What KSH International Limited does
KSH International makes magnet winding wires, the copper conductors wound into coils inside electric machines. A power transformer, a traction motor, an AC compressor, an alternator in a diesel genset - each one is built around coils of winding wire, and the wire's precision determines how much energy the machine loses as heat. KSH is a 45-year-old Indian manufacturer, the largest exporter of winding wires from India, and once Phase 2 of its current expansion completes by March 2027, the country's second-largest producer by installed capacity, at roughly 59,000 metric tons (Aug 2026, Feb 2026 concalls). At IPO time in Q2 FY26 it called itself third largest at 41,045 tons; by Q3 FY26 it claimed second at 43,445 tons (Jan 2026, Feb 2026 concalls).
The product line splits into two families with very different economics.
Specialized winding wires (roughly 75% of revenue): CTC (continuously transposed conductors), paper-insulated wires, and enamel-insulated rectangular conductors. These are engineered products with five or six precision manufacturing steps and fault-minimization processes, built on special-purpose machines that KSH designs to its own specifications. They go into large and medium power transformers used in T&D, renewables, railways, and data centers. CTC dominates the segment - it accounts for more than half of the specialized business - and KSH is India's CTC market leader: the first company to introduce and scale the product in India 20 years ago, and the only Indian company approved to supply HVDC 400 kV transformers (Jan 2026 concall).
Standard winding wires (roughly a quarter of revenue): round wires, produced in a two-step process with lower technical barriers. KSH deliberately confines these to select end uses where precision matters - EV motors, AC compressors, motors, and alternators for DG sets, including the backup gensets data centers run. The profitability gap is wide: specialized wires earn roughly three times the EBITDA per ton of standard wires, so the mix between the two drives the company's unit economics (Jan 2026 concall).
The business model insulates KSH from the two things that move its revenue line most: copper price and the dollar-rupee rate. The company is make-to-order. It receives a purchase order, books the copper at the day's LME price with its own supplier, processes the metal over 15-20 days, and invoices the customer at that same locked-in copper price. Neither KSH nor the customer carries copper exposure for the order cycle. Profits come from a separately agreed value addition per ton, set in a yearly contract with each OEM and built on a matrix of product type, complexity, and process (Feb 2026 concall). That is why management reports EBITDA per ton rather than margin percentage: revenue swings with copper, but unit economics reflect the real business.
Manufacturing is the moat. KSH's integrated production lines and in-house machine designs give it a 15-20 day order turnaround, which increases customer throughput and lets OEMs hold less wire inventory. The quality claim is that failures are designed out rather than inspected out at the end of the line. That matters because a faulty conductor in a 765 kV transformer or an HVDC link fails in the field, on the grid, in front of a utility. KSH's deployed fleet - some products still working 20 years on - is evidence utilities hold against the manufacturer when they consider new suppliers (Jan 2026, May 2026 concalls).
The recent numbers show the model working. Q1 FY27 revenue was INR 1,164 crores, up 108% year over year; specialized wire revenue grew 113%, standard wires 83%, and exports 76% (Aug 2026 concall). Sales volume was just under 8,000 tons in Q1, up from 7,600 in Q4 and 6,100 a year earlier, with consolidated utilization at 73.5% (Aug 2026 concall). EBITDA per ton hit about INR 93,000 in Q1 FY27 - a record driven by an unusually high share of CTC - against INR 74,000 in Q4 FY26 and INR 66,000 a year earlier. Management guides to a sustainable ~INR 75,000 for FY27 as the mix normalizes and Phase 2 fixed costs land (Aug 2026 concall).
Two recent build-outs round out the operation. The Chakan facility commissioned a 5,000-ton upcast unit in mid-2026 to recycle KSH's own copper scrap - a modest operating-efficiency and sustainability gain, not a new commercial venture (Aug 2026 concall). A 3.2 MW rooftop solar array at Supa, commissioned in May 2026, brought captive solar to 4 MW and cut plant power costs (May 2026 concall). The board has also authorized evaluating an additional 10 acres in Supa MIDC for the next phase of expansion beyond Phase 2 (Aug 2026 concall).
Business segments
Specialized Winding Wires
Specialized winding wires are the profit engine of KSH International. These are the magnetic wires wound into coils inside power transformers - the CTC (Continuously Transposed Conductors), paper insulated and enamel insulated rectangular conductors. The segment accounts for roughly 75% of total revenue, and the economics are starkly better than the company's other business: management puts the EBITDA-per-ton ratio between specialized and standard wires at about 3:1.
The core capability took decades to build. KSH claims to have been the first company to introduce and scale CTC in India about 20 years ago as an import substitute, and to have maintained leadership since. The product goes through five or six precision technology steps with fault-minimization processes, versus a two-step process for standard round wires. The barrier is not machinery alone but accumulated approvals: KSH states it is approved for all classes of power transformers, including being the only Indian company approved to supply HVDC 400 kV transformers. Management's estimate for a new entrant to work its way up to the 765 kV segment is five to seven years, because every utility runs its own approval process on top of the OEM's.
The customers are roughly 120 domestic and global transformer OEMs, with repeat revenue above 95%. During Q1 FY27, management announced the signing of a five-year supply framework agreement with Hitachi Energy Global:
"We are very pleased to announce that we have entered into a five-year supply framework agreement with Hitachi Energy Global to supply winding wires to their Indian plants as well as their some of their global plants."
- MD, Q1 FY27 concall (Aug 2026)
That agreement is still a framework - quantities and pricing are being finalized - but it reflects a broader shift management described across the Q4 FY26 and Q1 FY27 calls: transformer OEMs sitting on three-to-five-year order books are beginning to lock in wire supply as they expand capacity. The installed position matters here: at June 30, 2026, KSH had 43,445 metric tons of annualized capacity, making it the second largest winding wire manufacturer in India, and expects roughly 59,000 metric tons once Phase 2 of the Supa expansion completes by the end of FY27.
