Yes. Thank you.

Good afternoon, everyone. On behalf of Nuvama Institutional Equities, we are glad to host the senior management of KEI Industries Limited to discuss the Q1 FY27 earnings.

We have with us Mr. Anil Gupta, Chairman cum Managing Director of the company; Mr.

Rajeev Gupta, Executive Director Finance and CFO. We'll start the call with the opening remarks from the management and then move to Q&A session.

Thank you, and over to you, sir.

Thank you, Achal. Good afternoon.

I am Anil Gupta, CMD KEI Industries Limited. I hope that you must have received the brief of our Q1 results.

Or it must be with you. I'll give a brief.

The net sales in Q1 of FY 26-27 is ₹3,185 crore against ₹2,590 crore last year. Growth in net sales is 22 23%.

However, that total wire and cable sale in Q1 has grown by 24.4% against previous year. During Q1 26-27, operating margin has improved to 12.43%.

Margin has improved mainly because of the product mix and operational efficiencies. EBITDA in this quarter is ₹415 crore against ₹297 crore last year.

Growth is around 39.5%. EBITDA/net sales margin is 13.04% as against 11.49% in the same period previous year.

Profit after tax in this quarter is ₹274 crore against ₹195 crore. Growth in the PAT is 40%.

PAT/net sales margin is 8.61% against 7.56% in the previous year same period. Domestic wire and cable sale in this quarter is ₹2,784 crore and it has registered a growth of 29%.

Export sale in this quarter is ₹341 crore, against ₹375 crore previous year. The export is impacted because of non-execution of several orders of Middle East because of the war with Iran and also due to the custom duties issues in United States.

However, for full year guidance, the export will be grown substantially and will be in line with our guidance given earlier. Total sales of extra-high-voltage cable is ₹186 crore against ₹126 crore in the same period.

Growth in EHV sale is 47%. The contribution of sale through distribution network, that is B2C, is 59%.

Total active working dealer of the company as on 30th June is 2,128. EPC sale is ₹43 crore against ₹61 crore last year.

Out of that total sales of EPC, EHV EPC execution sale is ₹18 crore. Sales of stainless steel wire in Q1 is ₹53 crore against ₹51 crore in the previous year same period.

Pending order book is ₹4,292 crore, out of which EPC is 200 ₹271 crore, extra-high-voltage cable ₹793 crore, cable domestic 2,400 crore ₹2,400 crore, and export orders pending are ₹822 crore. The long-term rating from CARE India Rating and Research and ICRA is AA+ and short-term is A1+.

Book value as on 30th June is 725.94 against 697 as on 31st March 2026. Cash and bank balances as on 30th June is ₹1,054 crore, which includes QIP balance of ₹303 crore.

Interest income from bank deposits or others in Q1 is ₹14.59 crore, which is included in the other income. It was ₹28.77 crore last year in the previous year.

The company had raised ₹2,000 crore through QIP on 28th November 2024, out of which company has utilized QIP fund of ₹1,785 crore up to 30th June, and unutilized amount is ₹303 crore, which includes the interest on FDRs of QIP amount. Future outlook: during Q1, the company has incurred a capital expenditure payment of ₹191 crore, out of which Sanand capex is ₹180 crore.

Total capex done in Sanand up to 30th June '26 is ₹1,722 crore. Another ₹300 crore will be spent in this financial year.

Company is expected to incur capital expenditure of approximately ₹600 to ₹700 crore annually for next 3 to 4 years. Capacity utilized during Q1 is approximately 72% in cable division, 61% in house wire division, 91% in stainless steel wire division, and 45% in communication cable.

Sanand capacity addition is taking time to ramp up, and in coming months, capacity utilization will increase month after month. Now we have sufficient capacity to grow in wires and flexible segments for next 2 to 3 years.

Based on the strong demand in domestic and overseas markets, we are hopeful to grow more than 20% in next 2 to 3 years. There is a good demand in data centers and related energy segment: power transmission and distribution segment, renewable energy like solar and wind, electric vehicles, infrastructure, railway electrification, urban infrastructure, manufacturing in domestic as well as in global market.

Also the wire demand is strong in housing sector and in commercial spaces. This is a commentary from the management side.

We are very bullish about the market. We hope that with a strong market outlook in domestic as well as our export markets, company will outperform in the domestic as well as export markets and will be continuously growing year after year.

Thank you.

Thank you for the opportunity, sir. My first question is on the wires and cables margin.

Now, there has been a sequential sharp rise in wires and cables from 12.4 to 13.6. If I see sequentially, the opex number, that's pretty much flat despite we've gone aggressive on the retail side, which is a high-margin but a high-spend channel.

Then even full commissioning of the Sanand plant should bring in some cost on the P&L. Could you throw some light here that what line item has remained consistent because ideally, opex probably should have grown faster and even on a year-on-year run rate, this is the slowest that we've grown in terms of opex?

Natasha,

as we have earlier also highlighted that as the incremental sale is going up, the fixed expenditure does not increase in that way. Accordingly, the expenditure versus sales percentage, if you compare, it is low.

