KSH International Ltd Plant Visit Note stock analysis

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Sector Outlook: Positive

Riding the Electrification Cycle: Capacity, Complexity and Growth Visibility at KSH

KSH International is a 45-year-old manufacturer of magnet winding wires used in power transformers, industrial motors, EV motors, compressors, and other electrical equipment. The company is among India’s leading suppliers of winding wires and the country’s largest exporter of winding wires, servicing over 120 domestic and global OEM customers across 24 countries. KSH derives 75% of its revenue from specialized winding wires, primarily catering to the transmission and distribution (T&D) ecosystem through products such as Continuously Transposed Conductors (CTC), paper-insulated conductors and other high-value-added winding wires. The company currently operates four manufacturing facilities with installed capacity of 43,445 MT, which is expected to increase to approximately 59,000 MT by FY27, supported by ongoing expansion initiatives. The company benefits from long-standing customer relationships, stringent qualification requirements and approvals across high-voltage transformer applications, including HVDC transformers.

Valuation and Outlook

KSH International offers a differentiated play on the ongoing global electrification and transmission infrastructure investment cycle. Unlike conventional wire manufacturers, the company operates in niche segments characterized by stringent customer qualifications, high technical complexity, and strong customer stickiness. The combination of rising transformer demand, growing participation in HVDC applications, increasing exports and a visible capacity expansion roadmap provides a favourable backdrop for sustained growth. While the company’s earnings trajectory will remain dependent on successful capacity ramp-up, product mix improvement and execution in high-value-added segments, its positioning within the specialized winding wire ecosystem appears structurally stronger than that of conventional conductor manufacturers. Going forward, the pace of capacity utilization, growth in CTC demand and progress in higher-voltage applications will remain key factors influencing earnings growth. We, thus, expect KSH International to generate sustained growth and profitability over the long term, and is trading at a PE of 47.1x on FY26 EPS.

Following are the key takeaways from the interaction:

Operational Insights

The product portfolio remains skewed towards value-added offerings, with specialized products accounting for approximately 65-70% of total capacity while standard winding wires contribute the remaining 30-35%. Management continues to focus on increasing the share of specialized products, which are expected to support margin expansion over the medium term.

Lead times remain healthy at around 15 days for CTC products, while standard winding wires generally carry shorter delivery cycles.

Industry & Market Outlook

Management highlighted a significant increase in domestic demand for Continuously Transposed Conductors (CTC), with Indian demand rising from approximately 40,000 MT historically to 60,000-70,000 MT currently. Demand is expected to potentially reach 120,000 MT beyond CY2030, driven by power transmission investments, renewable integration, and grid expansion projects.

Globally, the CTC market is estimated at approximately 450,000 MT. The domestic market remains concentrated, with KSH International, Apar Industries and Precision Wires collectively accounting for nearly majority of the industry supply.

The company is currently approved for applications up to HVDC 400 kV. While HVDC 800 kV opportunities remain under development, management indicated that approval processes are still ongoing. Higher-voltage HVDC projects represent a significant long-term opportunity, particularly as renewable transmission infrastructure investments accelerate.