Thank you. Good afternoon, everyone, and I welcome you all to the Q4 FY '26 earnings call for APAR Industries.

To discuss the business performance and outlook, we have from the management side Mr. Kushal Desai, Chairman and Managing Director; Mr.

Chaitanya Desai, Managing Director; and the CFO, Mr. Ramesh Iyer.

I would now pass on to Mr. Kushal Desai for opening remarks.

Thank you, and over to you, sir.

Thank you, Ambesh, and good afternoon, everyone, and welcome to APAR Industries' Q4 and the annual FY '26 earnings call. I would like to start by giving a quick outline of our performance, followed by a short industry update.

I will follow this up with more details then on the individual segment performances of the three major segments, and then finally we can open the floor up to questions. We have concluded FY '26 with a reasonably healthy growth trajectory, reaching an all-time high revenue of 22,902 crores.

APAR has come a long way over the last five years, scaling up its top line from 6,406 crores in FY '21 to now 22,902 crores in FY '26. This represents a CAGR of approximately 29% over these five years.

The consolidated revenue for the quarter stands at 6,625 crores, which was almost equal to the annual sales of FY '21, representing a growth of 26.7% over the last year of Q4. This performance can be attributed to growth primarily coming from the domestic business, an improved product mix, as well as operating discipline.

Shipments to the United States were also higher in this quarter. Domestic revenues grew 33.6% over Q4 FY '25, and exports grew by 13.3%.

On a sequential quarter basis, exports have grown by 30% as the US business started scaling up, especially post the realigned US tariffs. The US revenues are higher than the same period last year by about 28.8% and 250% higher over the sequential quarter.

Export as a mix is approximately 28% in Q4 FY '26 compared to about 31% in Q4 FY '25. EBITDA post forex for the quarter came in at 584 crores, representing a year-on-year growth of approximately 19.3%.

The PAT margin is at 3.8%, which is only 100 basis points lower than the same period previous year. However, this number is, to give you a better idea of the operating performance and putting it in context, I'd like to state that if you look at just the operating activities, there are a few one-time provisions that have been made that have impacted the fourth quarter.

That includes an impact of gratuity and leave encashment, which we have further increased by approximately 8 crores. There is a mark-to-market impact of an ECB loan that the company has and due to the sharp depreciation of the rupee that happened in the first quarter.

Then there is a one-off provision for an old legal case based on the recommendations of our auditors that we have moved from contingent liabilities into a provision. If you exclude these non-operating impacts, which are amounting to 31 crores, the PAT, which came in at 254 crores, would have been at 285 crores, and so on an operating basis, the growth would be at around 14% compared to the same period previous year.

On an annual basis, the revenues have reached 22,902 crores, as I explained, which is 23.3% higher than FY '25. Domestic revenue is up by 29%, export revenue is up by about 12%.

The US revenues have grown by almost 50% versus the same period last year. The export mix stands at about 30% for the year.

EBITDA post open period forex grew to grew by 23% to 2,067 crores at an EBITDA margin of 9%. The PAT has grown by 19% to 977 crores at a margin of 4.3%.

I'd like to also cover some industry highlights. There has been a substantial increase in the clean energy additions which have happened, the non-fossil fuel-based capacity additions, which for the last quarter has been 50 GW-plus, which is the highest ever in a financial year.

This brings the country's total non-fossil capacity to anywhere between 250 and 270 GW, propelling India to be the third largest in the world in renewable energy deployment. Solar power has been the leader in terms of additions, which has now crossed 140 GW, and there has been a record annual addition of about 54 GW in FY '26 alone.

Wind power has also increased with a capacity increase of approximately 6 GW in FY '26. Both of these are a significant milestone in the country's renewable energy journey and is almost double of what it was in the previous year.

On the data center front, India is making is rapidly expanding in this sector. The current data center capacity in India is anywhere between 1.5 and 1.7 GW, which is expected to scale in a base case to 5 GW by 2030, with a more optimistic estimate going up to 7 to 8 GW.

This will attract more than $30 billion in investments, powering India's move towards being a trillion-dollar digital economy. On the transmission infrastructure and grid side, there has been a transformation capacity addition in FY '26 of 113,000 MVA, which is 30% higher than what existed in FY '25, though it is short of the planned target of 126,000 MVA.

We're about 13,000 MVA short, which is approximately 11% lower than what had been planned. Nearly 48% of the transformation capacity added in FY '26 was at the high voltage, which is at 765 kV voltage level, with 54,000 MVA already commissioned.

