not be able to grow at about 20%-30% for the year in volumes.
And what kind of confidence do you have to maintain the kind of margins that we did this year? Because this year was a super year in terms of margins. Given that you are growing volumes, would we be able to maintain these margins going ahead?
So far, this year, there was a mix of two things that helped us grow our margins. One was a superior product mix, which happened because we did not have a lot of volume to sell in the lower EBITDA margin business, which for the year 2025, 2026, we would have a good quantity in even the lower EBITDA business.
So our product portfolio or our product mix will be changing in 2026. Therefore, if we grow at, let's say, 20% or 30% in volumes, we are not expecting to grow at the same pace in EBITDA as well. Therefore, our margins might reduce or normalize this year.
Understood. And just last question before I join back with you. If you can just elaborate on the status about hose wire and steel cords where we are, and also on this 1.8 lakh- ton steel plant that we are doing in Gujarat.
Sure, sir. Steel Cord samples have already reached some of our customers, and till now, everything looks positive. I think we remain on track to start our production very soon. As far as Hose Wire is concerned, Hose Wire has been doing good. We are seeing very good and positive reactions from our customers. We are waiting for a couple of more approvals, which will come shortly in the next one to one and a half months, wherein we should be able to then ramp up our capacities very quickly. As of now, we are operating at 20%-25% capacity utilization.
Thanks, Pranav, and all the best.
Thank you. Next question is from the line of Vinit from Investec . Please go ahead.
Hi, hi Pranav. Good morning. Pranav, a couple of questions. One is considering that we've already done almost one lakh tons in this quarter and given you a guidance for 25%-30% volume growth for the next full year. Even if we annualize this one lakh ton run rate, we should be able to achieve broadly a guidance. So don't you think this guidance is slightly on the conservative side?
So, sir, we believe to be a little conservative whenever committing you a number. It'll be better if I am able to achieve a higher number than I commit. So, my guidance would remain the same, 20%-30%. Of course, there are opportunities wherein we should be able to grow at a higher pace, but I think 20%-30% is a good number and a safe number to consider.
Okay, okay. Pranav, second thing was on inventories, which has gone up this year. Any comment on that? What was the reason for it? Or is it the case where we have stocked up much more in anticipation of demand, or some of deliveries could not happen?
Sure, sir. So here, I think there are two or three different factors here. First, we have done a complete consolidation of all our group companies in the last year. Therefore, the inventories of all the companies are now in Bansal Wire. You will see a higher number therein.
Second, we are operating today out of six different locations because the two older entities have not completely stopped manufacturing. Although the sales have stopped from those entities, but the manufacturing is still there in the name of Bansal Wire. Therefore, we are having to keep inventories in six different locations. Over the course of this year, that should come back to a nominal level.
Understood, understood. Pranav, if you can throw some light on factoring, which we were thinking about for our receivables, what's the status there? Are we planning to start with it this year? How are you thinking about it?
So sir, our limits are already tied up. We've in fact started using some of it in the fourth quarter as well, but most of the limits are tied up for us to be using in the first and second quarter of this year. So that is all in place, due to which we will be able to see a better working capital cycle in the company. And this will start from the first quarter itself.
Understood, understood. And Pranav, lastly, before I move back to the queue, stainless steel rod, we've announced CapEx plans there. How will that happen? Is it a case that the whole facility, including the Wires and the Steel Rod manufacturing, will commence by September 27, or it will happen in a phased manner wherein some part of it will get commissioned earlier and some later?
Sir, we are expecting the wire facility to be commissioned maybe a quarter before the steel manufacturing. So in the third quarter is when we expect the commissioning of our backward integration. But in the second quarter, we should see some numbers from the wire facility. So stainless steel and low carbon will start before that.
Okay. And if I'm not wrong, this is Q2 or Q3 of FY28?
Yes, absolutely.
Understood, understood. Thanks, thanks, Pranav, for this. Thank you.
Thank you.
Thank you. Next question is from the line of Vidit Trivedi from Asian Market Securities. Please go ahead. We got disconnected from Mr. Trivedi. Next question is from the line of Mr. Akash from Dalal & Broacha. Please go ahead.
