Good afternoon, everyone. I welcome you all to the Q3 FY26 earnings call of 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 will now pass on to Mr. Kushal Desai for the opening remarks.

Thank you, and over to you, sir.

Yeah. Thank you, Ambesh.

Good afternoon, everyone, and welcome to the APAR Industries Q3 earnings call. I would like to start by giving a quick overview of our performance and then follow it up with a short industry update.

Post that, I would like to get into the specific segmental performance of the three major businesses and then finally throw open the floor to questions. Our consolidated revenue in Q3 came in at ₹5,480 crore, representing a 16.2% year-on-year increase.

This was particularly characterized by a resilient domestic business performance and a favorable product mix across all business verticals. The export business was affected due to the due to the US tariff situation.

If you look at the domestic revenues, it grew by 30% in Q3 FY26 versus the previous year, and 26.9% if you look at it in the 9-month period. Exports for the quarter were down 11.2%, contributing towards 25.6% of the company's overall revenue, compared with about 33.5% a year ago.

The US business performance remained quite subdued in Q3. This was related, obviously, with the tariff-related impacts, and especially with the announcement that took place during the quarter of what is called Section 232, where almost 400 product categories were added under Section 232, and this covered pretty much most of the cable and conductor products and resulted in an order booking which was very low in Q2, and the subsequent impact of that has happened in Q3.

However, in Q3, the order booking has been better, and I will cover that under each of the individual segments. If you look at EBITDA, the EBITDA is up 20.4% year-on-year to ₹483 crore.

The EBITDA margin stands at 8.8%. Due to the enactment of this new labor code, we have had to recognize a provision towards past service cost of gratuity, and and you know had to increase the provision amounting to approximately ₹25 crore based on the best possible estimates.

This has been accounted for under an exceptional loss. Profit after tax post this exceptional loss came in at ₹209 crore, which is 19.4% higher than the same quarter of the previous year.

The profit after tax margin is at 3.8%, which is about 10 basis points higher than the same period previous year. Now comparing the 9-month figures, the consolidated revenue has come in at ₹16,299 crore, which is up 22% year-on-year.

The export revenue has grown by 12%, and this was on the back of strong export revenues, especially US billing in the first half of the year. We billed in the first half about ₹1,600 crore, which is equal to the entire volume that we had done in the previous year.

EBITDA for 9 months is up by 23.8% and stands at ₹1,483 crore. Profit after tax at the end of 9 months is ₹723 crore, including the ₹25 crore exceptional item, and is up 26.6%.

The top line as well as the bottom line are both all-time highs for a 9-month period. In terms of some general industry highlights, India has achieved its highest-ever annual renewable energy capacity addition in the calendar year 2025, which is nearly 38 GW of solar and 6.3 GW of wind capacity.

Compared to current year 2024, the solar installations have increased by about 55%, and the wind capacity additions have increased by almost 85%, underscoring a sharp escalation in the country's clean energy deployment, and also the amount of hybrid installations coming in, which is a combination of wind and solar. As of December 2025, India's total installed renewable energy capacity has approximately reached 258 GW.

Solar energy continues to be the dominant contributor, accounting for about 53% of the total renewable energy mix. Wind power follows with 21% share, and large hydro is at 20%.

Bio and small hydro put together form the balance of approximately 6%. If you look at Additionally, India's power sector achieved a historic milestone in energy generation, transmission, and distribution as well in 2025 with a maximum power demand of 242 GW during the year.

It has reduced the national energy shortage to almost nil. On the transmission and substation addition, there is a growth momentum in this in this regard.

According to the latest statistics released by CEA, a total of 60,260 MVA of new substation capacity was added during the April to November timeframe, which reflects approximately a 55% increase compared to the corresponding period of the previous year. However, this achievement is only 75% of the planned additions in the period.

With regard to transmission lines specifically, the pace of additions still remains well off the plan. It has improved compared to the first half, where 5,077 circuit kilometers have been added in the April to December timeframe.

As a consequence, it is approximately 15% lower than what it was in the same period previous year. Now this figure up to 30th September was about 27% lower.

Clearly, there is some catch-up to be made, and the expectation is that in the fourth quarter onwards, there will be a certain amount of catch-up taking place. Coming to the specific segmental performances of of our businesses, I would first like to start with the largest business division, which is the conductor division.

In Q3 FY26, revenues were higher by 25.1% on the back of a good product mix. There was also an increase in commodity prices, which provided a tailwind.

Volume actually degrew by about 5.9%, which was largely on account of some of the delayed clearances and you know emanating from right of way as well as delays in transformer deliveries that are coming out of a lack of supply of bushings, which is resulting in some of the substation work getting delayed, and in turn, the transmission line work getting delayed. However, we have been working towards adding several new customers and approvals from utilities overseas.

The domestic revenue grew by 37% versus Q3 of FY25. The export revenue for the conductor division degrew by about 11%.

The export mix is about 18% compared to 25% in the previous year. The premium product mix remains healthy at 44.2%.

This has grown compared to 37.4% in the previous period. If you look at EBITDA post open forex, it has grown to ₹251 crore for the conductor division.

The EBITDA post forex per metric ton stands at ₹44,195 as opposed to ₹29,593 per metric ton in the same period previous year. Our order book is reasonably strong at ₹7,396 crore, of which exports is contributing approximately 32%.

The total new orders received in the 9-month period is at about ₹8,052 crore. Coming to the 9-month performance, the 9-month revenue stood at ₹8,948 crore, which is up 34% versus last year.

Physical volume grew 8.4%. The export mix came in at 21%.

The EBITDA post forex was up 31.2% to ₹748 crore, and the weighted average EBITDA margin is at ₹42,311 per metric ton, which is significantly higher than the ₹34,949 per metric ton in the 9-month previous year period. Coming to our oil business, the revenue from operations grew 18.4% with a volume growth of 21%.

