Delton Cables Ltd Management Discussions

Annexure-F to the Directors Report

Delton Cables Limited (“Delton” or “the Company”), founded in 1948, the Company has pioneered the development of Indias electrical industry. Our commitment to quality has been the most integral aspect of Deltons ethos for over 75 years. Our customers trust in us, further stems from over 50 years of being a publically traded Company. Our approval based and certifications further attached to our consistent performance.

The Company is manufacturing a wide range of wires, cables and switchgears. These products cater to a broad spectrum of applications across telecommunication, transportation, water treatment plant, cement & steel, energy, premise infrastructure, power & mining, online gas, railways, sewage treatment plant, aerospace, defence and various other industrial sectors. Deltons diverse customer base includes government and private distribution companies (discoms), EPC contractors, industrial clients, and international customers. The Company operates three manufacturing units situated in Faridabad and Palwal.

According to the IMF World Economic Outlook (Apr 2025), global growth remained quiet through 2024 and is expected to weaken further in 2025. Economic growth globally is projected to slow from an estimated 3.3% in 2024 to 2.8% in 2025.

The Asia-Pacific region, excluding China, witnessed mixed economic performance. While countries such as India, Vietnam and Indonesia experienced robust growth driven by domestic demand and infrastructure investment, other economies faced growth slowdowns due to external trade dependencies and commodity price volatility. The global economy is projected to grow at a stable but modest pace of 2.8-3.3% in 2025, slightly below the pre-pandemic average of 3.2%. The U.S. is expected to remain a key growth driver, though trade policies and tariffs could introduce inflationary pressures.

Overall, risks to the global outlook remain skewed to the downside, with escalating trade restrictions and prolonged policy uncertainty emerging as key concerns.

Indias economy exhibited robust resilience in FY 2024-25, achieving a real GDP growth of 6.5%, retaining its position as the worlds fastest growing major economy and remains firmly on track to become the fourth-largest economy.

Inflationary pressures have eased considerably, with Consumer Price Index (CPI) inflation falling to 3.16% in April 2025-the lowest level since July 2019. This decline is primarily driven by a sharp reduction in food prices, especially an 11% year-on-year drop in vegetable prices. In response, the Reserve Bank of India (RBI) has cut the policy repo rate by a total of 50 basis points in 2025, lowering it to 6.00% as of April 9, 2025.

Indias manufacturing sector is a key driver of the nations economic growth and ranks among its fastest-growing industries. As per Colliers India, the sector is projected to reach a valuation of USD 1 trillion by 2025-26, fueled by strong investment momentum and rising foreign direct investment, which has climbed to USD 29.79 billion.

The Indian wires and cables industry stood out as one of the topperforming sectors in FY 2024-25, continuing its robust growth momentum seen over the past three years.

In the first half of FY 2024-25, government capital expenditure experienced a temporary slowdown due to the general elections. However, project rollouts and fund disbursements picked up in the second half of the year. Despite this brief pause, the cables segment sustained strong growth, supported by the execution of ongoing projects. Key ministries like Railways and Road Transport & Highways continued to demonstrate near-full budget utilisation, in line with trends from previous years. Additionally, the Union Budget for FY 2025-26 increased infrastructure allocations by 17%, including grant-in-aid for the creation of capital assets by state governments-highlighting the ongoing emphasis on infrastructure development.

The global wire and cable market is projected to grow from USD 240.98 billion in 2025 to USD 314.96 billion by 2030, driven by rising electricity demand, renewable energy adoption, and the push for energy-efficient buildings. In India, the wires and cables sector, which forms about 39% of the electrical industry, is expected to grow at a CAGR of 11%-13% to reach ^1.2 lakh crore by FY 2028-29. Growth is supported by infrastructure development, housing demand, digital expansion, and rising exports, which nearly doubled from FY 2019-20 to FY 2023-24. Key drivers include renewable energy targets, 5G rollout, data center growth, and government initiatives such as SWAMIH Fund 2 and increased infrastructure allocations.

1. Rising Electricity Demand

• Indias per capita electricity consumption reached 1,395kWh in FY 2023-24, compared to 6,635kWh in China (2023).

• Growth driven by higher disposable incomes, increase in nuclear families, and expansion of the housing sector.

• Economic development and urbanization are significantly boosting power consumption.

2. Industrialization & Urban Expansion

• Rapid growth in manufacturing and infrastructure development is increasing the need for reliable and extensive power cable networks.

• Urban and industrial projects (residential, commercial, transport) require enhanced power distribution systems.

3. Government Initiatives

• Programs like the Revamped Distribution Sector Scheme (RDSS) are focused on upgrading power grids and improving rural electrification.

• These initiatives are directly increasing the demand for new power lines and cable systems.

4. Emerging Sector Requirements

• Rise in EV charging stations, railway electrification, metro and high-speed rail projects, and data centers is creating a need for specialized and standard-compliant power cables.

