Bansal Wire Industries Q4 FY25 earnings call

Where management's figures differ from the filing

• Q4 FY25 EBITDA: said ₹75 cr (+59% YoY); filed ₹71.94 cr ex other income (margin 7.7%). Stated ₹75 cr appears to include other income of ₹2.79 cr; ex-other-income ₹71.94 cr plus other income gives ~₹74.73 cr, close to ₹75 cr.

What moved the numbers, as management explained it

• Strong demand across automotive, construction and engineering drove 33% YoY Q4 revenue growth to ₹940 cr.
• Improved product mix with specialty wire commencement and lower volumes in lower-EBITDA business lifted Q4 EBITDA 59% YoY to ₹75 cr.
• Consolidation of group companies (Bansal Steel & Power, BWI) added to consolidated revenues and inventory levels. (accounting)
• Tax rate appeared 34% due to a subsidiary under MAT; cash outflow remains ~25%, expected to normalise in FY26. (accounting)
• Dadri ramp-up reached 40% utilisation in the last month of FY25 vs 25-30% output above Q3.

The numbers management led with

• Full year FY25 sales volume: ~3,44,000 tons
• FY26 volume growth guidance: 20–30%
• Installed capacity: 5.5 lakh tons per annum; expanding to ~6.7 lakh tons by Q2 FY26
• Total CAPEX FY26 + FY27 (Sanand backward integration): Rs 600 crores (1.8 lakh ton steel + 60,000 ton wire); Rs 350–400 cr in FY26, ~Rs 250 cr in FY27

Guidance on this call

By business

Balance sheet, capex and funding

• Debt-to-equity reduced from 1.5 to 0.5 after IPO; net debt/EBITDA at 2.2x.
• Cost of debt 8.25-8.5%.
• CAPEX plan: ₹600 cr for backward integration at Sanand (1.8 lakh ton steel + 60,000 wire), ~₹350-400 cr in FY26 and ~₹250 cr in FY27; ~₹700 cr total over next 2 years including upgrades.
• Cash flow reduced only ₹20 cr in Q4 (vs ~₹100 cr earlier); factoring limits tied up; positive operating cash flow expected from Q1 FY26.
• ROCE FY25: 19%; Q4 FY25: 21%; targeting above 20%.
• Inventory days expected to normalise but absolute level won't return to FY24 as volumes are ~50% higher.

The industry, as management sees it

Steel wire industry in India grows at 6–7% annually; Bansal Wire has historically outgrown the industry at 20–25% for the last decade, supported by demand from automotive, cable, infrastructure and general engineering. Demand visibility for FY26 is described as 'good' across both domestic and international markets, though Q1 is seasonally weak.

Risks management named

• Fluctuating raw material prices and geopolitical uncertainties flagged in opening remarks
• EBITDA/ton expected to fall ~10% in FY26 as product mix tilts toward lower-margin segments to drive volume
• Specialty wire (Steel Cord) ramp dependent on customer approvals — long lead time
• Q1 FY26 seasonal weakness from labour shortages in Northern India (50–60% of sales)
• Net debt/EBITDA at ~2.2x; capex funding dependent on internal accruals plus incremental debt

Not answered directly

• Segment-wise volume and capacity break-up (Low Carbon / High Carbon / Stainless Steel) — declined on both counts
• Hose Wire EBITDA/ton margin specifics — deferred as not on hand
• Blended Q4 capacity utilisation number — deferred to offline conversation with CFO

Asked for a number, answered without one

• Q4 FY25 blended capacity utilisation: Pranav said he did not have the Q4 number and asked the analyst to connect with Mr. Ghanshyam later for details.
• Segment-wise volume breakup (Low Carbon / High Carbon / Stainless): Pranav said the company does not disclose segment-wise numbers today and would try to fetch details later.
• Hose Wire margin (EBITDA per ton): Pranav said he did not have the margin numbers with him but expected it to be in line with prior guidance.

Every question, with its answer

1. 1. Volumes and FY26 guidance

   Prateek Singh, Dam Capital

   Question. What were the Q4 and full-year volumes and the break-up across Low Carbon, High Carbon and Stainless Steel? Also any guidance on FY26 volumes and on margin sustainability?

