While investors focus on cable and wire makers such as RR Kabel and Polycab India amid India’s power boom, a quieter opportunity is emerging deeper in the electrical value chain.
At the center of this shift are often-overlooked components: magnet winding wire, Continuously Transposed Conductors, copper foils, and aluminium products. These products are used in power transformers, electric motors, Electric Vehicle traction motors, and industrial equipment.
This makes them essential to the global electrification story. The global electrical infrastructure is entering a long investment cycle, driven by renewable energy expansion, grid modernization, urbanization, and rising electricity demand from AI-led data centers, creating strong demand tailwinds for winding wire manufacturers.
But the biggest tailwind comes from a growing supply-demand mismatch in the Transmission & Distribution sector. As India expands and modernizes power networks, demand for transformers has surged. In India alone, transformer capacity is expected to nearly triple from around 110 Gigavolt-Amperes (GVA) to 300 GVA by FY28 as per KSH International.
The National Electricity Plan also aims to invest approximately ₹9 lakh crore between 2023 and 2032, providing structural momentum. Against this backdrop, we look at two newly listed and under-the-radar wire manufacturers positioned to benefit from the electrification cycle.
#1 KSH International
KSH International is the second-largest manufacturer of winding wire in India and the largest Indian exporter of winding wire. It boasts a current installed capacity of 29,045 metric tons (MT). These coils are used in a wide array of electrical machines, ranging from large power transformers to small air-conditioning compressors.
Sourcing the World’s grid: A 30% export base and blue-chip clientele
It exports its products to 24 countries across the Middle East, Europe, and the USA, with exports making up approximately 30% of its total revenue. KSH is a B2B player supplying marquee customers such as Hitachi Energy, CG Power, BHEL, GE Vernova, Siemens Energy, and ABB.
KSH enjoys a strong competitive moat and a highly recurring revenue stream, with over 90% of its revenue coming from repeat customers. Variations in copper prices and exchange rates are directly passed through to the buyer. This structure shields the company from volatile raw material prices.
High-margin magnet wires: The engineering moat driving KSH’s profitability
In the product mix, specialised magnet wires account for 75% of revenue. This high-value segment includes Continuously Transposed Conductors (CTC), paper-insulated rectangular copper, aluminum wires, and bunched paper-insulated wires. KSH is the market leader in India for CTC products.
These specialized wires are essential for large power and distribution transformers, wind generator rotors, and traction motors for railways and EVs. Most notably, KSH is the only Indian supplier approved to supply winding wires for 400kV HVDC transformers.
Standard Magnet Winding Wires contribute 25% of revenue. This is more volume-driven and consists of round enameled copper and aluminum winding wires. These are used in smaller-scale and everyday applications such as hermetic compressors, home appliances, auto electricals, and general electric motors and switchgears.
Riding the 300 GVA transformer supercycle: Why KSH is doubling capacity by FY27
To meet increasing demand, KSH is doubling its capacity from 29,045 MT to 59,045 MT by FY27. During its first three months of operation, this plant quickly ramped up to over 50% capacity utilization. As volumes ramp up to a target 80-85% utilisation over the next 2-3 years, operating leverage will drive profitability.
Deconstructing the 61% Top-Line Spike: Realization gains vs. Volume growth
From a financial perspective, revenue grew by 61% year-on-year to ₹3,107 crore, driven by a 21% growth in sales volume. EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) surged by 56% to ₹192 crore, with margins at 6.2%.
EBITDA per MT surged to ₹67,625 from ₹52,536 in FY25. Net profit surged by 62% to ₹110 crore. The debt-to-equity ratio also improved to around 0.4 in FY26, from 1.2 in FY25.
The Inventory-to-Payable Cash Trap: Assessing Working Capital Stresses
While KSH maintains a high net working capital of 75-80 days, mostly tied to inventory, its payables are extremely low at around 5 days. This indicates that it pays for copper very quickly, whereas peers enjoy 50-60 days’ payable. This increases their working capital debt from banks. This needs to be monitored in case demand slows.
#2 Vidya Wires
Vidya Wires manufactures electrical and industrial winding and conductivity solutions. It primarily produces insulated copper conductors, with its core traditional products being super enameled copper wires and strips, paper-covered copper strips, and bare copper wires.
The Value-Chain Migration: Moving from Low-Margin Rods to Structural CTC Alloys
Recently, it moved up the value chain by expanding into higher-margin products. These new offerings include aluminum paper-covered conductors, aluminum enamelled wires and strips, photovoltaic (PV) round ribbons (for solar), multi-paper-covered copper conductors and copper busbars, as well as CTC and copper foils.
Its strategic expansion into new product lines is intended to directly target high-growth markets such as EV, renewable grid connectivity, and data center energy consumption. In the sectoral mix, power and transmission account for 51% of revenue, followed by electricals (27%), general engineering (13%), renewable and EV (7%), and consumer durables (2%).
The 35,000 MT ALCU Expansion: Capitalizing on Transformer Demand and Tax Subsidies
Its subsidiary, ALCU Industries, has doubled its manufacturing capacity from around 19,000 MT to 35,000 MT. Manufacturing at the new ALCU facility officially commenced on 7 February 2026. Currently, roughly 6,000-7,000 MT capacity has been added, and the remaining 8,000-9,000 MT will be added by October 2026.
The company anticipates utilising 50% to 60% of this capacity in FY27, with optimal capacity utilization (around 80%) expected by FY28. Phase 1 of the expansion specifically includes an annual capacity of 3,000 MT for CTC, a high-demand product used in the transformer industry.
As the new product lines serve high-growth segments, management expects this expansion to improve the company’s overall margin. It is also expected to benefit from local government tax incentives and GST subsidies over the next 10 years. Through these subsidies, the company is expected to effectively recover 45% to 50% of its capital investment during that decade.
A 41% Profit Surge Offset by 60-Day Working Capital Risks
From a financial perspective, revenue grew by 24% year-on-year to ₹1,840 crore in FY26, driven by a 6.5% increase in sales volume. EBITDA reached ₹86 crore, with margins at 4.7%. Net profit surged 41% to ₹58 crore. It mitigates fluctuations in raw material prices through back-to-back hedging.
Risks include an increased working capital cycle. The working capital cycle currently stands at 60 days. Management aims to bring the cycle down to 50-52 days by reducing debtor days. While it has a diversified global supplier base, ongoing shipping disruptions continue to challenge both its import and export operations.
Evaluating Capital Efficiency: Premium Valuations vs Industry Medians
KSH stands out with strong Return on Capital Employed (ROCE) and Return on Equity (ROE), followed by Vidya Wires. In terms of valuations, following a recent sharp re-rating, both KSH and Vidya Wires are trading at a premium relative to the industry.
| Peer Comparison (X) | ||||
| Price-to-Earnings Multiple | ||||
| Company | Company | Industry Median | ROCE (%) | ROE (%) |
| KSH | 42.3 | 26.5 | 21.4 | 20.1 |
| Vidya Wires | 36.9 | 17.1 | 20.7 | 17.8 |
India’s transformer capacity is expected to nearly triple from around 110 GVA to 300 GVA by FY28. As renewable energy additions, grid upgrades, and AI-led power demand accelerate, the winding wire industry appears set for a long demand cycle. Both KSH and Vidya Wires are gearing up to capitalize on the growing demand.
Meanwhile, following a sharp run-up, it would be beneficial to keep these on your watchlist.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were unavailable have we used an alternative, widely accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
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