- Orient Cables Has Built Scale Through Faster Growth
- The Market Is Growing Fast, But Orient Must Capture It
- Faster Growth Is Already Reflected in the Valuation
- Author's Take: Should You Apply For This IPO?
Orient Cables is entering the IPO market with an unusual combination: it is much smaller than the large listed cable companies, yet it has grown faster and earns a high return on shareholder capital. That helps explain why investors are being asked to value it at 57.79 times FY26 earnings at the upper price band.
But the premium comes with a clear trade-off. Much of its revenue is tied to a small number of customers, while debt and working-capital needs have risen sharply. The real question is whether its growth can continue fast enough to justify paying more for a smaller business.
Orient Cables Has Built Scale Through Faster Growth
Orient Cables makes networking and other cables used by telecom operators, internet providers, data centres, distributors, and other businesses. In simple words, its products carry electricity or data from one point to another.
It operates three plants in Bhiwadi and Bengaluru with an annual cable capacity of about 895,776 km. Revenue reached ₹1,171.65 crore in FY26. Around 90.74% of sales came from India, with exports to 15 countries making up the rest.
Its model is mainly business-to-business. Large customers place orders, and the company buys materials such as copper and plastic, converts them into cables, and delivers them.
The business has built long customer relationships. Its top 10 customers had relationships of more than nine years, and it supplies two of India's top three telecom operators. It also buys key inputs against customer orders, which helps reduce the time inventory sits in the business.
The IPO addresses an important part of the business economics. From its ₹552 crore IPO, it is raising ₹232 crore through an offer for sale, alongside the fresh issue, but the fresh capital is what funds the company's expansion and debt reduction.
Of the ₹320 crore fresh issue, up to ₹155.50 crore is planned for debt repayment and ₹91.50 crore for machinery and construction at its Bhiwadi unit. The expansion would lift cable capacity to 1.26 million km a year and increase accessory capacity as well.
The other side is that raw materials consumed 81.79% of FY26 revenue. So this is a high-volume business where controlling input costs and passing through price changes matter.
The Market Is Growing Fast, But Orient Must Capture It
India's broadband cable market is projected to grow at 17.6% a year from FY26 to FY31, while networking cables are expected to grow at 18.7%. 5G rollout, data-centre expansion, and low fixed-broadband penetration are key demand drivers.
But a growing market alone does not guarantee growth for Orient Cables. The more important evidence is that its own market share rose from 16% in FY22 to 22.9% in FY26. Its revenue also grew at a 33.46% CAGR between FY24 and FY26, almost twice the 17.27% average growth of its listed peer group.
That suggests the company has been gaining business faster than the market itself. Its supply relationships with major telecom operators, safety certifications, and ability to compete on price support that position.
Capacity expansion is therefore not just about adding factories. It is a bet that demand from existing and new customers will continue. The company is also moving into higher-value products such as electron-beam solar cables and EV charging cords. Specialty power and optical fibre revenue rose 155.3% to ₹250.39 crore in FY26.
There are limits to this opportunity. Customer concentration is high: the top 10 customers accounted for 76.52% of FY26 revenue, and the largest customer contributed 38.54% in the three months ended June 30, 2026. Debt also climbed to ₹258.46 crore. That makes successful growth important not only for expansion, but also for reducing financial pressure.
The IPO is open from 25 to 29 September 2026, so investors comparing it with other issues can also see the currently open IPOs.
Faster Growth Is Already Reflected in the Valuation
The peer comparison shows why the IPO is not being offered as a cheap entry into the cable sector. At ₹272, Orient Cables has a market capitalisation of ₹3,095 crore and a P/E of 57.79x.
That is above Polycab at 46.69x, KEI at 48.99x, and RR Kabel at 54.85x. Yet Orient's FY26 revenue of ₹1,171.65 crore is a fraction of Polycab's ₹28,883.79 crore and RR Kabel's ₹9,722.36 crore.
The premium, therefore, has to come from quality of growth and capital efficiency, not scale. Orient's 33.46% revenue CAGR and 25.84% ROE were stronger than those of these larger peers. ROE, simply put, shows how much profit the company generates from shareholders' capital.
However, its 8.23% EBITDA margin is below Polycab's 13.87% and KEI's 11.81%. Its net debt position is also much heavier than most large peers. The planned ₹155.50 crore debt repayment should help, but investors are still paying today for a business whose future earnings need to improve.
This is where the valuation becomes demanding. Orient IPO is already coming at a premium for faster growth and high ROE, even though the company is smaller, more concentrated, and more leveraged. The price can make sense if growth remains strong and new products improve profitability. If growth slows, the premium leaves less protection for investors.
Author's Take: Should You Apply For This IPO?
Orient Cables has a credible growth story. Its 22.9% networking-cable market share, 33.46% revenue CAGR and 25.84% ROE show that it has not merely benefited from industry growth; it has gained share while using capital efficiently. The planned capacity expansion and debt repayment could support the next phase.
But the IPO is not priced like a company with little to prove. At 57.79x P/E, investors are paying more than several much larger listed cable companies despite Orient's lower scale and weaker EBITDA margin. The biggest concern is concentration: 76.52% of FY26 revenue came from its top 10 customers. Rising debt and working-capital needs add another layer of risk.
My view is therefore that the business quality supports some premium, but the valuation leaves limited room for execution mistakes. The IPO appears more dependent on continued high growth than on current earnings alone. Investors comfortable with that trade-off may find the story interesting, while more valuation-conscious investors may prefer to wait for evidence that growth, margins and debt are moving in the right direction.
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