Ladies and gentlemen, good day, and welcome to the APAR Industries Limited Q4 FY 2026 Earnings Conference Call. I now hand the conference over to Mr. Ambesh Tiwari from S-Ancial Technologies. Thank you, and over to you, sir.
Thank you. Good afternoon, everyone. I welcome you all to the Q4 FY 2026 earnings call for APAR Industries. To discuss the business performance and outlook, we have from the management side, Mr. Kushal Desai, Chairman and Managing Director, Mr. Chaitanya Desai, Managing Director, and Chief Financial Officer, Mr. Ramesh Seshan Iyer. I will now pass on to Mr. Kushal Desai for opening remarks. Thank you, and over to you, sir.
Thank you, Ambesh, and good afternoon, everyone, and welcome to APAR Industries Q4 and the annual FY 2026 earnings call. I would like to start by giving a quick outline of our performance, followed by a short industry update. I will follow this up with more details then on the individual segment performances of the three major segments, and then finally, we can open the floor up to questions. We have concluded FY 2026 with a reasonably healthy growth trajectory, reaching an all-time high revenue of INR 22,902 crores. APAR has come a long way over the last five years, scaling up its top line from INR 6,406 crores in FY 2021 to now INR 22,902 crores in FY 2026. This represents a CAGR of approximately 29% over these five years.
The consolidated revenue for the quarter stands at INR 6,625 crore, which was almost equal to the annual sales of FY 2021, representing a growth of 26.7% over the last year of Q4. This performance can be attributed to growth primarily coming from the domestic business and improved product mix as well as operating disciplines. Shipments to the United States were also higher in this quarter. Domestic revenues grew 33.6% over Q4 FY 2025, and exports grew by 13.3%. On a sequential quarter basis, exports have grown by 30% as the U.S. business started scaling up, especially post the realigned U.S. tariffs. The U.S. revenues are higher than the same period last year by about 28.8% and 250% higher over the sequential quarter. Export as a mix is approximately 28% in Q4 FY 2026, compared to about 31% in Q4 FY 2025.
EBITDA post Forex for the quarter came in at INR 584 crore, representing a year-on-year growth of approximately 19.3%. The PAT margin is at 3.8%, which is only 100 basis points lower than the same period previous year. This number is to give you a better idea of the operating performance, and putting it in context, I'd like to state that if you look at just the operating activities, there are a few one-time provisions that have been made that have impacted the fourth quarter. That includes an impact of gratuity and leave encashment, which we have further increased by approximately eight crore. There is a mark-to-market impact of an ECB loan that the company has, and due to the sharp depreciation of the rupee that happened in the first quarter.
There is a one-off provision for an old legal case based on the recommendation of our auditors that we have moved from contingent liabilities into a provision. If you exclude these non-operating impacts, which are amounting to INR 31 crore, the PAT which came in at INR 254 crore would have been at INR 285 crore on an operating basis, the growth would be at around 14% compared to the same period previous year. On an annual basis, the revenues have reached INR 22,902 crore, as I explained, which is 23.3% higher than FY 2025. Domestic revenue is up by 29%. Export revenue is up by about 12%. The U.S. revenues have grown by almost 50% versus the same period last year. The export mix stands at about 30% for the year. EBITDA post open period Forex grew by 23% to INR 2,067 crore at an EBITDA margin of 9%.
The PAT has grown by 19% to INR 977 crore at a margin of 4.3%. I'd like to also cover some industry highlights. There has been a substantial increase in the clean energy additions which have happened, the non-fossil fuel based capacity additions. Which for the last quarter have been 50 GW plus, which is the highest ever in a financial year. This brings the country's total non-fossil capacity to anywhere between 250 GW and 270 GW, propelling India to be the third largest in the world in renewable energy deployment. Solar power has been the leader in terms of additions, which has now crossed 140 GW, and there has been a record annual addition of about 54 GW in FY 2026 alone. Wind power has also increased with a capacity increase of approximately six GW in FY 2026.
