Bansal Wire Industries Limited (BANSALWIRE) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY27 conference call of Bansal Wire Industries Limited. From the management, we have Mr. Pranav Bansal, MD and CEO, Mr. Ghansham Gujarati, CFO, and Mr. Manu Jain, Head Investor Relations, to take the discussion forward.

We also have an Investor Relations team from AdFactors.

As a reminder, all participant lines will be in the listener mode, and there will be an opportunity for you to

ask questions after the presentation concludes.

Should you need assistance during this conference call, please signal an operator by pressing star, then zero on a touchstone phone. Please note that this conference has been recorded. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risk and uncertainty. Please note the disclaimer mentioning these risks and uncertainties are on the disclaimer slide of the Investor Relations presentation that has been shared earlier. I now hand the conference Let's move over to Mr. Pranav Bansal for the opening remarks. Thank you, and over to you, sir.

Yeah, thank you. Good morning, everyone. Thank you for joining us for the Bansalwar Industries Q2 and H1 27 earnings call. I hope you had an opportunity to go through our financial results and investor presentations. Joining me today is our CFO, Manu Jain, who will join us. I am extremely pleased to share that this has been a landmark quarter for Bansalwar Industries. We have achieved our highest average, highest average, coming, uh, and get the other facility. We currently maintain that our near-term objective is to achieve 25% on an annualized basis, actually 22% to that objective. Even more meaningful is that they came immediately after challenging first quarter. We were able to overcome the operational challenges faced during industrial gas disruptions and higher input costs. It's our ability to recover quickly and move closer to our strategies such as automotive, infra, agriculture, power and transmission, and general engineering. We remain positive about the medium-to-long-term outlook for the steel wire industry in India, supported by increasing growing demand for special. Our strategy is to strengthen our market position by expanding our product portfolio, improving our manufacturing capability, and continuously developing new applications to capture the growth opportunities across the Indian economy. Our specialty of our business continues to progress well and remains an important part of our growth strategy. OHD line is progressing. Our approvals and related processes are progressing within the expected. Another area where we are making encouraging progress is our B2C business. Historically, we have largely been focused on industrial customers. Now we are expanding our reach into farming, building a stronger distribution of a recognized brand. Moving on, the capacity front. Our plans remain on track. We will add 60,000 tons of capacity at Dadari as Brownfield. We will strengthen our presence in Western India and bring us closer to the customers and improve supply chain efficiency. Our overall manufacturing capacity will increase from 6.8 lakh tons and reach approximately... Our indicative annual capital expenditure remains in the range of 200 to 225 crores. However, I would like to emphasize that expansion remains disciplined. Our objective is not simply to add capacity, but to ensure that new investments contribute positively to profitability, cash generation, and earlier, we are targeting cumulative operating cash flow generation of approximately 800 crores over FY27 and FY28 combined. We remain committed to funding a significant portion of our future investments. We believe this approach will allow us to scale the business while continuing to strengthen our financial position. As we enter the second half of FY27, we remain confident about the opportunities ahead. Our priorities are clear to strengthen our leadership in the steel wire industry, increase the contribution from specialty wire products, and expand our B2C business and execute our capacity expansions. We will continue to focus on improving operational efficiency cash flows and working towards our near-term ROC target of 25%. This quarter gives us confidence that the strategic initiatives we have undertaken are beginning to deliver tangible results. For us, the most encouraging aspect of this quarter is not just that we have achieved record financial numbers, but that we are seeing improvement across all parameters that matter for sustainable growth, profitability per ton, cash generation, and capital efficiency. Our ambition is to build Bansalwar into a larger, more profitable, and capital-efficient organization, creating sustainable value for all our stakeholders. With that, I will now hand over our call to our CFO, who will take you through the panel.

