Dynamic Cables Ltd Management Discussions

Company Overview

Dynamic Cables Limited is engaged in the manufacturing of power cables & conductors, including low voltage (LV), medium voltage (MV), and high voltage (HV) cables, as well as power control, instrumentation, exible and industrial cables, solar cables, and railway signalling cables. These products are used across various sectors such as power generation, transmission and distribution, railways, airports and various other industries.

The company serves a diverse customer base comprising government and private discoms, EPC contractors, industrial users and international clients. It has been recognized as a Two Star Export House by the Directorate General of Foreign Trade (DGFT).

Dynamic Cables operates three manufacturing facilities located in Jaipur and Reengus (Rajasthan). The companys operations are managed through a corporate of ce in Jaipur and supported by ve regional sales of ces across India. With a presence of over two decades, the company has consistently aligned its product offerings with evolving industry requirements.

Sector Basics

Cables involve one or more conductors which are used for the transmission of electricity, data or signals. The demand for cables and conductors is directly linked to the to the expansion of core manufacturing and infrastructure sectors, including power, telecommunications, residential and commercial real estate, industrial development, transportation, data centres, and renewable energy.

The Indian wire and cable market according to various reports is estimated to have surged to around ~ Rs. 900-950 billion in FY 2025. It is estimated that the industry has registered a growth of around 10% CAGR over last 12 years and going forward it is projected to grow at a CAGR of 12% to 14%, driven by increased government spending on infrastructure, robust activity in the real estate sector, and rising private capital expenditure.

The cables industry can be broadly segmented into extra high voltage power cables greater than 66 KV, medium voltage power cables up to 33 KV and low voltage power cables up to 1 KV, instrumentation and control cables, communication cables, light-duty cables, ber optic cables, copper telephone cables, elastomer rubber cables and specialty cables.

Economic Review

Global Economic Review

According to the IMF World Economic Outlook (Apr-2025), global growth remained subdued through 2024 and is expected to weaken further in 2025, re ecting rising trade tensions and elevated policy uncertainty. The introduction of near-universal tariffs by the United States in April 2025, followed by retaliatory measures from trading partners, has led to the higher effective tariff levels. This shift marks a signi cant negative shock to global economic activity. Under the reference forecast, global growth is projected at 2.8 percent in 2025 and 3.0 percent in 2026, down from 3.3 percent for both years projected earlier in January. Advanced economies are expected to grow at a slower pace, with U.S. growth revised down to 1.8 percent due to weaker demand and heightened uncertainty, while growth in the euro area is expected at 0.8 percent. Emerging market and developing economies are projected to grow at 3.7 percent in 2025, with notable downgrades for countries heavily exposed to new trade measures, including China. Global in ation is forecast to decline more gradually, reaching 4.3 percent in 2025 and 3.6 percent in 2026, with upward revisions in advanced economies. Risks to the outlook are tilted to the downside, including the potential for further trade escalation, nancial market volatility, and structural challenges such as aging populations, rising debt levels, and limited scal space. A coordinated policy approach focused on restoring trade stability, rebuilding buffers, and addressing domestic imbalances remains critical for supporting medium-term growth and global nancial stability.

Source: IMF World Economic Outlook April 2025

Indian Economic Review

India continues to demonstrate robust economic performance amid global uncertainties, maintaining its status as the worlds fastest-growing major economy. The International Monetary Fund (IMF) projects Indias real GDP growth at 6.2% for 2025, supported by strong domestic demand and resilient private consumption.

In ationary pressures have eased signi cantly, with the Consumer Price Index (CPI) in ation declining to 3.16% in April 2025, the lowest since July 2019. This moderation is largely attributed to a substantial drop in food prices, notably an 11% year-on-year decrease in vegetable costs. The Reserve Bank of India (RBI) has responded by reducing the policy repo rate by a total of 50 basis points in 2025, bringing it down to 6.00% as of April 9, 2025.

The RBIs accommodative monetary policy stance aims to stimulate investment and consumption, further bolstering economic growth. With in ation under control and supportive scal measures in place, Indias economic outlook for 2025 remains positive, underpinned by structural reforms and a focus on infrastructure development.

Raw material challenge

The wire and cable industry maintained strong demand during FY 2024 25, driven by government investments in infrastructure, housing, renewable energy, and robust export activity. However, manufacturers faced signi cant challenges due to the volatility in prices of key raw materials, particularly copper and aluminium.