5. Renewable Energy Integration

• Indias goal of 500 GW non-fossil fuel capacity by 2030 demands extensive cable infrastructure.

• Specialized cables are required for solar, wind and hybrid energy projects and for transmitting electricity from remote generation areas.

The Indian wires and cables industry is witnessing robust growth, driven by rising infrastructure investments. The Union Budget 2025-26 underscores this focus with a significant allocation of ^11.21 lakh crore to the infrastructure sector-exceeding last years ^11.11 lakh crore. This increased funding supports the ‘Make in India initiative and opens up vast opportunities for domestic manufacturers. Continued emphasis on infrastructure development, particularly in key sectors such as roads, energy, urban development, and railways, is fueling strong demand for high-quality cables and wires. Industry projections indicate that the wire and cable market is expected to grow at a CAGR of 12-14% in the coming years.

The Company faces multiple challenges, including a global economic slowdown, elevated inflation levels, and trade disruptions in West Asia, which affect both exports and supply chains. Rising competition from large integrated players and unorganized manufacturers continues to strain profit margins. Volatility in exchange rates and the prices of key raw materials further impacts profitability, amid intensifying competition in the wires and cables sector. Additionally, any unfavorable changes in government policies particularly related to capital expenditure, import-export duties, or power sector reforms could significantly influence market demand trends.

The company operates in single segment of Wires and Cables. The turnover of the company has increased significantly to Rs. 70,926 lakhs as compared to Rs.40,086 lakhs last year.

The Company remains optimistic about the near- to mid-term growth prospects of the Wires & Cables (W&C) industry, driven by favourable economic conditions and strong government focus on manufacturing and infrastructure development. The ongoing upcycle in the real estate sector, coupled with increased public and private investments, is expected to further accelerate demand.

Key growth drivers for the industry include the expansion and modernization of power transmission and distribution networks, railway infrastructure upgrades, rising investments in metro rail projects, smart grid initiatives, and the development of smart cities.

The Company is well-positioned to capitalize on these trends through its diversified product portfolio. In addition to tapping into infrastructure-led demand, the Company aims to drive growth through import substitution and deeper penetration into rural markets. With strong capabilities and a strategic focus, the Company is poised to benefit from the sustained momentum in both domestic and export demand for wires and cables.

The Company operates in a dynamic and often unpredictable external environment, which exposes it to a range of risks and uncertainties. It functions within a highly competitive industry landscape and is influenced by both positive and negative macroeconomic trends. Key challenges include intense competition from established industry players, difficulties in attracting and retaining skilled talent, and exposure to global economic fluctuations, inflationary pressures, foreign exchange volatility, and geopolitical uncertainties.

In addition to these external factors, evolving regulatory and policy frameworks present further operational complexities. To proactively address these challenges, the Company has implemented a comprehensive Risk Management Policy aimed at the timely identification, evaluation, monitoring, and mitigation of potential risks. Regular performance reviews are conducted in the context of emerging risks, and the management continually develops and updates effective mitigation strategies to safeguard the Companys long-term sustainability and performance.

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The Company has in place adequate internal financial controls including with reference to financial statement and for ensuring the orderly & efficient conduct of its business. The Companys internal auditors are entrusted with the ongoing monitoring and assessment of the effectiveness of its internal control systems. Any significant observations or findings are promptly communicated to the management to ensure timely corrective measures are implemented.

During the year under review, the Company achieved Revenue from operations of Rs.70,926 Lakhs as compared to Rs. 40,086 Lakhs in the previous financial year. Further, the Company has earned profit after tax and exceptional items of Rs. 2,051 Lakhs in the current financial year as against profit of Rs.1,466 Lakhs in the previous financial year.

The Companys Human Resource (HR) strategy is built on progressive, employee-focused policies aimed at nurturing a skilled, diverse, and motivated workforce. It strives to create a work environment that promotes professionalism, inclusivity, and continuous learning. The Company is committed to upholding ethical standards by actively preventing discrimination, harassment, and all forms of forced or child labour - both within the organization and across its supply chain. The HR culture encourages challenging conventional approaches to enhance competitiveness and agility. Decision-making processes are aligned with employees professional goals and personal wellbeing, fostering a supportive environment that promotes a healthy work-life balance.

As of March 31,2025, the Company had a permanent employee totalling 267.

The Management Discussion and Analysis may include forward-looking statements that are subject to inherent risks and uncertainties. Actual outcomes may vary significantly from those anticipated, as various factors could impact the Companys operations. These may include changes in government policies, political and economic developments, industrial relations, and other risks associated with the Companys growth. Additionally, market data and product analyses presented in this report are derived from internal Company reports as well as industry and research publications. While efforts have been made to ensure their accuracy, the Company does not guarantee their completeness or reliability.