Ladies and gentlemen, good day and welcome to the APAR Industries Limited Earnings Conference call. As a reminder, all participant lines will be 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 an operator by pressing Star then zero on your touch tone phone. I now hand the conference over to Mr. Ambesh Tiwari from Essential Technologies. Thank you. Over to you sir.
Thank you. Good afternoon everyone. I welcome you all for the Q4 of FY 2026 earnings call for APAR Industries Limited to discuss the business and outlook. We have our Chairman and Managing Director Kushal Desai and CFO Vishnu Rathi. I would now pass on to Mr. Kushal Desai. Thank you, and over to you sir.
Thank you, Ambesh. Good afternoon, everyone, and welcome to the.
Apar Industries Q1 FY 2026 earnings call. I would like to start by actually.
Giving a quick overview of our performance.
will get into a quick industry update.
Post that we can look.
At the segmental performance and finally open.
The floor to questions.
We have started off FY 2026 with a notable first quarter.
Our revenue for the quarter grew 27.3%.
Over the same period last year to reach INR 5,104 crore. This was driven by growth in.
The domestic business, particularly.
Export revenues contributed about 31.6% to the turnover. Our EBITDA is up 27% year-on-r on year to about INR 501 crore, which is.
At a margin of about 9.8%.
Profit after tax came in at INR 263 million.
crores, which is about 30% growth year.
On year with an absolute margin of 5.2%.
In terms of key industry highlights, India's.
Renewable energy sector has recorded its strongest.
Growth in the last three years.
Power generation rising by about 24% in.
The first half of 2025 compared to the same period in 2024.
The renewable power generation has reached 134.
Billion kW hours in the January to June 2025 period, which is the highest.
Semiannual growth rate that has been seen.
Right from 2002 onwards.
June 2025 alone added about 7.3 GW of renewable energy.
This is about 4x what it is.
Was in the same period a year.
Ago, which was 1.4 GW.
This sharp increase has primarily been.
Driven by both expansion in solar and wind, and this has been further advancing.
India's clean energy transition.
In the meanwhile, you will also find that coal-based electricity generation has declined.
By nearly 3% in the first half.
Of 2025, and this was influenced too.
Some extent by milder summer temperatures, that.
Reduced the overall power demand.
However, we expect that in the short to near term there will be an.
Increase in conventional energy as well.
Ensure that the baseload is being maintained.
In terms of recent tenders and projects.
In the renewable sector, I would like.
To point out that in June 25th, approximately 6.8 GW of renewable energy tenders.
Were issued for project development, reflecting that.
The sector is still seeing momentum.
SECI, which is a solar energy corporation of India, has invited bids for 2 GW of interstate transmission systems connected to.
Solar projects, along with additional between 1- 4 GW of energy storage systems as well.
During the same period, 520 MW of.
EPC tenders were announced, including 260 MW of solar EPC floated by NTPC in Rajasthan.
Further, about 1.6 GW of BESS, which.
Is battery energy solid systems capacity and 312 MW of renewable energy capacity were.
Also awarded to developers.
There is a lot of action.
That is happening in this sector.
You will see that increasingly more and more.
More systems are requiring storage solutions in place.
On the transmission side, according to Central.
Electricity Authority, India has added 22,190 MVA.
Of new substation capacity in the first quarter of FY 2026.
This is of 220 KV class.
Above, and this is more than double.
What was added in the same period last year.
However, this achievement is still significantly short of the planned capacity which was supposed.
To be 48,185 MVA for the quarter.
There is a pent up demand.
Which is continuing to be built up, in contrast, the addition of transmission lines.
In the first quarter FY 2026 was much below target. Only 1,031 circuit kilometers of lines, which.
220 KV and above were added.
Representing just 17% of what had been.
Targeted, which was 6,000 circuit kilometers.
Some of these delays have been actual.
Attributed to segments where the right-of-way has not come through, and there is a lot of attention being provided to get these clearances.
Once again, we feel that as.
These clearances come through, there will be.
Significant call-ups and demand coming up.
In the full year FY 2026, the planned addition of transmission line stands at.
24,400 circuit kilometers, which is planned to.
Be 2.5x what.
It was in FY 2025. Now, coming to more specifically the business performance by each segment, I'll cover.
The conductor segment first, follow that up with the specialty oil segment and then.
Finally, close to the cables.
In terms of our conductor division.
Q1 FY 2026 revenues grew by 43.9%, say 44% year on year.
On the back of improved product mix.
Higher realization as well as volume growth.
The volume has grown by about 18% versus Q1 FY 2026. Exports contributed about 20% to the overall.
Revenue of the conductor division as opposed to almost 30% in Q1 FY 2025.
As I mentioned in my opening remarks.
On the conductor side, the domestic business.
Was quite strong during this period.
The domestic order book as well.
The expected business to be awarded as.
I mentioned in my opening remarks, continues to look strong.
Our US revenues grew by almost 83%.
Over Q1 FY 2025 and 8.6% over the fourth quarter of FY 2025.
Looking at our premium product mix, that contributed 43.5% in Q1 FY 2026 compared to 37.1%.
In the last year.
On the profitability front, the EBITDA post open period forex came in at INR 43,688.
Rupees per metric ton as against INR 38,532 per metric ton in the same period last year.
This can be attributed to an improved.
U.S. and export product mix as well.
As growth in the premium business, if you look at the order book.
Our current order book stands at INR 7,779 million.
Crores and the new orders received during.
The quarter were about INR 3,135 crore.
All in all, the conductor business.
Has put in a very strong performance.
Coming to the oil business, even though the revenues seem to be flat over.
Last year, given that the average price.
Of crude, gas, oil, and some of the derivatives were lower than the same period previously.
However, the volume has grown by 8.1%.
Compared to Q1 FY 2025.
Transformer oil volume was higher by 7.4%. The domestic transformer oil volume grew by almost 20%.
It’s really the overseas business which.
Was a bit slower.
Automotive oil grew by about 8.4%.
Industrial lubricants grew by around 15.9% year -on- year.
However, as I said, the export side was a little bit slower.
Many transformer oil projects in some of.
Our key markets like Saudi Arabia, South Africa.
Africa and Australia have got a bit delayed.
We do have a strong order book, but its execution has been pushed out.
By a few months.
For the first time, the export mix.
Actually came down to 36.7%, which used.
To always remain 40 +. Last year on a comparable basis, it.
Was about 45% of our revenues.
Our expectation is that this is a temporary blip, and as the project executions.
Start picking up, you will see this whole equation reverse.
When you look at EBITDA for kL, it came in at INR 7,00 rupees as opposed to INR 6,009.35 per kL a year ago.
Now coming to our cable segment revenues.
In Q1 FY 2026 posted a revenue growth.
Of 36.3% and revenues have reached INR 1,419 crore. There has been a strong export performance.
In the cable division.
Domestic revenues grew 19.7% year -on- year.
Whereas our U.S. revenues actually grew 136%.
Over the same period last year.
Part of this was meeting customers, calling.
Our products to meet a deadline of August 1 where the tariffs will change pending a conclusion on the tariff agreement.
Between India and the U.S.
If you look at the export mix, it came in at 41.3% versus.
33.2% a year ago. If you see EBITDA post Forex, that also grew almost proportionately by 32.2% to reach INR 142 crore. The EBITDA margin came in at around.