Copper Price Trends:

Copper prices experienced notable uctuations throughout the scal year. Starting at approximately $8,730 per metric ton in March 2024, prices rose to $9,675 by March 2025, before adjusting to around $9,200 by April 2025. This volatility posed challenges for manufacturers in forecasting costs and managing budgets.

Aluminium Price Trends:

Aluminium prices also saw signi cant movement. From $2,250 per metric ton in March 2024, prices increased to $2,650 by March 2025, then moderated to $2,375 by April 2025. Such uctuations impacted procurement strategies and pricing models within the industry.

Historically, increases in raw material costs have been passed on to consumers through price adjustments. However, the extent of cost pass-through depends on market conditions, contractual terms, and competitive dynamics. Persistent volatility in raw material prices can affect purchasing decisions, particularly in price-sensitive segments, potentially impacting revenue growth and pro t margins. To navigate these challenges, manufacturers need to adopt agile pricing strategies and enhance supply chain resilience. At Dynamic Cables, our contracts include an inbuilt price variation clause that protects the company against raw material price volatility.

Key structural drivers for the sector

The cables industry is poised for signi cant growth, driven by a robust capital expenditure cycle from both the government and private sector. Government initiatives across various sectors such as power, housing, infrastructure, and digitization are expected to create substantial business opportunities for the wire and cable industry in the medium to long term. Additionally, the industrys growth will be propelled by infrastructure development, urbanization, the establishment of smart cities, the expansion of residential and commercial real estate, rural electri cation, and the shift towards renewable energy, collectively suggesting a promising future for the cables and wires sector.

Here is a list of a few structural drivers for the sector.

1) Increasing Electricity Demand: Indias per capita electricity consumption has risen substantially in the last decade, driving demand for power cables to meet growing energy needs and expand electri cation.

2) Rapid Industrialization & Urbanization: Ongoing industrial expansion, new manufacturing units, and increasing urban development (residential, commercial, infrastructure) necessitate robust power cable networks for ef cient power supply.

3) Government Initiatives: Schemes like the Revamped Distribution Sector Scheme (RDSS) are accelerating grid upgrades and rural electri cation, directly stimulating demand for power cables for new lines and system modernization.

4) New End-Use Sector Requirements: Growth in EV charging infrastructure, railway electri cation (including high-speed rail and metro projects), and data centers requires specialized and standard power cables to support their expanding electrical load.

5) Renewable Energy Integration: Indias target of 500 GW non-fossil capacity by 2030 requires extensive power cable infrastructure, including specialized cables for solar, wind, and hybrid projects, and for transmitting power from remote generation sites.

6) Exports: Traction in electricity transmission & distribution to continue in the Middle East, SAARC and America.

Companys performance

Operating revenue in FY 2024-25 grew by 34% as compared to FY 2023-24 and around 53% as compared to FY 2023-24. Operating margin was at 10.3% in FY 2024-25. PAT increased to Rs. 65 Crs in FY 2024-25. Company also has received an upgrade in its credit rating from Crisil A-(stable) to Crisil A (stable)

Financial performance

	PARTICULARS	2024-25		2023-24
Debtors Turnover ratio	Revenue from Operations	1,02,537.34	4.17	76,800.36	3.33
	Average Debtors	24,601.61		23,070.30
Inventory Turnover ratio	Revenue from Operations	1,02,537.34	7.42	76,800.36	7.14
	Average Inventory	13,812.42		10,760.58
	Earnings Available for Debt Service	9,101.58		6,777.42
Debt Service Coverage Ratio	Current Interest and	2,255.87	4.03	2,879.18	2.35
Current Ratio	Installments of Loan Current Asset	49,326.97	2.37	42,635.69	1.54
	Current Liabilities	20,800.87		27,688.50
Debt Equity Ratio	Total Debts	5,795.72	0.16	11,916.03	0.56
	Equity	37,388.74		21,395.18
Operating Pro t Margin	EBITDA excluding Other Income	10,536.49	10.28%	7,728.00	10.06%
	Revenue from Operations	1,02,537.34		76,800.36
Net Pro t Margin	PAT	6,482.05	6.32%	3,777.14	4.92%
	Revenue from Operations	1,02,537.34		76,800.36
Return on equity	PAT	6,482.05	22.05%	3,777.14	19.30
	Average Shareholders Equity	29,391.96		19,569.09
ROCE	EBIT	10,095.05	26.39%	7,150.67	29.56%
	Average Capital Employed	38,247.83		24,193.19
	(Total Debt + Equity)
ROA	PAT	6,482.05	11.00%	3,777.14	7.58%
	Total of Balance Sheet	58,929.54		49,852.85

