Yes. Thank you.

Good afternoon, everyone. On behalf of Nuvama Institutional Equities, we are glad to host the senior management of HFCL Limited to discuss the Q2 FY27 earnings.

We have with us Mr. Mahendra Nahata, Promoter and Managing Director; Mr.

V. R.

Jain, CFO; Mr. Manoj Baid, Company Secretary; and Mr.

Amit Agarwal, Head - Investor Relations. 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. This is Mahendra Nahata, Managing Director of the company.

Good evening to all of you, ladies and gentlemen. I extend a very warm welcome to all of you on HFCL's earnings call for the second quarter and half year ended September 30th, 2026, of the financial year 2026-27.

I trust you had an opportunity to review the financial results, press release, and investor presentation, which have been uploaded on the company's website as well as on the websites of the stock exchanges. It is my privilege to present the best-ever quarterly performance in HFCL's history that marks a defining moment in our growth journey.

These results reflect the increasing scale, strength, and momentum of our business and reinforce our confidence in HFCL's ability to deliver sustained growth and create enduring value for our stakeholders. Let me begin with our outstanding performance for the second quarter and first half of FY27.

Both profit before tax and profit after tax grew more than five-fold over the same period last year. Consolidated profit before tax in quarter two of FY27 reached to ₹538.60 crore as compared to ₹106.34 crore in Q2 of FY26, rising 406.49% year-on-year and 62.46% quarter-on-quarter.

Consolidated profit after tax in Q2 of FY27 rose to ₹394.22 crore as compared to ₹71.92 crore in Q2 of FY26, an increase of 448.14% year-on-year and 60.49% quarter-on-quarter basis. On half-yearly basis, the PBT grew from ₹61.64 crore to ₹870.12 crore, up by 1,311.62%, while PAT grew from ₹42.62 crore to ₹639.86 crore, up by 1,401.31%.

Consolidated revenue surged to ₹2,541.79 crore, increasing by approximately 143.62% year-on-year and by 32.73% over the previous quarter. EBITDA increased to ₹658 crore, delivering growth of 223.55% on year-on-year and 47.78% quarter-on-quarter.

Equally significant, EBITDA margin expanded to 25.89%, improving by 640 basis points year-on-year and 264 basis points quarter-on-quarter, while PAT margin rose to 15.51%, gaining 862 basis points over year-on-year and 268 basis points over previous quarter. Together, these numbers demonstrate the strength of our operating model and ability to translate rapid growth into sustainably higher profitability.

The momentum we are witnessing today reflects strategic initiatives taken and investment made by the company. We invested ahead of the curve in capabilities, capacity enhancement, backward integration, development of world-class technology products, and global market access, with a clear focus on building stronger and more scalable business.

These initiatives are now translating into meaningful business growth, which is also reflected in our export performance, representing a growth of approximately 493% year-on-year. More significantly, a growing business visibility across this strategic initiatives gives us strong confidence in our journey ahead.

I want to assure you that HFCL is on track to maintain a growth trajectory of revenue and profitability ahead. Our focus is on sustaining the pace of execution and translating the opportunity into continued strong performance.

Our order book stands at ₹28,900 crore, providing multi-year revenue visibility. Beyond this secured business, we also have a strong pipeline of orders and advanced stages likely to be converted into firm contracts in due course.

Friends, I want to emphasize that we do not see this quarter as a peak, but as the sustained phase of strong growth. Our confidence rests on robust order book, strong pipeline, and a long-term customer programs.

Our customers include some of the world's largest, financially strong technology companies with demand anchored in long-term agreements and firm commitments. As the pipeline converts into orders, we expect our order book to strengthen further.

These relationships, together with our capacity expansion and growing share of advanced optical connectivity products, gives us strong visibility and confidence in sustaining and building on the current revenue and profitability trajectory. Demand continues to accelerate across AI infrastructure, hyperscale data centers, and telecom networks.

Encouragingly, opportunities with hyperscalers and telecom operators across international markets are steadily converting into firm contracts, strengthening our order pipeline and providing revenue visibility for long term. Our sustained investments in technology, customer relationships, and manufacturing capacity position HFCL strongly to capture this long-term growth opportunity.

Friends, you will recall that we began FY27 with a revenue growth aspiration of approximately 20% over FY26. After the first quarter, I revised it to 40%.

Today, when I present Q2 FY27 results to you, I am extremely pleased to share that based on our current expectations and business visibility, we expect revenue growth of at least 80% in this financial year, 20 to 40, 40 to 80. We had envisaged achieving ₹10,000 crore revenue by FY29.

Given the momentum we are seeing, I will not be surprised if we reach this milestone much before that. Friends, to support the next phase, our planned investment of approximately ₹1,800 crore of across optical fiber, optical fiber cable, and preform manufacturing will expand capacities and deepen integration.

Our advanced cable portfolio and data center connectivity capabilities are also progressing well, strengthening our ability to serve customers as their requirements grow. Let me now turn to defense and aerospace sector, which we see as HFCL's next major engine of growth.

We are very excited by the long-term opportunity in this business. Years of investment in indigenous technology products, product development, and qualification have created a platform that we are now translating into orders and deliveries.

Our portfolio spans thermal weapon sights, surveillance radars, electronic fuzes, and multimode hand grenades. In September, we successfully delivered the second batch of thermal weapon sights for AK-203 rifles to the Indian Defense Forces.

We expect to complete the acquisition during the current quarter for aerospace business. Importantly, the aerospace business being acquired already has executed order book of approximately ₹1,600 crore, providing good visibility from the outset.

At the same time, our ambition in this sector extends well beyond this acquisition, and we are actively working on several other large opportunities. We remain on track towards our aspiration of approximately ₹500 crore of defense revenue in FY27.

We are also setting up an ammunition manufacturing complex in state of Andhra Pradesh. As I have already informed you that government of Andhra Pradesh has already allotted us 1,000-acre of land parcel to set up this complex.

Construction of this site will start soon. Together with the ongoing aerospace acquisition will further strengthen our defense and aerospace platform.

With a strong pipeline, expanding capabilities, and increasing business visibility, we are confident that defense and aerospace can emerge as a sustainably larger contributor to the company's growth in the coming years. Friends, let me close with conviction.

