Good afternoon, ladies and gentlemen. I am Madhuri, moderator for the conference call. Welcome to KSH International Limited Q4 FY 2026 Earnings Conference Call. As a reminder, all participants 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 and then zero on your touchtone telephone. Please note, this conference is recorded. I would now like to hand over the floor to Mr. Gulshan Singh. Over to you, sir.
Thank you, ma'am. Good morning and a very warm welcome to everyone. On behalf of Sunidhi Securities, I welcome you all to KSH International Limited Q4 and FY 2026 Earnings Conference Call. Today we have with us management represented by Mr. Rajesh Hegde, Managing Director; Mr. Amod Joshi, Chief Financial Officer; Mr. Dhruv Chopra, Head of Investor Relations; and Mr. Nakul Patil, CS & Compliance Officer. We thank KSH International Limited for giving us the opportunity to host the call. I would like to hand over the floor to the management for their opening remarks, after which we will open the floor for Q&A. Thank you, and over to you, Rajesh sir.
Good morning, everyone. This is Rajesh Hegde, Managing Director for KSH. I extend you a warm welcome to our fourth quarter fiscal 2026 results call. I am extremely pleased with the execution and momentum this year, and it sets the stage for us going into fiscal 2027 and beyond. Our fourth quarter and full- year financial results, along with supporting information, have been submitted to the exchanges and have been uploaded to our website. On today's call, I would like to focus on some of the strategic developments and demand trends we are seeing, as well as some of the key developments and operating performance of the company, including a status update on our Supa Project. Amod will discuss the financial and operating metrics for Q4 and full- year FY 2026.
To refresh all, KSH International is a 45-year-old manufacturer of magnet winding wires, which is the most critical components of coils used in large and small electric machines, from power transformers down to the smallest compressors for air conditioners and everything in between. We are the leading manufacturers of specialized winding wires in India and the largest exporter of winding wires from the country.
Our installed capacity at March 31st, 2026, was 43,445 metric tons, and once phase II of our Supa expansion is complete, we would have an installed capacity of roughly 59,000 metric tons. We are a B2B company servicing over 120 leading domestic and global OEM customers and maintain long-term relationships with these customers, resulting in repeat revenue above 95% during FY 2026. Additionally, our business is made to order, which means we procure the copper and begin processing only after receiving a purchase order from the customer.
Any copper price and exchange rate is a direct pass-through. We do not take any exposure to the short or long-term variations in the copper price. Roughly 75% of our revenues comes from large power transformers used in T&D, renewables, railways, and data centers, driven by our core Continuously Transposed Conductors or CTC product, in which we are the market leaders in India. CTC is a complex engineered product. All of our exports are exclusively to T&D customers across four continents. What is our competitive advantage for CTC? Being the first company to introduce and scale CTC in India 20 years ago, we have the most robust approvals and the longest track record of actively deployed transformers in the field, across classes and across continents.
Over 20 years, we have refined efficient and integrated production lines, which allow us to turn around an order in 15- 20 days, which increases throughput and also improves profitability. We focus on ultra-precision technology to improve quality and lower losses for our customers, ultimately saving them even more than the cost of the product itself over time. Our special purpose machines are built as per our own specifications. That takes years of experience to achieve such stringent quality standards. We also have long-standing relationships with all the leading transformer OEMs in India and abroad, which is built on years of trust and execution. By now, most people acknowledge that the T&D sector is in a structural long-term cycle driven by renewable energy, grid modernization, urbanization, and growing power demand for the AI data centers. This is not just an India phenomenon, but a global one.
The primary bottleneck is the supply of all types of transformers, which is driving the capacity expansion by OEMs globally. This directly feeds into demand for our products. At this point, it is worth noting that should all this transformer capacity come to market over the next three to five years, the whole supply chain, including magnet winding wires, will still have a lot more capacity expansion to do to keep up with this demand. With this demand backdrop, some of our large transformer clients have also begun to explore long-term, multi-year agreements to ensure predictability of supply as they ramp up their capacity. We are evaluating the strategic and financial implications of this model, as well as our need to maintain our ability and capacity to attract and service new customers.