Segment-wise or product wise performance

Customer segment wise sales break-up:

Segment	Sales (Rs. In lakhs)
Domestic
- Government	18381.00
- Private	74681.55
Export	9474.79
Others	-
Total	102537.34

Product wise sale break-up:

Product	Sales (Rs. In lakhs)
HT Cables	58154.00
LT Cables	30333.34
Railway Signaling Cable	4042.00
Conductors	7585.00
Others	2423.00
Total	102537.34

Going Ahead

The company holds a positive outlook regarding the opportunities within the institutional business segment. This optimism is fuelled by the resurgence of demand, which is directly linked to increased capital expenditure initiatives across the economy. Traditionally, the companys primary focus was on supplying to discoms; however, it has successfully diversi ed its presence into additional segments within the power sector.

Looking ahead, signi cant growth rates are projected for both exports and the domestic sector, which are expected to be key contributors to the companys future expansion. Furthermore, the company has entered the renewable cable markets, aligning with its forward-looking strategic goals.

Efforts are concentrated on enhancing the product portfolio through the development of new offerings that complement existing core products. This strategic approach underscores the companys dedication to innovation and its ability to adapt to emerging market opportunities, ensuring its continued relevance and competitive standing in the evolving industry.

Here are our key focus areas.

Product Mix:

The company has adjusted its product mix towards margin accretive products, including high-voltage cables and specialty products. This has resulted in the proportion of low-margin conductors decreasing from 20.60% in FY 2018-19 to 7.40% in FY 2024-25. Concurrently, the share of high-tension (HT) products increased from 34.90% in FY 2018-19 to 56.72 in FY 2024-25.

Renewable Energy Sector:

Indias targets for renewable energy, including 500 GW of non-fossil fuel capacity by 2030, contribute to demand for specialized cables. In FY 2025, the companys order book in this segment grew from zero to 100 crore. New products for this sector were also launched and received necessary approvals.

Infrastructure Development & Urbanization:

Drivers for demand include urbanization, smart city projects, metro rail expansions and construction of residential and commercial buildings. The increasing per capita consumption of power in India also necessitates further infrastructure development.

Export Market:

The company continues to pursue global opportunities, driven by power infrastructure investments in Africa and Asia. Efforts are also underway to enter the US market. In FY 2024-25, export sales constituted 9.24% of the companys total revenue from operations.

Power Sector:

Government initiatives focused on expanding power distribution infrastructure and modernizing existing systems present a favourable outlook. Increased privatization of the power distribution sector and efforts to strengthen state power distribution companies (discoms) are expected to drive investments in power infrastructure.

New Segments:

Emerging segments such as electric vehicles, railway electri cation, and import substitution are becoming new business avenues. The companys R&D team has allocated resources to develop specialized products for these speci c needs.

Union Budget 2024-25 Highest Ever capital investment outlay

For the Union Budget 2025-26, the Central Government has allocated 11.21 lakh crore for capital investment. This amount is directed towards infrastructure development and constitutes approximately 3.1% of the estimated GDP. This capital outlay represents an increase when compared to previous scal years. Speci cally, it is nearly 3.5 times higher than the outlay in 2019-20. The focus on capital investment aims to support economic growth, contribute to job creation and attract private sector investment.

The Reserve Bank of India (RBI) has projected Indias real GDP growth at 6.5% for FY26. This projection is based on current economic assessments, including the impact of government investments.

Strengths

Dynamic Cables has established its position in the power cable manufacturing sector, supported by consistent operational delivery and a reputation for product reliability. Strategic investments in capacity expansion and operational ef ciencies, contribute to growth and effective cost management. The companys focused management, effective governance, and lean capital structure foster operational resilience and long-term viability. As of March 31, 2025, the companys order book stood at 725.6 crore, and in FY25, it successfully launched new product lines, obtained approvals, and signi cantly grew its renewable energy order book.

Challenges

Raw material price volatility, particularly for copper, aluminium, and PVC, remains an inherent challenge for the sector. While Dynamic Cables incorporates price variation clauses in most contracts to mitigate input cost uctuations, unpredictable price movements can still affect cash ows and working capital cycles. Additionally, payment delays from state utilities and discoms, despite secured orders, continue to create liquidity pressures. External macroeconomic uncertainties, such as rising interest rates or scal tightening globally, also pose potential impacts on demand in key export regions.