10% which is marginally lower than what it was in Q1 FY 2025. The current pending order book stands at about INR 1,653 crore. If you look at exports in the non-U.S. market, we continue to encounter some headwinds due to the subsidized export taking place from Chinese companies. I mentioned in the last earnings call.
That we had at the end of.
The full year results were Chinese products.
Are being subsidized by between 8%- 12% and that trend continues.
The trade deal with the U.S., unfortunately.
Has not yet been closed, so the.
Impact on India still remains a bit.
Uncertain until this issue is settled.
However, pending the finalization of the import.
Duty structure, we are given to understand.
That many U.S. clients are sitting on the fence. They are going a little slower in.
Terms of ordering as we are not clear exactly what the landed cost will be.
Having said that, we are hopeful that the India duty rate should not be.
A huge disadvantage compared to some of.
The countries that so far we have.
Been having to compete with, which are.
Fundamentally Vietnam, Cambodia, Indonesia, Korea, Mexico, and the EU.
However, we are optimistic that in the.
Medium to long term, the demand in the energy sector with all the various initiatives that are running continues to remain strong in Europe. ESG requirements are continuing to increase, and in fact, participation in tenders is becoming contingent upon clearing a certain basic ESG screening.
As I mentioned in the last.
Earnings call as well that we are.
Continuing with our planned CapEx spending of about INR 1,300 crore. So far we have incurred INR 150 crore.
Of CapEx in Q1, and we additionally.
Expect, based on the orders that have.
Been placed, about INR 350 crore to be.
Spent in the next few months within.
The quarter may be running up to.
The month of October.
This will enable us to be prepared.
For the future and tap the various.
Opportunities that come by. I'd also point out that we have.
A detailed corporate presentation in the investor.
Section of our website.
Also this year APAR has released an integrated annual report. It's a very comprehensive report which covers.
Not only the financial performance, but it integrates ESG.
Considerations within the report.
We'd be happy if all of you go through it, and if any of you have any feedback, because this.
Is a gigantic exercise that has been.
Undertaken, and it's for the first time that we've done it.
Please feel free to give us your comments and feedback, because this is something.
That will continue going forward.
With this I'd like to come to the end of my comments.
I'd like to turn it over for any questions.
Thank you.
Thank you very much. We will now begin the question-and- answer session. Anyone who wishes to ask a question may press star and one on the touch of telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Vidit Trivedi from Asian Market Securities. Please go ahead.
Yeah. Hi sir. Thank you for the opportunity and congratulations on great set of numbers. My first question is with respect to the Conductor Division. We have seen the realization is close to INR 43,000. My question is how sustainable are these levels or should we stick to the earlier guided range of INR 30,000+ tailwinds?
Yeah, we have always been saying this Conductor Division because of the various products that we have, the premium and non-premium mix changes, and also the geography mix changes, and different product categories have different margins. We have always been saying that our guidance has been about INR 30,000 + tailwinds, and in many ways the tailwinds are not so easy to predict.
We continue with the same guidance.
INR 30,000+ tailwinds. The tailwinds will depend on the use of premium mix and non-premium mix on the various metals involved, the geography mix, and the kind of products which are there. A comprehensive mix of that will determine the EBITDA for the quarter.
Got it, sir. Second, on the U.S. growth this year in the conductor division, it's close to 83%. Can we assume that this is also because of the pre-buying? As sir mentioned, in the cables division a lot of activity was seen because of the pre-buying.
Yes, to some extent, yes, we can.
See that one of those activities, because this duty structure is uncertain at this stage, and therefore customers are being insisting for some early deliveries.
Sir, what's the rate of duty when we export to the U.S. and the other players export to the U.S.?
Ours is subjected to reciprocal tariff, which is.
10%+ the duty which was already there about 5%. That is what the products from India.
We are subject to.
Different countries have different rates of duties.
In some cases, there are typical tariffs. Also, as you are reading the newspapers, there is a duty on aluminum, on steel also.
That duty is different than.
The reciprocal taxes are on top of that.
Got it, sir. Thank you. All the best.
Thank you. The next question is from the line of Nitin Arora from Axis Mutual Funds. Please go ahead. Yes, Mr. Nitin, please go ahead.
First question on the conductors. When we look at your export mix, on a quarter-on-quarter basis it has still not moved that much as a share in conductors.
It looks like to us that.
This realization growth has come from the domestic side largely. Can you throw some light, is this analysis correct and how you're seeing domestic prices, specifically AL59, and also if you can throw some light, do you think there is a likelihood of expanding more of these capacities? Because you yourself said that domestic demand continues to remain strong. Just on one of that aspect, if you can throw some light.
On the first point, it is.
Correct that the domestic market is the one which has driven the growth compared to the export. On the second point, the various products which we have been expanding in on the copper side as well as on the aluminium side, both have grown in the domestic market. We see more of a possibility of growth in volume rather than expansion in margins, especially on AL59.
On the pricing of AL59, how that has been panning out, why I'm asking you this is because it was always our exports which used to drive EBITDA per ton or realization per ton on the conductor. This is the first time we are seeing that export market is so strong that it's taking your EBITDA or rather your realization or EBITDA per ton so higher. On the pricing side, do you.
See any risk in the domestic market.
Do you think the demand is so strong that this pricing will remain for the next one, two years, or three years? How are you looking a little on a longer term?
This is [audio distortion]
The function of EBITDA was on exports.
As you rightly said, also the function was on the.
Premium products that we've been selling in the domestic market.
We have the premium products that get.
Sold on the domestic market and the standard products that go to the export market. These two have been accounting for the high EBITDA margin. As you have seen earlier, even in the non-premium part of the domestic business last year, because of AL59, they have been able to get a higher price as compared to the traditional ACSR conductors. As of now, and it has been happening for the last 2 or 3 quarters, the entire AL59 has replaced the traditional ACSR market.
There are these three things at.
least on a big scale, that is accounting for the higher EBITDA. Export was just one part of it.
The high premium mix as well.
As more use of AL59 has also added to the EBITDA margin for the.
Dipster,
just one on that export part. I think you explained in the last call as well because one is obviously the reciprocal tariff. The other part, even on the steel, aluminum, they are putting a lot of tariff. I'm talking about U.S., and that's where Serge has faced that there might be a situation that he might start looking capacity there because as you rightly said in the starting of your point, what will be the landed cost? Nobody knows at this point in time. That's for every country given steel and aluminum. I think the duties are similar. India is not known how much they will put on U.S., but at least for the other markets the duty of steel and aluminum is about 30%-40%.
I'll just clarify that. You know there are the tariffs.
In the US, there is one which is a reciprocal tariff. However, the basic material, which is steel, aluminum, copper, and a few others, are.
Falling under a completely separate classification called Section 232, which are products of strategic.
Nature to the government of the U.S.
There the tax is an absolute.
I mean, the tariff is an absolute tariff.
Currently for all of these three.
Items, steel, aluminum, and copper, it is.
At 50%, 50%.
If a local aluminum manufacturer, meaning.
If a local conductor manufacturer needs to import aluminum or someone needs to import.
Copper or steel, for that matter, they.
Also have to pay 50%. The situation is a.
Little bit fluid in terms of where.
This is finally going to settle because just recently it was just about a month ago that it was increased from 25%- 50%. Copper, which was previously zero, has.