This is again the highest ever annual addition in this voltage class. This significantly strengthens the ISTS, which is the Inter-State Transmission System grid, for bulk power and renewable energy transfer.

The government has adopted a planning and implementation approach that prioritizes grid readiness, transmission expansion, and energy storage deployment as integral components of the renewable energy across the country. As per the National Electricity Plan, the transmission network is expected to expand from approximately 5 lakh circuit kilometers to about 6.5 lakh circuit kilometers by 2032, with transformation capacity scaling from about 1,429 gigavolts to 2,354 gigavolt-amps.

The inter-regional transmission capacity is also set to increase from 120 GW to about 143 GW by 2027 and by a further 168 GW by 2032. Now coming to the segmental performance, I would first like to to cover the Conductor division.

We concluded Q4 FY '26 with the highest top line for the Conductor division. Revenue for the quarter reached 3,764 crores, representing a significant 29.9% year-on-year growth.

This growth was driven by increase in volume, improvement in the product mix, and also there was the tailwind of commodity price increases that happened. Sales volume is up by 9%.

The domestic business grew 34.8%. Export revenue grew by 14.6% compared to last year, and on a sequential basis, it is up by 48.7%.

The export mix is at around 21.6% in Q4 FY '26 versus 24.5% a year ago. This difference is primarily because the domestic business in the in the last quarter was was fairly strong.

The US business has, as I stated earlier, started scaling up, and in Q4 FY '26, it is almost at par with Q4 FY '25 for the Conductor division, but compared to Q3 FY '26 is up by over 150%. Premium products continue to grow, and in this quarter, the premium products came in at 49.3% versus 44.3% in the last year.

EBITDA post open period forex stands at 44,919 rupees per metric ton compared to 41,430 rupees a metric ton a year ago. The EBITDA margins have grown largely on account of the improved product mix.

On a full-year basis, the revenues were are up 32.7% to reach 12,712 crores. With this, the Conductor division has crossed that 10,000 crore milestone, which is a historic milestone for us.

Volumes have grown in the year by 8.6%. Domestic revenues are up 38.3%.

Export revenues are up by about 15%. Premium product contribution to revenue stands at 45.8% for the year.

The EBITDA margin post forex came in at 43,012 rupees per metric ton compared to 36,683 per metric ton a year ago. Order inflow during the year came in at 11,450 crores.

The order book as on 31st March stands at a healthy 7,671 crores. This year marked the highest ever installation that our project division have also done, which is about 1,949 circuit kilometers, and that helped address the growing power demands for residential and industrial users and farmers, and also debottlenecked the grids coming into Mumbai and helping Navi Mumbai become the data center capital of India thus far.

Both CTC and busbars, which are our main copper products, have also recorded a strong growth in the year. Coming to the Oil division, our revenues from operations grew to 5.6 lakh kiloliters, and the volume level is at par with sorry, our revenues from operations grew by 5.6%.

The volume is approximately at par with the same period previous year. This was largely because exports were very severely affected in the month of March due to the Middle East disruption both in terms of supply chain as well as in terms of a sudden increase taking place in the freight, which required the company to go back to customers and negotiate a higher freight increase.

In fact, the supply chain for petroleum products came to a grinding halt, with all major refineries curtailing production and also reducing contract volumes which were signed up with with us. There was also no visibility of what would happen in the month of April as we started the month of April, and there was uncertainty even in terms of what the price level would be in the month of April.

We stopped booking fresh orders in March by the first week and only focused on completing execution of all the pending orders. There were increases in freight, there were increases in packing charges and other incidental costs, and the company systematically negotiated that with all its customers and executed all the pending orders in in the March period.

We only started booking right towards the end of the month and in the beginning of April. The supplies against contracts to APAR reduced by 50% from the key contracted refineries in the month of April, and in the month of May now, it is expected to get largely restored, but of course, at significantly higher prices.

If you look at the global transformer oil volume, it was marginally down by 1.4%, and the domestic transformer volume, in spite of all these problems, was up by 8.5%. Automotive oil grew by 19.5%.

Industrial lubricants grew by 6.1%. Exports contributed 36.3% to the overall Oil division revenues in Q4 as compared to 41.7% a year ago.

EBITDA per KL post foreign exchange stands at about 5,656 rupees per KL as against 5,873 rupees per KL. There was a fairly large provision made for foreign exchange, which is almost 15 crores in the month of March with the sliding of the rupee taking place post the war starting.

On a 12-month revenue basis, revenues have grown by 6%, posting 5,373 crores. The transformer oil business grew by 3.5% overall at a global level.

