Mumbai, March 26 The cables and wires industry in India is expected to continue its strong growth momentum, with a projected revenue increase of 15-16 per cent in fiscal 2026, a new report said on Wednesday.
According to a Crisil report, this follows an estimated 16 per cent rise in fiscal 2025, driven by increased investments in power generation, transmission, railways and real estate.
The sector is also benefiting from the global shift towards the China+1 strategy, as Western countries look for alternative suppliers.
The "China+1" strategy refers to companies expanding their manufacturing and supply chains beyond China to reduce dependency and mitigate risks.
India is among the key countries expected to benefit from this approach.
As per the report, organised players, who account for nearly two-thirds of the industry’s total demand, will see their domestic revenue grow by 15 per cent.
Meanwhile, exports are expected to grow at a faster pace of 20-22 per cent, with countries such as the United States and those in Europe preferring Indian manufacturers over their Chinese counterparts due to better product quality and wider offerings.
With demand remaining strong, the industry's capacity utilisation reached 80-85 per cent in fiscal 2024.
This has led to a sharp 70 per cent rise in capital expenditure (capex) in fiscal 2025, a trend that is expected to continue in fiscal 2026.
Despite the increase in investments, the financial stability of organised players remains strong, with a stable operating margin of 10-11 per cent.
One of the key reasons for the industry’s strong performance is its ability to manage raw material price fluctuations.
Since raw materials like copper and aluminum make up about 70 per cent of total sales, the industry has successfully passed on cost increases to consumers, ensuring steady profitability.
Additionally, the sector operates with a low fixed cost structure, which further protects its margins.
Crisil’s analysis shows that the financial health of the industry will remain strong, with debt-to-EBITDA and interest coverage ratios expected to be stable at 0.7-0.8 times and 15-16 times, respectively, during fiscals 2025-2026.
Return on capital employed (RoCE) is also expected to remain above 20 per cent, making the industry attractive to new investors, including those from allied sectors.
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