Competition inside the segment is fragmented but headed by a few qualified players. Management named Transformers & Rectifiers as a customer that is backward integrating into CTC, but argued the trend will stay limited because the continuous processes need order volumes to run efficiently and the end utilities must pre-approve any sub-vendor. Chinese CTC imports exist and were arriving when Indian capacity was short, but they face a 10% import duty calculated on the copper content as well as the fabrication, which makes them less competitive as domestic capacity comes online.
The demand backdrop is structural. T&D is in a long-term cycle driven by renewables, grid modernization, urbanization, and AI data centers, and almost every transformer OEM is expanding capacity - which means more transformers, hence more winding wire. HVDC is the highest-value frontier: as of the Q3 FY26 call, KSH had received cumulative orders for 37 HVDC transformers, to be supplied over 12 to 18 months, and stated it is the only Indian supplier qualified and certified by PGCIL for HVDC 400 kV work. Momentum for 765 kV transformers and reactors is higher than a year ago, and about 25% of CTC volume now goes to the largest power transformer classes.
Export is the growth accelerant. All exports are exclusively T&D customers across 24 countries, concentrated in the US, Europe and the Middle East (each 8-11% of total revenue annually). Export revenue grew 76% year-over-year in Q1 FY27, accelerating from 92% growth in Q4 FY26, and management targets returning exports to the historical peak of about 40% of revenue from the current ~27%.
The financial performance of the segment drives the group. Specialized wire revenue grew 113% year-over-year in Q1 FY27, and the record CTC contribution plus higher export volumes pushed consolidated EBITDA per ton to approximately INR93,000, up from 74,000 in Q4 FY26. Management guides to roughly INR75,000 per ton for FY27, acknowledging the mix will normalize as Phase 2 adds standard wire capacity. The company's upcast facility (commissioned August 2026, recycling its own copper scrap) is a group-level synergy that slightly reduces input cost, but the specialized segment carries the margin while the standard wire segment grows volume on the same copper pass-through model.
Standard Winding Wires
Standard winding wires are the round magnet wires wound into the coils of everyday electric machines - AC and refrigeration compressors, industrial motors, two- and three-wheeler EV traction motors, and the alternators inside diesel generating sets. They are a simpler product than KSH's specialized wires, which pass through five to six precision steps. Round wire is "essentially a two-step process", as management put it on the Q2 FY26 call. That simplicity means lower value addition per ton, but it also makes standard wires the volume engine that fills production lines as the new Supa plant ramps.
The durable capability here is not the process itself; it is the machinery underneath it. KSH is a 45-year-old magnet-wire maker whose specialized business built the copper sourcing, the OEM relationships, and the make-to-order discipline. Standard wires entered only in FY22, aimed at AC and refrigeration compressors and two-wheeler EV traction motors. Every order starts with a purchase order; copper is booked with suppliers at that moment, and the LME price and exchange rate flow straight to the invoice. The value addition is negotiated separately, per customer, typically for a year. Management described the mechanism on the Q1 FY27 call:
"We will book the copper once we receive the order... whatever is the known copper price, that becomes the invoice price for the copper portion for that particular order. So that's the pass-through mechanism, and then we focus on the value addition." - MD, Q1 FY27 concall (Aug 2026)
Inside the segment sit compressor-grade round wires for AC and refrigeration compressors, enamelled wires for two- and three-wheeler EV traction motors, wires for general motors, and wires for DG-set alternators, which the company expects to grow as data centers install backup power. Management noted on the Q3 FY26 call that high copper prices may push small motor makers toward aluminium, and KSH manufactures aluminium wires too, though that business is less than 1% of revenue. Higher-value EV products like PEEK-coated wires for 800-volt traction motors sit in the specialized segment rather than here.
Customers are the roughly 120 OEMs KSH serves across the group, with repeat revenue above 95% in FY26. The demand shift in this segment is partly regulatory: the Bureau of Indian Standards (BIS) is curtailing round-wire imports, moving the supply base to domestic makers such as KSH. Management's positioning for these wires is precision, not commodity:
"Our focus for standard wires is predominantly in select end-user industries such as EVs, AC compressors, motors, etc., where precision technology plays a critical role." - MD, Q4 FY26 concall (May 2026)
The EV part is already live in two- and three-wheelers, which management calls "very, very strong", while meaningful passenger-car volumes are expected around FY28-FY29; KSH is qualifying into those OEM programs now.
By capacity, KSH moved from third-largest Indian winding-wire maker at 41,045 metric tons (Jan 2026) to second-largest at 43,445 metric tons (Feb 2026), heading toward roughly 59,000 metric tons once Supa Phase 2 completes by the end of FY27. The calls name listed peers Ram Ratna and Precision Wires in the context of working capital days rather than market share; KSH's asserted edge is precision manufacturing for select uses, not commodity round wire. Capacity is not fungible: standard and specialized run on separate, dedicated machines, so standard output cannot absorb or cannibalize specialized capacity. The planned split at Supa is roughly 65% specialized and 35% standard.
Revenue split: specialized wires were approximately 75% of group revenue in both FY26 and FY25 (May 2026), leaving standard wires around a quarter. Within the group, standard wires carry roughly one-third the EBITDA per ton of specialized, a "3:1" ratio management gave on the Q4 FY26 call. The segment grows fast anyway: standard wire revenue rose 58% in FY26, 80% in Q4 FY26, and 83% in Q1 FY27 (Aug 2026). Because standard orders are smaller than the 20- to 25-ton batches typical for power transformers, they also smooth out inventory peaks in the working-capital cycle.
The value of standard wires to the group is utilization and scale. Phase 1 of Supa front-loaded specialized and CTC capacity; Phase 2 adds a greater share of standard and EV lines. Consolidated EBITDA-per-ton guidance for FY27 is around INR 75,000, up from INR 67,600 in FY26, with the mix between standard and specialized the swing factor management returns to across the calls.
