Strong volume growth masked by commodity-driven margin collapse

Delivered ₹498 Cr, 12.9% YoY confirmed

Prior guidance 9-9.5%; 8% is 150 bps below expectation

13% total revenue growth; 7-8% volume = 5-6% pricing, credible split

Switchgear margin 12% → 8% = 400 bps drop; 3.2% = 320 bps explains ~80% of it

70% of W&C is white-label OEM, cost-plus; no reported margin compression here

Delivered ₹8.3 Cr; call reported ₹8 Cr, minor rounding variance

Call states 18.6% contribution; targeting 25% is forward claim, no contradiction

Prior guide 9-9.5% → now 8-8.5% full-year average. Cites ongoing commodity pressure and pass-through lag through Q2.

Originally expected recovery from Q2; now pushed to Q3 onwards pending pricing action effectiveness.

Target to reduce pass-through lag from 1 quarter historically to <2 months; April hikes passed, June/August pending. Incremental but unproven.

Investor presentation showed 10% EBITDA target; management revised down to 8-8.5% on call. Acknowledged discrepancy, promised correction.

Will correct presentation. Revised down to 8-8.5% for full year due to commodity pressure and pass-through lag.

April done, June to take effect Aug, more hikes in Aug for Sep effect. Always lag due to pending orders. Working to reduce from 1-quarter to <2 months.

Mid-August start. ₹2 Cr/month, flows through at 50%. Minimal maintenance cost.

No. Annuity ~50 bps impact only. Base business 9-9.5%, full-year avg 8%.

2 years of margin pressure. Confident recovery when pricing normalizes Q3 onwards and cost absorption ends.

No cost-plus on switchgear—don't want to open costing sheets. Hedging avoided except natural hedge (stock holdings). Working to reduce lag to <2 months.

LK distribution ~15% of total revenue. OEM, B2B wholesale, B2C retail, exports make up rest. 65 people total marketing team.

Will attempt to include breakout half-yearly or annually once full data is collected.

None currently. Can apply for PLI/ECMS forward. PM E-DRIVE (user incentives, not direct). Export incentives ongoing.

Cross-selling active. Kaycee: ₹25 Cr → ₹60 Cr revenue (4 yrs), PAT ₹1.5 Cr → ₹5 Cr, 27% CAGR. Continue growing in areas Salzer absent.

Now at 80-85%. Can do 23-25% growth in same capacity. Next year switchgear capex needed; cables have 1 more year runway.

Wire & Cable: stable (cost-plus model, 70% white-label). Switchgear: hit hard (no cost-plus), 12% → 7.5-8% margin (4-4.5% drop in 2 qtrs).

7-8% volume growth. Rest (5-6%) is price inflation.

Continuing to evaluate. Acknowledged it's a drag. Believe opportunity huge but no specific recovery path or timeline.

Last 2 quarters challenging. Finance cost reduced 300 bps on revenue this quarter. WC days improved sequentially. Price increases drive WC up; working to improve efficiency.

Delayed to Sep-Oct 2026 (from Apr-May) due to West Asia conflict. Wire duct, terminal connectors. ₹25 Cr expected revenue FY28 (FY27 minimal, just transition).

Forward-looking, specific, anchored to structural demand (electrification, renewables, data centres, railways). Q1 delivered 13%, implies stronger H2 acceleration needed or full-year reset risk.

Q1 delivered 6%, Q2 expected similar pressure, Q3-Q4 expected 9-9.5%. Hinges on commodity stabilization and pass-through timing. High execution risk.

Contingent on price hikes (April, June, Aug done; more in Sep) taking full effect and commodity prices stabilizing. 2+ month lag unproven.

Saudi plant setup (minor this year), Hosur plant expansion. Major capex (switchgear capacity) deferred to FY28.

Copper (₹70→₹400→₹250/gram silver), aluminium volatility compressed switchgear margin 12%→8% in 2 quarters. Lag mechanism (1-2 months to reflect in pricing) creates earnings volatility.

Multiple price hikes (April, June, August, September planned) may trigger customer pushback or loss of orders. Switchgear customers not on cost-plus; resistance possible.

₹22 Cr finished goods waiting for customer clearance; only ₹3.5 Cr revenue delivered Q1. Multi-year drag with no credible recovery plan. Tender pipeline unclear (Tamil Nadu tender cancelled; next tenders timing unknown).

Price-driven WC creep: when commodity costs rise and prices increase, working capital utilization rises. Finance cost reduced 300 bps on revenue Q1 but still elevated. WC days improved sequentially but fragile.

West Asia conflict delayed Saudi Arabia plant commissioning from Apr-May to Sep-Oct 2026. Further delays possible. US tariff environment shift benefiting HVAC contactors (now picking up) but exposure to tariff reversals remains.