Also come into this 50% band.
There have been so many changes that have happened that I think a little bit more time will allow all of.
This is to settle down.
In the meantime, there will also be.
Some more clarity in terms of the reciprocal tariffs that India will have.
With respect to the U.S., what I.
Mentioned earlier, in terms of the race.
With some of the countries from where imports are taking place, that is a reciprocal tariff.
Section 232 is an absolute number.
There is no reciprocal tariff, nothing. It's just a fixed number irrespective of.
Pretty much where the import takes place.
I just hope that I've clarified this. It's a little bit complicated, but this is what our understanding is based on.
Whatever our UN advisors have said informed us.
This is very helpful. Basically, anyone, either you supplying from India or someone else applying for the other country, the raw material import cost is the same, or any U.S. local player also importing that, the duties are the same as of now.
The American manufacturer will have a 50%.
Duty on his raw materials, not us. We don't have 50% on our.
Supposing we are exporting a civil.
Raw, which is having aluminum in it at the moment.
Right now the reciprocal tariff is.
10%, the basic duty is 5%.
You end up paying 15%.
If today I file a bill of.
Entry in the US for aluminum.
Indirect, it would actually attract a 50% customs duty under Section 232.
Now what's the final Indian tariff settled that we need to still understand?
I mentioned a few countries, the.
EU currently, you know, the settlement deal.
Is at 15% reciprocal tariff, right?
You've got Vietnam, which is I.
Think at 19% or 20%, Indonesia at 19%, etc. Japan is at 15%.
Let me ask you this way, sir.
At what percentage do you think will go in favor for India, at least for our business? I don't know about any other business.
We were previously competing when the.
Tariffs were the same for, you know.
The tariff was the same for Indonesia.
Vietnam, India, Korea, Japan, all these places. If we are not at a.
Disadvantage relative to these countries, then you know it should.
The customer will be bearing a higher price, and whatever is the effect of.
The project cost going up will, you.
Know will result in some amount of.
Demand getting a bit.
We will not be at a.
Competitive disadvantage to these countries.
The EU is at 15%, which is.
Lower than the rest of the Asian countries that the export is happening.
I think in the course of the next few days I think there.
should be more clarity on this particular front.
Very helpful, sir. I'll come back in a queue. Thank you so much.
Thank you. The next question is from the line of Amit Anwani from PL Capital. Please go ahead.
Hi.
Thank you for taking my question. First question on the cables business. This quarter we saw pretty strong exports growth. Export number for cables is almost INR 586 crore versus almost INR 350 crore-400 crore run rate for the whole of last year. Despite that, the margins are keeping at about 10%. First thing I would like to understand is this strong export coming from only the U.S. or are there other functions? Second, despite export contribution going up this quarter, why are the margins still at this level?
Keeping at 10% for cables.
There is an overall growth in exports. A larger portion has gone to the U.S. market.
Part of it was as I mentioned.
In my opening remarks, to try to pick up a tariff where, you know, it had been declared as that 10%.
There has been some impact that has happened because in some contracts the customer.
Has paid the higher tariffs. That's the 10% reciprocal tariff.
In some cases, we have had to.
Negotiate and compromise with the client.
Make sure that all of this product has gone through.
A combination of these plus, you know, some of the freight rates also.
Had gone up in the short term.
When everyone is trying to push the.
Product into the U.S. during this interim period where the tariff was pushed back.
There have been so many moving parts.
I wouldn't look at it as.
A fundamental change in the business economics.
What fundamentally can change with if the.
Tariff situation becomes something that's highly unfavorable.
I also want to emphasize that the U.S. market on cables is about $55 b illion and 40% of those cables are still imported.
Even though there are a bunch.
Of new plants which are being declared.
If you look at the cumulative output.
Of those four, five major plants which are coming there, the output would just add up to a few billion dollars.
The growth rate there is about.
3% a year, year-on- year at least.
So far, just the growth is equal to $1.5 billion or $1.65 billion a year. Our assumption is, or thinking is that once this noise settles down there.
Will be a certain, you know, the.
Demand should start coming in.
The issue right now is that if someone were to say that what is the landed cost of my product?
You are not in a position to give that number.
Yeah.
Sir, again for cables, earlier we were highlighting about the competition increasing. Any change on domestic market on the competition front for cables as well as conductors? Both.
On the cable side, the competition does continue.
There's really been very little change in the intensity of competition.
We have been focusing on certain areas.
Where APAR has been fairly strong.
One of the segments which has been.
Growing very rapidly is the wind segment.
Because that's something that was very slow.
For the last few years, currently there are several new windmills going.
In, especially the hybrid project, which is.
A combination of solar and wind, we are seeing a good growth.
On the elastomeric cable and the windmill side.
Otherwise, there is no change in.
There's no major change in the competitive intensity.
Still remains competitive.
Our emphasis has been really on.
Improving productivity and taking out conversion costs, energy efficiency.
We have a bunch of new windmills.
Which are coming through for our own.
Third party captives, which will also help reduce power costs, etc.
Sir, on cable part the premium mix has gone up significantly. Q4 it was about INR 1,300 crore, this quarter also roughly about INR 1,200 crore. The run rate previously was only INR 800, 900 crore. I wanted to understand. You explained that the reason also for EBITDA pattern being higher is the standard product sales in the U.S. and premium product sales in India. I wanted to understand this premium product we are talking about. If you could explain more in the domestic market which has contributed very strong contribution from premium products during this quarter and in Q4 as well.
Yes.
Generally, there's been improved execution on.
The HTLS, which is the high temperature, low sag.
There's also been a growth in the.
Entire copper set of product. We have overhead railway conductors, we have copper transport conductors going to transformers, and we have bus bars. That range also has grown. Besides the HTLS and some of the execution of the semi-EPC turnkey projects that we have on the HTLS.
Overall, that whole group, every line.
Item has pretty much shown an increase on that side. That's how we are seeing.
Even the order book has increased by.
Almost 8 percentage points from the same period in the previous year.
Right. Any color on that is my last question. Any color on the non-US business this quarter, and how has been the performance in non-US business for conductors?
The non-U.S. business inquiries continue, but we are finding in many cases.
You know, some of the domestic projects.
Are more interesting than going down in pricing for exports in certain geographies, especially Africa and some parts of Latin America, where the Chinese products carry a fairly high level of acceptability.
Our strategy has always been that.
You know, what is the best netback that we get.
Based on that, we've been allocating where we want to export.
Over the last few years, and including in this CapEx cycle, we keep on.
Increasing the fungibility of our equipment gives us so much more flexibility to be able to move around.
Within the product mix.
That's why sometimes you find that [audio distortion] starts off being more conservative.
You know the number because if the opportunity comes up, we have the ability to switch, you know, on the fly.
Yeah, just a clarification. On CapEx, we said INR 1,300 crore and INR 350 crore is additional or it is.
Part of that's the execution of that.
When we spoke about this, 1,300.
crores which we expect to spend by.
June of 2026 of that INR 150 crore physically has been already spent.
INR 350 crore is what we.
Expect to spend in the next few months.
It will go through progressively.
The big payouts will come actually around November, December, January when you pay for all the equipment, because initially you pay 20%, 30% of the value of the.
Equipment and the rest of it comes later on. Progressively, this is being executed.
