Q1 2027 KEI Industries Ltd Earnings Call

Speaker #1: Ladies and gentlemen, good day and welcome to the KEI Industries Q1 FY27 earnings conference call, hosted by Nuwama Institutional Equities. As a reminder, all participant lines will remain in listen-only mode.

Operator: Ladies and gentlemen, good day, and welcome to the KEI Industries Q1 FY27 Earnings Conference Call hosted by Nuvama Institutional Equities. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing * then 0 on your touchtone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Achal Lohade from Nuvama Institutional Equities. Thank you, and over to you.

Speaker #1: And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touch-tone telephone.

Speaker #1: Please note that this conference is being recorded. I will now hand the conference over to Mr. Achal Lohade from Nuwama Institutional Equities. Thank you, and over to you.

Speaker #2: Yes, thank you. Good afternoon, everyone. On behalf of Nuwama Institutional Equities, we are glad to host the senior management of KEI Industries Limited to discuss the Q1 FY27 earnings.

Achal Lohade: Yes. Thank you. Good afternoon, everyone. On behalf of Nuvama Institutional Equities, we are glad to host the senior management of KEI Industries Limited to discuss the Q1 FY27 earnings. We have with us Mr. Anil Gupta, Chairman-cum-Managing Director of the company, Mr. Rajeev Gupta, Executive Director of Finance and CFO. We will start the call with the opening remarks from the management and then move to Q&A session. Thank you, and over to you, sir.

Speaker #2: We have with us Mr. Anil Gupta, Chairman and Managing Director of the company, and Mr. Rajiv Gupta, Executive Director, Finance, and CFO. We'll start the call with opening remarks from the management and then move to the Q&A session.

Speaker #2: Thank you, and over to you, sir.

Speaker #3: Thank you, Achal. Good afternoon. I'm Anil Gupta, CMD, KEI Industries Limited. I hope that you must have received a brief of our Q1 results.

Anil Gupta: Thank you, Achal. Good afternoon. I am Anil Gupta, CMD, KEI Industries Limited. I hope that you must have received a brief of our Q1 results. It must be with you. I will give a brief. The net sales in Q1 of FY 2026, 2027 is INR 3,185 crore against INR 2,590 crore last year. Growth in net sales is 23%. However, the total wire and cable sale in Q1 has grown by 24.4% against previous year. During Q1 2026, 2027, operating margin has improved to 12.43%. Margin has improved mainly because of the product mix and operational efficiencies. EBITDA in this quarter is INR 415 crore against INR 297 crore last year. Growth is around 39.5%. EBITDA/net sales margin is 13.04% as against 11.49% in the same period previous year. Profit after tax in this quarter is INR 274 crores against INR 195 crore. Growth in the PAT is 40%.

Speaker #3: It must be with you. I'll give a brief. So, the net sales in Q1 of FY26-27 is Rs 3,185 crore, against Rs 2,590 crore last year. Growth in net sales is 23%.

Speaker #3: However, the total wire and cable sales in Q1 have grown by 24.4% against the previous year. During Q1 26-27, the operating margin has improved to 12.43%.

Speaker #3: Margin has improved mainly because of product mix and operational efficiencies. EBITDA in this quarter is Rs. 415 crore, against Rs. 297 crore last year. Growth is around 39.5%.

Speaker #3: EBITDA to net sales margin is 13.04%, as against 11.49% in the same period of the previous year. Profit after tax in this quarter is ₹274 crore, against ₹195 crore. Growth in the PAT is 40%.

Speaker #3: PAT/net sales margin is 8.61% against 7.56% in the previous year same period. Domestic wire and cable sales in this quarter is Rs 2,784 crore.

Anil Gupta: PAT/net sales margin is 8.61% against 7.56% in the previous year same period. Domestic wire and cable sale in this quarter is INR 2,784 crore. It has registered a growth of 29%. Export sale in this quarter is INR 341 crore, against INR 375 crore previous year. The export is impacted because of non-execution of several orders of Middle East because of the war with Iran and also due to the custom duties issues in United States. For a full year guidance, the export will be grown substantially and will be in line with our guidance as it is given earlier. Total sales of Extra High Voltage cable is INR 186 crore against INR 126 crore in the same previous period. Growth in EHV sale is 47%. The contribution of sale through distribution network, that is B2C, is 59%. Total active working dealer of the company as on 30 June is 2,128.

Speaker #3: It has registered a growth of 29%. Export sales in this quarter are ₹341 crore, compared to ₹375 crore in the previous year. The exports have been impacted because of the non-dispatch or non-execution of several orders from the Middle East due to the war with Iran.

Speaker #3: And also, due to the customs duties issues in the United States. However, for full-year guidance, exports will grow substantially and will be in line with our guidance given earlier.

Speaker #3: Total sales of extra high-voltage cable is Rs 186 crore, against Rs 126 crore in the same period of the previous year. Growth in EHV sales is 47%.

Speaker #3: The contribution of sales through the distribution network, that is B2C, is 59%. The total number of active working dealers of the company, as on 30th June, is 2,128.

Speaker #3: EPC sale is Rs. 43 crore against Rs. 61 crore last year. Out of the total sales of EPC, EHV EPC execution sale is Rs. 18 crore.

Anil Gupta: EPC sale is INR 43 crore against INR 61 crore last year. Out of the total sales of EPC, EHV EPC execution sale is INR 18 crore. Sales of stainless steel wire in Q1 is INR 53 crore against INR 51 crore in the previous year same period. Pending order book is INR 4,292 crores, out of which EPC is INR 271 crore, Extra High Voltage cable INR 793 crore, cable domestic INR 2,400 crore, and export orders pending are INR 822 crore. The long-term rating from CARE Ratings Ltd and ICRA is AA+, and short term is A1+. Book value as on 30 June is INR 725.94 against INR 697 as on 31 March 2026. Cash and bank balances as on 30 June is INR 1,054 crore, which includes QIP balance of INR 303 crore. Interest income from bank deposits for others in Q1 is INR 14.59 crore, which is included in the other income.

Speaker #3: Sales of stainless steel wire in Q1 is ₹53 crore, against ₹51 crore in the previous year's same period. Pending order book is ₹4,292 crore.

Speaker #3: Out of which, EPC is ₹2,271 crore; extra high-voltage cable, ₹793 crore; cable domestic, ₹2,400 crore; and export orders pending are ₹822 crore. The long-term rating from Care India Ratings and Research and ICRA is AA+, and the short-term is A1+.

Speaker #3: Book value as on 30th June is ₹725.94, against ₹697 as on 31st March 2026. Cash and bank balances as on 30th June are ₹1,054 crore.

Speaker #3: This includes a QIP balance of Rs. 303 crore. Interest income from bank deposits or others in Q1 is Rs. 14.59 crore, which is included in other income; it was Rs. 28.77 crore last year.

Anil Gupta: It was INR 28.77 crore last year, in the previous year. The company had raised INR 2,000 crore through QIP on 28 November 2024. Out of which company has utilized QIP fund of INR 1,785 crore up to 30 June, and unutilized amount is INR 303 crore, which includes the interest on FDRs of QIP amount. Future outlook. During Q1, the company has incurred a capital expenditure payment of INR 191 crore, out of which Sanand CapEx is INR 180 crore. Total CapEx done in Sanand up to 30 June 2026 is INR 1,722 crore. Another INR 300 crore will be spent in this financial year. Company is expected to incur capital expenditure of approximately INR 600 to 700 crore annually for next three to four years.

Speaker #3: In the previous year, the company had raised Rs. 2,000 crore through QIP on 28 November 2024, out of which the company has utilized QIP funds of Rs.

Speaker #3: 1,785 crore up to 30 June, and the unutilized amount is 303 crore, which includes the interest on FDRs of the QIP amount. Future outlook: during Q1, the company has incurred a capital expenditure payment of Rs.

Speaker #3: 191 crore, out of which Sanand Capex is 180 crore. Total Capex done in Sanand up to 30th June '26 is 1,722 crore. Another Rs...

Speaker #3: Rs 300 crore will be spent in this financial year. The company is expected to incur capital expenditure of approximately Rs 600 to 700 crore annually for the next three to four years.

Speaker #2: Okay, 51.

[Analyst] (Axis Capital): Capacity one.

Speaker #3: Capacity utilized during Q1 is approximately 72% in the cable division, 61% in the house wire division, 91% in the stainless steel wire division, and 45% in communication cable.

Anil Gupta: Capacity utilized during Q1 is approximately 72% in cable division, 61% in house wire division, 91% in stainless steel wire division, and 45% in communication cable.

Speaker #3: Sanand capacity addition is taking time to ramp up, and in the coming months, capacity utilization will increase month after month. So now, we also have sufficient capacity to grow in wire and in wires and flexible segments for the next two to three years.

Rajeev Gupta: Sanand capacity addition is taking time to ramp up, and in coming months capacity utilization will increase month after month. Now also we have sufficient capacity to grow in wires and flexible segments for next two to three years. Based on the strong demand in domestic and overseas markets, we are able to grow more than 20% in next two to three years. There is a good demand in data centers and related energy segment in power transmission and distribution segment, renewable energy like solar and wind, electric vehicles, infrastructure, railway electrification, urban infrastructure and manufacturing, in domestic as well as in global market. Also, the wire demand is strong in housing sector and in commercial spaces. This is a commentary from the management side.

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

Speaker #3: Also, the wire demand is strong in the housing sector and in commercial spaces. This is just a commentary from the management side.

Speaker #2: From market companies.

Operator: From market comparison.

Speaker #3: We are very, you know, bullish about the market. We hope that, with a strong market outlook in the domestic as well as our export markets, the company will outperform in the domestic as well as export markets and will be continuously growing year after year.

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

Speaker #3: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Natasha Jain from PhillipCapital. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take the first question from Natasha Chen of Philip Capital.

Speaker #1: Please go ahead.

Speaker #4: Thank you for the opportunity, sir. My first question is on the wires and cables margin. Now, there has been a sequential sharp rise in wires and cables, from 12.4% to 13.6%.

Natasha Jain: Thank you for the opportunity, sir. My first question is on the wires and cables margin. Now there has been a sequential sharp rise in wires and cable from 12.4 to 13.6. If I see sequentially the OpEx number, that's pretty much flat despite we've gone aggressive on the retail side, which is a high margin but a high spend channel. Even full commissioning of the Salarpur plant should bring in some cost on the P&L. So could you throw some light here that what line item has remained consistent? Because ideally, OpEx probably should have grown faster and even on a year-on-year run rate, this is the slowest that we've grown in terms of OpEx.

Speaker #4: If I see sequentially, the OPEX number is pretty much flat, despite us having gone aggressive on the retail side, which is a high-margin but high-spend channel.

Speaker #4: And then, even full commissioning of the Sanand plant should bring in some cost on the P&L. So, could you throw some light here on which line item has remained consistent?

Speaker #4: Because ideally, OPEX probably should have grown faster, and even on a year-on-year run rate, this is the slowest that we've grown in terms of OPEX.

Speaker #3: Look, as we have earlier also highlighted, as the incremental sale is going up, the fixed expenditure does not increase in that way.