Looking at our export performance in Q4 of FY 2026, our export revenue increased at an incredible 92% year-over-year rate, accelerating from 37% growth in Q3 of FY 2026 and 22% in the quarter before that. Specialized wire revenues overall also grew 103% year-over-year compared to 50%-60% growth in the prior two quarters. Domestically as well, we continue to outpace the market. Specialized wires represented approximately 75% of revenue in both FY 2026 and FY 2025. Speaking of new customers, with our capacity available now, we are working with a number of new global transformer clients, predominantly across the Americas and Europe, as seen by our export growth performance in Q4. For most, initial quantities are modest to test out, but they have the potential to scale up over time.
In India, we already work with most of the large power transformer OEMs, thus the focus domestically is to maintain and grow wallet share. Domestically, we have added a number of standard wire clients as well, particularly as capacity has ramped up in Supa. As we have stated, our focus for standard wires is predominantly in select end-use industries such as EVs, AC compressors, motors, et cetera, where precision technology plays a critical role. Let me briefly touch on recent events in the Middle East. Like every company, directly or indirectly, we also face some impact. None of the repercussions were material to us specifically. I think it is important to note that we serve six to seven countries in the Middle East, any effects were on a country-by-country basis.
We had some shipments to customers deep in the Gulf that got stuck, ultimately were rerouted, the impact was a delay of a few weeks. Our Supa expansion continues to remain on track for FY 2027 completion. We ended FY 2026 with 43,445 metric tons of annualized capacity, which is available now for the full- year. We expect the next set of new capacity to come online around Q2 of this year. Consolidated company utilization was approximately 70% during Q4. Earlier this month, we completed another one of our IPO objects by commissioning our 3.2 MW rooftop solar project in Supa, bringing total company solar production capacity to 4 MW. These projects are for captive use and are expected to reduce power costs for the operating businesses as well.
In addition, our green copper backward integration project has also made progress, we expect to commence this facility during H2 of FY 2027. Overall, sales volumes were approximately 7,600 metric tons in Q4, up from 7,400 metric tons in Q3 and 5,900 metric tons a year ago. Volumes would have been higher had we been able to deliver some of our Middle East export shipments during the month of March, which we have been able to eventually deliver in April. Nonetheless, volumes grew 29% year-over-year, which is again at its highest levels in many years. Revenues and volumes only make up one part of the story. Revenue ultimately needs to translate into bottom-line contribution.
In Q4 of FY 2026, we reported an EBITDA per ton of approximately INR 74,000, up from roughly INR 64,500 in Q3 and INR 60,000 a year ago, largely on account of better product mix and an increase in export volumes. The key drivers for the improvement are volume growth in higher value-added products, volume increases in export, some positive contribution to exports from a weaker rupee as well.
I briefly want to highlight some of the financial trends of FY 2026 that we expect to continue. First, in FY 2026, with Supa capacity only available for part of the year, we delivered full- year volume growth of 21%. The higher capacity will be available for the full FY 2027 as opposed to only for a part of FY 2026, therefore we feel that we should be able to sustain at the very least last year's growth rates. Second, we reported an EBITDA per ton of approximately INR 68,000 in FY 2026 and INR 74,000 in Q4.
We believe that we should be able to sustain this range and the actual performance will of course depend on the product mix. In summary, our key strategies to drive sustained growth is to grow volumes from higher value-added segments like T&D, EV motors, and exports. Second, to expand our international presence, include expansion with our global clients. To also increase wallet share with existing customers and clients. Finally, to drive operating efficiencies through scale and backward integration. Lastly, of course, to improve our sustainability efforts along the way. With this, I would like to ask Amod to go over some of the financial and operational details. Over to you, Amod.
Yeah. Thank you, Rajesh. I will discuss our fourth quarter and FY 2026 financial and operating performance now. During FY 2026 and Q4, our revenues from operations were INR 3,107 crore and INR 1,018 crore, respectively. This shows an increase of 61% and 101% compared to the same period last year. Specialized winding wires represented approximately 75% of total revenues, excluding our operating revenue in FY 2026 and Q4. An increase 62% and 103% versus a year ago, driven by ongoing demand from our T&D clients.
Standard winding wires also grew 58% and 80% in FY 2026 and Q4, respectively. Revenues from exports grew 92% compared to Q4 of FY 2025 and represented 27% of total revenues, excluding other operating revenues. Volume mix and material prices were key drivers of the top-line performance. By FY 2026 and Q4, EBITDA of INR 190 crore and INR 56 crore improved from INR 123 crore and INR 35 crore last year, respectively.
