- KSH International leads India in specialized winding wire manufacturing and export
- Transformer demand in India to triple by FY28, boosting KSH's growth prospects
- KSH’s revenue grew 61% in FY26, driven by capacity expansion and export growth
The world is in the midst of a structural energy transition. The global and domestic push toward renewable energy, grid modernization, rapid urbanization, and the rising power requirements of AI-driven data centers are driving an unprecedented surge in demand for power infrastructure. In India, transformer manufacturing capacity is expected to nearly triple from approximately 110 GVA to 300 GVA by FY28. However, this demand expansion is constrained by a critical supply chain bottleneck of highly complex winding wire required to manufacture transformers.
This is where KSH International has emerged as a key beneficiary. The company's shares have rallied 155% year-to-date in 2026 to around Rs 900, while its valuation has rerated significantly. Its price-to-earnings (P/E) multiple has expanded from 30x to 53x, placing it alongside industry leaders such as Polycab (57x), KEI Industries (56x), and R R Kabel (50x).
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The key question, therefore, is whether this optimism is fully reflected in the stock price, or if the company's growth prospects still offer meaningful upside for investors.
India's Largest Manufacturer and Exporter of Winding Wires
KSH doesn't produce generic copper wires; it is a high-value-added wire player. The company is not only India's leading manufacturer of specialized winding wires but also its largest exporter. These specialized winding wires deliver approximately 3x higher EBITDA per ton than standard wires.
75% of Revenue Comes from High-Margin Magnet Wires
Around 75% of its revenue comes from specialized magnet-winding wires, mainly Continuously Transposed Conductors (CTC). These complex and engineered wires are used in high- and ultra-high-voltage applications, including 765kV transformers, high-voltage direct current (HVDC) transformers, traction motors, and reactors.
The Standard Winding Wire segment contributes the remaining 25% of revenue. This segment makes enameled copper and aluminum wire for electric vehicles, AC compressors, motors, and general electrical equipment. In FY26, revenue from specialized winding wires grew 62%, while revenue from standard winding wires grew 58%, reflecting strong demand for the product.
KSH's flagship product, CTC, offers a big addressable market. Domestic demand for CTC alone is projected to reach 100,000 tons by 2032, up from around 40,000 tons in FY25. As the market leader, KSH could be a key beneficiary of this demand.
Global Infrastructure Boom Driving Demand
Together, both segments position KSH's products at the core of critical global infrastructure, including transmission and distribution (T&D), railways, data centers, renewable energy, and electric vehicles. As global demand for high-voltage transformers continues to accelerate, so does the demand for KSH's specialized winding wires.
97% Repeat Revenue Moat
KSH supplies these wires to over 120 domestic and global OEMs, including major names such as CG Power, Hitachi Energy, BHEL, GE Vernova, and Siemens Energy. The company's strong client relationships have resulted in a repeat revenue rate of 97% (FY26), giving it a strong competitive advantage. This is evident in the 21% increase in sales volume to 28,168 metric tons in FY26.
Strong global demand was a key driver of this volume growth, with KSH export revenue growing by 39% in FY26. Nearly all exports are supplied to global T&D companies across 24 countries in North and South America, Europe, the Middle East, and Asia. Exports contribute approximately 30% of total sales, and the company plans to raise this share to 40%.
To increase the export revenue share, KSH has ongoing engagements with several transformer OEMs in the US and Europe. These customers are currently evaluating initial supplies, with the potential for volumes to scale meaningfully as their own manufacturing capacities come online.
The Competitive Moat and Barriers to Entry
KSH has multiple competitive advantages, backed by strong entry barriers. The Make-to-Order business model is a key differentiator of business. To this end, KSH procures copper and begins processing after receiving a confirmed purchase order. This protects it from volatility in copper prices and foreign exchange rates, as any changes in these costs are passed on to clients.
Because of this, even as copper prices fluctuated, KSH's EBITDA per ton increased to Rs 67,625 in FY26, up by 28.7% from Rs 52,536 in FY25. The growth in profitability was driven by a favorable revenue mix, with a higher contribution from specialized wires. Management expects a sustainable long-term EBITDA per ton in the range of Rs 67,000 to Rs 74,000.