Thank you, Professor. Good morning, everyone. Let me take you through the financial summary for the quarter, and first of all, 27. Our revenue for the quarter is two rate rupees, 1308 crores, up 24% year on year. EBITDA for the quarter, up 29% year on year, and net profit for the quarter is two rate rupees, 53 crores, up 38% year on year. We reported higher, higher table EBITDA and EBITDA per ton. For the first, the value is today to be 2476 crore EBITDA, 8 rupees 162 crore and net profit. As Pranav so already mentioned, our sales volume for the quarter is today to be 8, 129,000 metric tons compared to 114,609 metric tons in quarter 2 of FY26. Operations run at normal level through the quarter, following the industrial gas disruption in quarter one. The demand across our end market was. We generated operational cash flow of 218 crores during the quarter. Reflecting our continuous focus on generating heavy cash flow from the operation and improving the working capital cycle. This concludes my remarks. We can now open the floor.

A reminder to all, you may press star and one to ask a question. We'll take the first question from the line of Parthiv John, sir, from Anand Rathi. Please go ahead.

Hi, good morning, sir. Thank you for the opportunity. Sir, before I begin my question, I just want to give a thumbs up to the team who actually prepared the presentation. It's actually one of the best presentations. Thank you. Thank you, sir. I believe you have already given a full expectation that, okay, that will basically translate to some tangible, you know, top line and EBITDA. Number one. Number two, the 15,000 capacity once it happened line and EBITDA. Possibility that just 15,000, EBITDA 28 and 29 also.

So, we got our first trial order last working on.

Any possibility to give some quantifiable number as far as EBITDA pattern is concerned for IHT and OHT? Because blended business were up about 8,150 to 25 level. So, in quantifying, then we can build that particular number going towards the

whole of speciality-wide segment, I think, on an average for IHT, which we already see, you know, last-gen rating.

Sir, my second question is pertaining to your 20% volume growth, which basically translates to almost about 5,50,000 or 1,000 tonne on an analysed run rate. Considering that you have done about 2,40,000 in the first half, how confident are you of, because that's like only about 43%, so you still have about 57% of the room to be filled in, at a higher base also. So how confident are you considering, you know, Quartate has a lot of festive holidays and all coming in?

So, sir, our infrastructure and our team is geared up, you know, to deliver 20% volume growth, our target, and even after, you know, not delivering the best in the first quarter, I think we are still confident of achieving 20-20% kind of growth. There have been some issues, for example, right now there is a shortage, there is an acute shortage in our raw materials. So, you know, these are some, I think in the medium term, I don't think that we would still target that 20% growth. So, in the last one and a half, two months, a lot of our raw metal suppliers have diverted their production from wire rods to TMT, creating a shortage in wire rod. And there have also been some breakdowns in it at creating some shortages in the whole industry. And although, until September, we were able to manage this month's material, but that's a... I believe you carry two months of inventory, right, on your books? One and a half to two months? Yeah, we carry about a month and a half of inventory. So, therefore, September, we did not take a lot of it, whereas the whole industry suffered. Some of our plants and some of our sections, we were lacking in our production, which is now up and running again. So, these are small things, again, we still remain, you know, confident on 20% volume growth. Okay. And second, last question. On your opening remark, you mentioned 800 crores of CF over two years or 700 crores? 800 crores for this year and next year combined, but we've already done about 350 crores in the first half of this year. I think we will be able to do that.

Thank you. We will take the next question from the line of Vineet Shah from Dalalan Guruchah. Please go ahead. Mr. Vanil, please proceed with the question.

Hello. Thank you for taking my question, and congratulations on a great set of numbers. So, my first question was related to the B2C segment. Could the management please clarify how much was the revenue contribution from the B2C segment from this quarter? We had already clarified that Q2 and Q3 are seasonally softer quarters, but just on a sequential basis, what has been the performance?

We did about total volumes in B2C quarter there is to maintain our overall increase of about 15-20% in our total volume. We were able to push that.

I just wanted to clarify, like a follow-up to the previous part. So the 20% growth of volumes that we are having will be lost in Q1.

We cannot bring back before our general...

So, it is more of a supply question right now. The demand looks really positive for us. It will not be reversed due to the demand issue, but if a dormitory availability issue pertains, then we might take a 18-hour volume growth, correct?

Yes, that is true. But, I mean, through these years, we face temporary, which I do not see as a long-term glitch in our system. So, even if, you know, we lose 10 days in a particular month, we will make up for this, per our total.