As we have stated, reported margins can fluctuate due to movements in copper prices, given that copper is a part. This quarter copper prices increased sharply, negatively impacting margins, but as you can see, did not impact EBITDA per ton. Therefore, to evaluate the underlying progress of the company's profitability, it is more important to look at the unit economics of the business.
EBITDA per ton for FY 2026 was approximately INR 67,600 per ton on a consolidated basis, up from INR 52,500 in FY 2025. For FY 2026, we delivered EBITDA per ton above our expected range of around 65,000-67,000 per metric ton. During Q4 FY 2026, we reported a quarterly record PAT of INR 34.5 crore, which increased 87% from Q4 of FY 2025. For FY 2026, we reported annual record PAT of INR 110 crore, which is an increase of 62% from INR 68 crore in FY 2025.
Lastly, turning to balance sheet and cash flows and the steps we are taking to improve cash flow generation in the high growth environment. First, we have significantly deleveraged our balance sheet, including most of the long-term debt, in turn, bringing the debt to EBITDA ratio at 0.39x to FY 2026 from 1.21x in FY 2025. We are also working on the working capital days calculated on average balances, which remain between 65-68 days in FY 2026, though we expect this to start trending lower incrementally over the next several quarters. For this, we are in active discussions with banks to evaluate optimizing our banking products to achieve the desired outcome. With that, I'd like to hand the call back to the moderator to open up for questions, please.
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. The first question comes from Mohit Kumar from ICICI. Please go ahead.
Thanks again. Hello?
Hello.
Good morning, sir, and thanks for the opportunity. My first question was, I think you mentioned that Q4 was impacted by the Middle East, right? Is it possible to quantify the impact in terms of volumes or in terms of revenue during the quarter?
What was the Middle East effect, is it?
Yes, sir. Is it possible to quantify the impact?
Of Q4.
For the Q4, yeah.
Yeah. Roughly I can say, in dispatches of around 100- 150 tons, work could not happen in March, which later on in April were dispatched.
Understood.
Yeah.
My second question is, how do you think about the volume growth in FY 2027, especially given that whatever happening around us, the war, and also the inflationary environment, the copper prices have jumped up right?
Yeah. We've not seen any effect of In terms of the war, like we said, there was a temporary effect, finally looks like the Middle East is back up and we seem to be continuing that same momentum that we had in the previous quarters when it came to the Middle East. The other areas, in terms of exports, we've not really seen any real demand coming down. There has been some effect on the, what do you call the transport-related prices, this we have been able to effectively pass it on to the customer as well, wherever we have been doing on a CIF basis after discussing with the customer. Having said this, we've not really seen a reduction in terms of demand either because of copper prices nor because of the war. I think that's to answer your question.
Sir, any volume growth guidance for FY 2026 if you are giving?
I think I'm on this, Dhruv, so I think we said in the prepared remarks that we had the new capacity at Supa for part of the year, and we still delivered 21% volume growth for the full- year. Now that that additional capacity is available for this year, at the very least, we should be able to do last year's growth, which is 21%.
Understood, sir. Thank you. All the best, sir. Thank you.
Thank you.
Thank you, sir. Participants are kindly requested to ask two questions in the initial round and may join the queue for more questions. The next question comes from Dikshi Jain from InCred Research. Please go ahead.
Hello. Congratulations on great numbers. My first question is regarding the high EBITDA per ton for quarter four. What is the sustainable EBITDA per ton going forward for FY 2027, 2028?
Right. like you correctly pointed out, FY 2020 Q4 EBITDA per ton was almost across INR 70,000.
INR 70,000.
Across INR 70,000 per metric ton. we feel a range of around INR 65,000-INR 70,000 per metric ton will be sustainable on a long-term basis.
Okay. My second question is regarding the payable days have improved significantly, but the inventory days have also gone up. going forward, are the payable days going to be sustainable? what is the expected working capital cycle?
In fact, for the payable days, our target is to improve it much more than what we have achieved for FY 2026. With our negotiation with the bank, we expect the payable days to go upwards of 25 days going forward. From that perspective, the working capital cycle will reduce by those many days for this year, is what we're expecting.
[audio distortion]
Inventory days, what happens in the business of large power transformers, sometimes when we take an order, say, for one transformer, it could require, say, 60 metric tons per transformer. Eventually, that 60th ton has to be manufactured before it gets dispatched. That kind of increases our inventory days because we are in that type of a business. That's one of the reasons why the inventory days has increased slightly over the previous quarters.
Okay.
