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Cords Cable focuses on Diversification

Diversification and Operational Performance Top Priority

Cords Cable logo

Cords Cable has been recently in the News for great performance in the stock exchanges. A lot of publications and Channels have covered the turnaround in Cords Cable’s market and operational performance.

Ever since the takeover of Cords’ control by Mr. Naveen Sawhney, CMD of Cords Cable the company has been focusing on eliminating Operational inefficiencies, reduction in finance cost, strengthening and galvanising the core team and a lot of diversification in business.

Cords has successfully started a dealer and Industries division about a year and a half back and is keen on expanding in this lucrative segment. Margins are better than traditional Power sector business, delivery and payment cycles are much shorter. Cords has consciously been reducing dependence on the Power sector. As per the MD it is expected that Power Sector may account for a mere 15% of the total turnover, down from approx. 30% in FY17 and approx. 45% in FY16.

Cords Cable Kahrani factory
Cords Cable’s Kahrani Plant

Increased growth in the attractive dealer and Industries segments are likely to help Cords Cable in improving cash-flows by using the same cash multiple times over in addition to better margins. Some of the new clients the company has successfully added are Asian Paints, Biocon, MRF, ITC, Nestle, Sun Pharma, Sanmar Group, Hitachi, Bombardier, Jubilant Life Sciences etc.

Cords has also restarted its Exports Division which has been increasingly growing since the takeover two years back. The company has revived business from some old clients and also developed presence in new areas like Jordan and Qatar. Export margins are generally higher compared to domestic business.

The company has also been pushing to get approvals with the Railways to push its special cables for the massive expansion currently underway. Cords expects a lot of business from several Metro Rail and Dedicated Freight Corridor Projects. The company claims to have developed special varieties of cables to meet the requirements for this new growing sector.

Cords Cable Chopanki factory

Accordingly to the CMD of Cords, the company has endeavored to add new products and cable variants through continuous efforts in introducing new polymers, process variations and new processes to cater to the needs to the new industries where Cords plans to expand business / replace reliance on Power Sector.

Another major area for growth for Cords in time to come is the conversion of vehicle fuel from Bharat IV to Bharat VI norms. The deadline for upgrade to Bharat VI norms is 2020. This means that all major refineries would need to upgrade within a relatively short period to comply with the latest emission standards. Refineries involve a very high level of automation and process control. Since Cords Cable is a major manufacturer of Specialty and Instrumentation cables it is expected that Cords would be a major player and beneficiary from investments in the coming Refinery modernisation.

As per the Management of Cords the current capacity utilization level is at approx. 55%.

The company’s Growth story since Management change in 2015 and expectations from the company have been captured here for reader’s benefit:

Net Sales (INR Cr.)262.99265.03283.33315*375*
YoY Growth (%)-31.770.776.911.2*19*
Power Sector Contribution (approx.)(% of Revenue)5550453015*

*Expected figures

About Cords Cable Industries Ltd.: Cords Cable is an Indian manufacturer of Instrumentation, Signaling, other Specialty cables, Control and LV Power cables. Cords is among the market leaders for Instrumentation, Specialty cables and Control cables in India and among the best Worldwide. The company was incorporated in 1991, but the Cords brand has been manufacturing Special cables since over 30 years.