We believe both optical fiber cable, connectivity solutions, defense and aerospace business are on the cusp of enormous growth. In optical fiber cable, continuing demand, a strong order book, and the pipeline and deeper backward integration support our confidence.

In defense, our capabilities, deliveries, and strong pipeline are building the next leg of growth. We expect this growth momentum to continue.

The opportunity we see extends over next six to seven years and beyond. We are determined to convert it into sustained revenue growth, stronger profitability, lasting value for all our stakeholders.

Thank you very much for your continued trust in HFCL. I wish you and your families a very happy Dussehra and a very prosperous Diwali.

We will all now be happy to take your questions. Thank you very much, ladies and gentlemen, for sparing your time to joining this earnings call of HFCL.

Hello.

Please go ahead.

Thanks for the opportunity, and congratulations on a good set of numbers. I have two questions.

First question is you, your presentation mentions that you have around ₹18,500 crore of book for OFC and data center interconnect. Wanted to understand how much of that is coming from hyperscalers, and is there any concentration to specific hyperscaler in this order book?

Wanted to get a customer risk profile, if at all it is there.

Pranav, I can't obviously give you the customer names and profile. That would be confidential and under NDA.

Out of ₹18,500 crore, large portion would be from hyperscalers only, large portion. I don't have the exact number, but, yeah, maybe 70%, maybe 70% would be from hyperscalers.

Of the export orders. Of the export orders.

Now, the indigenous local orders are from telcos, mostly from telcos. Data centers are yet to pick up in India.

Whenever they pick up, we'll be supplying to them also.

Okay. Okay.

My second question is that you've given 80% plus kind of growth, and really good to see the acceleration. I think your guidance seems very conservative because it seems like flat H2, or maybe slight decline compared to what you have done in this quarter.

Is it because you are being conservative or there is a capacity constraint or there is any preform supply challenges? Any color on that would be helpful.

It is always good to be conservative, give you a lower number and surprise you by better numbers.

Okay. Basically that means that there is no supply challenges in terms of preform or anything like that.

No, no, no, not at all, not at all.

Okay. Thank you.

Good to hear that and that's it from my side. Wish you all the best for the future quarters.

Sure.

Hi. Congrats on a great set of numbers, and thank you for taking my question.

Sir, just questions around the margin, particularly given the fact that we have already hit this 26% sort of margin level right now, and I'm assuming that the interconnect and connectivity solutions piece of the portfolio will be a higher-margin business. How do you think about the margin trajectory for the business for this year and even going ahead over the, call it, next 2 years?

Look, margin profile again depends upon kind of customers, kind of cable, kind of solutions they want, because margin varies from product to product and solution to solution. On a overall basis, I would say margin profile is going to get better only.

There is no chance, I see, of getting it worse or less. It is going to get somewhat better only because more orders are coming up for connectivity solutions, more orders are coming for higher fiber capacity fiber cables which are not so much in supply by many suppliers.

The suppliers are limited. With the increase in volume, capacity, and also the kind of orders which you are receiving, there will be some increase in margin profiles.

There will be increase in margin profiles.

Understood, sir. Sir, and my second question is around the sort of demand trajectory that you guys are seeing because there's this whole noise around rates going up in the US and that could cause a slowdown in the build-out of data centers.

How are you guys seeing the demand? Is there any sort of slowdown that you guys are seeing in the near term at least?

I don't see any slowdown, because with rates going up, you have to view data centers as a point of necessity. As the rates go up, at the same time businesses wants to increase their efficiency.

Efficiency now AI has increased efficiency of the businesses by multi-folds. AI rather than being a luxury or availability to the few, it has become a common requirement and necessity.

With that kind of a necessity going around, I don't think more data centers coming up in future or the pace with which they are coming, I expect that to continue. The second point is very important, which is right now you see the growth in North America, predominantly USA.

Now, growth has not picked up as much either in Europe or in Asia. I am not talking about China because I am not really aware what is happening inside China.

Very few people would be aware. This growth has to pick up in Europe and Asia also, including India.

Middle East may be a different story at this point of time because of the political situation, but in rest of the Asia, Europe, this growth will pick up. Demand will come up from there also.

Second most important thing people may be missing, just 1 second. Sorry.

Second most important point people may be missing is the demand from telcos are also going to increase. Because finally, telcos have not been buying much since last 2 years.

Reason being simple because the prices increased so much, telcos were not ready to absorb that shock. Finally, they have realized they also need to increase their fiber network because data has to be ultimately carried from the subscriber by the telcos only in most cases.

They are also going to start buying fiber. In fact, some telcos which had not come to the market are coming up now, and we are looking at the possibility of large orders from telcos also now.

In fact, we have started receiving very concrete inquiries from these telcos. There may be if at all, I'm saying if at all, one or two companies slow down their data center requirement, the demand which will come up from Europe, from Asia, from Southeast Asia, from telcos, this is going to more than offset or rather increase the current level of demand.

Understood, sir. Sir, if I may, just a last, third question, which is around defense.

If you can help us with how you see the evolution of this business going ahead. I think we have a fairly steady order book, you guys are building capabilities.

How does the revenue from this segment look like over the, call it, next 3 years?

I can give a very short answer and a very long answer. Revenue this year, as I said, maintained ₹500 crore to ₹600 crore.

Next year, we look at least ₹2,000 crore. Aspiration is to take it in 3 years' time frame to ₹5,000 crore, around ₹5,000 crore.

Now, if we look at the sector, geopolitical situation itself will tell you that every country is strengthening its defense requirement, including India. Because defense has to be strengthened.

Particularly, our country, the way the neighbors are, we really need to strengthen our defense capabilities and government is doing it actively and promoting local industry. What we have done, developed a lot of equipment locally.

Number of them are which are currently under trial, in the last phase of trial. Like for example radars.

Certain radars we have developed are unique capability like foliage penetration radar, one trial has already taken place. Second trial is expected to happen in another 2 weeks or so.

First trial has been very successful. Second would also be successful because it is a different kind of a terrain.

Now those kind of radars, then the drone detection radar, we have already participated in a large tender for drone detection radar and jammer where it is indigenously designed. Ground surveillance radar, indigenously designed, which we are expecting export orders also for that.

These are the kind of technologies we have developed which are indigenously developed and are going to be required by our armed forces and may be export purposes also. Second area is aerospace, which we are going through acquisition, and they are also, we have a pending order book of ₹1,800 crore.