The transformer oil volume was up by about 10.6%, and some of the other areas also contributed well. The automotive oil grew 14.6%.

The industrial lubricant part of the business grew 15.7%. Overall, exports contributed 42% to the division's revenue, as compared to 43.8% a year ago.

EBITDA per KL came in at ₹5,331 per KL against ₹6,364 a year ago. Foreign exchange depreciation did affect the profitability for this quarter.

On a 9-month period, we are looking at a revenue growth a volume growth of 12.3% versus a revenue growth of 5.9%. The revenue growth was a little bit lower because the price of base oil was lower in the first 6 months of the year, though overall revenues came in at ₹4,062 crore.

The domestic transformer oil business grew by 13.4% in this 9-month period. In the same period, automotive oil is up 8.9%, industrial lubricants is up 16.8%, and the export mix stood at 41% in the 9-month period.

Coming to the cable division, the revenue in Q3 FY26 was up by only 7.6% to reach ₹1,362 crore. However, the domestic business had a had a strong performance, and it grew by 34.6%.

Overall, exports degrew by 44.3%, which was basically because the US revenues were down 65% in the third quarter over the previous year. As I had mentioned in the opening remarks as well as in the last earnings call, we had practically no new order booking that happened in Q2, which resulted in a relatively lower execution in Q3.

However, having said that, we have received approximately ₹500 crore of new order inflow in Q3, a large portion of which will get billed in Q4. We expect the export business to to make to have a comeback, and the US a large portion of this is actually US business.

The export mix came in at 17.6% versus 34% in the 3-month period. The EBITDA post forex came in at 8.7% to reach ₹132 crore.

The EBITDA margin is at 9.7% due to a favorable product mix as well as there were some gains on the cable side with respect to foreign exchange as the receivables from previous periods were collected. The pending order book is at approximately ₹1,700 crore.

In the 9-month period, the cable business grew 22.9% to reach ₹4,316 crore. Domestic revenue is up 18.6% year-on-year.

Export revenue grew by 30% year-on-year, especially given the fact that we had a very strong first half. The US revenue actually for the 9-month period is 44% higher than in the same period in the previous year.

Our expectation is that overall in the year, we will be equal to or greater than what we did in the previous year. Export mix stands at 34% in the 9-month period versus 32.2% in the previous year.

EBITDA post forex grew by 24% to ₹431 crore with an EBITDA margin of 10%. In terms of just concluding remarks, I would like to mention that, the 9-month numbers have been reasonably strong.

The Q3 was affected because of the cable revenues, which are largely accounted on a DDP basis, they have a lag of approximately 60 to 70 days depending on where the client is located. We continue to see, as we enter Q4, geopolitical issues characterized by global tensions, and and even there is a certain level of commodity price volatility.

However, the domestic business continues to remain strong. The cable business and orders in the US have also improved to over ₹500 crore in the quarter.

The trade deal with the US, the discussions are still going on, but there is not enough clarity in terms of which way and when the wind will blow favorably. We've just heard of a EU trade deal, the details of which are the fine print and and the exact BTN classification numbers are still awaited, but our expectation is that it would generally be favorable for both our cable and conductor business.

On this note, I'd like to conclude my presentation and would like to open up the floor to questions, please. Thank you very much.

Hi, sir. Thank you so much for the opportunity.

Am I audible?

Yes, yes.

Yeah. Sir, first question on the kind of positive surprise on the EBITDA per ton of ₹44,000, and I can see on a 9-month basis we have done roughly about ₹42,000.

Just wanted to understand, you have highlighted better product mix. This is despite there was a challenge in US also for conductor the growth was kind of hardly 2-3%.

What do you mean by product mix? Is it the premium product where we have seen the contribution of 44 45% in 9M versus last 9M was about 37% percent?

Would you be able to explain more in terms of what is driving this strong EBITDA per ton for conductors? Also would like to understand the volumes growth.

You did highlight that there's some comeback which is happening, but what is the volume growth expectation for conductors for 4Q and probably in medium term?

Amit, hi. You are right, Amit.

In terms of the EBITDA per ton, it is largely because of increase in the premium mix as compared to the total sales of the conductor. As we had discussed earlier also, US is always one of the reasons for the higher EBITDA, but as we have been premiumizing our portfolio over the last several years, this has made a big impact in terms of increasing our EBITDA margin on a per metric ton basis.

Overall, last quarter 3, we had a premium mix of about 37 percentage, which in this particular quarter has gone to 44 percentage, due to which our EBITDA margins have been higher. Of course, as you compared with last year, last year was the lowest EBITDA margin on a per metric ton basis that we saw in the last four quarters of the year.

This quarter, because of the favorable product mix, the margins have been higher. Also, as we discussed earlier, some of the non-premium mix also, because of the shift from ACSR to AL 59, has been giving a higher EBITDA per metric ton.

All of that has contributed to a higher margin in this particular quarter. In terms of volume overall, if you see last year, Q3, Q4 was heavy.

We expect that full year should be around the YTD range that we have been getting till now on the volume growth front. That's what we expect as of now to end the year with.

Which is kind of 8% to 9% if I'm

right? Yes.

Right. Sir, second thing.

Is it fair to assume that since premium is, as you rightly said, even on the EBITDA per ton basis doing fairly well, and I can understand the premium large portion of contribution is coming in the domestic market, and we are going very strong in the domestic market. The sustainable EBITDA per ton, are you revising that guidance of ₹30,000-plus because we have been delivering exceptionally well on EBITDA per ton still, despite the US challenge?

We'll continue with the same guidance that we have been giving in the past. Of course, as we have been saying, the tailwinds are always not so easy to predict given the various macro challenges and domestic competition that comes.