The domestic transformer oil business grew by 12.2%, even though we were on target to actually cross 15%, as the quarter had started. Automotive oil is up 11.1% versus the previous year.

Industrial oil is up 13.8%. Export mix stands at 39.4% for the year compared to 44.4% for the year ago.

EBITDA per KL came in at 5,943 rupees per KL. Now moving to the Cable division, revenues for the quarter reached 1,903 crores, up 35% over Q4 of FY '25.

Domestic revenues grew by 35.4%, and exports grew by 33.6% over Q4. The US revenues are up 52.2% over the last year Q4.

Export mix was at 28.1% in Q4 FY '26 versus 24.4% in the fourth quarter of '25. The EBITDA post forex grew 34.5% year-on-year to reach 202 crores at an EBITDA margin of 10.6%.

The pending order remains at approximately 1,900 crores. For the full year, revenues for the 12-month FY '26 came in at 6,220 crores, which is up 25.8% year-on-year.

This year, the Cable division overtook the Oil division to be the second largest business segment for APAR. The domestic revenue is up 23.6%.

Export revenues are up 30.6% year-on-year. The US revenue is higher by 46.7%.

The export mix stands at 32.3% in this period. The EBITDA post forex grew by 27.1% to 633 crores at a margin of 10.2%.

Our B2B channel business, which we had started this is only the second year of its operation has now crossed 500 crores. We also expanded our distribution network of a by adding 120 new B2C distributors and 25 new B2B distributors.

There has clearly been an impact from the war on both the price and availability of specialty polymers. Many of this were being sourced from multinational plants that are located in the Middle East area, notably in Abu Dhabi.

The prices have also increased of aluminum and copper, and polymers in general across the board. This has limited the ability of the company to aggressively book orders for specialty cables in the short term, given the shortage that has been there of these polymers.

There will be a near-term impact in both volumes and margins. In terms of concluding remarks, I would like to conclude that the financial year 2026 has been a good year in spite of all the volatility and the war at the end of the period disrupting supplies.

Despite the multiple iterations in the US tariffs throughout the year, the increase in LME prices, and the recent Middle East war, the company has still reported a strong growth. However, as I mentioned earlier, the short-term period, as mentioned, will see slowing demand, and there are several factors for this.

You have significantly higher metal prices. Added to that are higher premiums, both for aluminum and copper.

There is higher freight costs involved, including the war premiums that have been applied on all export shipments. The Middle East is where the maximum amount of problems are there because the containers are being transferred without complete insurance cover, resulting in some of the projects being actually deferred or delayed.

There have been several manpower issues in the recent months at various project sites with the elections coming up in the east. This has impacted the transit of goods to some extent within the country, but much larger in the form of the operation of the ports.

With these effects, some of the customers are actually preferring to postpone the delivery of their materials. We also see, in addition to this, that domestic players have started increasing their capacities, and this is increasing some amount of pricing pressure.

The Chinese competition is still quite severe in certain parts of the world. There is a fairly large difference between LME and the Shanghai Metal Exchange, the what they call the SHFE prices, which for aluminum has increased to about $330 to $360 a ton.

However, having said that, structurally, energy infrastructure fundamentals remain intact with the growth in T&D, rising electricity demand, and evacuation infrastructure being increased, data center expansions, the growing presence of EV, more opportunities for reconductoring and upgradation of aging lines, and finally, the significant investment happening in ultra-high-voltage transmission infrastructure and HVDC. All of these opportunities continue to provide a robust growth runway for the company, and we are quite focused and well-positioned to capitalize on this.

We plan to increase our capex for FY '27 to about 1,500 crores in addition to the FY '26 capex that we have incurred of two of 740 crores. This is to ensure that we have a capacity in place to meet meet future demand, given the longer capex cycle that is taking place.

With this, I would like to leave you all with an optimistic note that in spite of the short-term problems that are there, we still see a very strong future coming up. With this update, I'd like to conclude my presentation.

I'd like to thank all of you for joining this call and would like to open up the floor to questions, please.

Hi, thanks for taking my question. Thank you, sir.

Am I audible?

Yes, now it's much better. Please go ahead.

All right. Thank you for taking my question, sir.

Just on your outlook on the US market, I remember a few calls back, you also talked about the data center opportunity which you were seeing. You mentioned Microsoft and everyone as well.

How big is these opportunity are becoming for you? Because given such a tariff-challenging year, you're still able to deliver such high profitability on the conductor side despite US being down for us.

