CARE Ratings has reaffirmed the 'CARE A; Stable' and 'CARE A1' ratings for Universal Cables Ltd. The company reported a 25% revenue jump to Rs 3,026 crore in FY26, backed by a robust Rs 3,024 crore order book. While growth remains strong, investors should monitor the company's high working capital needs and potential capital requirements for a Rs 4,500 crore greenfield expansion at its joint venture, Birla Furukawa Fibre Optics.
Universal Cables Credit Rating Reaffirmed by CARE
Revenue grew 25% to Rs 3,026 crore in FY26; Order book stands at Rs 3,024 crore.
Reader Takeaway: Strong revenue growth and order visibility support stable ratings, but high debt-funded capex remains a monitorable.
What just happened
CARE Ratings has reaffirmed the credit ratings of Universal Cables Ltd, maintaining its 'CARE A; Stable' long-term rating and 'CARE A1' short-term rating. The reaffirmation reflects the company’s sustained performance and market position in the power cables industry, coupled with the support of the MP Birla group.
Why this matters
For investors, the rating stability provides confidence in the company’s near-term liquidity and financial health. The company is currently seeing significant momentum, particularly in the Extra-High Voltage (EHV) cable segment. With an unexecuted order book of Rs 3,024 crore as of September 2026, the firm has revenue visibility for the next 18 to 20 months.
The backstory
The company has demonstrated growth through a mix of improved product offerings and higher volumes. Financials show a healthy trend, with FY26 operating income at Rs 3,026 crore compared to Rs 2,414 crore in FY25. Profitability has remained resilient despite the inherent volatility in raw material costs, thanks to the company's active hedging strategies.
Risks to watch
Universal Cables faces two primary financial pressures. First, the business is working capital intensive due to payment structures common in EPC (Engineering, Procurement, and Construction) contracts, leading to reliance on bank debt. Second, the company’s joint venture, Birla Furukawa Fibre Optics Private Limited (BFFOPL), is planning a massive Rs 4,500 crore greenfield capex. As a 26.14% shareholder, Universal Cables may face demands for additional capital support, which is a critical monitorable for long-term credit health.
What to track next
Investors should look for updates on the funding structure of the BFFOPL project. Additionally, any changes in the company's leverage ratios due to its own internal capex plan of Rs 720 crore (FY25-FY27) will be key metrics to monitor in upcoming quarterly filings.