Key Highlights

The company predominately manufactures copper winding wires which are used in industries like power, consumer durables, automobiles etc.

Sudden movements of copper prices and rupee are hurting the company in short term. As per the management, such volatility is hurting the demand and will lead to inventory and forex losses.

The company is a long term debt free and for its short term working capital requirements it swaps between rupee loan and forex loans.

The company does not play on copper prices. It works on a back to back contract between suppliers and buyers. However on foreign currency side, the company does not hedge its foreign currency exposure on its import of copper.

As per the management, while the outlook on margins is uncertain, FY 2016 will be year of consolidation for the company as the challenges on raw materials and forex will remain.

The company by and large grew in past couple of years, by gaining more market share from unorganised players. The company did get the breakthrough in supplying to large players like ABB, Siemens etc last year. Gradually it will increase its share of supply to A grade customers.

The company is also trying to increase the sale from products like Submersible wires, Aluminium wires etc which have better margins and less competition.