   Answer, Pranav Bansal, MD & CEO. Full-year volumes ~3,44,000 tons; Q4 ~97,000–98,000 tons. Segment-wise break-up not disclosed. Volume growth guidance 20–30% for FY26. On margins, FY25 had a superior product mix as lower-EBITDA-margin business had limited supply; in FY26 the company will have volumes even in lower-margin businesses, implying normalisation of margins with 20–30% volume growth but no matching EBITDA growth.

   Follow-up. Status update on Hose Wire, Steel Cords and the 1.8 lakh ton Gujarat steel plant.

   Answer. Steel Cord samples already with customers and looking positive; Hose Wire running at 20–25% capacity utilisation, expecting more approvals in the next 1–1.5 months to ramp up.

   Partly answered.

2. 2. Guidance conservatism, inventory and factoring, CAPEX phasing

   Vinit, Investec

   Question. Q4 already at 1 lakh tons and you are guiding 25–30% — isn't that conservative? Also, why have inventories gone up and what is the status on factoring of receivables? And the timing of the Stainless Steel Rod CAPEX?

   Answer, Pranav Bansal, MD & CEO. On volumes, the company prefers to be a bit conservative — guidance maintained at 20–30%. On inventory: (i) full consolidation of group companies added to books, (ii) operations across 6 different locations since two older entities have stopped selling but continue manufacturing in Bansal Wire's name — this should normalise over FY26. Factoring limits tied up; some used in Q4, most to be used in Q1–Q2 FY26, which should improve the working capital cycle. On the Sanand CAPEX: Wire facility to commission in Q2 FY27, Steel Rod backward integration in Q3 FY27.

3. 3. Gross margin, Dadri utilisation, end-user mix, LRPC status

   Akash, Dalal & Broacha

   Question. Why have gross margins dipped from ~23% in Q3 to ~21% in Q4? Utilisation at Dadri? Which end-user industry will drive growth? Status of LRPC wire?

   Answer, Pranav Bansal, MD & CEO. Gross margin dip attributed to raw material fluctuation — not material. Dadri utilisation in Q4 was 25–30% higher than Q3; closed last month at ~40%. Demand well-diversified across automotive, cable, infra and general engineering. LRPC facility commissioned; awaiting BIS approval in next 10–15 days to begin customer sales.

4. 4. Capacity utilisation and EBITDA per ton trajectory

   Shweta Dikshit, Systematix Group

   Question. What is steady-state utilisation for new capacity? Run-rate based on Q4 implies 21% utilisation, full-year implies 63%. What utilisation on the 1.2 lakh ton addition within FY26? And what EBITDA/ton trajectory should we expect — full year Rs 8,000, Q4 Rs 7,600; further reduction in FY26?

   Answer, Pranav Bansal, MD & CEO. Historically achieved 89–90% utilisation and sees no reason not to repeat that on the new facility. On EBITDA/ton: FY25 was a margin-improvement year, FY26 will be a volume-led year with slight reduction in EBITDA — if 20–30% volume growth materialises, ~10% reduction in EBITDA is possible on the Q4 exit rate of Rs 7,600/ton. EBITDA should normalise back up in FY27 on a higher volume base.

   Follow-up. Confirmation that 10% reduction is on the Q4 exit rate.

   Answer. Yes, on the exit rate.

5. 5. CAPEX plan and funding; export contribution

   Mayank Bhandari, Asian Market Securities

   Question. What is the FY26 and FY27 CAPEX? How is the Rs 600 cr being funded given current cash position? And export contribution to FY25 revenue?

   Answer, Pranav Bansal, MD & CEO. Rs 600 cr total CAPEX for backward integration (1.8 lakh ton wire rods + 60,000 tons wire). Evenly split with majority in FY26 and some spillover into FY27. Funding mix: cash flow turned positive (Q4 saw only Rs 20 cr cash reduction vs Rs 100 cr earlier), factoring limits tied up, debt-to-equity down to 0.5x post-IPO enabling leverage, plus internal accruals from EBITDA growth. Exports at Rs 350 cr (~10% of revenue) — provided by the CFO.