Rajeev Gupta: We have earlier also highlighted that as the incremental sale is going up, the fixed expenditure does not increase in that way. Accordingly, the expenditure versus sales percentage, if you compare it, is low and little bit because of the product mix, it is getting changed and some export we have the good margins order, all are reflecting in the P&L of the balance sheet. We have already crossed now hurdle, which was earlier that less than 11% operating margin we were operating. Now that hurdle we have crossed, and we hope that now we will be in the range of 11% to 12% operating margin for the coming year.

Speaker #3: So accordingly, the expenditure versus sale percentage, if you compare, is low. And a little bit, because of the product mix, it is getting changed.

Speaker #3: And for some exports, we have good margin orders, so all are reflecting in the P&L and the balance sheet. And we have already crossed the hurdle, which was earlier—operating at less than 11% operating margin.

Speaker #3: So now that hurdle we have crossed, and we hope that now we will be in the range of 11% to 12% operating margin for the coming year.

Speaker #4: So you mentioned that you've gotten some high-margin export orders. I remember in previous calls you've always highlighted that exports are a similar margin business for you as they are in domestic.

Natasha Jain: Sir, you mentioned that you've gotten some high margin export orders. I remember in the previous many calls, you've always highlighted that export is a similar margin business for you as like it's in domestic. Have we now got orders which are better margin?

Speaker #4: So, have we now got orders which are better margin?

Speaker #3: It is always when the demand is strong, and in the global market the demand is strong, so a little bit it is increasing, as you also witnessed that earlier our retail sale was close to 50, maybe a 1% contribution.

Rajeev Gupta: It is always when the demand is strong, and in the global market, the demand is strong, little bit it is increasing. As you also witnessed that earlier our retail sale was close to 51% contribution, which has now increased to 59%. Put together all, it all reflecting in the P&L.

Speaker #3: Which is now increased to 59%. So, put together, it's all reflecting in the P&L.

Speaker #4: Got it. And sir, on the wires and cables segment, the next question is—I mean, the value growth has been 25%. But if I see now, given all the peer set numbers have come out, I think the industry has grown by 33% to 35%.

Natasha Jain: Got it. Sir, on the wires and cables segment, the next question is, the value growth has been 25%, if I see now, given all peer set numbers have come out, I think the industry has grown by 35%, 33% to 35%. Given pricing growth in itself is north of 28%, I know you don't give volume breakup, could you at least tell us qualitatively as to are we prioritizing EHV or losing market share on the LV side, or what's happening in the volume mix?

Speaker #4: Given that pricing growth in itself is north of 28%, I know you don't give a volume breakup, but could you at least tell us qualitatively whether we are prioritizing EHV or losing market share on the LV side, or what's happening in the volume mix?

Speaker #3: Ultimately, it is not the case of losing market share because the demand is very, very strong. Because every sale requires capital. So whatever capital we are having—we have earlier guided also to grow close to 20% plus kind of growth because we are continuously having a CAGR growth target of 20% plus—accordingly, we need to put more and more also on the capital expenditure.

Rajeev Gupta: It is not the case of the losing market share because the demand is very strong. Every sale required the capital. Whatever capital we are having, we have earlier guided also to grow close to 20% plus kind of growth because we are continuously having a CAGR growth target of 20% plus. Accordingly, we need to put more and more also on the capital expenditure. Yesterday we also announced our new capital expenditure in our Bhiwadi factory, that is Salarpur, where we will put around another INR 700 crores to put another factory in next 2 years' time. It will go hand in hand. Whatever capital we are having, we are allocating at the same time towards the growth of the company as well as for the creation of the capital expenditure.

Speaker #3: And yesterday, we also announced our new capital expenditure in our Bhiwadi factory—that is, Salarpur—where we will put around another ₹700 crore.

Speaker #3: To put another factory in the next two years' time. So it will go hand in hand. So whatever capital we are having, we are allocating at the same time towards the growth of the company as well as for the creation of the capital expenditure.

Speaker #3: So because of that, we are not comparing ourselves with anybody else or whatever they are doing. But we are growing with whatever we are. So, close to more than 20%, our target was there.

Rajeev Gupta: Because of that, we are not comparing anyone else, whatever they are doing, but we are growing whatever we are. Close more than 20%, our target was there, and we are continuously focusing that.

Speaker #3: And we are continuously focusing on that.

Speaker #4: Got it. And sir, Salarpur is ₹500 million plus this additional ₹700 million, right? Which takes it to ₹1,200 million.

Natasha Jain: Got it. Sir, Salarpur is 500 plus this additional 700, right? Which takes it to 1,200.

Speaker #3: No, no, no. No, no, no, no, no, no, no. As Anil said in the commentary, every year our target is ₹700 crore per year.

Rajeev Gupta: No, no. As in the commentary, Anil said, every year our target is INR 700 crore per year.

Speaker #3: So, the total capex of Salarpur is ₹700 crore. So, in the current financial year, ₹300 crore will be the remaining capex for Sanand, and another ₹300 crore to ₹350 crore we will use in Salarpur.

Natasha Jain: Perfect.

Rajeev Gupta: The total CapEx of Salarpur is INR 700 crore. In the current financial year, INR 300 crore will be remaining CapEx of the Sanand, and another INR 300 crore to INR 350 crore we will use in Salarpur. In the next year also, we will put the balance expenditure in the Salarpur, and we will use another capital expenditure in the new lands, that is maybe in Baroda or maybe in some existing location.

Speaker #3: So then, in the next year also, we will put the balance expenditure in the Salarpur. And then we will use another capital expenditure in the new lands.

Speaker #3: That is maybe in Baroda, or maybe in some existing location.

Speaker #4: Got it. And sir, just one quick question—the last one. If I see inventory in your balance sheet, that has also increased sharply. So, could you also throw some color in terms of what proportion would be, say, the exports which we could not do, sitting in our inventory, versus any inventory gains?

Natasha Jain: Got it. Sir, just one quick question, the last one. If I see inventory in your balance sheet, that has also increased sharply. Could you also throw some color in terms of what proportion would be, say, the exports which we could not do sitting in our inventory versus any inventory gains?

Speaker #3: A major part of the inventory increase is mainly because Sanand capacity is ramping up. So, since the factory is new, we need to create the full inventory over there.

Rajeev Gupta: Major part of the inventory is increased mainly because of Sanand capacity is ramping up. Once the factory is new, the full inventory we need to create over there, the major increase due to Sanand only. Another maybe INR 60 crore to INR 100 crore in the finished goods, maybe sometime it is delay in dispatch or in the export case, even though the sale has happened by way of bill. Because of the India's adjustment, if the finished goods has not reached, we need to reversal. Because of that, the inventory is highlighting high and the export is low. Actually the sale has happened.

Speaker #3: So, the major increase is due only to Sanand. And another maybe ₹60 to ₹100 crore is in the finished goods. Maybe sometimes there is a delay in dispatch, or in the export case, even though the sale has happened by way of bill, but because of the India's adjustment, if the finished goods have not reached, we need to do a reversal.

Speaker #3: So because of that, the inventory is showing high, and the export is low. But actually, the sale has happened.

Speaker #4: Understood, sir. Thank you so much. I have more questions; I'll get back in the queue. Thank you.

Natasha Jain: Understood, sir. Thank you so much. I have more questions. I'll get back in the queue. Thank you.

Speaker #3: Thank you.

Operator: Thank you.

Operator: Thank you. We take the next question from the line of Praveen Sahay from Prabhudas Lilladher. Please go ahead.

Speaker #1: Thank you. We will take the next question from the line of Praveen Sahay from PL Capital. Please go ahead.

Speaker #2: Thank you for the opportunity. Just for further clarification on the margin side, because in the P&L we can see there is a change in the inventory, which is on the higher side—nearly around ₹600 crore.

Praveen Sahay: Thank you for the opportunity. Just to further clarification on the margin side, because in the P&L, we can see there is a change in the inventory, which is on the higher side, nearly around INR 600 odd crore. Is there an inventory gain as well you had to book for this quarter Q1?

Speaker #2: So, is there an inventory gain as well? You had a book for this financial—this quarter, Q1?

Speaker #3: See the inventory gain or loss is the part of the every quarter on quarter and year on year because prices are up and prices are down.

Rajeev Gupta: See, the inventory gain or loss is the part of every quarter on quarter and year on year because prices are up and prices are down. That is not the major factor for the inventory increase. Inventory increase, as I just explained, because of the new factory of the Sanand, where all the raw material and work in process and finished goods is starting to have that kind of capacity. Second, when we do the export sale or institutional sale at the quarter end, there is a reversal if the material has not reached to the customer. Because of that, even though the sale has happened, but as per Ind AS, sale has to reversed. That's why the inventory is looking like this.

Speaker #3: So, that is not the major factor for the inventory increase. Inventory increased, as I just explained, because of the new Sanand factory, where all the raw material, work-in-process, and finished goods are starting to build up due to that kind of capacity.

Speaker #3: And second, when we do the export sale or institutional sale at the quarter end, there is a reversal if the material has not reached the customer.

Speaker #3: So because of that, even though the sale has happened, but as per India, the sale has to be reversed. So that's why the inventory is looking like this.

Speaker #2: Okay, sir. Second question related to Sanand. So, how much was the Sanand contribution for this quarter, or what are you expecting for FY27?

Praveen Sahay: Okay. Second question related to Sanand. How much of the Sanand contribution for this quarter or what you are expecting for FY27?

Speaker #3: So, Sanand plant's Phase One capacity has already reached 50% utilization as of today, and in the coming months, it will improve further from there.

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

Speaker #2: So just to referring to your you know the media interaction, sir has highlighted nearly around 3,000 odd crore of a additional revenue from the Sanand for this financial year.

Praveen Sahay: Just to referring to the media interaction, sir, as highlighted, nearly around INR 3,000 odd crore of additional revenue from the Sanand for this financial year. This financial year, you are INR 3,000 looking for from the Sanand, and how is that?

Speaker #2: So this financial year, you are looking for 3,000 from the Sanand, and how is that?

Speaker #3: No, no. Actually, in the media interaction, it was a little bit of a slip of the tongue. We expect around ₹1,500 to ₹2,000 crore revenue from Sanand in this financial year.

Natasha Jain: No, actually in media interaction, actually it was a little bit of a slip of tongue. We expect around INR 1,500 to 2,000 crore revenue from Sanand in this financial year, which will come in the contribution in FY27.

Speaker #3: Which will come in the contribution in this particular in FY27.

Speaker #2: But the overall growth, Praveen, will be more than 20% because, as you see, when the new factory is there, there are a lot of challenges for manpower, then machine, then the other environmental factors.

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

Speaker #2: So that's how it is. It is taking time, and month after month the production is increasing over there. Okay. Thank you, sir, and all the best.

Praveen Sahay: Okay. Thank you, sir, and all the best.

Speaker #1: Thank you. Participants who wish to ask a question, please press star then one. We will take the next question from the line of Raman K.V. from Sequined Investments.

Operator: Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Raman KV from Sequent Investments. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Hello, sir. Can you hear me?

Raman Venkata Kerti: Hello, sir. Can you hear me?

Speaker #3: Yes, yes.

Rajeev Gupta: Yes.

Speaker #2: Sir, with respect to Sanand, we have already spent around close to ₹1,700 crore for the capex, and we will be spending another ₹300 crore.