That acquisition is expected to be completed in this quarter itself. That revenue also will get consolidated after acquisition being completed.

That also has a very good export demand. This all orders are for exports, and we expect to receive large orders in this segment also in next few months' time frame.

Overall, it should not be difficult for us to reach the ₹2,000 crore figure and a ₹5,000 crore figure. We are looking for many more opportunities, many more partnerships.

Including this ammunition complex which we are creating in Andhra Pradesh, as I already told in my opening remarks, that should also start giving us revenue in about 2 years' time. We have already participated in a tender for 800,000 multimode hand grenades, which would also be manufactured at this site only.

We are pretty confident about defense and aerospace business. In fact, this provides us a second leg of growth in our business.

Hypothetically, 5, 7 years later, fiber market, if at all, stabilizes, then this sector of defense will show us growth. There are two pillars of growth in the company, which stabilizes the revenue and sustainability of profit or rather increases when the both of the sectors are going good.

Defense and aerospace, we are very positive about.

Understood, sir. Thank you.

Those were my questions.

Hi, thanks for the opportunity. Is it possible to give the split of revenues within telecom segment between conventional telcos and hyperscalers?

Say that again, I couldn't listen to you properly. Say that again.

Within the telecom revenues, the telecom segment, where we had about 2,300 odd crores of revenue, is it possible to give the split between conventional telcos and hyperscalers?

I would probably say it's something like 70-30. Something like, not exactly a number, but something more or less 70-30.

Got it. What utilization levels would this division be running at?

Look, fiber optic cable, let's divide in two parts: fiber and cable. Fiber runs 100% of our capacity.

Again, when you ask 100% of the capacity, it varies from kind of fiber you manufacture. If you manufacture 250-micron fiber, capacity is something different.

180-micron cable, machines have to be slowed down, capacity is something different, but the price realization is much higher. It is more than the 100% capacity of if it was 250-micron.

Similarly, cable depends upon who is buying cable. Somebody wants armored, somebody wants unarmored, somebody wants double jacketed, somebody wants loose tube, somebody wants tight buffer, somebody wants IBR, somebody wants flat ribbon.

You have to have different machines for different kind of cables, and not that all the machines simultaneously run for everything. Though capacity utilization is more or less 100%, but it may differ when the products are different, and kind of products which are in demand, like for example, data center products are in demand, it is running 24x7 all time.

Some telcos cable are less in demand, there may be some little bit lesser capacity. Overall in terms of money terms, whatever capacity utilization we have envisaged, that is 100%.

Okay. My second question is on the cost front.

What is the frequency of cost resets that we have in our contracts with our suppliers for preform? Just wanted to understand what kind of RM inflation are we seeing in preform, and maybe it's not hit us so far because of contracted nature, but eventually what sort of margin pressure could come from here?

Look, prices are determined on a either yearly basis or 18-months basis, depending upon contract to contract. Whichever have been our suppliers which are yearly contracts or 1.5 year, 18-months or 24-months contracts, there is no pressure on that.

Whenever those contracts expire, of course, price variation has to be there. Similarly, price is also increasing from the customers.

With customers also, we have the similar situation. On the long-term contract, the price variation clause is there on the year-to-year basis.

Year-to-year, we examine the prices and redo the prices. It can go down, it can go up.

Nowadays the time is, it is only going to go up. There is a price reset.

Hello? In both cases.

Got it. Margins you think that we would be comfortable maintaining current level of margins?

I am not only confident of maintaining, but I am confident of getting it better.

Got it. That's good to hear.

Thanks for the opportunity.

Thanks.

Hello?

Yeah.

Hi, sir. I'm audible?

You are audible. Yeah.

Thank you so much for the opportunity and congratulations for a very good set of results. Sir, first question is it's similar to the perspective you gave for the defense business from a 3-year perspective.

If you could share probably your 3-year perspective on the optic fiber business of where do we see ourselves in terms of business size over there? You did mention you're confident of improving margins also.

If you could outline what could be from a 3-year perspective the key drivers that will help you improve margins in the optic fiber business? One is the top-line perspective from a 3-year point of view and a perspective of how margins can improve in this business over the medium-term perspective.

Our margins are pretty decent even now, and there is a strong possibility of their improving. First let me come to the top line.

The top line will definitely increase because we are increasing capacity. Fiber optic fiber itself is going from 28 million to 34 and 34 to 43.

Cable is going to about from 34 to 63 million fiber kilometers. This itself would mean increase in the top line because the capacity is going up.

Then we are installing higher capacity for connectivity solutions, introducing more products than only the fiber-based products, but also the other products which are required inside the data center. That also we are introducing, and revenue would start coming maybe last quarter of the current financial year or maybe in the larger way, the beginning of the next financial year.

Anyway, this year itself, we have a connectivity solution revenue of about more than ₹800 crore we had projected, which may be better rather. Next year, we are projecting the revenue of ₹2,000 crore, which was ₹800 crore this year.

With the optical fiber cable revenue not going down, but increasing with the capacity increasing, there is every reason that we would see improvement in the top line. With the improvement in the top line, even if I maintain the current percentage of cost or the margin, the bottom line will also increase.

Percentage of margin, EBITDA or PBT you say, I expect somewhat increase in that also because of, one, higher capacity, two, more backward integration. Preform which we are introducing, this construction is going to start soon, and '28, late '28, our own preform would be available.

That would significantly increase our margin profile. One, top line is definitely increasing because of increase in capacity and higher number of connectivity solutions getting introduced, some of them are very unique.

Then the second, margin is going to improve because, one, higher capacity utilization or higher capacity available, and second, because of backward integration, third, because of connectivity solution.

Got it, sir. Thank you.

That is very useful. Sir, the second question that I have is with regards to the defense business in terms of the way in which we see this business ramping up.

You do have started reporting the segmental numbers here for some quarters now. While we see that there is not been any meaningful scale-up as yet, it's in that ₹40 crore, ₹50 crore as of now in terms of quarterly run rate.

For that 500, it seems that you will sort of at some point have to do about ₹200 crore of kind of a number a quarter. Can you help us with some visibility of what products have achieved some kind of approvals or scale, which will help us, let's say, maybe in Q3 or Q4 start doing a ₹200 crore quarter kind of a run rate for the defense business?

