A survey by Crisil Ratings predicted that organized cables and wires makers would have a consecutive mid-teen growth in the upcoming fiscal year, building on an estimated 16 percent increase in FY25. “This will be due to increased investment in end-user segments like power generation and transmission, railways, and real estate in domestic markets, as well as a boost from the China+1 strategy that some countries are implementing,” it continued.
Capital expenditures (capex) increased by around 70% year over year in fiscal 2025 and are predicted to continue their upward trajectory in fiscal 2026. Capacity utilization reached 80–85% in fiscal 2024 and promises promising growth prospects ahead.
Nonetheless, the Crisil assessment stated that players’ credit profiles will remain steady due to robust cash flows backed by a steady operating margin of 10–11% on a much higher revenue base. Two-thirds of the aforementioned demand is met by the organized players, therefore their domestic segment revenue is predicted to expand at a robust rate of 15.
In the meantime, exports will expand at a faster rate of 20–22% thanks to the diversification of Western nations’ suppliers from China, particularly the US and Europe, which together account for 45–55 percent of exports. The Crisil research claims that because of their growing product line and commitment to international quality standards, Indian companies are becoming more and more favored over their Chinese rivals.
Furthermore, the industry’s low fixed cost structure and companies’ proven ability to pass on any volatility in raw material costs—which account for around 70% of total sales—to end users, albeit with a slight lag, mean that operating margin will also not be affected.
The debt-to-earnings ratios before interest, tax, depreciation, and amortization (Ebitda) and interest coverage ratios are therefore anticipated to remain robust for fiscal years 2025–2026, at 0.7–0.8 times and 15–16 times, respectively, in accordance with the levels observed in fiscal year 2024.
According to Crisil, increased competition, the entry of new players from related industries, a slowdown in end-user segment investments, and the sharp volatility of raw material prices, like those of copper and aluminum, will all be closely watched.
