Buy Bansal Wire Industries; target of Rs 550: Anand Rathi

Anand Rathi's research report on Bansal Wire Industries

Incorporated in 1985, Bansal Wire is the second largest manufacturer of steel wire in India and the largest stainless steel wire manufacturer. With five plants in north India it expects to raise consolidated capacity ~2.5x to 0.679m tonnes, surpassing Tata Steel’s ~7-8% market share in steel wiring. It is venturing into high-growth, high-margin steel cord, lowrelaxation prestressed concrete and bead wires. This would plug gaps in its product range and improve EBITDA margins.

Outlook

We expect a 24% sales volume CAGR, >25% revenue CAGR and >26% EBITDA CAGR over FY25-27 on capacity expansions, high-margin VAPs, RM backward integration, diverse customers and ‘cost plus’ model. We initiate coverage with a Buy and Rs 550 TP (35x FY27e P/E).