Customers
Who buys
KSH is a B2B supplier to roughly 120 OEMs. The largest group is power transformer manufacturers - BHEL, CG Power, Hitachi Energy, GE Vernova, Bharat Bijlee, Siemens, and Toshiba are named on the calls (Jan 2026 concall). Every export shipment goes to a transformer company: 100% of exports are T&D products sold across 24 countries on four to five continents - the Americas, Europe, the Middle East, and parts of Asia (Feb 2026, May 2026 concalls). Among export geographies, the Middle East, Europe, and the US each contributed 8-11% of total revenue annually (Aug 2026 concall). Domestically, KSH already works with most large power transformer OEMs, so the Indian play is wallet-share growth more than new-name hunting (May 2026 concall). Standard wire customers are different: EV two- and three-wheeler manufacturers, AC compressor makers, motor builders, and DG set alternator producers, added as Supa capacity ramped (May 2026, Aug 2026 concalls).
The buying relationship
Purchases run through annual value-addition contracts with each OEM. The contract fixes a per-ton value addition across a matrix of product permutations - wire type, gauge, insulation, complexity - independent of copper price. When a customer releases a purchase order, the copper portion is priced on an unknown LME basis (daily, monthly, or a 15-day average depending on the customer), booked immediately with the supplier, and passed through. What KSH negotiates and protects is the value-added layer (Feb 2026 concall). Roughly 80-85% of business repeats annually; in FY26, repeat revenue exceeded 95% (Jan 2026, Aug 2026 concalls).
Tenure runs decades. Five of the top ten customers have been with KSH more than ten years; the oldest relationship approaches 40 years (Jan 2026 concall). Top ten customers account for about 50% of revenue spread, which sounds concentrated, but the counterparties are diversified across geographies and the relationships are persistent rather than tender-driven (Jan 2026 concall).
The customer's decision to buy is gated by regulation. A transformer OEM only selects a wire vendor if that vendor is already on the utility's approved sub-vendor list - PGCIL, NTPC, and their international counterparts. New wire suppliers must be qualified by each utility in each country, a process measured in years, not months (Jan 2026, May 2026 concalls).
Why customers pick KSH
Four things, in order: approvals, track record, quality, and turnaround.
- Approvals: PGCIL-certified for all transformer classes including HVDC 400 kV, the only Indian company with that clearance, plus utility approvals in each export country (Jan 2026 concall).
- Track record: 20 years of deployed CTC in the field. Utilities want proof the product has run live on the grid before they accept it.
- Quality: built-in precision that lowers losses and extends transformer life. KSH's special-purpose machines are designed in-house, so competitors cannot buy the same capability off the shelf.
- Turnaround: a 15-20 day order cycle increases customer throughput and lets OEMs hold less wire inventory (Feb 2026 concall).
The demand environment is tightening supply enough that customers are locking in capacity with multi-year agreements. In August 2026, KSH announced a five-year supply framework agreement with Hitachi Energy Global covering Indian and some global plants:
"We are very pleased to announce that we have entered into a five-year supply framework agreement with Hitachi Energy Global to supply winding wires to their Indian plants as well as their some of their global plants."
- MD Rajesh Hegde, Q1 FY27 concall (Aug 2026)
The agreement is a framework: quantities and prices are still being finalized. KSH says other large transformer OEMs are exploring similar arrangements as they expand capacity, given their own order books run three to five years (May 2026, Aug 2026 concalls).
Switching costs
Switching a strategic wire supplier costs a transformer OEM years of re-qualification. A new entrant must be approved by each utility, which requires a live field track record at progressively higher voltage classes. Management puts the time for a new supplier to reach 765 kV at five to seven years (May 2026 concall). For an installed and field-proven supplier like KSH, that barrier works in reverse: the customer's incentive to re-qualify someone else is low, and wallet share with existing customers is sticky. That is also why KSH wins new global business from OEMs that previously bought elsewhere - each addition is a multi-year revenue stream, though early quantities are modest as customers test performance (May 2026 concall).
Competitive landscape
Where KSH sits
The Indian winding wire industry splits into two tiers. Standard round wires are largely commoditized, price-tender-driven, and carry roughly one-third the EBITDA per ton of specialized wires (Jan 2026 concall). Specialized wires - CTC and rectangular conductor products - are approval-gated, with 5-6 step manufacturing processes and utility certification required. KSH sits at the top of the specialized tier: India's CTC market leader, the only Indian company approved for HVDC 400 kV, and the largest winding wire exporter from India (Jan 2026, Feb 2026 concalls). By capacity it rose from third to second as Supa came online (Feb 2026, Aug 2026 concalls). Peers such as Ram Ratna compete in the standard and round-wire space with different commercial terms, notably deeper payable days on supplier credit (Feb 2026 concall Q&A).
The competitive threats
Chinese imports into India. Some CTC enters India from China because of the earlier domestic supply-demand gap. It is structurally uncompetitive: a 10% import duty applies to the entire value including the copper portion, and a weak rupee widens the gap. Management expects the import channel to shrink as domestic capacity, including KSH's, absorbs demand (Feb 2026 concall).
New Indian CTC entrants. Round-wire manufacturers are announcing CTC capacity to chase the demand cycle. A new plant requires capital, specialty machinery with 8-12 month lead times, and then a multi-year qualification ladder. Management's view:
"in the past, we've seen new entrants have taken anywhere from five to seven years to finally come up to a 765kV range as well."
- MD Rajesh Hegde, Q4 FY26 concall (May 2026)
The approval process is identical whether the entrant is independent or a transformer OEM's captive line: utility sub-vendor lists require a live field track record before the product can be used at higher voltage classes.
Backward integration by transformer OEMs. Transformers and Rectifiers has announced CTC backward integration. KSH treats this as contained risk: CTC and other specialized manufacturing runs continuous processes 24/7, needs scale to be efficient, and does not fit the transformer OEM's core competence. Globally, no transformer OEM of significance has backward-integrated into magnet winding wire (Jan 2026, Feb 2026 concalls).
