Project Defence
Confidential Information Summary – buy-out opportunity in insulated power-distribution conductors and heat shrinkable tubes
01 Executive Summary
Project Defence is a promoter-owned manufacturer of insulated overhead conductors for low-tension power distribution, with a smaller line of heat shrinkable tubes. It supplies state power distribution companies in southern India and is offered for a buy-out.
The company was established in 1996 by a foreign national and acquired by its present promoters in 2013. It operates one manufacturing site of about two acres with an in-house research laboratory and a compounding line that produces its own insulating material. It holds a Class 1 Electrical Contractor licence and has executed turnkey line projects for a distribution utility. Management states that a covered conductor combines the installation ease of a bare conductor with the safety of insulated cable at a lower installed cost than aerial bunched or underground cable.
Sales are won through utility orders priced per circuit kilometre. Revenue has doubled over three years, though not in a straight line, and the balance sheet moved from borrowing to net cash. The figures for FY26 are unaudited and are labelled so throughout this document.
At a glance
- Sector
- Power distribution equipment – insulated conductors and heat shrinkable tubes
- Region
- Southern India
- Established
- 1996; present promoters since 2013
- Ownership
- 100% promoter-held
- Products
- Two segments: covered conductor with accessories, and heat shrinkable tubes
- Principal customers
- State power distribution companies; heat shrinkable tubes also serve aerospace and defence, railway, engineering and education customers
- Capacity
- 6,240 circuit km a year on a 12-hour shift; management states it can double on a 24-hour shift
- Site
- About 2 acres including laboratory; 30,000 sq. ft. of land available for expansion
- Opportunity
- Buy-out; stake and structure to be discussed with interested parties
02 Investment Highlights
Each highlight below is tied to a figure in the company's financial statements or a statement by management, and is labelled as such.
Revenue has doubled in three years
Revenue from operations rose from ₹20.5 Cr in FY23 to ₹41.2 Cr in FY26 (unaudited), a compound growth rate of 26.2%. FY24 was a down year at ₹14.9 Cr, so growth has been order-driven rather than steady.
Executed orders from three utilities
In FY26 the company executed orders for three state distribution companies totalling 3,000 circuit km and ₹37.5 Cr (management). A further order of 1,400 circuit km worth about ₹17.5 Cr is confirmed, with 200 circuit km executed in April 2026.
Net cash and minimal borrowings
At 31 March 2026 cash and bank balances were ₹11.1 Cr against borrowings of ₹0.5 Cr (unaudited), up from net debt of ₹4.5 Cr at 31 March 2024.
Capacity and land for growth
Executed FY26 volume of 3,000 circuit km compares with stated single-shift capacity of 6,240 circuit km, and management says a second shift can double it. About 30,000 sq. ft. of land is available on site.
In-house technology, qualified contractor status and a second product line
Management states the company developed its own polyolefin covered-conductor design and the compounding of the insulating material, and invested about ₹1 Cr in FY26 in a new line, tube expansion, test equipment and an in-house compounding line. It holds a Class 1 Electrical Contractor licence. Heat shrinkable tubes provide a second product line with customers outside the utility sector. Ownership of the technology and the licence terms are being documented for buyers.
03 Business Overview
The company converts aluminium conductor and polyolefin compound into insulated overhead conductors and tubes, and sells mainly to state power utilities that are replacing bare lines in congested and loss-prone areas.
Covered conductor
Rabbit-size steel-reinforced aluminium conductor wrapped with a thin polyolefin layer and fitted with heat shrinkable accessories. Used on low-tension lines up to 1.1 kV. Principal product line.
Heat shrinkable tubes
Polyolefin and fluoropolymer tubes that shrink on heating to seal and protect cables and connections. Applications include power, railway, automotive, defence and electronics.
Turnkey line work and compounding
Class 1 licence holder with turnkey line projects executed for a utility. The in-house compounding line also allows third-party compounding, which management is evaluating as a new vertical.