Little bit, because of the product mix, it is getting changed. Some export, we have the good margins orders, all are reflecting in the P&L of the balance sheet.

We have already crossed now hurdle which was earlier that less than 11% operating margin we were operating. Now that hurdle we have crossed, and we hope that now we will be in the range of 11% to 12% operating margin for the coming years.

Sir, you mentioned that you've gotten some high-margin export orders. I remember in the previous many calls, you've always highlighted that export is a similar margin business for you as like it's in domestic.

Have we now got orders which are better margin?

It is always when the demand is strong, and in the global market, the demand is strong, little bit, it is increasing. As you also witnessed that our retail sale was close to 51% contribution, which is now increased to 59%.

Put together it all reflecting in the P&L.

Got it. Sir, on the wires and cables segment, the next question is, the value growth has been 25%, but if I see now, given all peer set numbers have come out, I think the industry has grown by 35%, 33% to 35%.

Given pricing growth in itself is not of 28%, I know you don't give volume breakup, but could you at least tell us qualitatively as to are we prioritizing EHV or losing market share on the LV side or what's happening in the volume mix?

Madam, it is not the case of the losing market share, because the demand is very, very strong. Because every sale require the capital.

Whatever capital we are having, we have earlier guided also to grow close to 20% plus kind of growth, because we are continuously having a CAGR growth target of 20% plus. Accordingly, we need to put more and more also on the capital expenditure.

Yesterday, we also announced our new capital expenditure in our Bhiwadi factory, that is Salarpur, where we will put around another ₹700 crore to put another factory in next 2 years' time. It will go hand-in-hand.

Whatever capital we are having, we are allocating at the same time towards the growth of the company as well as for the creation of the capital expenditure. Because of that, we are not comparing anyone else whatever they are doing, but we are growing whatever we are, more than 20% our target was there, and we are continuously focusing that.

Got it. Sir, Salarpur is 500 plus this additional 700, right, which takes it to 1,200?

No,

no. As in the commentary, Anil has said, every year, our target is ₹700 crore per year.

The total capex of Salarpur is ₹700 crore. In the current financial year, ₹300 crore will be remaining capex of the Sanand, and another ₹300 crore to ₹350 crore, we will use in Salarpur.

Then in the next year also, we will put the balance expenditure in the Salarpur, and then we will use the another capital expenditure in the new land. That is maybe in Baroda or maybe in some existing location.

Got it. Sir, just one quick question, the last one.

If I see inventory in your balance sheet, that has also increased sharply. Could you also throw some color in terms of what proportion would be say, the exports which we could not do sitting in our inventory versus any inventory gains?

Major part of the inventory is increased mainly because of Sanand capacity is ramping up. Once the factory is new, the full inventory we need to create over there.

The major increase due to only Sanand only. Another may be a ₹60 to ₹100 crore in the finished goods may be some time it is delay in dispatch or in the export case, even though the sale has happened by way of bill, but because of the Ind AS adjustment, if the finished goods has not reached, we need to reversal.

Because of that, the inventory is highlighting high, and the export is low. Actually, the sale has happened.

Understood, sir. Thank you so much.

I have more questions, I'll get back in the queue. Thank you.

Thank you, Natasha.

Thank you for opportunity. Just to further clarification on the margin side, because in the P&L, we can see there is a change in the inventory, which is on the higher side, nearly around ₹600-odd crore.

Is there an inventory gain as well you had booked for this quarter, Q1? See,

the inventory gain or loss is the part of the every quarter-on-quarter and year-on-year, because prices are up and prices are down, so that is not the major factor for the inventory increase. Inventory increased, as I just explained, because of the new factory of the Sanand, where the all the raw material and work-in-process and finished goods is starting to have that kind of capacity.

Second, when we do the export sale or institutional sale at the quarter end, there is a reversal if the material has not reached to the customer. Because of that, even though the sale has happened, but as per Ind AS, sale has to reversed.

That's why the inventory is looking like this. Okay.

Second question related to Sanand. How much of the Sanand contribution for this quarter, or what you are expecting for FY27 for full?

Sanand phase 1 capacity has already reached to 50% utilization as on today, and in coming months, it will ramp up further from there.

Just referring to your the media interaction, sir has highlighted nearly around ₹3,000-odd crore of additional revenue from the Sanand for this financial year. This financial year, you are 3,000 looking for from the Sanand, and how is that?

No, no. Actually, in media interaction, actually, it was a little bit of a slip of tongue.

We expect around ₹1,500 to ₹2,000 crore revenue from Sanand in this financial year, which will come in the contribution in FY27.

The overall growth, Praveen, will be more than 20% because, as you see, when the new factory is there, there is a lots of challenges for manpower, then machine, then the other environmental factors. That's how it is taking time, and month after month, the production is getting increased over there.

Okay. Thank you, sir, and all the best.

Hello, sir. Can you hear me?

Yes, yes, Ramanji.

