Relicab Cable Manufacturing Ltd Management Discussions

INDUSTRY OVERVIEW

The Indian wires and cables industry continues to benefit from increasing investments in power transmission and distribution, infrastructure development, industrial activity, renewable energy, construction, real estate, telecommunications and other electrical applications. Government initiatives relating to infrastructure development and strengthening of the power sector are expected to support demand for wires and cables over the medium to long term.

The Union Budget 2025-26 provided significant support for infrastructure and power-sector development, including measures for strengthening power distribution and transmission systems. The Government also provided Rs.1.50 lakh crore of interest-free loans to States for capital expenditure and continued emphasis on power-sector reforms and infrastructure augmentation. These developments provide a favourable demand environment for manufacturers of electrical wires and cables.

The industry, however, remains exposed to fluctuations in the prices of key raw materials, particularly copper, aluminium, PVC and other petroleum-based inputs. Competitive pricing, quality standards, timely delivery, technological capabilities and working-capital management remain important factors for sustainable growth.

COMPANY OVERVIEW

Relicab Cable Manufacturing Limited is engaged in the manufacture and supply of wires, cables and allied products. The Company was established in 1992 and operates its manufacturing facility at Daman, India. The Company states that it is an ISO 9001:2015 certified organisation and manufactures products conforming to applicable standards including IS 694 and IS 1554 (Part 1).

The Companys product portfolio includes power and control cables, instrumentation cables, PVC insulated and sheathed cables, auto and battery cables, submersible and dewatering cables, telecommunication cables, screen cables, elevator flat cables, wire harnesses, mains cords and connectors, tailor-made/specialty cables and PVC compounds.

The Company also manufactures copper conductors and PVC compounds, supporting its product and manufacturing capabilities.

During FY 2025-26, the Company continued to focus on manufacturing and supplying cable products to meet the requirements of its customers across various applications and industries.

BUSINESS PERFORMANCE

FY 2025-26 was a year of significant growth in the Companys operating revenue.

Revenue from operations increased to ^6,420.59 lakh in FY 2025-26 from ^3,983.33 lakh in FY 202425, representing a growth of approximately 61.19%.

Total income increased from ^4,063.30 lakh in FY 2024-25 to approximately ^6,518.38 lakh in FY 2025-26.

The increase in revenue reflects substantially higher business volumes during the year. The Company continued to leverage its manufacturing capabilities and product portfolio to cater to customer requirements.

The Company has only one reportable primary business segment, namely Cables. Accordingly, the

Companys performance is substantially linked to the demand and operating conditions of the cable industry.

FINANCIAL PERFORMANCE

The financial performance of the Company for FY 2025-26 compared with FY 2024-25 is summarised below:

Particulars	FY 2025-26	FY 2024-25	Change
Revenue from Operations (Rs. lakh)	6,420.59	3,983.33	+61.19%
Other Income (Rs. lakh)	97.78	79.97	-27.75%
Total Income (Rs. lakh)	6,518.38	4,063.30	+59.45%
EBITDA* (Rs. lakh)	525.02	500.69	+4.86%
Profit Before Tax (Rs. lakh)	216.74	236.72	-08.44%
Profit After Tax (Rs. lakh)	190.13	171.03	+11.17%
Basic EPS (Rs.)	1.86	1.70	+9.41%

*EBITDA has been derived as Profit Before Tax + Finance Costs + Depreciation, based on the audited financial results.

The Companys revenue growth was strong during the year, with revenue from operations increasing by more than 61%. However, profitability did not increase at the same pace as revenue, primarily reflecting higher material and operating costs and the overall cost structure of the business.

Profit Before Tax decreased from Rs.236.72 lakh to Rs.216.74 lakh, of approximately 08.44%.

Profit After Tax increased from ^171.03 lakh to ^ 190.13 lakh, representing growth of approximately 11.17%.

Basic EPS increased correspondingly from approximately Rs.1.70 per share to Rs.1.86 per share.

PROFIT ANALYSIS

The Company maintained profitability during the year despite a substantial increase in revenue.