Raman Venkata Kerti: Sir, with respect to Sanand, we have already spent around close to INR 1,700 crore for the CapEx, and we will be spending another INR 300 crore. You initially guided that we can do from Sanand facility around INR 6,000 crore of revenue. Am I right?

Speaker #2: You initially mentioned that we can generate around ₹6,000 crore of revenue from the Sanand facility. Am I right?

Speaker #3: Yes sir.

Rajeev Gupta: Yes, sir.

Speaker #2: So yes, sir. I just want to understand, in Sanand, what kind of products are we catering to, and where will you be spending the additional ₹300 to ₹350 crores this year?

Raman Venkata Kerti: Yes, sir. I just want to understand in Sanand, what kind of products are we catering to, and phase II, in which we will be spending additional INR 300 to 350 crore this year, are we planning to add the existing capacity or are we planning to add new high margin cable and wires capacity?

Speaker #2: Are we planning to add to the existing capacity, or are we planning to add new high-margin cables and wires?

Speaker #3: The Sanand project is not yet completed. Phase one has been completed; that is for low voltage and medium voltage power cables. Then, we added the machinery over there, which is operational now in the second quarter, for the electron beam cable.

Rajeev Gupta: Sanand project not yet completed.

Raman Venkata Kerti: Okay.

Rajeev Gupta: Phase I has completed, that is for low voltage and medium voltage power cable. We added the machinery over there, which is operational now in the second quarter for the e-beam cable. Now we are in the execution for the extra high voltage power cable, for which we are making a 152-meter tall tower over there. By March 2027, our extra high voltage power cable project also will get commissioned. By next year, the full capacity will be available. Close to overall capacity in the next financial year, 70% to 75%, we will be in a position to utilize for next financial year.

Speaker #3: And now we are in the execution phase for the extra high voltage power cable, for which we are making a 152-meter tall tower over there.

Speaker #3: So, by March 2027, our extra-high voltage power cable project will also be commissioned. So, by next year, the full capacity will be available.

Speaker #3: And close to overall capacity, in the next financial year, 70 to 75% we will be in a position to utilize—for next financial year.

Speaker #2: So, the entire ₹300 crore will be spent on the extra high voltage cable.

Raman Venkata Kerti: The entire INR 300 crore will be spent on the extra high voltage cable?

Speaker #3: No, no. It is a part of the project. The total cost of the project was ₹2,000 crore.

Rajeev Gupta: No, it is a part of the project. The total cost of the project was INR 2,000 crore.

Speaker #2: Okay.

Speaker #3: So, already, we have spent ₹1,722 crore. The balance remaining will be spent in the coming six months.

Raman Venkata Kerti: Okay.

Rajeev Gupta: Already we spent INR 1,722 crore, balance remaining will be spent in the coming six months.

Speaker #2: Just a follow-up here. You said that around 70 to 75% utilization is what you will try to achieve next year. That closely translates to ₹4,000 crore of revenue.

Raman Venkata Kerti: Just a follow-up here. You said around 70% to 75% utilization you will try to achieve next year. That closely translates to INR 4,000 crore of revenue. Is my calculation right?

Speaker #2: Is my calculation right?

Speaker #3: Yes. Yes. Yes.

Rajeev Gupta: Yes.

Speaker #2: Okay. Understood. And sir, with respect to the margins, in the earlier guidance you mentioned that there was a change in the product mix which led to the margin expansion.

Raman Venkata Kerti: Okay, understood. Sir, with respect to the margins, in the earlier guidance, you mentioned that there was change in product mix, which led to the margin expansion. Is it because there was a good amount of contribution from Extra High Voltage cable? Or can you just specify what kind of product led the margin expansion?

Speaker #2: Can we is it because we had the there was a good amount of contribution from extra high voltage cable or can you just be can you just specify what kind of product led the margin expansion?

Speaker #3: Yes. It is a mix of three, four things. One is, extra high voltage power cable contribution has increased. Second is, the overall retail dealer distribution contribution has increased.

Rajeev Gupta: Yes. It is a mix of three, four things. One is Extra High Voltage power cable contribution has increased. Second is the overall retail dealer distribution contribution has increased. Because of the top line higher, the expenditure versus sales ratio has gone down. It's a combination of three, four things.

Speaker #3: And because of the top line being higher, the expenditure versus sales ratio has gone down. So it's a combination of three or four things.

Speaker #2: And sir, just a follow-up here. What would be the incremental margin, if you can give a ballpark figure, when we are producing or selling an extra high voltage power cable versus low and medium power cable?

Raman Venkata Kerti: Sir, just a follow-up here. What will be the incremental margin, if you can give a ballpark figure, when we are selling Extra High Voltage power cable versus Low and Medium power cable?

Speaker #3: For extra high voltage, the margin operating margin was close to 15%. As compared to low voltage and medium voltage power cable, the institutional side was 10.5%, and the retail side was 11%, and export was more than 11%.

Rajeev Gupta: Our Extra High Voltage operating margin was close to 15%, as compared to Low Voltage and Medium Voltage power cable. Institution side was 10.5% and retail side was 11%, export was more than 11%.

Speaker #2: So, out of this ₹6,000 crore of revenue expected from Sanand, can you give us a split between how much we can do with respect to extra high voltage?

Raman Venkata Kerti: Out of this INR 6,000 crore of revenue expecting from Sanand, can you give a split between how much can we do with respect to Extra High Voltage? I just want to understand.

Speaker #2: I just want to understand.

Speaker #3: 1,300 crore, 1,300 crore, 1,300 crore capacity belongs to extra high voltage power cable, and the balance is for low voltage, medium voltage, and electron beam cable.

Rajeev Gupta: INR 1,300 crore capacity belong to Extra High Voltage power cable, balance for Low Voltage and Medium Voltage and e-beam cable.

Speaker #2: And sir, with respect to the ₹700 crore capex every year that you want to do, is it on the extra high voltage side? I just want to understand the market for extra high voltage.

Raman Venkata Kerti: Sir, with respect to the INR 700 crore CapEx every year, which you want to do, is it on the Extra High Voltage side? I just want to understand the market of Extra High Voltage.

Speaker #3: A new a new a new investment will be for low voltage and medium voltage which we have just announced yesterday. Because extra high voltage power cable capacity we will be expanding further only here only itself.

Rajeev Gupta: The new investment will be for low voltage and medium voltage, which we have just announced yesterday.

Rajeev Gupta: Extra High Voltage power cable capacity, we will be expanding further only here only itself, in Sanand. Whenever we need, we will add more lines here.

Speaker #3: In Sanand, whenever we need, we will add more lines here.

Speaker #2: And sir, what is the total market opportunity for extra high voltage?

Raman Venkata Kerti: Sir, what is the total market opportunity from Extra High Voltage?

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

Rajeev Gupta: As of now, it will be more than INR 3,000 crore.

Speaker #2: Okay. And are you the only player, or is there any competition?

Raman Venkata Kerti: Okay. You are the only player or is there any competition?

Speaker #3: No, there are universal cables also, and they are imported also.

Rajeev Gupta: No, there are Universal Cables also.

Raman Venkata Kerti: Okay.

Rajeev Gupta: There are imports also.

Speaker #2: Understood, sir. Thank you. Thank you so much, sir.

Raman Venkata Kerti: Understood, sir. Thank you so much, sir.

Speaker #1: Thank you. Participants who wish to ask a question, please press star and one. We will take the next question from the line of Umang Mehta from Kotak Securities.

Operator: Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Umang Mehta from Kotak Securities. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Hi, thanks for the opportunity and congrats on a strong margin print. So, my first question is again on margin. You mentioned product mix and efficiencies in operations.

Umang Mehta: Hi. Thanks for the opportunity, and congrats on a strong margin print. Sir, first question was again on margin. You mentioned product mix and efficiencies in the operations. EHV, sir, 5% going to 6% won't move the needle too much, right? Secondly, in terms of operational efficiencies, if you can share some more color. Thirdly, just wanted to check, have you changed anything on wires pricing? You were earlier looking to reduce the discount versus peers. Is that something that is helping your margins?

Speaker #4: So, EHV—so, 5% going to 6%—won't move the needle too much, right? And secondly, in terms of operational efficiencies, if you can share some more color. And thirdly, just wanted to check: have you changed anything on wires pricing? You were earlier looking to reduce the discount versus peers. Is that something that is helping your margins?

Speaker #3: So देखिए, जैसा मैंने बोला उमंग जी, 3-4 things where the pricing plays a role, then the overall growth of the company, and resulting in expenditure versus sales ratio.

Rajeev Gupta: Sir, as I said, Umangji, three, four things where the pricing plays a role. The overall growth of the company and resulting in expenditure versus sales ratio. In each and every market, we are trying to build our product well-placed because we are spending in the advertisement, we are pushing through the IPL. Our brand are very popular. That's how our dealer distributor sale is also reflecting from 51%, we have now reached to 59%. Our focus is to shift the market where the lower working capital are there, how we can improve the margin, whether from retail or from exports. Ultimately, it is resulting to increase 1%. Now we are in the trajectory for the future, where 11% to 12% operating margin we will be operating. Earlier our hurdle was reaching out to 11% plus.

Speaker #3: So in each and every market, we are trying to build our product well-placed because we are spending on advertisement. We are pushing through the IPL, so our brand is very popular. That's how our dealer-distributor sales are also reflecting—from 51%, we have now reached 59%. So our focus is to shift the market where the lower working capitals are there, and see how we can improve the margin, whether from retail or from exports. Ultimately, it is resulting in an increase of 1%.

Speaker #3: So now we are on the trajectory for the future where we will be operating with an 11–12% operating margin. Earlier, our hurdle was reaching 11% plus, so now we have actually crossed that hurdle.

Rajeev Gupta: Now we have crossed that hurdle actually.

Speaker #2: Thank you.

Speaker #4: Understood, sir. And sir, my second question was on this growth versus margin trade-off. So I understand where you come from—where you don't want to grow, or maybe from a working capital perspective, you want to restrict growth to a certain percentage.

Umang Mehta: Understood, sir. Sir, second question was on this growth versus margin trade-off. Sir, I understand where you come from, where you don't want to grow, or maybe from working capital perspective, you want to restrict growth to a certain percentage. In counters where peers are growing faster or where you might be letting go of some business, is it easy to win that back when the situation turns? How do you think about that on competition front?

Speaker #4: In counters where you know peers are growing faster, or where you know you might be losing or letting go of some business, is it easy to win that back when the situation turns?

Speaker #4: How do you think about that, compet—I mean, on the competition front?

Speaker #3: So, we are very old in this market and continuously, for the last 15 years, we have been growing at 16 to 17%. Then we started our growth rate at 17 to 18%, then 19 to 20%. Now, we are targeting 20% plus, because we are a debt-free company now, and we are continuously allocating our capital in two parts: one for working capital and another for capital expenditure.

Rajeev Gupta: Sir, we are very old in this market, continuously since last 15 years, we are growing at a 16% to 17%. We started our growth rate at 2017 to 2018, 19% to 20%. Now we are targeting 20-plus because we are a debt-free company now, we are continuously allocating our capital in two parts, one for working capital and another for the capital expenditure. Certain discipline and capital allocation need to be there in the company so that long-term goal, sustainable manner we can achieve. That's how we are going ahead with our original plan of which we've given you in 2024 while we were raising the QIP. The same kind of growth plan we were maintaining, and we will be maintaining. This kind of discipline also we will be maintaining.