Chinese competition in export markets. KSH competes with Chinese manufacturers wherever it exports. In Southeast Asia (Indonesia and similar), Chinese suppliers win via bilateral FTAs that cut their duty advantage, so KSH steps back there. In the US, China vacated the market post-COVID and Indian suppliers including KSH picked up the slack - KSH has served the US for over a decade. In Europe, the Middle East, and Japan, KSH competes on a level playing field and is cost-competitive with Chinese suppliers on a like-for-like basis (Jan 2026 concall). US tariff treatment of India is in flux: value-addition duties on India were around 54%, with government signaling 18-25% (still to be confirmed), versus China at roughly 34% on value-added US revenue (Feb 2026 concall).
Why the moat holds
The entry barriers stack. Product complexity (in-house SPM design, 5-6 step processes), utility and OEM approvals that take years, a 20-year field track record, and a 15-20 day turnaround that subscale competitors cannot match with the same economics. Within specialized, the highest-margin classes - 765 kV, HVDC - have the fewest qualified suppliers, and KSH is the only Indian one at the top of that ladder. The structural T&D upcycle reinforces the moat: as transformer OEMs expand, they need supply security, which pushes them toward established, approved, scaled vendors rather than unproven new capacity.
Honest pressure points
Intense competition lives in standard wires, which is why KSH confines itself to precision niches (EV, compressors, motors, alternators) rather than the commodity end. The CTC import channel, though duty-punished, persists during supply gaps. And the mix itself is the pressure: a higher share of lower-margin standard wire as Phase 2 comes online will drag the blended EBITDA per ton toward the guided ~INR 75,000, from the INR 93,000 record in Q1 FY27 (Aug 2026 concall). KSH's competitive position within its niche is strong; it is not immune to the economics of its own product mix.
Industry
Demand drivers
The T&D sector is in a structural, multi-year upcycle. Four forces are pulling transformer demand: renewable energy build-out (which needs grid connections and long-distance evacuation), grid modernization and urbanization, and surging electricity demand from AI data centers. The bottleneck is transformer supply, not demand - transformer OEMs globally are sitting on order books of three to five years and expanding capacity through the late 2020s. Every new transformer needs winding wire, and the year-on-year additions of OEM capacity through roughly 2029 sustain wire demand even as the market matures (May 2026, Aug 2026 concalls).
Management frames the cycle as continuous: "should all this transformer capacity come to market over the next three to five years, the whole supply chain, including magnet winding wires, will still have a lot more capacity expansion to do to keep up with the demand" (May 2026 concall). Within T&D, the fastest-growing sub-segment is HVDC, driven by long-distance renewable evacuation. India is executing HVDC projects (the Khavda-Bhadla corridor), with additional HVDC transformer orders from GE and repair orders from other OEMs beyond what PGCIL has already placed (Feb 2026 concall).
Market size
Management cited a CTC demand estimate for India of roughly 40,000 tons in FY25, trending to 70,000-75,000 tons by FY27-28, and 100,000-120,000 tons by 2030-2032 (May 2026 concall). The domestic supply-demand gap has been importing ~1,000 tons of CTC per month due to non-availability; that import window is expected to close as domestic capacity, including KSH's 59,000-ton footprint and peer additions, comes online (May 2026 concall).
India's position in the global supply chain is two-sided. It is a windfall beneficiary of China+1 diversification in the US and Europe for transformer-critical materials: Chinese suppliers vacated the US after COVID, and European buyers actively seek alternate sources. KSH exports to 24 countries, all T&D. At the same time, India imports CTC when domestic supply is short, and the 10% duty plus rupee weakness makes those imports expensive - which is why local capacity additions are self-reinforcing for domestic manufacturers (Feb 2026, May 2026 concalls).
Trade and tariff dynamics
Two tariff layers matter. On imports into India, a 10% customs duty applies to the full value including copper, making Chinese CTC imports structurally more expensive than domestic supply once capacity exists (Feb 2026 concall). On exports to the US, value-addition duties on India were around 54%; the government is negotiating down to 18-25% (unconfirmed). China sits at ~34% on value-added US revenue. For KSH, US tariffs land on the value-added layer, and its US customers currently absorb and pass the tariff through to end users (Feb 2026 concall). The rupee's persistent weakness is a tailwind for export value addition, though management does not build guidance around it (Aug 2026 concall).
Regulation and localization
Two regulatory forces shape the industry. BIS implementation is driving localization: standard winding wires that used to be imported into India must now be supplied by BIS-certified Indian makers, which shifts volumes to domestic producers including KSH (May 2026, Aug 2026 concalls). And utility approvals (PGCIL, NTPC, and foreign equivalents) govern who can supply wire into transformers connected to the grid. Approvals are not transferable and not fast: every new supplier works its way up from medium power transformers through 765 kV and HVDC over five to seven years, and must maintain a live field track record (May 2026 concall). Together these two forces mean the specialized end of the market is a governed oligopoly - few players, high barriers, fast-growing demand - while the standard end is a BIS-consolidated but still competitive domestic market.
Cyclicality and position in the cycle
The industry is capacity-constrained today, the inverse of the classic cycle. Transformer OEMs expanding their own facilities occasionally delay wire order pickups as they resolve commissioning bottlenecks - KSH saw a few weeks of such delays in Q1 FY27 and expects normalization once new plants run (Aug 2026 concall). Copper price volatility hits reported revenue and margins even though it passes through; working capital requirements scale with copper, since higher metal prices mean more debt to fund inventory and receivables, which is why interest cost rises in high-growth, high-copper periods (Feb 2026, May 2026 concalls). KSH's working capital days improved to 60 in Q1 FY27 from 71 a year earlier, against an industry-standard target of 30-35 (Aug 2026 concall). Where the cycle goes next depends on whether transformer OEM capacity expansions land on schedule, whether HVDC order flow sustains, and whether the EV traction motor market - two- and three-wheelers strong now, four-wheelers meaningful only in FY28-29 - matures as expected (Aug 2026, May 2026 concalls).
Growth triggers
Supa Phase 2 expansion completion: installed capacity to reach ~59,000 MT by end FY27; next wave of capacity expected in Q2 FY27
The capacity addition at the Supa facility in Maharashtra is the engine for all of KSH International's volume growth. The company entered FY27 with 43,445 metric tons of installed annual capacity, and Phase 2 of the expansion is scheduled to bring this to roughly 59,000 metric tons by the end of the financial year, making KSH the second largest winding wire manufacturer in India.