Sir, with respect to Sanand, we have already spent around close to ₹1,700 crores for the capex, and we will be spending another ₹300 crores. You initially guided that we can do from Sanand facility around ₹6,000 crores of revenue.

Am I right?

Yes, sir.

Yes, sir. I just want to understand in Sanand, what kind of products are we catering to?

The phase 2 which in which we will be spending the additional ₹300 to ₹350 crores this year, are we planning to add the existing capacity, or are we planning to add a new high-margin cable and wires product?

Sanand project not yet completed. Phase 1 has completed, that is for low-voltage and medium-voltage power cable.

Then we added the machinery over there, which is operational now in the second quarter for the electron-beam cable. Now we are in the execution for the extra-high-voltage power cable, for which we are making a 152-meter tall tower over there.

By March 2027, our extra-high-voltage power cable project also will get commissioned. By next year, the full capacity will be available, and close to overall capacity in the next financial year, 70% to 75%, we will be in a position to utilize for next financial year.

The entire ₹300 crores will be spent on the extra-high-voltage cable?

No, no. It is a part of the project, nah?

The total cost of the project was ₹2,000 crore. Already we spent ₹1,722 crore, and balance remaining will be spent in the coming 6 months.

Just a follow-up here. You said around 70% to 75% utilization you will try to achieve next year, that closely translates to ₹4,000 crores of revenue.

Is my calculation right?

Yes, yes.

Okay. Understood.

Sir, with respect to margins, in the earlier guidance, you mentioned that there was change in product mix which led to the margin expansion. Can we is it because there was a good amount of contribution from extra-high-voltage cable, or can you just specify what kind of product led to the margin expansion?

It is a mix of three, four things. One is extra-high-voltage power cable contribution has increased.

Second is the overall retail dealer distribution contribution has increased. Because of the top line higher, the expenditure versus sales ratio has gone down.

It's a combination of three, four things.

Sir, just a follow-up here. What will be the incremental margin, if you can give a ballpark figures, when we are selling a extra-high-voltage power cable versus low and medium power cable?

Our extra-high-voltage margin operating margin was close to 15% as compared to low-voltage and medium-voltage power cable institution side was 10.5%, and retail side was 11%, and export was more than 11%.

Out of the ₹6,000 crores of revenue expecting from Sanand, can you give a split between how much can we do with respect to extra-high-voltage? I just want to understand the

1,300 1,300 ₹1,300 crore capacity belong to extra-high-voltage power cable, and balance for low-voltage and medium-voltage and electron-beam cable.

Sir, with respect to the ₹700 crores capex every year which you want to do, is it on the extra-high-voltage side, or I just want to understand the market of extra-high-voltage and

The new investment will be for low-voltage and medium-voltage, which we have just announced yesterday. Because extra-high-voltage power cable capacity, we will be expanding further only here only itself, in Sanand.

Whenever we need, we will add more lines here.

Sir, what is the total market opportunity for from extra-high-voltage?

As of now, it will be more than ₹3,000 crore.

Okay. You are the only player, or is there any competition?

No, there are Universal Cables also. There are imports also.

Understood, sir. Thank you.

Thank you so much, sir.

Hi. Thanks for the opportunity, and congrats on a strong margin print.

First question was again on margins. You mentioned product mix and efficiencies in the operations.

EHV, sir, 5% going to 6% won't move the needle too much, right? Secondly, in terms of operational efficiencies, if you can share some more color.

Thirdly, just wanted to check, have you changed anything on wires pricing? You are earlier looking to reduce the discount versus peers.

Is that something that is helping your margins?

Sir, dekhiye, jaise maine bola, Umang, three, four things where the pricing plays a role, then the overall growth of the company, and resulting in expenditure versus sales ratio. In each and every market, we are trying to build our product well-placed, because we are spending in the advertisement, we are pushing through the IPL.

Our brand are very popular. That's how our dealer distributor sale is also reflecting from 51%, we have now reached to 59%.

Our focus is to shift the market where the lower working capital are there, how we can improve the margin, whether from retail or from exports. Ultimately, it is resulting to increase 1%.

Now we are in the trajectory for the future where 11% to 12% operating margin, we will be operating. Earlier, our hurdle was reaching out to 11% plus.

Now we have crossed that hurdle actually.

Understood, sir. Sir, second question was on this growth versus margin trade-off.

I understand where you come from, where you don't want to grow on maybe from working capital perspective, you want to restrict growth to a certain percentage. In counters where peers are growing faster or where you might be letting go of some business, is it easy to win that back when the situation turns?

How do you think about that on competition front?

Sir, we are very old in this market, and continuously since last 15 years, we are growing at a 16% to 17%. Then we started our growth rate to 17% to 18%, then 19% to 20%.

Now we are targeting 20% plus because we are a debt-free company now, and we are continuously allocating our capital in two parts: one for working capital, another for the capital expenditure. Certain discipline and capital allocation need to be there in the company so that long-term goal, sustainable manner, we can achieve.