Understood, sir. Thank you so much and all the best.
Thank you.
Thank you. The next question is from the line of Garvit Goyal from Nvest Analytics Advisory LLP. Please go ahead.
Hi, am I audience?
Yes, please go ahead.
Good evening sir and congratulations for a decent set of numbers. My first question is from your opening remarks, you mentioned about the transmission lines that we have achieved 17% of our annual target for FY 2026. Is it due to monsoons entering earlier in India or any structural issues that you are seeing?
No, sir, last year.
The last year number was very majorly affected because of the elections as well.
If you are talking about so.
Far in the first quarter, 17% of.
The planned quantity has been executed.
If you were to split into four quarters, it should have been about 25%. There is a little bit of a, you know, part of it is because the monsoons did come in a bit early.
There is also a right-of-way issue.
Many lines have got stuck because of.
Right-of-way actually matters.
There's also a few forest permissions.
Clearances that are required.
The expectation is that given the fact that so much solar is being added, these lines also will have to speed up.
I think everybody right from CA.
Downward, including the PMO's office, everyone is.
Aware of this particular issue.
This is on the back of last.
Year being also relatively miscellaneous, the plan.
As I mentioned, by a fairly large number.
There is a good amount of.
Pent up demand, which should come up.
In the domestic market.
Got it, sir. Secondly, there are some issues happening in the industry related to delays in approval for solar projects that are to be connected with the grid and some land availability issues that you rightly mentioned in the domestic market. Conductors are also important components in the wiring of the solar plants. Are you seeing any slowdown here in the orders in Q1?
We've had a reasonably good order.
Book as we mentioned, you know, INR 3,000 + crores, INR 3,175 crores approximately. The order flow has still come in, and our expectation is that it should continue as these executions take place. It's if they had gone as per.
The plan, they would have done more business than.
We've been awarded.
Our plants are running pretty much full and in a way actually it.
Will time some of the expanded equipment that's coming in.
Okay, I'm just trying to understand from you regarding the industry issues that recently came into picture regarding some approval getting delayed with respect to solar parks to be connected with the grid, and secondly on this IFT waiver that is removed from the inter transmission connectivity. Are these issues anyway going to impact our business going ahead?
I don't think so.
In fact, these are matters which have to get resolved. I think, as I mentioned, even at the highest level there is a.
reasonably good understanding of what the issues are. People are all working towards solutions on this.
In fact, on the contrary, I believe that in the months going out.
You may see stronger demand once these issues get sorted out there.
will be more ordering that will take place.
Got it. Thank you very much, sir. That's it for myself, sir. All the best for the session.
Thank you.
Thank you. The next question is from the line of Charanjit Singh from DSP, please go ahead.
Yeah.
Hello sir. Thanks for the opportunity. Sir, my question is on the premium conductors, especially in the domestic market. If you can help us understand in terms of the demand supply scenario and from the growth perspective, what is the current size of the market and how do you see over the next two to three years. This is mainly for the domestic market, premium conductors.
There is no challenges, there are no.
Sources to get the market information on this kind of premium products.
What is also happening due to.
Various right-of-way issues and the general increase in electrification, there is more tendency to switch to reconductoring, due to which the work on reconductoring is happening or may happen on a faster scale.
Hello, Mr.
Chair.
Hello.
Yes, sir. Yes, sir.
Can you mute other people?
I don't know from where the noise was coming.
Sorry for your interest.
Currently, there are no organized sources.
Getting this market for its premium products, as I said, there is more room to do.
Hello?
Hello.
Yeah.
Yes sir.
Yes.
As I said, there are no.
Sources to get this market information. Overall, as I said, there is more tendency to do more of reconductoring projects because of various right-of-way issues, because of time cost, because of capital cost outlaid by the utilities company. There is more tendency on the premium part of the conductor business.
Okay, sir. In terms of the execution of the projects and especially in the U.S. market, how you are seeing that on the ground, and when you are saying in terms of the stocking and the inventory buildup which has happened there, this could be for what duration you would generally see the kind of inventory buildup happening there.
The challenge is on the build.
These are all projects which are being executed. Most of the products have actually gone to project sites.
I think calling them APAR.
Little bit sooner is only because whoever.
Has been importing. The production has already.
Given a fixed price previously for the bid.
This is not like the kind of stocking up that happened at COVID.
There were several months of destocking.
To take place, at least not in.
Our products, because we were not in.
A position already running at full capacity. We only gave some preference to clear.
Off orders where the settlement had taken.
Place with the customer in terms of.
We will land it prior to July 31.
I don't see really a big.
Overhang from the current supply.
What will be critical to see is.
Where the tariff finally lands up.
Hopefully, it will not be disadvantageous to India. If it isn't, then we would continue.
To see the order flow taking place.
On the contrary, we have really.
Improved our go to market channels, the distributors.
We signed up. We have today a.
Team of three full-time representatives in the U.S. We have a fourth colleague who is going to be joining shortly.
The team is being enhanced, and our sense is that once the noise.
Settles down, then I think business should.
Start picking up again.
Got it, sir. On the EBITDA pattern perspective, would you like to change your guidance in terms of what the number has been, or would you like to maintain at the earlier level of guidance itself?
We have been increasing these guidances.
On the conductor EBITDA per metric channel, you have times where competition is putting a lot of pressure. As you see in the domestic market, there is pressure on prices, and also on the non-U.S. market, there is pressure on the prices. Wherever we feel that we have that confidence that the EBITDA cannot go beyond X level, that's where we put our guidance on, and we have been increasing that.
Having said that, in the last quarter.
We increased further to 30,000+ tailwinds. For now, we are studying and depending on how the future quarters and U.S. tariffs, and there are so many moving.
Parts to all of this.
Currently, we would like to maintain it at 30,000 +. As I said, the tailwinds could be positive depending on various things that happen. We are not able to predict the exact amount of what kind of tailwinds that will happen in a quarter.
We probably wait until all this.
Quarter has settled down. I think after that if any revision has to be done, I think a more appropriate time would be once all this settles out in terms of U.S., Arab, etc. etc.
Got it, sir. Thanks a lot for taking my questions and all the best for the future.
Thank you.
Thank you. The next question is from the line of [audio distortion], an individual investor. Please go ahead.
Hello.
Yes sir, please go ahead.
Yeah, please go ahead.
Congratulations on your good number. Sir, one question I have regarding the for a long time you are spending earlier, at least in 2024, we have heard that you are facing a lot of competition from the Chinese because they are transshipping the goods to Vietnam. Now, how is the situation panning out after this transshipment tariff has come in? Are you facing some better ecosystem with regards to the competition? You mentioned that they are still giving 8 to 10% subsidy. This transshipment you were facing earlier, how are things now?
I think the current U.S. administration.
Is very much aware of this.
I think the undertones have been very.
Clear that if they start picking up.
Activities of this sort, there could be an immediate change in the tariff.
That.
Country is facing whether it's Vietnam or whether it's Cambodia, etc.
I think the current level.
Of heightenedness that is available now.
Much higher than what it was prior to the Trump administration coming in.
I think it is something for.
Us to wait and watch. If this transhipment route is being used, then I think whoever is using.
Is really gambling on this.
That's the sense that we have.
