Birla Cable Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Companys main business activities are manufacturing and sales of all types of Optical Fibre Cables, Copper Telecommunication Cables, Structured Copper LAN Cables, Specialty cables and allied accessories.

Although the Financial Year 2025-26 ended with subdued demand for Optical Fibre Cables throughout the year, the Structured Copper LAN Cables segment recorded strong volumes. This resilience in operations continued throughout the year, significantly uplifting overall performance and enabling the Company to navigate the challenging environment in the telecom sector.

A deep global dearth in Optical Fibre Cable demand drove the industry to historically low levels, severely impacting cable manufacturers. The Company, however, with exceptional performance in the Structured Copper LAN Cable segment, managed to withstand this downturn and maintain stability.

Encouragingly, demand for Optical Fibre Cables has shown signs of revival since late March 2026 and is poised to strengthen in F.Y. 2026–27. With resilient systems and diversified operations, the Company remains well-positioned to withstand cyclical downturns and capitalize on emerging opportunities.

OVERALL REVIEW

Business Review and Outlook

Indias telecom sector is expected to sustain its strong growth momentum in F.Y. 2026–27, driven by rapid 5G adoption, increasing fiberisation, and rising data consumption. Mobile subscriptions have surpassed 1,265 million as of March 2026, with Reliance Jio (31.6%), Bharti Airtel (23.7%), and BSNL (15.5%) leading the market.

In the Union Budget 2026–27, the Government of India allocated Rs 74,000 crore to the Department of Telecommunications, with a focus on infrastructure revival and supporting BSNLs 4G and 5G Advanced rollouts. This is expected to drive large-scale fiberisation of telecom towers and backhaul networks.

The sector is increasingly adopting AI and automation, strengthening the foundation for next-generation digital infrastructure. Rising investments in data centres are further accelerating demand for specialised telecom and data cables. The Indian wire and cable industry is projected to grow at a CAGR of 11–13% through FY 2029.

The India telecom market is projected to expand steadily, rising from USD 153.83 billion in 2025 to USD 159.8 billion in 2026, and further reaching USD 193.34 billion by 2031, reflecting a CAGR of 3.88% between 2026 and 2031. This growth trajectory is underpinned by sustained mobile-data consumption, accelerating enterprise digital transformation, and a strategic shift from sheer subscriber volume growth to value-driven service innovation.

Data and internet services already contribute more than 60% of industry revenues, supported by average monthly usage of 30 GB per subscriber across nearly 490 million active connections. Voice services, though declining, still account for close to 17% of revenues, with VoLTE adoption gaining momentum as legacy 2G and 3G networks are phased out. Bundled OTT content, cloud add-ons, and AI-enabled offerings are steadily lifting ARPU, particularly in urban markets.

Enterprise customers are emerging as the fastest-growing segment, with private 5G networks, edge connectivity, and managed cloud services driving a 4.29% CAGR in B2B revenues. Competitive intensity remains high, as three dominant operators control more than 80% of the market, but differentiation is increasingly defined by network quality, ecosystem depth, and AI-driven service portfolios. Reliance Jio alone carries nearly 8% of global mobile traffic, underscoring Indias data-centric trajectory.

Fixed Wireless Access (FWA) is set to cross 10 million subscriptions by end-2026, offering an alternative broadband pathway in underserved regions. Affordable pricing combined with dense 5G rollouts positions India to pioneer data-intensive consumer and industrial applications. Public-sector fibre backbones are lowering the marginal cost of rural rollouts, enabling private carriers to extend 4G and 5G coverage into previously uneconomical villages. BSNLs state-funded 4G rollout, targeting 100,000 sites by March 2027, exemplifies how government stimulus is de-risking private capital while anchoring demand from e-health, agri-tech, and e-learning initiatives.

Finally, compliance with Indias data-localization rules is creating parallel demand for locally hosted cloud and connectivity services, pulling the telecom market into new revenue pools. Together, these dynamics position Indias telecom sector as a resilient, data-driven industry poised to unlock significant consumer and enterprise opportunities through FY 2031.

If we see Global Telecom Market, the FY 2026–27 has begun on a strong note for the Optical Fibre Cable (OFC) business, with both demand and pricing reaching record levels. Current trends indicate that this favourable environment is likely to continue in the near to medium term.

