What it is
KSH makes magnet winding wire. This is the insulated copper (and some aluminium) conductor that gets wound inside transformers and motors. About 75% of revenue is specialised wire for large power transformers, and the core product there is CTC (continuously transposed conductor), a woven multi-strand cable used in big grid transformers. The other 25% is plain enamelled wire for motors, compressors and appliances.
The economics are simple once you strip out the metal. KSH works on a make-to-order basis: it buys copper only after it has a purchase order, and the copper price plus the exchange rate are passed straight to the customer. So the metal (roughly 85 to 90% of the invoice) is not where the money is made. What KSH actually earns is a fixed value-addition per ton, set in one-year or multi-year contracts with each OEM through a fixed price matrix, independent of the copper price. That is why the only profit number worth tracking is EBITDA per ton, not EBITDA margin. When copper rises, revenue inflates and the margin percentage falls even though the rupees earned per ton do not change.
Where it stands (all figures ₹ cr unless noted):
FY23 | FY24 | FY25 | FY26 | |
|---|---|---|---|---|
Revenue | 1,050 | 1,383 | 1,928 | 3,107 |
EBITDA | 50 | 72 | 123 | 192 |
PAT | 27 | 37 | 68 | 110 |
Volume (MT) | 17,645 | 21,495 | 23,324 | 28,168 |
EBITDA per ton (₹) | 32,326 | 33,244 | 52,536 | 67,625 |
D/E | 0.62 | 0.90 | 1.21 | 0.39 |
ROE | 14.8% | 17.6% | 25.7% | 19.9% |
FY26 revenue grew 61% and PAT grew 62%. The stronger story is EBITDA per ton, which has doubled in two years as the mix moved toward CTC and exports. Q4 FY26 alone did ₹74,018 per ton. The IPO (listed December 2025) raised fresh money used mainly to repay ₹226 cr of debt, which is why D/E dropped from 1.21x to 0.39x, plus ₹87 cr of Supa machinery capex and a small solar plant.
The moat is genuine and specific. KSH was first to scale CTC in India 20 years ago. It is the only domestic supplier approved to make CTC for HVDC and 765kV transformers, and it holds approvals with Power Grid, NTPC, NPCIL and RDSO. Management says a new round-wire entrant needs five to seven years to work up from entry-level transformers to the 765kV and HVDC class, because each utility runs its own approval process and a wire that fails in the field is a grid problem. Repeat revenue was above 95% in FY26. Contingent liabilities in the RHP were just ₹3.5 cr of bank guarantees, so there is no visible litigation or tax overhang.
Why now
The full 43,445 MT capacity is available for all of FY27, versus only part of FY26. Supa Phase 2 takes it to about 59,045 MT by Q4 FY27. Management floor-guides at least 21% volume growth in FY27 (the FY26 rate) and says peak utilisation is around 85%, reached two to three years after a new plant starts.
Demand is in a multi-year cycle, not a spike. Transformers are the bottleneck in the global grid and renewables build-out, and every transformer needs winding wire. On CTC specifically, management sizes the India market at about 40,000 tons in FY25, going to 70,000 to 75,000 tons by FY27-28 and 100,000 to 120,000 tons by 2030. KSH is the leader in that pool.
Two tailwinds are quantifiable. First, imports. Roughly 1,000 tons of CTC a month was being imported into India due to shortage; a weaker rupee plus a 10% import duty on the full landed value (including the copper) now makes imported CTC uncompetitive, which pushes that demand to domestic leaders. Second, exports. All exports go to transformer makers, across four continents. Export revenue grew 92% in Q4 FY26 and is about 27% of sales. Management wants to take it back toward the 40% it once was, as global customers add capacity.
Triggers
Already working:
Volume up 29% in Q4 FY26 with EBITDA per ton at ₹74,018, the highest in years, driven by CTC share rising inside the specialised mix (gross profit per ton went from ₹1,12,000 to ₹1,27,000).
Export revenue up 92% in Q4, with new transformer clients being onboarded in the Americas and Europe.
Balance sheet already de-levered post-IPO (debt to EBITDA 0.39x).
Possible, not yet proven:
Operating cash flow turning positive in FY27. This is the single most important item and it has not happened yet.
Utilisation climbing toward 85% on the 59,045 MT base over the next two to three years, which is where operating leverage shows up (management expects it to start after Q4 FY27).
Long-term multi-year supply contracts with large OEMs, which management is evaluating.
Free options:
Green copper backward integration (in-house upcast rod), expected to start H2 FY27, to cut raw material cost.
PEEK-coated wire for 800V EV traction motors. Small and early; meaningful in 1.5 to 2 years. EBITDA per ton similar to or above CTC. Around 5 to 10% of the 59,045 MT is earmarked for automotive.