Second question was related to the EBITDA portal sustainability. So, like we had given a range of 7,000 to 8,000 portal EBITDA margins, and we have surpassed the upper limit of the margin. But do we think this is a sustainable margin going forward until the higher product mix fix it?

So, this EBITDA that we've received, that we've gotten this quarter, I think this is a mix of a lot of factors. One is a sustainable factor, that is economies of scale. We are finally seeing the benefits of NADRI coming in. As, you know, the utilization ramps up, those economies of scale benefits are coming in. So, those are some things that are sustainable and should only increase in the future. Apart from that, this has also come from a one-time inventory gain. We entered this half of Q1, we reduced our margins, but the second half of Q1 itself, we had the demand, otherwise also 500-600 rupees a ton here and there can always go. Sir, our thought process is that we should maintain our margins at about 7-7.5. That has been our goal for this year.

Thank you.

We will take the next question from the line of Aditya Bhartia from Investec. Please go ahead.

Hi, good morning, Tanav. My first question is on EBITDA per time itself. We had almost 8,000 rupees this quarter. What could be the inventory valuation gain in this quarter, and if we kind of exclude that, then what is the number that we arrive at? Is it at the upper end of 7,700 rupees range that you are speaking about?

Say, inventory gain would be maybe 200 rupees a ton, you know, just better margins in the industry or, you know, our Dadiri facility, honestly, is also contributing a lot. In this, we are seeing those positive trends in all, as in when, you know, our Dadiri ramps up, I think that that is something that is sustainable.

In that context, when you're speaking about 7,500 per ton, do you think you're being fairly conservative and the numbers are likely to be higher than that, especially with the slightly kind of improving mix?

Sir, yes, I mean, we've delivered 8,000 rupees of EBITDA this quarter. In this, a one-time stock inventory gain is only 200 rupees a ton. So, we've still delivered 78, 79. If everything goes as it is, I think we should continue. Own estimates or, you know, our own strategy has been as this is just something that we're getting. We've honestly not worked very hard to get.

What has kind of contributed to the 7,000-odd number you have been speaking about for a few quarters, but what has contributed to 7,000 moving more towards 7,800-odd bucks in the last quarter? You've also mentioned about mixed change. What exactly is the mixed change? Is it only about B2C, or is it also that we had a higher proportion of high-carbon wire?

So, actually, in last quarter, although our estimates or our strategy is that low carbon should be about 55-60% of our total volumes, last quarter our low carbon was about 55%, so lower end of, you know, 55-60 range. Because of that, at the lower end, our blended EBITDA is better, so a better product mix was definitely one contribution. And within low carbon, our B2C segment has increased drastically. So that is also contributing well in EBITDA. Because in the B2C segment, we see at least 50% higher EBITDA as compared to our general B2B segment. So that is also a major contribution. So I would say, you know, a healthier product mix coupled with Dadiri ramping up. I mean, Dadiri, the second facility in India after Dadiri would be at least one-fifth of its size. So we are definitely enjoying the economies of scale. If we talk about gas, if we talk about anything, labor costs, everything, Dadiri is much superior, much better than any other facility that even we have.

My second question is around the volume outlook. If we consider last year, fourth quarter was a pretty weak quarter, with some challenges around gas supply, etc. as well. So, on that basis, the 20% kind of a growth outlook for the second half looks to be slightly muted. Again, just want to understand that, is it that you are being a little conservative, or we should be at least hitting, let's say, 145,000, 150,000 kind of a run rate in the next two quarters?

One thing is that, you know, if I am committing to you something, I should have the ability to do a little better. I will not want to commit to you some number and then, you know, at the end of the next quarter or later come to you that, okay, these were the reasons. So that is not something that we want. So, we would rather be a little conservative than, you know, risk not. Still, I would say 20% is a reasonable number. I am not talking about 20% increase from first quarter, from H1. I am talking about a year-on-year increase. So, second half of last year as compared to second half of this year, we would still be able to see. I mean, we have not entered the second half with a very good, you know, the first month of the second half, we are experiencing raw metal shortages. So, there are some negative factors at play from the initial, but we'll try to rectify this and we'll try to overcome it.