Infrastructure and capacity
| Item | Position (management) |
|---|---|
| Site | One manufacturing site of about 2 acres including an in-house research laboratory |
| Covered conductor capacity | 6,240 circuit km a year on a 12-hour shift; can be doubled on a 24-hour shift |
| FY26 executed volume | 3,000 circuit km across three orders (source-derived: about 48% of single-shift capacity) |
| Expansion land | 30,000 sq. ft. available |
| FY26 investment | About ₹1 Cr: new covered-conductor line, tube expansion, testing equipment, compounding line |
Machine-level specifications, age and condition will be provided in the detailed information stage.
The business has a long operating history under changed ownership, summarised below.
Operating model. Management describes a cycle from enquiry and quotation to order, procurement of conductor and compound materials, extrusion and tube production, testing, dispatch and invoicing. Stage-wise timings, responsible roles and outsourced steps will be provided in the detailed information stage.
04 Market & Opportunity
The company sits at the last stage of the power chain, on the low-tension lines that carry electricity from the local distribution transformer to the consumer.
Most such lines in India are still overhead bare conductor, which is exposed to faults, accidents and theft. Utilities have a choice between bare conductor, insulated aerial bunched cable, underground cable and covered conductor. Management positions covered conductor as the balanced option on cost, safety and installation effort. Market information in this section is drawn from the research cited in management's earlier materials, which combines client information, public sources (including Central Electricity Authority data) and expert interviews; it has not been independently verified by the adviser.
Replacement of bare lines
The research states that nearly 80% of low-tension distribution lines are overhead bare, and that a central distribution reform scheme targets replacement of bare conductor in high-loss areas. The scheme's end date and current completion status are being confirmed.
Safety regulation
A December 2022 national regulation requires insulated cables in congested, theft-prone and accident-prone areas, according to the research.
New lines and electrification
New low-tension lines from rural electrification, electric-vehicle charging sites and small grid-connected solar projects add demand for durable, safe overhead conductor.
Adoption in other states
The research reports large bare-line networks in other states, for example about 6.9 lakh circuit km of bare low-tension lines in one large western state, and bare conductor at about 76.5% of the network in another. Insulated products are only beginning to take share there.
For heat shrinkable tubes, the research cites an Indian market of about US$59 Mn in 2024 growing to about US$113 Mn by 2031 (projection), with power transmission and distribution the largest application at 49%.
Management states the covered-conductor market is nascent with few players. No market-share estimate has been supplied.
05 Business Model & Economics
Revenue comes from supplying insulated conductor and tubes against utility orders priced per circuit kilometre, with turnkey line work as a further stream. It is order-driven, not subscription-based.
Covered conductor supply
Principal stream. Sold to state distribution companies under utility orders; quantity and value are fixed per order, with price variation claims in some cases.
Heat shrinkable tubes
Smaller stream sold to utility, defence, railway and engineering customers. Revenue split by customer has not yet been supplied.
Turnkey and third-party compounding
Turnkey projects under the Class 1 licence have been executed. Third-party compounding is under evaluation and generates no revenue yet.
The three orders executed in FY26 show the pricing basis directly.
FY26 executed covered-conductor orders (management)
| Order | Circuit km | Value (₹ Cr) | Value per circuit km (₹ lakh, derived) |
|---|---|---|---|
| Order A | 1,000 | 12.50 | 1.25 |
| Order B | 1,400 | 17.50 | 1.25 |
| Order C | 600 | 7.50 | 1.25 |
| Total | 3,000 | 37.50 | 1.25 |
All three orders work out to the same ₹1.25 lakh per circuit km, which suggests a common tender rate across the three utilities. The confirmed order for FY27 is also 1,400 circuit km for about ₹17.5 Cr, again ₹1.25 lakh per circuit km.
Order book and pipeline (kept separate)
| Category | Position |
|---|---|
| Confirmed order book | One order of 1,400 circuit km, about ₹17.5 Cr, with 200 circuit km executed in April 2026; completion expected by October 2027 (management) |
| Price variation claims | Management expects further price variation on the current order; amounts are not included in the figures above |
| Pipeline | Not yet provided |
Unit economics per circuit km, product-level margins and customer-wise revenue are not yet available and are therefore not presented.
06 Competitive Positioning
The company competes less with other covered-conductor makers than with the alternatives a utility already uses for low-tension lines.
