News Stocks Rajratan Global Wire targets volume-led growth in FY26, margins to stay around 13-14%Rajratan Global Wire targets volume-led growth in FY26, margins to stay around 13-14%
Rajratan Global Wire is adopting a volume-focused growth strategy for FY26, expecting margins to remain at 13-14% amid competitive pressures. The company is expanding Chennai plant capacity from 30,000 to 60,000 tonnes while Thailand operations show 37% volume growth with 20% YoY growth expected. Rising raw material costs are being managed through operational efficiencies and higher volumes.
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Rajratan Global Wire is shifting its strategic focus toward volume-led growth in FY26 as competitive market conditions continue to pressure margins both domestically and internationally. Managing Director and CEO Sunil Chordia outlined the company's approach to navigate the challenging market environment while maintaining operational efficiency.
Strategic Shift Toward Volume Growth
The company has moved away from margin-focused strategies to prioritize market share protection and volume expansion. Chordia emphasized that strong volume growth over the last two quarters has validated this approach, with the company accepting lower-priced orders to improve capacity utilization across its facilities.
| Strategic Focus: | Details |
|---|---|
| Primary Strategy: | Volume growth over margin expansion |
| Expected Margins: | 13-14% range |
| Market Approach: | Protecting and regaining market share |
| Pricing Strategy: | Accepting lower-priced orders for capacity optimization |
Capacity Expansion and Operational Metrics
The Chennai facility represents a key growth driver for the company's expansion plans. The first phase currently operates at 70% utilization with significant expansion underway to double the plant's capacity.
| Chennai Plant Details: | Current | Target |
|---|---|---|
| Current Capacity: | 30,000 tonnes | 60,000 tonnes |
| Utilization Rate: | 70% | - |
| Production Target: | - | 35,000 tonnes next year |
International Operations Performance
Thailand operations have emerged as a significant growth contributor, demonstrating strong momentum in international markets. The facility serves as a strategic hub for expanding presence in key global markets.
| Thailand Operations: | Performance |
|---|---|
| Recent Volume Growth: | 37% |
| Expected YoY Growth: | 20% |
| Key Markets: | US, Europe, Southeast Asia |
Market Dynamics and Cost Management
Raw material cost pressures have increased by approximately 3% at the start of the current quarter, with potential for further increases. The company is managing these challenges through a combination of customer price adjustments and operational efficiencies. Higher volumes and reduced conversion costs are helping offset the impact of rising input costs.
The tyre sector, which represents a significant portion of demand, maintains steady growth patterns with 70% of tyres going to replacement markets and 30% to original equipment manufacturers. The industry expects around 12% growth this year, supported by lower GST rates.
Competitive Landscape Challenges
Competition has intensified across both domestic and international markets. In India, new capacity additions including additional plants in Chennai have increased competitive pressure. Global operations face competition from Chinese players, particularly affecting the Thailand market dynamics.
Rajratan Global Wire currently maintains a market capitalization of ₹2,417.97 crore, though shares have declined more than 3% over the past year, reflecting broader market challenges and competitive pressures in the wire manufacturing sector.
Historical Stock Returns for Rajratan Global Wire
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.69% | -9.06% | -6.44% | +5.63% | -4.37% | +270.35% |
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