Going in FY '27, FY '28, how this US opportunity looks like to you? Because you're increasing again the capex, which looks like a very high visibility you are seeing.

Just your take first on a little detailed way on the US capex.

Nitin, the US market, we are seeing actually a very strong traction in the US market. It is being clearly led by the data center opportunity there.

All the major public companies' data is already available from the numbers that they've given from the Q1 earnings call that the Metas and the Amazons, Googles of the world have already had. We have already taken positive steps in this direction.

We've supplied to three major data center projects so far and in the US. The total of cables that has gone in there is in the range of about $15 million.

With this, we are now slowly getting more and more access and RFQs which we are being asked to bid upon. We see the cable side on the data center, growing and being a larger opportunity for APAR as time passes by.

We have also made certain capex provisions for adding specific capacity to produce the data center cables which are required in the US that are of a significantly higher specification than the data center cables that are going into India. On the conductor side, we have had extensive discussions with various utilities there, both public utilities and the IOUs.

From whatever we see of the amount of capital that they are allocating to improve their transmission line capacities and modernization of the grids, we see that this business will only continue to increase year on year. We are seeing fairly strong signal and visibility across the board in the US.

Getting it.

What has helped is that I think the tariff situation, even though there are tariffs,

it's

have settled down, and this is also helpful in terms of customers having to take decisions. Last year was a very difficult period, and in spite of that we grew, because the end customer, moment they have had an imported product from India, they were not clear what the landed cost would have been, which really their decision-making.

As a consequence, that had an effect in terms of where we stood. That I think is today something that is much more settled, and so you will see in FY '27 a larger APAR presence in terms of sales in the US.

Okay. When you announce this capex, is it something that these hyperscalers are trying to block capacity as they're trying to do with all the data center suppliers across the world?

Or it's predominantly a mix of Indian

Nitin, you're still not audible. Could you please use your phone on the handset mode in case if you're on the?

Am I audible now?

We can hear.

Go ahead, Nitin.

[unclear]

No, I think your Nitin, the line is totally garbled right now. Hello?

Yeah. Audible?

Am I audible?

Now yes. Please go ahead.

Yeah. I'm asking on this capex which you have announced and upsized again, is it like coming more from the US data center hyperscalers side where they're trying to block your capacity, the way they're doing for all the vendors around the world?

Or is it a mix of both India capex and US capex all together?

No, it's looking at all the opportunities. If you see that even as I mentioned earlier, that even in India, the data center expansion is there.

There is also an expansion happening on solar and wind in India. There is a significant increase in solar capacities that we are seeing getting lined up in the US as well.

The US is being led by data centers. Unlike in the case of fiber and some of the other things where they're going directly and blocking capacities, here these are largely projects which are awarded to EPC players, and then EPC players in turn go into the market and start, picking up or ordering the business.

The capex increase we are seeing is fundamentally overall demand growing, with the US being, one market where we see significant growth besides India. These are the two markets which APAR is really focusing on.

Right. Just last question, sir, on the profitability.

Given if US increases next year in exposure and, you're already able to do 44,000 in conductor for the whole year, how one should think about profitability of a conductor business next year?

Nitin, we typically give guidance for medium to long-term perspective as we always been doing consistently in the past. Based on the historical EBITDA margins that we have made, we expect that from on a medium to long-term perspective, our conductor margins could be in the range of 35 to 36,000 per metric ton.

This has been resulting because of the impact of high premium products, the reconductoring opportunity, as well as the copper mix that is going up. In line with that, we expect this margins to be high.

Also to note is that with the increase in the metal prices, you will see higher interest cost also coming in because the metal price is going up. As we are looking at EBITDA, it's earnings before interest, to that extent our interest cost our EBITDA will also go up.

Of course, these are excluding the tailwinds. We always talk about EBITDA plus tailwinds, it's to be in the range of 35 to 36,000 per metric ton plus the tailwinds coming our way.

See, one thing, Nitin, I'll add to this is that everywhere there is still whether it's the US or whether it's India there is a short-term slowdown in ordering because, especially with aluminum, aluminum moves along with the cost of energy. Because of this whole war-related problem, the as I mentioned in my opening remarks, there is a very sharp increase in the price of aluminum.

There is further and and a premium increase. If you look at the MJP, which is the mean premium of Japan, that also has increased.

The freight costs have increased everywhere. In the US, they're at all-time high, prices of diesel, gasoline, everything.

There is a small meaning I expect a short-term slowdown, but the kind of budgets which are being allocated and these are being allocated right from the big data center companies, the budgets which are getting approved in the board meetings of these big utilities is showing a very strong picture going forward. You may not be able to place things like what you're asking in the exact buckets at this stage because of the uncertainty in the current environment.

