Bansal Wire Industries Q1 FY26 earnings call

Where management's figures differ from the filing

• EBITDA: said ₹75 cr (+20% YoY); filed ₹71.86 cr (+18.1% YoY, margin 7.7%, ex other income). Filed EBITDA excludes other income of ₹2.62 cr; including it bridges the gap to ~₹74.48 cr but growth-rate gap of ~2pp is not explained on the call.

What moved the numbers, as management explained it

• Record quarterly volume of 104,000 tons vs 97,000 tons in Q4 FY25, achieved at 74% capacity utilization (room for further growth).
• Cost-plus model passing through raw material price changes, keeping realization at ~₹90,500-91,000/ton and EBITDA per ton at ₹7,200.
• Working capital tightening — dedicated 10-person inventory team and channel financing — drove >₹100 cr operating cash flow vs -₹150 cr in Q1 FY25.
• Other income includes INR2.82 cr forex gain in Q1 FY26, moderating on a YoY basis (Q1 FY25 had INR5.56 cr). (one-off)
• Capacity addition of 60,000 tons delayed by about 1 quarter to Q2 FY26 (from Q1) to maintain utilization and protect margins.

The numbers management led with

• Q1 FY26 sales volume: 104,000 tons (record quarterly, vs 97,000 tons in Q4 FY25)
• Free cash flow from operations: Over INR100 cr in Q1 FY26 (vs negative INR150 cr YoY)
• Sanand capex: ~INR650 cr (raised from INR600 cr) for 1.8 lakh ton steel/stainless facility
• Total FY26-27 capex: INR700-750 cr (INR600 cr Sanand + INR100-150 cr maintenance/upgrade)

Guidance on this call

Filed figures are summed from the company's own quarterly results for the whole period (EBITDA excludes other income); where one sits against what was guided is arithmetic, not a judgement.

By business

Balance sheet, capex and funding

• Operating cash flow of ~₹100 cr in Q1 FY26; target to improve further each quarter with channel financing and debtor reduction.; cash
• Total capex guidance of ~₹700-750 cr over FY26-27, including ~₹650 cr for Sanand and ~₹100-150 cr for maintenance/upgradation.; capex
• Majority of Sanand capex to be funded via internal accruals; some debt planned given low current leverage on balance sheet.; funding
• Working capital days targeted back to 70-80 day range; debtor days to be reduced in coming quarters (Q1 improvement was largely inventory-driven).; working_capital
• Channel financing on non-recourse basis (debtor side) and recourse on payable side being utilized.; funding
• Capacity additions of 60,000 tons in Q2 FY26 and another 60,000 tons by Q3 FY26 at Dadri.; capex

The industry, as management sees it

India's infrastructure and manufacturing push is fueling strong demand for steel wires, with the IHT wire market specifically for 2-wheeler EVs estimated at 15,000-20,000 tons and growing rapidly. Specialty wire (hose, IHT, steel cord) is currently a 4.5-5 lakh ton import-substitution opportunity in India with no domestic manufacturers for steel cord.

Risks management named

• Specialty wire revenue dependent on customer approvals; 12-18 month approval cycles
• EBITDA margins to decline ~10% in FY26-27 by design to grab market share; recovery not until FY28
• Dadri facility at 35% exit utilization — ramp-up pace is key to volume delivery
• Capex of INR700-750 cr over FY26-27 will require some debt; balance sheet is currently low-leverage
• Finance cost rising with revenue scale; LRPC wire margins currently sub-target at INR2.5-3/kg

Not answered directly

• Quarter-wise volume/EBITDA guidance
• Segment-wise volume breakup (high carbon / low carbon / stainless)
• Q1 capex number (CFO said it was not on hand)

Asked for a number, answered without one

• Segment volume breakup (high carbon, low carbon, stainless): Declined, saying segment-wise revenue/volume is not disclosed on the quarterly call.
• Q1 FY26 capex spend: Said exact numbers are not available, will share later.
• Q2 FY26 volume and EBITDA guidance: Declined quarter-wise guidance, said 30% volume and 10% EBITDA growth for full year is the guidance; quarter-wise is dynamic.
• Dadri-specific EBITDA per ton: Said Dadri already contributes to EBITDA and revenue (20-25% of revenue last quarter) but did not give a per-ton EBITDA split.

