Prime Cable Industries Limited Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

Global Economy Outlook

The global economy exhibited resilient but uneven growth during the year under review. As per the International Monetary Funds (IMF) World Economic Outlook Update of July 2026, global growth is projected at approximately 3.0% for calendar year 2026 and 3.4% for 2027, moderating from the average of approximately 3.5% recorded during 2024-25. This moderation primarily reflects the drag on energy-importing and vulnerable economies from the ongoing conflict in the Middle East, partly offset by strong momentum in the global technology cycle driven by continued advances in artificial intelligence and its adoption across industries. Global headline inflation is estimated at approximately 4.7% in 2026, revised upward on account of elevated energy prices, and is expected to ease to approximately 3.9% in 2027. Growth in advanced economies is estimated at approximately 1.7% in 2026, led by the United States at approximately 2.1%, while the Euro area is expected to grow more modestly at approximately 1.2% amid energy dependencies and manufacturing competitiveness challenges. Emerging market and developing economies, including Asias technology-integrated economies, continue to benefit from AI-driven demand for semiconductors and digital infrastructure, even as global trade growth is expected to moderate to approximately 3.5% in 2026 from approximately 5.0% in 2025.

INDIAN ECONOMY OUTLOOK

The Indian economy continued to be among the fastest-growing major economies globally during the year under review. As per provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) in June 2026, Indias real GDP grew by approximately 7.7% in FY 2025-26, an improvement over the 7.1% growth recorded in FY 2024-25, supported by robust government and private capital expenditure, resilient private consumption and sustained momentum in infrastructure spending. Looking ahead, growth is estimated to moderate to approximately 6.6%–6.9% in FY 2026-27 as per estimates of the Reserve Bank of India (RBI) and other institutions, reflecting a normalization from the exceptionally strong growth recorded in the previous year, while still keeping India well ahead of most major global economies. The RBI maintained the policy repo rate at 5.25% as at its June 2026 review, with CPI inflation for FY 2026-27 projected at approximately 5.1%. Continued Government focus on infrastructure creation, power sector reforms, renewable energy capacity addition and initiatives such as Make in India and the Revamped Distribution Sector Scheme (RDSS) is expected to continue providing a supportive demand environment for capital goods and infrastructure input industries, including the cables and wires industry in which the Company operates.

GLOBAL CABLES AND WIRES INDUSTRY OVERVIEW

The global wires and cables market was estimated at approximately USD 230.9 billion in CY2025 and, as per available industry estimates, is projected to grow at a CAGR of approximately 3.8%–6.6% over the medium term (with the variance reflecting differences in scope and methodology across market research sources), reaching an estimated range of approximately USD 313 billion to USD 320 billion or more by the early 2030s. Growth in the global industry continues to be driven by sustained investment in power transmission and distribution infrastructure and grid modernization, the expansion of fibre-optic and data-centre connectivity, increasing deployment of renewable energy and smart-grid infrastructure, and continued industrialization and urbanization across emerging markets. Asia-Pacific remains the largest and fastest-growing regional market, accounting for approximately 38% of global revenue in 2025, with China and India among the leading contributors to incremental demand. Power cables continue to represent the largest global product category, on account of sustained investment in utility networks and renewable energy evacuation infrastructure, while communication and fibre-optic cables represent one of the fastest-growing categories, driven by the expansion of data-centre and broadband infrastructure worldwide. Within this global context, India continues to be among the more attractive growth markets for cable manufacturers, underpinned by the structural demand tailwinds discussed later in this report.

OVERVIEW OF THE INDIAN CABLES AND WIRES INDUSTRY

The Indian cables and wires industry underpin the countrys power transmission, distribution and industrial infrastructure ecosystem, and is closely linked to capex cycles in power, real estate, industrialization and digital/railway infrastructure. As per industry estimates, the India cables market was valued at approximately Rs.91,344.1 crore in CY24 and is projected to reach approximately Rs.2,11,921.1 crore by CY30F, a CAGR of approximately 15.1%, driven by sustained investment in power infrastructure, renewable energy integration, urbanization and industrial capital expenditure.

MARKET SEGMENTATION By cable voltage:

Low Voltage (LV) cables, which manage electricity below 1.1 kV, constitute the largest segment at approximately 68.9% of the market.

Medium Voltage (MV) cables, managing electricity between 11 kV and 33 kV, account for approximately 22.3% of the market.