Look, one is electro-optic sights, which have started increasing revenue and that will increase the revenue. Number two, radars, for example, foliage penetration radar, that has almost been through approval in another couple of weeks.

That will give us good revenue. Then the second most important is aerospace business, which we have gone for acquisition, and that is getting completed within November.

That has an order book of 18- about 16- or ₹1,800 crore. That will start giving us revenue from this quarter.

All put together, ₹500 crore is not a issue. We'll surely be able to achieve.

Got it, sir. Thank you.

Just one last question, sir. In the EPC business, we do see that this quarter also there was a loss in that segment.

You did mention that with O&M revenues that should start seeing better profitability. Could you give us some sense on when do you start seeing that segment report positive numbers?

I tell you why there has been loss. First, you should understand that, and then I come to when.

Sure.

One, this Army's AMC contract is now on the final stage of approval. First year's AMC is going to be done by BSNL, means they would give us a contract, then next year onwards, it would be by the Army.

BSNL is in final stage of approval, maybe a week or 10 days, it will get approved and it will get signed. That revenue would start coming in.

That expenditure which is being incurred, large part of that would be offset by the revenue which come in because of AMC which will be started coming to us. That is number one.

Number two, last quarter, we did a lot of work for BharatNet. Because there are some defined milestones in the tender, though expenses were incurred, but bills were not raised, because the milestones are yet to be completed, verified, and you know the processes.

This engineers, what they call, IEs, and the BSNL verification, then this BharatNet Authority verification, all these [lamba lamba?] processes.

File has to go through 25 different steps, and one file the 25th step put some query, it goes back to step zero and then comes back to step 25 again. Submission of bill because of milestone issues has taken a longer time.

This quarter, those bills will be getting submitted. What had been debited as expense in the last quarter, against that, billing would be done in this quarter.

The loss which we incurred because of expenses incurred, but not billed, that will not happen this quarter. I would say this loss which you have seen ₹121 or some crore in the current quarter, in next two quarters put together should not be more than ₹75 crore to ₹100 crore.

Got it. When do we see profits reported in this segment, sir, next year?

I think, first quarter of next year, you would start seeing profit in this segment.

Got it, sir. Thank you so much for all the answers.

Thank you.

Hi. Thank you for the opportunity and congrats on a great set of quarter.

I'm just curious to understand on very high level about the India data center opportunity. We do hear from many other industry participants about the data center growth in India and how it's evolving, but is there any color you can share in terms of how the pipeline is evolving for you, what kind of engagement or traction you are seeing on that front?

Look, India data center, government is putting a lot of emphasis and lot of incentives are also coming from governments for creation of data center by state governments in terms of availability of water, availability of power, availability of land. Lot of facilities are being given.

Current capacity in India, as much I understand, is about 1.6 gigawatt for data centers. This is expected to become 6 gigawatts by 2030.

It's a good increase, very good increase, and it will generate reasonably good demand. If we compare to what is happening in US, it is miniscule in a sense that US is already having 130 gigawatt of capacity and which they want to increase to 300 gigawatt by 2030.

You can understand the difference. It doesn't mean that India is lagging behind.

If you look at Europe, Europe is also at the same situation what India is. They are not, again, as advanced as what US is.

These countries will also come up. Like India, in 4G came up all of a sudden.

We became amongst the first five in the world in 4G, 5G. Similar thing is going to happen in data center also.

In my personal opinion, the way the private investment is coming in data center, this 6 gigawatt capacity would be more than 6 gigawatt by 2030, maybe 10 gigawatts still we get. That's still is a good number.

All the major industrial houses are working on data center, Reliance, Adani, Yotta, Mahindra, all of them Tata, all of them are working on creation of new data centers. Government is also working on its own way of giving incentives to creation of data center.

I am quite positive about India, but yes, compared to North American market, we are still a lot to catch up.

Got it. Thank you so much.

Maybe my second question, just in terms of the FY29 ₹10,000 crore of number that you've given seems extremely conservative given the kind of run rate that you're already delivering. Anyway, in some way, if you can give us some guidance for FY28, both on top line and margins.

I would avoid giving any guidance for '28, but I can say, this ₹10,000 crore number would be achieved much sooner than we projected in '29, because you can see the run rate by yourself. And '28, I think we should be again, it's too early to give a guidance, but yes, we should be doing better than what we are doing now in the current quarter or the current year or current half year.

Because the reason is simple, we have order book to be fulfilled, and those orders have to be executed. With the execution of those orders, revenue will definitely go up.

Moreover, more orders are in pipeline. Capacity increase is taking place, most importantly.

With the increased capacity, of course, there would be increased supply also. Revenue numbers and top-line numbers and bottom-line numbers both are going to be better to the best of my expectation.

Unless there is some global geopolitical thing happens, nobody can predict that. Business remaining business as such, I am pretty sure that numbers would be better.

All right. Okay.

No, that's helpful. Just lastly, with current revenue run rate, what kind of utilization levels would we be running at this current point?

I already answered this question. Fiber, 100%.

Cable also, again, as I said, different kind of cable are required by different class of customers. Depending who is giving order for what, capacity utilization depends.

You have to keep the machines for every kind of cable, what customer requires, any other different customers require. Sometime a particular kind of order, machine may be working at 80% capacity or some other kind may be working at 100% capacity.

If we tend on the basis of revenue numbers, because machines have to be kept for every kind of requirement. On the revenue numbers, if you see, we are achieving 100% of capacity.

Okay. All right.

Thank you so much. Thanks for your time and thanks a lot.

Great congrats again on the great set of results.

Thank you.

Good evening, sir. Many congratulations on numbers which are better than expectations again.

Sir, I have two, three questions. The first is out of this H1 revenue of ₹4,457 crore, how much will be revenue attributable to the $1.1 billion order that we had got from the hyperscaler?

Will you be able to share that number with us?

Kush, I don't have that number in particular. Only thing I can say, we have already started delivering against that.

Okay. Apart from that hyperscaler, we have some other hyperscaler orders, sir?

Just wanted to understand.

Yes, yes, of course, we have.

Okay. Understood.

Sir, in the order book, we are seeing ₹5,000 crore of O&M order book.

Yeah.

I'm sure that would be at a higher margin than the regular business. Would you be able to quantify again the margin profile of the O&M business that you are running, sir?