Within that tailwinds, as we have more profitable orders, the tailwinds are expected to be higher. For now, we'll continue with the same guidance.

Right. Sir, in terms of commodity impact, how one should read it?

You have been highlighting that this is a pass-through. I think in the last call, you did highlight that probably the customers might be putting projects or inflows on hold because of high commodity prices, especially copper, aluminum.

If at all there's an impact, is there a chance that we might also have to take a hit, or what exactly are you anticipating for 4Q and 1Q in terms of commodity price impact, whether on the business or the margins?

You're right

In our That's true for cables both, yeah.

Yeah. You're right.

Our business model is a pass-through, we are not taking any risk on the commodity prices per se. However, you also are right what you said that if the clients who have taken the risk of the commodity prices are sort of off compared to the assumptions they have made when they've won the business, then sometimes they are waiting for the commodity prices to come down in order to go ahead with the delivery.

To the extent their projects can afford to delay a little bit, they are exercising that option of delaying some of the supplies. Right now, we have seen a little bit of that affecting us in this Q3, and it's possible in Q4 also there could be some.

Although as of now, as things stand, we feel that Q4 will be as per our original expectation. Again, if the commodity prices go up the way they have been going up since the last couple of months, then there is a possibility that some customer may face some difficulty and postpone some of the deliveries.

However, at some point, those customers will have to take the deliveries to complete the project.

Right. Sir, in terms of tariff, which is still 50%, and you did highlight in the past calls that conductors value, I think 25-30% is affected, and for cables, almost 50%.

What is the view now? Are we back on track in terms of a better performance in 4Q?

You did highlight that I think we got ₹500 crore orders. What is the status now, assuming that 50% tariff still continues?

Is it Q4 or Q1 when we see the normalized business, and how is the customer response now after the ongoing projects, which might have saw they taking the hit in terms of increased tariffs?

The current tariff situation remains the same at 54%. Whatever order inflow we have got in Q3, which is approximately ₹500 crore for the cable business, there we have had to adjust the prices down to some extent to keep the order flow going.

Mind you, there's also been some increase that has happened across the board because other countries also have had some increase in tariff, and the Section 232 has also raised the prices of products in the US. That has provided some amount of cushion.

Overall, we have had to reduce prices to some extent in order to book fresh product. I'd mentioned in the last earnings call as well that for us, the US market is a very strategic market.

We spent several years building access to customers. We've got approvals now coming in from some of the data centers and critical clients, which takes a very long cycle to get approvals from.

Our strategy is to continue to ride this period by making sure that we service customers there, even though it means at a slightly lower margin. That strategy is something that we will continue to follow.

Given a period of time, we are hoping that there will be some normalization that comes on the tariff front. Having said that, we've increased our efforts to pick up business from other areas, and the domestic market has been reasonably strong, which has offset at least in Q3 some of the deficits that we had on the export front.

I hope that answers your question.

Sure, sir. Sir, lastly, just clarification on US revenue.

You spoke about ₹1,600 last full year and ₹1,600 H1, and I think you did highlight that this year we're looking for equal to last year. Does that mean nil US revenue for H2?

Is it the right understanding?

It will be higher is what we said. Yeah.

No. What I was saying is that in the last year, the US business in the first 6 months, as you rightly said, was equal to approximately what we did in the previous year.

With the gap that we've had in Q3, as we get into Q4, you'll get back into this ₹500 crore order book which we have, a significant portion of that will get executed in Q4. Plus, we are still in discussions for additional business to come in.

Most of that will get then picked up in the first quarter of 2027. You will see close to ₹500 crore of revenue that will come into Q4 of this year.

Right.

Sure, sir. Is it possible to share the US revenue for 9-month basis for conductors and cables?

We don't have that number handy. Right now, I have the 6-month number, which was equal ₹1,600 crore was the 6-month.

I have an overall export number, which is what I gave out, yeah?

Yeah. Thank you, sir.

Thank you and all the best. Thanks.

Hi, team, and congrats for a very good set of results against, I think, more of a softish quarter what you guided last time for Q3. I think it was more of a positive surprise.

My first question is on recent FTA between India and EU. I want to understand how big the EU market is in terms of conductor and cable, and how competition is also over there.

Are there any duties against Chinese players from EU countries, and how we can approach approvals from EU countries?

Okay. The fine print of the EU deal is still something that we need to go through.

You have to actually look at each BTN number to see whether the specific products that we manufacture and are exporting to the EU are covered under a zero tariff or a lower tariff situation. The European market otherwise is very large, but the access to the market has been very restricted because the utilities there tend to prefer to buy EU manufactured products locally.

I think the assessment of this European deal and the consequence to us, it'll take us a little time before which we can really put this together. It's bound to be more positive than what it was before.

To what extent, I think we still need to gauge that.

Understood. Currently, how much of your export revenues are from EU?

About 5% of our revenues have been coming from there.

Understood. Now if I look at our conductor segment, I think if I look at domestic market since last 1 year or so, there are, I think, delays happening in terms of transmission projects.

If you look at our volume trajectory as well, maybe for this year we will close with about 8% to 9% growth on volume side. I think going into FY27, considering that there were delays in '26 and there were also issues in FY25 as well, I think how can one factor in volume growth for conductor business in FY27?

Currently there is a backlog which is there because of, as I mentioned in my opening remarks, that there is a problem of transformer deliveries because of a lack of bushings and the bushing capacity that's available. The government is actually making a concession for import of bushings, which will kick in very shortly within the next week or so.

In the meantime, the bushings capacity in India is also getting increased. Several new plants and brownfield expansions in place.

In about 6 months' time, we expect that the domestic side will also increase. As the import clearance comes in, you will start seeing the execution of some of these pending orders getting cleared.