That's how we are going ahead with our original plan of which we giving you in 2024 while we were raising the QIP. The same kind of growth plan we were maintaining, and we will be maintaining.

These kind of discipline also we will be maintaining. Those investors, those who are dealing with us since last 5 years or even 10 years also, we are very conservative people.

Whatever we say, we try to deliver more than that.

Got it, sir. Thank you so much, and all the best.

Thank you, Umang.

Good afternoon, sir. Most of my questions are already been answered.

Just a few questions from my side. Could you share the current utilization level across cables and wires for this quarter?

I hope I heard it correct, you said 70% to 75% of utilization would be by this year, right?

No. At present, because of increased capacity of Sanand, our utilization rate is 72%.

For the future, somebody was asking that how much capacity will be for the next plant, ₹6,000 crore plant, I was explaining 70% to 75%, we will be utilizing by next year.

For the next year. Sir, at what utilization threshold would the company require another major capex cycle beyond this ongoing expansion, as you see the demand clearly coming up?

To maintain a CAGR of 20% plus, we need to continue growth of the capacity also. For that, we have given our guidance to do the capital expenditure of ₹600 crore to ₹700 crore year after year, because we need to grow every year, and then we need to add the capacity also every year.

Because whenever we go for a greenfield capex, it takes us to complete the process for the 2 year actually. Like yesterday, we announced for the Salarpur project, where we will be investing around ₹700 crore, there also, it will take another 2 years to complete construction, plant machinery, trial run production, like this.

Because

in the current market, the demand is strong because of the electrical vehicle, data center, infrastructure boom, and the global demand is also very, very strong. Please, you are asking something?

Yes, sir. I was asking about this new capex plan that you have announced.

That would be for EHV cables, right? You answered that question.

No. It is for low-voltage and medium-voltage power cable.

Got it, sir. One on the EHV cables segment side, could you please update how much of customer approvals or order inflow is coming from EHV and at what point do you expect that EHV business will become a meaningful contributor to the consolidated revenue and margins and will further increase the margins of the company?

Now

whatever capacity we are adding for extra-high-voltage power cable, close to 9% to 10% will be the contribution from EHV cable.

Got it, sir. That's all from my side.

Thank you.

Thank you, ma'am.

Yeah. Sir, thank you for the opportunity.

First, in terms of the global markets, if you could talk a little bit in terms of how we are playing across the regions, where are we in terms of the scale-up, what kind of mix can we expect next 2, 3 years in the export segment across different geographies, if you could comment a little bit on that?

I'll comment on that. In different markets, we are targeting different sectors.

Like in US, we are steadily working with oil and gas sector and also with data centers projects. Now we are also working with some distribution projects in US.

Secondly, in Australia, we are mostly working with solar and wind energy projects and also some manufacturing factories, industrial projects as well. In Middle East, our major customer base is oil and gas refineries and upstream facilities of oil extraction.

Our majorly oil and gas market is there in Middle East. In Africa, we are working with distribution and transmission utilities and also the oil refineries.

This is the major focused areas in a few of the countries where we are working in our export markets.

Any possible mix you would talk about, let's say in 3 years' time?

See, it is very difficult to determine product mix, because it keeps on varying. We have very versatile product range and production facilities.

We are able to adapt to any change in the type of products in our factories as per the market demand. How the market demand emerges is very difficult to predict.

Got it. Sir, second question I had was with respect to Sanand plant.

Given ₹2,000 crores of capex and the EHV and the non-EHV mix, how do we look at the asset turn and the total revenue potential from this facility?

Achal, earlier we told that this total ₹2,000 crore will give us a production of ₹6,000 crore. In the past experience, whenever we go for a greenfield project, after the commissioning of the full project, there is a scope for the balancing of equipment.

Then another ₹100, ₹200 crore, we are putting for balancing of equipment, which will give us the another ₹1,000-plus crore turnover. The total capacity will reach around ₹7,000 crore within 2 years' time in Sanand.

That's how we executed in the past also. If you see our Chinchpada plant, initially it was only for the wire.

Then we added the low-tension power cable over there. Then we added the few more capacity over there.

As of now, this plant is giving us very huge turnover, approximately ₹225 to ₹250 crore per month turnover is coming from the Chinchpada plant. That's how the balancing of equipments work actually.

Got it. Sir, you did make a comment demand is strong, but if it is possible to get some more color in the domestic market, how the different verticals within the demand drivers are doing, if you could talk a little bit on that as well?

See, major demand is there in India mainly in power generation, transmission, and distribution sector and also the power energy user sector, which includes data centers, manufacturing plants, urban infrastructure, and railway infrastructure. There is a strong demand in the housing and commercial spaces also.

These are the major sectors where the domestic demand is there. Now, even the thermal power projects are also in strong construction phase.

That will also be bringing substantial demand in India.

Understood. Any of these are particularly doing very well and a little bit weak, if you could call out a little bit, sir, on that?

No, I have no comments on that.