Kush, it would be broadly the same. Some of them may be less also, some of them may be more.

Broadly, margin would be same as we get in the normal turnkey contract. Normal turnkey contract margin could be about let us say EBITDA margin could be something like 15% to 20%.

Okay. Also sir, you mentioned about the EPC business, there was some possibility of restructuring or some thoughts on that.

Any update?

We are already discussing that. The committee, board committee which we had formed for restructuring and we are some external advice also taking from E&Y probably, yes, E&Y, and that committee is already on the just finishing line of making their recommendation.

Once I receive the recommendation, I think maybe week or 10 days' time, we would be calling for board meeting for to discuss and take a decision on that. Another couple of weeks, I think, we should be able to finalize whatever restructuring we finally do.

EPC is, of course, one thing which is under active consideration.

Okay. Sir, obviously we are under a CapEx program of around ₹1,250 crore is what I see in preform and there may be some other CapEx.

Early thoughts because of the cash flow generation, any deleveraging thoughts going ahead, sir?

Any

any? Debt reduction.

What what?

Debt reduction plans?

Debt reduction, yes, it will happen. Already, we are repaying old debts.

We have taken some new debts for CapEx. Finally, that debt reduction will start in the current year.

You mean to say, sir, the March '27 and March '28 balance sheets, the debts will keep coming down?

Yes, it will substantially go down.

Okay. Sir, You've answered this question, but just wanted to understand, sir, in this quarter again, this is business as usual, no high-margin order, no one-time event, nothing like that in this quarter either?

No, there is no such thing that there is very high-margin business of any particular quarter. It will be as normal.

As I have said, there may be some improvement in the margin, but there is no diamonds falling down from the sky.

Sure, sir. Congratulations, sir.

Those were my questions. All the best.

Thank you.

Thank you for the opportunity. Congratulations, sir, on yet another excellent quarter.

My first question is with regards to the preform facility. We have announced the CapEx to increase and we have doubled our capacity from 300 metric tons to 600 metric tons.

We've also moved up the commissioning timeline by almost 9 to 10 months. I wanted to understand what would the progress be on this expansion?

Given that all global peers are also looking at capacity expansions on similar or larger scale, do we see any headwinds in terms of supply chain issues or any machinery delay, any of that, if you can help me, sir?

Look, there is no such significant delay. I can't give you more details on that particular aspect because of commercial confidentiality, but we are going to have a mid-term solution for our own preform starting from the first quarter of the next year itself, calendar year itself.

That is one thing which is happening. Second, this 600-ton which you talked about, there is no headwind as such, but, yes, machine supplies were, there were two, three months' delays experienced by us, which we have already taken into account when we say October '28, because suppliers also got large orders.

Like we get orders, they get orders. There is no such headwind, and October '28 timeline which you have given, that should be

met. Right, sir.

Just a quick follow-up on that. Again, with the preform facility, right now, since we're outsourcing preform, we don't really require germanium.

Once the capacity comes in, do we have any contracts or how do we plan to ensure that we have adequate supply of germanium? Could we see any impact on margins or any utilization ramp-up delays because of the availability?

Khushi, we are already talking to some of the suppliers for germanium. It's too early to finalize contracts, but we are already getting in touch with couple of suppliers for germanium from whom we have received positive response.

Right, sir. Thank you, sir.

My second question would be

Prices, of course, but germanium percentage in the overall cost is so low, price would not be much impacted. Yes, supply we have to tie up in advance, that's what we are working.

We would be needing germanium 2 years from now. We are actively working on that.

Right. Thank you, sir.

My second question would be if you could provide some color on the quarter-on-quarter trends in terms of volumes and pricing, especially if you can give a sort of bifurcation between telecom and data center, and how the data center segment has scaled up for us. What kind of revenues we saw in FY26, then in Q1 and Q2, maybe a sense of the mix that we have seen.

Khushi, quarter-on-quarter trend, I can only say the revenue which you have seen in the current quarter, there will be growth in that revenue. There would definitely be growth in Q3.

That's my best estimation as on today, barring any absolutely something out of control happening, which is like geopolitical situations, which cannot be controlled by anybody. A business going as such, there would be growth in next quarter.

Quarter-on-quarter, there is a growth expected. Next year also, there is a growth expected because the very fact that which I have told two, three times on this call, capacity itself is going on, and orders are there.

Naturally, there will be growth in revenue also. There's no doubt about that.

Growth in revenue and profitability, both are expected.

Right, sir. Any kind of split in the data center and telecom that you can provide us with?

I would generally say anywhere between data center would be 65% to 75%, telcos would be between 25% to 35%. Somewhere it will vary between that.

Sir,

this is in terms of revenue or volume?

In terms of revenue.

In terms of revenue. If you can just give a sense of the difference in realizations?

Pardon me?

Difference in pricing or realizations between data center and telecom.

Data center prices are a bit higher because they need a very specialized fiber. Telcos don't need that kind of specialized fiber, naturally, data center prices would be higher because of higher level of technology and the kind of fiber required involved.

In Q2, we have had a revenue growth of 33%, right? If you can give us a sense of the growth mix or price mix, how much is DC more than telecom?

Just a broad sense so we can understand what is the mix.

It's not comparable because the products are different. Whereas telcos most cases require D fiber, 657.D, which is fiber price is let us say roughly $15, roughly $15.

Now data centers require A2 fiber of 180-micron. The fiber price is $25, $26, $27, something like that, $25 maybe.

It is not comparable, because these are two different products. You can't compare the price of a car and an aircraft.

It's something like that. I cannot compare the prices between the two.

Relative pricing, I can say, yes, data center prices are costlier because that kind of a fiber you draw at a very less speed because it's thinner. It has to be more careful to draw the fiber because the geometries have to be maintained.

Tight-clad fibers are there. These are different products.

In terms of when you talk of revenue, per meter revenue for a per kilometer, let me say, for a data center cable is much higher than a cable required by telco because the products are completely different.

Right, sir. In Q2, have you seen any increase in the blended prices?

I understand you mentioned that each of the fiber is different and we cannot have a sense of each and every one, but on a blended level, have we seen prices go up or remain stable? What has the trend been like, if you can highlight on it?

Definitely

Q2 has really gone up. I now see more or less stabilizing.