Okay, another question, I am listening to your conversations. One thing is, I know there is a lot of confusion right now in terms of tariffs and because raw materials are higher carries in the U.S. late even 8%-1 0% subsidy. Chinese is given that. There are a lot of carries to have come in, almost 30% tariffs on Chinese products. Matrix, I do not across the products, what is the competitive advantage? How much competitive advantage China is now having over subsidies and etc. How much in terms of, you know, on the.
The subsidies constitute anywhere between 8%-1 2% in terms of efficiency of conversion cost, etc.
There is no difference.
We are able to in a level playing field.
We are in a position to compete.
Against the Chinese on a day-in, day-out basis.
Okay. Okay.
Yeah.
Thank you. Thank you.
Thank you. The next question is from the line of Nikhil Poptani from Kizuna Wealth. Please go ahead.
Yeah. Hi sir, and thank you for giving the opportunity and congratulations on the great set of numbers.
Thank you.
My first question is like with so much uncertainty to cables exports, are we still guiding 25% value growth in cable segment?
Yes, we are still guiding 25% value.
Growth on the cables.
That's great to hear. Second question is, let's say India, as you mentioned that tariff, we have the tariff with the duty at 15%, and if you assume that the reciprocal tariff goes to 15%- 20%, then our landed cost would be like 25%- 30%. Will this be an advantage over the Chinese competition or not with that kind of scenario?
You know the Chinese tariff is generally running 20% higher. When the interim tariff for India and various countries was at 10%, the Chinese tariff was at 30%.
Right now it seems like the new normal they are looking at is.
Of 15% which is what they have.
Finalized with Japan, what they finalized with the EU, etc.
It's all speculation right now. It's a matter of a few days. I think some of this should start.
Getting settled down, but I don't think.
India will be at a disadvantage relative to Chinese.
The 10% gap at least as.
far as the US market is concerned.
May not really be much of a worry going forward.
Also, as we mentioned in the last.
Call, this is not the first time.
That China has had such subsidies where.
The Shanghai Metal Exchange is so much.
Lower than LME and the premium, basically.
Doesn't exist there at the moment.
The Chinese government, when the losses.
Go up of the subsidy become too large, they have in the past just.
Completely reversed it as well.
It is not something that will be.
Sitting with us forever.
We've seen it happen a couple of times.
Before, and we've seen it getting reversed as well.
Okay sir, that's great to hear and get started. My next question is, like the cable segments, how would the volume growth in that segment be, and are we assuming the same kind of volume growth going forward too?
We don't report the volumes in the.
Cable segment, because there are a number of categories within the segment, we are only reporting the value.
Yeah, I mean to answer the.
Yes, there is the demand. Domestic demand remains reasonably strong for us.
What's important is the premium segments, the segments where we differentiate ourselves.
The demand for that should be strong. That's how our domestic participation happens.
We are seeing the wind sector is doing reasonably well.
We are also seeing that solar is continuing to expand. We are supplying several data centers here in India.
We see that the demand generally.
The domestic market has been strong.
What may get affected in the short.
Term for the cable side is the.
Export to the US because of the.
Until this tariff thing gets sorted.
Out, but fundamental demand may. We don't.
See too much of a let up. It will continue to be there.
Yes sir. My next question is, like the new contracts that we are signing or new orders that we are getting, who will pay the tariff? Are we supposed to pay the tariffs or will it be split between the client and you? What are the new norms of these orders that we are taking in?
Tariffs today is coming.
As a line item, you know it comes with a.
Straightforward assumption today, saying that okay, the tariff at the moment that we price.
It is at this, whatever changes happen is not to APAR's account, it will.
Be to the client's account.
If the client is not willing.
To accept that, then we are actually not taking on the business and we.
Are just sitting it out.
The orders that are continuing to come.
In today are those attached to projects.
Which are at advanced stages of execution.
Because you see the cost of the.
Cable is about 5% of the cost of the project.
Even if you have a 10%.
Difference, it becomes only 0.5% on the project. Delays in the project actually would.
Result in a much higher overall than.
Just paying the increased tariffs.
We are not taking on any more tariff risk for new orders and new business that we have been signing on ever since this whole tariff thing got declared.
Whatever compromises had to be made.
Was before, you know, this whole order.
Book which we were carrying prior to.
The declaration of the tariff, the 10% increase that happened of the reciprocal tariff.
The same thing is also true.
On the conductor side.
Both the division, APAR, isn't following exactly the same practice.
That's really great to hear. My next question is like on our conductor's order inflow, we had a five quarter high order inflows on the conductor segment. Majority of these might be from the domestic business as you said. Are we looking at the exports? How are the export RSPs and all that in terms of conductor side business order inflow?
Yeah, they are okay.
As in, like it was explained in an earlier question answered towards that, we are getting the RFQs and we are giving the quotations, but our success ratio has dropped because of the intense competition from Chinese, which is subsidized. This may not last for long, hopefully. We are keeping with the market and we are actively, sort of, you know, trying to make inroads again into that marketplace, but at a reasonable price.
Okay, sir, that's great to hear, sir. Thank you for giving the opportunity, sir, and all the very best.
Yeah, thank you.
Thank you. The next question is from the line of Himanshu Upadhyay from Bugle Rock Capital. Please go ahead.
Yeah, hi, good afternoon. My question was on the oils business. What we are seeing is we are having pretty good growth rate on the better products, transformer oil, auto oil, and which we have been highlighting in industrial lubricants versus rubber processing oil and some of those tech times. The margins wise it seems there is not much of an improvement, though it seems year over year it is some improvement, but again the price of crude has fallen.
The reference which you know, I read out and I mentioned during my opening remarks is a quarter-to-quarter reference.
If you see in the first.
Quarter of last year it was also.
The highest margin that was there in the year.
If you see on an absolute.
Level the margin of INR 7,000 + EBITDA per kL is one of the higher.
Margins that we've had.
Are we seeing these margins, what we are having, what we are expecting, will it be because of product mix improvement majorly or.
Yes, is it primarily volatility is helping?
No, the volatility is actually not helping at all. It's actually dragging things down. It would be even higher.
It's really the mix, the transformer oil part of the business.
Has grown and so has the lubricant side of the business, as I mentioned in my earlier remarks.
These are the two segments which have grown.
The white oil business has actually export.
Side of the white oil business has.
Degrown because that's really something that's very practical for us.
The margins grown good, we just allowed that part of the business to slip a little bit.
The transformer oil and oil business, some of those challenges which are there on the conductor side, are those similar challenges on the transformer oil end?
No sir.
The market, the geographic mix is very.
Different for our transformer oil business compared to what we do on conductor and cables.
In conductor and cables, both of their.
Largest market outside India is the U.S.
When you add up the United States, Canada, and some of the LATAM.
Countries, that's where they're focused. If you look at our transformer oil.
Business, we are very strong in Asia, all across Asia.
Right.
Including Australia, we have a very strong position in South Africa, we have a strong position in Turkey, and we are.
The largest in the GCC. It's a completely different geographic footprint.
The challenges which were there is that some of the projects in these countries in Saudi and.
Australia, South Africa got postponed a little bit.
Even though we have a good.
Order book, the execution of that got pushed out.
Okay. Okay.
Yeah.
Thank you so much.
Thank you. The next question is from the line of Sagar Dhawan from ValueQuest.