The makings of and allocations, very serious allocations from all these different players that will drive the market, in the future. That's one of the reasons why we have committed to a larger capex because, given that the current scenario, the capex cycle also is significantly longer than what it is, what it was 2 to 3 years ago.

From the time you order equipment from a top equipment supplier to the time you get the equipment coming in and the installation takes place, that has actually that cycle has got dragged out. I hope that answers your question.

Hello?

Hi, sir. Good evening, and congrats for strong set of numbers in Cable and Conductor division.

My first question is pertaining to our current capacity utilization in these three divisions, and at the same time, if you can give us further detailed breakup of 1,500 crores of capex that you're planning for FY '27.

On the Conductor division, our capacity utilization currently would be about 90 to 95 percentage. Similarly, for cables, it could be close to about 85 to 90 percentage.

Oil division, as the operations are not so capital intensive, we would have enough capacity because it would be in the range of 65 to 70 percentage capacity there.

Lubricant is higher at the moment. Our lubricant capacity is running at almost 85 to 90% for the small can and the bucket filling because, as you've seen, there's been a substantial growth in the last year.

The company is making some further investments as part of this capex to debottleneck that.

Yeah. Anything else you wanted, Umesh?

A breakup of 1,500 crores of capex that you are planning for FY '27.

Around 400 400 crores would be coming from Conductor division, around 200-odd crores from Oil division, and Cable would be in the range of 850 crores.

Got it. My second question is pertaining to domestic market.

Now that a lot of these large HVDC projects are entering into execution mode, just wanted to know whether material awarding for these projects are already being done or it is expected to come up in FY '27? Second, any kind of delay in tender finalization that you've seen domestic market for transmission lines?

The answer to the first question is that no, these HVDC projects have just been just been awarded. Both conductor and the oil will come significantly later.

Fortunately, the the two main players in this or rather the three main players in this are Hitachi Energy, your GE, and Siemens. APAR has been the principal and only supplier to all of these three companies so far in terms of the HVDC transformer oil.

None of these orders have started getting awarded. I think the business will run through FY '27, FY '28 also in terms of the awards taking place.

What was the second second question you had, Umesh?

Regarding current tendering pipeline in terms of finalization, how it is happening, whether you are seeing any delays because of inflationary pressures where earlier probable estimates for transmission lines could be different, now given that copper and aluminum has both seen significant inflation, any kind of revision to that estimate will take approval times? Any kind of delays that you can anticipate in first half FY '27 in domestic market?

We've seen effect of both. In some cases where we already have the orders and where the customer needs to actually block the metal, they have been delaying the delivery of those supplies.

Also, there is some amount of postponement that is happening because the factor is not just metal, it's manpower is a big problem in India at the moment, especially with the Bihar with the West Bengal elections and the elections in the northeast. A lot of the workforce at project sites comes from those areas and those jurisdictions.

There has been a little bit of a slowdown that's coming from these things. Our sense is that this time should pass, and you will have a pick up.

If you see last year, the second half of the year had a tremendous execution intensity compared to the first half. Maybe a similar sort of phenomenon may come up in this year.

Short term, as I mentioned, there definitely are all these moving parts which have resulted in higher cost, and people are postponing decisions and deliveries wherever they can. We have seen similar even on all the fiber optic, OPGW, all that because fiber costs have gone up 3x and 4x times what they were, compared to about a year ago.

Understood. My last question is pertaining to data center.

Now three parts to this question. One, any rough cut idea about how much of value of cable supply that you can give to a 1 MW or 1 GW of data center infrastructure, suppose in US?

Second, do you see pricing in data center user industry to be relatively far better than other user industries? Third, any color on potential long-term contract that you can get on the lines of similarly what we have seen on the fiber side in domestic market from US customers?

Any kind of long-term contracts or tying up of capacity that you are now discussing with the large players in US data center market? Thank you.

The last question, I can tell you that, as far as our wires and cables are concerned, there is no blocking of capacity that we're seeing with not only us, but with any of the major players around the world. Because the way it runs is that it's then placed on an EPC contractor.

The EPC contractor then places it on to an electrical contractor who then does, the contracting. Your first question, the data centers vary very dramatically.

If you see the kind of spec that runs in India is totally different than what runs in the US. Also, the spec that runs in a data center which is a general data center versus an AI data center is also vastly different.