High Voltage (HV) cables, managing electricity above 33 kV, account for the remaining approximately 8.8% of the market.

By cable type:

Power cables (used to transmit electricity in high/low voltage systems): approximately 23.7% of the market.

Housing/building wires (used in residential and commercial infrastructure): approximately 24.3% of the market.

Control cables (carrying control signals in automation systems): approximately 16.9% of the market.

Aerial bunched (AB) cables (used for overhead power distribution): approximately 15.8% of the market.

Lead wires (used for high-current electrical connections in electronics, batteries and industrial equipment): approximately 8.1% of the market.

Solar cables (durable cables for solar power systems): approximately 2.5%; other specialty, communication, instrumentation, coaxial and telephone cables: approximately 8.7%.

By end-user:

Housing/smart city: approximately 28.9%; industrial plants and conductors: approximately 21.2%; power plant substations: approximately 14.4%; substation distribution networks: approximately 10.5%; thermal power plants: approximately 10.4%; refineries: approximately 9.4%; and other end-uses: approximately 5.1%.

PRODUCT-WISE MARKET

OPPORTUNITY (CY30F)

Product	CY30F
	Market Size
Control cables	Rs. 36,450 Cr
Power cables	Rs. 37,621 Cr
Aerial bunch cables	Rs. 31,511 Cr
Others	Rs. 85,995 Cr

Source: Interviews with industry experts, industry articles and Ken Research analysis. Note: CY30F market opportunity represents low voltage and medium voltage industry size.

INDUSTRY GROWTH DRIVERS

The industry is being driven by multiple structural, long-term demand tailwinds, including:

a) Power infrastructure transformation:

Ongoing grid modernisation, smart metering and loss-reduction initiatives across India.

Expansion of transmission and distribution networks across urban and rural India, with Indias transmission and distribution substation capacity increasing from 15,87,260 MVA in FY22 to 17,74,325 MVA in FY24, and projected to reach 29,44,995 MVA by FY30F.

Increasing shift toward underground cabling and higher-reliability systems.

b) Renewable energy and grid integration:

Large-scale solar and wind capacity additions, with Indias total renewable capacity growing from 39 GW in FY15 to 162 GW as of December 2024 (a CAGR of approximately 15.8%), and projected to reach 571 GW by FY32F (a CAGR of approximately 19.0% over the period).

Development of dedicated transmission infrastructure for renewable energy evacuation and a growing need for high-performance MV/HV cables to support grid stability.

c) Digital and data infrastructure:

Expansion of data centres, cloud infrastructure and telecom networks, with Indias data centre capacity growing from 350 MW in CY19 to 877 MW in CY23 (at 93% capacity utilisation), and projected to reach 1,950 MW by CY26F (at 96% capacity utilisation), together with the 5G rollout and rural broadband penetration.

d) Railways and transport electrification:

Railway electrification, metro expansion and high-speed rail projects, and the deployment of signalling, safety and station infrastructure, are driving demand across LV, MV and specialised cables. Total infrastructure investment in India is projected to increase from USD 779 billion (FY18-FY22) to USD 1,719 billion (FY24-FY30F), with railway infrastructure investment increasing from USD 124 billion to USD 750 billion over the same periods.

e) Industrialisation and automation:

Growth in manufacturing and industrial capital expenditure, rising adoption of automation systems requiring precision cabling, and increasing demand for screened control cables in EMI-sensitive environments.

f) Urbanisation and premiumisation of consumption:

An increasing urban population is driving higher standards in electrical infrastructure, a shift toward PVC-insulated copper wires and higher-specification products, and a greater focus on safety, durability and long-term performance.

g) Infrastructure and real estate expansion:

Continued build-out across roads, railways, ports and urban infrastructure, along with strong growth in residential and commercial real estate. The India real estate market has grown from USD 180 billion in CY20 to USD 345 billion in CY23, and is projected to reach USD 1,000 billion by CY30F.

Rising demand for safe, fire-resistant and energy-efficient cabling solutions.

h) Electric mobility ecosystem:

The scale-up of EV charging infrastructure is creating an early-stage but structurally growing demand segment for high-load, safety-critical cables.

i) Cross-border power and energy security:

Increasing power exchange with neighbouring countries, development of regional grid connectivity, and the resultant requirement for high-capacity transmission infrastructure.