Some of the transformers are in a half-made, not a completed sort of form or situation. That itself will end up driving demand for transformer oil as well as some of the transmission lines which have been stalled, they will also start getting accelerated.

There are some right of way issues also which have added to this. Our understanding is that there is some movement in that direction as well.

For overall Q4, as I mentioned earlier, we expect a much better execution on the ground.

Correct. That I understood.

Going into FY27, as you mentioned correctly, I think a lot of these legacy issues are kind of getting resolved. At the industry level, we will see much faster ordering and then

Our sense is that because if you see the plan which was there, we are still 15% behind the plan.

You also have a lot of new solar installations likely to be coming in both from the big business houses, from the Adani side, from the Reliance side, etc. The transmission line demand should continue to be there.

We're going to track it quarter-by-quarter because of these various approvals and things like that, but there is no slowdown expected in the trend.

As I mentioned earlier, see that some of the delays which the client could afford to do, they have probably been utilizing that leeway this year. Next year, it is possible they may have to catch up on that.

Understood. Is it fair to assume that we will return back to double-digit kind of volume growth for a conductor business?

That's clearly the target. If you see actually, if you look at the 9-month period, the growth is still pretty strong.

It's still at about 8.5% volume growth if you look at the 9-month period. Yes, we expect next year volumes to again be back to double digit.

Understood. My last question is on cable side.

I think a couple of years back, we guided for our strategic endeavor to grow at about 20% CAGR till FY28 and reach at about close to ₹10,000 crore. Where are we on those plans on the top-line growth side for cable business?

Second, I think on the EBITDA margin side, our endeavor is also to get into double-digit range, more close to 11%. I think for this year, at least, we are slightly falling behind.

How you are planning to approach margin trajectory for this particular business?

If you take the 9-month period, our revenue is up 22%. We are tracking on a 20%-plus CAGR growth.

Given the 9-month performance and what we see in terms of visibility for Q4, we should definitely be in that 20%-plus growth range. In terms of EBITDA, 9-month EBITDA is at 10%.

Of course, the US business actually, and having to make some sacrifice on pricing in the US is going to have some impact on the EBITDA in the cable business. As I said, it's a strategic call that we've taken, and our belief is that in the long term, something or the other will come up to iron that out.

In the meantime, we don't want to lose access to the market which we've developed. Overall, we've been managing between other markets, domestic, etc., to maintain both top line and bottom line so far.

Understood, team. Thank you.

Thank you so much. I'll get back in the queue.

All the very best.

Thank you.

Hi, sir. Congratulations on a good set of numbers, and thank you for the opportunity.

Sir, first question is around this new line of business announcement that you made, that ₹156 crore order. If you can talk more about it, our scope of work, and how big the opportunity is for APAR?

Actually, it's really an extension of what we're trying to do in the cable solutions space around telecommunication and the telecom products. This is really we won one package in the Kavach project, which is basically increasing the security and safety in the railway lines.

That package is about ₹153 crore. We just formally received the order today.

We received an LOI earlier. Execution timeframe is approximately 22 to 24 months.

It entails setting up signaling for improving the safety in the railways. Now Kavach projects are actually, if you see, totally the railway will be spending upwards of ₹40,000-₹50,000 crore in upgrading safety standards.

This is our initial foray into that.

Sure, sir. Sir, my second question is related to export, and this is for both conductors and the cable business.

Sir, what is the kind of conversations that customers are having now, specially in the US market, given the commodity volatility, this tariff has continued for too long now? Do they still continue to believe that they'll keep sourcing from where they were sourcing, or how are they thinking about all this situation?

On the tariff front, you have two sets of products. You have products which are aluminum-based and copper-based.

The copper-based products for somebody exporting from India, the effect is very big, very huge because there is a reasonable amount of copper production within the United States. As a consequence, the local producers are not picking up that 50% tariff.

On the aluminum front, 90% of the US aluminum is actually imported. As a consequence, directly or indirectly, whether it's in the form of a ingot, rod, or whatever stage, you're picking up the 50% tariff on an aluminum-based product.

The conversations that we have with clients are also varying depending on the nature of the product that we have. For aluminum-based products, by making an adjustment in the price, we are still in a position to make a positive margin and continue the access to that business.

Whereas on the copper side, things are very different because the US copper rates are quite competitive, and if you have to pay the tariff to export to the US, then there will be a problem. Now having said that, most of our volume so far has been aluminum-based.

Our market access will get a little bit reduced, but it's still there. Customers are still having conversations with us.

We've been exporting to that market now for several years, and our products are very well received in the US by EPC players, by asset aggregators, etc. Conversations are still happening.

That's how, in spite of everything, we did pick up almost ₹500 crore of business, new order book, in Q3. Sure, sir.

Sir, if you can quickly also give us some update on status of the capex on both conductors and the cable side, where are we on that? We are pretty much on plan.

We've already completed about ₹500-plus crore worth of capex as of Q3 out of a total plan of about ₹1,400 crore. We expect that in Q4 and Q1 of FY27, a large portion of that remaining capex will actually take place.

By September, that means by the mid of FY27, you'll pretty much have all the facilities up and running. Sure, sir.

We're on track.

Sure, sir. Thank you so much, and best of luck for the future quarters.

Thank you.

Hi, sir. Thank you for the opportunity, and congratulations, great set of numbers.

Most of the questions have been answered. Just a few clarifications I wanted to know.

First, you've mentioned that your share was hardly 5% from the European Union. Just wanted to know, this was as of last year or for the 9-month period?

It was for the last year and it's an approximate number for the last year. Sir, what's the situation before the tariffs and after the tariffs?

What's the tariff situation?