Achal, always it happens because it's a rotating demand. Sometimes demand come from transmission, then comes from distribution, then again from the generation.

It's basically move on. Sometimes the refinery products are there, sometimes fertilizer products are there.

The demand is also rotating because in every year, the capital expenditure is rotating from one sector to another sector.

Fair point. Just last question from my end, sir, and we again go back to the queue.

In terms of the demand-supply, we see that practically everybody is adding capacity. How do you see this demand-supply scenario?

Is there any risk of overcapacity over next 1, 2 years in your opinion, or things are pretty much tight for next 2 years?

Sir, whenever there is addition of capacity, it takes 2 to 1/2 years' time, 2 and 1/2 years' time to put up a project. Then another 1-year time for ramping up the production facility.

You see in our Sanand plant, we started in 2000 2023, now almost 3 years is there, now the project has commissioned, still we are ramping up. It takes time.

From your angle, you must see that so many products are coming, but those companies, those who are putting the projects, the construction time of the project is also 2 and 1/2 years to 3 years' time. Then for utilization of capacity is also 3 to 4 years' time.

It is not the case that whatever we put, we will use the capacity only in 1 year. That's how we are again guiding for the disciplined growth, that 20% plus CAGR growth we will maintain.

We are never targeting for a growth of a 35% or 40%. That's how we are having the discipline, and accordingly, the market is available.

Got it, sir. Thank you.

I'll fall back in the queue. Thank you.

Thanks for the opportunity, sir, and congratulations on strong margin performance during the quarter. Finally, the barrier of 11% has been broken.

Sir, my only question to you would be that if you look at the end of fourth quarter FY26, we were talking about roughly around 18% volume guidance. In the morning in the media interviews, you said around 25% kind of value growth for the current year.

Now we are talking about 20% value growth on YoY basis. If you can clarify Now

also I am sure that our growth in this financial year will be more than 25% in financial terms, in revenue terms. Normally in the interactions, we generally like to be conservative instead of giving too bullish numbers.

Manojji, issue kya hai ki jab bhi hum koi percentage bolte hain na, aap usme do, teen percent aur add kar dete ho. Woh hamari mushkil aur badha dete ho aap usme.

That's why we want to be conservative.

Sir, aap

outperform karte

ho, to

hum bhi badha dete hain numbers. Wahi to, ab sahab ke muh se aapne 25 nikalwa liya.

Ab aap 25 tak to simit raho. Ab aap uske upar bol doge, woh hum kar nahi payenge, very frankly.

Aaj hi mana kar dete hain, usse upar hoga nahi. Kyunki woh ek discipline nahi hai na, kyunki kisi bhi value growth ko chase karne ke liye capital required hota hai, dekhiye.

Demand is there, but it is not the case ki we need to put all our capital only for growth, then how we will maintain a future growth if we are not putting the capacity. We need two type of capital.

That's why we want to be little bit conservative. Since the same kind of growth you will see for full year, whatever you have seen in the quarter 1, because the demand is there, we have the capacity.

Our request to all of you not to add into that expectation. That is my humble request to all of you.

Sir. Sir, the only reason why I asked was, because if you look at there has been prolonged issues in Middle East, the West Asia crisis definitely would be hurting to some extent on the exports also.

Just wanted clarity because of the macro uncertainty. I do understand that the domestic growth opportunities remain very strong and robust.

Just for clarity, that question came here.

Manoj, we also explained in the past also, we need to grow, whether we need to grow from export, from domestic institution, or from the retail network. Ultimately, sale is sale for anyone.

Our purpose to focus on all the markets so that if anytime any market is having some problem, like the Middle East problem is going on, we can compensate our sale from the other market. That is the major focus area where we are trying to build that whether marketing from export, marketing from domestic, or institution.

We need to focus all the sectors. We cannot know in advance which sector will do good, which sector will not do good.

That's why that is our duty to focus all the sectors, and that's how we are continuously doing since last so many years. Your earlier wish was that when we will cross that hurdle of 11%, with all of your blessings, we have crossed that hurdle.

In future, we will be operating more than 11% EBITDA margin. That we are very hopeful.

Sure, sir. Thank you, sir, and wish you all the best.

I hope you break many more hurdles like this.

Thank you, Manoj. Thank you very much.

Hi, sir. Am I audible?

Yes, sir.

Hi, sir. Congratulations on a very strong margin performance.

Just one clarification: in the past, when you have guided for EBITDA margins, you've included other income in the same. Right now, when you're saying 11% to 12%, we should read it as EBITDA plus other income, or this is only pure operating EBITDA margins?

Sir, it is a operating margin I'm talking, because you people are always evaluate us only on operating margin. That's how the operating margin we are discussing.

Okay. This doesn't include other income then, right?

Yes, sir.

Great. Second, sorry to belabor this point, but on Sanand, like Anil was saying, it should do ₹1,500 to ₹2,000 crores this year, even if it were to come up in a gradual manner, and exports will pick up.