Also the Middle East also did have some effect, because we were carrying some inventory in the last quarter, which was manufactured in Q4, but finally it got shipped out in Q1 of this year.
Okay.
Thank you, ma'am. The next question comes from Surya Narayan Nayak from Sunidhi Securities. Please go ahead.
Yeah. Congratulations for the set of numbers. Sir, one question is that because of the EBITDA margin improving significantly, and we are not reporting CTC as a special segment in the specialized. Just to understand, can it be possible for us to give data regarding the CTC volume, so that we can gauge something?
Surya, hi, this is Dhruv. That level of granularity is not something that we do provide. I think we've said that CTC does make up the majority of our specialized, well, more than half of our specialized winding wires, but we haven't gone into specific details.
Okay. Sir, one basic question. In the wake of a few players entering into CTC area, one of weaker competitors and even one transformer company also has entered. In that light, just to understand how long it takes for a new entrant to get approval for CTC from the PGCIL?
Yeah. For an absolute new entrant in this business, generally what happens is they have to start with the lower kV segment, which is probably your entry level for CTC would be your 50 MVA or 100 MVA transformer. Then kind of work through to reach the level of, say, HVDC, which is the highest level of transformers which uses CTC. In the past, we've seen new entrants have taken anywhere from five to seven years to finally come up to a 765 kV range as well. Our guess is that it does take a long time because this is a product that goes into a transformer that goes into the grid as well. Generally onboarding of suppliers, utilities are very careful.
Also, it's not just that you have PGCIL approval and then you automatically are approved for everybody, because every utility has their own approval process, whether it is local or global. I think for a new entrant which is coming up for the first time, my guess is that it could take anywhere from five to seven years.
Okay. Sir, in the empanelment list of the PGCIL, just to understand, because you nearly have a mastery over the annealing science and enameling chemistry. When a particular batch of, let's say, production, when you get orders from the different transformer companies, is that the margin are pre-decided? Because we are not going to participate in the PGCIL directly, but one of the OEMs are participating. In that case, in the complexity of the annealing and the enameling, is the margin are decided by you time to time?
How this business works is we normally with any transformer company, our customer is not PGCIL, our customer is a transformer company. Normally we have a year-long contract or maybe a multi-year contract now, is something that we were discussing. Where we decide on the value addition, depending on the complexity of the product we are going to manufacture. Again, as you go up higher in the complexity chain, like say HVDC or 765 kV, the value addition is obviously higher as you move up the segment. That's how the price is decided, unless it's an absolutely new customer where we are quoting for the first time, then we would obviously quote on the basis of what is the complexity of the design of the product is. Does that answer your question?
Yeah. You have any say over different variability, that is what I'm asking. Let's say, because they are very big, OEMs are very big. How relationship we are maintaining because to accommodate our say in the matter, that is my point.
Surya, hi, it's Dhruv. Just to try and clarify. Normally, as Rajesh pointed out, we work with these one year or longer agreements with value addition agreements with the OEMs, where we fix on the basis of a permutation and combination of various product services, complexities, materials, et cetera. There's a matrix for them. With each permutation and combination, there is a prescribed value addition per kg or per ton that is set. It's not based on copper price. We operate with that. Depending when they raise a purchase order with us, where it falls in this grid or matrix, that value addition is determined for the duration of that contract.
Okay, perfect.
Yeah.
Thank you, sir. The next question comes from Mahesh from LIC Mutual Fund. Please go ahead.
Hi, sir. Thank you so much for the opportunity. Sir, I think our current capacity is around 43,000 metric tons, and our presentation talks about reaching capacity to around 59,000 by Q4 FY 2027. My question is for FY 2028, how much production is possible given if demand remains robust as it is now?
Yeah. Generally, in our business, we say that peak capacity utilization is somewhere around 85% of your installed capacity. It is safe to assume that if we have 59,000 metric tons of capacity on the ground, then the peak capacity would be at about, say, 85%. Obviously, you are asking a question, how much we would be manufacturing in FY 2028, and our endeavor is, when a new plant starts, it does take about, say, two to three years to reach that 85% figure. Of course, we will try to do it much faster now that the demand environment is very different. It is safe to say that it takes about anything from, say, two to three years to reach that 85% capacity utilization.
Sure. Sir, given the strong demand on power side and opportunities in EV side, any plans of further adding any capacity, any plant or any new product line over the next 18- 24 months?
