Rajratan Q4 FY26: Record volumes, margin shock, and a fresh capacity ramp

Rajratan Global Wire ended Q4 FY26 with its highest-ever quarterly volumes, even as profitability softened under a sharp spike in raw material and energy costs. On a consolidated basis, operating revenue rose to INR 314.29 crore in Q4 FY26, up 25% year on year. Total sales volume increased 19% to 36,484 MT. But EBITDA declined 14% to INR 28.60 crore, taking the EBITDA margin down to 9.1% from 13.3% a year ago. Profit after tax still inched up to INR 15.43 crore.

Management attributed the divergence to a sudden rise in wire rod prices from January to March, estimated at around INR 10,000 per ton, combined with higher energy costs. The company said it could not pass on the full inflation immediately and absorbed the impact in Q4. The price increase was passed on to customers from April 1, 2026, and management indicated margins should revert closer to the 13% to 13.5% range in Q1 FY27 if conditions remain normal.

Volumes: growth from both India and Thailand

Volume growth was broad-based. In Q4 FY26, India volumes rose to 22,122 MT from 18,409 MT in Q4 FY25, while Thailand volumes increased to 14,362 MT from 12,164 MT. Full year volumes reached 133,615 MT, up 18% YoY.

The company also presented a regional revenue share snapshot for Q4 FY26: 65% from India operations and 35% from Thailand operations. It did not provide a product-wise revenue split.

Margin pressure: the cost pass-through lag

The management commentary was consistent across the presentation and concall. The quarter saw stable realisations but a spike in key inputs. With limited ability to reprice immediately, the company absorbed the inflation and indicated that the price revision was implemented from April 1, 2026.

In the concall, management reiterated that the margin decline was largely a function of the January to March wire rod inflation and energy availability and pricing issues. They also stated there is currently pressure on dispatches due to raw material shortages, though they expected supply conditions to smoothen by the end of the month.

While management avoided giving geography-wise profitability, they guided that consolidated EBITDA margins of about 13.5% to 14% are a reasonable base assumption over time, balancing competitive intensity and operating leverage.

Capacity and capex: Chennai expansion and a new niche product

Rajratan operates bead wire capacity of 72,000 TPA at Pithampur (with 60,000 TPA for bead wire) and 60,000 TPA in Thailand. The newer Chennai plant has a planned capacity of up to 60,000 TPA, with 30,000 TPA installed in Phase 1.

Management said Chennai operated at about 85% to 90% utilisation on the installed 30,000 TPA during Q4, with an exit rate of about 2,200 to 2,300 tons per month. This underpinned the decision to add balancing equipment and double capacity to 60,000 TPA by Q2 FY27. For FY27, management indicated Chennai sales could reach about 34,000 to 35,000 tons, up from about 17,000 tons in FY26.

Alongside Chennai, the company is investing in a pilot project for steel cord for conveyor belts at its Indore facility. Management described it as a 10,000 TPA project with a peak top line potential of about INR 150 crore at current pricing. Trials are expected in Q2 FY27, with meaningful revenue contribution expected next financial year. Total capex mentioned for this steel cord project was around INR 70 crore, with about INR 50 crore already invested and the balance to be spent.

Exports and working capital: growth with longer cash cycles

Management said export development remains robust, with multiple European companies approving Rajratan and regular supplies underway for about six months. The US market was also described as robust, with the main recent challenge being longer shipping lead times and congestion at ports such as Singapore and Colombo.

A notable operational point was the working capital impact of the US structure. Management explained that their US entity pays import duty, and customers pay 30 to 60 days after receipt, which increases receivable cycles and working capital borrowing needs. They indicated working capital borrowings would likely continue as exports scale.

Sustainability: green energy and net zero intent

The company outlined sustainability initiatives including adoption of recyclable packaging, chemical reuse, and responsible chemical management with suppliers. It also stated solar installations were commissioned at the Thailand facility and were being installed at Chennai, expected to meet a substantial portion of operational energy needs. The company also mentioned it is establishing net zero targets.

What to watch next

Rajratan enters FY27 with strong volume momentum but a clear reminder that raw material shocks can compress margins when repricing lags. Management’s near-term focus is on restoring margins after April 1 price resets, improving utilisation across plants, and commissioning Chennai’s enhanced capacity by Q2 FY27.

Longer term, investors will track three execution threads: the pace of Chennai ramp-up, the durability of export growth amid shipping disruptions and working capital stretch, and whether the conveyor-belt steel cord pilot converts from trials into steady revenue over the next couple of years. The company also flagged uncertainty on PLI eligibility for Chennai and said projections exclude it, making any clarity on that front an incremental catalyst rather than a base-case assumption.