Can Universal Cables Capture the EHV Cable Opportunity From India’s Expanding Transmission Network?
India’s electricity system is moving into a period where transmission infrastructure is becoming as important as generation capacity. Renewable-energy projects are increasingly located away from major consumption centres, while electricity demand is also rising from industrial expansion, data centres, electric mobility and other new loads.
Universal Cables is entering this cycle with its EHV capabilities. The key question is whether rising transmission complexity and limited specialised EHV manufacturing capacity can allow Universal to increase utilisation, improve product mix and sustain higher margins.
With a market capitalization of Rs 4,978.61 crore, Universal Cable’s share is currently trading at Rs 1,434.95 per share, down 2.04% from its previous close of Rs.1,464.85. The stock trades at a P/E of 24.85x.
India’s transmission network is becoming much larger
The starting point is the scale of India’s planned grid expansion. The transmission network of 220 kV and above stood at 5.09 lakh circuit km in June 2026. Under the National Electricity Plan, this is expected to reach 6.48 lakh circuit km by 2032. That represents an addition of approximately 1.39 lakh circuit km, or around 27% from the June 2026 base.
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The increase is not restricted to transmission-line length. Transformation capacity is expected to rise from 1,478 GVA to 2,345 GVA over the same period, an increase of approximately 867 GVA or nearly 59%. Inter-regional transmission capacity is also planned to increase from 120 GW to 168 GW, representing a 40% increase.
The scale of this investment matters because the transmission system increasingly needs to transport electricity over longer distances and integrate generation from renewable-energy centres into major load centres. The government is planning transmission systems to integrate more than 500 GW of renewable capacity by 2030 and more than 600 GW by 2032. Dedicated HVDC links are also being developed for long-distance bulk power transfer and greater grid controllability.
This creates a structural demand pool for equipment used in high-voltage transmission. But the number of circuit kilometres alone does not determine EHV cable demand. A significant portion of India’s transmission network continues to use overhead lines. Underground EHV cables are used selectively because of their higher cost and technical requirements.
That distinction is important for the thesis. The argument should not be that every kilometre of India’s planned transmission network will require EHV cable. The argument is that the growing complexity of the grid is increasing the addressable market for specialised EHV cable applications, while the number of manufacturers capable of producing these products at scale remains more limited.
The EHV market is different from the conventional cable market
Universal’s EHV business provides a way to participate in this higher-value portion of the power-infrastructure cycle. The company describes itself as a leading producer of EHV cables, with capabilities extending to 400 kV using Vertical Continuous Vulcanisation technology. Its annual report also highlighted successful exports of 400 kV EHV HVAC cables to Europe and said the company is developing additional capabilities for the EHV HVDC segment.
The distinction between conventional and EHV cables is important. A relatively broad supplier base can manufacture LV or MV cables. EHV products require more sophisticated insulation systems, specialised production lines, stringent testing and customer qualification.
Universal’s Satna facility uses VCV technology for EHV cable production. The company has also established testing and manufacturing capabilities around the EHV segment over several years. This creates a qualification barrier.
A transmission utility or EPC contractor cannot simply replace an approved EHV supplier with another manufacturer based only on price. Technical specifications, reliability history, testing and project execution experience become important. This can potentially improve pricing discipline and create longer customer relationships.
However, higher technical complexity does not automatically mean higher margins. The thesis needs to test whether Universal’s EHV mix actually translates into better profitability through higher realisation, utilisation and operating leverage.
Universal’s EHV business is already growing
There is evidence that EHV is becoming a meaningful part of Universal’s growth. During FY26, the company’s EHV Power Cable segment recorded approximately 33% revenue growth.
These projects matter because they provide evidence of Universal’s ability to execute technically demanding EHV projects rather than simply supplying standard cables. The company has also supplied 400 kV EHV cables to European markets.
This is important for two reasons. First, it gives Universal an opportunity to participate in a global EHV market rather than relying entirely on Indian transmission spending. Second, successful international execution can strengthen the company’s credentials when competing for future high-value projects.
The company has said that its VCV facility is equipped to manufacture EHV HVDC cables and that it is developing additional capabilities in this area in anticipation of emerging domestic demand.
If HVDC-related opportunities become a larger portion of the Indian transmission pipeline, this could potentially increase the addressable market for Universal’s specialised manufacturing capabilities.
The order book provides the first test of this opportunity
Universal entered FY27 with substantial order visibility. Its pending order book stood at approximately Rs.2,860 Cr as of July 1, 2026, including export orders worth approximately Rs.485 Cr. A further Rs.390 Cr of export orders was reported to be in the pipeline.
The Rs.2,860 Cr order book is equivalent to roughly 95% of FY26 standalone revenue of Rs.3,022 Cr. That is significant because the company does not need to win an entirely new year’s worth of orders to support substantial revenue growth. It already has a sizable backlog that can be executed through the next several quarters.
Management has guided for revenue growth of approximately 25% or more during FY27 based on the existing order book and expected order inflows. The composition of that order book will be more important than its absolute size.