Yeah, thanks for the opportunity. And Pranav, sorry, I have some wait ahead of numbers. So firstly, sir, I would like to understand why have our gross margins dipped this quarter from around 23% last quarter to 21%?
Sir, that would be some fluctuation in raw material. But even that, I mean, not a big number for us.
Okay. Sir, what kind of utilizations we have achieved at Dadri currently? I mean, what scale are we operating at currently?
So sir, in the fourth quarter, we've done about 25%-30% more output as compared to the third quarter. And I think the last month, we closed at about 40% utilization in Dadri.
Okay. So we have achieved 40% utilization in the quarter?
Yes.
Great, and my second question was to understand from an industry standpoint, from the end user industry. I mean, I think this year we have seen great demand coming from infrastructure and general engineering, right? Apart from automotive, of course, so I mean, going forward, which industries do you feel will contribute more and more for us?
So sir, I think we are pretty much very diversified when it comes to end user industries. So therein, we are not really dependent on one specific industry for our growth. But I mean, just to give you a perspective, I think automotive, cable, infra, general engineering, these have always been the major contributors of our growth, and that will continue even this year.
Understood. Sir, we have started LRPC wire already, or will you start with the second?
We've commissioned the facility. We are right now waiting for some BIS approval to start selling to all our customers, which should be with us in the next 10-15 days.
Understood. I'll come back and get you.
Thank you. Next question is from the line of Shweta Dikshit from Systematix Group. Please go ahead.
Hello. Yes, hi. Good morning. Thank you for the opportunity. My question is regarding what is a steady-state capacity utilization to assume for the new capacity coming in? Because if I look at the run rates as of now, on a full year basis, the capacity utilization comes to around 63%.
But if I look annualized the fourth quarter number, we are already at 21% capacity utilization. So what is the level that we can look at to improve the existing capacity utilization? Also, once we commission the new 120,000 tons by the end of second quarter, how much utilization can be achieved within FY26 on that volume?
Sure, ma'am. So historically, we have been able to achieve 89%-90% kind of a capacity utilization. And I don't see any reason why we should not be able to do it even in the new facility, if not higher. And of course, we have another 1.2 lakh- tons, which is to be commissioned in the next two quarters, which will give us enough room to grow quarter- on- quarter. As I said, for the full year, we are expecting about 20%-30% kind of a volume growth if everything remains as it is. So I think the capacity is there for us to consume.
And any sense on what kind of a bigger margin we can expect going forward? Because on a per ton basis, we are currently at around INR 7,600. And for the full year, the average is around INR 8,000 per ton. So we have already seen a little bit of softness in EBITDA per ton this quarter. So is this the reduction we should estimate for FY26, or there can be a further reduction in our EBITDA per ton?
So ma'am, historically, our strategy has been that one year we play on higher volume, and the next year we try to maintain a growth rate with an increased EBITDA. So last year has been a year where we've been able to increase our EBITDA.
This year, we are looking at as a year where we might reduce our margin a bit, but increase our volume so that by FY27, we again come back to this kind of EBITDA with a higher base of volume. Therein, we would see some slight reduction in EBITDA for sure. If we are able to gain 20%-30% volume growth, I would believe that another 10% reduction in EBITDA would be possible.
From the 4Q exit that we saw, right?
Yes, yes.
Okay. Thank you so much.
Thank you. Next question is from the line of Mayank Bhandari from Asian Market Securities. Please go ahead.
Thanks for the opportunity. Sir, what would be your CapEx in FY26 and FY27?
Sir, we have announced one major CapEx. That is the backward integration, wherein we are putting up a 1.8 lakh- ton capacity to making our own wire rods and another 60,000 wire capacity. So for this, we are looking at about INR 600 crores of total investment. That's the main capex that we are looking at as of now. Apart from that, whenever as in when we get good orders in specialty wire, we would be also looking at expanding in a greenfield plant for specialty.
So this INR 600 crore is evenly split in 26- 27?
Yes, sir. 2026, 2027, we will see majority of this happening in 2026, and some of it will be in 2027.