We do have the space required for us to add another 10,000 tons of capacity if required. That is something that we will evaluate as time goes by. It will take us a shorter amount of time to add that incremental 10,000 tons of capacity because we have the land, the building, as well as some of the utilities, et cetera, is already there at the Supa Site.
We will wait and watch because there are so many. It is not just the T&D that we are watching. We are looking at the EV side of it as well as the standard wires as well. Whichever sector is growing at a faster pace, we will look at that particular at that point in time. I would not rule out that over the next 24 months, we won't add capacity. At this point in time, it's still something that we'll wait and see how the market plays out.
Thank you so much, sir.
Thank you, Thank you Mahesh.
Thank you, sir. The next question comes from Jay Shah from HDFC Securities. Please go ahead.
Hi, sir. Am I audible?
Yes.
Congratulations on good set of numbers, sir. There are a couple of questions from my side. First would be, how does your EBITDA per ton differ between HVDC wires versus standardized transformer wires or versus coming EV traction motor wires? Is HVDC meaningfully attractive to your INR 67,000 per ton FY 2026 average? Is that a meaningful number in terms of HVDC? I just wanted to know on that part.
Yeah. If you divide our business up, we've said it's specialized and standard wires, right? If you see on an EBITDA, but what we report, of course, is a blended EBITDA per ton, which is approximately around INR 74,000 for Q4 of last year. A ballpark number is like three is to one. If you look at specialized, it's about three times more than standard wires in terms of EBITDA per ton. We are growing on both fronts, that is also on the standard as well as the specialized. We expect the same blend to continue, is what I'm going to say.
Okay. Also on your export revenue, which significantly grew in FY 2026 and Q4 as well. What geographies and product categories are driving this acceleration? Are these one-time project wins or recurring relationships?
All our exports is actually going to the T&D sector, which is transformer companies around the world. 100% of our exports goes to transformer companies across four continents, which is basically the Americas, North and South, Europe, the Middle East, and some to Asia as well.
Okay.
We have long-term customers here in most of these geographies, and then we are also working with some new customers as well who are expanding their facilities. All of our customers where we export to are in the process of adding capacity, which we feel will come about sometime in this financial year or some of it in the next financial year also. If you look at our exports, we've been at approximately about 30%. In the past, we were as high as 40% also. Our endeavor is to take it back up to about 40% over the next couple of years, and that's what we are going to be working on actively as well, since the demand environment for transformers is quite good right now.
Okay.
Yeah. Thank you.
Thank you, sir. The next question comes from Govind Chellappa from CSIM. Please go ahead.
Hi, Rajesh. Thanks for taking my question. I have two questions. First, given what's happened with currency, how does that change your pricing, especially where the competition is imported, maybe in HVDC? Secondly, how does that impact your competitiveness globally? That's the first question. My second question is, if copper price were to remain where it is, part of the increase in EBITDA per ton, I'm assuming is because of the higher inventory holding cost, and if the mix remains the way it has been for the last few quarters, which is what you've just commented, shouldn't the EBITDA per ton stay where it is in the fourth quarter? Thanks.
To answer your first question, which was the impact of FX. When it comes to import of CTC, obviously imports become much more expensive because it's not only the dollar to rupee, but also there's an import duty of 10% on the overall value, that is also on the copper portion as well. I would say, imports is now going to become even more. As it is, anything that was being imported was coming at a landed price, which was much higher than what the Indian prices are. This would actually make it more, I guess importing would be even more not beneficial for the transformer manufacturers, that is number one. Your second question was the, what you said is the inventory holding cost, right? Yes. If I can request you to repeat the question. The second one, I couldn't really understand. You're saying that the go ahead.
Yeah. I'm trying to understand the impact of higher copper prices which leads to higher inventory holding costs for you, and that you've said in the past gets passed on.
Yes.
Right? That's part of the reason why EBITDA per ton has gone up. Is that a fair-
Yeah. It's all in the blended. When we say the value addition, it all comes within that as well.
Okay. Now if the mix were to stay the same, which is what you just mentioned a couple of minutes ago.
Yeah.
If copper prices were to stay where they are, there is no reason for EBITDA per ton to come below INR 74,000. Yeah, as long as the product mix remains-
Yeah
We expect it to be.
Yeah. It's a blend of exports, then the higher value-added products. If the copper prices were to stay at the same level also, I think we should be close to that number, what we are talking about.