The third thing is that we are seeing that the bill of materials is also evolving. As, the Nvidia's new chips are being utilized and things like that, the electrical requirements are also starting, to change.

To give you an idea, the a medium-sized data center that you would supply in the US would be taking about $10 to $12 million worth of cables. Of just the medium voltage cables.

You'd probably have something equivalent in terms of the other, low voltage cables in there. About $25, $30 million for a medium-sized data center in the US.

Over here in India, you're looking at about 2 crores worth of cables for, a 50 a 50 MW kind of facility.

Understood. Yeah.

For a 50 MW, correct. If it's 100 MW, it would be about 5 to 6 crores, like that.

Got it. Sir, last question.

I know that you are guiding for 35 to 36,000 of EBITDA per ton on conductor side. If I look at our pending order backlog where export mix is relatively higher at about 39%, while we did about 21% export sales in conductor in last year, and probably there is also a higher room to supply to US because this especially in last year was weak.

Considering all this thing, it looks like you can report probably improvement on last year's EBITDA per ton number reported at about 43,000 rupees. Any color over here?

Thank you so much, sir.

That's what we always indicate, 35 to 36 plus tailwinds. As you can see, the order book is not representing the entire requirement for the year.

Also, there would be some order books part of some order book that could spill over to the next financial year. As you indicated earlier, these are our medium to long-term guidance.

We don't give the guidances for next year. We have been increasing our guidances historically.

It used to be about 8 to 10,000, and from there gradually it has gone up now to 35,000 to 36,000, which even in earlier quarter was about 30,000. As and when we see more visibility, we would take the call on that.

For now, we feel that on a medium to long-term basis, our margins could be in the range of 35 to 36,000 plus tailwinds.

Sir. Thank you so much, and all the very best.

Thank you.

Yeah. Good afternoon, and thanks for the opportunity.

Sir,

my first question is on the can you help us with your dependence on the Middle East for specialty oil business in terms of sourcing and sales?

Okay. In terms of sourcing, the refinery that we source a reasonable amount of quantity and have a long-term contract with is Saudi Aramco's base oil refinery in Yanbu.

That refinery at the moment is still running. It hasn't shut down at all through the entire period, and they have been shipping product out of there.

That's one of the refineries that has actually met every quarter's requirement, including the month of April and now in the month of May. From a sourcing standpoint, there's not a major impact from the refinery in the Middle East.

On the contrary, what has happened is that Saudi Aramco's other subsidiary, S-Oil, which is our largest supplier, then Formosa, which is out of Taiwan, and many of the other refineries, they had a major shock in the month of April where the raw materials which were on the way to their refineries got stranded. That's the reason why in the month of April all these issues have taken place.

By the time we came into the month of May, alternate arrangements have been made, as well as Saudi has started loading large amount of quantities from Yanbu. Out of the 9 to 10 million barrels that they were loading previously from Ras Tanura, that has been substituted with about 7 million barrels from Yanbu itself.

There has been a bit of a substitution that has come in. On the sales side, our transformer oil, we have a very strong supply going into Saudi Arabia and Kuwait.

Both of those had been affected. There were no shipments that went to these geographies in March, nothing went in the month of April.

However, in May, we have made shipments after getting the increased freight costs, etc., from these refineries. I would still see, and these are supplies that have gone into projects which are at very advanced stage, where commissioning of the transformers and all that were coming up.

I see that the Middle East business will continue to remain a little bit subdued until this war gets completed. There's also an impact in the Conductor division where we have certain contracts with Iraq and some of these places where the deliveries will get pushed out until there's a resolution over there.

Understood, sir.

Does that answer your question?

Yes, sir. It did.

It helps, yeah. My second question: can you help us with the growth outlook in premium conductors in domestic market and compare the inquiry pipeline with the last year?

I'm specifically talking about AL-59, HTLS, railway overhead, CTC conductors, and copper plates, yeah.

Generally, we see a good growth prospects in this year. There was a little bit of holding back of tenders last year.

This year, we expect more and more tenders to be finalized, and accordingly, the supplies will be more forthcoming. With regard to CTC also, there has been a good growth in the transformer segment.

While there's been overall more supply also because of the expansions which have come through for us as well as competitors, but overall market is growing, we see that as a positive. Mohit, if you see, as I mentioned in my opening remarks, 45.8% is the mix that we had of premium products.

If you look at that as a percentage of the current order book, it's a little over 50%. You will see, continuing growth happening, in these areas, as Chaitanya just mentioned.

Understood. Last question, sir: is it possible to sell this CTC conductor to export market, and where are we in terms of getting those approvals?