6. 6. Dadri capacity, guidance revision, quarterly utilisation

   Hemant Soni, Individual Investor

   Question. Is the entire Dadri capacity available now? You had earlier guided 5 lakh tons for FY26 in a media interview but now guiding lower — is the 1.2 lakh ton addition over and above 5.5 lakh tons? What is blended capacity utilisation and Q4 utilisation? Expecting improvement in Q1?

   Answer, Pranav Bansal, MD & CEO. Dadri at ~3 lakh tons now, another 0.5 lakh tons to commission in ~1 month and another 60,000 tons by Q2 FY26 — taking Dadri to ~4.2 lakh tons. Total company capacity to move from 5.5 to 6.7 lakh tons. FY25 blended utilisation 69%; Q4 number not on hand (deferred to CFO). On guidance, 20–30% growth seen as conservative with room for upside. Q1 typically slower due to labour shortages in North India; ramp-up expected from Q2. CFO added that Q4 PAT was lower despite higher EBITDA because of capitalisation and working capital deployment.

   Follow-up. Are we expecting improved capacity utilisation in Q1?

   Answer. Yes, better numbers every quarter, but Q1 is structurally soft; ramp-up from Q2.

   Partly answered.

7. 7. Associate consolidation and specialty wire margin path

   Yashvi, Molecules

   Question. Status on consolidation of the associate companies and lease agreements with Bansal High Carbon and Balaji Wires. If specialty wires (Bead, Hose, Steel Cord, IHD, OHD) are being added, why should margins dip rather than spike in FY26?

   Answer, Pranav Bansal, MD & CEO. All sales of the two entities are already consolidated under Bansal Wire; manufacturing remains at Balaji and Bansal High Carbon because Dadri is not fully ramped — those capacities will shut down within FY26 as Dadri ramps. On margins: Steel Cord and Hose Wire have long approval cycles; FY26 will not see meaningful Specialty Wire contribution, with material ramp only in FY27, coupled with backward integration in late FY27. EBITDA normalises back in FY27.

   Follow-up. Confirm Specialty wires show up only in FY27? Will you add Steel Cord capacity after approvals?

   Answer. Confirmed; yes, CAPEX in that segment will follow approvals.

8. 8. Market share gains and Dadri utilisation

   Vidit Trivedi, Asian Market Securities

   Question. Have we gained market share in FY25? And Dadri utilisation?

   Answer, Pranav Bansal, MD & CEO. Industry grows at 6–7%; Bansal Wire grew revenue ~35% in FY25 and would have outgrown industry in volumes too — market share has been gained every year for the last 10 years (company growing 20–25% vs industry 6–7%). Dadri utilisation at 40% in the last month of FY25.

9. 9. Sanand funding, receivables, ROCE and inventory impact

   Jay Vaghasia, Patel Equities

   Question. How is the Rs 600 cr Sanand expansion being funded given negative cash flows? Are receivable days higher than industry? Will backward integration reduce inventory?

   Answer, Pranav Bansal, MD & CEO. On funding: cash flow turning positive from Q1 FY26, EBITDA growth every year, debt headroom available — mix of accruals and debt to fund Sanand. On receivables: have been at this level for years while growing 20–25%; improvement from Q1 FY26. ROCE at 19% for FY25, 21% in Q4 — targeting >20% ROCE and positive cash flows through the year. Backward integration helps (i) secure raw material (which has constrained growth in some areas) and (ii) expand margins from FY28; it will not reduce inventory because raw-material stocks will simply shift in-house.

10. 10. Capacity mix and EBITDA per ton

    Prakhar Khajanchi, Anand Rathi

    Question. Capacity break-up between Stainless Steel, Low Carbon and High Carbon? And what EBITDA/ton to expect going ahead?

    Answer, Pranav Bansal, MD & CEO. Segment-wise capacities not disclosed; overall ~5.6 lakh tons with majority Low Carbon, then High Carbon and Stainless Steel. EBITDA/ton: FY25 Rs 8,000; Q4 Rs 7,600; expected to reduce slightly in FY26 due to product mix and market share drive.

    Not answered directly.

11. 11. Volume growth sustainability, EBITDA/ton basis, CAPEX split, working capital, leverage and seasonality

    Depesh, Invesco

    Question. Like-for-like volume growth in FY25? How can the company sustain 25–30% growth when industry is at 6–7%? Is the 10% EBITDA/ton reduction on the exit rate or full-year? CAPEX split — Rs 400 cr in FY26 plus anything on Specialty? Normalised inventory levels? Net debt/EBITDA threshold? Seasonality?