North America and Europe (particularly Germany and the UK) are witnessing robust demand for high-speed connectivity, supported by the rapid expansion of hyperscale data centres. This has significantly increased fibre consumption, leading to supply constraints and elevated pricing. A major portion of this demand is concentrated in high-count Rollable Ribbon cables. Key global players are expanding their offerings to support 5G and fibre infrastructure. Emerging markets in Latin America, Africa, and the Middle East present significant growth opportunities as countries accelerate digital infrastructure upgrades and mobile connectivity. Key growth drivers include AI-enabled hyperscale data centres, drone applications, increasing internet penetration, government initiatives, smart city projects, and the proliferation of IoT applications.

Broadband delivery in India continues to rely extensively on copper LAN cables, leveraging the strengths of optical fibre cables in the backbone network. Enterprise networks, in particular, consume large volumes of structured copper LAN cables, as the hybrid topology of fibre backbones combined with copper access ensures reliable broadband connectivity in dense application environments. This hybrid deployment model has become central to meeting subscriber demand, enabling seamless performance across enterprise and consumer segments. For the cable manufacturing industry, such hybrid use cases translate into significant bulk uptake, providing a stable and calibrated growth trajectory.

Telecommunication Cables (A) Optical Fibre Cables (OFC)

The Optical Fibre Cable (OFC) business recorded a marginal decline, closing at Rs 10564.95 Lakhs in FY 2025–26, compared to Rs 11516.07 Lakhs in the previous year. This contraction was primarily driven by subdued demand for optical fibre cables across both domestic and export markets. Of the total, exports contributed Rs 7848.84 Lakhs, reflecting the impact of sluggish global market conditions during the year under review.

(B) Copper Telecommunication/Structured Cables

The Company significantly ramped up sales in the Structured Copper LAN Cable segment, registering a robust increase in turnover during FY 2025-26 and achieving the highest-ever revenue in this category. Sales rose to Rs 66312.66 Lakhs in the year under review, compared to Rs 51520.66 Lakhs in the previous year.

This performance was strongly supported by the Companys commitment to customer service excellence and its ability to meet prompt delivery requirements, which has been widely appreciated by leading clients in the segment. With long-standing customer relationships and a focus on setting industry benchmark standards, the Company is well positioned to continue fulfilling client needs and sustaining growth in the years ahead.

FINANCIAL REVIEW

(a) The revenue from operations increased by 16.54% to Rs 77111.40 Lakhs during the financial year 2025-26 as compared to Rs 66165.23 Lakhs during the previous year, primarily due to improved demand and higher market traction in the structured Cables segment.

(b) The raw material consumption was higher by 0.31% as compared to previous year.

(c) During the year under review, the Finance cost has decreased to Rs 1233.51 Lakhs in current year under review as compared from Rs 1371.75 Lakhs in the previous year.

(d) The profit after tax for the year under review stood at Rs 1678.78 Lakhs as compared to Rs 503.11 Lakhs in the year 2024-25 (e) The Other Equity of the Company stood at Rs 25186.95 Lakhs for the year under review.

(f) The additions to the Fixed Assets of Rs 191.05 Lakhs during the year is mainly on expansion of existing manufacturing capacity of the Company.

(g) For detailed information on the financial performance with respect to operational performance, a reference may please be made to the financial statements.

(h) Details of significant changes in key financial ratios:

Ratios	2025-26	2024-25	Variation	Reasons for Change
Interest Coverage Ratio (in Times)	3.50	1.58	121.48%	Increase in Interest Coverage Ratio was primarily attributable to higher profitability driven by increased turnover and reduction in finance costs during the year.
Operating Profit Margin Ratio (in %)	3.61	2.30	57.43%	Increase in Operating Profit Margin Ratio was primarily attributable to higher profitability driven by increased turnover and better Operational Performance.
ROE to Net Worth (in %)	7.28	2.25	223.16%	Increase in ROE to Net Worth Ratio was primarily attributable to higher profitability driven by increased turnover and better Operational Performance.
Net Profit Margin Ratio (in %)	2.30	0.80%	186.43%	Increase in Net Profit Margin Ratio was primarily attributable to higher profitability driven by increased turnover and better Operational Performance.
Return on Capital Employed (in %)	8.42	5.52	52.58	Increase in Return on Capital Employed was primarily attributable to higher profitability driven by increased turnover and better Operational Performance.
Return on Investment in Shares (in %)	31.84	9.40	238.51	Due to increase in the Market value of investments as compared to previous year.