REGULATORY DEVELOPMENTS AND COMPETITIVE LANDSCAPE

The industry continues to operate under a framework of Bureau of Indian Standards (BIS) certification requirements across product categories, including power cables (IS 1554, IS 7098 Part 2), building wires (IS 694), aerial bunched cables and conductors (IS 14255, IS 398 Part 6) and solar cables (IS 17293). During FY26, the Company secured BIS certification for medium voltage (MV) power cables (IS 7098 Part 2), ACSR connectors (IS 398 Part 6) and solar cables (1500V DC, Class 5), marking its entry into the renewable energy cable segment. The Company also received incremental state authority (vendor) approvals across 5 additional states during FY26, taking its cumulative state approvals to 20 states, which enhances its eligibility to participate in public sector tenders and procurement across a wider geography.

The Indian cables and wires manufacturing industry is highly fragmented, comprising over 100 domestic manufacturers, of which approximately 40 or more are primarily B2B players focused on power and control cables. Of these, only about 10 or more companies have in-house NABL-accredited testing laboratories, and only about 3 are small and medium enterprises with such facilities (data as of September 2025). This concentration of accredited testing capability acts as a significant entry barrier, as NABL accreditation, valid test reports and pre-qualification requirements (PQR) are typically mandatory or preferred for tender eligibility with institutional and government buyers.

Taken together, these regulatory and accreditation requirements — including BIS certification, ISO accreditation, in-house NABL-accredited testing capability and state-wise vendor approvals — act as significant entry barriers within an otherwise fragmented industry. The Companys continued compliance with, and investment in, these requirements strengthens its eligibility for high-value institutional and government tenders and reinforces its competitive positioning relative to smaller, non-accredited players.

OPPORTUNITIES, THREATS AND OUTLOOK Opportunities

a) Deepening presence with existing institutional clients:

The Company has long-standing relationships with electricity boards, EPC players and public sector undertakings (PSUs), and has the opportunity to increase wallet share by supplying higher-value, higher-margin products and cross-selling new offerings such as medium voltage (MV) cables to its existing customer base.

b) Expansion of geographical footprint:

Current revenues remain concentrated in 5-6 key states, with Bihar (23.2%), Karnataka (12.9%), Rajasthan (8.7%), Tamil Nadu (7.8%) and Madhya Pradesh (7.1%) among the leading contributors, leaving significant headroom to expand into underpenetrated and new states across India by leveraging the Companys existing vendor approvals.

c) Strengthening the order pipeline:

The Companys multi-state vendor approvals (across 20 states) can be utilised to increase participation in government and private tenders, building a broader and more diversified order book.

The Companys unexecuted order book stood at approximately Rs.191.0 crore as of 15 May 2026 (Rs.170.0 crore as of FY26 year-end), to be executed over the following 4-6 months.

d) Product portfolio expansion and entry into the medium voltage (MV) segment:

The Company has a track record of expanding its product portfolio from PVC cables to XLPE cables, aerial bunched cables (ABC) and conductors, and is now entering the medium voltage segment (1.1 kV-33 kV), which will enable participation in higher-value power transmission and infrastructure projects and strengthen its positioning in the utility, industrial and renewable energy segments. The MV cables market is estimated to be growing at approximately 15% CAGR.

e) Capacity expansion:

Installed capacity has increased from 15,000 kms in FY22 to 34,000 kms in FY26, and a new manufacturing unit (Unit-III) focused on MV cables is under construction at Ghiloth, with installed capacity of 5,000 kms per annum targeted by the end of H1 FY27, scaling to over 8,000 kms per annum by Q1 FY28, at a total project cost of approximately Rs.39.9 crore.

f) Export opportunities:

The Company intends to leverage its product quality and certifications, including international product certifications from Royal Stancert B.V. across aerial bunched cables, XLPE insulated cables and PVC insulated (heavy duty) cables, to build export-led growth in select international markets.

g) Favourable industry tailwinds:

The Company is well placed to benefit from the structural demand tailwinds described in Section 1.4 above, including power infrastructure expansion, renewable energy integration, urbanisation, industrialisation, digital infrastructure growth, railway electrification and the emerging electric mobility ecosystem.