Margin	FY 2025-26	FY 2024-25
EBITDA Margin	7.96%	12.57%
PBT Margin	4.16%	5.83%
PAT Margin	2.92%	4.30%

The decline in operating and net margins compared with the previous year indicates pressure on profitability despite strong revenue growth. The Companys cost of materials consumed increased significantly in line with the increase in business activity. Finance costs also remained significant.

The Company will need to focus on product mix, manufacturing efficiency, procurement optimisation, working-capital management and cost control to improve margins as business volumes expand.

COST REPORT

Raw materials constitute a significant component of the Companys manufacturing cost. The cost of materials consumed increased substantially during FY 2025-26, corresponding with the higher level of revenue and production activity.

The Companys business is therefore sensitive to fluctuations in the prices of copper, aluminium, PVC and other inputs. Any sustained increase in raw-material prices that cannot be passed on to customers could adversely affect margins.

Employee benefit costs also increased during the year in line with the Companys increased scale of operations.

Finance costs remain an important component of the Companys cost structure. The Company will

continue to focus on efficient utilisation of borrowings and working capital with the objective of improving financial efficiency.

OPPORTUNITIES

The Company operates in an industry that has several structural growth opportunities.

Key opportunities include:

• Increasing investments in electricity transmission and distribution infrastructure.

• Expansion of renewable energy and associated electrical infrastructure.

• Growth in industrialisation, construction and infrastructure activities.

• Increasing demand for specialised and application-specific cables.

• Opportunities to expand the Companys product portfolio and customer base.

• Potential for increased exports and international market development.

• Greater use of customised cables and value-added cable products.

• Backward and forward integration opportunities through PVC compounds, copper conductors, wiring harnesses and related products.

The Governments continued focus on infrastructure and power-sector development provides a favourable long-term environment for the electrical cable industry.

THREATS AND CHALLENGES

The Company faces a number of risks and challenges in its business operations, including:

Raw Material Price Volatility

Copper, aluminium, PVC and other raw materials constitute important inputs. Volatility in their prices may affect production costs and operating margins.

Competition

The wires and cables industry is competitive, with the presence of both organised and unorganised manufacturers. Maintaining product quality, competitive pricing, customer relationships and timely delivery is therefore essential.

Working Capital Risk

The significant increase in trade receivables during FY 2025-26 highlights the importance of efficient credit and collection management.

Interest Rate and Financing Risk

The Company uses borrowings as part of its financing structure. Changes in interest rates and financing costs may affect profitability.

Regulatory and Compliance Risk

Changes in labour laws, environmental requirements, product standards, taxation and other regulatory requirements may increase compliance obligations and operating costs.

Customer and Market Risk

Changes in demand, customer concentration, project delays and changes in market conditions may affect order flows and revenue.

RISK MANAGEMENT

The Company seeks to manage business risks through appropriate operational and financial controls. Key areas of risk management include:

• Monitoring raw-material prices and procurement costs.

• Maintaining quality standards across manufacturing processes.

• Monitoring receivables and customer credit.

• Managing inventory levels.

• Monitoring borrowing and finance costs.

• Maintaining compliance with applicable laws and regulations.

• Investing in manufacturing capabilities and process improvements.

• Diversifying the product portfolio and customer base.

The Company should continue strengthening its systems for reconciliation and confirmation of deposits, advances, receivables and payables.

HUMAN RESOURCES

Human resources are an important contributor to the Companys manufacturing and operational performance. The Company has qualified and dedicated personnel involved in manufacturing, processing, quality control and other business functions.

The Company provides training to its workforce to improve technical capabilities and operational efficiency.

With the growth in business volumes, continued focus on employee training, workplace safety, productivity and retention will be important.

The statutory auditor has also highlighted that the Company is evaluating the impact of the Labour Codes that became effective from 21 November 2025. The financial impact, if any, had not been fully ascertained as at the reporting date.

TECHNOLOGY AND QUALITY

Quality and manufacturing consistency are critical to the cable manufacturing business.

The Company undertakes quality checks during various stages of manufacturing, including processes such as bunching, extrusion, stranding and armouring. These processes are intended to ensure appropriate product characteristics, durability and performance.