So how are we going to fund this INR 600 crore if it's happening in 2026? Because our cash position is a little not helpful at this moment in terms of funding.
Sir, even on cash flows, we have actually been able to go towards cash flow positivity this year. The last quarter, we have seen only INR 20 crores of reduction in cash flows, wherein we started with about INR 100 crore reduction. And looking at the factoring and all these optimizational benefits in our working capital, we should be able to turn towards cash flow positivity within the first quarter of FY26.
With this being said, after our IPO, we've also reduced our debt significantly. Our total debt to equity ratio from 1.5 has come down to 0.5. So we can leverage our books with some kind of debt going forward. And we also have a lot of good cash flows that we are expecting in this year and the next year. Even if you look at the last year, we did about INR 270 to 80 crores of EBITDA.
And even with reduced margins, but we will be growing our volume by 20%-30%. So we are expecting a higher EBITDA this year and the year after that. Therefore, a mix of internal cash accruals and some amount of debt, we will be able to do this project.
About the export opportunities, what is the export contribution in this FY25 revenue?
Sir, I do not have those numbers with me. Maybe Ghanshyamji, can you comment on this?
Sorry? Yeah. Export is around INR 350 crores?
About 10% of our revenue.
Oh, yeah.
Okay, sir. Thank you.
Thank you. Next question is from the line of Hemant Soni, an individual investor. Please go ahead.
Sir, thank you for providing me the opportunity. But sir, sorry to say, but not very happy with the results because I was expecting a better number considering the ramp-up of the Dadri plant. So coming down to my questions, I have a couple of questions. First of all, the entire capacity of Dadri is available right now?
And the second question is, sir, we had earlier guided for 5 lakh- tons of sales volume in FY26 in a media interview. Now we are giving a lower guidance. And one more thing I wanted to ask is that 1.2 lakh- tons, the expansion is over and above the 5.5 currently?
Sure. So sir, right now we are at about 3 lakh- tons of capacity in Dadri. Another 0.5 lakh- tons is to be commissioned maybe within the next one month. And after that, we are also looking at an additional 60,000 tons of capacity, so about another 0.6- 0.7 lakh- tons of capacity to be commissioned by the second quarter. So Dadri from 3 lakh will go to about 4.2 lakhs in the next two quarters. That is one.
As far as the capacity or the sales guidance for the next year goes, we have already done a good growth this year. And the next year also does not seem, I mean, we see a good demand for the year after this as well. Therefore, our 20%-30% guidelines, although they might seem a little conservative, I think are good guidelines for the first year. But yes, there is definitely an opportunity for us to grow at a higher rate.
So sir, the current capacity as of now, including the Dadri, is 5.5 lakh-t on, correct?
Absolutely, sir.
And another 0.5 lakh- tons will be added in the next month, June, and then 1.2 lakh- tons?
Sir, 1.2 lakh- tons in total will be added in the next two quarters.
1.2 lakh- tons. So it will take the entire capacity to 6.7, right?
Absolutely, sir.
So the entire 5.5 is available right now, right?
Yes, sir.
Sir, what is the blended capacity utilization? Or 5.2?
The blended capacity utilization, I think for the full year, was about 69%.
No, I'm talking about the fourth quarter, sir.
Fourth quarter, I do not have the numbers now, but you can connect with Mr. Ghanshyam, and he will give you the details later.
So sir, are we expecting some sort of improved capacity utilization in quarter one?
Sir, we are definitely expecting some better numbers every quarter herein.
I want to.
The first quarter for our industry generally is a little slow because of labor shortages throughout the northern part, but I think from the second quarter is where you will see better ramp-up happening.
Even I was expecting better numbers in quarter four, actually, given the ramp-up of the Dadri plant, but a little disappointed because there was no Q-on-Q growth.
Actually, I will say that I had one more point that you might have seen that our working capital has been utilized, and the capitalization has already also been done during this quarter, and because of all these things, that our EBITDA is higher, but due to these two factors, that our profit has come down. I would love to add to the performance.
But no problem, sir. We'll try to deliver you better results in the coming quarters.
Okay, sir. Thank you.
Thank you. Next question is from the line of Yashvi from Molecules. Please go ahead.