Every question, with its answer

1. 1. Segment mix, working capital, bead wire

   Prateek Singh, DAM Capital

   Question. On the 104,000 tons, any ballpark split between high carbon, low carbon and stainless? And second, what were the key drivers behind the working capital reduction and how should we see it going ahead? Third, on bead wire — has production started?

   Answer, Pranav Bansal, Managing Director and CEO. We do not disclose segment-wise volume on quarterly calls; the breakup is not currently available. On working capital: the company has historically been a low free-cash generator but this quarter shows INR100 cr FCF and the target is to improve each quarter/year — inventories have been tightened, debtor days reduced, and new instruments introduced. Going ahead, further tightening of inventories is expected, with debtor ratio improvement via channel financing. On bead wire: capacity is installed but not being utilized because better margins are available in other products; production fungibility allows a shift to high-carbon wire until bead wire realizations improve.

   Follow-up. Just to clarify, the breakup of volumes can be disclosed or not?

   Answer. That I do not have currently.

   Not answered directly.

2. 2. Group consolidation, volume trajectory, working capital levers

   Aditya Bhartia, Investec

   Question. On consolidation of group entities (Balaji and Bansal High Carbon), what proportion of YoY volume growth came from those two entities vs organic? And is it fair to assume sequential quarterly increases of 10,000-15,000 tons taking the year-end run rate to 130,000-140,000 tons? Separately, on working capital, can we get to ~70-80 days? And have you started using vendor financing/debtor factoring?

   Answer, Pranav Bansal, Managing Director and CEO. On consolidation: majority of YoY volume growth is organic, as those two entities' sales were already consolidated in Q1 of last year, with the balance in Q2-Q3. Consolidation has also improved efficiencies and customer branding. On volume run-rate: confident of 30% volume growth, putting exit run rate at 1.2-1.3 lakh tons by year-end. On working capital: team is working on reducing both inventory and debtor days; sees no reason why 70-80 day range cannot be achieved or beaten; INR100 cr FCF is just for one quarter. On instruments: Q1 improvement was a mix of inventory and instruments — channel financing has been newly used and will help reduce debtor days further.

3. 3. Finance cost, capex funding, working capital teams

   Saumil Mehta, Kotak Mutual Funds

   Question. Operating cash flow of ~INR100 cr is strong, but finance cost has started going up — how to think about FY26 finance cost, and structurally is there a thought process on EBITDA-to-operating-cash-flow conversion over the next 2-3 years? Also, ballpark FY26 and FY27 capex guidance? And given the capex number, will leverage go up? Lastly, are there specific internal teams working on each working-capital line item?

   Answer, Pranav Bansal, Managing Director and CEO. Finance cost will keep increasing as revenue grows, but cash flows will improve further via working capital, debtor financing and channel financing. INR600 cr allocated for Sanand, planned to be funded mostly through internal accruals. Capex guidance: ~INR600 cr (Sanand) + INR100-150 cr (maintenance/upgrades) = INR700-750 cr over FY26-27. Leverage will go up modestly — balance sheet has very low debt today and management is comfortable with some debt for the Sanand project (quick utilization once live). On teams: complete organizational restructuring done; dedicated 10-person team for raw material procurement driving inventory reduction; 75-person sales/credit control team working debtor days; Q1 gain was largely inventory, with debtor-day gains expected in coming quarters.

4. 4. BSPL volume split, Dadri utilization, specialty wire ramp

   Akash, Dalal & Broacha

   Question. Standalone top line improved from ~INR600 cr to INR900 cr — can you bifurcate Q1 volumes between BSPL and standalone? What is Dadri's current utilization? What is Q2 volume guidance and year-end utilization target? And on specialty wire — how many tons of hose wire? And by when can commercial production of steel cord start, basis customer interactions?

   Answer, Pranav Bansal, Managing Director and CEO. BSPL: ~23,000 tons in Q1; balance from Dadri and 3 other manufacturing units; Dadri Q1 production ~25% higher than Q4 last year. Dadri exit utilization: ~35%. Capacity addition: 60,000 tons in Q2; total 1.2 lakh tons can be added quickly. Full-year volume guidance: 30% (broad); quarter-wise breakup difficult. Specialty wire — hose wire: ~20% capacity utilization currently; steel cord samples sent in Q1 with positive feedback; commercial production targeted Q3-Q4 FY27 with phased ramp FY28-30; FY28 utilization of 60-70% targeted; hose wire 35-40% utilization FY26 rising to 50%+ FY27. IHT production starts Q3 FY27, approvals to follow.