The European tariff varies between 4% and 7.5%, and there is also an anti-dumping duty on Indian players for fiber optic cables. We have to see, as I said, in the fine print that where does this actually finally land up.

It's definitely going to be more favorable than what it was before, but what will be the exact percentage for the different classes of products, that information we don't have yet. It should be something that will come out shortly.

Got it, sir. Thank you.

Sir, what will be the margin profile on this?

Having said that, we were fully aware that this whole conversation was happening between India and the EU. We have been working on getting more utility approvals in Europe.

That process is also underway. Our sense is that with the EU deal being signed and if the tariffs actually fall, utilities and other players will start taking Indian manufacturers more seriously because when you sign an FTA, it is a much longer-term sort of arrangement, it gives much more stability in terms of what the tariff situation will be over the years.

We'll be able to lay our hands on this and be able to answer some of these questions in a couple of months once data is more clearly available, but all of this is positive.

That's helpful, sir. Sir, what will be the margin profile in the new line of business, the Kavach project?

We don't talk about specific. We don't want to comment on specific projects because that opens up, because we have so many other projects which are running on the conductor side as well.

It's a profitable order and it's something that, I think is very strategic because a lot of business is going to come fundamentally in that direction.

Right, sir. Sir, just last one.

Would it be possible for you to give a breakup in terms of volume and value growth in the cables division?

Cables division, we actually report the value numbers because there is too many products involved. We have historically always been giving the value numbers.

We have thousands of different varieties of cables. We have the largest variety of cables being manufactured by an Indian manufacturer.

The only common denominator really is value.

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

Thank you.

Thank you.

Sir. Thanks for taking my question.

Sir, my question was regarding the demand drivers for the cables in the domestic market. I also wanted to understand what is the demand mix from the various sectors that we have in the cables.

We have continued to see for us strong growth coming from the renewable energy side, especially given the fact that APAR cable division is the major supplier to all the windmill manufacturers. As the wind installations are increasing, we clearly get a benefit out of that.

Renewable side has grown. The railway business also has grown year-on-year.

We are the main supplier to Medha, who's currently executing the first set of Vande Bharat trains. Again, the growth from the railway side has also increased.

We are accessing and supplying to a number of data centers in India, we've seen growth in that channel as well. There has been some amount of growth on the defense side.

These are the channels where we've seen most of the growth taking place.

Sir, how is the affordable housing and the real estate sector doing for you in terms of demand driver?

Most of that is being serviced through our dealer distribution network. For APAR, compared to some of the larger cable companies in that space, we are still relatively smaller.

We are offering premium products in the wire side. Our emphasis has not been on the affordable housing.

It has been actually on more large commercial installations, bungalows, and wherever people have laid a premium on safety. Because our products are all focused on a higher performance level with respect to safety.

We are really not very focused on the affordable housing market as much as on the more premium wires that go into commercials and real estate.

Right. Any pricing actions we have taken in the cables side in the wires as well as on the cables side post the strong run-up in copper prices?

We've actually increased prices to cover the delta in copper. The entire copper pricing has been passed through.

All the B2B orders that we take, we take it only on a back-to-back basis. Any order which is 25 metric tons or higher of copper that's involved, or aluminum, we would take a specific hedge.

In the case of smaller orders, we accumulate it until it reaches that number and then take a hedge. The book is largely hedged.

It's not only the commodity increase, but it's also the exchange rate. The effect is the dollar increase in aluminum and copper multiplied by the exchange value.

That entire thing has been factored into the pricing.

Sir, on the premiumization and on the conductor side, it's largely now around 45% odd level. To what extent it can potentially go in the medium term?

We are already in the mid-40s. It all depends on how much reconductoring work keeps coming up.

Our sense is that if you look at it in the medium term, there will be a lot of reconductoring required. As you have data center projects that are coming up, even in India, even though we have few projects which are in the gigawatt category, there are several projects which are in the hundreds of megawatt category.

These require a lot of energy. When you add that to whatever other growth is taking place, reconductoring is bound to be a larger business.

Also, our capexes are going more in those categories where there's a more premiumization. As the phase-wise expansions happen, then some of these premium products will increase in the volume for us.

It can cross 50% in revenues, but it's all a question of how the adoption of these things come. We are ready with our capex.

We are ready with our capacities, with approvals, and everything. Moment tenders come in and spending takes place, we are right there to be able to pick up our shares.

Yeah. Some of this premium products that we are making are in the copper category.

Value-wise, they will have a higher pro-rata value.

Great, sir, and congratulations on a good show.

Thank you.

Thank you, sir. Sir, I've got a couple of questions.

You mentioned that the order book has increased significantly from US in Q3, but in the cables division, we see that there has been a dip QoQ. Just can you clarify on that, and also highlight how has been the ordering trend in Q4?

Sorry, can you put your question? I think, Ramesh, the question was that the order book has improved, whereas the numbers for Q3 was

I was saying, sir, you mentioned that the order inflow has started to improve from Q3, but we see a dip in the order book for the cables division QoQ. Just some clarity on that, and how has been the order inflow trend in Q4, if you can?

What we mentioned is that the US orders dipped in Q2, due to which there was less sales in Q3. What we mentioned is that the order inflow in Q3 has gone up as compared to Q2 in the US market.

Cable business typically operates on a low order book period. Even if there are a lot of orders that comes during the quarter and also gets executed in the quarter.

Even if there are quarter-on-quarter order book reductions, typically it gets made up from the new orders that comes and gets executed in the quarter. These days, from order to delivery, the expectation is a bit shorter.

You'll find that the order book may vary, especially when you've got things like windmills coming up and solar. Every month you keep getting orders, and you execute fundamentally in three to 3 to 4 weeks.