THREATS AND RISKS

a) Raw material price volatility:

The Companys key raw materials, namely copper and aluminium, are commodities subject to price volatility linked to global metal markets, which can impact input costs, margins and working capital requirements if not adequately passed through to customers or hedged.

b) Working capital intensity and elongating receivables:

The Companys business is working-capital intensive, given the nature of institutional and government-oriented sales. Debtor days increased from 65 days in FY25 to 85 days in FY26, and the cash conversion cycle stood at 81 days in FY26 (73 days in FY25), reflecting extended collection cycles typical of government and PSU-oriented business, which could impact liquidity if not actively managed.

c) Customer and segment concentration:

The top 10 clients accounted for approximately 55% of revenue, and government and EPC-billed-on-behalf-of-government clients accounted for a significant, though declining, share of total revenue (50.9% in FY26, down from 74.5% in FY25), indicating continuing but reducing dependence on a limited set of large institutional and government customers.

d) Competitive intensity in a fragmented industry:

The Indian cables and wires industry is highly fragmented, with over 100 domestic manufacturers and the presence of multiple regional and mid-sized players catering to localised markets, which could exert pricing pressure, particularly in less differentiated product categories.

e) Regulatory and compliance risk:

The Companys ability to participate in institutional and government tenders is contingent on maintaining BIS certifications, ISO certifications (9001, 14001, 45001, 17025) and NABL accreditation, and on continued compliance with bid qualification requirements (BQR) and vendor approval conditions across states; any lapse in these approvals or changes in regulatory/testing standards could affect tender eligibility and revenue visibility.

f) Execution and capacity ramp-up risk:

The Companys growth plans are contingent on the timely commissioning and ramp-up of the new Ghiloth (Unit-III) MV cable manufacturing facility and on achieving targeted utilisation levels (28% in FY27, 45% in FY28, ramping to 85% at peak); delays in commissioning, project cost overruns, or slower-than-expected demand ramp-up could affect the anticipated growth trajectory.

g) Financing and interest rate risk:

While the Companys net debt-to-equity ratio has improved significantly to 0.6x in FY26 (from 2.5x in FY25), continued capacity expansion (including the Rs.39.9 crore new manufacturing unit, of which Rs.25.4 crore is planned to be funded through internal accruals and debt) exposes the Company to interest rate and refinancing risk.

OUTLOOK

Backed by peak or near-peak utilisation at its existing Narela (Unit-I) and Ghiloth (Unit-II) facilities as of March 2026, an unexecuted order book of approximately Rs.191.0 crore as of 15 May 2026, the planned commissioning of the new Ghiloth (Unit-III) medium voltage facility by the end of H1 FY27, and continuing state vendor approvals (20 states as of FY26), the Company expects its revenue to grow at a CAGR of approximately 45% over the next two years. This growth is expected to be driven by strong demand tailwinds across the power, renewable energy, infrastructure and industrial sectors, the gradual ramp-up of new manufacturing capacity, and the Companys planned transition towards higher-margin products, including its entry into the medium voltage cables segment, while it continues to leverage its established institutional relationships, quality certifications and vendor approvals to strengthen its competitive positioning within the Indian cables and wires industry.

RISKS AND CONCERNS

The Company has instituted a structured risk management framework encompassing the identification, analysis and assessment of key business risks, evaluation of their probable impact, and the formulation and implementation of appropriate mitigation measures. While the risks inherent to the Companys business, as outlined above, cannot be eliminated entirely, the Board and senior management remain focused on minimising their impact on operations through continuous monitoring, timely course-correction and proactive mitigation strategies.

SEGMENT WISE AND PRODUCT WISE PERFORMANCE

The Company is engaged in the business of manufacturing cables and wires, comprising control cables, power cables, aerial bunched cables, instrumentation cables, and housing/building wires and conductors, catering to a diversified institutional customer base, including EPC players, electricity boards and public sector undertakings engaged in the generation, transmission and distribution of power, as well as customers in the oil and gas, mining, steel, real estate and electrical panel manufacturing sectors. In accordance with the applicable accounting standards on operating segments, the Companys chief operating decision maker reviews the business as a single operating segment, and accordingly no separate segment reporting is required. The Companys product-wise revenue performance for FY 2025-26, as compared to FY 2024-25, is set out below:

Product	FY 2025-26	FY 2024-25	YoY Growth	% of FY26 Revenue
	(Rs. Cr)	(Rs. Cr)
Control cables	91.3	72.0	27%	38.9%
Power cables	67.4	45.8	47%	28.7%
Aerial bunched cables	62.6	14.9	321%	26.6%
Others*	13.6	8.3	65%	5.8%
Total revenue from operations	234.9	141.0	67%	100.0%

*Others comprises revenue from housing/building wires and sale of spare XLPE, PVC and scrap.