I'm just trying to think that what's the constraint to growth. I think you've mentioned working capital a little bit couple of times in the past and today as well.

Just if you could help us understand a little better because I think what's happening frankly is that street's extrapolating the metal price increase and thinking growth should be higher. Obviously, you're doing very well.

No complaints there. It's along the guided lines.

Just to understand the constraints to growing faster. 20%, 25% ka jaise aap bol rahe ho, 25% ka nahi hoga, wo 35% kyu nahi ho sakta?

Sir, constraint is basically the capital. You see, whatever capital

Sir, I'll tell you. When In a greenfield project, the the production ramp-up takes time in terms of manpower's test and machinery stabilization.

The hence, I have said that month after month, our new facility Because if it is a brownfield expansion, it is easier to, stabilize. In a greenfield expansion, it take it is it it has to take taken time.

That is why, month after month, our production ramp-up is coming up. Capital allocation is definitely a discipline which Rajeev has talked about.

I'm what I am saying is that we will be growing more than I mean what we are saying, much more than that. We don't want to give very very high numbers on on on as a as a guidance.

Sahi hai, Anilji.

I think that philosophy is very well understood. We just love to see a little more aggression on growth.

Margin pe what you had promised, you've delivered. Margins have come up very, very happy.

All the best to the team for the upcoming year.

Thank you very much, sir.

Good afternoon, sir. Excellent execution.

Just two questions. First on wires, can you elaborate what kind of growth are we witnessing, and also the dealer contribution has gone to 59%, how much more scope is there?

This is first question. On second, can you highlight that big projects like what the leader is executing on the BharatNet, etc.?

How are we planned in those directions of executing the big-order projects of the government? Thanks.

Sir, BharatNet is mainly for optical fiber cable supply and execution. We are not in the manufacturing of optical fiber cables, so that is out of our product range.

The second question was

On the wires. Sir, I was mentioning big ticket size products in The growth is already more than

Wire growth is already more than the cable growth, because the construction phase is going on in the country. Overall, the domestic wire and cable business is very, very strong.

Sure.

And

And

You

go ahead, sir. Go ahead.

No, please. BharatNet, I have already answered that we are not in the production of optical fiber cable.

We don't produce cables for BharatNet.

Just sir, as you highlighted a lot of times that it requires capital and then it takes time to ramp up the capacity. If the industry growth rate for next 2 years is happening at 30% or near about those levels, is it fair to say that you will up your guidance, or you will like to maintain at a guidance which you're mentioning conservative at 20%

plus? Because retail

Yeah.

We will be growing more than what we are guiding, and we will be to the level of industry standard, but we don't want to give very high numbers. That is not our policy.

Sure. Thank you, sir, and best wishes.

Thanks.

Hello, sir. Thank you for the opportunity.

I have a couple of questions. Firstly, our gross margin is at a 4 or 5-year kind of high.

I think we were at 25% gross margin back in 20 FY22. Can you tell me, is this gross margin level that we're at today sustainable?

Last 2, 3 quarters, we've seen a very sharp improvement in terms of gross margin.

Sir, because earlier, the EPC portion was higher. Now the EPC portion is not there, only the pure the cable and wire portion is there, where because of that and the product mix and the export and the retail market.

If you see the continuous last four quarter from June onward last year, September, December, March, and this first quarter, quarter after quarter, whatever we have planned for the next year, we have reached to the situation where we were in the margin range of 11% to 12%. As I explained that whenever a margin increase of any company, there are three, four leverage: one leverage is the mix of the product, then second is the mix of the markets, then the expenditure ratio versus sales ratio.

All these three are contributing towards the profit and loss. It is not only the one case where the margin has increased.

No, sir, that part is understood, sir. Just that can we expect that the gross margin should be in this range?

I get what you're saying. Sir.

Sir, and then

Sir, gross margin, because as I said, that gross margin will be in this range only. Sometimes, you see, the volatility in the market by way of the rate or by way of the demand scenario, always 1/4 to 1/2 percent margin fluctuates quarter-to-quarter basis.

That you will see or you will witness in the past results also. For the full year, it is average out always.

Now we are in the trajectory where we will operate 11% to 12% EBITDA margin. That is operating side.

Got it, sir. Sir, I just have a few more questions.

I think one of the things you mentioned was that export share of revenue will come back again. I think you mentioned this quarter's bit on the weaker side.

What would be a target on a full-year basis, what would we want to have our export as a percentage of sales?

Sir, dekhiye, ultimately, as I said, Anil has said that growth rate will be close to 24%, 25%. The first target figure will be that.

Out of that, sometimes the export will grow more, sometimes the retail will grow more, sometimes the domestic institution will grow more. It will always happen from sector to sector.

Our target to reach export at least 17% to 18% for the current financial year. Even the last financial year also, it was 16%.

Got it.

That we will be there.

Sir. Sir, and just one last question.

I wanted to confirm something you mentioned. You said this ₹2,000 crore of capex that we have done or we're underway, the revenue it can generate is how much?