Please go ahead, consider the opportunity and congratulations upon a good set of numbers. My question is on the U.S. demand sir, basically if you just keeping the tariff related oil central aside for a minute, what is your outlook on the U.S. demand after the big beautiful bill getting passed as an act because it puts a predictive service deadline for the renewable projects to come in to amend the incentives. Does it change anything on the demand front for you in the U.S. because of the.
If you look at.
The renewable, it falls under actually three buckets.
You have solar, you have onshore wind, you have offshore wind.
For a long time we've been saying that the offshore wind side, you.
Know, has been one which cannot operate without significant subsidies. That's the first one that's getting killed.
If you look at the other end of the spectrum, which is solar, solar.
Can actually be viable even without subsidies. It's the cheapest form of power today.
Pretty much in most of the world.
In North America, it's a good source of power because most of the.
Countries receive fairly good sunshine.
We don't expect any massive change coming from the solar side.
The wind side could face some challenges, especially projects where the subsidy is playing an important role and the plant load factor is not good based on just the natural amount of wind that's flowing. That could have some compensatory effect. However, on the other hand, one sector.
In the U.S., which is going extraordinarily.
Strong is the whole data center market. Data centers require both upgradation of.
Transmission lines coming into them as well.
As a reasonable amount of cables.
We don't see overall the demand.
Scenario actually getting affected.
We feel that there'll still continue to.
Be a growth in the North American market.
Got it, sir, got it. The other question that I had was again on the U.S. Any plans of setting up a local manufacturing capacity in the U.S.? You talked about it in the past, what is your view now?
We've been doing our homework on it. However, at this stage, unless and until this whole tariff thing becomes clear.
Suddenly there was this increase from 25%.
To 50% for import of aluminum ingots.
Copper rod, all these things.
That would obviously have a material.
Impact if you were to manufacture locally in the U.S.
We've been doing our homework quietly in terms of figuring out what could.
The possibility is there, but we haven't taken a call. I think we need more clarity before a commitment can be made.
The last question from my side is on the conductor volume growth. You have been guiding for about 10% of the volume growth on conductors. Any change in that guidance or are.
We sticking to that number?
Sticking to the same number, 10% on an annual basis, some quarters may.
Be high or low, I think.
On an annual basis, 10% volume growth.
Is what we are guiding.
Sir, if I heard correctly, answer to the earlier participant's running its full capacity. Did I get that correctly?
We are pretty much for most of.
The products on the conductor side, we are running at capacity.
However, you know, as part of the.
1,300 crores, that is almost INR 400 crores.
300 crore and odd going into expanding.
The conductor, various products that are in.
Agricultural divisions are starting to come in, you know, getting installed.
A chunk of them are coming.
Actually in Q3 and early Q4. This is from me.
Thank you, sir.
Okay.
Thank you. The next question is from the line of Amit Anwani from PL Capital. P lease. Go ahead.
Yes, just a couple of things on conductor as the realization has been high in Q4. Are we expecting a similar number like INR 480,000 per ton?
That's what we reported. Just wanted to understand on realization going.
Forward for conductors it depends on the product mix, Amit. It's not possible to predict that way. As you know that our business runs on order books and there are one, it comes from the pending order book and another would be the orders that we get during the quarter due to the various product categories which are there. It's difficult to get that number whether what kind of trend will continue.
In terms of realization.
We are more guided with the EBITDA per ton. Also, aluminum price and copper prices, as you know, fluctuate and there's a big.
Difference between the two.
One is almost, yeah, 3.5x .
When that price of metal fluctuates, the composition of that changes. It's a bit difficult to predict that number.
You know the business, everybody in the business is actually measured on a.
On a per ton basis, that's a good measure to track because everyone, you know, variable compensation, bonuses, everything is based on fundamentally that metric.
That's the metrics which we also.
Put out for investors.
In the public.
I think focusing on that rather.
Than a realization I think would be.
Better in terms of setting up your model as well.
Yeah. Sir, you highlighted about reconductoring being very strong opportunity in domestic market. Just wanted to understand what was the reconductoring contribution in terms of volume or what is the percentage of reconductoring of current order book, how much reconductoring would be any color.
On reconductoring contribution we don't actually end.
Up giving sub-segments within that.
We classified a certain set of products.
Which are premium products, and this falls within that.
I can only tell you that as.
These right-of-way issues continue.
Best solution is reconductoring.
Theoretically, we feel that every conductor.
That has been put into India.
Few years ago is actually primed for being reconductored.
We don't have a breakup of that. We don't give the breakup of that.
Because it's sensitive information.
Otherwise, as you can see that.
Whole sector or section is growing.
That includes the reconductoring portion of the business.
Right. Any color on the competition? Is reconductoring what our crops just applying? Are we just one or two players, or how is the market players who?
Are you getting into the business?
The largest is clearly ourselves.
After that you have Sterlite Power and following that is GSK.
The way we do the business.
Is not just supplying the conductor, but.
We also do the entire solution for the utility. It's one thing to produce the.
Conductor, it's another thing to be able.
To provide that solution.
Having done now close to 200+ projects in the country, we really have a very strong ability to actually execute these reconductoring projects.
Even if competition comes in, the market itself will grow and .
The expertise doesn't lie just in doing.
A conductor production, but in the end.
Providing the entire solution, which is far.
More difficult to do.
Lastly sir, on cables business is possible to share the breakup of specialty cables, power cables, elastomeric LGC, and the kind of growth we have witnessed in this.
Quarter,
give it total only.
Amit, you don't share the breakups of that.
Okay, for any color on the growth of total specialty cable portion, has this been higher than the total growth in the cable business?
I think it's been almost similar. As I said, the power cables also have the segments have moved for us where we've done more work with respect.
To data centers in India, we are supplying pretty much every major data center company.
Recently we also got into the global.
Microsoft approved vendor list for cables to data centers.
That includes the approval for the U.S. market.
You know, once this whole.
Tariff overhang settles down, that's another opportunity for growth.
Otherwise, you know we've seen the power cable side growing. We've seen a little higher growth in.
The flexible elastomeric side because the wind.
Has actually picked up very substantially compared to previous periods. Otherwise, you know, it's really growth across segments.
The railway side has been also steady as they add more Vande Bharat trains, etc.
We are still at 90% of the supply to Vande Bharat Train as well.
It is quite a secular growth.
Great sir, thank you so much. Thank you so much and all the best.
Thank you. The next question is from the line of Balasubramanyam from Arihant Capital. Please go ahead.
Good answer, sir. With solar industry model manufacturing capacity is almost doubling up, and how we are leveraging our solar cables and conductor side, and is there any risk of oversupply in the solar segment which is impacting our changes.
On the solar side, we have substantially increased our own.
If you look at.
The solar cable, as you see in.
The investor tech that we have, sorry, the presentation which we have, which is the comprehensive company presentation, 140-odd pages.
That is a slide which gives all the different types of cables used.
In the renewable energy.
One is the string cable, which is the cable that's connecting the panel.
That is, the wrapper actually has a.
Very strong position because those are electron beam cables. We do our own compounding. We manufacture the whole cable end to end.
End, every component that goes into it.
That part of the business has.
Been substantially growing for us.
The margins there may have come a little bit under pressure because the volumes are just higher, but that business has been growing quite substantially. There is the cables which connect.
The panels into the substation, which is.