Speaker #3: So, certain discipline and capital allocation need to be there in the company so that long-term goals can be achieved in a sustainable manner. So that's how we are going ahead.

Speaker #3: With our original plan, which we gave you in 2024 while we were raising the QIP, the same kind of growth plan we were maintaining and will be maintaining.

Speaker #3: So these kinds of discipline also we will be maintaining, and those investors who are dealing with us since the last five years, or even 10 years also, so we are very conservative people. Whatever we say, we try to deliver more than that.

Rajeev Gupta: Those investors, those who are dealing with us since last five years or even 10 years also, we are very conservative people. Whatever we say, we try to deliver more than that.

Speaker #4: Got it, sir. Thank you so much, and all the best.

Umang Mehta: Got it, sir. Thank you so much, all the best.

Speaker #3: Thank you Umang ji.

Rajeev Gupta: Thank you, Umangji.

Speaker #1: Thank you. We will take the next question from the line of Deesha from Thrinetra Asset Managers. Please go ahead.

Operator: Thank you. We take the next question from the line of Disha from Trinetra Asset Managers. Please go ahead.

Speaker #5: Good afternoon, sir. Most of my questions have already been answered—just a few questions from my side. Could you share the current utilization level across stables and wires for this quarter? And I hope I heard it correctly.

Operator 2: Good afternoon, sir. Most of my questions have already been answered. Just a few questions from my side. Could you share the current utilization level across cables and wires for this quarter? I hope I heard it correct, you said 70% to 75% of utilization would be by this year, right?

Speaker #5: You said 70 to 75% of utilization would be by this year, right?

Speaker #3: No, no, no. First of all, at present, because of the increased capacity at Sanand, our utilization rate is 72%. And for the future, somebody was asking about how much capacity there will be for the next plant—the 6,000 crore plant.

Rajeev Gupta: No. First of all, at present because of increased capacity of Sanand, our utilization rate is 72%. For the future, somebody was asking that how much capacity will be for the next plant, 6,000 crore plant. As I explained, 70% to 75% we will be utilizing by next year.

Speaker #3: So, I was explaining 70 to 75% we will be utilizing by next year.

Speaker #5: Okay, for the next year. And so, at what utilization threshold would the company require another major capital cycle beyond this ongoing expansion, as you see the demand clearly coming up?

Operator 2: Okay. For the next year. Sir, at what utilization threshold would the company require another major CapEx cycle beyond this ongoing expansion as you see the demand clearly coming up?

Speaker #3: To maintain a CACR of 20% plus, we need to continue the growth of our capacity as well. For that, we have given our guidance to do capital expenditure of ₹600 crore to ₹700 crore year after year.

Rajeev Gupta: To maintain a CAGR of 20%-plus, we need to continue growth of the capacity also. For that, we have given our guidance to do the capital expenditure of INR 600 crore to INR 700 crore year after year. We need to grow every year, we need to add the capacity also every year. Whenever we go for a greenfield CapEx, it takes us to complete the process for two years actually. Like yesterday we announced for the Salarpur project, where we will be investing around INR 700 crore. There also, it will take another two years to complete construction, plant machinery, trial run production, like this.

Speaker #3: Because we need to grow every year so then we need to add the capacity also every year. Because whenever we go for a greenfield capex it takes us to complete the process for the two year actually.

Speaker #3: Like yesterday, we announced for the Salarpur project, where we will be investing around ₹700 crore. So there also, it will take another two years.

Speaker #3: To complete construction, plant machinery trial run, production like this.

Speaker #5: And that's one complicated.

Operator 2: That plant will be catering-

Speaker #3: Because in the current market, the demand is strong due to the electric vehicle and data center infrastructure boom, and the global demand is also very, very strong.

Rajeev Gupta: In the current market, the demand is strong because of the electrical vehicle data center infrastructure boom, the global demand is also very strong. Yeah, please, you are asking something?

Speaker #3: Yeah, please. You were asking something?

Speaker #5: Yes, sir, I was asking about this new capex plan that you have announced. That would be for ESG cables, right? You answered that question.

Operator 2: Yes, sir. I was asking about this new CapEx plan that you have announced. That will be for EHV cable, right? You answered that question.

Speaker #3: No, no, no. It is for low voltage and medium voltage power cables.

Rajeev Gupta: No, no. It is for low voltage and medium voltage power cable.

Speaker #5: Got it, sir. And one on the ESG cables segment side—could you please update how much of this customer approvals or order inflow is coming from ESG, and at what point do you expect that ESG business will become a meaningful contributor to the consolidated revenue and margins, and will further increase the margins of the company?

Operator 2: Got it, sir. One on the EHV cable segment side. Could you please update how many of those customer approvals or order inflow is coming from EHV? At what point do you expect that EHV business will become a meaningful contributor to the consolidated revenue and margins and will further increase the margins of the company?

Speaker #3: No, whatever capacity we are adding for extra high voltage power cable, close to 9 to 10% will be the contribution from EHV cables.

Rajeev Gupta: No, whatever capacity we are adding for extra high voltage power cable, close to 9% to 10% will be the contribution from EHV cable.

Speaker #5: Okay, got it, sir. Thanks, sir. That's it from us, sir. Thank you.

Operator 2: Okay. Got it, sir. Thank you.

Speaker #3: Thank you ma'am.

Rajeev Gupta: Thank you, ma'am.

Speaker #1: Thank you. We will take the next question from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.

Operator: Thank you. We take the next question from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.

Speaker #2: Yeah sir thank you for the opportunity. First in terms of the global markets if you could talk a little bit in terms of how we are playing across the regions where are we in terms of the scale up what kind of mix can we expect our next two three years within in the in the export segment across different geographies.

Achal Lohade: Yeah. Sir, thank you for the opportunity. First, in terms of the global market, if you could talk a little bit in terms of how we are playing across the regions. Where are we in terms of the scale-up? What kind of mix can we expect over next two, three years in the export segment across different geographies? If you could comment a little bit on that.

Speaker #2: If you could comment a little bit on that.

Speaker #3: Yeah, I'll comment on that. In different markets, we are targeting different sectors. Like in the US, we are steadily working with the oil and gas sector and also with the data center projects.

Anil Gupta: Yeah. I'll comment on that. In different markets, we are targeting different sectors. Like in US, we are steadily working with oil and gas sector and also with data centers projects. Now we are also working with some distribution projects in US. Secondly, in Australia, we are mostly working with solar and wind energy projects, and also some manufacturing factory industrial projects as well. In Middle East, our major customer base is oil and gas refineries and upstream facilities there of oil extraction. Majorly oil and gas market is there in Middle East. In Africa, we are working with distribution and transmission utilities, and also the oil refineries. This is the major focused areas in a few of the countries where we are working in our export markets.

Speaker #3: And now we are also working with some distribution projects in the US. Secondly, in Australia, we are mostly working with solar and wind energy projects.

Speaker #3: And also some in the manufacturing factories and industrial projects as well. In the Middle East, our major customer base is oil and gas refineries and upstream facilities for oil extraction.

Speaker #3: So, these are our majorly oil and gas markets in the Middle East. In Africa, we are working with distribution and transmission utilities, and also with the oil refineries.

Speaker #3: So, these are the major focus areas in a few of the countries where we are working in our export markets.

Speaker #2: And any possible mix you would talk about, let's say, in three years' time?

Achal Lohade: Any possible mix you would talk about, let's say in three years' time?

Speaker #3: See, it is very difficult to, it is very difficult to determine, you know, product mix because it keeps on varying. We have a very versatile product range and production facilities.

Anil Gupta: See, it is very difficult to determine product mix because it keeps on varying. We have very versatile product range and production facilities. We are able to adapt to any change in the type of products in our factories as per the market demand. How the market demand emerges is very difficult to predict.

Speaker #3: So we are able to adapt to any change in the type of products in our factories as per the market demand. But how the market demand emerges is very difficult to predict.

Speaker #2: Got it. Sir, the second question I had was with respect to the Sanand plant. Given ₹2,000 crores of capex, and the ESG and non-ESG mix, how do we look at the asset turn and the total revenue potential from this facility?

Achal Lohade: Got it. Sir, second question I had was with respect to Sanand Plant. Given INR 2,000 crores of CapEx and the EHV and the non-EHV mix, how do we look at the asset turn and the total revenue potential from this facility?

Speaker #3: So, Achal, earlier we said that this total ₹2,000 crore will give us a production of ₹6,000 crore. But in our past experience, whenever we go for greenfield projects, after the commissioning of the full project, there is a scope for balancing of equipment.

Rajeev Gupta: Achal, earlier we told that this total INR 2,000 crore will give us a production of INR 6,000 crore, in the past experience, whenever we go for a greenfield project, after the commissioning of the full project, there is a scope for the balancing of equipment. Another INR 100 to 200 crore we are putting for balancing of equipment, which will give us another INR 1,000 plus crore turnover. The total capacity will reach around INR 7,000 crore within two years' time in Sanand. That's how we executed in the past also. If you see our Chinchpada plant, initially it was only for the wire. Then we added the low tension power cable over there, then we added a few more capacity over there. As of now, this plant is giving us very huge turnover. Approximately INR 225 to 250 crore per month turnover is coming from the Chinchpada plant.

Speaker #3: So then another 100 200 crore we are putting for the balancing of for balancing of equipment which will give us the another 1,000 plus crore turnover.

Speaker #3: So the total capacity will reach around ₹7,000 crore within two years’ time in Sanand. So that's how we executed in the past also. If you see our Chinchpala plant, initially it was only for the wire.

Speaker #3: Then we added the low tension power cable over there. Then we added a few more capacity over there. So as of now, this plant is giving us a very huge turnover. Approximately ₹225 to ₹250 crore per month turnover is coming from the Sanand, the Chinchpada plant.

Speaker #3: So that's how the balancing of equipment works, actually.

Rajeev Gupta: That's how the balancing of equipment work actually.

Speaker #2: Got it. Sir if you could just you did make a comment demand is strong but if it is possible to get some more color in the domestic market how the different verticals within the demand drivers are doing if you could call you know talk a little bit on that as well.

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

Speaker #3: See, major demand is there in India mainly in the power transmission and distribution sector, and also the power energy user sector, which includes data centers, manufacturing plants, urban infrastructure, and railway infrastructure.

Anil Gupta: Major demand is there in India, mainly in power generation, transmission, and distribution sector, and also the power energy user sector, which includes data centers, manufacturing plants, urban infrastructure, and railway infrastructure. There's a strong demand in the housing and commercial spaces also. These are the major sectors where the domestic demand is there. Even now, even the thermal power projects are also in strong construction phase. That phase will also be bringing substantial demand in India.

Speaker #3: There is a strong demand in the housing and commercial spaces also, so these are the major sectors where the domestic demand is there.

Speaker #3: And now even even now even the thermal power projects are also in strong construction phase so that that phase will that will also be bringing substantial demand in in India.

Speaker #2: Understood. Are any of these performing particularly well, and are there any that are a little bit weak? If you could call that out a little bit, sir.

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

Speaker #3: No, I have no comments on that.