I would not be very bothered about the pending order situation on the cable side. On the conductor side, it's a much longer-cycle business, and I think that number then is far more important.

Understood. Sir, on the domestic side, are you seeing some kind of slowdown in ordering?

Not really. If you see our domestic Q3 number is up 33.4%.

Right. Going forward, in terms of enquiry and the pipeline?

Sorry?

In terms of enquiry, future enquiries and pipeline.

We are reasonably well-placed on the domestic side. In fact, we see the domestic side on the cable business particularly being quite strong.

Okay. Just a final question.

You mentioned that you're also getting orders for data centers. If you can share what is the ticket size of these orders?

In India the data center sizes are varying very dramatically. You have right from smaller data centers which are in the 10, 15 MW These data centers are measured in terms of the amount of power they consume.

You've got in Dronagiri Adani setting up a 1 GW data center, which is in Navi Mumbai. It really varies in terms of size.

Understood.

Sure, sir. There are lots of more data centers coming up, and the requirement of cables will continuously increasing for that application.

In terms of wallet share, what would be our wallet share in total project cost for data center?

It's in the same range as what you'd see in renewables and stuff, where you're looking at it at around 3-4%, 4% also.

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

Yeah.

Hi, sir. Thanks for the opportunity.

Sir, my first question is on the cables export. If you see the exports were down 65% from US market.

However, the overall exports are down 44%. Clearly, there is some increase in other markets.

If you can highlight how we have grown in other markets and how is the growth sustainable?

Besides the US, we've been exporting products to Latin America, some products to Europe and Australia. We also have a presence in some of the African countries.

That presence continues. There is Chinese competition in all the geographies that I mentioned.

There are pockets where we have the products, we have the approvals, and we continue to grow in those areas. Some of them are utilities like Enel and where we would be supplying directly to the utilities.

Okay. Nothing different this time in this quarter that has contributed.

This is just business as usual. No, no.

This is a relatively steady business. The US piece is relatively large, and as you can see, there was less business in one quarter, the number fell.

In the next quarter, we started getting a new order inflow. In Q4, you will see that ₹500 crore is approximately the order book lined up in Q3, which will be largely executed in Q4 of this year.

Okay. Sir, second question is on the conductor side.

If we see these premium conductors like these are HTLS, AL 59, etc. As far as I understand, HTLS is mostly going into reconductoring.

AL 59 is used in coastal area. If you can highlight the demand trend for these conductor types?

AL 59 is also used in the TBCB, not just the coastal area. It is almost currently, along with the conventional ACSR conductor, comprising of maybe 98% of the market in India.

2% right now is almost like the reconductoring, very small right now. It's more of a niche area.

Okay. Also there were some news around many of the states going for premium conductors compared to replace the existing ACSR network.

How do you see the opportunity?

AL 59 is what people are using nowadays in India in a major way. It is relatively better than the ACSR, but it is still in the category of conventional, this AL 59.

Okay. Okay.

AL 59, you categorize into premium products? AL 59 is not part of that, correct?

Correct. Yeah.

It's non-premium. Yes.

Okay. It is also getting very competitive.

Okay. Sir, last question on the cable side.

If we are saying that the cables business is likely to grow at 25% CAGR year-on-year, just wanted to understand if we look at subsegments like power cables, instrumentation, elastomeric, etc. I guess power cables is the majority part of it, and we are building capex in that subsegment.

Just wanted to understand how subsegments will be growing, at 15-20% some will be growing at more than 30%. If you can highlight some of the key growth drivers for cables business.

As I mentioned earlier, for us, the key growth drivers really are coming from the addition of renewable energy, the additions in the Indian Railways, some of the growth that's happening on the defense front, and then if you look at infrastructure side, the presence that we have in MVCC and data centers. These are the major areas where we see the growth taking place, and our sense is that this is going to continue.

These segments will continue into the next year and beyond.

Okay. Sir, is it possible to give the share of, let's say, power cables in our overall revenue?

We've not been actually giving the detailed breakup of that.

Got it. Got it.

Thank you.

Hi, am I audible?

Yes, we can hear you.

Good evening, sir, and congrats for a decent set of numbers. Just one question on the Kavach side only.

Despite it is our initial contract that we got, I just want to understand what is our exact role going to be here in future as well in the upcoming contracts as well as in this contract as well?

It's a complete turnkey. It's a supply and installation of the entire system.

There is a fiber optic and a cable portion which is part of that, and then you have towers, you have the installation, there are some passive components, some active components. It's a complete turnkey.

All these projects are awarded on a full turnkey basis.

Understood. From whom we got this contract, sir?

Contract is from the Indian Railways.

Okay. Understood.

That's it from my side, sir. All the best for future.

Thank you.

Thank you.

Hi, sir. Thank you for giving me the opportunity.

Sir, my first question is in our investor presentation press release that you uploaded, you have stated that volume for the conductors were impacted due to increased competition from the non-US geographies. Can you elaborate more on that?

As per your initial remarks, you said that it was due to the transformers. Can you elaborate more on that part?

Actually, the line was not very clear, but was your question to do with the Chinese competition?

No, sir. Am I audible, sir?

You're audible. Yes, now you're audible.

Yes, sir. Sir, as per our investor press release that you uploaded, you have said that the conductor volumes were impacted due to increased competition from the non-US geographies.

In our initial commentary, we stated that we also had the volume problem in the domestic market due to transformers. Can you elaborate more on how are we looking at the trends going ahead from the both non-US geographies perspective and domestic market perspective?

Yeah. There's

two different matters, I think, which probably have got mixed up in your question. One part is to do with the non-US geographies, which are, like rest of Asia other than India, then Africa, Middle East, Europe, Latin America, etc.

There, we have been impacted due to the Chinese competition. That is one part.