Govind, hey, this is Dhruv. Just one additional data point. I think one of the key drivers is clearly the mix between standard and special. If you look at both last year and last quarter, I think specialized has outpaced standard, but they've both grown at a healthy pace. We do expect with capacity, standard also to grow. As long as they grow at similar rates, I think the relationship should be similar. If standard were to grow higher, then obviously it would reduce the ability of specialized to pull EBITDA per ton higher.
Cool. Thank you.
Thank you, sir. The next question comes from Vinay Mariwal from Edelman Harris. Please go ahead.
Hi, Rajesh sir. Thank you for the opportunity. I was tracking your share of exports and share of specialized wire. Your share of specialized wires and share of exports have remained same from the last quarter. What I can see is your gross profit per ton has gone up from INR 112,000- INR 127,000. The sole variable I could attribute this is the increasing share of CTC within the specialized wires. Am I right on that track? Like this gross profit ton per increase is because of that.
Yes. You're right on that. In terms of CTC, obviously in the specialized wire, like we had mentioned, we have front-ended some capacity of CTC, which is there in Supa, and that has been utilized. Within that specialized bucket, CTC has been a major contributor.
Sure. Sir, also, I wanted to understand the extent of volumes we could have done if not for the Middle East disruption, and also if there was a component of deferment of demand from our domestic OEM customers. If not for these factors, what could have been the utilizations in this quarter? Once these factors, which I would assume are temporary, wind down, what is the capacity utilization we could see for the whole year in 2027?
Yeah, it could have been a few hundred tons. About 200 because it was not only what deliveries got postponed, but there were some orders we didn't start manufacturing as well in the last quarter, seeing the Middle East situation. That was the effect for the last quarter, actually. I would say maybe about 200-300 tons would have been the overall effect when you look at it.
Are you seeing any deferment of demand from our domestic OEM customers because of the whole transformer oil and the component pricing pressure on their part?
No, because our business, we are quite well spread out. It's not that we are dependent only on one or two transformer manufacturers. That's why I can say that if at all we see any deferment of demand or any situation that occurs with any one customer, we are able to actually look at other areas or other customers who's adding capacity or has the demand on their side also, yeah.
Sure. Sir, last question, if I could add. Your employee cost per ton and if I calculate other expenses per ton have gone up from the last quarter. Is there a room for operating leverage to play out as the volumes increase going forward? Maybe our EBITDA per ton will see some air itself because of operating leverage.
Yeah. Look, as the new capacity comes up, like we started the Supa plant sometime in Q3 of FY 2026, that's why the fixed cost employee as well as other expenses have kicked in the last two quarters of FY 2026. Coming to FY 2027, also we have a lot of new capacity that is going to kick in Q2 and over the year. We expect that at least for FY 2027, our fixed cost will play out for the new capacity as it has played out in the last two quarters. The operating leverage, if any, should kick in maybe gradually after Q4 of FY 2027.
That is very helpful, sir. Thank you so much.
Yeah. Thank you.
Thank you, sir. The next question comes from Lovish Soien from Burman Capital. Please go ahead.
Hi. Thank you for the opportunity. Am I audible?
Yes, Lovish.
Congratulations, sir, on the great set of numbers. My question was specifically on the CTC side. I wanted to understand what is the total demand for CTCs in India in metric tons, if you can help me with that, and how much of that demand is currently being met by imports?
Total demand, what we expect somewhere around 2030 is somewhere between 100,000- 120,000 tons is our estimate. In India, that is. Of that, I think what we roughly saw was approximately about 1,000 tons of CTC was being imported every month because of non-availability. That was actually a few months ago. As of right now, when we've added capacity and some of the others have also added capacity, we feel that this import trend will go down, not only because of capacity being available, but also because now in terms of their dollar to rupee exchange rate also makes it prohibitively more expensive. Now that capacity is available here, I think we should see that availability factor going down.
Sir, I just wanted to confirm. You said 100,000- 120,000 tons just for CTCs or is it for the overall-
I'm talking about only CTC. Since you asked me only CTC, I'm talking about CTC. That is India demand. Again, global is something else.
Sorry, this is Rohil. Also just to clarify, that's where the market expectations are for 2030, 2032 timeframe. If you look historically from the data where we are, I think FY 2025 was probably about 40,000, and from what we've seen, FY 2027, 2028 is probably going to be closer to 70,000, 75,000.