Both of these are a significant milestone in the country's renewable energy journey and is almost double of what it was in the previous years. On the data center front, India is rapidly expanding in this sector. The current data center capacity in India is anywhere between 1.5 GW and 1.7 GW, which is expected to scale in a base case to 5 GW by 2030, with a more optimistic estimate going up to 7 GW-8 GW. This will attract more than INR 30 billion in investments, powering India's move towards being a trillion-dollar digital economy. On the transmission infrastructure and grid side, there has been a transformation capacity addition in FY 2026 of 113,000 MVA, which is 30% higher than what existed in FY 2025, though it is short of the planned target of 126,000 MVA.
We are about 13,000 MVA short, which is approximately 11% lower than what had been planned. Nearly 48% of the transformation capacity added in FY 2026 was at the high voltage, which is at 765 kV voltage levels, with 54,000 MVA already commissioned. This is again the highest ever annual addition in this voltage class. This significantly strengthens the ISTS, which is the Inter-State Transmission System Grid, for bulk power and renewable energy transfer. The government has adopted a planning and implementation approach that prioritizes grid readiness, transmission expansion, and energy storage deployment as integral components of the renewable energy across the country. As per the National Electricity Plan, the transmission network is expected to expand from approximately 5 lakh circuit kilometers to about 6.5 Lakh circuit kilometers by 2032, with transformation capacity scaling from about 1,429 gigavolts to 2,354 gigavolt amps.
The inter-regional transmission capacity is also set to increase from 120 GW to about 143 GW by 2027, and by a further 168 GW by 2032. Coming to the segmental performance. I would first like to cover the conductor division. We concluded Q4 FY 2026 with the highest top line for the conductor division. Revenue for the quarter reached INR 3,764 crores, representing a significant 29.9% year-on-year growth. This growth was driven by increase in volume, improvement in the product mix, and also there was the tailwind of commodity price increases that happened. Sales volume is up by 9%. The domestic business grew 34.8%. Export revenue grew by 14.6% compared to last year, and on a sequential basis, it is up by 48.7%. The export mix is at around 21.6% in Q4 FY 2026 versus 24.5% a year ago.
This difference is primarily because the domestic business in the last quarter was fairly strong. The U.S. business, as I stated earlier, started scaling up, and in Q4 FY 2026, it is almost at par with Q4 FY 2025 for the conductor division. Compared to Q3 FY 2026, it's up by over 150%. Premium products continue to grow, and in this quarter, the premium products came in at 49.3% versus 44.3% in the last year. EBITDA post open period Forex stands at INR 44,919 per metric ton compared to INR 41,430 a metric ton a year ago. The EBITDA margins have grown largely on account of the improved product mix. On a full year basis, the revenues are up 32.7% to reach INR 12,712 crores.
With this, the conductor division has crossed that INR 10,000 crore milestone, which is a historic milestone for us. Volumes have grown in the year by 8.6%.
Domestic revenues are up 38.3%. Export revenues are up by about 15%. Premium product contributions to revenue stands at 45.8% for the year. The EBITDA margin post Forex came in at INR 43,012 per metric ton compared to INR 36,683 per metric ton a year ago. Order inflow during the year came in at INR 11,450 crores. The order book as on 31st March stands at a healthy INR 7,671 crores. This year marks the highest ever installation that our projects division have also done, which is about 1,949 circuit kilometers, and that helped address the growing power demands for residential and industrial users and farmers, and also de-bottlenecked the grids coming into Mumbai and helping Navi Mumbai become the data center capital of India thus far. Both CTC and busbars, which are our main copper products, have also recorded a strong growth in the year.
Coming to the oil division, our revenues from operations grew by 5.6%. The volume is approximately at par with the same period previous year, and this was largely because exports were very severely affected in the month of March due to the Middle East disruption, both in terms of supply chain as well as in terms of a sudden increase taking place in the freight, which required the company to go back to customers and negotiate a higher freight increase. In fact, the supply chain for petroleum products came to a grinding halt with all major refineries curtailing production and also reducing contract volumes which were signed up with us. There was also no visibility of what would happen in the month of April as we started the month of April, and there was uncertainty even in terms of what the price level would be in the month of April.