And the last bit around steel cord, you mentioned that we may see some commercialization sometime during this year itself. So, if you could just kind of guide us on how things may play out. How is it that you're seeing it today? How the wrap-up around steel cord is likely to play out over the next two years?

So, sir, one of our main customers that we were working with, we had already received their trial order, which is already gone, and we are expecting a second round from them very soon. Hopefully within a month. We have already started making supplies for another customer who we are awaiting a formal PO from, which should be here within the next 10-15 days, hopefully. But we've already made, their team has already visited us, given us an approval of supplies. So, that is an increase. Our samples have also been approved with a third customer, which, you know, the trial process is not very long. So, because of that, I feel confident that out of these three developments, at least one of them should be able to.

And as commercial production starts, is it that the particular customer starts procuring a fairly large chunk of their requirements straight away, or is it a very slow ramp-up?

Sir, I would say that the first two quarters would be a little slow because that depends on if we are only supplying to one customer or two customers. But for one customer also, I think the first two quarters would be a little slow, see a good ramp up. And also, we don't want to depend entirely on one customer. So, even we wouldn't want to supply more than 20-25% of our total sales to one customer because there needs to be room for me to do trials and supplies to other customers for the larger project that we want.

Thank you so much.

Thank you. A reminder to all the participants, you may press star and one to ask a question. We have the next question from the line of Vishaka Jain from Veritas. Please go ahead.

Hi, thanks. Thank you. Congrats on good set of number. So my question was regarding to the split. With, sorry, regarding the split that has happened, can the rationale, can I know the rationale if you are okay with it?

Sure, I mean, the thought process behind the split was, you know, to increase our, to increase our number of shares. That was the main thought process. Liquidity, we thought that, you know, if it is at a better price, we would.

Okay, even from the retail perspective, because, I mean, I believe this price is not that high for the retail also.

Yeah, so that was, yeah, that's the main thing, I mean, to get more retail shareholders because our total holding, I mean, total public or retail holding is very less.

Okay, okay.

We saw room of improvement.

We have the next question from the line of Pujan Shah from Molecule Ventures. Please go ahead.

Hi, sir. Thanks for the opportunity. My first question pertains to the C-Steam Cards. So, basically, we have all costs for receiving the approval and also planning to supply production for the construction. I just wanted to know your view in terms of capacity addition, over 20,000 metric tons of capacity addition as a pilot project. Even when we move ahead and demand demand, we see our incremental demand which we plan to create at 5.28 or 5.29 with the visibility of getting stock orders.

So, sir, our goal is definitely two last times. There is no changing that goal. We have been a little delayed because of the fire incident. We've seen very positive response from all our customers. As and when, you know, we get approvals, I think in the last two years, we've prepared our company to execute a bigger project. Right now, if you see even last quarter's result, in the first six months itself, we have reduced our debt by 40%. So our total debt today stands at about 300 crores with about 0.2 debt to equity. So, I think we are very well placed in terms of, you know, taking a bigger capex whenever required for steel time. So, as and when, we would definitely be going in for that. And there is a good demand in the market. We are still sitting at 2.5 lakh to 3 lakh tons of demand in the country. The majority of this being met by imports. So, we definitely see a good opportunity here. And that is why we've been very focused on, as in when we get approval, we will definitely start immediately after that with our Capex. We might have some good numbers or, you know, some good news for you in the coming.

Sir, but if you look at one of the companies, which is Bicart, you know, it's expanding. So, as industry is growing at 8-10% only, so are we confident enough to place our, within the market,

We see that the market is growing at a very good pace because in steel tyre cord, we are getting A, the tyre industry growth and second, the radialisation also that is happening because this is only a product that is used in radial tyres and not in bias tyres and today in the truck and bus segment especially, the radialisation in India stands at about 60%, so there is a good room there. If you see developed markets, they are almost 100% radial. So there is a good room of growth in the tire industry, and this is what we witnessed in the last two, three years. That is one. Second, yes, there is domestic competition here, but that domestic competition is also not expanding as well as the market is. I mean, in the last five years or six years, if you see, they've expanded by maybe 20, 30%. That's a big company, you know, a multinational company, which has focused on a lot of different segments and a lot of different So, India is just one of that. Whereas, for us, we will be a little more aggressive here. And, of course, the country today also gives us a good room.