75,000. Got it. Great. Yeah. This is helpful, sir. Sir, also from what I understand, all the major players are adding capacities. How do you see the competitive intensity going up given that there's a lot of capacity coming online in India as well?
You mean to say in terms of CTC capacity or transformer capacity, you're saying?
CTC capacity, I'm talking about, sir.
Yeah. Obviously in a high demand environment, we expect new capacity to come in. What we should really see is which of the players are already qualified, and CTC obviously is going to be used in the higher kV segment. Qualification wise, the existing players who are already qualified to supply to the market, that capacity is meaningful, I would say when you look at the Indian demand scenario.
Any new player, let's say a round wire manufacturer who's going and now decided to come in at a subscale level into CTC because of the demand, we feel that like I said earlier on in the call, that it might take anything from say five to six years for someone like that to really get approved and come to the segment that we operate in, which is about 765 kV, HVDC, et cetera. That's the way to look at this business.
Got it.
Thank you, sir. The next question comes from Rutu Chavan from PhillipCapital. Please go ahead.
Hello, sir. Am I audible?
Yes, Rutu, you are audible.
Thank you so much for the opportunity, and congratulations on the great set of numbers. Sir, I wanted to know that out of the total capacity, is there a specific amount of capacity which is dedicated for the specialized wires or is it all fungible?
No. For specialized wire, some processes are fungible, otherwise we have distinctively standard wire is a separate capacity and specialized wire is a separate capacity. That's how it is broken up.
Is it possible to give by portion about around INR 43,000, how much is for specialized and how much is for standard?
Around 65% is for specialized and balance is for standard.
Standard.
Okay. Understood. Sir, the second question is regarding, currently as our EBITDA per ton is already at INR 67,000 per ton, and since we're already at 75% of the specialized magnet winding wires, this thing. In terms of FY 2027, 2028, do we see an additional improvement in the EBITDA per ton or Is it possible just to sustain the INR 67,000 per ton?
We've said it's going to be between INR 67,000- INR 74,000 is what we expect, because INR 74,000 is what we had for the Q4. Somewhere in between is something that is sustainable, is what we are talking about.
Even if currently it is at INR 75,000, there is still a scope to improve it more than INR 67,000?
Yeah. It also depends on the product mix eventually, and how much exports we do. What we are saying, I think in the call also earlier we said, you can take it that it will be anything from 67- 74.
Okay.
Thank you, sir. The next question comes from Pranav Jain from Agilis Capital. Please go ahead.
Hi, sir. Thank you for the opportunity. Mine was more on a sourcing perspective. While I agree the demand is really strong for all the products that you're into, and the end user demand is also picking up really well, what I want to understand is with respect to everything that's happening in the world right now, does sourcing ever become an issue? Do you ever look at that as a potential question mark going forward in case the situation persists?
No, our supply chain is quite well diversified. We don't depend on only one supplier for anything. In terms of cost, it can become an issue, let's say if transport costs or something goes up, but it doesn't mean that availability of material is an issue at any point in time. That's how we've managed this business so far.
Got it. Sir, with respect to this quarter, was there any contribution from the additional capacity or it was all from the existing line?
You mean to say in Q4?
Are you asking about contribution from Supa?
Yeah.
Yeah.
Yeah, no, Supa started contributing last quarter itself. I think in the first quarter of operation, which was Q3.
Yeah, we were almost more than 55%.
Capitilization
Capitilization.
That has pushed higher in Q4. Again, it's not based on annualized capacity. You have to see what is available capacity for that period.
Got it.
Supa came online October 1st onwards, then we added some more capacity in the Q4 as well.
Yeah. What I meant was the additional capacity that you added in Q4.
Yeah. There was some contribution. The contribution is there.
There was contribution.
Okay.
Thank you, sir. The next question comes from Jenish Karia from Union Mutual Fund. Please go ahead.
Yes, thank you for the opportunity and congratulations for a very good set of numbers. My question is more on the competition. While you alluded that new competition will take time for approvals and everything, do you envisage a scenario where the demand on the transmission side is very good and the transformer companies have been guiding for a very strong cycle for five to seven years? Considering the insourcing and indigenization requirement, do you see a scenario where the transformer companies can set up smaller capacities to meet their timelines? Do you see that scenario panning out?
Transformer companies setting up capacity for CTC, you're saying? Hello?
Yes, sir. That was the question.
