News Details

Sterlite Electric Credit Rating Update 2026

CRISIL has reaffirmed its long-term rating of ‘AA-/Stable’ and short-term rating of ‘A1+’ on the bank loan facilities of Sterlite Electric Limited, citing a healthy business profile and strong revenue visibility, even as raw material cost pressures weigh on near-term margins.

Business Performance Highlights

• Strong revenue growth: Consolidated revenue rose ~25% year-on-year in FY2026 to approximately Rs 6,266 crore, up from Rs 4,997 crore in FY2025.
• Conductors and cables lead the charge: The conductors and cables segments grew ~35% and ~50% respectively, together accounting for ~85% of total sales. The broader products segment (conductors, cables, and optical ground wires) contributed close to 90% of revenue.
• Record order book: The order book stood at over Rs 8,000 crore as on March 31, 2026, up from Rs 6,675 crore a year earlier, giving the company strong near-term revenue visibility.
• Capacity expansion: Installed conductor capacity increased to 133,000 tonnes (from 117,195 tonnes a year ago), with cable capacity steady at 2,760 km. Both businesses ran at utilisation levels above 95%.
• Vadodara plant on track for October 2026: The greenfield cables plant in Vadodara — delayed by roughly nine months — has received requisite certifications for Europe and the US and is now expected to be operational in October 2026, which should support export growth and margin expansion from the second half of FY2027.
• Exports set to recover: The export revenue share fell sharply to ~8% in FY2026 from ~26% in FY2025, but SEL has recently secured overseas orders making up ~20% of its total order book, pointing to a pickup ahead.
• Planned capex: The company may invest Rs 300–350 crore over the next few fiscals to expand conductor capacity and value-added cable products, funded through a mix of debt and internal accruals.

Profitability and Outlook

EBITDA margin contracted to ~8% in FY2026 from ~9.5% in FY2025, largely due to elevated aluminium premiums (linked first to the Red Sea crisis and more recently the West Asia conflict) and deferment of some high-margin orders. Margins are expected to stay constrained in the first half of FY2027 before normalising, aided by price-variation clauses being built into new contracts to partly pass on raw material cost spikes to customers.

The rating outlook remains Stable, reflecting expectations of continued revenue growth backed by the strong order pipeline, alongside a comfortable financial risk profile and liquidity of over Rs 1,527 crore as on March 31, 2026.

Credit Rating: https://www.crisilratings.com/mnt/winshare/Ratings/RatingList/RatingDocs/SterliteElectricLimited_July%2014_%202026_RR_400355.html