Anil Gupta: No, I have no comments on that.

Speaker #2: Achal, it always happens because it's a rotating demand. Sometimes demand comes from transmission, then comes from distribution, then again from generation, so it basically moves on.

Rajeev Gupta: Achal, always it happens because it's a rotating demand. Sometimes demand comes from transmission, then comes from distribution, then again from the generation. It basically moves on. Sometimes the refinery projects are there, sometimes fertilizer projects are there. The demand is also rotating because in every year the capital expenditure is rotating from one sector to another sector.

Speaker #2: So sometimes the refinery projects are there, sometimes fertilizer projects are there, so the demand is also rotating because every year the capital expenditure is rotating from one sector to another sector.

Speaker #2: Fair point. Just one last question from my end, sir, and then we'll go back to the queue. In terms of demand and supply, we see that practically everybody is adding capacity. How do you see this demand-supply scenario? Is there any risk of overcapacity over the next one to two years, in your opinion, or do you think things are pretty much tight for the next two years?

Achal Lohade: Fair point. Just last question from my end, sir. We again go back to the queue. In terms of the demand supply, we see that practically everybody's adding capacity. How do you see this demand supply scenario? Is there any risk of overcapacity over next 1, 2 years in your opinion, or things are pretty much tight for next 2 years?

Speaker #3: Sir, whenever there is an addition of capacity, it takes two to two and a half years' time to put up a project.

Rajeev Gupta: Sir, whenever there is addition of capacity, it takes 2 and a half years' time to put up a project. Then another 1 year time for ramping up the production facility. You see in our Sanand plant, we started in 2023. Now almost 3 years is there. Now that project has commissioned. Still we are ramping up. It takes time. From your angle, you must see that so many projects are coming, but those companies, those who are putting the projects, the construction time of the project is also 2 and a half years to 3 years' time. Then for utilization of capacity is also 3 to 4 years' time. It is not the case that whatever we put, we will use the capacity only in 1 year.

Speaker #3: Then another one year time for ramping up the production facility. You see, in our Sanand plant, we started in 2023—now almost three years is there—but so now the project has commissioned, still we are ramping up.

Speaker #3: So it takes time. So from your angle you must see that there so many projects are coming but those those companies those who are putting the projects they are putting the projects the construction time of the project is also two and half years to three years time.

Speaker #3: Regarding utilization of capacity, it also takes three to four years' time. So, it's not the case that whatever we put in, we will use the capacity only in one year.

Speaker #3: So that's how we are again guiding for the disciplined growth—that 20% plus CAGR growth we will maintain. So we are never targeting a growth of 35% or 40%.

Rajeev Gupta: That's how we are again guiding for the disciplined growth, that 20%+ CAGR growth we will maintain. We are never targeting for a growth of a 35% or 40%. That's how we are having the discipline. Accordingly, the market is available.

Speaker #3: So that's how we are maintaining the discipline. And accordingly, the market is available.

Speaker #2: Got it, sir. Thank you. I'll fall back in the queue. Thank you.

Achal Lohade: Got it, sir. Thank you. I'll fall back in the queue. Thank you.

Speaker #1: Thank you. We take the next question from the line of Manoj Gori from Aquarius Capital. Please go ahead.

Operator: Thank you. We take the next question from the line of Manoj Gori from Equirus Capital. Please go ahead.

Speaker #3: Yeah, thanks for the opportunity, sir, and congratulations on strong margin performance during the quarter. So finally, the barrier of 11% has been broken. So, my only question to you would be that if we look at the end of the fourth quarter FY26, we were talking about roughly around 18% volume guidance.

Manoj Gori: Yeah, thanks for the opportunity, sir. Congratulations on strong margin performance during the quarter. Finally, the barrier of 11% has been broken. My only question to you would be that if we look at the end of Q4 FY26, we were talking about roughly around 18% volume guidance. In the morning, in the media interviews, we said around 25% kind of value growth for the current year, and now we are talking about 20% value growth-

Speaker #3: In the morning, in the media interviews, we said around 25% value growth for the current year. And now we are talking about 20% value growth.

Rajeev Gupta: Sir

Speaker #3: On bio basis, so now also, now also, now also, I'm sure that our growth in this financial year will be more than 25% in financial terms, in revenue terms.

Manoj Gori: on YOY basis.

Rajeev Gupta: Sir. Now also-

Manoj Gori: If you can clarify. Now also, I'm sure that our growth in this financial year will be more than 25% in financial terms, in revenue terms. Normally, in the interactions, we generally like to be conservative instead of giving too bullish numbers.

Speaker #3: I'm in, but normally in these interactions we generally like to be conservative instead of giving two bullish numbers.

Speaker #2: Manoj ji, issue کیا ہے کہ جب بھی ہم کوئی percentage بولتے ہیں نا، آپ اس میں دو تین percent اور add کر دیتے ہو۔ وہ ہماری مشکل اور بڑھا دیتے ہو آپ اس میں۔ تو that's why we want to be conservative, sir. اب outperform کرتے ہیں تو ہم بھی بڑھا دیتے ہیں numbers. اب آپ کے منہ سے آپ نے 25 نکلوا لیا، اب آپ 25 تک تو سیمت رہو، اب آپ اس کو اوپر بول دو گے، وہ ہم کر نہیں پائیں گے very frankly۔ آج ہی منع کر دیتے ہیں، اس سے اوپر ہوگا نہیں کیونکہ وہ ایک discipline نہیں ہے نا۔ کیونکہ کسی بھی value growth کو chase کرنے کے لیے capital required ہوتا ہے۔ دیکھیے demand is there, but it is not the case کہ we need to put all our capital only for growth. Then how will we maintain future growth if we are not putting the capacity? So we need two types of capital. So that's why we want to be a little bit conservative. But since the same kind of growth you will see for full year, whatever you have seen in Q1, because the demand is there, we have the capacity. But our request to all of you is not to add into that expectation. So that is my humble request to all of you. Okay sir, so the only reason why I asked was because if you look at—there have been prolonged issues in the Middle East, so the West Asia crisis definitely would be hurting to some extent on the exports also. So just wanted clarity because of the macro uncertainty. I do understand that the domestic growth opportunities remain very strong and robust. So just for clarity, the question came. Yeah Manoj ji, we have also explained in the past also, we need to grow—whether we need to grow from export, from domestic institution, or from the retail network. Ultimately, sale is sale for anyone. So our purpose is to focus on all the markets, so that if any time any market is having some problem, like the Middle East problem is going on, we can compensate our sale from the other markets. That is the major focus area where we are trying to build that—whether marketing from export, marketing from domestic or institution—so we need to focus on all these sectors. We cannot know in advance which sector will do good, which sector will not do good, so that's why it is our duty to focus on all these sectors and that's how we are continuously doing since last so many years. And your earlier wish was that when we will cross that hurdle of 11%, so with all of your blessings, we have crossed that hurdle, and in future we will be operating more than 11% margin. That we are very hopeful for. Sure sir, thank you sir, and wish you all the best, and I hope you break many more hurdles like this. Thank you Manoj ji, thank you very much.

Rajeev Gupta: Manojji, the issue is that whenever we quote a percentage, you add 2% to 3% more to it. You increase our difficulty in that. That's why we want to be conservative.

Manoj Gori: Sir, if you outperform, we also increase the numbers.

Rajeev Gupta: Sir, you have extracted 25 from him. Now you limit yourself to 25. If you say above that, we will not be able to do it, very frankly. We refuse today itself, it will not happen above that.

Manoj Gori: Correct.

Rajeev Gupta: It is not a discipline. To chase any value growth, capital is required. Demand is there, but it is not the case that we need to put all our capital only for growth, then how we will maintain a future growth if we are not putting the capacity. We need 2 types of capital. That's why we want to be a little bit conservative. Since the same kind of growth you will see for a full year, whatever you have seen in Q1, because the demand is there, we have the capacity. Our request to all of you is not to add into that expectation. That is my humble request to all of you.

Manoj Gori: Okay, sir. The only reason why I asked was because if you look at there has been prolonged issues in Middle East. The West Asia crisis definitely would be hurting to some extent on the exports also. Just wanted clarity because of the macro uncertainty. I do understand that the domestic growth opportunities remain very strong and robust. Just for clarity, the question came.

Rajeev Gupta: Manojji, we also explained in the past also, we need to grow. Whether we need to grow from export, from domestic institution, or from the retail network. Ultimately, sale is sale for anyone. Our purpose is to focus on all the markets so that if any time any market is having some problem, like the Middle East problem is going on, we can compensate our sale from the other markets. That is the major focus area where we are trying to build that, whether marketing from export, marketing from domestic or institution. We need to focus all the sectors. We cannot know in advance which sector will do good, which sector will not do good.

Manoj Gori: Correct.

Rajeev Gupta: That's why that is our duty to focus all the sectors. That's how we are continuously doing since last so many years. Your earlier wish was that when we will cross that hurdle of 11%. With all of your blessings, we have crossed that hurdle, and in future we will be operating more than 11% EBITDA margin. That we are very hopeful.

Manoj Gori: Sure, sir. Thank you, sir, wish you all the best, and I hope you break many more hurdles like this.

Rajeev Gupta: Thank you, Manojji. Thank you very much.

Speaker #1: Thank you. We take the next question from the line of Akshay Thakkar from Fidelity International. Please go ahead.

Operator: Thank you. We take the next question from the line of Akshen Thakkar from Fidelity International. Please go ahead.

Speaker #4: Hi sir my audible.

Akshen Thakkar: Hi, sir. Am I audible?

Speaker #3: Yes

Rajeev Gupta: Yes.

Speaker #4: Hi sir, congratulations on a very strong margin performance. Just one clarification: in the past, when you have guided for EBITDA margins, you included other income in the same. So right now, when you're saying 11 to 12%, should we read it as EBITDA plus other income, or is this only pure operating EBITDA margins?

Akshen Thakkar: Hi, sir. Congratulations on a very strong margin performance. Just one clarification. In the past, when you have guided for EBITDA margins, you've included other income in the same. Right now, when you're saying 11% to 12%, we should read it as EBITDA plus other income, or this is only pure operating EBITDA margins?

Speaker #3: So it is operating margin I am talking about, because you people always evaluate us only on operating margin, and that's how the operating margin—we are discussing.

Rajeev Gupta: Sir, it is operating margin I'm talking, because you people always evaluate us only on operating margin, and that's how the operating margin we are disclosing.

Speaker #4: Okay, so this doesn't include other income then, right?

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

Speaker #3: Yes sir

Rajeev Gupta: Yes, sir.

Speaker #4: Okay great and the second sorry to belabor this point but on Sanand you know if you were to like an easy was saying it should do 1500 to 2000 crores this year even if it were to come up you know upon a gradual manner and you know exports will pick up I'm just trying to think that what's the constraint to you know growth I think you mentioned working capital a little bit couple of times in the past and today as well just you know if you could help us understand a little better because I think what's happening frankly is that streets extrapolating the metal price increase and thinking growth should be higher and obviously you're doing very well and no complaints there and it's along the guided lines but just to understand the constraints to growing faster and 20 25 کا اوپر نہیں ہوگا وہ 35 کیوں نہیں ہو سکتا

Akshen Thakkar: Okay, great. Second, sorry to belabor this point, on Sanand, if you were to, like Anilji was saying, it should do INR 1,500 to 2,000 crores this year, even if it were to come up in a gradual manner. Exports will pick up. I'm just trying to think that what's the constraint to growth? I think you mentioned working capital a little bit a couple of times in the past and today as well. Just if you could help us understand a little better, because I think what's happening, frankly, is that Street's extrapolating the metal price increase and thinking growth should be higher. Obviously you're doing very well and no complaints there, and it's along the guided lines. Just to understand the constraints to growing faster.