"Our installed capacity at June 30th, 2026 was 43,445 metric tons and once phase two of our Super expansion is complete by the end of this year, this financial year, we would have an installed capacity of roughly 59,000 metric tons"
- MD, Q1 FY27 concall (Aug 2026)
The expansion is being rolled out in waves. Phase 1, which brought the first 12,000 metric tons online at the end of September 2025, was completed during FY26. A further 2,400 metric tons was added during Q3 FY26, taking capacity to 43,445 metric tons by December 2025 (Q3 FY26 concall, Feb 2026). The next wave of Phase 2 capacity is expected to come online during Q2 FY27, with the remainder landing by March 2027 (Q1 FY27 concall, Aug 2026).
The mechanism is straightforward: this capacity converts directly into sellable volume. KSH is a make-to-order business, so the constraint on revenue has been production capacity, not demand. Management stated in Q1 FY27 that the higher Phase 1 capacity being available for the full year should sustain the 26% trailing twelve-month volume growth rate for FY27 (Q1 FY27 concall, Aug 2026). The capacity is already being utilized - consolidated utilization improved to 73.5% in Q1 FY27, up from 70% in Q4 FY26, on a larger installed base.
The expansion covers all product lines. Management noted that Phase 1 capacity was front-loaded towards specialized winding wires, which is why CTC (continuously transposed conductors) contribution to revenue reached record levels in Q1 FY27. As Phase 2 completes, management expects additional standard wire and EV-focused specialized capacity to come online, normalizing the product mix (Q1 FY27 concall, Aug 2026).
Hitachi Energy five-year supply framework agreement - to supply winding wires to Indian and global plants (framework agreement, details being finalized)
On the Q1 FY27 earnings call (August 2026), management announced a five-year supply framework agreement with Hitachi Energy Global covering winding wires for Hitachi's Indian plants and some of its global plants:
"We are very pleased to announce that we have entered into a five-year supply framework agreement with Hitachi Energy Global to supply winding wires to their Indian plants as well as their some of their global plants."
- Rajesh Hegde, MD, Q1 FY27 concall (Aug 2026)
Hitachi Energy is a core KSH customer, named alongside BHEL, CG Power, GE Vernova, Bharat Bijlee, Siemens and Toshiba as transformer OEMs whose public order backlogs validate the demand environment (Q2 FY26 concall, Jan 2026).
The mechanism: this is a framework, not a fixed order. It sets the terms under which Hitachi releases purchase orders over five years. The products are specialized winding wires - CTC, paper insulated and enamel insulated rectangular conductors - the category tied to the roughly 75% of KSH revenue that comes from large power transformers (Q1 FY27 concall, Aug 2026). Management confirmed the broad construct is agreed but quantity and price are still being finalized (Q1 FY27 concall, Aug 2026).
The deal matters for two reasons. First, visibility. As Supa Phase 2 takes installed capacity from 43,445 metric tons to roughly 59,000 metric tons by March 2027, a multi-year commitment from one of the world's largest transformer OEMs supports utilization ramp-up on the larger base (Q1 FY27 concall, Aug 2026). Second, it may be the first of several. Transformer manufacturers globally sit on orders books of three to four years and want to lock in winding wire supply; management said discussions with other customers are ongoing (Q1 FY27 concall, Aug 2026).
On economics, management said per-ton margins on the Hitachi business would be similar to the company average, not premium (Q1 FY27 concall, Aug 2026). Actual revenue depends on the purchase orders released under the framework, which is still being finalized.
HVDC orders: cumulative orders of 37 HVDC transformers received; supplying over 12-18 months; more HVDC transformers expected as renewable push continues globally
KSH International holds orders to supply specialized winding wires for 37 HVDC transformers and began shipping against them in Q3 FY26. Management said the orders would be supplied over 12 to 18 months, and confirmed the buyer is an Indian HVDC transformer manufacturer rather than an export customer (Q3 FY26 concall, Feb 2026).
KSH is the only Indian company approved to supply CTC for HVDC 400 kV transformers (Q2 FY26 concall, Jan 2026). That approval is the reason the orders land with KSH and not competitors. HVDC transformers sit at the top of the power transformer class, so the CTC that goes into them carries the highest value addition in KSH's portfolio. Replacement supply is protected too: imports carry a 10% duty on the full value including copper, and new domestic entrants need five to seven years to get qualified up to 765 kV, let alone HVDC.
The mechanism is straightforward. HVDC is required to evacuate renewable power over long distances, so every HVDC transformer order that flows to OEMs like BHEL, Hitachi Energy and GE Vernova creates winding-wire demand. KSH converts each received transformer order into revenue over the 12-18 month supply window, and each additional order adds volume at the highest margin tier in the business.
At roughly 40 transformers, the orders are still small relative to total capacity.
"Though, at the current level of 40-odd transformers, it will not meaningfully impact any given quarter's performance. But as more HVDC transformers begin to be supplied, which we expect to happen, it should start to have an incremental benefit to the company, given it is our highest value addition product."
- MD, Q3 FY26 concall (Feb 2026)
Management cited a recent GE HVDC order and repair orders with other transformer manufacturers as pipeline beyond the 37, and expects the Khavda-Bhadla renewable corridor to feed additional transformer awards. The business case rests on HVDC becoming a larger share of transmission capex globally, with KSH positioned as the qualified Indian supplier of the critical wire inside those transformers.
Export growth: 76% YoY in Q1 FY27, 92% YoY in Q4 FY26; target to increase back to historical peak of ~40% of total revenue (currently ~27%)
Exports are where KSH converts its CTC (continuously transposed conductor) capability into premium pricing. All exports go exclusively to T&D customers - transformer OEMs across North and South America, Europe, the Middle East, and Asia. The growth has been accelerating: 22% YoY in Q2 FY26, 37% in Q3 FY26, 92% in Q4 FY26, and 76% in Q1 FY27 (Q4 FY26 concall, May 2026; Q1 FY27 concall, Aug 2026). Export revenue in Q1 FY27 was also 12% higher than Q4 FY26, so the momentum is sequential, not just year-over-year.