Essentially, a power cable.
The requirements in the U.S. are quite unique.
The requirements in India are relatively straightforward.
You know, that part of the.
Business for us, we just measure it.
Up against other opportunities that we have for power cables.
The solar cables which we talk about, where APAR is a very strong position, is the DC cables, which are.
The cables that are used for stringing the panels, we've invested in, we have capacity to grow.
My sense is that the highest amount of addition is still.
To come because as Reliance starts producing their own modules, there will be a huge amount of execution that they will do.
Similarly, as you know, I read out.
Earlier in the, you know, in the.
Opening remarks, the momentum of more and.
More solar projects continue to grow.
Some of the solar projects are very large in size, so you will start.
Seeing more premium conductors being used.
That the evacuation that can be done.
From those sites is actually carrying much.
Higher power from those sites.
Okay, sir. On the oil storage terminal side, how much cost reductions can we expect from JNPT expansions? Will this improve our export competition units?
First of all, what's.
Happening today is that since we've exhausted.
The building storage within our existing facilities.
We actually have rented out a whole.
Lot of tanks outside.
This is going to result in.
Actually, consolidation of that.
A lot of tank land is basically.
Sitting on companies which previously used to.
Manufacture liquid products, and they shut down.
They've been renting out these tanks.
As time passes by, the rental value on these tanks is continuing to.
Grow or companies are going to redevelopment of that land.
You see that tank capacity will start getting a little bit more scarce.
As well as it will get more expensive.
This is one way of actually consolidating our stocking, making sure that the base oils are also maintained with very good quality in terms of salts.
Because when you use so many third party facilities, we don't have as much.
Control on how the product gets into the tank, gets out of the tank.
It does open up, as you did mention, the possibility of exporting products.
In bulk, which we haven't been doing so far, it's all going out in flexi bags, etc.
That bulk portion is still a discovery that needs to take place, but the project can be justified simply.
On a payback based on, you know, external storage cost.
Got it, sir. On that export side, especially we are focused on aluminum alloy cable, 8000 series, especially for US. Is there any copper demand lacking due to cost or any performance factors?
Previously what was happening is that.
Copper in the U.S. had zero duty.
Whereas the cables carried duty that was.
The same as aluminum.
As a consequence, there was more competitiveness that a local U.S. manufacturer had to produce copper-based cables compared to.
Aluminum alloy-based 8000 series.
Now the situation has changed where copper.
Has been moved into that situation, strategic 232 sections. We have to see we have capacity that's coming on stream within the next few months.
Once the dust settles, you know.
We can move around in terms of.
Whether to produce more copper or to produce more aluminum alloy or to actually.
Allocate more cables to be produced for.
The US market itself.
There is a lot of flexibility that will come at our end as this.
CapEx is getting executed.
It is something that one has to still discover based on, you know, how this whole tariff thing settles down. Whichever way it goes, the product mix wise we are very flexible.
Thank you. The next question is from the line of Mayank Bhandari from Asian Market Securities. Please go ahead.
Thanks for the opportunity. Sir, I have one clarification: for export in the oil business, does it include the same that we are doing from the Sharjah plant?
Yeah, absolutely. It's a global sales that we report.
What was the FY 2025 number for that Sharjah plant?
Thousand crore.
It's about INR 1,000 crore.
Which was almost.
Exact number you will find in the.
Annual report because all the subsidiary.
Numbers are there in place.
The number that we've been talking.
About is the overall consolidated number.
Okay, and just in terms of understanding the aspect there in the Middle East, we are hearing very good demand, particularly in the construction side. I mean, how's the business of specialty oils particularly panning out from that segment? What kind of growth should we anticipate from that particular plant in Sharjah?
I didn't hear your question, Mayank. Can you just rephrase your question again, please?
Specialty oils, Sharjah plant. I mean we are exporting from Sharjah to nearby countries, I am assuming. How is the business growing in terms of the demand environment, if you could comment on that?
Yeah, actually it's a mixed bag.
Some countries are doing very well.
For example, there are a lot.
Of infrastructure being added in Saudi Arabia, given that they have a commitment to.
Increase in country value.
As a consequence, there's a lot.
Of plants coming up, a lot of new requirements coming up from there, and the government is also expanding the infrastructure substantially.
You've got other countries where demand is.
Flat to, you know, marginally declining.
Like you've got Oman, you've got Qatar. You know, Qatar did a huge build up before the World Cup.
Some of the North African countries are a little slow.
Egypt has improved a bit, but.
It's nowhere close to what its peak was.
However, from our plant in [Umbergaon], we.
Also export product into Australia and South Africa.
Africa is covered from there, for example.
It all depends on which geographies.
APAR produces exactly the same slate of products.
Whatever we produce in Hamriyah, those formulations.
Are identical to what we produce in India.
We have actually 100% fungibility for our client.
We end up looking at wherever.
The trade and logistics are better, both in terms of timeline as well.
In terms of cost.
We work with our customers.
To allocate where it makes.
Sense for them to receive the product from.
Sir, we were planning to leverage on this cost advantage from that plant. I mean, why is this segment and overall not delivering growth?
The growth has been quite muted for quite some time.
I mean, you know, everything is relative when you look at the growth.
Relative to what the whole segment is growing at, the entire specialty oil lubricant segment itself is growing at around 2%- 3%.
When you have an 8% growth.
You are at around 2.5x-3x the market.
Also, there are some segments in there.
If you, as I mentioned earlier.
My opening remarks, the transformer oil side.
Is proportionately growing because a lot of.
Electrical networks are getting added.
The white oil side, we've been dropping it off because we don't like the.
Margin on some of those products, and we treat that significantly more tactical.
If you see the overall business of the oil side, the sales volume is, every year, every quarter has.
Been hitting all-time highs and it's.
Not a very huge number, but it's.
Very consistently been growing.
If you see the quantity today.
The base oil that APAR imports into India and blends in India is larger.
Than any single base oil refinery that runs in India.
If you take the largest refinery of.
IOC, you take the largest refinery or.
HPC, we consume more than that entire refinery can produce.
It's a very steady business. It's not a business that's going to.
Grow at the pace of the conductor business or the cable business, but it's a very good cash flow business.
Okay.
Okay.
To sum it up, whether your overall business, whether the Sharjah plant will grow faster in this oil business or the overall, the domestic business won't grow faster.
I believe that the domestic business.
Is actually growing faster than Hungary.
Business because we have transformer oil, which is a big portion of our domestic business.
We also have lubricants, which is a.
Big portion of our domestic business here.
Having said that, the Sharjah plant is an extraordinarily efficient plant. The fixed structure there is not.
Very high, and so you have a.
Lot of ability to actually scale up.
and down depending on the opportunities that arise.
The market presents itself.
Sure.
Thank you.
Thank you. The next question is from the line of Sushil Dhoot from Insightful Investment LLP. Please go ahead.
Yeah, so my question is a couple of things. From a more longer term, on a structural perspective, what really worries you most in terms of if you just have to do some brainstorming in terms of what can go wrong? For instance, other than.
China, which is not likely to be.
A possible where duties will be lower than India, from a U.S. perspective, is there another country who has the capacities.
The capabilities to export into the U.S.
If that particular country has a lower duty than us eventually, will that be something that will worry us? Number one?
Number two, on the fact that you.