There is absolutely a possibility of exporting it. Far, we had really not exported product because there was a major deficit in the domestic market.

To tell you honestly, given the deep relationships that APAR has had on the transformer oil side with all the major power transformer manufacturers across the country who are the main users of the CTC, obviously there was a lot of pressure to supply them as well. Now, having gone through five phases of expansion within APAR, we are now in a position to start exporting the product.

Initially, we had got approvals from Middle East manufacturers and had started exporting to them. We are now working towards getting approvals in Europe and the United States as well.

As you see going into FY as we look at FY '27, FY '28, we will want to broad-base ourselves and look at exports. Europe is definitely something which is an attractive market.

In the case of the US, there is a tariff that the Indian CTC faces compared to a product that's manufactured locally in the US. We are in the process of exploring this because I don't think there's sufficient CTC manufactured in the US by itself.

Understood, sir. Thank you.

You will see that as a higher percentage going forward.

Thank you, sir. Thank you.

Thank you. Understood.

Okay.

Hi, sir. Thank you for the opportunity.

Sir, first question on the cables capex, which you said probably about 850 crore capex, which we have envisaged for this year also. With earlier capexes, we were probably trying for roughly about 10,000 crore revenue.

Any change in terms of, the volumes we want to achieve after this round of capex, as you said we're front-loading the capex for the future years? What's the kind of long-term outlook?

And

Capex is working towards getting to that 10,000 crores. The we have already spent about 400 crores in FY '26.

If you look at all the carry-forward projects which we have into FY '27, that's about 850 crores. The total spending has actually increased by almost about 400 crores compared to what we had planned earlier.

Most of this is going into there's a certain set going into expansion of medium voltage cables, both XLPE as well as rubber-based, that go into data centers, go into general expansions for utilities, industries, all of that. There is a capacity increase for what we produce for the wind sector.

There's a capacity increase of what we produce for solar. There's also capacity increase for what we produce for the railways and defense.

It's quite a broad-based, and we are seeing this is a capex towards that 10,000 crores only. Just that we are putting it forward a little bit.

We would have staged it out, instead of spending 1,200 crores in 2 years, we would have otherwise spent 800 crores in 2 years and then 400 in the third year. We're trying to actually pull it forward.

Right. Sir, is the capacity kind of fungible, since you said data center there would be different specs and in India and also in exports and you are building capabilities there?

Is the current capacity fungible there? Second, what kind of expectations we have in terms of data center kind of contribution going forward, since we are building this capacities for that also?

Second, on margin, we have about 10.2%. How this margins can move, because you also talked about some competition in the domestic market, and players are actually setting up their own setups for this?

On this two aspects, yeah, that's the question. Okay.

In terms of fungibility, the machineries are capable of producing different specification of products. The US has a combination of XLPE, but largely rubber-based for the data centers.

That's one of the reasons why we have added capacity expansion to produce a much larger quantity of these medium voltage, EP, EPR, or polymer-based cables. As this expansion happens, the fungibility is going to remain reasonably high.

Second thing is you're talking about competition coming in. Yes, there is a competition coming in.

You heard some very big names. After UltraTech disrupted the paints market, now they are investing and wanting to launch basically wires.

We see our strength really in cables and especially in the specialty cables for all the segments that I mentioned to you. I don't think either the current plan or the immediate launch that UltraTech, is going to do, the Birla Aditya Birla Group is going to do, is going to affect these high-value products.

I think their focus is much more on the building wires and the building segment. Similarly, the Adani Group also seems to be focused more on the wires and the LDC or the light-duty cables which go through the distribution network.

We feel that there is a very large access that's available, in the market, both in India as well as overseas. We are continuing to look at, growing irrespective of what happens with respect to some of these players.

There could be, increased competition to some extent. You may lose a percentage or so in EBITDA here or there.

The overall size of the pie will continue to grow.

Right. Sir, on conductors, how the premium product volumes would have grown this year, and what's the outlook for next year in terms of the overall volumes growth in conductor and specially the premium product volumes growth in conductors?

Overall figures, we are continuing to look at a 10% growth year-on-year on our conductor side by volume. We are looking at growing by 25% a year in our cable side of the business as well.

All these expansions are all in line with that. We needed a 25% CAGR to be able to get to 10,000 crores in that five-year timeframe when we launched the program.

We are very much on track, in fact maybe slightly ahead.

Right. Sir, premium conductor, how much they have been the volume growth?

Premium conductors, as I mentioned, we as a percentage, 45% is a for the year. 45.8%, almost 46% for the year.