The mechanism is straightforward. KSH is make-to-order with copper as a direct pass-through, so export profitability comes from the value addition on top of copper, not from the metal. Management stated that exports carry better margins than domestic sales, and a weaker rupee adds a further tailwind to EBITDA per ton (Q1 FY27 concall, Aug 2026). Export volumes are all specialized winding wires, which carry roughly 3x the EBITDA per ton of standard wires (Q4 FY26 concall, May 2026).
Three forces are driving the export push. First, capacity was the constraint - historically exports ran at 30-40% of revenue, but were consciously reduced to ~30% in FY25 because domestic demand offered better value while capacity was limited (Q2 FY26 concall, Jan 2026). Second, global transformer OEMs are all expanding capacity, and KSH's existing customers in those markets are adding facilities, which supports wallet-share gains (Q1 FY27 concall, Aug 2026). Third, export growth is coming from new customers added over the past two quarters, not just existing relationships.
"in terms of exports, our endeavor is to take it back up to about 40% over the next couple of years, and that's what we are going to be working on actively as well. Since the demand environment for transformers is quite good right now."
- MD, Q4 FY26 concall (May 2026)
In Q1 FY27, exports were approximately 27% of revenue excluding other operating revenue, up from 24% in the prior year period. The stated target is to return to the historical peak of roughly 40% over the next couple of years (Q1 FY27 concall, Aug 2026). Management confirmed that export demand remains strong across all key geographies, with no reduction in demand despite copper price movements or geopolitical disruptions in the Middle East, which caused only a few weeks of shipment delays in Q4 FY26 (Q4 FY26 concall, May 2026).
The structural tailwind matters here: US tariff policy has made imports of CTC and specialized winding wires more expensive, which benefits Indian exporters. Management noted that Chinese competitors face a 34% value-add duty on US revenue while India's rate is expected to land between 18-25%, and that Chinese players have largely vacated the US market post-COVID (Q3 FY26 concall, Feb 2026). In markets with a level playing field like Japan, KSH is already cost-competitive with Chinese manufacturers on a like-for-like basis (Q3 FY26 concall, Feb 2026).
EV traction motor wires (PEEK, 800V architecture): market maturing, meaningful volume expected in FY28-FY29; capacity being set up now at Supa
KSH International's EV play is built around PEEK-coated magnet wire, the insulation required for 800-volt traction motor architectures. The current industry standard is 400 volts, and the shift to 800 volts is driven by faster charging and larger vehicle sizes. PEEK is a patented technology held by just two European manufacturers, and it does not yet exist in India. KSH signed an exclusive licensing agreement with one of them, HPW, to indigenize the product line.
The mechanism is qualification-led. Traction motor manufacturers setting up capacity for 800-volt and above need approved wire suppliers, and KSH is investing now to be on those approved lists before volumes actually arrive. Management was explicit that this is an early investment with a delayed payoff:
"We are investing a little bit early in our cycle. But this will not have an immediate impact. But, you know, we will be working on programs with some of the manufacturers for EV motors. And that's where the real benefit will come maybe, after FY '27 is when we expect to."
- MD, Q2 FY26 concall (Jan 2026)
The timeline management has flagged is FY28-FY29 for meaningful volumes. On the Q4 FY26 call, they added that PEEK capacity is part of the phase two Supa expansion, and that roughly 5-10% of the total 59,000-ton capacity will serve the automotive sector once fully installed. The value of this business is in the unit economics: management stated PEEK wire will be "the highest EBITDA per ton or value addition within our basket of products," comparable to or slightly higher than CTC.
The 800-volt architecture has not yet matured in India. What matters is that the 2-wheeler segment is already contributing volume today; the larger 4-wheeler and bus programs, where PEEK comes in, are still in the validation stage. KSH is positioning itself so that when those programs industrialize, it is already qualified, approved, and has the lines running at Supa.
Upcast backward integration facility commissioned in Chakan (5,000 MT) - recycles own copper scrap, provides modest operating efficiency and sustainability benefits
In the first week of August 2026, KSH commissioned a 5,000 metric ton upcast backward integration facility at Chakan, completing another stated objective of its IPO. The plant adds no wire-making capacity. It converts the company's own copper scrap back into copper rod, the key raw material for drawing winding wire.
The economics work through the scrap-to-virgin-rod spread. Copper is a pass-through in KSH's business, but the scrap generated during drawing and insulation would otherwise be sold at a discount to the rod the company buys back. Capturing scrap in-house lets KSH keep more of the metal value on its gross profit line, which is where its unit economics are built.
"Last week, we completed yet another one of our IPO objectives on time by commissioning our upcast backward integration facility in Chakan. This facility will have a capacity of 5,000 metric tons and be used to recycle our own copper scrap, which in turn should provide some modest operating efficiency and further strengthen our sustainability efforts."
- MD, Q1 FY27 concall (Aug 2026)
Scale defines the ceiling on the benefit. Head of IR Dhruv Chopra said the recycling capacity is "sub less than 10%" of KSH's overall capacity, and confirmed the 5,000 metric tons roughly matches the scrap generated across the company's ~59,000 metric tons of installed wire capacity. CFO Amod Joshi quantified the near-term impact: for the remainder of FY27, the facility should add "a few rupees to the bottom line, to the gross profit, but not more than that," with no immediate plans to scale beyond captive scrap. One analyst noted the investment is small, around INR6-7 crore.
The commissioning arrived earlier than the H2 FY27 commencement date flagged in the May 2026 concall. It was funded from the INR97 crore IPO allocation for the Supa and Chakan capex programs, and sits alongside the 3.2 MW rooftop solar project at Supa as the second completed IPO "sustainability" item. The sustainability label carries commercial weight: KSH's exports run exclusively to T&D customers across Europe, the Americas and the Middle East, where OEMs increasingly factor a supplier's copper carbon footprint into sourcing decisions.