Now have power storage which is more affordable, and if wind overall slows down, is that something that can affect our longer term growth rates?
These kind of questions is what.
Basically, answer that I'm looking for, okay.
On a structural basis, if you see what is our biggest worry, our biggest worry is actually these geopolitical tensions.
Because, you know, they're coming in from.
All kinds of different directions.
Like the U.S. right now and the.
Trump administration is not just increasing tariffs.
It's threatening that if you use Russian oil then we will.
Basically, there's a tariff whip that's being.
Used to try to police things.
That adds to a certain level of uncertainty. I'm not sure that any of this is sustainable, but it can cause a.
Lot of short-term confusion.
Obviously, that's something that would keep.
It has to be very high on the risk level.
In terms of the renewable energy front.
I think we have relatively less worry.
Simply because there is no other option that's out there.
Again, there may be some short term.
Issues, you may have someone carrying an.
Opinion, but you can't change facts.
The problem that seems to be.
There with some of the administrations around the world is that they're playing around with facts.
You can play around with an opinion, but you can't play around with the fact.
When you do that, then it's only a short term thing before you.
The reality dawns on you.
Wherever you are, the thing is.
That we focus a lot on where the demand of the market is going to come from. The solar demand is going to be universal everywhere because it is the fastest.
Cheapest form of power completely. Yeah, on the wind side, we are focusing.
Basically, to a large extent, on the.
Wind in India because what has happened is that given that solar was cheaper and very easy to add, a lot of emphasis has been given to solar.
There are two issues coming up with solar. One is that if you want to.
Build really huge solar farms, land is.
Starting to get difficult.
Not everybody can build in.
The salt pans of Kutch and in.
The Thar Desert and things like that.
The seasonality of solar is a little high given that we do.
Have a four month monsoon where it falls, and wind actually complements it completely.
As a consequence, you are seeing that new tender coming out, are coming.
Out with the hybrid, and they are.
Coming out with a certain minimum power that you have to deliver.
That can be delivered based on.
A combination of solar, wind, and the amount of battery storage that you put in. When you look at all these things, and I think the.
Regulators are getting very smart now.
Pushing for all these combinations, etc.
Our sense is that, you know, wind is not going anywhere. Wherever there are big subsidies required to run wind, then you will have a problem.
We are focusing. Actually, North America has some of the.
Best wind tunnels, and they are also.
In places where Mr. Trump is not.
In a position to see the windmill.
Because they are way out of.
Where he would typically play golf or.
Go on a holiday or travel around.
I don't think wind is going to disappear.
It's a little unpopular for some, powerful.
People in the world, but the economics.
Are changing, especially where a plant load factor remains good.
We are not gaming excessively on wind in case wind slows down for whatever reason, whether in India.
Or U.S.,
that's not going to change.
Materially our secular growth rate.
I don't think so.
At the moment, India has still got a huge runway to go on winds.
I think that the one thing that hasn't yet picked up but is going.
To pick up because it's right at.
The top of the regulators' discussion is the replacement of windmills on existing land.
You see, the windmills that went in.
10 years, 15 years, 20 years ago.
Were of a very suboptimal size.
They are occupying some of the best wind real estate in the country. That is going to change because you are going to go from 250.
Kilowatts to upwards of 3, 3.5 MW.
The amount of wind that you.
Can generate per acre of land is going to dramatically change if the old.
Windmills are pulled down and the new.
Ones are put in place. There are some policy issues that need.
To be ironed out to help the change to happen. The moment that happens, you will.
See large scale replacement of windmills happening.
As a consequence, again, good demand.
For cables, because the towers will be replaced.
We really think that this is a very long term thing.
It's not going to really get affected.
Okay. Sir, any one or two particular countries other than China where, you know, because U.S. is doing bilateral now with most of the countries, you know, where.
If the duty structure turns out to be lower than India for that particular.
Country, you know where our exports, particularly of conductors or cables and cables both, can get impacted.
I think that makes sense to take a call, you know, once the.
Dust settles on, depending on the rate.
few weeks, there'll be the letters going.
Out to various countries, especially those that haven't got into any serious dialogues with the U.S.
If 15% seems to be the.
Bottom then, and you know, if India.
Is in that ballpark, then we don't.
See anything major upsetting this whole.
I understand.
It's just that if you know, Vietnam, Cambodia, Korea, or I don't know, Bahrain or someone gets, you know, 10% or 15% differential versus India, then you know, do they have those kind of capacities where you know.
They can really, if something happens, where.
Bahrain is 10% cheaper than India, then.
Obviously their conductors and land cheaper.
They don't do cables, so the cables also there are still.
Some specialty conductors, which we do especially.
The HPLs and some other special forms, which are quite popular in the US.
Which will continue to go from here.
I think Shushil, please wait for.
It till all this happens, then take a call.
Fair enough. Thank you so much and best of luck for the year ahead. Thank you so much.
Thank you.
The next question is from the line of Vignesh Iyer from Sequium Investment. Please go ahead.
Thank you for the opportunity. My first question is on the interest that we face for the quarter, which is around INR 85 crore. Even though our execution is almost similar to what we did in quarter four, I wanted to understand if this lower interest outflow is majorly because of a lower net working capital cycle or if it is because we paid off some long-term borrowings and our total costs have come down.
We have used cash and internal.
Accruals to fund our purchases as compared.
To the letter of credit.
When you do the letter of credit, you have an interest element, but when you do cash purchases, that kind of cost comes down. That's the reason you see in.
This particular quarter, there is a reduction.
In the finance cost, it's also a measure of more working capital utilization that we are able to generate cash and internal accruals more to be able to purchase on cash business.
Right?
Right. So basically, instead of the working capital usage, we have gone for the internal accrual. That has resulted in this lower interest, right? If I get it right.
Yes, hello. Okay. Secondly, sir, on the cable division side, we have seen exceptional growth in this quarter, and if I remember from your commentary at the start of the call, it is because of higher procurement from us due to fear of tariff. Can we assume that the other three quarters on a normalized basis could consistently give us a 25% growth?
So we have been targeting 25 growth in our actual number can be more for less depending on what kind of orders we get during that quarter. At the same time, domestic business is also very strong. Our domestic business is also growing by 20 odd percentage. So we won't be able to give that impact how much will happen if that U.S. Thing, U.S. Orders would have not got executed, would have been the growth rate, those would be difficult to predict. But overall, we feel that for the blended division, 25% value growth should be something that we can guide for.
Okay. That's all from my side, sir, and all the best for the year ahead.
Yeah. Thank you.
Thank you. That was the last question for today. I now hand the conference over to Mr. Kushal Desai for closing comments.
Yeah. Thank you. Thank you, everyone, for joining our earnings call. As I mentioned, you know, we fundamentally remain fairly optimistic about business. There are a few overhangs and short term clouds, particularly around The U.S. Tariff. The domestic side of the business, we feel continues to remain fairly strong, right across the platform of cable as well as the platform of oil side. As I mentioned earlier, there was a little slowdown in some of the strategic markets for our transformer oil exports side of the business due to project delays, but that is also picking up. And I guess once the dust settles on the whole U.S. Tariff and import policies, then we should start seeing business again picking up there and getting to more normalized levels. So with that, I once again like to thank everyone for taking the time to be on our earnings call. Thank you very much.
On behalf of APAR Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.