Hello. Am I audible?
Yes, ma'am.
Yes, ma'am.
Morning, sir. My question is regarding the consolidation of the associate companies. So from what I understand, we have consolidated two companies, which are Bansal Steel and Power and BWI. But we still have two lease agreements with Bansal High Carbons Private Limited and Balaji Wires. So are we planning to consolidate these two entities as well, or what is the scenario there?
Ma'am, in the last year, we have actually consolidated all sales for these two entities also. Only the manufacturing still remains because Dadri is not fully available in terms of operational capacity. As in, when we are able to ramp up in Dadri, those capacities that we are operating in Balaji and Bansal High Carbon will shut down. This should happen within this year. But again, with that being said, all revenue and EBITDA is already part of Bansal Wire.
Okay. And my second question is, you are saying that the EBITDA margins next year shall dip due to the volume growth you're expecting, which is 20%-30% growth. But as we're adding the Specialty Wires, don't you expect a margin spike instead as we're also doing Bead Wires, Hose Wires, and Steel Cords, and IHT and OHD wires? So why are you expecting a margin dip, and how does the volume affect the margins?
So ma'am, so these products that we've added, for example, steel cord, hose wire, these are products which have a long-run approval process. Although that approval process has started, it will take us a year to see good ramp-up happening in steel cord specifically, which will increase our EBITDA.
Therefore, for FY26, we do not see a lot of benefit coming from Specialty Wire vertical. FY27, however, we should see some good numbers happening. Coupled with backward integration that will happen in the later part of 2027, I think our EBITDA should be coming back to normal in 2027.
Okay. So specialty shall show up in the numbers in FY27 and not the next year. Am I correct there?
Yes, absolutely.
Okay, and so you'll also add up the capacities for the Steel Cord once you are done with the sampling and getting the approvals, and then you'll look forward for CapEx in that segment. Is that correct?
Absolutely.
Okay. Thank you.
Thank you. Next question is from the line of Vidit Trivedi from Asian Market Securities. Please go ahead.
Hello. Hello.
Yes, sir.
Hi, sir. Morning. Most of the questions have been answered. Just wanted to check, have we gained any market share during the financial year?
Sir, although I do not have the right details with me, but just to give you a small understanding, as per our understanding of the industry, the industry grows at about 6%-7% every year, whereas we have grown at about 35% in revenue.
And we would have definitely outgrown the industry in volumes as well. So therefore, there would definitely be an increase in market share, which has been the case throughout. Even in the last 10 years, we've been growing at 20%-25%, whereas the industry grows at 6%-7%. So every year, we grab market share.
Got it, sir. And I'm sorry I dropped off the call. What's the capacity utilization in Dadri?
Capacity utilization by the end of the last month of this year was at 40%.
Got it, sir. Thank you.
Thank you. Next question is from the line of Jay Vaghasia from Patel Equities. Please go ahead.
Yeah. So hi, Pranavji. So just wanted to make sure. You see, we are doing an INR 600 crore expansion in Sanand. So how are we going to fund it? Because cash flows are negative. So have you achieved financial closure? Any details you could give on that?
Sir, as I previously mentioned, we are already going towards positive cash flows. And I think from the first quarter of next year, you will see our cash flows coming in from our operations activity. That will really help us in funding this capacity expansion in the next two years. And even at EBITDA front, we see some growth happening every year.
Therefore, at INR 270 crores-INR 280 crores of EBITDA that we did last year, we are expecting something better in 2026 and 2027. That coupled with a bit of debt, we should be able to manage this backward integration.
Right. But again, the problem is, Pranavji, this receivable days, so is it pretty standard, or are we on the higher side in receivable days as compared to industry? Your thoughts?
Sir, we have been at this kind of a level throughout many years and been able to grow at 20%-25%. But yes, definitely, this is something that we are improving on. And from the first quarter of 2026 itself, you will see some change happening. We will go towards positive cash flows and also better ROCE. Although we've closed this year at about 19%, our quarter four specific ROCE was 21%. So as we guided earlier as well, we want to remain at above 20% kind of a number in ROCE, and positive cash flows is what you will see the whole year.
and the last question is, once the Sanand comes online, would it help us in reducing our inventory? Because now, being a backward integrated, would it help us to any extent, or it is just for the security of our raw materials? How are you seeing?