Rajeev Gupta: Sir, constraint is basically the capital.

Speaker #3: سر constraint is basically the capital you see whatever capital sir I'll tell you when in a green field project the production ramp up takes time in terms of manpower and machinery stabilization so so hence I said that month after month our new facility if it is a brownfield expansion it is easier to you know stabilize but in a green field expansion if they it is it it has took time taken time that is why you know month after month our production ramp up is coming up and capital allocation is definitely a discipline which Rajiv has talked about and I'm what I am saying is that we will be growing more than I mean what we are saying much more than that but we don't want to give very very high numbers on on on as a you know as a guidance

Anil Gupta: Sir, I'll tell you. In a greenfield project, the production ramp-up takes time in terms of manpower and machinery stabilization. Hence, I said that month after month. If it is a brownfield expansion, it is easier to stabilize. In a greenfield expansion, it has taken time. That is why month after month, our production ramp-up is coming up.

Rajeev Gupta: Allocation is definitely a discipline which Rajeev has talked about. What I am saying is that we will be growing more than what we are saying, much more than that. We don't want to give very high numbers as a guidance.

Speaker #4: GMUG, I think that philosophy is very well understood. We would just love to see a little more, you know, aggression on growth margin. Per what you had promised, you have delivered—margins have come up. Very, very happy, and all the best to the team for the upcoming year.

Akshen Thakkar: I think that philosophy is very well understood. We just love to see a little more aggression on growth. Margin pay, what you had promised you've delivered. Margins have come up. Very happy. All the best to the team for the upcoming year.

Speaker #3: Thank you very much sir

Rajeev Gupta: Thank you very much, sir.

Speaker #4: Thank you.

Operator: Thank you. We take the next question from the line of Rahul Maheshwari from Ambit Investment Advisors Private Limited. Please go ahead.

Speaker #1: We take the next question from Rahul Maheshwari of Ambit Investment Advisors Private Limited. Please go ahead.

Speaker #5: Good afternoon, sir. Excellent execution. Just two questions. First, on wires—can you elaborate what kind of growth are we witnessing, and also, the dealer contribution has gone to 59%. How much more scope is there? This is the first question. And the second, can you highlight that big projects like what the leader is executing on the BharatNet, etc.—how are we planning in those directions of executing the big order projects of the government? Thanks.

Rahul Maheshwari: Good afternoon, sir. Excellent execution. Just two questions. First, on wires. Can you elaborate what kind of growth are we witnessing? Also the dealer contribution has gone to 59%. How much more scope is there? This is first question. On second, can you highlight that big projects, like what the leader is executing on the BharatNet, et cetera, how are we planned in those directions of executing the big order projects of the government? Thanks.

Speaker #3: Sir, BharatNet is mainly for optical fiber cable supply and execution. We are not in the manufacturing of optical fiber cables, so that is out of our product range. And the second question was...

Rajeev Gupta: Sir, BharatNet is mainly for optical fiber cable supply and execution. We are not in the manufacturing of optical fiber cables. That is out of our product range. Second question was?

Speaker #5: On the wires, sir, I was mentioning big ticket size production.

Rahul Maheshwari: On the wires. Sir, I was mentioning big ticket size products.

Speaker #3: Growth is already more than wire growth, is already more than the cable growth, because the construction phase is going on in the country. So overall, the domestic wire and cable business is very, very strong.

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

Speaker #5: sure and yep

Rahul Maheshwari: Sure.

Rajeev Gupta: Yeah, please carry on.

Speaker #3: Yeah please please carry on.

Speaker #5: Yeah, yeah, go ahead, sir. Go ahead.

Rahul Maheshwari: Yeah, go ahead, sir.

Speaker #3: No, no, please. BharatNet—I have already answered that. We are not in the production of optical fiber cables, so we don't produce cables for BharatNet.

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

Rahul Maheshwari: Okay.

Rajeev Gupta: We don't produce cables for BharatNet.

Speaker #5: And just sir one as a this thing that as you highlighted a lot of times that it requires capital and then it takes time to ramp up the capacity but if the industry growth rate for next two years is happening at 30% or near about those levels is it fair to say that you will up your guidance or you will like to maintain at a guidance which you have mentioned conservative at 20% plus because yeah.

Rahul Maheshwari: Just one, this thing that as you highlighted a lot of times, that it requires capital and then it takes time to ramp up the capacity. If the industry growth rate for next two years is happening at 30% or near about those levels, is it fair to say that you will up your guidance, or you will like to maintain at a guidance which you have mentioned conservative at 20% plus? Because.

Rajeev Gupta: We will-

Rahul Maheshwari: Yeah.

Speaker #3: We will be growing more than what we are guiding, and we will be to the level of industry standard, but we don't want to give, you know, very high numbers. That is not our policy.

Rajeev Gupta: We will be growing more than what we are guiding, and we will be to the level of industry standard, but we don't want to give very high numbers.

Rahul Maheshwari: Sure.

Rajeev Gupta: That is not our policy.

Speaker #5: Okay, thank you, sir, and best wishes. Thanks.

Rahul Maheshwari: Okay. Thank you, sir, and best wishes.

Speaker #1: Thank you. We will take the next question from Patanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.

Operator: Thank you. We take the next question from the line of Pathanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.

Speaker #4: Hello sir, thank you for the opportunity. I have a couple of questions. Firstly, our gross margin is at a four- or five-year high. I think we were at a 25% gross margin back in FY22. So, can you tell me if this gross margin level that we are at today is sustainable? In the last two to three quarters, we have seen a very sharp improvement in terms of gross margin.

Pathanjali Srinivasan: Hello, sir. Thank you for the opportunity. I have a couple of questions. Firstly, our gross margin is at a four or five-year kind of high. I think we were at 25% gross margin back in FY22. Can you tell me if this gross margin level that we are at today is sustainable? Last two, three quarters, we have seen a very sharp improvement in terms of gross margin.

Speaker #3: Sir because earlier the EPC portion was higher now the EPC portion is not there only the pure pure pure pure the cable and the wire portion is there where the because of that and the product mix and the export and the retail market so if you see the continuous last four quarter from June onward last year September December March and this first quarter quarter after quarter whatever we have planned for the next year we have reached the situation where we were in the margin range of 11 to 12% as I explained this whenever a margin increase of any company there are three four leverage one leverage is the mix of the product then second is the mix of the markets then the expenditure ratio versus sales ratio so all these three are contributing towards the profit and loss it is not only the one one case where the margin has increased

Rajeev Gupta: Sir, because earlier the EPC portion was higher. Now the EPC portion is not there, only the pure cable and the wire portion is there. Because of that and the product mix and the export and the retail market. If you see the continuous last four quarters from June onward last year, September, December, March, and this first quarter. Quarter after quarter, whatever we have planned for the next year, we have reached the situation where we were in the margin range of 11% to 12%. As I explained this, whenever a margin increase of any company, there are three, four levers. One lever is the mix of the product, second is the mix of the markets, the expenditure ratio versus sales ratio. All these three are contributing towards the profit and loss. It is not only the one case where the margin has increased.

Speaker #5: Hello sir, that part is understood. Just to clarify, can we expect that gross margin should be in the same range? But I get what you're saying. Okay sir, then.

Pathanjali Srinivasan: No, sir. That part is understood, sir. Just that, can we expect that gross margin should be in this range? I get what you're saying. Okay, sir.

Speaker #3: Sir gross margin because as I said that gross margin will be in this range only because but sometimes you see sometimes the volatility in the market by way of the rate or by way of the demand scenario always quarter to half percent margin fluctuates quarter to quarter basis that you will see or you will witness in the past results also but for the full year it is average out always so now we are in the trajectory where we will operate 11 to 12% EBITDA margin that is operating side

Rajeev Gupta: Sir, gross margin, because as I said, that gross margin will be in this range only. Sometimes you see, sometimes the volatility in the market by way of the rate or by way of the demand scenario, always quarter to half percent margin fluctuates quarter-to-quarter basis that you will see or you will witness in the past results also. For the full year, it is average out always. Now we are in the trajectory where we will operate 11% to 12% EBITDA margin. That is operating side.

Speaker #5: Got it, sir. I just have a few more questions. I think one of the things you mentioned was that export share of revenue will come back again. I think you mentioned this quarter is on the weaker side. What would be a target for the full year basis? What would we want to have for our export?

Pathanjali Srinivasan: Got it, sir. Sir, I just have a few more questions. I think one of the things you mentioned was that export share of revenue will come back again. I think you've mentioned this quarter's bit on the weaker side. What would be a target on a full year basis? What would we want to have our export-

Speaker #3: Sir ultimately ultimately as I said Anil Jiya said that growth rate will be close to 24 25% so first so the first target figure will be that out of that sometimes the export will grow more sometimes the retail will grow more sometimes the domestic institution will grow more it will always happen from sector to sector but our target to grow to reach export at least 17 to 18% for the current financial year even the last financial year also it was 16% so that we will be there

Rajeev Gupta: Sir, look here. Ultimately, as I said, Anil ji has said that growth rate will be close to 24% to 25%. The first target figure will be that. Out of that, sometimes the export will grow more, sometimes the retail will grow more, sometimes the Domestic institution will grow more. It will always happen from sector to sector. Our target to reach export at least 17% to 18% for the current financial year. Even the last financial year also, it was 16%.

Pathanjali Srinivasan: Got it.

Rajeev Gupta: That we will be there.

Speaker #5: Okay, sir. Just one last question—I wanted to confirm something you mentioned. You said this ₹2,000 crore of capex that we have done or is underway, the revenue it can generate is how much? You mentioned—I think I heard it as ₹7,000 crore, but I just wanted to confirm.

Pathanjali Srinivasan: Okay, sir. Sir, just one last question. I wanted to confirm something you mentioned. You said this INR 2,000 crore of CapEx that we have done or we are underway, the revenue it can generate is how much you mentioned? I think I heard it as INR 7,000 crore, but I just wanted to confirm.

Speaker #3: No, Sanand revenue originally was ₹6,000 crore, but in future, when the project gets completed with a few crores of balancing equipment, we always increase the production facility over there. So, that's how it will increase to ₹7,000 crore within two years' time that I mentioned.

Rajeev Gupta: No, Sanand revenue originally was INR 6,000 crore, in future when the project gets completed with a few INR crores of balancing equipment, we always increase the production facility over there. That's how it will increase to INR 7,000 crore within two years' time. That I mentioned.

Speaker #5: This is LV and DHV all put together. You're saying ₹2,000 crores will give around ₹6,000 to ₹7,000 crores.

Pathanjali Srinivasan: This is LV & EHV all put together you're saying INR 2,000 crores will give around INR 6,000 to 7,000 crores, is that correct?

Speaker #3: I can, but Rajiv wanted to say that instead of three, as in terms of three, it can go up to four terms in half the time.