We stopped booking fresh orders in March by the first week and only focused on completing execution of all the pending orders. There were increases in freight, there were increases in packing charges and other incidental costs, and the company systematically negotiated that with all its customers and executed all the pending orders in the March period. We only started booking right towards the end of the month and in the beginning of April. The supplies against contracts too have reduced by 50% from the key contracted refineries in the month of April, and in the month of May now, it is expected to get largely restored, but of course, at significantly higher prices. If you look at the global transformer oil volume, it was marginally down by 1.4%, and the domestic transformer volume, in spite of all these problems, was up by 8.5%. Automotive oil grew by 19.5%.
Industrial lubricants grew by 6.1%. Exports contributed 36.3% to the overall oil division revenues in Q4 as compared to 41.7% a year ago. EBITDA per KL post foreign exchange stands at about INR 5,656 per KL as against INR 5,873 per KL. There was a fairly large provision made for foreign exchange, which was almost INR 15 crore in the month of March, with the sliding of the rupee taking place post the war starting. On a 12-month revenue basis, revenues have grown by 6%, posting INR 5,373 crore. The transformer oil business grew by 3.5% overall at a global level. The domestic transformer oil business grew by 12.2%, even though we were on target to actually cross 15% as the quarter had started. Automotive oil is up 11.1% versus the previous year. Industrial oil is up 13.8%.
Export mix stands at 39.4% for the year compared to 44.4% for the year ago. EBITDA per KL came in at INR 5,943 per KL. Moving to the cable division.
Revenues for the quarter reached INR 1,903 crores, up 35% over Q4 of FY 2025. Domestic revenues grew by 35.4% and exports grew by 33.6% over Q4. The U.S. revenues are up 52.2% over the last year Q4. Export mix was at 28.1% in Q4 FY 2026 versus 24.4% in the fourth quarter of 2025. See, EBITDA post Forex grew 34.5% year-on-year to reach INR 202 crores at an EBITDA margin of 10.6%. The pending order remains at approximately INR 1,900 crores. For the full year, revenues for the 12-month FY 2026 came in at INR 6,220 crores, which is up 25.8% year-on-year. This year, the cable division overtook the oil division to be the second largest business segment for APAR.
The domestic revenues are up 23.6%. Export revenues are up 30.6% year-over-year. The U.S. revenue is higher by 46.7%. The export mix stands at 32.3% in this period. The EBITDA post forex grew by 27.1% to INR 633 crores at a margin of 10.2%. Our B2B channel business, this is only the second year of its operation, has now crossed INR 500 crores. We also expanded our distribution network by adding 120 new B2C distributors and 25 new B2B distributors. There's clearly been an impact from the war on both the price and availability of specialty polymers. Many of this were being sourced from multinational plants that are located in the Middle East area, notably in Abu Dhabi. The prices have also increased of aluminum and copper and polymers in general across the board.
This has limited the ability of the company to aggressively book orders for specialty cables in the short term, given the shortage that has been there of these polymers. There will be a near-term impact in both volumes and margins. In terms of concluding remarks, I would like to conclude that the financial year 2026 has been a good year in spite of all the volatility and the war at the end of the period disrupting supplies. Despite the multiple iterations in the U.S. tariffs throughout the year, the increase in LME prices, and the recent Middle East war, the company has still reported a strong growth. However, as I mentioned earlier, the short-term period, as mentioned, will see slowing demand, and there are several factors for this. You have significantly higher metal prices. Added to that are higher premiums, both for aluminum and copper.
There is higher freight cost involved, including the war premiums that have been applied on all export shipments. The Middle East is where the maximum amount of problems are there because the containers are being transferred without complete insurance cover, resulting in some of the projects being actually deferred or delayed. There have been several manpower issues in the recent months at various project sites with the elections coming up in the East. This has impacted the transit of goods to some extent within the country, but much larger in the form of the operation of the ports. With these effects, some of the customers are actually preferring to postpone the delivery of their materials. We also see in addition to this, that domestic players have started increasing their capacities. This is increasing some amount of pricing pressure.
