Bansal Wire Q1 profit shrinks 46% as gas-cost spike knocks margins, revenue up 25%
Bansal Wire Industries — a top Indian manufacturer of steel wires that go into everything from car tyres and power cables to suspension springs — reported a sharp 45.6% year‑on‑year drop in standalone net profit to ₹16.5 crore for the quarter ended June 2026, even as revenue rose 25% to ₹1,135 crore. The hit came from a surge in natural‑gas costs and production disruptions triggered by geopolitical tensions, management said, calling the impact temporary and sticking to a 20% growth target once volumes normalise.
Q1 FY27 scorecard: topline jumps, bottom‑line sinks
Revenue grew despite a subdued start to the quarter, but the cost of materials consumed jumped to 84.4% of revenue from 82.9% a year ago, while employee and other expenses also climbed. Consequently, operating profit fell by a quarter and margins contracted sharply.
What squeezed the margins
The culprit was a sudden escalation in natural‑gas prices, which management flagged in the Q4 earnings call (). Pranav Bansal, Managing Director, said gas costs rose by ₹4,000–5,000 per ton, pushing up blended gas expenses by about 50%. Because the company runs a cost‑plus model with a 30‑ to 40‑day order book, it had to absorb the bulk of the spike on existing orders, while production in March was cut by 35% owing to geopolitical supply‑side disruptions (). In April, volumes were just 80–85% of normal.
“Out of 90 days I think at least 50 days of standard EBITDA we should get,” Bansal estimated, noting that fresh orders were being booked at higher prices to reflect the elevated gas costs (). The drag, therefore, was expected to be limited to the initial order backlog.
Management’s view: short‑term sting, 20% growth ahead
Management reiterated that the business is still volume‑ and EBITDA‑per‑ton driven and that the current margin pressure is temporary. Once conditions stabilise, “we still expect us to return on our targeted 20% growth trajectory,” Bansal said, specifying that both volume and EBITDA should grow at about 20% (). The company has not issued a precise full‑year FY27 forecast given the uncertainty, but long‑term aspirations that include crossing 25% ROCE by FY27 and generating ₹600+ crore in cumulative operating free cash flow over FY26‑27 remain in place — FY26 alone delivered ₹333 crore ().
No trade‑off between volume and margin is anticipated in the medium term. The ramp‑up of specialty wires — particularly IHT, OHT, and later steel cord — is expected to lift per‑ton earnings over the next 12‑18 months.
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