Again, I may be completely wrong. I said this in the last quarter also that it looks to be stabilizing, but then it has gone up by some 20%.

If you ask my opinion, there may be some increase, but not as much as what you have seen in the previous quarters.

Thank you, sir. That's great.

Thank you, and congratulations once again, and wish you much more luck for the rest of the year. Thank you.

Thank you, Khushi. Thank you.

Hi, sir. Good evening.

Thank you so much for taking my question. Most of my questions have been answered.

Just one thing I wanted to understand, this is also on the margin front. If I compare our telecom margin, which is at EBITDA level must be upwards of 30%, and if I put that number for a Indian competition who is again fully backward integrated doing around 20%, and a globally very large competition like Corning, who is again much higher attach rate and much higher connecting solution doing 30%, just wanted to understand in a comparative landscape, we are doing around 32%, 33% kind of EBITDA margin in telecom business.

Is it largely because of the product mix? It is largely because of the hyperscaler mix?

What exactly is benefiting us to do this kind of margin in this quarter?

[Foreign language] [Foreign language], sir. Thank you.

[Foreign language] [Foreign language], sir.

[Foreign language] [Foreign language], sir. Anyway.

Sorry, sorry for this little, out of the context conversation. Debashish, I cannot comment on what somebody else is doing and how he is doing, because it's not possible for me to know inside of anybody else's business.

Only thing I can say what we are doing, and that is the thing I can explain. We are supplying to mostly to data centers till now, but now starting for telcos also.

Last year last quarter also, we supplied to telcos, particularly Indian telcos, not international telcos. Now we are talking to international telcos also where we think we will get some orders where telcos are now increasing their demand.

Obviously, as I said earlier, telcos have a different kind of cable requirement, and data centers have a different kind of quality as well as quantity. Quantity is also different in case of telcos and data centers, as I explained, 180-micron, 250-micron, D fiber, A2 fiber.

It depends who is doing more business of what kind, you know. If somebody's supplying more to telcos, his revenue per kilometer maybe lower.

Somebody's doing more of a high-quality fiber, maybe revenue could be higher. It's all depends upon, who is doing what.

I cannot comment on what somebody else is doing. That's not for me to comment, you know.

Everybody does what he thinks best. They must be doing whoever their best.

My good wishes to all competitors.

Sure, understood. Sir, this Yeah, please.

I don't

treat competitors as competitors, I treat them as friends.

Sure, sure, obviously. This 29-

Maybe some of them are listening to this call.

Possible, sir. This ₹29,000 crore order book that you are talking about, this will be delivered by what time, sir?

What is the timeframe to be delivered of this order book?

Look, this would be some of them are 4 to 6 months, some of them are 3 years, 4 years. Mostly up to 4 years contract, maybe.

Largely to be delivered on an average in a 2-year time frame considering that ₹10,000 crore number that, yeah, sorry.

Not necessarily. Some of them would extend to 4 years.

Now we are talking of contracts for further 4 and 5 years now. That would be next 5 years.

Oh,

understood. Sir, third question is that 600 MT preform that we are putting in, is that sufficient for the 45 million ckm capacity that will be having or we need further import there?

No,

no, that would be just half of that. Half of that.

Okay.

Rest, we will have to initially buy from outside. That is the preform we will have to buy, and our own preform would be roughly about half of the capacity.

Rest of the preform we have to buy from outside, for which we have some long-term contracts also.

Sure, sure. Understood, sir.

Thank you very much for answering my question, sir.

Thank you.

Sir. Hi.

Thank you for taking my question, and congratulations for a great set of numbers. Just as you gave the defense revenue visibility for the next 2, 3 years, your aspirations, can you also share how are you looking at your optical fiber cable business for the next 2, 3 years?

Do you have any aspiration in mind that what kind of scale do you want to reach to?

Look, as I already said, we are increasing our capacity from 34 million fiber kilometer to 63 million fiber kilometer. That itself would give us increase in revenue.

Now, how much in monetary terms is very difficult to say at this point of time, depends upon what kind of cable could be required, what capacity cable would be required, very difficult to say. But 34 to 63, you can start doing your own calculation.

34 to 63, right. Right.

Let's assume that this year you'll be about ₹8,000-₹9,000 crore of revenue from OFC, so that would translate to about ₹16,000-₹17,000

crore? I have not said that.

You have said that.

Out of 10,000, I think defense would be 500, right? The rest I think about 500 so ₹9,000 crore.

EPC is also there, telecom is also there, all of them are there.

Achha. No, I was talking about tele- yeah.

Let us say any number, doesn't matter. 34 will go to 63.

Any number you talk, 7,000, 7,500, 8,000, I am just not going into the numbers right now, but, yeah, somewhere around that, let us say 7,000, just as an example. If it goes to 63, so, you can do your calculation.

Be very careful. When I say 34 is a total capacity, some part of the capacity, for the telcos, for example, they need loose tube cable.

They may not be buying at this point of time, they may be lying idle. So, 34 is a theoretical capacity, but finally, the numbers are important, what kind of numbers you achieve.

That's what determines your capacity, because not all kind of cables are manufactured at every point of time. Generally, you can say the utilization will get better because we are now expanding the capacity of cable which are currently in demand like data center cables.

Overall, it will increase only, but you can do your own calculations on that.

Right. My next question was basically on the visibility because you just said that your order book is ₹28,000 crore and about average about 4 years is what you said, right?

That if I divide just by four, you have about ₹7,000 crore of annual revenue run rate, whereas you are talking about maybe even less than slightly less than double in three two years. It seems that we don't have any visibility beyond that ₹6,000-₹7,000 crore for now.

Is that the right way to assume or?

No, no, no, no, no, there are 4 years you are talking, more orders are going to be received. Do you think that I am going to be sitting idle not taking more orders?

Many more orders are in pipeline. Delivery will happen, orders will come.

Like when I met you last time, I think order book was ₹26,000 crore if I'm not wrong, now it has become ₹28,900 crore, almost ₹29,000 crore, it has increased. Though we have delivered ₹2,500 crore, but order book has gone up.

So, ₹25 crore plus ₹3,000 crore if you look at that, it means you have received ₹5,500 crore of more orders. We'll keep on receiving more orders.

I think orders would be more than the supply we do.

No, that I understand. I understand that you will keep getting orders.