Furthermore, the qualification cycle for supplying these wires is rigorous. For a new competitor attempting to enter the market, it can take anywhere from five to seven years to advance from lower-kV segments to the 765kV or HVDC approvals that KSH already possesses. KSH is currently the only Indian supplier approved for HVDC transformers and boasts a 20-year track record.
Capacity Expansion to Drive the Next Growth Phase
To meet the accelerating global demand for winding wires, KSH is currently undertaking an aggressive, multi-phase capacity expansion at its Supa facility in Maharashtra. In FY25, KSH legacy capacity stood at roughly 29,045 MT, while it exited FY26 with an installed capacity of 43,445 MT and a blended capacity utilization rate of roughly 70% in Q4.
As capacity utilisation gradually inches towards the peak target of 85% in 2-3 years, KSH expects revenue and operating leverage to improve after Q4FY27, further strengthening the bottom line. Furthermore, KSH has also reduced its debt-to-equity ratio from 1.21x in FY25 to just 0.39x in FY26. Lower financial costs could also support profitability in FY27.
To drive incremental growth, KSH is executing Phase II of its Supa expansion, which is expected to be complete by the end of Q4FY27. Once Phase II is operational, KSH's total installed capacity will increase to 59,045 MT, nearly 2X the FY25 capacity. If demand increases, the company can also add 10,000 MT of incremental capacity at this plant.
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To further strengthen its market position, KSH is expanding its presence in the EV market. KSH plans to launch PEEK insulated wires in Q2FY27, specifically designed for advanced 800-volt EV traction motors. Management expects PEEK wires to generate the highest EBITDA per ton across KSH's entire product portfolio. This business will mature over the next 1.5 to 2 years.
Backward integration could also support margins and profitability. KSH expects to commission a green copper plant in H2FY27. To reduce captive power costs, it also recently expanded its rooftop solar production at the Supa plant, bringing its total solar capacity to 4 MW. That said, capacity expansion already drove strong growth in FY26.
Strong Revenue Growth with Operating Leverage
The company revenue grew by 61% year-on-year to Rs 3,107 crore in FY26, from Rs 1,928 crore in FY25. This was supported by volume expansion as new capacity from the Supa facility came online. EBITDA also increased by 55.5% to Rs 192 crore, while margins remained at around 6.2%. This operational growth led to a 62% increase in net profit to Rs 110 crore.
On the returns front, the company maintained strong capital efficiency despite ongoing capacity investments. It reported a return on equity of 19.9% and a return on capital employed of 16.17% in FY26. Still, rapid growth is putting pressure on its working capital and cash flow.
Key Risk: Working Capital and Cash Flow
The company's inventory doubled to Rs 425 crore from Rs 211 crore in FY25. Management stated that this is a common feature of large power transformer supply chains. As sales increased, trade receivables also increased to Rs 333 crore in FY26 from Rs 224 crore in FY25.
As a result, KSH reported negative operating cash flow for FY26. To optimize cash flow, KSH aims to increase its payable days from 25 to 30.
Can Future Earnings Justify the Valuation?
Looking ahead, assuming copper prices remain in line with FY26 levels, the expanded capacity could support peak annual revenue of Rs 5,535 crore at 85% capacity utilisation. As a result, KSH could generate an EBITDA of Rs 326-350 crore at management's long-term EBITDA guidance of Rs 65,000-70,000 per ton.
At a 3.5% net profit margin, KSH could generate a net profit of around Rs 194 crore at peak utilisation. At the current market capitalisation of Rs 5,834 crore (as of 16 June), this implies a forward P/E of around 30x, compared with its premium valuation based on FY26 earnings.
Thus, the rerating reflects the market's confidence in the company's long-term growth story. But sustaining it will ultimately depend on KSH's ability to execute its capacity expansion, achieve targeted utilisation, and deliver the earnings growth that investors are already pricing in.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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