Customer alternatives and management's comparison
| Alternative | What it is | Management's view of the trade-off |
|---|---|---|
| Bare conductor | No insulation | Lowest cost to set up, but poor safety, exposure to faults and theft by hooking |
| Aerial bunched cable | Insulated conductors bundled and suspended overhead | Safer, but costlier, with a steel messenger and heavier maintenance |
| Underground cable | Insulated cable laid in the ground | Safest, but highest installation cost and right-of-way issues |
| Covered conductor (the company) | Thin insulating layer over conductor | Claimed installation ease close to bare conductor, lower cost than aerial bunched or underground cable including accessories, with better safety than bare |
The company's position is as a manufacturer that also holds the contractor licence and an in-house compounding line, so it can supply material and, where needed, install it. Management cites field feedback from utility officials in two states, including a pilot of covered conductor on medium-voltage lines.
- Evidence available: repeat orders from three utilities in FY26 and a further confirmed order; a Class 1 contractor licence; in-house compounding line.
- Not yet evidenced: comparative cost data, patent or know-how ownership, the names and shares of competitors, and written approvals for wider use.
These are management claims. A buyer should expect to test cost, approvals and technology ownership in due diligence.
07 Financial Snapshot
The accounts show a business that grew sharply in the latest year, carries almost no debt and now holds cash.
FY23 to FY25 are audited. FY26 is unaudited, with some tax provision entries pending, so its figures are provisional. EBITDA below is operating EBITDA as shown in the financial statements, before other income. Management's own adjusted EBITDA and any normalised EBITDA are not presented here because the adjustments are still being documented.
Income statement summary (₹ Cr)
| Particular | FY23 (audited) | FY24 (audited) | FY25 (audited) | FY26 (unaudited) |
|---|---|---|---|---|
| Revenue from operations | 20.50 | 14.92 | 22.87 | 41.20 |
| Growth | – | (27.2%) | 53.3% | 80.1% |
| Operating EBITDA | 2.09 | 2.81 | 2.20 | 13.70 |
| EBITDA margin | 10.2% | 18.9% | 9.6% | 33.3% |
| Profit before tax | 1.38 | 1.87 | 1.46 | 11.18 |
| PBT margin | 6.8% | 12.5% | 6.4% | 27.1% |
| Profit after tax | 1.04 | 1.35 | 1.09 | 8.37 |
FY26 tax is estimated at 25.17%. CAGR FY23–FY26 revenue: 26.2%.
Revenue rose from ₹20.5 Cr to ₹41.2 Cr, with a 27.2% fall in FY24 before recovering. EBITDA margin was between 9.6% and 18.9% in the three audited years and 33.3% in unaudited FY26.
Balance sheet at 31 March (₹ Cr)
| Item | FY25 (A) | FY26 (U) |
|---|---|---|
| Trade receivables | 7.59 | 11.57 |
| Inventories | 5.54 | 3.46 |
| Trade payables | 1.46 | 2.69 |
| Cash and bank | 5.47 | 11.11 |
| Borrowings | 4.95 | 0.52 |
| Net cash | 0.52 | 10.59 |
| Net equity | 17.17 | 25.54 |
What the numbers show
- Revenue is 2.0 times the FY23 level, though one year in four fell.
- Borrowings fell from ₹4.95 Cr to ₹0.52 Cr in FY26.
- Net cash is ₹10.6 Cr (unaudited); management describes about ₹10 Cr as surplus cash.
- Reported EBITDA margin moved from 9.6% in FY25 to 33.3% in FY26; the audit of FY26 will confirm the basis.
Weakest metric: receivable days. Closing receivables over annual revenue were 204, 297, 121 and 102 days for FY23 to FY26. Collections from government utilities are slow, and receivable ageing will be shared with buyers.
A normalised EBITDA bridge is not shown. The adjustments management has proposed are being supported with documents and will be presented once confirmed.
08 Management & Organisation
The company is run by its promoters, who bought it in 2013 and hold all of its equity, supported by a production team that management describes as long-serving.
