Dynamic Cables Ltd Q1 FY27 Results

Delivered ₹349.1 Cr, 33.2% YoY; confirmed against FY26 Q1 base

Delivered 10.9% OPM; within prior guidance of 10.5-11%

Delivered 37.0% YoY, ₹25.0 Cr; corroborates call narrative

Order book only 10% YoY growth (implies ~₹738 Cr prior Q1); weak given 33% revenue growth

Management admits only 5-6% volume growth; balance 27-28% from aluminum price inflation

Q1 was pricing-driven; customers postponing orders (Apr-May weakness); only near-term contracts being booked

Order book only ₹811 Cr (+10% YoY); prior calls assumed order book supporting 15-20%+ revenue CAGR; now clearly lagging at +10%.

Q1 volume ~5-6%; prior call base (last Q1 ~25-26% volume growth) shows sharp deceleration; pricing now the only lever.

US started Q1 (15% of exports = ~₹45 Cr revenue annualized); distribution-led model; first orders placed, reordering pending.

Sept 2026 commissioning confirmed (was 'delayed'); now inline with prior guidance.

80% variable pricing; limited pricing power when costs fall; margin compression risk if aluminum prices decline.

Variable price contracts pass volatility to customers; fixed price contracts include raw material booking at order time; 4x working capital turnover maintained through credit ratings.

5-6% volume growth; balance derived from aluminum price inflation. High base effect from prior Q1 (25-26% volume) and April-May order postponement.

April-May saw reluctance to book at elevated prices; customers waiting for price correction; industry-wide phenomenon, not Dynamic-specific.

Delays now behind; on track for September 2026 commissioning.

US started Q1, ~15% of exports. Distribution-led model; first shipments dispatched; reordering pending. Traditionally exported to Asia/Africa/Middle East.

Early stage; first shipments being consumed; margins initially similar to domestic, upside as foothold established. Long-term huge opportunity.

Order cycle shortened, not dispatch impacted. ~20% fixed price; 80% variable. Customers not booking far-fetched orders at high prices.

20% in Q1; expect similar for H1 FY27. H2 may increase slightly with new plant; more notable next year.

Inventory value up 20-30% due to higher raw material costs (volume same, value higher). Debtors stable on last-6-months basis.

Approval process long; few players have required certifications. Birla focused on house wire, not power cables. Adani still unclear; order flow not yet impacted.

Meaningful contribution from Q4 only. Ramp to 80-85% utilization over 12-18 months post-September.

Futuristic plays; very large market. In product development. Most capex fungible; key focus is customer engagement & product approvals. Competition global (local + Mexico/Turkey/India/China).

Raw material prices unpredictable. Target long-term 18-20% growth; some quarters high due to price/volume, others moderate. Overall trajectory maintained.

Lot of expansion by all players; demand picking up pace in tandem. Competition healthy so far. Secular growth play in T&D.

Existing plants at ~85% utilization (optimal). E-beam is new setup in new plant only.

Building wire B2B segment only (not B2C distribution). Complementary to power cable segment. Not entering low-margin B2C space.

Price is king. Customers unwilling to lock orders for Q3 execution at high prices. Only near-term (2-4 month) delivery orders being taken.

Target 80-85% utilization by end FY28; very difficult to predict 18 months hence; dependent on market response.

Reiterated on call; no short-term target given. Q1 33% driven by pricing, not sustainable.

Q1 delivered 10.9% (within range). Cost discipline and mix improvement supporting; no new margin expansion expected.

September 2026 commissioning; target 12-18 months to 80-85% utilization by FY28. Brownfield expansion scope within plant.

80% of revenue on variable-price contracts; aluminum/copper spikes inflate revenue but mask weak volume. If prices correct, revenue stalls while margin compressed.

Order book +10% YoY (₹811 Cr) but revenue +33% implies pull-forward and shortened order cycle. Customers postponing orders (Apr-May weakness) to wait for price correction.

₹45 Cr capex; September 2026 target ambitious post-prior delays. Ramp to 80-85% by FY28 assumes sustained 15-20%+ growth. If order book stays weak, capacity underutilized.

Only 5-6% volume growth this quarter vs historical 15-25%+ CAGR. Prior Q1 had 25-26% volume growth (high base). New baseline unclear; sustainable growth at risk if pricing unwinds.

All major cable players (fragmented market) expanding capacity in HV/EHV; healthy competition claimed now but risk of overcapacity/price war as supply doubles.