If a larger proportion comes from EHV cables and associated high-voltage projects, the business could experience a different revenue and margin profile from a situation where growth is driven primarily by conventional LV and MV cables. Therefore, the key number investors should track is not just order-book growth. It is EHV order-book growth as a percentage of the total backlog.
FY26 already showed operating leverage
Universal’s FY26 numbers provide another reason to examine the EHV mix more closely. Revenue from operations increased from Rs.2,408.39 Cr in FY25 to Rs.3,022.67 Cr in FY26, representing 25.5% growth. Earnings before finance costs, depreciation and tax increased from Rs.248.62 Cr to Rs.371.22 Cr, representing growth of approximately 49.31%. PAT increased from Rs.57.28 Cr to Rs.96.53 Cr, a growth of approximately 82.48%. The EBITDA margin on this basis Marginally contracted from approximately 10.3% in FY25 to 9.6% in FY26.
The next stage of the thesis is therefore straightforward. Can the company move beyond a roughly 10% operating margin as the higher-value product mix increases and the new capacity becomes productive?
There is already some evidence from Q1 FY27. Revenue from operations increased 57.5% year on year to Rs.945 Cr. EBITDA increased 57.1% to Rs.94.57 Cr, while EBITDA margin stood at 10.01%. PAT increased 105.88% to Rs.70 Cr.
The company attributed the strong performance to higher sales volumes, improved product mix, sustained momentum in EHV cables and strong growth in capacitors and allied power-quality solutions. This makes the margin question central to the thesis. If revenue grows at 20% to 25% but EBITDA margins remain around 10%, Universal would primarily be a volume-growth story.
If higher EHV contribution, better utilisation and operating leverage can push margins materially higher, the earnings growth could be considerably stronger than revenue growth.
Capacity expansion is the second half of the story
Universal is not simply trying to benefit from the current demand cycle. It is adding capacity. The company increased the total outlay for its ongoing organic capacity-expansion programme from Rs.550 Cr to approximately Rs.617 Cr. The programme is focused on increasing MV and HV cable capacity through additional capacity and debottlenecking, with commissioning planned in phases through FY27.
More importantly for this thesis, Universal separately approved approximately Rs.73 Cr for technological upgradation and modernisation of its EHV cable facility at Satna. The investment is focused on precision manufacturing, flexibility and meeting evolving domestic and international standards.
This creates an interesting two-part investment programme. The approximately Rs.617 Cr programme increases overall cable capacity, while the approximately Rs.73 Cr EHV investment seeks to improve the capability and competitiveness of the specialised facility.
The combined allocation is therefore around Rs.690 Cr. That is a substantial investment relative to FY26 PAT of Rs.163 Cr. The return on this capital will become one of the most important factors determining whether the expansion creates shareholder value.
Capacity additions are only useful if they are accompanied by orders and high utilisation. The current Rs.2,860 Cr backlog provides some initial visibility, but investors will need to track utilisation as the new facilities come online.
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Exports could become an important part of the EHV thesis
Universal’s export opportunity is particularly relevant because EHV cable demand is not limited to India. The company’s export revenue increased 187% year on year to Rs.120.01 Cr in Q1 FY27, contributing approximately 12.7% of revenue from operations. The order book contained approximately Rs.485 Cr of export orders as of July 1
The company’s FY25 annual report specifically highlighted successful supplies of 400 kV EHV cables to Europe and said that overseas EHV HVAC markets provided significant opportunities. This could be important from a margin perspective.
International EHV projects can involve stringent specifications and higher qualification requirements. But they also expose Universal to competition from established global cable manufacturers. The company’s ability to convert its European references into repeat orders will therefore be an important test.
Export growth also creates currency exposure and working-capital requirements, so higher export revenue should not automatically be treated as equivalent to higher profitability.
HVDC could expand the opportunity further
The longer-term opportunity may be in HVDC. India’s transmission plan includes dedicated HVDC links for long-distance bulk power transfer, while the government has highlighted HVDC as an important technology for renewable-energy integration and improved grid controllability.
The earlier National Electricity Plan envisaged nine additional HVDC lines with total capacity of 33.25 GW, in addition to 33.5 GW already operating. Universal’s EHV facility is already capable of producing EHV HVDC cables, and the company has said that it is developing additional capabilities to expand into this segment.
This creates a potentially important option for the company. If India’s HVDC pipeline expands, Universal would not need to build an entirely new business from scratch. It could potentially leverage its existing EHV manufacturing base, technology and customer relationships.
However, this remains a future opportunity rather than an established revenue stream. The critical evidence will come from actual HVDC orders, customer approvals and capacity utilisation.
The cable market is still cyclical
The EHV thesis should not ignore the risks associated with the cable industry. Raw-material prices can move sharply because copper and aluminium account for a significant proportion of cable costs. Working capital can also rise when commodity prices increase or when project execution cycles lengthen.
Universal’s Q1 FY27 results illustrate this issue. While EBITDA margins improved to approximately 10%, raw-material costs remained a substantial component of revenue. The company also has meaningful finance costs. FY26 standalone finance costs were Rs.114.9 Cr against EBITDA of Rs.289.0 Cr.