If they were to backward integrate because of right now, that challenge was there for these companies when availability was an issue maybe a year ago, because all of us were in capacity expansion mode. I don't see that happening now where it makes a case for any transformer company to really do a backward integration, because there is capacity available, and we've also made it available. I don't see many transformer companies backward integrating because this is a complex product, again, and there are a lot of continuous processes in this. You need orders to feed these processes in order to run them efficiently as well. My guess is that, barring one or two manufacturers who thought about backward integration, I don't see that being the general trend going forward because there is capacity available also in India.
Got it, sir. Globally, are they backward integrated in any regions, or that is not the trend globally as well?
No. Globally, we've seen none of the transformer companies are backward integrated, actually.
Got it, sir. Understood.
Thank you, sir. The next question comes from Chirag Jain from Spark Capital. Please go ahead.
Hello. Thanks for the opportunity. I hope I'm audible. I had just one question. Most of the questions got answered. Sir, can you give any update on PEEK- insulated wires? Like, what is the current status?
Yeah. Hi, Chirag. This is Rajesh. See, PEEK is a new product which we are going to introduce, and sometime end of Q2 is this capacity is coming online. This is at a very concept stage. In terms of overall capacity also, it's not a very large capacity that we are starting off with. We are talking to OEMs where we will be providing some samples, and then they will make the traction motor out of it. This will really come about, PEEK will really make a meaningful difference maybe about, say, one and a half to two years down the line, where we would be looking at increasing capacity as well as the market matures to the 800- volt traction motor architecture as well.
Okay. Sir, can you just tell me how much capacity we are starting with?
Sir, you're not audible, sir.
Yeah.
Chirag sir, can you please speak louder? Yeah.
Yes. Can you just confirm how much capacity we are adding?
Of PEEK, is it?
Yes. We haven't specifically mentioned for PEEK or other EV products, but I think in terms of once our full capacity of 59,000 tons is set, somewhere between 5%-10% of that capacity would be for the automotive sector.
Okay, understood. Yeah. Thank you, sir. All the best.
Thank you.
Thank you, sir. The next question comes from Vandana Rathi from Korman Capital. Please go ahead.
Yes. Most of the questions are answered. I have just one question regarding the cash flow, sir. We can see the operating cash flows have been negative for the last two or three years. Do you want to throw some light on that? When can we see it improve?
Right. Regarding this, hi, this is Amod here. Regarding the cash flow, once the turnover, if you see, has gone up by almost 29%, and considering our working capital cycle of around 65-68 days, there's the investment needed for funding the additional revenues that are there. That's why you can see the cash flows from operating activities, mainly because of the investments that have gone into the receivables as well as inventories, is negative in the current year.
Having said that, what steps we are taking to improve that situation? One is the payable days, like we mentioned earlier, is expected to go up. In FY 2026, it has already gone up by almost four to five days as compared to last year. In the current year also, our target is to improve the payable days beyond 25 to close to 30 days by the end of the year. That should significantly improve the cash flows for 2027.
Okay, sir. Thank you so much.
The next question comes from Purva Jhaveri from One Up Financial Consultants. Please go ahead.
Hi, sir. Am I audible?
Yeah.
Yes, sir.
Hi. Yeah. Congratulations on a good set of numbers. Sir, just wanted to ask you about the revenue, like EBITDA per ton, which you can do in PEEK wires. What is the normal EBITDA per ton which you can do? Is it specific to some kind of OEMs or it will be a mass market product or premium product? Can you just throw some light on that front?
For PEEK, you're saying, right?
Yes, sir.
Yeah. For PEEK, it would probably be the highest EBITDA per ton or value addition within our basket of products. Again, this is something that will go into traction motors for 800- volt and above. That's a new market that will come about sometime in the future. I would say, in terms of EBITDA per ton, it will be similar to CTC or slightly higher. This market would really mature sometime, say about one and a half to two years down the line, then we have to be able to supply this at an initial design stage or a validation stage in order to get qualified with the automotive OEMs.
Sir, even another question regarding receivable days. What is the reason behind the increase in the receivable days? Is it a normal increase or one-time increase?
No, receivable days, if you see in FY 2026, there's a slight improvement from FY 2025. You mean to say, I think inventory days, maybe it's increased as compared to last year.
All right, sir.
Thank you, sir. That will be the last question for the day. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Doertsch Abbas Conference Call Service. You may disconnect your lines now. Thank you and have a pleasant day.
Thank you so much. Thank you.