The Chinese competition is still quite severe in certain parts of the world. There is a fairly large difference between LME and the Shanghai Metal Exchange, what they call the SHFE prices, which for aluminum has increased to about $330-$360 a ton. Having said that, structurally energy infrastructure fundamentals remain intact with the growth in T&D, rising electricity demand, and evacuation infrastructure being increased, data center expansions, the growing presence of EV, more opportunities for reconductoring and up-gradation of aging lines, and finally, the significant investment happening in ultra high voltage transmission infrastructure and HVDC. All of these opportunities continue to provide a robust growth runway for the company, and we are quite focused and well-positioned to capitalize on this. We plan to increase our CapEx for FY 2027 to about INR 1,500 crores, in addition to the FY 2026 CapEx that we have incurred of INR 740 crores.
This is to ensure that we have a capacity in place to meet future demand, given the longer CapEx cycle that is taking place. With this, I would like to leave you all with an optimistic note that in spite of the short-term problems that are there, we still see a very strong future coming up. With this update, I'd like to conclude my presentation. I'd like to thank all of you for joining this call and would like to open up the floor to questions, please.
Thank you. 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 handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Nitin Arora with Axis Mutual Fund. Please go ahead.
Hi, thanks for taking my question. Thank you, sir.
I'm sorry, Nitin. You are not quite audible. Hello? Nitin.
Am I audible?
Yes. Now it's much better. Please go ahead.
All right. Thank you for taking my question, sir. Just on your outlook on U.S. market, I remember a few calls back, you also talked about the data center opportunity which you were seeing. You mentioned Microsoft and everyone as well. How big is these opportunity are becoming for you? Given such a tariff challenging year, you're still able to deliver such high profitability on the conductor side despite U.S. being down for us. Going in FY 2027, FY 2028, how this U.S. opportunity looks like to you because you're increasing again the CapEx, which looks like a very high visibility you are seeing. Just your take first on a little detail way on the U.S. CapEx.
Nitin, the U.S. market, we are seeing actually a very strong traction in the U.S. market. It is being clearly led by the data center opportunity there. All the major public companies data is already available, from the numbers that they have given from the Q1 earnings call that the Metas and the Amazons, Googles of the world have already had. We have already taken positive steps in this direction. We've supplied to three major data center projects so far in the U.S. The total of cables that have gone in there is in the range of about $15 million. With this, we are now slowly getting more and more access and RFQs which we are being asked to bid upon. We see the cable side on the data center growing and being a larger opportunity for APAR as time passes by.
We have also made certain CapEx provisions for adding specific capacity to produce the data center cables which are required in the U.S. that are of a significantly higher specification than the data center cables that are going into India. On the conductor side, we have had extensive discussions with various utilities there, both public utilities and the IOUs. From whatever we see of the amount of capital that they are allocating to improve their transmission line capacities and modernization of the grids, we see that this business will only continue to increase year on year. We are seeing fairly strong signal and visibility across the board in the U.S.
Getting it.
What has helped us is that in the tariff situation, even though there are tariffs-
Yeah
It seems to have settled down. This is also helpful in terms of customers having to take decisions. Last year was a very difficult period, and in spite of that, we grew because the end customer, the moment they had an imported product from India, they were not clear what the landed cost would have been, which really affects their decision-making. As a consequence, that had an effect in terms of where we stood. That, I think is today something that is much more settled. You will see in FY 2027 a larger APAR presence in terms of sales in the U.S.
Okay. When you announced this CapEx, is it something that these hyperscalers are trying to block capacity as they're trying to do with all the data center suppliers across the world, or it's predominantly a mix of Indian-
Nitin, you're still not audible. Could you please use your phone on the handset mode in case if you're on the internet.
Am I audible now?
No, not really.
Yeah. We can hear.
Yeah. Go ahead, Nitin.
Yeah. sir, Is it like these hyperscalers are booking you on the vendors?
No, I think, Nitin, the line is totally garbled right now. Hello?
Yeah. Am I audible?
Yeah. Now, yes, please go ahead.