Board authorized evaluation of acquiring additional 10 acres of land within Supa MIDC for long-term expansion requirements
On August 10, 2026, the board authorized management to evaluate buying 10 additional acres in Supa MIDC, the same industrial area as the current expansion. The mandate sits apart from Supa Phase 2, which takes installed capacity from 43,445 metric tons to roughly 59,000 by March 2027. Nothing has been decided: no land acquired, no tonnage or capex figure attached to the plot.
"To secure a long-term capacity expansion requirements, our board last night authorized management to evaluate acquiring an additional 10 acres of land within Supa MIDC for its long-term expansion requirements. Purchasing land in Supa MIDC is the obvious choice for us, given the established infrastructure we are currently building out."
- MD, Q1 FY27 concall (Aug 2026)
The trigger is about securing optionality, not immediate capacity. Equipment lead times run from eight months to a year (Q2 FY26 concall, Jan 2026), and new plants typically take two to three years to reach the ~85% utilization management treats as the efficient ceiling (Q4 FY26 concall, May 2026). The existing Supa site already holds room for another 10,000-12,000 tons (Q1 FY27 concall, Aug 2026); the 10 acres sits beyond that. Investor Relations head Dhruv Chopra said tonnage from any plot depends on machine and product mix, which management has not begun deciding: "This is more to ensure that longer term we have the ability to add more capacity as we need it."
The timing reflects the demand read. Management describes transformer OEMs sitting on three-to-five-year order books, Q1 FY27 volume grew 30% YoY, and exports rose 76% (Q1 FY27 concall, Aug 2026). Buying adjacent land now means the next plant inherits Supa's roads, power and utilities instead of building them from scratch. Management has stated that capacity decisions follow once utilization on the installed base reaches 85%; the land purchase is the step taken in advance of that decision point.
Working capital improvement: from 60 average working capital days to target 30-35 days (industry standard)
Working capital days on an average balance basis stood at 60 days in Q1 FY27, down from 71 days a year earlier and 65 days in Q4 FY26 (Q1 FY27 concall, Aug 2026). Management's target is 30-35 days, which CFO Amod Joshi described as the industry standard, achievable, and a level they aim to beat.
"we feel that 30, 35 days is something that is fairly achievable, and that is what our aim in the going forward will be to do better than that also if possible."
- Dhruv Chopra, Head of Investor Relations, Q1 FY27 concall (Aug 2026)
The high baseline has two structural causes. KSH historically prepaid copper through bank-financed advances, leaving payables at about 5 days versus peers at far higher levels (Q3 FY26 concall, Feb 2026). Inventory days run high because large transformer orders are lumpy. Rajesh Hegde explained that a 60-tonne transformer order cannot ship until the last ton is manufactured, so finished inventory sits on the balance sheet until dispatch (Q4 FY26 concall, May 2026).
The mechanism is three levers pulled together. First, shift copper purchases from advances to supplier credit, extending payables toward 25-plus days; management has been negotiating banking products to enable this (Q4 FY26 concall, May 2026). Second, receivables collection discipline, which improved two days in Q1 FY27. Third, inventory control, held flat in Q1 given the nature of the business (Q1 FY27 concall, Aug 2026).
Progress is visible quarter by quarter: 75-80 days on a closing basis in Q3 FY26, a 65-68 day average for FY26, 65 days in Q4, then 60 days in Q1 FY27, with payables contributing a five-day improvement in the latest quarter (Q3 FY26 concall, Feb 2026; Q1 FY27 concall, Aug 2026). Management frames the remaining path as multi-quarter, not multi-year.
The payoff is twofold: freeing cash that currently works at working-capital interest rates of 6% to 9.5%, and meeting the stated goal of being operating cash-flow positive even while volumes grow in excess of 30% a year (Q1 FY27 concall, Aug 2026). Historically, positive operating cash flow held only outside such hyper-growth years, so compressing working capital days is what lets this growth fund itself (Q2 FY26 concall, Jan 2026).
Key risks
Fixed-cost absorption lag on Phase 2 capacity. Every new wave of Supa capacity is capitalised before volume catches up. Q3 FY26 showed the pattern: an INR3.8 crore depreciation charge, INR2.7 crore of Supa term-loan interest, an INR1.6 crore Labour Codes expense, and a drop in consolidated utilization to 68% from 90%+ (Q3 FY26, Feb 2026). Management repeated the warning in August 2026 - "we expect some fixed costs to increase as we ramp up capacity utilization" - and guided FY27 EBITDA/ton to ~INR75,000, below the INR93,000 Q1 print (Q1 FY27, Aug 2026). Each new wave, including the one expected in Q2 FY27, carries the same upfront drag before volumes fill it.
Product mix normalization compresses blended margins. The INR93,000/ton Q1 result was flattered by record CTC contribution because Phase 1 Supa capacity was deliberately front-loaded to specialized wires (Q1 FY27, Aug 2026). As Phase 2 brings standard-wire and EV lines online, the blend reweights toward a product that earns roughly one-third the EBITDA/ton of specialized (Q2 FY26, Jan 2026). Management says the mix will "normalize to previous levels" over the next two to three quarters, which pins the rest of FY27 meaningfully below the Q1 peak despite the strong demand backdrop.
Working capital intensity of hyper-growth. The company needs 60 average working capital days (Q1 FY27) against the 30-35 day industry norm it has set as its own target (Q1 FY27, Aug 2026). In its ten-year history, negative operating cash flow appeared precisely in years of 30%+ growth - and FY27 is tracking as such a year, with trailing-twelve-month volume up 26% and capacity still ramping (Q1 FY27, Aug 2026). Higher copper prices multiply the rupees locked in inventory and receivables, and interest on working capital (in the 6-9.5% range) scales with revenue (Q1 FY27, Aug 2026). Payable-day extension and the upcast facility are the mitigations, but management's own timeline is "multi-quarter, not multi-year."
Copper price and input volatility. Copper is a direct pass-through on every order, so EBITDA/ton is structurally insulated. But the metal still drives two indirect costs: working capital rupees (and therefore interest) and customer behavior at the margin. In small motors and fans, sustained high copper pushes buyers toward aluminum, which is less than 1% of KSH's business today (Q3 FY26, Feb 2026). A sharp copper move also freezes order timing as customers absorb pass-through quotes before committing.