5. 5. IHT wire market, EBITDA, capacity expansion

   Mayank Bhandari, Asian Markets Securities

   Question. On IHT wires — sense on market size and which players are there? EBITDA per ton on IHT? On the 30% volume growth at 74% utilization — total capacity will be 6-6.5 lakh tons by year-end? What was Q1 capex?

   Answer, Pranav Bansal, Managing Director and CEO. IHT wire is for 2-wheeler EV suspension; market size ~15,000-20,000 tons and growing rapidly. Only one Indian producer today (Tata); rest is imported — fits import-substitute strategy. IHT EBITDA: INR15-20/kg. Capacity: 60,000 tons being added in Q2; total 1.2 lakh tons can be added quickly. (CFO Pranav said capex for the quarter was not on hand.)

   Follow-up. So basically, the 60,000 ton number was 1 lakh-1.2 lakh tons last quarter, right? And by end of Q2 it will be 60,000 tons added?

   Answer. Yes — 60,000 tons is what we were supposed to add within Q1, which is what we will add now. So a total of 1.2 lakh tons can be added quickly.

   Partly answered.

6. 6. Specialty wire targets, export competition, other income

   Rehan Saiyyed, Trinetra Asset Managers

   Question. On the 4.5-5 lakh ton specialty wires market potential — which markets are we aiming to capture in 2-3 years? How are we competitively positioned vs China and Vietnam in stainless steel wire exports? And on standalone other income of INR5.1 cr — what is driving the increase: primary income, fair value gain, or one-time assessment?

   Answer, Pranav Bansal, Managing Director and CEO. Specialty wire ramp: '27 will be the year for initial numbers, '28 will see full-year results, post which 2 lakh ton steel cord project is planned. On exports: only mature markets targeted (US and Europe — 75% of exports) where customers pay for better service/quality; China+1 has worked; key advantage is products where raw material is <50% of pricing. On other income: Ghanshyam Gujrati clarified that other income includes forex gain of INR2.82 cr (and not INR5.1 cr as analyst suggested) — actually lower than prior year.

7. 7. ROCE trajectory, tire cord customer feedback

   Sameer, Dymon Asia

   Question. How should one think on ROCE/ROE trajectory, especially with the capex coming up? Once the capex is behind us, would we hit the 20%-25% mark over the next 2-3 years? And how is customer feedback on the tire cord project?

   Answer, Pranav Bansal, Managing Director and CEO. On ROCE: working capital initiatives will improve ROCE within this year itself; focus has completely shifted to ROCE; targeting 25% in the near future. Even after capex, decent ROCE expected by year-end. On tire cord (steel cord) customer feedback: samples sent to 2 main customers in Q1; positive feedback from one, awaiting feedback from another; 12-15 month approval cycle expected from one, others 15-18 months. Confidence in product quality that has come off the line.

8. 8. Sanand benefits, Dadri capacity phasing

   Prakhar, Anand Rathi

   Question. On Sanand — what are the benefits from raw material integration? And the 60 kt being added at Dadri — when can we expect the additional 120 kt to come in?

   Answer, Pranav Bansal, Managing Director and CEO. Sanand benefits: next 2-3 years are market-share years (margin sacrifice), but backward integration from late FY27 should bring margins back to FY25 levels in FY28 — and potentially better. The 120 kt addition is delayed by 2-3 months; 60 kt comes in Q2 and the remaining 60 kt by Q3 (so Q2-Q3 for the full 120 kt).

9. 9. Dadri ramp, export contribution

   Vidit Trivedi, Asian Markets Securities

   Question. Dadri capacity is at 35% utilization — when do you expect it to contribute materially to EBITDA? And what's the current share of exports?

   Answer, Pranav Bansal, Managing Director and CEO. Dadri is already contributing to revenue and EBITDA — more than 20-25% of revenue came from Dadri last quarter; ramp-up pace is below expectation but customer responses have been good; better results expected in Q2-Q3. On exports: Q1 export revenue was INR72 cr, about 7.5% of total revenue.

10. 10. Factoring terms, Sanand EBITDA, tyre materials conference response

    Jay Patel, Patel Equities

    Question. On the factoring being done — is it recourse or nonrecourse? Would a receivable default be borne by Bansal Wire? Why nonrecourse given the higher cost? On Sanand backward integration — how much additional EBITDA per ton? And on the recent Tyre Materials Conference, how was customer response given the competition from China?