The Company also operates an ISO 9001:2015 certified quality-management framework and has product certifications/standards including IS 694 and IS 1554 (Part 1).

Continued investment in manufacturing technology, process automation, quality systems and product development can support productivity and competitiveness.

FINANCIAL RATIOS

Ratio	FY 2025-26	FY 202425	%change	Reasons for Change (if +/- 25% or more)
Current Ratio	2.00	1.86	7.23%	N/A
Debt to Equity	0.96	0.78	23.22%	Due to increase in long term debt.
Debt Service Coverage Ratio	1.81	1.99	-8.92%	Due to increase in long term debt and increase in Depreciation cost
Return on Equity Ratio	0.12	0.13	-4.10%	Due to Increase in Capex and relevent depreciation
Inventory Turnover Ratio	2.77	1.55	78.69%	Due to increase in Turnover this ration increases.
Trade Receivables Turnover Ratio	5.50	4.99	10.22%	Due to increase in Turnover this ration increases
Trade Payables Turnover Ratio	3.95	3.75	5.27%	Due to increase in Turnover this ration increases.
Net Capital Turnover Ratio	3.07	2.85	7.61%	Due to increase in Turnover this ration increases
Net Profit Ratio	0.03	0.04	-31.03%	The contraction in net profit due to increased depreciation cost, the net profit impected.
Return on Capital employed	0.15	0.22	-30.49%	Due to contraction in EBIT level while total capital investments simultaneously expanded.

Based on the comparative balance-sheet figures disclosed in the FY 2025-26 audited results.

The increase in revenue and profit demonstrates strong business growth, while the reduction in profitability margins highlights the need for continued focus on cost efficiency and product profitability.

OVERALL PERFORMANCE

FY 2025-26 was a year of strong revenue growth for Relicab Cable Manufacturing Limited. Revenue from operations increased by approximately 61.19%, while Profit Before Tax decreased by approximately 08.44% and Profit After Tax increased by approximately 11.17%.

The Companys balance sheet expanded during the year, supported by higher operating activity and increased working-capital requirements. Operating cash generation remained positive.

At the same time, the decline in EBITDA, PBT and PAT margins indicates that growth in revenue was accompanied by higher cost pressures. The significant increase in trade receivables also makes working- capital management an important area of focus.

Going forward, the Companys ability to convert revenue growth into sustainable profitability will depend on improving product mix, controlling raw-material and operating costs, managing working capital efficiently, strengthening internal controls and capitalising on opportunities arising from Indias infrastructure and power-sector development.

The management remains committed to sustainable business growth, operational efficiency, customer satisfaction, quality improvement and long-term value creation for stakeholders.

INTERNAL CONTROL AND ADEQUACY

The Company has an adequate system of internal financial controls commensurate with the size, scale and nature of its operations. The internal control framework is designed to ensure orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The Company has established appropriate checks and controls across its operational and financial processes, including procurement, inventory management, production, sales, receivables, payments and accounting. The Accounts Department monitors the effectiveness and adequacy of the internal control systems and ensures compliance with established accounting procedures and policies.

The internal audit function assists in reviewing the effectiveness of the control environment and identifying areas requiring corrective action. Significant observations, wherever applicable, are reviewed by the management and appropriate corrective measures are undertaken. The Audit Committee periodically reviews the internal audit observations and the status of corrective actions. Based on the evaluation carried out by the management, the Company believes that its internal financial controls were adequate and operating effectively during the financial year ended March 31, 2026.

INDUSTRY OUTLOOK

The Indian wires and cables industry continues to remain an important component of the countrys electrical and infrastructure ecosystem. The sector is expected to benefit from sustained investments in power transmission and distribution, renewable energy, industrial infrastructure, real estate, railways, data centres, electric mobility and other infrastructure projects.

Indias increasing electricity demand and the continuing expansion and modernisation of the power transmission and distribution network provide a favourable long-term environment for the wires and cables industry. The Governments National Electricity Plan (Transmission) envisages substantial expansion of the transmission network and transformation capacity up to 2032, with significant investments planned to facilitate renewable energy integration and meet the countrys growing power requirements.