The second part is to do with the transformers, where we were saying that the transformer manufacturers were not getting certain inputs like the bushings. As a result, their delays were happening for their executions, and therefore, they were delaying some of the requirement of transformer oil and the CTC.

That had impacted in a different way the demand for us. The substation also is getting delayed because the transformer is at the heart of a substation.

There, to relax this particular supply situation, the government is now allowing Chinese manufacturers' bushings to be also used in the execution of transformers to alleviate this problem.

Sir. That's really good to hear.

Sir, my second question is also we had that global approvals in the Microsoft for data center cables. Are we also going to look at the impact in the cables segment from the data center perspective in the US geography?

Are we going to Yeah.

We have been looking at that. Unfortunately for us, the US data centers largely use copper-based cables.

As I explained earlier, the pricing of copper in the US is very competitive relative to the rest of the world. It is competitive.

In the case of aluminum, they import 90% of the aluminum. The effect of this Section 232's 50% tariffs is much more on aluminum-based products and relatively less on copper-based products.

As we try to export copper-based cables from India, we would face a significant tariff differential compared to in the case of aluminum. We are not able to export very much of copper-based products at the moment until this tariff situation changes.

Until it changes, we won't be able to access most of the data center requirements.

Sir. That's that's really clear to you.

Sir, now on the perspective of order inflows in the cable segment, we saw like in the month of post-September like there were 2 months that we had the muted order book in the cable segment. How does it look from the November, December, January perspective till now, and how do we expect the trend post July like you you already said that K4 post post Q1, we will be able to normalize the business order inflows.

How has been the the month of November, December, and January, sir?

In that period, as we mentioned, we had an order inflow of cables of about ₹500 crore from the US. There is an inflow of business that has started coming in now,

yes. Sir, then my question is was it a consistent business, or it was a lumpy one order flow, or something like that?

No, it's

several orders meaning from several different customers and different projects which are involved. They're all project-related orders which we've received and are executing, or largely project-related orders.

Sir. That's It's not one lumpy project, yeah.

Sir. That's it from my side.

Thank you, sir.

Okay.

Hello. Yes.

Good evening. Am I audible?

Yes, we can hear you. Yeah.

Good evening, sir, and congratulations on a good set of numbers. Sir, a few questions.

The first one is time and again, you have been alluding to or saying that we are looking to set up our manufacturing in USA. If I recall clearly, the last call, you mentioned that US utilities usually don't buy from exporters.

They buy directly from domestic. What is stopping us actually, or are we still thinking, or what are the metrics that we are looking to so that it fits our thought process there?

That's my first question.

Basically, we are doing our studies, but as the situation is quite fluid, we are also watching the situation, and then appropriately will take decisions.

Okay. Second question, sir, is more on the recent management change that we saw in the cable solution business.

The CEO sort of resigned, and then we saw that the CEO joined our competitor. Currently, who's heading the cable solution division?

Is it then directly overlooked by you, or are we looking to

No, no. We have Mr.

Chandrashekhar Shrotri has joined the cable business. He joined on the 4th of December, he's been now in the role for almost a little over 1 and 1/2 months.

Previous to this, he worked for Siemens for 30 years and was in charge of the low-voltage business across 27 or 28 different countries. Very seasoned individual who has been involved not directly in cables, but very familiar with the customer base as well as the channels.

Okay. Also, sir, under wires and cables segment, we have guided that we will grow 25% to be precise with 10% to 11% margin range.

We have achieved that 10%, but 25% growth, we fell quite short in this quarter, and if we take 9 months, it is 22%. Do you think that with Q4 and whatever orders we have from the US because we are losing margins there, we will be able to suffice that growth, and of course, we can't get both, but can we get the volume growth that we are looking or the revenue growth we are looking for?

That's the guidance which we've given, that we will be for the year definitely 20%-plus on the revenue front. We are trying to track an EBITDA which is close to what we've delivered for 9 months, in spite of having to sacrifice some amount of margins on the US business.

Okay. Only one last question, sir, if I may.

I think we have been developing good products and technical products over the years, and now with this new capex coming up in cables as well as some part of it going to conductors, are we looking for more higher technical product like say HVDC or HVAC sort of where the industry might go going ahead due to all the surge in energy demand? Also, your quick comments on the new draft NEP that we saw that was announced by the Government of India.

Yeah.

The expansions what we are doing are having a mix of the premium areas as well as fungibility with the normal, conventional requirements also. Our efforts will be always to use our assets for the more premium products.

With the backup that in case we don't get enough orders of the premium, then we can utilize those assets for the general purpose type also.

Yeah. Exactly.

Your comment on the NEP service? Can you give some comments?

Are you talking about the announcement for the India-EU deal, you're saying?

No, no, the new National Electricity Plan that the Government of India announced wherein we have increased the guidance for FY32 to I think we have increased that guidance on National Electricity Plan.

Yeah. We are generally positive that the demand in India will continue to be good.

We've put in capex, which is if you see the commentary from some of the previous earnings calls, we've gone ahead and put capex 1 to 2 years ahead of the actual sales likely to take place simply because we are bullish on demand going forward. These days to set up the capex, the capex cycle itself is much longer, especially if you go to some of the best equipment manufacturers.

Our capacity is going to be in place for us to be able to take into account increased business flow coming in. If demand exceeds whatever has been projected, we should still be in a position to pursue that opportunity.

Sir. That's it from my side, sir.

All the best and congratulation once again. Thank you.

Hello, sir. Can you hear me?

Yes, we can hear. Please go ahead.

Yeah.

It's not a question, it's just a doubt. From what I'm hearing, with respect to renewables, the PPAs which have been signed, there is a decrease in the new PPAs that has been signing in terms of renewables mainly because of fearing the over capacity of modules and cells coming up in India.

