Rajratan Global Q2 FY27 Earnings Call — Analysis (NSE: RAJRATAN)
Rajratan Global Wire delivered strong 27% revenue growth in Q2FY27, driven by high capacity utilization across Chennai and Thailand and expanding global tyre MNC approvals.
Result quality: watch — Margin pressure. Management sentiment: optimistic.
The take
Q2FY27 EBITDA ₹45.79 Cr ( +14% YoY ) . New guidance — FY27 consolidated sales volume 160,000 tons . New story: Thailand Capacity Expansion and Global MNC Ramp .
Results
Consolidated EBITDA rose 14% YoY and 10% QoQ to ₹45.79 Cr on 27% revenue growth; debt-to-equity stood comfortable at 0.6x with positive operating cash flows.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| EBITDA | ₹45.79 Cr | +14% | yoy · Q2FY27 |
| EBITDA | ₹45.79 Cr | +10% | sequential · Q2FY27 · vs Q1FY27 ₹41.71 Cr |
| Revenue Growth | 27% | yoy · H1FY27 | |
| Sales Volume | 71,000 tons | none · H1FY27 · consolidated | |
| Thailand Export Volume | 5,200 tons | none · Q2FY27 · Thailand subsidiary exports | |
| Debt to Equity | 0.6x | point_in_time · Q2FY27 · Sep-26 | |
| Consolidated CWIP | ₹115 Cr | point_in_time · Q2FY27 · Sep-26 |
Guidance
Management targets 160,000 tons of consolidated volume in FY27 (~20% YoY growth), 15-20% multi-year volume CAGR, and expects Thailand's 50,000-ton expansion online within 3-4 quarters.
What management committed to
- [Rajratan Global Wire] will achieve close to 160,000 tons of consolidated sales volume in [FY27]. — 160,000 tons, FY27
- [Rajratan Global Wire] will deliver 15% to 20% year-on-year volume growth for the next 10 to 15 quarters across [Thailand, Chennai, and Indore]. — 15% to 20%, FY29
- [Rajratan Global Wire] will operationalise the 50,000-ton brownfield capacity expansion in [Thailand] within 3 to 4 quarters for an incremental capex of ₹100 Cr. — 50,000 tons, Q2FY28
- [Rajratan Global Wire] will achieve total exports of more than 30,000 tons in [FY27] from [India and Thailand combined], with India exports growing ~40% to 14,000-15,000 tons. — more than 30,000 tons, FY27
- [Rajratan Global Wire] will capitalize the ₹80 Cr [Pithampur steel cord project] at the end of [Q3FY27] and achieve commercial scaling in [FY28]. — ₹80 crores, FY28
- [Rajratan Global Wire] will increase the premium customer mix in [Thailand] from 30%-32% to 40% in [FY28]. — 40%, FY28
Key themes
Capacity expansion and export market penetration
How the narrative shifted
- Thailand Capacity Expansion and Global MNC Ramp: Thailand plant is operating at full capacity, prompting a 50,000-ton low-cost brownfield expansion to satisfy surging demand from global tyre majors.
- Green Bead Wire Competitive Advantage: Access to 92-95% scrap-based wire rod in Thailand enables certified green bead wire supply, unlocking rapid supplier approvals with European tyre MNCs facing CBAM regulations.
- Cost Inflation and Margin Floor: Operating leverage benefits have been partly masked by surge in power, gas, and sea freight costs, but management views current ~13% EBITDA margins as rock-bottom.
- Domestic Share Defense vs New Entrants: Maintaining >50% counter share at top Indian tyre makers and intentionally pricing aggressively to prevent competitors like Tata Steel and Bansal Wire from gaining ground.
Operational commentary
- Thailand plant is operating at ~100% capacity utilization; 50,000-ton brownfield expansion initiated for ₹100 Cr incremental capex, expected online in 3-4 quarters.
- Chennai bead wire capacity is currently rated at 40,000 tons and ramping toward 60,000 tons; FY27 production targeted at 37,000-38,000 tons.
- Green bead wire produced from 92-95% scrap wire rod in Thailand is securing accelerated approvals from European tyre MNCs seeking CBAM compliance and decarbonisation.
- Pithampur steel cord conveyor belting project (10,000 tons, ₹80 Cr CWIP) entering customer sampling and trial phase in H2FY27, with commercial scaling scheduled for FY28.
- Working capital cycle for European exports is 70-80 days (including 40-50 days transit) vs 40 days domestic Thailand collection, driving increased short-term working capital borrowings.
Analyst Q&A
Q. What drove the realization improvement in Thailand and what is the capex and timeline for the 50,000-ton expansion?
The Thailand brownfield expansion requires ₹100 Cr incremental capex (total ₹125 Cr including factory land/shed across the road) and will be operational within 3-4 quarters. Realizations are benefiting from higher mix of multinational tyre clients and expanding exports.
Q. Why have EBITDA per ton and operating margins faced pressure despite strong volume growth?
Margins have absorbed significant cost inflation across gas, electricity, packing materials, and international freight surcharges; management chose to maintain production and gain market share rather than exit price-sensitive volume.
Q. When will the Pithampur steel cord project start contributing revenue and margins?
Trials and customer sampling will proceed in H2FY27 with ISO/BIS certifications; no material revenue is budgeted in H2FY27, but full-scale operations are expected in FY28.
Q. What is the pricing differential between premium and standard tyre customers in Thailand?
The price difference between premium tyre MNCs and local/Chinese accounts in Thailand is up to THB 10,000/ton (~₹25,000-₹26,000/ton); premium customer mix is currently 30-32% and targeted to reach 40% next year.
Research and educational content only. Not investment advice.