I think I heard it as ₹7,000 crore, but I just wanted to confirm.

Sanand revenue originally was ₹6,000 crore, but in future, when the project get completed, with the few crores of balancing equipments, we always increase the production facility over there. That's how it will increase to ₹7,000 crore within 2 years' time.

That I mean.

This is LV and EHV all put together you're saying ₹2,000 crores will give around 7 ₹6,000 to ₹7,000 crores, right?

What Rajeev wanted to say that instead of three asset turns of three, it can go up to four times.

3 and 1/2 times.

Yeah.

Sir. Got it, sir.

Thank you, sir. Congrats on very good set of numbers.

Thank you, sir.

Sir, thank you for taking my question. Sir, this has been two quarters where not you, but most of the industry has not spoken much about volume growth.

Revenue growth has been phenomenal. What I'm trying to understand is that your commentary, some of your peers' commentary also on demand has been extremely positive in terms of how they're looking at the outlook.

As analysts, are we not looking at the right thing? I'm trying to understand with volume growth not being there, is it just that the nature of the product has changed, are you doing more high-value products, and that's how the business is going to set?

I'm just trying to understand why that disconnect between volume growth, value growth, and the positive commentary that is coming from you as well as some of your peers. Just help us understand that a little better now.

Pulkit, first of all, why we are talking on value growth, because the government expenditure budget maintain in the value terms only. If in the budget they have allocated the ₹11 lakh crore, whatever the prices gone up or gone down, can this budget expenditure they have fixed for the capital expenditure will change?

I think it will not change. Same case with the state government also.

Same case with the power generation, transmission, distribution also. Everything, allocation of the budget is there.

That's how the value prevails actually. Because of that, that I have also explained in earlier conference why we are reluctant to give the value growth.

Even in the past, even if you go back to 2018-19, 19-20, even in 17-18, continuously, the copper price was going down. In spite of that, all the cable companies were growing.

Mainly the rationale behind was that the capital expenditure allocation in the budget was in the value. Because of that, we will take the demand from the infrastructure, from the government, from the bridges, railway, transmission, distribution, generation.

Everything relate to the value only actually. That is my humble submission.

No,

fair point, sir. Your commentary is reflective of the strong outlook.

I was just trying to understand that so your view is, in a scenario that copper prices go down, then volume will do the heavy lifting so that the revenue number comes close to where we are thinking it. Sir, because

if the ₹11 lakh crore government budget is there and state government budget is ₹6 lakh crore, that budget will remain as it is, whether the copper price or aluminium price or steel price is going up or going down. Because of that, ultimately, they spent in the value, not in the volume.

Everybody make their balance sheet in the value, not in the volume.

Sure, sir.

If the capital is available in the value terms, it will also go through into the order book.

Fair point. Sure.

That is very useful, sir. Thank you so much for it.

Thank you, Pulkit bhai.

Hi, sir. Thanks for the opportunity.

I just wanted to ask you on your exports bit. You just gave a, target range of around 17% to 18% of your exports this year of your sales this year to come from exports.

Just wanted to understand, that just based on FY26 numbers, that would imply around, 30% to 40% growth in FY27 in exports itself. In the first first quarter, we've seen a decline actually of, 7%, 8%.

Does that mean you're expecting in the balance 9 months to grow at, over 50% in exports, especially given, same time last year the balance 9 months also saw 50% plus growth in exports? Is that what gives you that confidence of growing that 50% in this

Yeah. I think you are right, because we could not dispatch a lot of goods in the first quarter because of the Middle East crisis and shipments were not available, which has started now, but albeit at a high shipping cost.

Similarly, US also is opened up, which was stalled. The markets are positive, and we will be able to achieve what we are saying.

Sir, one more humble request to all of you is that sometimes what happened even in the last year, when export grows more, some of the analysts say that if the domestic demand is weak. If we need to grow 24%, 25%, whether we grow in export, grow in retail, grow in institutional market, it will be again into the 24%, 25%.

Right, sir. Thank you.

Just secondly, in your presentation in previous quarters, you would normally give that breakup of your sales across house wires, low-tension, high-tension cables. Maybe this time that breakup was missing.

If you could just share what was your house wires

No, sir. We cannot give that figure, because now the competitor was using those numbers actually.

That's why we have decided not to go for individual product-wise number actually.

Oh, got it, sir. Just lastly on the retail sales which has risen to 59% this quarter, is that a number you see sustainably going ahead, because 40% growth in the first quarter, is this a growth sustainable?

Just if you could talk about that.

Sir, as I said, we are more focusing towards retail mainly because of lower working capital requirement. Sometimes when the export order is more, we need to sell to the export market also.

This mix can get changed internally, but overall growth rate will remain.

Got it, sir. Just lastly on your other income, could you explain the drop in your other income from about ₹40 crores to

Sir, in the last year, other income was mainly because of the interest cost.

Because

QIP money was lying in the FDR, interest cost was high there.

Right. The other income that we saw in FY26, that is unlikely

to

sustain in FY27?