Anil Gupta: What Rajeev wanted to say that instead of effect terms of three, it can go up to four times.

Rajeev Gupta: Three and a half times.

Speaker #5: Okay, okay, okay, sir. Got it, sir. Thank you, sir. Congrats and very good set of numbers.

Anil Gupta: Yeah.

Pathanjali Srinivasan: Okay. Okay, sir. Got it, sir. Thank you, sir. Congrats on very good set of numbers.

Speaker #3: Thank you sir.

Rajeev Gupta: Thank you, sir.

Speaker #1: Thank you. We take the next question from the line of Kulkeet Patni from Goldman Sachs. Please go ahead.

Operator: Thank you. We take the next question from the line of Pulkit Patni from Goldman Sachs. Please go ahead.

Speaker #5: Sir, thank you for taking my question. Sir, this has been two quarters where not you, but most of the industry, has not spoken much about volume growth.

Pulkit Patni: Sir, thank you for taking my question. Sir, this has been two quarters where not you, but most of the industry has not spoken much about volume growth. Revenue growth has been phenomenal. What I'm trying to understand is that your commentary, some of your peers' commentary also on demand has been extremely positive in terms of how they're looking at the outlook. As analysts, are we not looking at the right thing? I'm trying to understand with volume growth not being there, is it just that the nature of the product has changed? Are you doing more high value products and that's how the business is going to change? I'm just trying to understand why that disconnect between volume growth, value growth, and the positive commentary that is coming from you as well as some of your peers. Just help us understand that a little better now.

Speaker #5: And, you know, revenue growth has been phenomenal. What I'm trying to understand is that your commentary, as well as some of your peers' commentary on demand, has been extremely positive in terms of how you are looking at the outlook.

Speaker #5: So as analysts, are we not looking at the right thing? I'm trying to understand—with volume growth not being there, is it just that the nature of the product has changed?

Speaker #5: Are you focusing more on high-value products, and is that how the business is being set up? I'm just trying to understand why there is a disconnect between volume growth, value growth, and the positive commentary that is coming from you as well as some of your peers.

Speaker #5: Just help us understand that a little better now.

Speaker #3: Kulkeet ji first of all why we are talking on value growth because the government expenditure budget maintain in the value terms only. So if in the budget they have allocated the 11 lakh crore rupees whatever the price is gone up or gone down can this budget expenditure they have fixed for the capital expenditure will change?

Rajeev Gupta: Pulkit, first of all, why we are talking on value growth, because the government expenditure budget maintain in the value terms only. If in the budget they have allocated the INR 11 lakh crore, whatever the price is gone up or gone down, can this budget expenditure they have fixed for the capital expenditure will change? I think it will not change. Same case with the state government also. Same case with the power generation, transmission, distribution also. Everything, allocation of the budget is there. That's how the value prevails actually. Because of that I have also explained a few in my universal conference why we are reluctant to give the value growth. Even in the past, even if you go back to 2018, 2019, 2020, even in 2017, 2018, continuously the copper price was going down.

Speaker #3: I think it will not change. Same case with the state government also, same case with the power generation, transmission, distribution also—everything. Allocation of the budget is there, so that's how the value prevails, actually.

Speaker #3: So because of that, I have also explained a few things in my universal conference about why we are reluctant to give the value growth. Even in the past, if you go back to 2018-19, 2019-20, even in 2017-18, continuously the copper price was going down. But in spite of that, all the cable companies were growing. Mainly, the rationale behind that was that the capital expenditure allocation in the budget was in the value. So because of that, we will take the demand from the infrastructure from the government: from bridges, railway, transmission, distribution, generation. So everything is related to the value only, actually.

Rajeev Gupta: In spite of that, all the cable companies were growing. Mainly the rationale behind was that the capital expenditure allocation in the budget was in the value. Because of that, we will take the demand from the infrastructure, from the government, from the bridges, railway, transmission, distribution, and generation. Everything relates to the value only actually. That is my humble submission.

Speaker #3: So, that is my humble submission.

Speaker #5: No fair point sir and and your commentary is reflective of the of the of the strong outlook. I was just trying to understand that like so so your view is in a scenario that that copper prices go down then volume will do the heavy lifting so that the revenue number comes close to where we are thinking it.

Pulkit Patni: No, fair point, sir, and your commentary is reflective of the strong outlook. I was just trying to understand that, your view is in a scenario that copper prices go down, volume will do the heavy lifting so that the revenue number comes close to where we are thinking it.

Speaker #3: Sir because if the 11 lakh crore government budget is there and state government budget is 6 lakh crore rupees so that when will that budget will remain as it is whether the copper price or ammonium price or steel price going up or going down so because of that ultimately they spent in the value not in the volume everybody make their balance sheet in the value not in the volume so if the capital is available in the value terms it will also go in into the order book fair point fair point sure

Rajeev Gupta: If the INR 11 lakh crore government budget is there and the state government budget is INR 6 lakh crore, that budget will remain as it is, whether the copper price or aluminum price or steel price going up or going down. Because of that, ultimately they spent in the value, not in the volume. Everybody made their balance sheet in the value, not in the volume.

Pulkit Patni: Sure, sir.

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

Pulkit Patni: Fair point. Sure. That is very useful, sir. Thank you so much for that.

Speaker #5: That is useful, sir. Thank you so much for it.

Speaker #3: Thank you Pulkit bhai.

Rajeev Gupta: Thank you, Pulkit bhai.

Speaker #1: Thank you. We will take the next question from the line of Shiram Kapoor from Jefferies. Please go ahead.

Operator: Thank you. We take the next question from the line of Sriram Kapoor from Jefferies. Please go ahead.

Speaker #6: Hi sir, thanks for the opportunity. I just want to ask you about your exports bit. So, you just gave a target range of around 17% to 18% for your exports this year.

Sriram Kapoor: Hi, sir. Thanks for the opportunity. Just want to ask you on your exports bit. You just gave a target range of around 17% to 18% of your sales this year to come from exports. Just want to understand that just based on FY26 numbers, that would imply around 30% to 40% growth in FY27 in exports itself. In the first quarter, we've seen a decline actually of around 7% to 8%. Does that mean you're expecting in the balance nine months to grow at over 50% in exports? Especially given same time last year the balance nine months also saw 50%+ growth in exports. What gives you that confidence of growing that 50% in this balance nine months?

Speaker #6: Of your sales this year to come from exports. Just want to understand, you know, that just based on FY26 numbers, that would imply around, you know, 30 to 40% growth in FY27 in exports itself. But in the first quarter, we've actually seen it decline by, you know, 7 to 8%.

Speaker #6: So does that mean you're expecting, in the balance nine months, to grow at, you know, over 50% in exports? Especially given, you know, same time last year, the balance nine months also saw 50% plus growth in exports.

Speaker #6: So, is that what gives you the confidence of growing that 50% in this?

Speaker #3: Yeah yeah I I think you are right because because we we could not dispatch a lot of goods in in the first quarter because of the Middle East crisis and shipment shipments were not available which has started now but Albert at a high shipping cost but and similarly US also has opened up which was stalled so the markets are positive and we will be able to achieve what we are saying.

Anil Gupta: I think you're right because we could not dispatch lot of goods in the first quarter because of the Middle East crisis and shipments were not available, which has started now but at a high shipping cost. Similarly, US also has opened up, which was stalled. The markets are positive and we will be able to achieve what we are saying.

Speaker #6: Sir one more humble request to all of you is that sometimes what happen in the even in the last year when export grows more so some of the analysts say that the if the domestic demand is weak so if the if you see if we need to grow 24 25% whether we grow in export grow in retail grow in institutional market it will be again into the 24 25%.

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

Speaker #1: Right sir. Thanks thank you. Just secondly on you know in your presentation in previous quarters you would normally give that breakup of your sales across you know housewires low tension high tension cables but maybe this time that breakup was missing so if you could just share you know what was your.

Sriram Kapoor: Right, sir. Thank you. Just secondly, in your presentation in previous quarters, you would normally give that breakup of your sales across house wires, low tension, high tension cables, maybe this time that breakup was missing. If you could just share, what was your house wire-

Speaker #6: No sir, we cannot give that figure because now the competitor is using those numbers actually, so that's why we have decided not to give individual product-wise numbers.

Rajeev Gupta: No, sir, we cannot give that figure because now the competitor was using those numbers actually, that's why we have decided not to go for individual product wise number actually.

Speaker #1: Oh, got it, got it, sir. And just lastly, on the retail sales, which has risen to 59% this quarter, is that a number you see sustainably going ahead? You know, because forty percent growth in the first quarter—is this growth sustainable or, you know, do we—yeah, just if you could.

Sriram Kapoor: Oh, got it, sir. Just lastly on the retail sales, which has risen to 59% this quarter, is that a number you see sustainably going ahead? 40% growth in Q1, is this growth sustainable? Just if you could comment on that.

Speaker #3: Sir, as I said, we are more focused towards retail mainly because of lower working capital requirements. But sometimes, when the export order is more, we need to book—so we need to sell to the export market also. So, this mix can change internally, but overall growth rate will remain. Got it, got it sir.

Rajeev Gupta: Sir, as I said, we are more focusing towards retail mainly because of lower working capital requirement. Sometimes when the export order is more, we need to book, so we need to sell to the export market also. This mix can get changed internally, but overall growth rate will remain.

Sriram Kapoor: Got it. Just lastly on your other income, could you explain the drop in your other income from around INR 40 crore to-

Speaker #1: Just lastly, on your other income, could you explain the drop in your other income from about ₹40 crore?

Speaker #3: Sir, in the last year, other income was mainly because of the QIP. The interest cost was higher because the QIP money was lying in the FDR, so the interest income was high there.

Rajeev Gupta: Sir, in the last year, other income was mainly because of the QIP, the interest cost.

Sriram Kapoor: Got it.

Rajeev Gupta: QIP money was lying in the FDR, so the interest cost was high there.

Speaker #1: Right. So, what was the other income that we saw in FY26 that is unlikely to sustain in FY27? Got it.

Sriram Kapoor: Right. The other income that we saw in FY2026, that is unlikely to sustain in FY2027.

Speaker #3: Mainly. Yeah yeah.

Rajeev Gupta: Mainly.

Sriram Kapoor: Got it.

Rajeev Gupta: Yeah.

Speaker #1: Got it, sir. Thank you so much.

Sriram Kapoor: Got it, sir. Thank you so much.

Speaker #3: Thank you very much sir.

Rajeev Gupta: Thank you very much, sir.

Speaker #1: Thank you. We take the next question from the line of Bhavani from Axis Capital. Please go ahead.

Operator: Thank you. We take the next question from the line of Bhavani from Axis Capital. Please go ahead.

Speaker #6: Yeah, hi sir. Congratulations on a good set of numbers. I just wanted one clarification. What is the kind of price hike we have taken, sir, in Q1?

[Analyst] (Axis Capital): Yeah, hi, sir. Congratulations on good set of numbers. Just wanted to take one clarification. What is the kind of price hike we have took, sir, in Q1?

Speaker #3: Sir price hike it is not a percentage it is basically on the depend on the how much the copper company content is going up or going down.