Backward integration would help us in two different ways. First, it will help us in securing our raw material and in some areas, we are not able to grow because of raw material availability. So that will really help us. Second, it will help us in expanding our margin profile.
Dip in our margins this year, but by FY28, we will come back to the 25% margin numbers because of this backward integration. Inventories, it will not really reduce because any inventory that we carry in raw material, we will carry in wire rods, we will carry in the raw material for backward integration.
Got it. Got it. Okay. Thank you. Thank you, Pranavji.
Thank you. Next question is from the line of Prakhar Khajanchi from Anand Rathi. Please go ahead.
Hello. Hi, Pranavji. Thank you for the opportunity and congratulations on a good set of numbers. I have just one question. Could you please share the capacity breakup between stainless steel, low carbon, and high carbon?
Sir, we do not disclose segment-wise numbers or capacities. Overall, our capacity was at 5.6 lakh- tons. Majority of it, I could say, is low carbon, and then would be high carbon and stainless steel.
What kind of EBITDA patterns we can see for this year going ahead?
So, sir, the last year, we did about INR 8,000 of EBITDA. And the quarter four, we were at INR 7,600 a ton EBITDA, which should reduce slightly because of the product mix and grabbing higher market share this year.
Thank you.
Thank you. Next question is from the line of Dipesh from Invesco. Please go ahead.
Yeah. Hi, Pranavji. Thanks for taking my question. Sir, can you just highlight, because of consolidation, we are a little confused, but for volume growth as a group, what was the volume growth that you saw in FY25?
Sir, I think we did about 15% roughly volume growth. But for the exact numbers, we can get you right now.
Understood. No, this is fine. So 15% kind of a growth. Now, I just want you to understand, you're guiding down 25%-30% kind of volume growth, and you also say that industry is going at 6%-7%. So is there any much opportunity in India, given our market share, that we can grow at this rate consistently going forward? Or export will be a big part of the growth in the future?
So sir, historically, we have been able to manage a 20-25% growth. Although this happens wherein one year we try to increase our margins and maybe increase our volume by 10-15%. But the next year, we try to increase our volume by 20-30% while reducing our margins a little bit.
And the next year, again, we try to stabilize our margins. So therefore, even the last year has been a year where we've improved our margins significantly while only growing at 10-15% in volume. But 2026 should be a year where we will sacrifice our margins a bit to grab a higher market share.
But when you sacrifice your margins and you take the volume from others, do they also have to react, right? So when the industry is not growing, that's what I want to understand because 20%-25% growth in industry is going at 7%. How is it possible?
So sir, the good thing is that we are part of an industry in which, being the second largest steel wire company today, we still only have 67% market share. So therein, we believe that there is room for one more Bansal Wire every year. So we are not honestly taking away any quantities from them, but we would like to think of it as getting the additional quantity that the market is growing at.
Understood. Understood. Got it. And secondly, in one of the questions you replied that you expect 10% reduction in the EBITDA per ton number. I just want to clarify, is that on the exit rate you're saying or the full year number that you're saying that you have 10% reduction? Because.
That will be reduced by 10% to 7,600 per ton minus 10%. Of course, it might vary a little bit due to the product mix. But yeah, in general, I think 10% number on exit is good to consider.
Okay. Understood. And thirdly, basically, the CapEx that you have in FY26, once you said like INR 600 crore majority, you will be doing in FY26 only. So let's say like 60% you are going to do. And then Dadri where you have a INR 30 crore CapEx which is lined up, right? So more than INR 400 crore CapEx you will do plus anything on specialty you also want to do in this year?
Specialty, we are not looking at a big number this year. That should happen in FY27.
Okay. And inventory levels which have increased this year, you explained that because of consolidation that happened. But what is the normalized number? Can it go back to FY24 levels this year?
Sir, it will not, on absolute terms, it will not go to FY24 levels because from FY24 to FY26, our volumes will be higher by about 50%.