Sir, coming to LRPC, and we have already started commission all soils and Bidware. Now, just to get a...

Sir, LRPC gets around 5 to 7 rupees a lot. Right now, LRPC is... Today, we are not making much money in LRPC. Bead wire, yes, I think, generally, this is a good range to consider. For hose wire, we are looking at a bigger number, at a better number, because this comes in with our steel tire cord. So, steel tire cord and hose wire, both we are looking at a similar number.

Just to let us play it, we have reached to 15,000, in which IST would be 9,000 and OST would be 9,000.

Sir, we have a process of installing OST, taking the 9,000 total to 15,000, one or two.

Total IST included, that's a daily basis, we have to pass it because ultimately we also...

In availability, we do not see any challenge. There has not been a challenge for the last one quarter. Right now it has increased gradually, so that has also been passed on to us.

Yes, sir, you are right.

I think we are fairly confident of delivering 7 to 8, provided there is the long run. Yes, we would definitely look at 8 to 10,000 rupees. 10,000 rupees or higher than 10,000 kind of range once our speciality were number. That is definitely going to be the long run.

Got it, sir. Thank you so much for explaining each.

Thank you. A reminder to all the participants, you may press star and one to ask a question. We have the next question from the line of Saket Kapoor from Kapoor Co. Please go ahead.

Yeah. Namaskar, I hope I'm all right. Firstly, pertaining to the capital work in progress closing balance towards what is attributed to which of the product line And what is going to get capitalized in the second half of the year?

There are two things that we are working on right now. One is the 6,000 tons addition of OHD wire, which is to come in hopefully in the third quarter or, I mean, if it stretches, maybe in the fourth quarter. And apart from that, we are also working on 60,000 tons of additional capacity in Ladri. So, in which most of the work has already been done, that is why you see the CWIP. I think in the next quarter or by the end of...

And for the Dabu unit, what would be the key products that will attribute the volume addition?

So, sir, 60,000 ton is going to come in from low-carbon and high-carbon wires. And apart from that, 6,000 tons would come... This is one side, and the second side is also the Sanan facility that we have started working on for the 90,000 tons of capacity of stainless steel as well as low-carbon.

Already, sir, we have spent, already done capex for the Sanand facility, that is there in the closing one, sir, it doesn't like to be balanced?

Majority of this is coming from Gadari, not Sanand as of now. Sanand will, you will see something coming from next quarter or the quarter.

And, sir, how much have we outlined for the project there, including the land investment, what would be the total capex and what would be the effect and what?

Sir, we are looking at about 150 crores of capex there, apart from landland. We have already taken about a year back. But from now, I think we are looking at 150 crores of capex there in stainless steel as well as. Really, I think our company maintains our general, so I think that should also be the case there. Similar numbers, I think you can take. In general, sir, our thought process of expansion is about 250 crores of KPEX every year. That we'll continue doing, which will come from our internet.

Secondly, if you could outline for us the capacity for both the steel cord and the bead wire segment, what have we outlined and how much will be the ramp-up, how the ramp-up process would be? And second question is, what are the realizations for the steel cord and your application, your customers are attached to with the allegories?

In steel cord, our total capacity is about 20,000 tons, which we will, as and when required, and when we get our approvals, we will take to 2 lakh tons. Then bead wire, our napeyate capacity is about 30,000 tons, although some balancing equipments are still to be placed there. So right now, we are running at about 10,000, 15,000 tons. All of the, both of these products go in the tire industry. Beed wire is used at the side of the tire, whereas steel cord is what makes the tire. So, steel cord as a percentage is consumed more.

What should be the realization for steel cord? Do we find steel cord in application in the conveyor belt and other applications also, or does it only attributable to the tire segment for us?