Right. Lastly, on the US sales, sir, how was the US sales for this year, and then what are the expectations we're building in for FY '27 in terms of US sales?

Last year was obviously a year that was very badly affected because of that 20% premium that India had to pay, or a penalty, because of the Russian oil purchase angle. Currently, the duty structures have got rationalized.

The total duty that you pay on Indian products is 25% for both copper as well as aluminum cables. Because it falls under the Section 232.

The pricing is at that level. We feel that our business will go up in FY '27, it will further go up in FY '28 because we are spending a lot of time in getting approvals there and started getting from a much wider range of customers, initial orders.

You'll see a growth, significant growth over the previous years in the US market on the cable side. Similarly, we see that the conductor side also will be higher than what we have seen in last year's numbers.

The short-term factors are not looking good because of higher freight costs and the product costs itself being high. As I mentioned couple of times in the call so far, everybody in the world is pushing out, decisions to the extent that they can.

Because moment the war gets over and energy costs come down, you will automatically see an impact happening, especially on aluminum.

Understood, sir. Thank you.

Thank you so much.

Yeah.

Thank you so much, sir, for taking my question. My first question was on the US tariff scenario.

Recently, the US has changed the Section 232 tariffs. There is a flat tariff of 50% on conductors and 25% on cables.

How do we see the pipeline evolving due to these tariffs? Is this beneficial for APAR, and how has the customer reaction been?

My first question, sir.

What actually has done under 232 is that with whatever rationalization has been done, it seems like that now this is here to stay for a while. The uncertainty which was really the big problem that existed in the last financial year, that problem is now at least the visibility is there, you can do a proper computation in terms of what the landed cost would be.

In that sense, it is positive. I guess India is still continuing to have discussions with the US government, and I don't know whether there could be reduced tariffs coming in.

Otherwise, in the meantime, whatever plans and whatever I'm discussing is considering the current tariffs under Section 232. We see that at these tariffs, we will grow significantly in FY '27 over FY '26 as far as the US market is concerned.

Please bear in mind, even a American producer will incur the duty on the aluminum. Exactly, of 50%, and the US imports close to 90% of its aluminum.

Whereas it imports less than 5% of its copper. The impact on exporting products to the US which are aluminum-based products is not as high as a barrier which exists when you export copper-based products.

Makes sense, and we export largely aluminum to the US, so that is, okay. Makes sense.

Yep. Second question was on the competitive intensity in the domestic market.

There is I think there's a private player who has who is almost coming up with their carbon core technology for conductors and is I think close to getting a PGCIL approval. Any comments on that or any R&D that we are doing apart from our HTLS segments that could negate that effect?

Just your comments on that, sir.

Even earlier on actually, but in all these tenders with Power Grid and others, there is a requirement to have past performance successfully. If the parties who are coming up new, they will not be given that easy access, to sell and be acceptable or eligible in the tenders.

They may come in vendor development type program, but it may take time for them to get established. The ACCC conductor is up to three times more expensive than the ACSR, which is the cheapest base conductor.

The difference between the two is made up more than made up based on two aspects: one is lower line losses and significantly higher amount of power that you can transfer, on the line. Unless those two are actually proved in field conditions, there is no easy way of taking a risk on the higher cost of the conductor.

It's not a if someone comes up with a new composite core, it is not easy to actually just start getting large-scale orders on that. Because if you fail on these two counts, then the conductor has become very expensive, number one.

Number two is that most of these jobs are for debottlenecking, for example I mentioned earlier about Navi Mumbai. APAR has debottlenecked one arterial line coming into Mumbai and about four or five smaller lines.

This has enabled more than doubling the amount of power that has been able to come into the city. Now, you see the stakes are so high in terms of a project like that, that you can't try out new products that easily.

The entry barriers are extremely high.

Makes sense. That makes sense, yeah.

Thank you so much for taking my questions. Those were my questions.

Thank you, and all the best.

I'd like to conclude by essentially saying that as in my concluding remarks, that we see at the moment that there is a little bit of uncertainty because of the war situation, the prices of metal, high premiums, high freight costs, etc. Some amount of postponement in decision-making as a consequence of this, or ordering of materials which have been ordered.

As you look at the fundamental structure and the energy infrastructure, it continues to remain extremely strong. We are very bullish, and based on that, we have increased our own capex programs and preponed it, because we see that there is a strong runway available over the next 3 to 5 years.

I'd also like to take this opportunity to thank all of you for joining this call, and I know today is a public holiday, and thank you very much for being with us.