No, correct. I'm saying inventory days, as a % of sales, can it go back?
It will go to 24. It might even reduce because this year, as I said, we are focusing on positive cash flows and better ROCE. Therefore, overall, throughout even receivables or inventory days, we are targeting to reduce that by a good margin.
Understood, and the net debt to EBITDA?
We will get cash from the company.
Got it. And net debt to EBITDA has already crossed around 2. It's around 2.2 levels right now. Is there any threshold number which you don't want to cross? Is there any number in the mind?
Sir, again, for the last 20 years, we've been maintaining 4x kind of a gross debt or net debt to EBITDA, and we've been very comfortable. However, we don't believe that even with this expansion, we will have to go to that level again.
Understood. And last question.
We are looking at a good EBITDA coming our way in the next two years.
Understood. Understood, and the last question on my side is, since your company is new, we just want to understand, is there any seasonality in the business or you can see a volume growth every quarter?
Sir, there's not a lot of seasonality in the business. However, just the first quarter of every year, we see a lower volume owing to labor shortages in the northern part of India. And that is where 50%-60% of our sales comes from. So there is some less offtake in our customers in northern India.
Okay. And then due to monsoons, there's no impact?
It doesn't affect us very much.
Okay. And then any monsoon impact because that transition is a big part of your, right? So that is also. So H2 should be heavy in volumes. That's how to read it?
Yes, sir. Generally, H2 is better than the first half, and second quarter is also good. Second is good. Third is the best, generally.
Okay. Got it. Got it. Okay. Thanks, Pranavji. Thank you very much. Bye.
Thank you, sir.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in conference, please limit your question to two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. Next question is from the line of Hiten Boricha from Sequent Investment. Please go ahead.
Hello.
Hello.
Hi.
Hello.
Yeah. Good morning, sir. Sir, my question is again on the CapEx. So if you can just give us the breakup of the INR 600 crore, how much we are going to spend this year and how much we are going to spend next year, just to understand how will our debt look like by end of this year? And also, if you can share the cost of debt.
So sir, I believe we are looking at about INR 350 crore, INR 350 odd crore, or INR 400 odd crore in total of investments this year, and about INR 250 crore next year. That's the total number.
Okay. And if you can share the cost of debt, sir.
Cost of debt, Ghanshyamji, can you take this?
It would be around 8.25 to 8.3, 8.5.
Okay. Yeah. Also, I have one small suggestion, sir. If you can add your volume numbers quarterly basis and EBITDA per numbers in your presentation, it would be helpful for us as an analyst to understand more and then ask you questions on the con call.
Sure, sir. Sure, sir.
Yeah. Thank you.
Thank you.
Thank you. Next question is from the line of Akash from Dalal & Broacha. Please go ahead.
Yeah. Actually, I also wanted to understand the reason for the higher tax incidence that we have every quarter. I think this quarter it was almost as high as 34%. So why is it so high?
Can you say that again, please?
Yeah. Actually, I wanted to understand the higher tax incidence that we have. So this time, I think the applicable rate was almost as high as 34% on the PBT. So why so high taxation numbers for us?
Ghanshyamji, can you take this?
Actually, our subsidiary is under MAT. Subsidiary is under MAT. And because of that, we are paying 33%. Actual outflow is not there. The incidence of direct tax, the incidence of MAT is there actually. So because of that, it is looking like that 34%. Otherwise, it is around 25%.
So when do we expect this to normalize? I mean, going forward, now that we have brought most of our business in a standalone entity?
Yeah. Yeah. By 26.
26, so we'll come back to 25%?
Yeah. We will come back to 25%. Actual outflow is not there.
Sir, actually, it is already 25%. It is only on the face of it that you see 34%. Actual outflow is 25% still.
Understood. So the cash outflow is not there, but optically, it looks like it's 33%-34%.
Because of the legal compliance, it is going to be there.
Fair enough, but in FY26, it shall normalize, right?
Yeah. Yeah.
Great. Thanks.
Thank you. Next question is from the line of Pratik Singh from DAM Capital. Please go ahead.