Yeah. I'm asking on this CapEx, which you have announced and upsized again. Is it coming more from the U.S. data center hyperscaler side where they're trying to block your capacity the way they are doing for all the vendors around the world? Or is it a mix of both India CapEx and U.S. CapEx altogether?
No, it's looking at all the opportunities. If you see that, even as I mentioned earlier, that even in India, the data center expansion is there.
Yeah.
There is also an expansion happening on solar and wind-
Yeah
In India. There is a significant increase in solar capacity that we are seeing getting lined up in the U.S. as well.
Right.
The U.S. is being led by data centers, but unlike in the case of fiber and some of the other things where they're going directly and blocking capacities here, these are largely projects which are awarded to EPC players, and then EPC players in turn go into the market and start picking up or ordering the business. The CapEx increase we are seeing is fundamentally overall demand growing with the U.S. being one market where we see significant growth besides India. These are the two markets which APAR is really focusing on.
Right. Just last question, sir, on the profitability. Given if U.S. increases next year in exposure, and you're already able to do 44,000 in conductor for the whole year. How one should think about profitability of a conductor business next year?
Nitin, we typically give guidance for medium to long term perspective, as we have always been doing consistently in the past. Based on the historical EBITDA margins that we have made, we expect that from a medium to long term perspective, our conductor margins could be in the range of INR 35,000-36,000 per metric ton. This has been resulting because of the impact of high premium products, the re-conductoring opportunity, as well as the copper mix that is going up. In line with that, we expect these margins to be high. Also to note is that with the increase in the metal prices, you will see higher interest costs also coming in, because the metal price is going up. As we are looking at EBITDA, it's earnings before interest, to that extent, our interest costs, our EBITDA will also go up.
Of course, these are excluding the tailwinds. We always talk about EBITDA plus tailwind, so it's in the range of INR 35,000-INR 36,000 per metric ton, plus the tailwinds coming our way.
See, one thing, Nitin, I'll add to this is that everywhere, whether it's the U.S. or whether it's India, there is a short-term slowdown in ordering. Especially with aluminum moves along with the cost of energy, and because of this whole war-related problem, as I mentioned in my opening remarks, there is a very sharp increase in the price of aluminum. There is further a premium increase. If you look at the MJP, which is the main premium.
Japan
of Japan, that also has increased. The freight costs have increased everywhere. In the U.S., they're at all-time high prices of diesel, gasoline, everything. I expect a short-term slowdown, but the kind of budgets which are being allocated, and these are being allocated right from the big data center companies, the budgets which are getting approved in the board meetings of these big utilities, is showing a very strong picture going forward. You may not be able to place things like what you're asking in the exact buckets at this stage because of the uncertainty in the current environment. There are makings of and allocations, very serious allocations from all these different players that will drive the market in the future.
That's one of the reasons why we have committed to a larger CapEx, because given that the current scenario, the CapEx cycle also is significantly longer than what it was two to three years ago. From the time you order equipment from a top equipment supplier to the time you get the equipment coming in and the installation takes place, that cycle has got dragged out. I hope that answers your question.
Hello?
Participant has dropped. The participant has dropped, we'll move to the next participant. That would be Umesh Raut with Nomura Holdings. Please go ahead.
Yeah. Hi, sir. Good evening, and congrats for strong set of numbers in cable and conductor division. My first question is pertaining to our current capacity utilization in these three divisions. At the same time, if you can give us further detailed breakup of INR 1,500 crores of CapEx that you are planning for FY 2027.
Yeah. On the Conductor division, our capacity utilization currently will be about 90%-95%. Similarly for Cables, it could be close to about 85%-90%. Oil division, as the operations are not so capital intensive, we would have enough capacity because it would be in the range of 65%-70% capacity there.
Lubricant is higher at the moment. Lubricant capacity is running at almost 85%-90% for the small can and the bucket filling. As you've seen, there's been a substantial growth in the last year, and the company is making some further investments as part of this CapEx to re-bottleneck that.
Yeah. Anything else you wanted, Umesh?
Yeah, a breakup of INR 1,500 crores of CapEx that you are planning for FY 2027.
Around INR 400 crores would be coming from Conductor division, around INR 200 odd crores from Oil division, and Cable would be in the range of INR 850 crore.