The Government of India has also been focusing on the integration of renewable energy into the national grid and the development of transmission infrastructure for achieving the target of 500 GW of nonfossil fuel capacity by 2030. The Ministry of Powers transmission roadmap envisages addition of more than 1.91 lakh circuit kilometres of transmission lines during the period from 2022-23 to 2031-32 and investment opportunities exceeding Rs.9 lakh crore in the transmission sector up to 2032.

The wires and cables industry is therefore expected to witness sustained demand over the medium to long term, supported by power sector investments, renewable energy projects, infrastructure development, industrial expansion, electrification and emerging applications such as electric vehicles and data centres.

At the same time, the industry remains exposed to factors such as volatility in the prices of key raw materials, particularly copper and other metals, competitive intensity, changes in customer demand, foreign exchange movements and evolving regulatory and quality requirements. The Companys focus on quality manufacturing, product diversification and servicing various industrial applications is expected to support its participation in the opportunities emerging in the sector.

Overall, the Company remains cautiously optimistic about the medium-to-long-term prospects of the wires and cables industry and intends to leverage opportunities arising from infrastructure development and increasing demand for reliable electrical connectivity solutions.

SEGMENT WISE PERFORMANCE

The Company is principally engaged in the manufacturing and marketing of wires, cables and PVC compounds. The Companys product portfolio comprises power and control cables, instrumentation cables, PVC insulated and PVC sheathed cables, auto and battery cables, telecommunication cables, screen and shielded cables, elevator flat cables, submersible and dewatering cables, wire harnesses, mains cords and connectors, tailor-made specialty cables, copper conductors and various grades of PVC compounds.

During the financial year 2025-26, the Company recorded significant growth in its overall business performance. Revenue from operations increased to approximately ^64.21 crore as compared to ^39.83 crore in the previous financial year, registering a growth of approximately 61%. Total revenue increased to approximately ^65.18 crore from ^40.63 crore in the previous year.

The growth was supported by increased business activity across the Companys wires and cables product portfolio and continued demand from industrial and electrical applications. The Companys diversified product range enables it to cater to customers across sectors including electrical and industrial applications, telecommunications, automotive, household appliances and other specialised applications. The Company continues to focus on strengthening its product portfolio, maintaining product quality and developing customised cable solutions in line with customer requirements. The Company also remains focused on improving capacity utilisation, operational efficiencies and customer reach.

The Profit After Tax for the year stood at approximately Rs.1.90 crore as compared to Rs.1.71 crore in the previous year. While the Company witnessed substantial growth in revenue during the year, profitability continued to be influenced by factors such as raw material prices, operating costs, finance costs and competitive market conditions.

The Company remains focused on sustainable growth across its product portfolio and intends to leverage the increasing demand for electrical connectivity solutions arising from infrastructure development, power transmission and distribution, renewable energy, industrial expansion and other emerging applications.

SAFE HARBOUR

This Annual Report contains forward-looking statements that involve risks and uncertainties. These statements are based on certain assumptions and expectations of future events and financial performance of the Company. Actual results could differ materially from those expressed or implied in such forward-looking statements due to various factors, including changes in economic conditions,

market conditions, demand and supply dynamics, prices and availability of raw materials, competition, regulatory changes, technological developments, government policies and other risks and uncertainties that may affect the Companys business and operations.

The Company assumes no responsibility for publicly updating or revising any forward-looking statements, whether as a result of future events, new information or otherwise. Readers are advised not to place undue reliance on these forward-looking statements and to exercise their own judgement in assessing the Companys future performance.

The information contained herein should be read in conjunction with the Companys financial statements and other disclosures forming part of this Annual Report.

CAUTIONARY STATEMENT:

Statement made in this report in describing the companys objectives, estimates and expectations are "Forward looking Statement" within the meaning of applicable laws and regulations. They are based on certain assumptions and expectations of future events, but the company, however, cannot guarantee that these assumptions are accurate or will be materialized by the company. Actual results may vary from those expressed or implied, depending upon the economic conditions, Government policies and/ or other related factors.