Hi. Hey, thanks for taking my question again. Just wanted a clarification on a prior answer. Pranav, when you said that specialties will start contributing from 27 onwards, so this year, there will be some contribution from Hose Wires, right? And they also are recently had a margin like INR 20,000-INR 25,000 per ton kind of EBITDA margin business. So will we have some contribution from Hose Wires this year?
Sure, sir. We will definitely have contribution from hose wires. But that contribution in the total scheme of things is not very significant.
Right. Right. So I understand that 20KT is the total volume. So this year, can we expect like 5- 10KT, or it would be even lesser than that in terms of Hose Wires?
Sir, it all depends on approvals. Although we are expecting something good to happen in the next 25-30 days. So I think 5000-7000 KT, 5000-7000 tons is a good number to consider.
Understood. And again, I'm just stretching it a bit, so pardon me for that. Just wanted to understand what kind of margins, very ballpark. I understand that we are not still selling it. But what kind of margins do we make there? Is it INR 20,000-INR 25,000 per ton number correct, or can we do a bit higher or lower than that?
Sir, right now, I do not have the margin numbers with me, but I think it should be in line with our guidance before.
Okay. Understood. Thanks. Thanks a lot.
Thank you. Next question is from the line of Shweta Dikshit from Systematix Group. Please go ahead.
Hi. Thank you again. So one question. What would be your CapEx for FY27, capital expenditure for FY27, and what kind of CapEx trajectory are you looking at for beyond FY27 in your medium-term growth plan?
Ma'am, as I've said before, we are looking at about INR 600 crores of capex for backward integration, which will happen in 2026 and 2027. Apart from that, maybe another INR 100 crores in some upgradation and some capacity, some expansion in Dadri. So INR 700 crores of, I think, total capex in the next two years, which will be funded majorly through internal accruals and some amount of debt.
Any plans of CapEx beyond FY27 if anything is under evaluation, or what is your targeted growth plan that this is the steady-state CapEx that you would like to take on every year?
So ma'am, for the wire business itself, I think another INR 100-150 crores of CapEx every year is what we would look at to grow regularly. And apart from that, the opportunity that we have on hand is the specialty wire business, the steel cord division, which has a potential for us to grow at about 10 times from the pilot project that we have. So that is an investment that we would like to do as in when we see some good results coming from the customers. But that number is not known for us today.
Understood. Thank you so much.
Thank you. Next question is from the line of Praful Kumar from Dymon Asia. Please go ahead.
Hi, Pranav. Congratulations on good numbers. Just to summarize, sorry I joined the call a bit late. You're talking about 25% volume growth next year, which is slightly lower EBITDA per ton given the market share gains that you are looking at, and improving ROCE, correct?
Yes, sir. Absolutely. Improving ROCE and improving cash flows.
And free cash flows. Okay. Secondly, on that big project that you got an entire team for, how is that progressing, and when should it see light of the day? How are the pilot going and feedback on the product?
So sir, the steel cord and hose wire project currently is going better than our expectation. Hose wire, we are already seeing 25% capacity utilization, and this should jump significantly in the next two to three months after we get some approvals from our customers. Apart from that, steel cord also, we have already sent samples, and they are under evaluation.
Right now, we've gotten good response of products from our customers as well. So I think we are on track, if not better, to get some good utilization next year. And once we are able to get some approvals, we will start expanding in that specialty wire vertical.
Okay. And the last one is, is there any PLI that you fall into in terms of this product, or you are looking at that?
Sir, we have applied for some PLIs. We already have a PLI for bead wire in Bansal Wire, which we will start utilizing this year, and apart from that, we will also be able to apply for PLI in Specialty wire, the steel cord project, whenever we go for it.
You will be eligible, correct?
Yes. Absolutely.
Okay. Okay. Good luck, Pranav. Do well. Thank you.
Thank you.
Thank you. Ladies and gentlemen, that was the last question of the day. I now hand the conference over to Mr. Pranav Bansal for closing comments.
Thank you, everyone, for joining the call. I hope we've answered all your queries. For any other questions, please do not hesitate to contact us. We will get you all the information that is available. Thank you again. Looking forward to your continued support.
Thank you. On behalf of Bansal Wire Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the line.