Orient Cables (India) IPO

It holds a 22.9% market share in India’s networking cable industry in FY26, up from 16% in FY22. As one of the top four players, its established market presence and wide range of products make it harder for new competitors to enter the market.

Its operating revenue grew at a two-year CAGR of 33.46% to ₹1,171.65 crore in FY26 from ₹657.77 crore in FY24. This was much faster than its listed industry peers, which recorded an average CAGR of 17.27% over the same period.

It generated a Return on Equity (ROE), which shows how efficiently it uses shareholders’ money, of 25.84%, and a Return on Capital Employed (ROCE), which measures how well it uses its overall capital, of 23.82% in FY26. It also recorded the highest ROE among its listed industry peers in both FY25 and FY26, showing efficient use of capital.

It supplies cables to two of India’s top three telecom operators by revenue and has maintained relationships of more than nine years with its top ten customers. These long-term relationships can support steady demand and repeat orders while making it harder for competing suppliers to replace it.

It follows a back-to-back procurement model, meaning it buys raw materials, especially copper, against customer orders and aligns purchase costs with prevailing market prices. This helps keep inventory holding periods to 21-29 days and reduces the impact of global metal price swings on unit margins. In FY26, the cost of materials consumed was ₹958.32 crore, or 81.79% of revenue.

It manufactures key components, such as fiberglass yarn, in-house, reducing its dependence on outside suppliers and giving it better control over quality. Its products are also price-competitive with Chinese manufacturers, helping it export cables to 15 countries and generate 9.26% of its FY26 sales from exports.

It is expanding into higher-margin products such as electron-beam solar cables, EV charger cords, and keystone jacks. Revenue from its specialty power and optical fiber segment jumped 155.30% to ₹250.39 crore in FY26, helping improve its product mix and profitability.

It gets a large share of its sales from a small group of customers, with 84% of revenue coming from its top 10 customers in the three months ended June 30, 2026, and 76.52% in FY26. Its biggest customer alone contributed 38.54% of sales during those three months. Losing any major customer could therefore have a significant impact on its cash flows and profitability.

It also depends heavily on a small group of suppliers, with 74.91% of raw materials coming from its top 10 suppliers in the three months ended June 30, 2026, and 69.71% in FY26. Most purchases are made through short-term purchase orders rather than long-term contracts. So, any dispute with a supplier or disruption in the supply chain could affect its ability to keep manufacturing.

Raw materials made up 81.79% of its operating revenue in FY26, costing ₹958.32 crore. Key materials such as copper and PVC are linked to global commodity and crude oil prices, which can move sharply. If the company cannot pass higher input costs on to customers, its profit margins could come under pressure.

Its total borrowings reached ₹258.46 crore as of June 30, 2026, while its Net Debt to EBITDA ratio, which shows how large its debt is compared with operating earnings, rose to 4.67 times from 2.31 times in FY26. Higher debt means more cash goes towards repayments and interest, while bank covenants can also limit its financial flexibility.

Its working capital is also under pressure because customers are taking longer to pay. Trade receivables rose to ₹293.90 crore as of June 30, 2026, pushing net working capital requirements to 57.99% of revenue. Since it offers credit periods of up to 90 days, cash can remain tied up for longer, forcing the company to rely on additional short-term bank loans.

It also faces legal and trademark disputes with Orient Electric Limited over the use of the “ORIENT” brand, including a suit seeking ₹2 crore in damages. If the court rules against it, the company could face the cost of changing its brand name, along with potential damage to its market goodwill.

Its allied product capacity is also significantly underutilised. It produced only 311,635 pieces of keystone jacks against an installed capacity of 5,040,000 pieces in FY26, resulting in just 6.18% utilisation. This leaves a large part of the plant unused while fixed costs still have to be paid, which weighs on the economics of these newer product categories until demand grows enough to use the available capacity.