Mainly. Yeah.

Got it, sir. Thank you so much.

Thank you very much, sir.

Yeah. Hi, sir.

Congratulations on good set of numbers. I just wanted one clarification.

What is the kind of price hike we have took, sir, in Q1? Sir,

price hike, it is not a percentage. It is basically on the depend on the how much the copper component content is going up or going down.

Accordingly, that formula is there. It is not the base case.

It is directly on the price fluctuation.

Understood. Sir, most of the price hike has been passed on, right?

The cost inflation has been passed on.

Yes, yes, yes.

Understood, sir. Sir, thank you so much for this.

Thanks.

Thank you, Bhavani.

Yeah. Namaste, Anil.

Namaste, Rajeev.

Namaste, Bharat. Namaste.

Now when

we see most things into falling in place, we now have better production capacity available with a good runway ahead for growth to capitalize on. The export situation is also shaping up well unless Mr.

Trump comes up with something peculiar again, but other than that, overall situation looks very healthy there. Given our greater business in value-added products and increasing retailization of our wires business, and the size of opportunity continues to keep expanding at a rapid place.

In scenario like this, it is easy to feel overconfident and less worried about probably challenges which may be lurking around. What, in your opinion, could be potential spots of trouble, or what can really be a spoiler may not be a spoiler, but it can dampen if at all any issues that worries your mind?

Bharat, what the kind of business we have created with so much of widespread of customer base and in India as well as in different geographies, the purpose of creating this kind of base is that we insulate ourselves from any possible impacts, risks from any particular geography or territory. Even if we have seen blockade from USA, we have seen the wars in Middle East, which led to stoppage of shipments, but still we have been able to grow from wherever our customer base is there.

Risk factors will always nobody knows about in today's time what geopolitics does, but our aim is to remain risk-free in terms of our financial goals and our marketing goals so that we are spread over in so many countries that we are able to make up our sales from somewhere or the other. Similarly, now we are a debt-free company, to that extent, risk of any dent about some markets or some lower sales, we are insulated from that.

See, you can't have zero risk ever. How do we mitigate the risk, that is what we have been doing.

Absolutely. All those points have been very very much in evidence in terms of the prudence in which we have conducted our balance sheet, we have conducted our business, and in a very deliberated way, we have continued to grow.

I understand that external threats or challenges could materialize over which we do not have any really control. Internally, are you seeing any constraints or any issues that need to be mindful of or to be sorted out?

Internally, as we have discussed even in the past a few years, where you have highlighted earlier that the risk or the sustainability or for the capital allocation, that we have fully addressed. Even for the debt risk, we have fully now the debt-free company.

Whatever risk any investor has highlighted to us or internally we envisaged, we tried to mitigate those risk. Accordingly, we are disciplined ourselves.

Even though in spite of in this 1-hour call, everybody was saying why can't we grow 30% or 35%, even though the market is there, the debt can be arranged easily. We are still reluctant to say that we will not grow more than that only because of the discipline and the proper capital allocation policy.

That's how we have learned over a period of time in the past, and it has paid us well also. We will be keeping in our mind that good capital allocation, proper risk mitigation, and a long-term, at least for 5-year sustainable plan, business plan, we are already guiding you as well as to the complete market.

Accordingly, we are going ahead with that.

Rajeev, when do we, once again, cross or touch 30% or higher return on capital employed? Will it be in 27-28,

or Sir, no. Because of the capital expenditure is going on, so as of now, we are having 23%, 24%.

The second question, because our creditors are very low, it's because of the good financial health of the company. We are buying our metal on cash.

Otherwise, if we buy metal against the LC, it will be seeing at least 28% as of now itself. Because of the creditors, which was earlier used to be 3 and 1/2 months, it is now only less than 1 and 1/2 months.

Nahi,

main Rajivji

puch raha

tha,

27-28 mein

30 30%

ho jana chahiye, isn't it? Nahi nahi, sir.

27-28 mein, kyunki humne creditor level kam rakha hua hai na, sir. Interest cost bachate hain usme.

To agar creditor level badha denge, to wo to immediately ho hi jayega, sir. Ji, samajh gaya main.

Ek

last question. In the year of 27-28, is it possible to think of the turnover of ₹20,000 crores, or it is just being too greedy?

No. Sir, whatever we are guiding, we are guiding accordingly.

The capacity we are created, we are not created only for 1 year. It will be created for another 2 years, because the next plant which we announced yesterday, it will take another 2 years.

We need to utilize the capacity year after year.

To 28-29

mein hona chahiye mota mota, 20,000 ka jo milestone hum plan karte hain? Sir, humne aapko 29-30 ka 25,000 ka target diya hai, wo pura karke denge aapko.

Ji.

Okay. Thank you, Rajeev.

Thank you, Anil. All the very best.

Thank you. All the best.

Thank you very much, sir, for your blessings.

Thank you very much for joining this conference call. We are always available to answer any other questions or queries you may have.

Thank you so much for joining.

Thank you very much, sir.