So, this is what we are working on is steel tire cord, which is only for the tire industry. The conveyor belt application is basically more of a fine cord or a rope that you can say that goes in the conveyor cord industry, which is a very small application in general. But these are two very separate.

For the realization part, can you give an understanding of how the realizations are?

The steel port average pricing should be about 130-140 rupees a kg.

Okay, two small points. Firstly, about the LRPC margin profile, you also mentioned that margins are on the lower side, and we also see that one of the major players is either exiting or lowering the mix in the total profile. So, out of the total revenue mix, what is the contribution for the LRPC, and what is our thought process for the way ahead?

The PC right now, we are doing less than 1% of our total sales. This is just a product that is, so the thought process behind this has, you know, been able to diversify as much as we can, so that there are always some products that are doing very well. Some part is what makes us very consistent in our results. So, LRPC is also just one of those products that we added. Right now, it is not doing well but there will be a time when we will be able to make some good EBITDA in LRPC and when LRPC will support our other segments and the good thing about us is that most of our equipments are made by us and our investment per ton is very less. So, even at a lower EBITDA, we are still able to make decent return on our capital.

And lastly, in the presentation, if going ahead, we can put forward the revenue mix product-wise also. That would give us further understanding. So, as you mentioned, 1% only contribution. So, are these facilities fungible? Means, as you mentioned, that whenever the demand is contributing, because having 1% in the portfolio, how does it make any difference? Just to get my understanding.

Sir, we have 3,500 products, 0.1% of our total portfolio also, and those are still meaningful products for us. And that is how we've structured our organization in the last 85-90 years. We do not depend on one single product, which is one of the main reasons why we've been very consistent. Even if there are 10 products that are not doing well, there will always be 100 other products that will do well. So, LRPC, even though it is a 1% in our business, it is still a meaningful number for all of us. So, that is that, and yes, of course, we will try and give, you know, revenue.

Mr. Kanpoo, for the beadware, as you mentioned, that we have current capacity of 30,000, so we commercialized our unit there, and what is the tenant expected, and in terms of customer's empowerment, have we got the major OEMs also registered, and our facility is in David. Is it really in that vicinity itself or if we just give some more color of the roadmap of the Bidwar segment we have done?

Bidwar plant for us is in North India. It is part of our Dadari facility. So we have a small... Honestly, Bidwar is a product that we have not really focused on in the last one, one and a half years because we were facing a challenge in ramping up our capacities. So, when we are facing those kind of challenges, we were focusing on our existing products rather than getting into newer applications. So, right now, although in the last quarter, we've been able to ramp up our Dadri facility well. So, in the future, maybe in the next one or two quarters or three quarters, we will start focusing on beadware and sales there. In terms of approvals, I think right now we are supplying to the cycle market. And some non-OEM TAR customers, right now we have not started the approval process, but it is not as long as SteelTAR course. So this, whenever we start, I think we will get some approval. Honestly, we've just not been focusing on it.

Even if we eliminate the benefit of this one-time gain of inventory of 200, is it correct for investors to extrapolate these numbers for the second half as a base, or since we have one because of an unfortunate reason, does this EPS of India have a remaining part of the year that is H2 also?

Sir, for the second half, our range is about 7,500 rupees a ton, is our EBITDA. This is what we are confident on delivering. We were able to do a better quarter, we will hope for similar results, but as far as my commitment goes, I think 7.

Sir, you mentioned about the volume growth, I mean, once again, what is the volume growth expected for HQ?

20% over H2 of last year. Year on year, 20% vote.

Thank you. A reminder to all the participants, you may press star and 1 to ask a question.

I think we can, I think most of our questions are answered.

Sure, sir. Ladies and gentlemen, that will be the last question. I now hand the conference to the management for the closing company.

Thank you, everyone, for joining us on our call. I hope we have answered all your questions. If there is still anything that is remaining, please get in touch.

Thank you, members of the management. On behalf of Bansal Wire Industries Limited, we conclude this conference. For any queries, you can connect with AdFactors IRD. With that, you may now disconnect your minds. Thank you very much.