My only point was that right now as of now, we have ₹6,000-₹7,000 crore of visibility in terms of revenue per year. Beyond that, the more

No?

See,

again you are wrong. It's not evenly distributed over 4 years, nah?

Okay.

It's not evenly distributed.

Right. Okay.

More orders will come, they would get added, more orders are coming. More capacity is being added, that is on the basis of the order pipeline and orders in hand.

You cannot say if there is a ₹28,000 crore order book and that will remain at ₹28,000 and supply would be made out of that only. I've given you one example.

In one quarter, 26,000 has become 29,000, whereas there has been a supply of ₹2,500 crore. Against ₹2,500 crore supply, you have received orders of ₹5,500 crore.

[Foreign language] next two years.

At any point of time, do you have any visibility for the next 2 years in terms of revenue?

As I already said, capacity is increasing, 34 to 63, and last question I answered this to Khushi,

and then

defense revenue I've already said we are to do ₹2,000 crore and possibly ₹5,000 crore in next 2 years. That should give enough visibility that there is going to be a reasonable growth in revenue and bottom line, both.

Perfect. Thank you so much for answering my questions.

Thank you.

Sure.

Hi, sir. Thank you for taking my question, and congratulations on a good set of numbers.

My question pertains to the defense segment. Basically, we did around ₹80 crore of revenues in the first half and we are aspiring of around ₹500 crore in FY27.

Basically, I just wanted to understand this gap, how much of this gap-

Hello? Hello?

Sir,

Hello? Congratulations on a great set of numbers.

I just had one broad level industry-related question, sir. For the next few years, right, you have roughly ₹30,000 crore of order book, right, which will drive the growth plus you'll get more orders from there.

Post let's say FY29, right, what kind of CapEx from hyperscalers, from AI data centers will you need to maintain a 14%, 15% growth rate from there on?

CapEx we have already announced that pending CapEx is ₹1,800 crore.

No, not from your side, sir, from the consumers.

What I have heard of, I don't recollect the number, but I think they have been talking of $35 billion something like CapEx for growth of data centers in US alone, US alone. Now, if you

Currently it is around 8 $800 billion for this year only.

Yeah. I may be wrong on those numbers, don't hold me on that number.

It may be very different number, but it's in billions of dollars and I don't have that number in my mind right now.

Okay. Sir, I also wanted to understand how you're targeting ₹800 crore of connectivity revenue in this year, what was that number in Q2?

You're talking about?

Connectivity.

Connectivity. Q2, I don't have the right number.

Total is 800. Q1 you

Hello?

Just 1 second, I will try to get the number for you.

If

I think, you should take another ₹300 crore, ₹200 to ₹300 crore, something like that.

Okay. That's for Q1 or Q2, sir?

No,

no, I am talking about this Q2.

Okay.

It should be about ₹300 crore plus, I think, ₹300 crore should be there.

Okay. Thank you, sir.

Thank you for the opportunity and congratulation on a strong set of numbers. Most of my questions have been answered, but one question I would like to have clarity on is on the interconnect revenue in quarter two as well as quarter one FY26 and what we expect for the full year FY27.

I have already answered this question that ₹300 crore is our expectation for quarter two and ₹800 crore is our expectation for the whole year.

In quarter one? Quarter one Just 1 second.

Quarter one was nil, there was no quarter one. Quarter one was

nil. That was helpful.

Thank you, that's all from my side.

Yeah.

Congratulations on the stellar set of numbers, sir. I had just two questions.

My first question is from Q1 to Q2, you had around 40% quarter-on-quarter growth. How much of the growth came from the volume increase versus realization increase?

In this, going forward in Q3 and Q4, do you expect further realization increase or not? Is there any capacity for more volume growth in next 2 years?

Look, this growth came from volume and price, both. It's not only price, not only volume, it came from both of the things.

Production also increased and prices also became better. The same trend is going to continue in future also.

It would come from both sides, volume and pricing both. Now, how much would be volume, how much would be price, it's very difficult to say.

Price, how much will become better or remain stable, is very difficult for me to say now. Because different cables have different prices, different customers have different prices, different type of cables and fiber is there.

It's very difficult to say like that, but overall there will be growth, that much I can say.

Sir. That is great.

It would be better if I can get some ballpark number, by any chance.

It is

more than 50 like ratio is 50-50, 60-40, or 70-30, that would be great. I

cannot give you ballpark number. If I give you, that would be incorrect statement, though.

Sir. No problem.

Sir, my second question is on how much was the revenue from connectivity in Q2? That you answered rightly.

What is the trend can we see going forward?

I have already told that three times in this call that we expect ₹800 crore this year, ₹2,000 crore next year.

Thank you.

Thank you so much for the opportunity. Am I audible?

Yeah.

Congratulations on a good set of numbers. Sir, I know previous participant had asked a question on probably on volume, value mix, but we of course get it, that's volume growth coming from the new fiber as a cable capacity is going live.

Just wanted an understanding on pricing terms. When you say, sir, the prices have increased, let's say, by 20%, 25% Q-on-Q, and because these are prices of market, right, but then we have entered into contracts which are long-term in nature.

Are we able to pass on this complete 20%, 25% given our contracts are long term or is there a certain extent to which only this pass on happens?

Tejas, one thing. When I say 20%, 25%, it's not for every raw material.

I am talking about fiber.

20%,

25% fiber is there. There are other raw materials also.

Gases are there, there are plastic products are there, jelly is there, there are many other products. Not that every product has gone up by 20%, 25%.

That is one. Second, whenever there is a price increase, there is a negotiation between the buyer and seller, and some equilibrium is always reached.

That neither their purchase price is affected too much in percentage, nor our profit margin is impacted. There is a price reset clause in most of the cases.

Most of long-term contracts, there is a price reset clause. Short-term contracts of 4 to 6 months, there is no reset clause.

In their cases, if prices of raw material go up, we have less margin. In those contracts which are 4 to 6 months, the price is always higher than there would be a 5-year.

All these things get balanced out finally.

Superb. Superb, got it.

Sir, in between you said you are probably having a mid-term solution for our own preform, starting from first quarter. If you could elaborate on this, what exactly is the solution?

I can't elaborate, this is a trade secret.

Okay. No problem, sir, no problem.

Sir, my last question is, sorry. Yeah.

There is a mid-term solution, but I can't elaborate more on that.