OPPORTUNITIES AND THREATS

Indias telecom sector is entering a transformative phase, powered by rapid 5G rollouts and extensive fiberisation of towers and backhaul networks. This infrastructure push is unlocking a new wave of consumer and enterprise applications, positioning the industry at the forefront of digital innovation.

Fixed Wireless Access (FWA) is emerging as a strong alternative broadband pathway, with subscriptions expected to cross 10 million by 2026. This development is particularly significant for underserved regions, where affordable connectivity can bridge long-standing digital divides. Complementing this, the Government of India has allocated Rs 74000 crore to the Department of Telecommunications for infrastructure revival and BSNLs 4G/5G rollout. Such state-backed initiatives are reducing risk for private capital while accelerating rural coverage. Public sector fibre backbones are further lowering rollout costs, enabling expansion into villages that were previously uneconomical to serve. On the enterprise front, private 5G networks, edge connectivity, and managed cloud services are driving robust growth, with B2B revenues projected to expand at a CAGR of 4.29%. Compliance with Indias data localization rules is simultaneously creating demand for locally hosted cloud and connectivity services, opening new revenue pools for operators.

The consumer market continues to be data-centric, with internet services already contributing more than 60% of industry revenues. Average monthly usage has reached 30 GB per subscriber across nearly 490 million active connections, ensuring sustained demand. Rising ARPU is being supported by bundled OTT content, cloud add-ons, and AI-enabled offerings, particularly in urban markets. AI and automation adoption is strengthening next-generation infrastructure, enabling telecom operators to differentiate through service quality and ecosystem depth. By leveraging AI-driven portfolios, operators can enhance customer experience, reduce churn, and build resilience in a highly competitive market.

At the same time, rising investments in data centres are boosting demand for specialized telecom and data cables, creating strong linkages between connectivity and digital infrastructure. Beyond traditional telecom services, new demand anchors are emerging from e-health, agri-tech, and e-learning initiatives, which rely on robust connectivity to scale across Indias diverse landscape. Together, these dynamics highlight a sector that is not only resilient but also poised to unlock significant opportunities across consumer, enterprise, and public service domains. Indias telecom industry is steadily evolving into a data-driven ecosystem, laying the foundation for inclusive digital growth through FY 2031.

Indias telecom industry, while poised for growth, faces a series of structural and operational challenges that could weigh on its long-term profitability. Market concentration remains a defining feature, with Reliance Jio, Bharti Airtel, and BSNL together controlling more than 80% of the market. This dominance has intensified competitive pressures, leading to price wars and margin erosion. In such an environment, differentiation is increasingly dependent on network quality and ecosystem depth—both of which demand heavy capital expenditure.

Voice services, though still contributing around 17% of revenues, are steadily shrinking as legacy 2G and 3G networks are phased out. Operators must therefore offset this decline by accelerating the shift toward higher-value digital services. Yet, the path forward is capital-intensive. Large-scale fiberisation, 5G rollouts, and rural expansion require significant investment, raising the risk of debt accumulation and financial stress, particularly for BSNL and smaller players with weaker balance sheets. Regulatory and compliance factors add further complexity. Indias data localization rules increase costs for global operators, necessitating fresh investment in local infrastructure. At the same time, policy uncertainty around spectrum pricing and telecom regulations continues to cloud profitability outlooks. Even with government support, extending coverage into remote areas faces logistical hurdles and slower monetization, while ARPU uplift remains concentrated in urban markets, leaving rural profitability uncertain.

Technology disruption is another looming challenge. The rapid evolution of AI, cloud, and edge services could outpace operator readiness, creating gaps in service delivery. Meanwhile, OTT platforms and alternative connectivity solutions such as satellite broadband and private networks threaten to erode traditional telecom revenues, forcing operators to rethink their business models. Taken together, these dynamics underscore the delicate balance the Indian telecom sector must maintain. While opportunities abound in data-driven growth, enterprise services, and digital transformation, the industry must navigate intense competition, regulatory headwinds, and disruptive technologies to sustain momentum.