Okay, got it. My second question is pertaining to domestic market. Now that a lot of these large HVDC projects are entering into execution mode, just wanted to know whether the material awarding for these projects are already being done or it is expected to come up in FY 2027. Second, any kind of delay in tender finalization that you see in domestic market for transmission lines?
The answer to the first question is that no, these HVDC projects have just been awarded, so both conductor and the oil will come significantly later. Fortunately, the three main players in this are Hitachi Energy, GE, and Siemens. APAR has been the principal and only supplier to all of these three companies so far in terms of the HVDC transformer oil. None of these orders have started getting awarded. I think the business will run through FY 2027, FY 2028 also in terms of the awards taking place. What was the second question you had, Umesh?
Regarding current tendering pipeline in terms of finalization, how it is happening, whether you are seeing any delays because of inflationary pressures, where earlier probable estimates for transmission lines could be different now, given that copper and aluminum have both seen significant inflation. Any kind of revision to that estimate will take approval times. Any kind of delays that you can anticipate in first half FY 2027 in domestic market?
We've seen effect of both. In some cases where we already have the orders and where the customer needs to actually block the metal, they have been delaying the delivery of those supplies. There is some amount of postponement that is happening because the factor is not just metal. Manpower is a big problem in India at the moment, especially with the Bihar, with the West Bengal elections and the elections in the Northeast. A lot of the workforce at project sites comes from those areas and those jurisdictions. There has been a little bit of a slowdown that's coming from these things. Our sense is that the time should pass and you will have a pickup. If you see last year, the second half of the year had a tremendous execution intensity compared to the first half.
Maybe a similar sort of phenomenon may come up in this year. Short term, as I mentioned, there definitely are all these moving parts which have resulted in higher cost, and people are postponing decisions and deliveries wherever they can.
Understood.
We are seeing something similar even on all the fiber optic, OPGW, all that, because the fiber costs have gone up 3X and 4X times what they were compared to about a year ago.
Understood. My last question is pertaining to data center. Three parts to this question. One, any rough idea about how much of value of cable supply that you can give to one megawatt or one gigawatt of data center infrastructure, suppose in U.S.? Second, do you see pricing in data center user industry to be relatively far better than other user industries? Third, any color on potential long-term contract that you can get on the lines of similarly what we have seen on the fiber side in domestic market from U.S. customers? Any kind of long-term contracts or tying up of capacity that you are now discussing with the large players in U.S. data center market? Thank you.
The last question I can tell you that, as far as our wires and cables are concerned, there is no blocking of capacity that we are seeing with not only us, but with any of the major players around the world. Because the way it runs is that it's then placed on an EPC contractor. The EPC contractor then places it onto an electrical contractor who then does the contracting. First question, the data centers vary very dramatically. If you see the kind of spec that runs in India, it's totally different than what runs in the U.S. Also, the spec that runs in a data center, which is a general data center versus an AI data center, is also vastly different. The third thing is that we are seeing that the bill of materials is also evolving.
As NVIDIA's new chips are being utilized and things like that, the electrical requirements are also starting to change. To give you an idea, a medium size data center that you would supply in the U.S. would be taking about $10 million-$12 million worth of cables, of just the medium voltage cables. You would probably have something equivalent in terms of the other low voltage cables in this. About $25 million-$30 million for a medium sized data center in the U.S. Over here in India, you are looking at about INR 2 crores worth of cables for a 50 MW kind of facility.
Understood.
For a 50 MW. Correct. If it's 100 MW, it would be about INR 5- INR 6 crores, like that.
Okay, got it. Sir, last question. I know that you are guiding for INR 35,000-INR 36,000 of EBITDA per ton on its conductor side, if I look at our pending order backlog where export mix is relatively higher at about 39%, while we did about 21% export sales in a conductor in last year. Probably, I think there is also a higher room to supply to U.S. because base, especially in last year, was weak. Considering all these things, it looks like you can report probably improvement on last year's EBITDA per ton number reported at about INR 43,000. Any color over here? Thank you so much, sir.
