Indian cable and wire (C&W) manufacturers are expected to post resilient operating profits during the current financial year (April 2026–March 2027) despite intensifying competition among industry players and sharper-than-expected increases in raw material prices. Organised sector companies continue to face challenges in fully passing on higher input costs to consumers, as maintaining product quality remains critical in a highly competitive market. The inability to compromise on quality standards while keeping end-product prices under control is likely to keep margin pressures elevated across the sector.
According to a study by leading rating agency Crisil, C&W companies are projected to register volume growth of over 20 percent in FY 2026-27, while operating profitability is expected to remain resilient. The anticipated growth in volumes would be driven by robust demand from infrastructure-linked sectors such as thermal power, renewable energy and data centres, along with sustained momentum in the real estate sector. Strong order inflows from these segments are expected to support capacity utilisation and revenue growth for organised industry players during the fiscal year.
Mohit Makhija, Senior Director, Crisil Ratings, commented, “This fiscal too, volumes will continue to grow on the back of demand for housing wires and power cables (around 50 percent of total revenue) with investments up to Rs. 10-12 lakh crore or Rs 12 trillion lined up in renewables, power, real-estate and new age sectors like data centres and smart meters. However, volume growth is expected to be a tad lower this fiscal at around 10 percent as higher prices (18-20 percent rise in realizations) may lead to some deferment of discretionary capex spends by industrial sector.”
High pricing flexibilityOperating profits of C&W manufacturers are also expected to improve, supported by strong pricing flexibility demonstrated by organised players in the past. The sector’s ability to partially pass on higher raw material costs to customers is likely to help offset pressures arising from rising input prices and intensifying competition following the entry of new players. Despite margin pressures, established companies with strong brands, extensive distribution networks and consistent product quality are expected to maintain healthy profitability levels during the financial year.
Meanwhile, robust demand and healthy capacity utilisations across the industry are expected to drive fresh capacity additions by manufacturers seeking to capitalise on rising opportunities in infrastructure and real estate-linked sectors. However, strong internal cash generation and limited dependence on external borrowings are likely to keep the credit profiles of major players stable. Healthy balance sheets and prudent financial management are expected to support expansion plans without significantly increasing leverage levels across the sector.
Study parametersAn analysis of 17 C&W manufacturers, which together account for nearly 70 percent of the organised sector’s estimated revenue of Rs 100,000 crore, highlights the sector’s strong growth momentum and stable operating outlook. The study indicates that organised players are likely to continue benefiting from robust demand across infrastructure-linked industries, supported by healthy capacity utilisation levels and sustained investments in power and urban development projects.
The C&W sector has recorded a compound annual growth rate (CAGR) of more than 15 percent in volumes over the past five years, driven by rising capital expenditure towards rapid digitisation, increasing urbanisation and growing power demand. Expanding investments in renewable energy, transmission and distribution networks, data centres and real estate projects have further strengthened demand for C&W, positioning the sector for continued growth over the medium term.
Realisation to increaseAt the same time, higher realisations are expected to partly offset the sharp increase in prices of key raw materials amid tightening global supplies triggered by the ongoing West Asia conflict. Prices of copper and aluminium — two critical inputs for the C&W industry — have risen by nearly 22-27 percent over the past fiscal year. The price of polyvinyl chloride (PVC), another major raw material used extensively in the sector, has also increased by around 12 percent during the same period, adding to input cost pressures for manufacturers.
Despite the rise in raw material costs, C&W manufacturers continue to benefit from strong pricing flexibility and have historically demonstrated their ability to pass on cost increases to customers. Industry players maintain that wires and cables generally account for less than 5 percent of the overall project cost, which provides room for calibrated price revisions without materially affecting project economics. This pricing power is expected to help organised manufacturers protect margins even during periods of elevated commodity prices.
However, intensifying competition following the entry of new players into the sector is likely to restrict the extent of price hikes by incumbent companies. As a result, manufacturers are expected to adopt a more measured approach toward passing on higher input costs to customers. Nevertheless, supported by healthy demand growth and improved realisations, the sector’s absolute operating profits are projected to expand by around 12-13 percent during the financial year.
Rucha Narkar, Associate Director, Crisil Ratings, stated, “Healthy cash flows and steady demand will encourage players to ramp up capex as utilization levels already touched approximately 75 percent last fiscal. Overall, capacities are expected to go up gradually by 20–22 percent by the end of fiscal 2027, of which nearly half will be added by new players. Majority of the funding will be through internal accruals and equity including for new entrants, having strong financial flexibility, thereby, keeping balance sheets strong and credit profiles stable.”
Higher working capital requirementHigher raw material prices are also expected to increase the working capital requirements of C&W manufacturers during the current financial year. However, companies are likely to manage the additional funding needs through channel financing arrangements and existing working capital limits, thereby avoiding significant pressure on their balance sheets. Healthy operating cash flows are expected to support liquidity positions despite elevated inventory and procurement costs arising from higher commodity prices.
Financial metrics of organised players are projected to remain comfortable, with the ratio of debt to earnings before interest, tax, depreciation and amortisation (EBITDA) expected to sustain at around 0.5–0.6 time, while interest coverage is likely to remain strong at 16-17 times. Nevertheless, rising competitive intensity within the industry and any slowdown in investments across key end-user sectors such as infrastructure, power and real estate will remain important monitorable factors for the sector going forward.
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