Rajeev Gupta: Price hike, it is not a percentage. It is basically depend on how much the copper content is going up or going down. Accordingly, that formula is there. It is not the base case. It is directly depending on the price fluctuation.

Speaker #3: So, accordingly, that formula is there. It is not the base case; it is directly depending on the price fluctuation.

Speaker #6: Understood. And sir, most of the price, most of the price has been passed on, right? The cost inflation has been passed on.

[Analyst] (Axis Capital): Understood. Sir, most of the prices have been passed on, right? The cost inflation has been passed on.

Speaker #3: Yes yes yes yes.

Rajeev Gupta: Yes.

Speaker #6: Understood, sir. Understood, sir. Sir, thank you so much for this. Thanks.

[Analyst] (Axis Capital): Understood, sir. Sir, thank you so much for this. Thanks.

Speaker #3: Thank you Bhavani ji.

Rajeev Gupta: Thank you, Bhavani Ji.

Speaker #1: Thank you. We will take the next question from the line of Bharat C. Shah from BCS Capital Ideas Private Limited. Please go ahead.

Operator: Thank you. We take the next question from the line of Bharat C. Shah from BCS Capital Ideas Private Limited. Please go ahead.

Speaker #7: Yeah, namaste Anil ji. Namaste Rajiv ji.

Bharat Shah: Yeah. Namaste, Anil Ji. Namaste, Rajiv Ji.

Speaker #3: Namaste Bharat ji.

Rajeev Gupta: Namaste, Bharat Ji.

Speaker #7: Namaste. Now, when we see most things seem to fall in place, we now have better production capacity available. With a good runway ahead for growth to capitalize on, the export situation is also shaping up well—unless Mr. Trump comes up with something peculiar again. But other than that, overall, the situation looks very healthy there.

Bharat Shah: Namaste. Now when we see most things seem to fall in place. We now have better production capacity available, with a good runway ahead for growth to capitalize on. The export situation is also shaping up well, unless Mr. Trump comes up with something peculiar again. Other than that, overall situation looks very healthy there. Given our greater business in value-added products and increasing retailization of our wires business, the size of opportunity continues to keep expanding at a rapid pace. In scenario like this, it is easy to feel overconfident and less worried about probably challenges which may be lurking around. What, in your opinion could be potential spots of trouble or what can really be a spoiler in May not be a spoiler, but it can dampen, if at all, any issues that worries your mind.

Speaker #7: And given our greater business in value-added products and increasing retailization of our wires business, the size of the opportunity continues to keep expanding at a rapid pace.

Speaker #7: In a scenario like this, it is easy to, you know, feel overconfident and less worried about probable challenges which may be lurking around. What, in your opinion, could be potential spots of trouble, or what can—what can really be a spoiler? I mean, it may not be a spoiler, but is there anything that can dampen—or any issues that worry your mind?

Speaker #3: Bharat ji sir what the kind of business we have created with it which with so much of widespread of customer base and in India as well as in different geographies the purpose of creating this kind of base is that we insulate ourselves from any possible impacts risks from any particular geography or territory even if we have seen you know blockade from USA we have seen the wars in Middle East we which led to stoppage of you know shipments but still we have been able to grow from wherever wherever our customer base is there.

Anil Gupta: Bharat Ji, what the kind of business we have created with so much of widespread of customer base and in India as well as in different geographies. The purpose of creating this kind of base is that we insulate ourselves from any possible impacts, risks from any particular geography or territory. Even if we have seen blockades from US, we have seen the wars in the Middle East, which led to stoppage of shipments, but still we have been able to grow from wherever our customer base is there. Risk factors. Nobody knows in today's time what geopolitics does. Our aim is to remain risk-free in terms of our financial goals and our marketing goals, so that we are spread over in so many countries that we are able to make up our sales from somewhere or the other.

Speaker #3: So, risk factors will always be there. Nobody knows, in today's time, what geopolitical politics does, but our aim is to remain risk-free in terms of our financial goals and our marketing goals.

Speaker #3: So that we are spread over so many countries that we are able to make up our sales from somewhere or the other.

Speaker #3: Similarly now we are a debt free company so to that extent risk of any you know any dent about any some some some markets or some you know lower sales so we are insulated from that.

Anil Gupta: Similarly, now we are a debt-free company, to that extent, risk of any dent about some markets or some low sales, we are insulated from that. See, you can't have zero risk ever. How do we mitigate the risk? That is what we have been doing.

Speaker #3: So, see, you can't have zero risk ever. But how do we mitigate the risk? That is what we have been doing.

Speaker #7: Absolutely. Although the points have been very much in evidence in terms of the prudence with which we have conducted our balance sheet, we have conducted our business, and in a very calibrated way, we have continued to grow.

Bharat Shah: No, absolutely. All those points have been very much in evidence in terms of the prudence in which we have conducted our balance sheet, we have conducted our business, and in a very calibrated way, we have continued to grow. I understand that external threats or challenges could materialize over which we do not have any really control. Internally, have you seen any constraints or any issues that need to be mindful of or to be sorted out?

Speaker #7: So I understand that external threats or challenges could materialize over which we do not have any real control. But internally, are you seeing any constraints or any issues that need to be mindful of or need to be sorted out?

Rajeev Gupta: Sir, internally, as we have discussed even in the past few years, where we have highlighted earlier that the risk for the sustainability or for the capital allocation that we have fully addressed and even for the debt risk, we are fully now the debt-free company. Whatever risk any investor has highlighted to us or internally we envisage, we try to mitigate those risks. Accordingly, we are disciplined ourselves, even though in spite of in this 1-hour call, everybody was saying, Why can't we grow 30% or 35% even though the market is there? The debt can be arranged easily, but we are still reluctant to say that we will not grow more than that, only because of the discipline, the proper capital allocation policy. That's how we have learned over a period of time in the past, and it has paid us well also.

Speaker #3: Sir internally as we have discussed even in the past a few years where we have highlighted earlier that the risk for the sustainability or for the capital allocation that we have fully addressed and even for the debt risk we have we have we have fully now the debt free company.

Speaker #3: So whatever risk any investor has highlighted towards or internally we in which we try to mitigate those risk and accordingly we are disciplined ourselves even though in spite of in this one hour call everybody was saying why can't we grow 30 percent or 35 percent even though the market is there the the debt can be arranged easily but we are still reluctant to say that we will not grow more than that only because of the discipline and the proper capital allocation policy.

Speaker #3: So that is how we have learned over a period of time in the past, and it has paid us well also. So we will be keeping in our mind that good capital allocation, proper risk mitigation, and a long-term, at least for five years, sustainable business plan. We are already guiding you as well as the complete market, and accordingly we are going ahead with that.

Rajeev Gupta: We will be keeping in our mind that good capital allocation, proper risk mitigation, and long-term, at least for 5-year sustainable business plan, we are already guiding you as well as to the complete market, and accordingly, we are going at it that.

Speaker #5: The investor conference call is just going to finish in two to three minutes.

Anil Gupta: Investor conference call is just going to finish in two minutes.

Bharat Shah: Rajeevji, when do we once again cross or touch 30% or higher return on capital employed? Will it be in 2027, 2028?

Speaker #7: Rajiv ji, when will we once again cross or touch 30 percent or higher return on capital employed? Will it be in 2017?

Speaker #3: Sir because of the no sir no so because of the capital expenditure is going on so as of now we are having 23 24 percent and and the second question because our creditors are very low because of the good financial health of the company so we are buying our metal on cash otherwise if we buy metal against the LC it will be seeing at least 28 percent as of now itself because of the creditors which was earlier used to be three and a half month it is now only less than one and a half month.

Rajeev Gupta: No, sir. The capital expenditure is going on. As of now, we are having 23%, 24%. The second question, because our creditors are very low because of the good financial health of the company.

Bharat Shah: Yes.

Rajeev Gupta: We are buying our metal on cash. Otherwise, if we buy metal against the LC, it will be seen at least 28% as of now itself. Because of the creditors which was earlier used to be three and a half months, it is now only less than one and a half month.

Speaker #7: See, Rajiv ji पूछ रहा था, 27-28 में 30% हो जाना चाहिए, isn't it.

Bharat Shah: No, Rajivji, I was asking, in 2027, 2028, 30% should be there, isn't it?

Speaker #3: नहीं-नहीं सर, 27-28 में, क्योंकि हमने creditor level कम रखा हुआ है न सर, interest cost बचाते हैं उसमें।

Rajeev Gupta: No, sir. In 2027, 2028, because we have kept the creditor level low, sir. We save interest cost in it.

Speaker #7: ठीक है.

Bharat Shah: Okay.

Speaker #3: तो अगर creditor level बढ़ा देंगे, तो तो immediately हो ही जाएगा, सर.

Rajeev Gupta: If we increase the creditor level, then it will happen immediately, sir.

Speaker #7: जी, जी, जी, समझ गया मैं। And एक last question: in the year of '27-'28, is it possible to think of a turnover of ₹20,000 crore, or is it just being too greedy?

Bharat Shah: Yes. I understood.

Rajeev Gupta: Yes.

Bharat Shah: Last question. In the year of 2027, 2028, is it possible to think of the turnover of INR 20,000 crore, or it is just being too greedy?

Speaker #3: No, no, no. Sir, whatever we are guiding, we are guiding accordingly. So, and the capacity we have created, we have not created only for one year. It will be created for another two years, because the next plan which we announced yesterday, it will take another two years.

Rajeev Gupta: No, no. Sir, whatever we are guiding, we are guiding accordingly. The capacity we have created, we have not created only for 1 year. It will be created for another 2 years because the next plant which we announced yesterday, it will take another 2 years. We need to utilize that capacity year after year.

Speaker #3: So, we need to utilize the capacity year after year, होना चाहिए मोटा मोटा.

Bharat Shah: In 2028, 2029, it should be there, roughly. The milestone of INR 20,000 crore that we have planned.

Speaker #7: 20,000 का जो milestone हम plan कर रहे थे।

Speaker #3: हाँ सर, हमने आपको 29-30 का ₹25,000 का टारगेट दिया है, वो पूरा करके देंगे आपको।

Rajeev Gupta: Sir, we have given you a target of INR 25,000 crore for 2029, 2030. We will fulfill that for you.

Speaker #7: Ji ji, okay. Thank you, Rajiv ji. Thank you, Arjun ji. And all the very best.

Bharat Shah: Okay. Thank you, Rajivji. Thank you, Anujji, and all the very best.

Speaker #3: Thank you. All the best. Thank you very much, sir, for your blessings.

Rajeev Gupta: Thank you. All the best. Thank you very much, sir, for your blessings.

Speaker #1: Thank you. Ladies and gentlemen, with that we conclude the question and answer session. I now hand the conference over to the management for their closing comments.

Operator: Thank you. Ladies and gentlemen, with that, we conclude the question and answer session. I now hand the conference over to the management for their closing comments.

Speaker #3: Thank you very much for joining this conference call. We are always available to answer any other questions or queries you may have. Thank you so much for joining.

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

Speaker #3: Thank you very much sir.

Rajeev Gupta: Thank you very much, sir.

Speaker #1: Thank you sir. On behalf of Nuwama Institutional Equities that concludes this conference call. Thank you for joining us and you may now disconnect your lines.

Operator: Thank you, sir. On behalf of Nuvama Institutional Equities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.

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