Delton Cables Gains 6.08%: Margin Pressures and Flat Quarterly Performance Shape the Week

Monday, 9 February: Positive Start Amid Broad Market Rally

Delton Cables began the week on a positive note, closing at Rs.526.45, up 1.72% from the previous Friday’s close of Rs.517.55. This gain outpaced the Sensex’s 1.04% rise to 37,113.23, signalling early investor optimism. The volume was modest at 1,296 shares, reflecting cautious participation as the market digested recent developments.

Tuesday, 10 February: Steady Gains Continue on Increased Volume

The stock extended its upward trajectory, closing at Rs.535.00, a 1.62% increase. This outperformance contrasted with the Sensex’s marginal 0.25% gain to 37,207.34. Volume more than doubled to 3,076 shares, indicating growing investor interest. The steady gains suggested confidence in the company’s underlying demand strength despite broader market uncertainties.

Wednesday, 11 February: Sharp Rally on Robust Volume

Delton Cables surged 7.92% to Rs.577.35, marking the week’s highest daily percentage gain. This rally was supported by a significant volume increase to 5,733 shares. The Sensex, meanwhile, rose only 0.13% to 37,256.72, underscoring the stock’s strong relative performance. The sharp move reflected anticipation of the upcoming quarterly results and optimism about sustained growth momentum.

Thursday, 12 February: Gains Persist Despite Market Weakness

The stock continued to climb, closing at Rs.590.15, up 2.22%, even as the Sensex declined 0.56% to 37,049.40. Volume moderated to 2,843 shares but remained healthy. This divergence highlighted Delton Cables’ resilience amid a weakening broader market. Investors appeared to focus on the company’s record quarterly net sales, which were expected to be announced the following day.

Friday, 13 February: Quarterly Results Disappoint, Stock Corrects Sharply

Delton Cables reported a flat quarterly performance for Q3 FY2026, with record net sales of ₹268.40 crores but margin contraction and rising interest costs weighing on profitability. The quarterly profit after tax declined 18.4% to ₹3.75 crores compared to the average of the previous four quarters, despite an 88.46% increase in six-month PAT to ₹10.04 crores.

The operating profit to interest coverage ratio fell to 1.64 times, signalling increased financial strain. Interest expenses surged to ₹11.00 crores, the highest in recent periods, further squeezing margins. These factors led to a downgrade in the company’s financial trend score from 22 to 5 and a sell rating from MarketsMOJO, with the mojo score now at 40.0.

The stock reacted negatively, falling 6.97% to close at Rs.549.00 on heavy volume of 19,162 shares, underperforming the Sensex’s 1.40% decline to 36,532.48. This sharp correction reflected investor concerns over margin pressures and the company’s elevated leverage position.

Weekly Price Performance: Stock vs Sensex

Key Takeaways

Delton Cables demonstrated strong top-line growth with record quarterly net sales, reflecting robust demand in its core electrical equipment segment. The stock’s 6.08% weekly gain notably outperformed the Sensex’s 0.54% decline, underscoring relative strength amid a mixed market backdrop.

However, margin pressures and rising interest expenses have emerged as significant headwinds. The 18.4% drop in quarterly PAT and the low interest coverage ratio highlight operational and financial challenges. The downgrade to a sell rating and a subdued mojo score of 40.0 reflect these concerns.

Investors should note the sharp price correction on the final trading day, which signals caution despite the company’s long-term outperformance. Elevated leverage and margin contraction may limit near-term earnings stability, contrasting with some peers who have managed to improve profitability.

Conclusion

Delton Cables Ltd’s week was characterised by a strong rally driven by record sales growth but tempered by margin contraction and rising financial costs. The flat quarterly performance and downgrade to a sell rating have introduced caution into the stock’s near-term outlook. While the company’s long-term returns remain impressive, the recent results highlight the need for improved cost management and debt servicing efficiency to sustain momentum.

Investors should monitor upcoming quarters closely for signs of margin stabilisation and financial health improvement before reassessing the stock’s potential relative to sector peers and broader market benchmarks.

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