How are you seeing the overall demand with respect to the renewables as an end user? A follow-up on that is due to the recent increase in the silver prices, renewables are becoming expensive in terms of capex cost.

Is that putting the difficulties in terms of new renewables project, which the government plans to tender out, or I just want to understand the current dynamics of the renewable energy ecosystem in India playing out.

We are seeing currently a demand coming in from wherever PPAs have already been signed and the executions are taking place. That's one aspect.

Second side is the rooftop solar is increasing everywhere, even that is a segment that results in increased requirements for wires and cables. Thirdly, the wind side, as I mentioned earlier, is growing at a faster pace than solar simply because its base is currently lower.

That forms the third sort of vertical where we're seeing growth on the renewable side. Overall, we've not seen any major slowdown.

Even the projections if you have for Q4 coming from solar and wind additions, both of them seem to be reasonably strong. We've not really seen any major slowdown on this front.

Sir. Sir, it's a follow-up on this.

Amongst the cable division, what kind of cables are you seeing a tremendous growth? Is it a high-voltage cable or a low-voltage cable?

In our case, we are very focused on certain verticals. As I mentioned a couple of times earlier in the call, that we've seen growth on the renewable side, we've seen growth in the railways, we've seen growth in defense, and we've seen growth taking place in data centers and in our medium-voltage covered conductors, in MVCC.

These are the areas where we are seeing growth. Overall, I'm sure there's growth even on the industrial and commercial side, etc., but we are not the strongest player in that category.

Understood, sir. Basically, solar and telecom cables.

Telecom and communication cables. All of these areas.

As I said, railways, defense. Data centers is also got a lot of power cable requirements.

That's copper-based or aluminum-based, MV, and MVCC is all aluminum, which is in the upgradation of the last-mile distribution, overhead distribution lines. These are all the areas where APAR is seeing the growth.

Understood, sir. Thank you, sir.

Okay.

Hi, sir. Thanks for the opportunity once again.

Sir, question on the ₹500 crore order win which you said has happened in US. What's the impact we took versus pre-tariff?

Was there an impact on margin? What are the terms for these orders, and what can we expect for upcoming orders?

You last time highlighted that for the older projects, the customers are willing to absorb, but how about this newer projects which you have won?

It's a variety of cables and from a variety of customers. Depending on what the local competition is, we've had to make some adjustments in prices.

It's varied across the product categories. Clearly I don't want to specifically talk about how much is the margin hit, but there is clearly a compromise to be made on margins, but we've seen that as that compromise is made, the order inflow is taking place.

Sure, but there would be some impact, right,

pre-tariff? There is an impact.

I wouldn't want to comment specifically. It's a big variety of cables and orders.

There is some impact. Overall, as we said, we are still targeting hitting what our guidance is for the year, and this ₹500 crore is going to help, definitely achieve the top line.

As far as the bottom line is concerned, we are trying to be within the same range as we are in today.

Is that the cables margin still will be impacted for 4Q?

There are a range of products, Amit, as that we sell in cables and different products will have different margin profile. Of course, as we said that we don't want to divulge specific information on this US project, how much the margin will behave.

Overall, we've been guiding about 9.5-10% margin, and we expect it should be around this level. YTD already we are at 10%.

We expect that our margin profile should be in similar range, more or less.

Right. Sir, more details on reconductoring.

You said it's a big opportunity. Any color in terms of market, whether in terms of maybe circuit kilometer or the value which came in, let's say, for FY20 current financial year, and what is the expectation for next two financial year?

Any data on that in terms of circuit kilometer or value? Then how the APAR is standing, is there a competition or what is the wallet share currently in terms of reconductoring, if you could explain more?

Unfortunately, there is no published data. In our own way, we are making our assessment.

Our year-to-year, it slightly fluctuates also as to how much is the breakup between the conventional type and the HTLS type. Our current estimate is roughly 2% by volume.

In HTLS, though, there is a service component of the labor to actually put up the line and some designing aspects also, which is little more value add for us. As far as future is concerned, we expect that, higher growth pro rata, it has a low base, so, it may have percentage-wise little faster growth of the HTLS compared to the conventional.

It is a much more expensive product, so, the clients are choosy when to use the HTLS, and especially when no choice is there due to ROW, then they may go for that option. If they find that there is other option, then they may go for a new line instead.

On the competitive strength, I think we have elaborated it more in detail in this corporate presentation. We've completed more than 175 projects in difficult terrains, etc., and it's more appropriately elaborated there.

You may want to have a look at that to see what are our competitive strengths in this particularly reconductoring opportunity.

Sure. Sir, this MVCC, this is also included in reconductoring, the upgradation of overhead distribution through MVCC you highlighted?

Is it also part of reconductoring?

The manufacturing of medium-voltage covered conductors are actually done in the cable business because it's an insulated product. If we take it on a turnkey basis, then our project division actually takes it on a turnkey basis.

They do the execution of the project. Today, bulk of our supplies have been going to third-party EPC players,

yeah. Understood, sir.

Thank you so much. Thank you.

Yeah. I'd like to take this opportunity to thank all of you for joining our Q3 earnings call.

As I mentioned, we continue to remain optimistic in terms of delivering whatever guidance that we had for this year. We will clearly see a higher revenue coming in from our US exports in Q4.

We also see that the fundamental demand drivers continue to remain intact, and the company is on track with respect to its capex plan and look forward to actually improved utilization of all the new equipment that comes in over the next few years as the demand for our products continues to increase. APAR is clearly the leader in carrying current in all different, between conductors, cables, transformer oils, etc., and carrying current business is going to only increase as the years come by.

With that, I'd like to end and thank you very much for joining us today. Thank you.

On behalf of APAR Industries Limited, that concludes this conference.