Orient Cables

Orient Cables

By Geetanjali Kedia
about 10 hours ago

IPO Size: Rs. 552 cr

  • Fresh Issue of Rs. 320 cr (10% dilution) for (i) capex Rs. 92 cr till FY29E (ii) repaying Rs. 156 cr of Rs. 259 cr gross debt as of 30.6.26
  • Offer for Sale (OFS) of Rs. 232 cr by promoter (100% stake to shrink to 82%)

Price band: Rs. 258-272 per share

M cap: Rs. 3,095 cr (IPO is 18% of m cap)

IPO Date: Fri 25th Sep to Tue 29th Sep 2026, Listing Mon 5th Oct 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Telecom Cables Manufacturer

Orient Cables is a two-decade-old Delhi based manufacturer of networking cables and speciality power cum optical fibre cables with its Rs. 1,200 cr annual revenue split 70:30 between these product segments. Company has an installed capacity of 8.96 lakh km as of 30.6.26, up 13% from 7.95 lakh km for FY26, spread across 4 plants in Rajasthan and Bengaluru. Operating at over 70% capacity utilisation, company commands 23% market share in networking cables industry. Nearly 70% of company’s revenue comes from broadband and telecom sector, and balance comprising smart building automation/ security, data centres, renewable energy etc.

 

Sizeable Capex

Company proposes Rs. 92 cr capex for capacity expansion, to increase cables manufacturing capacity by 40% to 12.5 lakh kms and more than double allied products capacity to 1.2 cr pieces per annum, from 50 lakh pieces as of 30.6.26. With a gross fixed asset turn of 6x, this capex has a revenue potential of ~Rs. 600 cr FY29E onwards. Company is also venturing into new products including E Beam irradiated specialty cables, solar junction box, tethered drone systems, cable harnesses, power cords, EV charging cables and guns.

 

Growing Financials

In the past 3 fiscals, company has posted 29% revenue CAGR and 31% EBITDA CAGR, with revenue touching Rs. 1,172 cr in FY26 and EBITDA at Rs. 96 cr, resulting in an EBITDA margin of 8%. This was supported by Rs. 170 cr capex, which increased net fixed assets from Rs. 45 cr as of 31.3.23 to Rs. 189 cr as of 31.3.26.

Q1FY27 revenue surged to Rs. 489 cr, partly due to 13% capacity addition and majorly due to sharp rise in realisation – FY26 average realisation of cables of Rs. 21,100 per km strengthened to 30,700 per km in Q1FY27. As a result, Q1FY27 EBITDA margin strengthened to 11.2% with PAT of Rs. 33 cr, leading to 6.7% net margin.

This should normalise going forward as the sudden surge in commodity prices led to one-time gains. Nevertheless, FY27E outlook is positive.

 

Undemanding Pricing

M cap of Rs. 3,095 cr and Enterprise Value (EV) of Rs. 3,183 cr implies a historic PE multiple of 52x, based on FY26 EPS of Rs. 5.3, which appears expensive. However, it is more realistic on future estimates.

Q1FY27 EPS stood at Rs. 3.2, but as explained above, annualising Q1FY27 earnings may be incorrect. Based on FY27E estimated EPS of Rs. 10.2, the current year PE multiple of 26.7x is also attractive for 26% RoE, growing topline and emerging demand from sunrise sectors like data center, EV charging etc.