Short-circuit at BBS Cables: Once a Tk100cr profit maker, now a Tk100cr loss burden

BBS Cables PLC, once one of the most promising industrial names on the Dhaka Stock Exchange (DSE) capable of churning out over Tk100 crore in annual profits, has suffered a catastrophic financial meltdown.

The company, which dominated the market just a few years ago with robust government contracts and soaring share prices, is now fighting for its survival. 

A combination of drying government orders, alleged loss of political patronage, and a challenging macroeconomic environment has triggered what can only be described as a "short circuit" in its operations – turning a profitable blue-chip entity into a massive loss-making burden for its shareholders, according to the market analysts.

The extent of the financial bleeding is evident in the company's latest financial statements. 

For the fiscal year 2024-25, BBS Cables reported a staggering net loss of Tk86 crore. This represents a colossal 561% year-on-year increase in losses, a stark contrast to the modest Tk13 crore loss incurred in the previous fiscal year. 

The decline is even more shocking when viewed against the company's historical performance; in FY19, the cable manufacturer posted its highest-ever net profit of Tk145 crore. The reversal of fortune from a Tk145 crore profit to a Tk86 crore loss illustrates a complete erosion of the company's financial foundation in less than six years.

The collapse in profitability is directly linked to a precipitous drop in revenue. 

In FY25, the company's revenue plummeted by 46% year-on-year to settle at just Tk210 crore. To put this into perspective, the company generated revenue of approximately Tk900 crore during its peak in FY19. 

The downward trajectory has been consistent and alarming. Revenue stood at Tk713 crore in FY20, gradually decreasing to Tk638 crore in FY21 and Tk628 crore in FY22. While there was a brief respite in FY23 with revenue climbing to Tk655 crore, the floor fell out in FY24 as sales crashed to Tk386 crore, before halving again in the most recent fiscal year.

The decline only deepened in the current fiscal year. In the July-September quarter of FY26, the company's revenue dropped by 48% to Tk52.45 crore, while net loss widened by 331% to Tk18.20 crore from the same period a year earlier.

With losses accelerating and sales continuing to erode, BBS Cables failed to recommend any dividend for FY25, after having offered a token 1% cash dividend the year before. Its highest payout – 10% cash and 15% stock – dates back to FY18, a reminder of a bygone era of profitability and expansion.

In a price-sensitive disclosure, BBS Cables attributed the heavy losses to multiple adverse factors: a steep fall in revenue, higher bank interest rates, dollar volatility, rising raw material prices, and most critically, a significant decline in government tenders – the company's primary revenue driver. 

The management acknowledged that fewer state-funded projects had directly crippled its sales pipeline.

Auditor T Hussain & Co raised serious flags in the FY25 audit report, identifying the evaluation of the company's going concern status as a key audit matter. 

The audit noted that turnover had plunged from Tk386 crore in FY24 to Tk210 crore in FY25, a 45.4% drop that "may cast substantial risk on the company's ability to continue as a going concern for the foreseeable future." 

The audit team scrutinised management explanations, probing issues like market conditions, order cancellations, competition, rising input costs, and the impact of foreign currency volatility.

However, when The Business Standard attempted to reach Chairman Abu Noman Howlader and Managing Director Badrul Hassan for comments, neither responded to calls or WhatsApp messages.

A former employee, requesting anonymity, shed light on what insiders believe to be a major contributing factor to the company's downfall: the collapse of political connections. 

According to him, the chairman, originally from Bhola, had close ties with a powerful Awami League leader who previously held ministerial office. 

During that period, BBS Cables secured large volumes of government contracts, particularly for national power transmission line installations. The Power Division reportedly purchased significant quantities of cables from the company until 2023. 

But when those political dynamics shifted and new contracts ceased, BBS Cables lost its main source of revenue almost overnight. "That's when the real downfall began," the former employee said.

Beyond the loss of government contracts, the company's mounting debt has become another pressing burden. As of September 2025, BBS Cables had Tk60 crore in long-term loans and Tk258 crore in short-term loans. Sonali Bank remains its largest lender. 

These loans carry interest rates ranging from 12% to 16%, further tightening the noose around the financially distressed company. 

In a high-interest-rate environment, such debt levels severely limit operational flexibility and deepen losses, especially when cash flow continues to shrink, said an analyst of a brokerage firm.

BBS Cables' journey on the stock market has been as dramatic as its financial decline. The company was listed on the DSE in 2017, raising Tk20 crore by issuing two crore shares at Tk10 each. 

Investor optimism was immediate and intense — on its first trading day, the share price surged to Tk90 and reached Tk150 within a month. But this rapid ascent soon came under regulatory scrutiny. 

In 2020, a Bangladesh Securities and Exchange Commission (BSEC) investigation concluded that the company's chairman, managing director, and their family members were involved in manipulating the share price. 

The commission imposed fines of around Tk6 crore for the misconduct. 

Since then, the stock has continually eroded, reflecting both the regulatory scandal and the deterioration in the company's core business. 

Today, the share price closed at Tk14.60 – less than one-tenth of its peak value.