Growth during the year was led by aerial bunched cables, which grew 321% on account of increased execution of rural and urban power distribution projects, followed by power cables (up 47%) and control cables (up 27%), reflecting higher capacity utilisation at the Companys manufacturing facilities and a growing share of non-government/private institutional clients (49% in FY26) in the Companys overall revenue mix.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During FY 2025-26, the Company delivered strong operational and financial performance, as summarised below:

(Rs. in crores)

Particulars	For the year ended on March 31, 2026	For the year ended on March 31, 2025
Revenue from Operations	234.9	141.0
Other Income	0.9	0.1
Profit before finance cost	21.0	13.9
Finance Cost	4.5	3.8
Profit before tax	16.5	10.1
Tax	4.3	3.0
Profit After Tax	12.2	7.4

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal financial controls commensurate with the size and nature of its operations, and these controls operated satisfactorily during the year under review. The internal control framework comprises policies and procedures designed to ensure the reliability of financial reporting, timely feedback on the achievement of operational and strategic objectives, compliance with applicable laws, regulations and internal policies, and the economic acquisition, efficient use and adequate protection of the Companys assets and resources.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Employees continue to be the Companys most important asset. The Company regularly undertakes initiatives for employee welfare, development and performance enhancement, with a view to building a strong team of talented professionals. The Companys human resources are commensurate with the size, nature and scale of its operations. As at 31 March 2026, the Companys total permanent employee strength stood at 173, and it continues to maintain open and cordial employee relations. The Companys Vigil Mechanism continues to serve as an important channel through which employees and directors can report genuine concerns to management.

DETAILS OF SIGNIFICANT CHANGES 3I.E. CHANGE OF 33% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR3 IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE, INCLUDING

S. no. Ratios	2025-26	2024-25	Change (%)	Details of Significant Change
1. Current Ratio	1.36	1.14	19.30	Increased from 1.14 to 1.36, indicating an improvement in the Companys short-term liquidity position.
2. Debt-Equity Ratio	0.85	2.63	(67.68)	Decreased significantly from 2.63 to 0.85, mainly indicating a substantial reduction in reliance on debt compared with shareholders funds.
3. Interest Coverage Ratio	4.87	3.86	26.17	Improved from 3.86 to 4.87, indicating an improvement in the Companys ability to service its interest obligations.
4. Return on Equity Ratio (Return on Net Worth)	32.47	67.31	(51.77)	Decreased from 67.31% to 32.47%, indicating a substantial reduction in returns generated on shareholders equity or indication attributable to the fresh issue of shares during the year, resulting in an increase in net worth without a proportionate increase in profitability.
5. Inventory turnover ratio	5.92	5.36	10.45	Increased from 5.36 to 5.92, indicating improved inventory movement/eFFiciency.
6. Trade Receivables turnover ratio	4.30	5.59	(23.08)	Decreased from 5.59 to 4.30, indicating slower collection of trade receivables.
7. Trade payables turnover ratio	5.59	6.31	(11.41)	Decreased from 6.31 to 5.59, indicating that the Company is taking relatively longer to settle trade payables.
8. Net capital turnover ratio	11.21	23.39	(52.07)	Decreased from 23.39 to 11.21, indicating lower sales generated per unit of net working capital, on account of the increase in working capital deployed during the year.
9. Net profit Margin (%)	5.21	5.22	(0.19)	Almost unchanged, indicating that the Companys net profit margin remained broadly stable.
10. EBITDA Margin (%)	10.00	10.40	(3.85)	Decreased marginally from 10.4% to 10.0%, primarily on account of a higher mix of aerial bunched and power cable orders and an increase in other expenses during the scale-up of operations, partly offset by operating leverage from higher capacity utilization.
11. Return on Capital employed	18.54	25.82	(28.19)	Decreased from 25.82% to 18.54%, indicating lower returns generated from the capital employed, largely on account of the increase in capital employed following the equity infusion during the year.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

During the year under review, Return on Net Worth (%) of the Company decreased by 51.77% primarily due to the fresh issue of shares during the year, which resulted in an increase in net worth without a proportionate increase in profitability.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, plans or industry conditions or events are forward-looking statements within the meaning of applicable securities laws and regulations. Actual results, performance, or achievements could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, competitors pricing, changes in government regulations, tax regimes, and economic conditions within India. The Company assumes no responsibility to publicly update, amend, modify, or revise any forward-looking statements, based on any subsequent development, new information, or future events or otherwise except as required by applicable law.