Demand-supply mismatch draws in imports and new entrants. Chinese CTC imports ran at roughly 1,000 tons a month because domestic capacity could not meet demand (Q4 FY26, May 2026). That gap is closing as KSH and others add capacity, and the import differential is wide because a 10% duty applies to the copper value, not just processing (Q3 FY26, Feb 2026). But the same demand signal is pulling round-wire manufacturers into subscale CTC entry - they need five to seven years of utility approvals to reach 765kV/HVDC, but can reach the 50-100 MVA entry segment sooner and compete on price there (Q4 FY26, May 2026). If the industry builds faster than the ~70,000-75,000 tons of CTC demand management projects for FY27-28 (Q4 FY26, May 2026), the lower end of the market turns price-competitive.
Transformer OEM backward integration. Transformers and Rectifiers is already backward-integrating into CTC (Q2 FY26, Jan 2026). Management's counter is that continuous 24/7 processes need scale, OEMs still need utility pre-qualification for any new wire source, and no global transformer OEM has integrated wire production (Q2 FY26, Jan 2026). The risk is asymmetric: roughly 75% of revenue depends on transformer OEMs (Q1 FY27, Aug 2026), so if even two or three large OEMs replicate the move, the addressable specialized market shrinks at the high-value end KSH prioritizes.
Middle East disruption and export lumpiness. Export growth has been lumpy - 22% YoY in Q2 FY26, 37% in Q3, 92% in Q4, 76% in Q1 FY27 - because it is wallet-share- and project-driven, not a smooth curve (Q4 FY26, May 2026; Q1 FY27, Aug 2026). The Middle East is a key export geography (one of three regions each at 8-11% of annual revenue), and the March 2026 disruption delayed 100-150 tons of dispatches and another 100-150 tons of production decisions (Q4 FY26, May 2026). Any recurrence compresses quarterly volumes and inflates inventory days, and export is the higher-margin stream the company is growing back toward 40% of revenue.
Long-term supply agreements lock in average economics. The five-year framework with Hitachi Energy Global anchors supply visibility for the Phase 2 ramp, but it is a framework, with quantity and price still being finalized (Q1 FY27, Aug 2026). Management says value additions will be "similar" to company average, which means the agreement locks in blended margins at a time when record CTC, HVDC, and export mix could earn more. If more OEMs follow - management confirms others are exploring the same model (Q1 FY27, Aug 2026) - the company could be contractually bound to average per-ton economics while discretionary demand for higher-value product remains strong.
Customer ramp delays stall order pickup. Some transformer OEMs in active capacity expansion have been delaying pickup of ordered wire by a few weeks while their new facilities clear bottlenecks (Q1 FY27, Aug 2026). Management expects normalization, but the pattern already showed in Q1 FY27. Repeated delays push inventory days up (they stayed flat this quarter) and stretch receivables, both of which work against the 60-to-35-day working capital plan.
US tariff uncertainty on export economics. India's value-addition tariff in the US moved from roughly 54% to a still-unconfirmed 18-25%, with China at ~34% (Q3 FY26, Feb 2026). Lower tariffs are a tailwind for exports, but the unresolved rate is a planning problem: pricing for US-bound orders is set against an unsettled duty, and since customers absorb the tariff, any upward revision tests their willingness to keep ordering.
Scenarios
Bull case
Supa Phase 2 lands on schedule - next wave in Q2 FY27, full ~59,000 tons by March 2027 - and utilization climbs from 73.5% toward the 85% industry norm faster than the typical two-to-three-year ramp because the Hitachi framework converts into firm multi-year volume and more transformer OEMs sign similar agreements. Export momentum (76% YoY in Q1 FY27) carries export share back toward the 40% historical peak, helped by the weaker rupee and US tariff relief. HVDC orders scale beyond the 37 transformers as more consortium and repair orders land, and PEEK/800V traction-wire programs mature by FY28-FY29 at margins at or above CTC. Working capital reaches the 30-35 day target, converting hyper-growth cash burn into positive operating cash flow. EBITDA/ton holds above INR75,000 even as standard-wire share grows, because specialized stays the majority of the blend.
Base case
Phase 2 completes by March 2027 as guided, and utilization grinds from 73.5% into the low 80s through FY27-28, with each new wave of capacity carrying its upfront fixed costs before volume fills it. EBITDA/ton moderates from the INR93,000 Q1 peak toward the guided ~INR75,000 for FY27, dipping in quarters when new capacity capitalizes. Standard wires grow faster than specialized as designed, holding the blend in the guided band. Exports stay at 27-35% of revenue, gaining wallet share with existing global clients rather than rapid new-client wins. Working capital improves five to ten days a year, reaching the mid-40s rather than the 30-35 target, which keeps interest costs rising in absolute terms and PAT growing slower than EBITDA. The Hitachi framework converts to firm orders that anchor volume at average value additions.
Bear case
Phase 2 slips past March 2027 as eight-to-twelve-month SPM lead times and commissioning stretch, and utilization stalls as transformer OEM customers keep delaying order pickup while their own plants ramp. CTC mix normalizes faster than planned as standard-wire capacity comes online, pulling EBITDA/ton below INR75,000. Chinese CTC imports persist near 1,000 tons a month, and if the domestic buildout overshoots the ~70,000-75,000 tons of FY27-28 CTC demand, the entry-level segment turns price-competitive. OEM backward integration spreads beyond Transformers and Rectifiers, shrinking the specialized addressable market. Middle East disruption recurs, hitting the higher-margin export stream. Copper stays elevated, pinning working capital above 60 days and keeping operating cash flow negative through FY27 - compounded by continued capex into the 10-acre Supa land purchase and the next 10,000-12,000 tons of capacity that demand has not yet justified.
Source coverage note: No annual report was available; business detail leans on concalls. This report is built from 4 concall transcript(s) (Aug 2026, May 2026, Feb 2026, Jan 2026).