Therefore, revenue growth alone is not enough. Investors need to monitor cash conversion, working capital, finance costs and return on capital alongside EBITDA. The FY26 operating cash flow was Rs.63.48 Cr compared with Rs.175.62 Cr in FY25, despite the sharp increase in reported profitability. This is an important number for the thesis because the company is simultaneously entering a heavy capex cycle.
If earnings grow strongly but operating cash flow remains weak, the company could require additional borrowing to fund expansion. The board has already approved raising up to Rs.200 Cr through NCDs or other debt securities. The quality of the next phase of growth will therefore depend on both earnings and cash generation.
What could go wrong?
The first risk is that India’s transmission expansion does not translate into equivalent EHV cable demand. Much of the transmission network will continue to rely on overhead lines, meaning the 27% planned increase in total transmission circuit kilometres cannot be directly converted into a 27% increase in EHV cable demand.
The second risk is competition. Larger cable manufacturers are also expanding their high-voltage and EHV capabilities. If industry capacity expands faster than demand, pricing could weaken.
The third risk is execution.Delays in commissioning or slower-than-expected customer ramp-up could reduce returns on capital.
The fourth risk is working capital. Large infrastructure orders can involve long execution periods, milestone payments and substantial inventory requirements. Strong EBITDA growth therefore needs to be converted into operating cash flow.
The fifth risk is raw-material volatility. Copper and aluminium price movements can affect margins if cost increases cannot be passed through quickly.
The sixth risk is that the current margin improvement proves cyclical rather than structural. Universal’s EBITDA margin has already improved significantly, but maintaining this level through different commodity and demand environments will be a more meaningful test.
The seventh risk is that EHV becomes a larger revenue contributor without becoming a sufficiently profitable one. Higher technical complexity can increase manufacturing and testing costs, so investors need evidence that the additional value captured through EHV products exceeds the additional capital and operating costs.
The numbers to watch from here
The next three years should provide a much clearer test of whether Universal Cables can convert India’s transmission expansion into a structural earnings opportunity. The first number is the transmission network itself. India plans to increase the 220 kV-and-above network from 5.09 lakh circuit km in June 2026 to 6.48 lakh circuit km by 2032. Transformation capacity is planned to increase from 1,478 GVA to 2,345 GVA, while inter-regional capacity rises from 120 GW to 168 GW.
The second number is Universal’s order book. At approximately Rs.2,860 Cr on July 1, 2026, it already represented nearly 95% of FY26 revenue. The composition of this backlog, particularly the EHV component, will determine how much of the transmission opportunity is actually reaching Universal.
The third number is export revenue. Q1 FY27 exports of Rs.120.01 Cr were up 187% year on year. Sustaining this growth would provide evidence that Universal’s EHV capabilities are gaining acceptance outside India. The fourth number is capacity utilisation. The Rs.617 Cr expansion programme and approximately Rs.73–74 Cr EHV modernisation programme will only create value if the additional capacity is absorbed by new orders.
The fifth number is EBITDA margin. Universal generated approximately 9.6% EBITDA margin in FY26 and 10.01% in Q1 FY27. The critical question is whether EHV mix, operating leverage and capacity utilisation can push profitability higher without excessive working-capital requirements. The sixth number is operating cash flow. FY26 operating cash flow of Rs.63.48 Cr was substantially below the previous year’s Rs.175.62 Cr despite the improvement in earnings.
The final number is the company’s FY27 growth trajectory. Management is targeting revenue growth of approximately 25% or more, supported by the existing order book and expected order inflows. Universal therefore enters the next phase with a combination of strong demand visibility, expanding capacity and increasing exposure to specialised EHV products.
The broader transmission opportunity is substantial. India is planning to add approximately 1.39 lakh circuit km of 220 kV-and-above transmission lines, 867 GVA of transformation capacity and 48 GW of inter-regional transmission capacity by 2032 from the June 2026 base. But the investment thesis is not simply that India will build more transmission lines.
The more important question is whether the increasing technical requirements of the grid create a sufficiently large market for EHV cables, HVDC applications and specialised power infrastructure, and whether Universal can capture a meaningful share of that market.
The company already has 400 kV EHV capabilities, international references, a Rs.2,860 Cr order book and a dedicated investment programme for expanding and modernising its manufacturing base. Its Q1 FY27 results also show that revenue and EBITDA are currently growing rapidly. The next phase will determine whether this growth can become structurally more profitable.
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If Universal can increase EHV utilisation, win more international orders, successfully commission its new capacity and maintain stronger cash generation while keeping margins at or above current levels, its earnings profile could become increasingly linked to India’s grid-modernisation cycle rather than simply the broader volume growth of the cable industry.
The central question is therefore not whether India needs more transmission infrastructure. It does. The question is whether the increasing complexity of that infrastructure creates a bottleneck in specialised EHV cable capacity, and whether Universal Cables has the technology, manufacturing capability, order visibility and capital discipline required to capture that opportunity.