Delton Cables | Latest market updates

Delton Bags Rs. 177.83 Cr Order from EPC Companies Under RDSS Scheme

This post explores Delton Cables’ recent significant order, company’s performance, and its strategic growth plans.

Delton Secures Major Order

Delton Cables has secured an impressive order worth Rs. 177.83 crore from leading EPC companies under the RDSS scheme. This order, set for completion over the next two years, highlights Delton’s strong market position and its capability to deliver high-quality power cables. The order’s value represents a substantial 0.48% of Delton’s market cap, which currently stands at Rs. 368 crore.

Following the announcement, Delton’s shares surged, hitting the upper circuit limit of 5%. This positive momentum has contributed to a remarkable 64% return for the stock year-to-date. Investors are clearly optimistic about Delton’s future prospects, driven by this significant order and the company’s robust performance metrics.

About Delton Cables

Delton Cables, with over 75 years of industry experience, is renowned for its low-voltage cables. Originally known for its telecom cables, Delton has successfully transformed into a customised supplier for high-growth sectors such as railways, EPC, telecom, and smart metering. Delton’s extensive product range and strong customer relationships make it a preferred choice for many global clients.

Boasting a rich legacy spanning over seven decades, Delton offers a diverse array of products including wire and cables, structured cabling solutions, and smart metering solutions. The company has established a strong brand presence and recall across various customer segments, supported by a pan-India sales network. Delton focuses on growth-oriented, niche markets, with significant potential in the EPC, railway, and telecom sectors.

Key Growth Metrics

Delton has demonstrated impressive revenue and profitability growth. Revenue increased from Rs. 160 crore in FY22 to Rs. 401 crore in FY24, with capacity utilisation improving from 44% to 76% over the same period. This growth was driven by targeted customer engagement and tailored product offerings, supported by focused marketing and monitoring practices.

Delton has significantly improved its working capital efficiency. Working capital days have decreased from 218 in FY22 to 138 in FY24, and the cash conversion cycle has improved from 214 days to 116 days. The company has rationalised its inventory by reducing SKUs and focusing on a product range that maximises value. Delton aims to maintain its working capital cycle within 100-120 days.

Future Growth Strategies

Delton is employing an asset-light approach to drive future growth. The company plans to maximise asset utilisation through strategic investments in top-tier machinery within leased facilities, focusing on an OPEX model rather than heavy CAPEX. This strategy aims to enhance productivity while maintaining financial flexibility.

The company’s future growth plans include a phased capex strategy, allocating resources systematically to ensure sustained growth. Delton’s capacity utilisation is projected to increase further, and the company aims to capture a larger market share in the low-voltage cable segment.

The market size for low-voltage cables is expected to grow significantly, with Delton well-positioned to capitalise on this trend. The company’s strategic focus on high-growth sectors and its robust product offerings provide a strong foundation for future expansion.

Conclusion

Delton Cables’ recent order worth Rs. 177.83 crore underscores the company’s strong market position and growth potential. With a robust strategic plan, improved financial metrics, and a focus on high-growth sectors, Delton is well-prepared to continue its upward trajectory. The company’s asset-light approach and strategic investments will likely drive sustained growth, making Delton a formidable player in the low-voltage cable industry.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.