    Answer, Pranav Bansal, MD & CEO. Volume growth ~15% on like-for-like basis. With 6–7% market share as the second largest steel wire player, there is room for 'one more Bansal Wire' — not really taking share but capturing incremental industry growth. EBITDA/ton reduction 10% is on the Q4 exit rate (Rs 7,600), subject to product mix. CAPEX: Rs 600 cr in 26–27 (majority FY26); no major Specialty CAPEX in FY26 (FY27 more likely). Inventory days to reduce below FY24 levels in FY26 — focus on positive cash flows and ROCE. Net debt/EBITDA historically comfortable at 4x; no expectation to revisit that level. Some seasonality in Q1 due to labour shortages in North; H2 better than H1, Q3 the strongest.

    Follow-up. Should H2 be heavy in volumes because of monsoon impact on construction?

    Answer. Yes, generally H2 better than H1; Q2 good, Q3 best.

12. 12. CAPEX split and cost of debt

    Hiten Boricha, Sequent Investment

    Question. Break-up of the Rs 600 cr CAPEX between FY26 and FY27; debt level by end of FY26; cost of debt?

    Answer, Pranav Bansal, MD & CEO. Rs 350–400 cr in FY26 and ~Rs 250 cr in FY27. Cost of debt ~8.25–8.5% (provided by CFO). Suggested more granular volume and EBITDA/ton disclosure in presentations — accepted.

13. 13. Tax rate anomaly and normalisation

    Akash, Dalal & Broacha

    Question. Why is the tax rate 33–34% on PBT in Q4? When does it normalise?

    Answer, Ghanshyam Das Gujrati, CFO. Subsidiary is under MAT — cash outflow is not there, deferred tax incidence on MAT is what makes it look like 33%. Actual cash outflow remains ~25%. Normalises in FY26 to 25%.

    Follow-up. So cash outflow is 25% but optically 33–34% — confirms FY26 normalisation.

    Answer. Confirmed by both CFO and CEO.

14. 14. Hose Wire volume and margin contribution in FY26

    Prateek Singh, Dam Capital

    Question. Hose Wire is high-margin (Rs 20,000–25,000/ton) — what contribution in FY26 volume terms and is that margin estimate correct?

    Answer, Pranav Bansal, MD & CEO. Hose Wire will contribute in FY26 but not significant in the total scheme of things. Volume contribution estimated at 5,000–7,000 tons pending approvals in the next 25–30 days. Margin specifics not on hand but expected to be in line with prior guidance of Rs 20,000–25,000/ton.

    Follow-up. Margin estimate validation.

    Answer. Should be in line with prior guidance.

    Partly answered.

15. 15. CAPEX trajectory beyond FY27

    Shweta Dikshit, Systematix Group

    Question. CAPEX for FY27 and CAPEX trajectory beyond FY27 in the medium-term growth plan?

    Answer, Pranav Bansal, MD & CEO. Rs 600 cr for backward integration across FY26 and FY27, plus ~Rs 100 cr for Dadri expansion/upgradation — Rs 700 cr total CAPEX over two years, funded by internal accruals and some debt. Beyond FY27, Rs 100–150 cr/year maintenance/expansion CAPEX in Wire; Steel Cord has potential for 10x growth from the pilot — additional investment to follow customer validation but quantum not yet known.

16. 16. FY26 strategy recap, Steel Cord/Hose Wire progress, PLI

    Praful Kumar, Dymon Asia

    Question. Confirming the FY26 volume growth ~25% with lower EBITDA/ton and improving ROCE/cash flows. Progress on Steel Cord/Hose Wire and feedback on the pilot. Any PLI applicability?

    Answer, Pranav Bansal, MD & CEO. Confirmed FY26 strategy. Steel Cord and Hose Wire going better than expected — Hose Wire at 25% utilisation to ramp after more customer approvals; Steel Cord samples under evaluation with positive customer response. On PLI: Bead Wire PLI already sanctioned and will be utilised in FY26; Specialty Wire (Steel Cord) PLI to be applied for when project expands.

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