Birla Cable Limited has received a mixed credit rating update from CARE Ratings Limited, with the agency taking divergent actions on different facilities amid the company's proposed merger with Vindhya Telelinks Limited.

Rating Actions and Facility Details

CARE Ratings reaffirmed the rating at CARE BBB+/CARE A2 for long-term bank facilities worth ₹55.00 crore while placing them on 'Rating Watch with Positive Implications'. However, the agency downgraded other facilities, with long-term bank facilities of ₹120.00 crore downgraded to CARE A(CE) and short-term bank facilities of ₹176.00 crore downgraded to CARE A1(CE), both simultaneously placed on 'Rating Watch with Developing Implications'.

The credit-enhanced ratings are based on an unconditional and irrevocable corporate guarantee from Vindhya Telelinks Limited, which itself carries a CARE A(RWD)/CARE A1(RWD) rating.

Proposed Merger Impact

The rating actions are primarily driven by the announced amalgamation of Birla Cable into Vindhya Telelinks Limited. The merger, approved by the Board on March 21, 2026, is expected to take approximately 10-12 months for completion, subject to regulatory and other requisite approvals. Under the merger terms, shareholders of Birla Cable will receive 10 equity shares of Vindhya Telelinks Limited for every 115 shares held, with no cash consideration involved.

Financial Performance Analysis

Birla Cable's recent financial performance shows mixed trends. In 9MFY26, total operating income increased to ₹557 crore compared to ₹505 crore in 9MFY25, indicating improved traction. However, operating margins moderated slightly to around 4.66% from 4.93% in the corresponding period, driven by weak demand and steep price corrections in the optical fibre cable segment.

For FY25, the company reported total operating income of ₹663.40 crore compared to ₹688.76 crore in FY24, with PBILDT margin moderating to 5.27% from 6.35%, impacted by a higher share of structured and copper cables in the product mix.

Key Rating Strengths and Challenges

CARE Ratings highlighted several positive factors supporting Birla Cable's credit profile, including its association with the well-established MP Birla Group, which provides demonstrated financial support and operational expertise. The company benefits from a reputed customer base comprising leading telecom service providers and infrastructure companies, though this comes with high customer concentration risk.

However, the ratings remain constrained by several challenges. The optical fibre cable segment continues facing headwinds due to global overcapacity and weak demand sentiment, with bare optical fibre prices declining by approximately 50% since early 2023. The company's operations remain working capital intensive, with an operating cycle of 125 days in FY25, and it faces exposure to raw material price volatility, particularly in copper and optical fibre.

Outlook and Monitoring Factors

CARE Ratings expects gradual improvement in Birla Cable's performance, supported by anticipated recovery in optical fibre cable demand from FY27, driven by 5G rollout, data centre expansion, and BharatNet Phase III implementation. The company's diversified cable portfolio and expected enhanced utilization of structured cable capacity are expected to support operating resilience.

Key monitoring factors include the timely completion of the proposed merger, sustained improvement in operating performance, maintenance of debt metrics, and recovery in the optical fibre cable market. The agency will continue monitoring developments regarding the amalgamation scheme and will reassess ratings after the merger's completion and clearer visibility on its impact on the combined entity's credit risk profile.

Birla Cable Limited has filed its quarterly compliance certificate with stock exchanges for the quarter ended 31st March, 2026, fulfilling regulatory requirements under SEBI (Depositories and Participants) Regulations, 2018. The submission demonstrates the company's adherence to dematerialization compliance protocols and regulatory governance standards.

Regulatory Compliance Filing

The company submitted the certificate dated 1st April, 2026, to both BSE Limited and National Stock Exchange of India Limited under Regulation 74(5) of SEBI regulations. This quarterly filing confirms proper handling of security certificates during the dematerialization process throughout Q4 FY26.

Dematerialization Process Confirmation

Birla Cable Limited confirmed that all security certificates received for dematerialization during Q4 FY26 were properly processed according to regulatory requirements. The company verified that certificates were mutilated and cancelled after due verification, with depositories' names substituted in records as registered owners.

The compliance process ensures investor protection and maintains integrity of the dematerialization system. This quarterly confirmation is mandatory for all listed companies to demonstrate proper handling of physical securities conversion to electronic form.

Registrar Confirmation

MUFG Intime India Private Limited (formerly Link Intime India Private Limited) provided the compliance confirmation as the company's registrar and share transfer agent. The registrar certified that:

• Securities received from depository participants were confirmed within prescribed timelines
• Security certificates were properly mutilated and cancelled after verification
• Depositories were substituted as registered owners in member records
• All securities remain listed on stock exchanges where previously issued securities are traded

Corporate Governance

The filing was signed by Suman, Company Secretary and Compliance Officer of Birla Cable Limited, demonstrating proper corporate governance protocols. This quarterly compliance certificate reflects the company's commitment to regulatory adherence and transparent investor relations practices.

The submission ensures continuity of trading operations and maintains investor confidence in the dematerialization process. Regular compliance filings like this support market integrity and regulatory oversight of securities trading infrastructure.