Johnson plans 167,580-km capacity addition despite 79.62% utilisation

Johnson Cable Electricals Private Limited plans to add 167,580 kilometres of wires and cables capacity at Unit-II, more than twice its 79,950-kilometre installed base as of March 31, 2026. Johnson reported aggregate capacity utilisation of 79.62% in FY 2025-26, when production reached 63,659 kilometres.

Why is Johnson planning a 167,580-km capacity addition?

Johnson plans the 167,580-kilometre capacity addition to support its stated long-term growth strategy and demand from existing and prospective customers across end-user industries. The company proposes to construct an additional factory shed and install plant and machinery at Unit-II in Mehsana, Gujarat. Vishvakarma Consulting Services Private Limited, an independent chartered engineer, assessed the proposed addition in a technical evaluation report dated August 6, 2026.

The proposed addition would take Johnson's installed capacity to 247,530 kilometres if it is completed and the March 31, 2026 capacity base remains unchanged. This calculation combines the proposed 167,580 kilometres with the existing 79,950 kilometres across two plants. In FY 2025-26, the existing base comprised 26,950 kilometres of cable capacity and 53,000 kilometres of wire capacity.

Unit-I, operational since 2012, had installed capacity of 70,000 kilometres as of March 31, 2026. Unit-II, operational since 2024, accounted for 9,950 kilometres, or 12.4% of aggregate capacity. Unit-II is on 21,796 square metres of leased land, compared with 5,997 square metres for Unit-I, and is the site selected for the additional shed and machinery.

How fully was Johnson using capacity before the expansion plan?

Johnson used 79.62% of its aggregate capacity in FY 2025-26, producing 63,659 kilometres against installed capacity of 79,950 kilometres. This was 4.28 percentage points above the 75.34% utilisation reported in FY 2024-25, when production was 36,090 kilometres against 47,900 kilometres of capacity. From FY 2024-25 to FY 2025-26, capacity increased by 32,050 kilometres and production increased by 27,569 kilometres.

The FY 2026-27 figure covers five months to August 31, 2026 and cannot be directly compared with full-year utilisation. Johnson calculated the 33,400-kilometre capacity on a pro-rata basis and said annualised capacity remained 79,950 kilometres, including 70,000 kilometres at Unit-I and 9,950 kilometres at Unit-II. The company reported no fresh capital expenditure on plant and machinery, or material change in shifts, maintenance assumptions or other key operating factors during that five-month period.

Installed capacity is based on assumptions that include preventive and unplanned maintenance, production set-up changes, loading and unloading time, power failures and breaks. Johnson calculates total utilisation by dividing actual production by aggregate available capacity for the relevant fiscal or period. This methodology means reported utilisation measures production against effective capacity rather than the maximum output of individual machines without operating allowances.

Which facilities and product categories will determine capacity absorption?

Unit-I carried most of Johnson's FY 2025-26 output, while the ramp-up of Unit-II will be important for using the existing and proposed capacity. Unit-I produced 57,000 kilometres and operated at 81.43% total utilisation in FY 2025-26. Unit-II produced 6,659 kilometres and operated at 66.92%, leaving a 14.51-percentage-point utilisation gap between the two facilities.

The product mix also differed by facility in FY 2025-26. Unit-I wire utilisation was 87.50%, compared with 68.18% for cables. Unit-II cable utilisation was 77.96%, while wire utilisation was 56.00%; it produced 2,800 kilometres of wires after reporting no wire production at the plant in FY 2024-25.

Unit-II manufactures armoured and unarmoured cross-linked polyethylene, or XLPE, power cables, control cables, single-core and multicore industrial cables, and solar cables. The facility has wire-drawing, stranding, insulation and sheathing lines, armouring machines, annealing and furnacing equipment, a cooling tower and a polyvinyl chloride, or PVC, compound mixing plant. The new capacity must therefore be absorbed across individual product categories, not only through total wire and cable demand.

Johnson manufactures low-voltage cables designed to operate at up to 1.1 kilovolts. Production includes drawing copper or aluminium rods, annealing, stranding, PVC or XLPE insulation, armouring, testing and packing. Finished cables undergo dimensional, conductor-resistance, insulation-resistance, high-voltage, tensile-strength and thermal-stability tests under applicable Indian Standards and customer specifications.

What demand evidence and constraints accompany Johnson's plan?

Johnson's revenue from operations rose to Rs 210.47 crore in FY 2025-26 from Rs 139.79 crore in FY 2024-25 and Rs 88.34 crore in FY 2023-24. Renewable-energy revenue was Rs 48.91 crore in FY 2025-26, up from Rs 23.25 crore in FY 2024-25, while railway revenue was Rs 39.73 crore, compared with Rs 25.89 crore. These sectors feature in Johnson's strategy to expand its presence in renewable energy, power infrastructure and railway-related supplies.

Demand visibility is limited because Johnson does not maintain a formal order book of long-term or unexecuted contracts. The company primarily receives regular purchase orders and generally manufactures and dispatches within one to two months, depending on the quantity, nature and delivery schedule of an order. Railway business can involve tenders, followed by purchase orders after a successful award.

Customer concentration is also relevant to demand absorption. Johnson's 10 largest customers generated Rs 139.41 crore, or 66.24% of FY 2025-26 revenue from operations, and the largest customer represented 18.35%. The customer count declined to 460 at March 31, 2026 from 524 a year earlier, after Johnson added 199 customers but recorded no current-year sales from 263 customers that bought in FY 2024-25.

The expansion will also operate within a working-capital-intensive model. Cost of goods sold was Rs 179.16 crore, or 85.12% of FY 2025-26 revenue from operations, compared with 88.25% in FY 2024-25. Copper and aluminium rods, PVC, XLPE, galvanised iron strips or wires and wooden drums are key inputs, while the top 10 suppliers accounted for 49.30% of purchases in FY 2025-26, down from 64.05% in FY 2024-25.

Conclusion

Johnson's planned 167,580-kilometre addition is larger than its 79,950-kilometre installed capacity as of March 31, 2026. FY 2025-26 production of 63,659 kilometres and 79.62% aggregate utilisation show rising use of the existing base, but Unit-II's 66.92% utilisation and different wire and cable utilisation rates show that capacity absorption remains uneven between facilities and categories.

The disclosed next steps are construction of an additional Unit-II factory shed, installation of plant and machinery and a proposed rooftop solar power plant for the manufacturing facilities. Whether the enlarged base is used will depend on recurring purchase orders, tender awards and demand across product categories, since Johnson has no formal long-term order book and normally completes orders within one to two months.