5 Reasons Investors Should Keep This Small-Cap Stock on Their Watchlist
Magnet winding wire is manufactured by the firm for use in transformers, electric motors, generators, and other electrical apparatus. The distinguishing characteristic of the firm is the emphasis on specialty products like continuously transposed conductor (CTC) wire, paper-insulated wire, and high-voltage products. Specialized products require strict standards and take longer to approve, which makes it hard for new competitors to enter the market.
Shares of KSH International were trading at around ₹950, with a 52-week range of ₹330 to ₹1,059.90. Its market capitalization stood at roughly ₹6,438 crore, while the stock was trading at a P/E of around 49x.
A Business Built Around Specialised Wires
The specialized segment has become the main part of the company. In FY26, specialised magnet winding wires contributed 75.3% of revenue, while standard wires accounted for 24.7%. Specialized products are used in areas such as HVDC transformers, 765kV transformers, reactors, power transformers, and traction motors.
That mix matters because these are not simple commodity wires. The company says the products involve ultra-precision manufacturing, stringent quality standards and long approval cycles. KSH is also an approved supplier to Power Grid, NTPC, NPCIL and RDSO, adding another layer to the qualification barrier.
HVDC Could Make the Position Stronger
One of KSH’s more specific advantages is its presence in HVDC transformer applications. The company says it is the only Indian supplier approved for HVDC transformers and has already received its first awards for specialized HVDC transformer wires. Within its CTC volumes, more than 25% has recently come from higher-voltage applications such as 765kV and HVDC.
This is important because transformer manufacturers are expanding capacity as power demand rises, grids are upgraded, and renewable projects increase. KSH’s management expects more transformers to translate into higher demand for winding wires.
Capacity Is Nearly Doubling
The company is not relying only on the existing business. Installed capacity stood at 29,045 MT in FY25, increased to 43,445 MT by June 2026, and is planned to reach 59,045 MT by March 2027. Of the planned 30,000 MT expansion at Supa, 14,400 MT had already been completed, with the remaining 15,600 MT expected by March 2027.
Utilisation was around 73.5% in Q1 FY27, leaving room for further volume growth even before the full Phase 2 capacity comes online. The company has also authorised management to evaluate another 10 acres at Supa for longer-term expansion.
Customers May Be the Bigger Barrier
KSH serves more than 120 domestic and global OEM customers, including Hitachi Energy, Siemens Energy, GE Vernova, BHEL, CG Power, and Nidec. It reported 97% repeat revenue in FY26, showing how much of the business comes from existing relationships.
The company has also signed a five-year framework agreement with Hitachi Energy Global covering its Indian and some global plants. The agreement is still being finalized on quantities and pricing, so it should not yet be treated as a fixed revenue commitment.
Growth Is Already Showing Up in the Numbers
The consolidated revenue of KSH grew from ₹1,382.8 crore in FY24 to ₹1,928.3 crore in FY25 and further to ₹3,107 crore in FY26. The EBITDA expanded from ₹71.5 crore in FY24 to ₹122.5 crore in FY25 and reached ₹192.1 crore in FY26, while PAT rose from ₹37.4 crore in FY24 to ₹68.0 crore in FY25 and ₹110.1 crore in FY26.
The momentum was sustained in Q1 FY27, with consolidated revenue surging 108.4% YoY to ₹1,164.2 crore, EBITDA advancing 85.1% YoY to ₹74.4 crore, and PAT growing 85.9% YoY to ₹42.2 crore.
Backward Integration Adds Another Layer
KSH commissioned a 5,000 MT upcast facility at Chakan during Q2 FY27 to recycle its own copper scrap. The company expects this to provide some operating efficiency while also reducing dependence on external processing for part of the copper cycle. The facility could also improve control over raw material quality and processing timelines as volumes increase. However, the financial benefit will depend on how quickly the plant reaches steady utilisation and how copper prices, scrap availability and conversion costs move over time.
With specialised wires, long customer qualifications, HVDC approvals, a large OEM base and another 15,600 MT of capacity still to come, KSH is building several layers around its business. The key test now is whether the company can keep its specialised product mix strong while absorbing the new capacity without putting pressure on profitability. A rapid increase in capacity can create execution risks, particularly if customer approvals or industry demand do not progress at the same pace. The company will also need to maintain quality standards and delivery reliability as production expands across its facilities.
Management has indicated it is comfortable with around ₹75,000 EBITDA per tonne for FY27, although the actual number will depend on product mix, exports and currency. The ramp-up of the new capacity, the contribution from higher-voltage products and the pace of demand from transformer and power equipment manufacturers will therefore be important factors to track. If these elements develop as planned, the expansion could allow KSH to grow volumes while retaining its position in higher-value applications.
