Could you give us a background on business of Cords Cable Industries?
Cords Cable Industries Limited is a specialised Control & Instrumentation cable company offering wide range of cable products to multiple industries. We have over 3 decades of rich experience and enjoy a strong brand equity in the B2B segment. CORDS became perhaps the only listed cable manufacturer in the entire Asia-Pacific region to be recognized by Forbes magazine under its “Asia’s 200 Best (Companies) under a Billion Dollar” category in 2008. We design, develop and manufacture a varied range of Instrumentation, Control, Thermocouple and Power Cables.
CORDS is in the business of providing cost-effective and quality solutions for various signalling & electrical connectivity requirements. CORDS has carved a niche in manufacturing of customised cables as per the customer’s specifications.
What differentiates you from the other cable manufacturing companies?
We do not focus on manufacturing standardized products unlike the other players in the broader wire & cable industry. Our endeavour is to provide solutions that cater to the customers’ needs. Today, CORDS caters & receives enquiries for supplies of various special & customized cables for a diverse variety of engineering & infrastructure projects across multiple sectors such as Metro Rails, Freight Corridors, Oil & Gas, FMCG, Ferrous & Non Ferrous Metals, Cement, Fertilizers, Chemicals, Renewable Power, Nuclear & Thermal Power, Indian Railways, Refineries, LPG Bottling, Airports Development & Modernization, Water Desalination, Building Automation, Sewage Treatment etc.
It is noteworthy to mention here that CORDS has supplied cables to almost all the Metro rail projects in India. This is a testimony of our quality & brand name. We also take pride in the fact that we have never lost a single customer till date.
What is the Company’s current capacity and capacity utilization?
We have state of the art facilities with a total capacity of approximately 65,000 core cable Kms p.a. spread across 2 manufacturing facilities in Rajasthan. Chopanki unit has a capacity of around 30,000 core cable Kms p.a. while Kahrani unit has a capacity of about 35,000 core cable kms p.a.
Chopanki unit manufactures LV Power, Instrumentation, Control & Speciality Cables while Kahrani unit, apart from the above, can also manufacture more specialized cables like Fieldbus, PV Solar, EPR Insulated and many more. Currently our capacity utilization rate is close to 70%.
What kind of cables are these?
Ours is a complete B2B business. Hence, the cables we manufacture are not of day to day use which you may see. These are highly customised cables manufactured as per the customer’s requirements and specifications. 95% of all our products are as per customized and comply with the highest standards of quality which ensures higher customer recall, first choice for customers as well as repeat orders.
Could you help us understand it segment-wise?
We have broadly categorised our cables into 2 segments that is Instrumentation & Control Cables and other one is Power Cables. Instrumentation & Control cables are further divided into 3 sub-segments:-
- Thermocouple cables – These are used to extend thermocouple circuits from the sensor to reference unit.
- Control & Electric Wiring cables – Control cables are used in interconnection of process control, communication and panel control systems. Electric wiring cables are used for electric power, lighting & internal wiring.
- Instrumentation, Signal & Data cables – These are used in data acquisition systems, computer networking, PA systems, digital control measuring communication systems
- The Instrumentation & Control Cables category accounts for over 80% of our revenue for Q2FY20. Second broad category, that is Power cables are used by the Power transmission companies. Nearly 20% of revenue comes from this category.
Which are the sectors you cater to? Are you dependent on any sector?
We cater to multiple industries like oil & gas, hydrocarbons, airport development & modernization, railways, metro rails, power sector and others as well. We have a diversified pool of revenue from all these sectors. To give you some idea, for FY19, our revenue from hydrocarbons sector contributed highest i.e. 54% to the total revenue, about 19% came from power sector while 11% came from metro & freight corridors. Gradually, we have focused on reducing our dependence on the power sector and have increasingly focused on comparatively cash-rich sectors like hydrocarbon & others.
What is your orderbook as on September 2019?
Our total orderbook as on 30th September 2019 is of about Rs148cr. As previously said, this is a fairly diversified order book from various sectors. Of the total order book, approximately 64% is constituted by hydrocarbons, 16% from power, 7.5% from cement & metals while the rest is spread between metro, freight corridor, fertilizers, chemicals, FMCG and water.
What plans does the company have to grow business further?
We see ample opportunities for company’s further business growth especially from Metro rails, Dedicated Freight Corridors, Railways, Airport Modernization & Development, Exports & Sales through dealer network. These opportunities are further strengthened through the recent approvals the company has already in place from RDSO (Research Design & Standards Organization) under Ministry of Railways, Govt. of India & from AAI (Airports Authority of India) under Ministry of Civil Aviation, Govt. of India. Besides, CORDS has exported to more than 40 countries in the past. Recently, we received approvals from global majors like ADNOC (Abu Dhabi National Oil Company), Samsung Engineering, and others. We have renewed our focus on the exports business and see greater opportunities from the Middle East, especially from the Gulf Cooperation Council Member states, Africa, Europe & Far East. This segment contributed in lower single digit in FY19, but we see its share going upto over double digits in FY20.
Further, as a part of diversifying our business we have started supplies to small dealers who cater to smaller industries. Gradually we plan to foray into the B2C space at an opportune time.
The company's financial performance in the past was largely stagnant, we have seen an uptick in the numbers since FY2018, what has led to this?
In 2015 we bought out the stakes of our co-promoter’s post which entire control of the company vested in our hands. We focused on streamlining of processes, strengthening of internal controls and inculcate a culture that is focused towards growth into the organization. This enabled in quick decision making and proper strategic planning to bring the company back on growth track. This lead to a boost in the confidence with our customers, vendors & various stakeholders coupled with an improvement in our liquidity, efficiency ratios & external credit ratings upgrade. Our robust financial performance over the past two years is a culmination of all these efforts.
What is the growth outlook you envisage for CORDS during the current financial year?
First half of the current fiscal has been very good for us with a 10% growth in the top line & 22% in the bottom line with an improvement in our margins. The base build by us over the past couple of years has enabled us to post a robust performance in such an uncertain economic environment. Had there not been such uncertainties in the overall macroeconomic environment, our growth could have been higher. Having said that, we are currently adopting a cautious approach to ensure that we maintain our profitability & cashflows. However, going forward, we are very optimistic & bullish on the medium to long term growth prospects of business. We look at ending this year at about 11% to 14% growth.