That's what we always indicate, 35-36 plus tailwinds. As you can see, the order book is not representing the entire requirement for the year. Also, there would be some order books, part of some order book that could spill over to the next financial year. As we indicated earlier, these are our medium to long-term guidance. We don't give the guidances for next year.
We have been increasing our guidances historically. It used to be about INR 8,000-INR 10,000, and from there, gradually it has gone up now to INR 35,000-INR 36,000, which even in the earlier quarter was about INR 30,000. When we see more visibility, we would take the call on that. For now, we feel that on a medium to long-term basis, our margins could be in the range of INR 35,000-INR 36,000 plus tailwinds.
Okay, sir. Thank you so much, and all the very best.
Thank you.
The next question comes from the line of Mohit Kumar with ICICI Securities. Please go ahead.
Yeah. Good afternoon, and thanks for the opportunity.
Sure.
My first question is, can you help us with your dependence on the Middle East for the specialty oil business in terms of sourcing and sales?
Okay. In terms of sourcing, the refinery that we source a reasonable amount of quantity and have a long-term contract with is Saudi Aramco's base oil refinery in Yanbu. That refinery at the moment is still running. It hasn't shut down at all through the entire period, and they have been shipping product out of there. That's one of the refineries that has actually met every quarter's requirement, including the month of April, and now in the month of May. From a sourcing standpoint, there is not a major impact from the refinery in the Middle East.
On the contrary, what has happened is that Saudi Aramco's other subsidiary, S-Oil, which is our largest supplier, then Formosa, which is out of Taiwan, and many of the other refineries, they had a major shock in the month of April, where the raw materials which were on the way to their refineries got stranded. That's the reason why in the month of April, all these issues have taken place. By the time we came into the month of May, alternate arrangements have been made, as well as Saudi has started loading large amount of quantities from Yanbu. Out of the 9 million-10 million barrels that they were loading previously from Ras Tanura, that has been substituted with about 7 million barrels from Yanbu itself. There has been a bit of a substitution that has come in.
On the sales side, our transformer oil, we have a very strong supply going into Saudi Arabia and Kuwait, and both of those had been affected. There were no shipments that went to these geographies in March. Nothing went in the month of April. However, in May, we have made shipments after getting the increased freight costs, et cetera, from these refineries. I would still see, and these are supplies that have gone into projects which are at very advanced stage, where commissioning of the transformers and all that were coming up. I see that the Middle East business will continue to remain a little bit subdued until this war gets completed. There's also an impact in the conductor division, where we have certain contracts with Iraq and some of these places, where the deliveries will get pushed out until there's a resolution over here.
Understood, sir.
Does that answer your question?
Yes, it does. My second question, can you help us with the growth outlook in premium conductors in domestic markets and compare the inquiry pipeline with the last year? I am specifically talking about AL-59, HTLS, railway overhead, CTC conductors, and copper plates.
Generally, we see a good growth prospects in this year. There was a little bit of holding back of tenders last year. This year, we expect a lot of more tenders to be finalized, accordingly, the supplies will be more forthcoming. With regard to CTC also, there has been a good growth in the transformer segment. While there's been overall more supply also because of the expansions which have come through for us as well as competitors, overall market is growing. We see that as a positive.
Mohit, if you see, as I mentioned in my opening remarks, 45.8% is the mix that we had of premium products. If you look at that as a percentage of the current order book, it's a little over 50%. You will see continuing growth happening in these areas, as Chaitanya just mentioned.
Understood. Last question, sir. Is it possible to sell the CTC conductor to export markets, and where are we in terms of getting those approvals?
There is absolutely a possibility of exporting it. Far, we had really not exported product because there was a major deficit in the domestic market. To tell you honestly, given the deep relationships that APAR has had on the transformer oil side with all the major power transformer manufacturers across the country, who are the main users of the CTC, obviously there was a lot of pressure to supply them as well. Now, having gone through five phases of expansion within APAR, we are now in a position to start exporting the product. Initially, we had got approvals from Middle East manufacturers and had started exporting to them. We are now working towards getting approvals in Europe and the United States as well. As you see, as we look at FY 2027, FY 2028, we will want to broad base ourselves and look at exports.