A further 10,000 MT expansion at Supa, for which the land, building and utilities already exist.
Risks
Cash conversion is the real weakness. Operating cash flow has been negative for the last two to three years. The 29% jump in turnover pulled cash into inventory and receivables (FY26 inventory ₹425 cr versus ₹211 cr, receivables ₹333 cr versus ₹224 cr), funded by working-capital borrowings and IPO money. Working capital is 65 days. Until this turns, reported PAT overstates the cash the business actually earns. Management's fix is to stretch payables past 25 days; that is the thing to verify in FY27, not assume.
The price leaves no cushion. About 52 times FY26 earnings for a business whose core is metal conversion at a 6% EBITDA margin. Any wobble in the ramp, or any drift back toward a normal wire-maker multiple, hurts regardless of how the plant runs.
Supplier concentration. Top 10 suppliers were about 98% of raw material cost. Copper itself is not scarce, so this is a vendor-relationship risk more than a pricing one, but it is concentrated.
Mix can cut both ways. Specialised earns roughly 3x the EBITDA per ton of standard wire. If standard grows faster than specialised, blended EBITDA per ton falls even with volumes rising.
New CTC entrants. Round-wire players and one platform company are entering CTC at subscale. They are five to seven years from the high-kV segment KSH owns, but the low end will see more competition.
Customer concentration is easing but present. Top 10 customers are about 53% of revenue, down from 59% three years ago.
What the price expects
Market cap ₹5,743 cr against FY26 PAT of ₹110 cr is about 52 times trailing earnings (about 46x on the reported diluted EPS of ₹18.37, which uses a part-year share count from before the December issue). So the starting point is a high-fifties multiple on a business that earns a 6% EBITDA margin because most of the invoice is pass-through copper.
Top-down. The demand pool is real. Management sizes India CTC demand at about 40,000 tons today, going to 70,000 to 75,000 by FY27-28 and 100,000 to 120,000 by 2030, with KSH the approved leader and imports being priced out by duty and a weak rupee. So volume has a multi-year runway. I will not convert that into a profit forecast, because the only forward figures management has actually given are a floor (at least 21% volume growth in FY27) and a range (EBITDA per ton of ₹67,000 to ₹74,000). There is no guided FY27 or FY28 profit number, so I am not going to invent one.
Bottom-up. The earning power is capacity times utilisation times EBITDA per ton. The machine is the 59,045 MT base by Q4 FY27, management's roughly 85% peak utilisation reached over two to three years, and the guided per-ton range, with specialised earning about 3x the per-ton of standard so the mix sets the blend. That describes the engine. It does not fix a number, and I will not pretend it does.
The inversion. Two things carry the whole return, and only one of them is safe.
Hold the 52x multiple flat, and my return simply equals earnings growth. On that basis a 15% return needs 15% earnings growth, which the demand and the moat comfortably support. In isolation, the hurdle is clearable.
The multiple is the risk, and this is where the price is demanding. A 52x rating is paying for many years of fast compounding, not for 15%. If the rating normalises toward a normal wire-maker's 25x, earnings have to roughly double just to hold the price flat (52 divided by 25 is about 2.1x), and would have to rise about 2.7x for the price to still compound at 15% a year over three years. That is what today's quote is asking the business to deliver. It uses only the current multiple and a plausible exit multiple, no forecast of mine.
So the price already assumes the ramp works and the market keeps awarding a premium rating. The ramp is the high-confidence part. The multiple is not, and underneath it the cash flow is still unproven. That is why this is a satellite: own the CTC and HVDC leadership, but small, and let delivery earn the re-rating rather than paying for one that is already in the quote.
What would change my view
Add, or move it toward core:
Operating cash flow turns clearly and repeatably positive in FY27, so PAT starts becoming cash. This is the biggest single unlock.
Utilisation on the 59,045 MT base moves toward 85% faster than the two-to-three-year guide.
Green copper or the EV wire shows up as a real number, or a large OEM signs a multi-year contract. Any of these justifies the multiple instead of merely defending it.
A price reset back toward the low-to-mid 30s P/E without a break in the ramp. That rebuilds the safety margin.
Trim, or exit:
Cash conversion stays weak through FY27 while working capital keeps absorbing cash. If PAT never becomes cash, 52x is indefensible.
Volume ramp slips or utilisation stalls, and the new fixed costs from Supa work against a smaller volume base.
EBITDA per ton slides because standard wire outgrows specialised, or a customer squeezes the value-addition matrix.
The multiple simply normalises toward the sector with earnings merely in line. At today's price, that alone takes the return below the hurdle even if the plant runs well.
TenetFour Research. Educational analysis only. Not investment advice or a recommendation to buy, sell, or hold any security. Author may hold a position. Readers are responsible for their own decisions.