    Answer, Pranav Bansal, Managing Director and CEO. On factoring (CFO): payable side is on recourse, debtor side is nonrecourse. Pranav clarified that any debtor financing is on nonrecourse basis, so defaults are not borne by Bansal Wire. CFO noted cost is not higher and is borne by debtors. On Sanand EBITDA: INR7,000-8,000 per ton to be added. On tyre materials conference: response described as 'truly overwhelming' — customers are chasing the company; most samples already received by customers; no other Indian manufacturer of steel cord, which is why response is positive.

11. 11. Sanand capex escalation, revenue, EBITDA per ton

    Jigar Jani, Nuvama Research

    Question. On Sanand — capex for the year has been increased from INR600 cr to INR650 cr — what led to the escalation? On full utilization, what revenue and EBITDA per kt can we expect? And would the cash conversion cycle be similar to consolidated numbers?

    Answer, Pranav Bansal, Managing Director and CEO. Capex increase of ~INR60 cr is for two reasons: addition of a 60,000-ton wire facility (stainless steel and low carbon wire) that was not originally planned, and selection of equipment that can be debottlenecked to expand from 1.8 lakh tons to 2.5 lakh tons. Sanand being full backward integration of 1.8 lakh tons will not reflect on top-line revenue (output consumed internally); INR7,000-8,000 EBITDA per ton will be added. (Call was cut short by the moderator.)

    Partly answered.

12. 12. Q2 volumes, EBITDA margin, per-ton trajectory

    Prakhar, Anand Rathi

    Question. What were the volumes for Q2? And on EBITDA margin and EBIT per ton for Q2? On a blended basis, is there anything we can expect on overheads? EBITDA per ton?

    Answer, Pranav Bansal, Managing Director and CEO. Quarter-wise guidance not possible — 30% volume growth for the year and 10% EBITDA growth remain the targets. FY26 and FY27 are tough on margins as market share is being captured; backward integration and specialty wire are the margin levers. On EBITDA per ton: targeting INR6.5/kg for the year, already at INR7.2/kg in Q1.

    Not answered directly.

13. 13. EBITDA margin guidance, change vs prior quarter

    Shweta Dikshit, Systematix Group

    Question. On the 20% decline in EBITDA margin — is that what was guided? Last quarter the indication was around a 10% drop in EBITDA per ton over the next year, with recovery slightly in FY27 and back in FY26 — what is changing on a Q-on-Q basis?

    Answer, Pranav Bansal, Managing Director and CEO. Pranav clarified: there is no change vs prior guidance. The 10% increase in absolute EBITDA is the standing guidance. On EBITDA per ton, a 10% decrease is expected (driven by margin sacrifice) and another ~10% impact from product mix shift on a blended basis. 30% volume growth and 10% EBITDA growth targets remain on track. Q1 came in better but management is not committing to specific Q2/Q3 numbers given the dynamic market-share phase.

14. 14. EBITDA per ton trajectory FY27-28

    Saumil Mehta, Kotak Mutual Fund

    Question. EBITDA per ton of ~INR7.2 (in the INR7-7.5 range) — should we see this number improving in FY27, or is it more of FY28? This year closer to INR6, next year back to INR7-7.5, and improvement from there?

    Answer, Pranav Bansal, Managing Director and CEO. FY28 would be a better year for EBITDA per ton improvement — backward integration kicks in at the later end of FY27 (with 1-2 month timing variability). Specialty wire contributions coming in should drive further improvement beyond backward integration.

15. 15. LRPC wires, utilization guidance

    Mayank Bhandari, Asian Markets Securities

    Question. On LRPC wires — progress on certification, and market color? Margin in LRPC? On the 30% volume growth guidance on last year's 344,000 tons — implies ~60-65% utilization, isn't that conservative given the capex pace? What is the optimal utilization for FY27?

    Answer, Pranav Bansal, Managing Director and CEO. LRPC: some approvals received, still awaiting BIS certification to start majority of supplies — expected within 1-2 months; market is sluggish with excess capacity, margins have reduced substantially. Current LRPC EBITDA: INR2.50-3/kg vs INR5/kg expectation. Equipment is fungible so currently being used for other high-carbon wires. On utilization: company has historically run at 85-90% utilization; FY25 was a one-off with Dadri capacity doubling within the year. Optimum for the company is 85-90% — would want to operate at that pace going ahead, though a quarter may run lower when capacities are added.

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