Roles
| Role | What is known |
|---|---|
| Promoter-directors (100% shareholders) | Acquired the company in 2013; hold all shares. Individual responsibilities and post-closing roles to be discussed |
| Production team | More than 20 experienced production staff; management states the team has been consistent since inception |
| Technical and laboratory | In-house research laboratory and compounding line; team composition to be provided |
| Employee cost | ₹1.43 Cr in FY26 (unaudited), against ₹2.05 Cr in FY25 |
Governance details, board composition and the second layer of management have not yet been provided and will be shared in the detailed information stage.
Key-person consideration. A business with 100% promoter ownership, a handful of customers and in-house technology depends on its promoters for relationships, technical know-how and utility registrations. Buyers should expect a transition period and retention arrangements to be discussed.
09 M&A Proposition
The promoters are inviting interest in a buy-out of the company, which a strategic or financial buyer could use to scale a growing, cash-generating niche in power distribution.
What is on offer
A buy-out of a company that is 100% promoter-held. The percentage to be sold, structure, and treatment of land, building, cash and debt will be discussed with interested parties after an NDA.
Buyer profile
Electrical equipment and cable manufacturers seeking a distribution-segment product, infrastructure and utility-focused investors, and strategic buyers wanting a licensed supplier to state utilities.
The case for acting now rests on three data points.
FY26 revenue (unaudited), 2.0 times FY23.
Net cash at 31 March 2026 (unaudited), with borrowings of ₹0.5 Cr.
Circuit km executed in FY26 against single-shift capacity (management).
Proposed structure. No terms have been confirmed. Consideration, earn-out or deferred payment, escrow, promoter transition and any non-compete will be set out in the process stage.
Value creation. Evidence-backed opportunities are limited to those stated by management: use of the idle single-shift capacity, a second shift, expansion on the available land, and the in-house compounding line as a possible third-party business. The earlier management materials include a long-range projection, which is not presented here because it has not been supported by orders or a capex plan.
Use of proceeds. Not applicable to a buy-out of promoter shares; the position will be confirmed if a primary component is proposed.
10 Risks & Mitigants
The points below are the ones a buyer is likely to raise, with the current position on each, including what remains open.
Customer and region concentration. Revenue is mostly from state distribution companies, and over 90% from one southern state; three orders account for ₹37.5 Cr of FY26 revenue.
Repeat orders from three different utilities and a further confirmed order. Heat shrinkable tubes and other states offer diversification, but customer-wise revenue and contract terms are yet to be shared.
FY26 figures are unaudited. The step-up in margin from 9.6% to 33.3% rests on provisional accounts with some tax entries pending.
FY23–FY25 are audited. The audited FY26 accounts will be provided before management meetings; adjusted and normalised EBITDA are not presented until supported.
Receivable days. 204, 297, 121 and 102 days over FY23–FY26, with a government customer base.
Days have fallen as revenue doubled and net cash is positive. Ageing and recent collections will be shared; this is an open item.
Policy and order dependence. Demand depends on utility tenders and the funding of distribution-reform schemes, and the product is still gaining acceptance.
Regulation requiring insulated cable in high-risk areas and large bare-line networks support demand; the scheme's current timetable is being confirmed.
Key-person and technology ownership. Know-how, registrations and relationships may rest with the promoters.
Long-serving production team and an in-house laboratory. Ownership of the compound formulation, licence terms and post-closing roles are being documented.
Earnings adjustments and statutory position. Management has proposed adjustments to reported earnings and a buyer will test tax and compliance history.
Not yet supported with documents and therefore not relied upon here. Tax assessments, returns and statutory status will be disclosed in the data room; protections such as indemnity or escrow may be discussed.
11 Process
Interested parties are invited to proceed in four steps, beginning with a non-disclosure agreement.
Project Defence · Project code SEL-002. Please direct all enquiries and expressions of interest to the adviser. Do not contact the company, its promoters, employees, customers or suppliers.
Sign NDA. Execute a non-disclosure agreement and confirm buyer profile.
Detailed information. Receive the full information memorandum and data-room access.
Management meeting. Meet the promoters and visit the site.
Indicative offer. Submit a non-binding offer on the stated perimeter and structure.