RISKS AND CONCERNS

Like any other industry, the telecom sector is exposed to a range of risks and challenges that can arise from time to time. These include the non-availability of low-cost financing, logistical bottlenecks, policy uncertainties, taxation issues, shortage of skilled manpower, foreign exchange fluctuations, and high workforce turnover. Logistics remain a particular concern, both in terms of sourcing raw materials for manufacturing and distributing finished products to customers. Recent geopolitical disturbances, coupled with rising transportation costs, have further intensified this challenge.

Additional concerns include foreign exchange volatility, adverse movements in raw material prices, warranty and security obligations, working capital management, interest rate fluctuations, and contingent liabilities. The Company actively identifies and monitors these risks, implementing appropriate mitigation strategies. Its crisis management framework is well-developed, ensuring protection of business continuity and reputation with stakeholders. Nevertheless, the Company has established systems and robust policies designed to mitigate such risks and safeguard operations.

Technological

(a) No more traditional copper telecommunication cable requirements in the network are required, as all the telecom operators are going for optical fibre cables.

(b) Cut-throat competition is the norm which is always prevailing in the cable industry as some of the players offering highly advantageous price levels to the customers, thereby bringing the margins under huge pressure.

(c) Players offering products with inferior technology, ultimately affecting the network to standards which are not at par with international ones.

Financial

Financial risks would include, interalia, low-capacity utilization, un-remunerative prices, highly concentrated customers base, shorter delivery schedule and liquidated damages, foreign exchange exposure and related exchange rates fluctuation, commodity price including adverse movements in prices of raw-materials, warranty, and security, current or future litigations, working capital management and interest rate, contingent liabilities, etc. In addition, the credit risks could increase, if the financial condition of Companys customers declines. The Company regularly identifies and monitors the financial risks as well as potential business threats and develops appropriate risk mitigation plans. The Companys crisis management capability is also reasonably honed to protect its reputation with its stakeholders.

INTERNAL CONTROL SYSTEMS

The Companys financial, operational, compliance, and risk management controls are firmly rooted within its business processes. These systems provide reasonable assurance regarding operational efficiency, asset security, and the orderly, legitimate conduct of business under foreseeable circumstances.

A clearly defined organizational structure, delegated authority levels, internal procedures, and established rules guide the execution of transactions. To further strengthen governance, the Company has engaged a firm of Chartered Accountants as Internal Auditors. In addition to conducting periodic audits, they independently review control measures and report their findings to Management and the Audit Committee. Corrective actions are promptly initiated wherever deviations are identified, ensuring continuous improvement in internal controls.

ENVIRONMENT & SAFETY

The Company successfully continued with the implementation of occupational health and safety, quality and environmental protection measures and these are ongoing processes at the Companys plant and facilities. Various proactive measures have also been adopted and implemented which, interalia, include adoption of cleaner technologies wherever feasible, conservation of resources through waste reduction and training of employees with a focus on sustainable development by improving standards on occupational health & safety and environment protection. As a recognition of these objectives, the entire range of products of the Company continue to remain certified to the requirement of international standard ISO 14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health and Safety Management System) by the DNV Business Assurance India Pvt Ltd.

INDUSTRIAL RELATIONS & HUMAN RESOURCE DEVELOPMENT AND CORPORATE SOCIAL RESPONSIBILITIES

The Company sees its relationship with its employees as critical to the future and believes that every employee needs to possess apart from competence, capacity and capabilities, sustainable values, current and contemporary which would make them useful, relevant and competitive in managing the change constructively for overall growth of the organization. To this end, the Companys approach and efforts are directed towards creating a congenial work atmosphere for individual growth, creativity and greater dedicated participation in organizational development. In-house and external training and instructions are also provided to employees at all levels, which help in attaining professional and productive culture by a blend of technology and highly skilled manpower.

The Company is committed to maintain good industrial relations through active participation of workers, regular meetings and discussions on all legitimate and legally tenable issues. The Company employed 280 number of permanent employees on its Roll as on March 31, 2026.

CAUTIONARY STATEMENT

Statements in the Managements Discussion & Analysis Report which seek to describe the Companys objectives, projections, estimates, expectations and predictions may be considered to be "forward-looking statements" as of the date of this report and are stated as required by applicable laws and regulations. Actual performance and results could differ materially from those expressed or implied and the Company owes no obligation to publicly update these forward looking statements to reflect subsequent events or circumstances. Market data and product analysis contained in this Report has been obtained from internal Company reports and industry publications, but their accuracy and completeness are not guaranteed and their reliability cannot be assured.