Okay. Okay.

Sir, but does this reduce cost? Is it something related to process or something or is it some sourcing strategy?

I would only say that it would reduce cost.

Okay. Superb.

Sir, one last question is, sir, when you say, we're probably putting up a facility for connectivity as well and we are guiding good numbers towards connectivity as well, all these business of connectivity, is it all of scale across, that is between the data centers and within the campus? We are yet to still sell a solution or make a product for completely that goes inside the data center, right, because we will be needing separate certifications for that, right?

Is that understanding correct?

Look, what connectivity we are doing, it is inside the data centers. That certification is already there.

That's why we have started supplying and generating revenue out of that. Now when you talk of certification, every data center does not require same kind of connectivity solutions.

If somebody else requires a different kind of connectivity solutions, he would definitely do his own testing and qualification again. Not again, for the first time maybe he will do that because they're different kind of a connectivity solution.

That is an ongoing process which always continues because cable also same thing. People require different kind of cable.

If they buy a particular kind of cable for the first time, then qualification will have to happen. That's a continuous process.

Superb. Superb.

Sir, last question. In the presentation we have put up, stating margins of let's say greater than 27%, but today, just wanted to get your views not on margins, but a broader scenario.

Today a lot of it has to do with the prices which optic fibers are currently at, right? Let's say a lot of these global players have announced capacity increase of almost like 40%, 50%, we ourselves are almost like doubling our capacity, same is with our peer.

So 2, 3 years down the line, the preform capacity also would be coming in. I'm just trying to get an understanding on your views on the prices, let's say, would get impacted because of this supply, how are we probably thinking on margins when today we are saying we'll be able to maintain 27% margins 2, 3 years down the line?

I tell you. Preform prices will have to come down.

Right now, the preform if you want to buy from market, we are not buying from market because we have a pre-done contracts, we have not a issue. If you try to buy from market, it's an insane price, insane.

That has to come down. It cannot continue.

They have gone up by 600%. 600%.

I don't have to suffer because of that because I have a predetermined contracts and those are being supplied. That's insane because that's something non-availability.

They have to come down. This 300 metric dollars per metric ton cannot continue, but per kg, sorry, not metric ton, it cannot continue.

They will come down. Once the capacity increases, they have to come down to reasonable level, which is equivalent to the prices of the fiber which is available at this point of time.

Those prices, current prices are insanity and is a factor of non-availability. If somebody ask you, what is the price of something like X, which is not even available, then you quote any price, how does it matter?

That price right now is insanity. It has to come down.

That what it means that there is a very less capacity than what is required. That capacity is required, it has to come up.

That would not mean any dent on the profitability of company like ours because this we don't have to pay $300 in any case. It has to come down because it has to come down to realistic level.

These are the prices of non-availability.

Perfect. Great, sir.

I have a few more questions, would love to connect offline. Thank you so much

and

all the best.

Anytime.

Yeah. [Foreign language] [Foreign language]

[Foreign language]

Sir, just to continue on the aspect which you were just alluding to, particularly with respect to the preform availability and the insane prices. Taking into account the cyclicality factor, sir, [Foreign language], what, according to you, are the key risks currently associated with our business in terms of OFC pricing and this non-availability of the key raw material that has contributed to the improved realization?

Sir, how will you summarize [Foreign language] scenario play out [Foreign language]?

Look, I tell you. Raw material availability, we need germanium after 2 years.

We have already started talking to suppliers for germanium. Now, my preform suppliers at this moment have not talked to me of any less availability of germanium.

It means germanium is available to them. If it is available to them, it will be available to us also.

I don't think there is such a short supply that it would inhibit production of preform in a great quantity, because it is available from several companies. Country to country, they have export restrictions, but it's not that these are not available.

In 2 years' time, we will definitely need it and we have already started talking to suppliers. Right now, it is not impacting us.

I do not have any knowledge about how it is impacting others. I have no knowledge of that.

From 2 years from now, geopolitical situation may be completely different. This shortage or so-called shortage is geopolitical, not really the shortage of raw material for the any natural reason.

Right, sir. That only what would to factor it into the pricing also for the end product.

Do you think that this is the sustainability of these margins going ahead? Secondly, with the type of cost of finance that has gone up, especially for the US market, and lot of the data centers being funded through debt, how will these two scenario put pressure on the viability of even the data centers going ahead and then the entire story that has been planned out for 4 to 5 years?

Just to have a understanding from you people as you are the veteran in the industry. Hum sir, kaise placed hain abhi ye pure chakravyuh mein, sir, just to your thought on the same?

As far

as data centers are concerned, people have a rational mix of debt and equity of the large hyperscalers I'm talking about, large hyperscalers like Google, Meta, Microsoft, OpenAI and all that. If you look at the orders which companies like NVIDIA with GPUs, which are primary suppliers for data centers, if you look at their demand, they have huge demand, they cannot fulfill.

It means data centers are coming up. Now, even if there is some percentage less of data centers come up because of cost of capital increase who are heavily reliant on debt, heavily reliant on debt, which obviously the major hyperscalers are not, in that situation, as I already talked, there will be demand coming up from Europe and Asia, which have not yet started in a meaningful manner.

That will offset that particular less capacity expansion of that data center which are heavily reliant on debt only. Rest, who are not heavily reliant on that would continue, because the company are strong companies.

Then the demand for data center emanates from more data being generated, which AI is generating. Now, if you say, what happens if AI does not happen?

I cannot say on the comment on that, but I don't think that there is any reason that AI will not happen. Some restriction may be there on use of AI for nefarious purposes, but AI is so much beneficial to humanity that it will keep on increasing its utilization and therefore data will keep on growing.

I don't foresee any big risk out of its interest rate change, except there may be some closures, some less expansion in heavily debt-reliant companies, but that would be offset by Asia, Europe, and demand of telcos, as I have already said. Thank you.

I think, all questions that can be there have already been answered. Any further question would only be repetition only.

Still, any of you have any further query which is left unanswered, please send a mail to Amit Agarwal and we will immediately reply that. The last question.

Thank you very much, gentlemen. Thank you very much, ladies and gentlemen, for being on the call.

I really appreciate your presence and again give you my look out for the business that business is going to remain positive, business cycle is good, and there would be sustainability in the revenue and profitability of the company. Thank you very much.