Opportunities

The Indian cables and conductors industry is experiencing growth driven by increased infrastructure spending. Sustained government focus on power distribution reforms (RDSS), railway electri cation, green energy initiatives, and electri cation in rural and urban areas provides multi-year demand visibility.Industry estimates project the wire and cable market to grow at a CAGR of 12 14%, in coming years. With robust order in ows and ready capacity, Dynamic Cables is positioned to bene t from this sector-wide growth.

Threats

Increasing competition from large integrated players and unorganized manufacturers continues to exert pressure on pro t margins. Any adverse shifts in government policy speci cally regarding capital expenditure allocation, import-export duties, or power sector reforms could alter market demand dynamics. Furthermore, external risks such as skilled labor availability, rising regulatory compliance costs, and global commodity or foreign exchange volatility may impact the companys pro tability and operational ef ciency.

Risk and mitigation

Geopolitical Risk

Risk: Global geopolitical developments, including ongoing con icts, trade policy shifts, and regional instabilities, carry the potential to disrupt global supply chains and in uence commodity prices. Such events may also lead to a contraction in demand across certain international markets where the company operates.

Mitigation: The companys operational footprint spans over 40 countries, providing a degree of geographical diversi cation that reduces concentrated risk in any single region. Continuous monitoring of country-speci c risk pro les informs market engagement decisions. On the supply side, the company implements strategic sourcing and vendor diversi cation initiatives to enhance resilience against potential disruptions.

Commodity Price Volatility Risk

Risk: Key input materials for the company, such as copper, aluminum, steel, PVC, and zinc, are subject to uctuations in global market prices. This volatility can directly impact production costs and in uence pricing strategies, potentially affecting overall margins.

Mitigation: A signi cant portion of the companys contracts incorporate price variation clauses, allowing for the adjustment of pricing based on changes in raw material costs. For speci c orders, the company may also secure raw material prices at the time of order booking.

Currency Fluctuation Risk

Risk: Movements in the value of the Indian Rupee against foreign currencies can affect nancial performance. A depreciation of the Rupee can increase the cost of imported raw materials, while appreciation might impact the competitiveness of exports, posing challenges for consistent margin management.

Mitigation: The company addresses foreign exchange-related cost pressures through contractual provisions that accommodate input price variations. A disciplined approach to currency hedging is maintained to reduce nancial exposure. The strategic emphasis on expanding export markets also allows the company to bene t from favorable exchange rate dynamics when they occur.

Demand Risk

Risk:A slowdown in capital expenditure on infrastructure or reduced activity within critical end-user sectors, including railways, power distribution, real estate, and telecommunications, could lead to a decline in order in ows and sales volumes.

Mitigation: The company maintains a diversi ed market presence across multiple geographies and sectors. Growing engagement in international markets and an expanded product portfolio, encompassing high-growth segments like renewable energy, contribute to the diversi cation of revenue streams. This strategy aims to enhance resilience against demand uctuations speci c to particular sectors or regions.

Human Resources

The Company attributes its competitive edge to its skilled workforce. At Dynamic Cables, employees bring diverse multi-sectoral experience, technological expertise, and deep domain knowledge to the table. The HR culture emphasizes disrupting traditional norms to bolster competitiveness. Decision-making aligns closely with employees professional and personal aspirations, fostering an environment conducive to achieving an optimal work-life balance.

As of March 31st, 2025, the Company had a permanent employee totaling 977. The Company implemented Automation of HR Processes (HRMS) to enhance its HR capabilities. Employee training is at the heart of the Companys HR strategy. During the nancial year 2024-25, company covered 85 topics with a total of 128 training sessions. This averages to 11 sessions per month, which is 6.6 % above the set target. The total training man-hours for this nancial year amount to 1923, which is around 1.97 hours per associate. During this nancial year, our focus was on technical and product-related trainings, accounting for around 55.46%. This resulted in zero customer complaints related to product quality.

Internal Control System and their adequacy

The Company maintains a robust framework of internal controls tailored to its operational scale and complexity. This framework is designed to manage evolving risk factors and reinforces a culture of strong corporate governance. Each year, the Internal Audit plan is approved by the Audit Committee, focusing on reviewing internal controls and risks across the Companys operations, including factories, warehouses, and centrally managed business units. This systematic approach ensures thorough oversight and compliance with established standards and procedures.

Cautionary Statement

The Management Discussion and Analysis may contain certain statements that might be considered forward looking. These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed in the Statement as important factors could in uence the Companys operations such as Government policies, local, political and economic development, industrial relations, and risks inherent to the Companys growth and such other factors. Market data and product analysis contained herein has been taken from internal Company reports, Industry & Research publications, but their accuracy and completeness are not guaranteed and their reliability cannot be assured.