Europe is definitely something which is an attractive market. In the case of the U.S., there is a tariff that the India CTC faces, compared to a product that's manufactured locally in the U.S. We are in the process of exploring this because I don't think there's sufficient CTC manufactured in the U.S. by itself.
Understood, sir. Thank you.
You will see that as a higher percentage going forward.
Thank you, sir. Thank you. Understood.
Okay.
Thank you. Ladies and gentlemen, in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Amit Anwani with PL Capital. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, first question on the cables CapEx, which you said probably about INR 850 crore CapEx, which we have envisaged for this year also. With earlier CapExes, we were probably trying for roughly about INR 10,000 crore revenue. Any change in terms of the volumes we want to achieve after this round of CapEx? As you said, you're front-loading the CapEx for the future years. What's the kind of long-term outlook?
CapEx is working towards getting to that INR 10,000 crore. We have already spent about INR 400 crore in FY 2026. If you look at all the carry-forward projects which we have into FY 2027, that's about INR 850 crore. The total spending has actually increased by almost about INR 400 crore compared to what we had planned earlier. Most of this is, there's a certain set going into expansion of medium voltage cables, both XLPE as well as rubber-based, that go into data centers, go into general expansions for utilities, industries, all of that. There is a capacity increase for what we produce for the wind sector. There's a capacity increase of what we produce for solar. There's also a capacity increase for what we produce for the railways and defense. It's quite broad-based, and we are seeing this is a CapEx towards that INR 10,000 crore only.
All right.
It's just that we are bringing it forward a little bit. We would have staged it out. Instead of spending INR 1,200 crores in two years, you would have otherwise spent INR 800 crores in two years and then INR 400 crores in the third year. We're trying to actually pull it forward.
Right. Sir, is the capacity kind of fungible? Since it's a data center, there would be different specs in India and also in exports, and you are building capabilities there. Is your current capacity fungible there? Second, what kind of expectations we have in terms of data center, kind of contribution going forward since we are building this capacity for that also? Second, on margin, we have about 10.2%. How these margins can move, because you also talked about some competition in the domestic market, and players are actually setting up their own setups for this. On these two aspects, yeah, that's the question.
In terms of fungibility, the machineries are capable of producing different specification of products. The U.S. has a combination of XLPE, but largely rubber-based for the data centers. That's one of the reasons why we have added a capacity expansion to produce a much larger quantity of these medium voltage EPR or polymer-based cables. As this expansion happens, the fungibility is going to remain reasonably high. Second thing is you're talking about competition coming in.
Yeah.
Yes, there is a competition coming in. You heard some very big names after UltraTech disrupted the paints market. Now they are investing and wanting to launch basically wires. We see our strength really in cables, and especially in the specialty cables for all the segments that I mentioned to you. I don't think either the current plan or the immediate launch that UltraTech is going to do, the Aditya Birla Group is going to do, is going to affect these high-value products. I think their focus is much more on the building wire than the building segment. Similarly, the Adani Group also seems to be focused more on the wires and the LDC or the light duty cables which go through the distribution network. W e feel that there is a very large access that's available in the market, both in India as well as overseas.
We are continuing to look at growing irrespective of what happens with respect to some of these players. There could be increased competition to some extent. You may lose a percentage or so in EBITDA here or there, but the overall size of the pie will continue to grow.
Right. Sir, on conductors, how the premium product volumes would have grown this year, and what's the outlook for next year in terms of the overall volumes growth in conductor and especially the premium product volumes growth in conductors?
Overall figures, we are continuing to look at a 10% growth year on year on our conductor side by volume. We are continuing to look at growing by 25% a year in our cable side of the business as well. All these expansions are all in line with that. We needed a 25% CAGR to be able to get to INR 10,000 crores in that five-year timeframe when we launched the program. We are very much on track, in fact, maybe slightly ahead.
Right. premium conductor, how much has been the volume growth?
premium conductors, as I mentioned, as a percentage, 45% For the year. 45.8%, so almost 46% for the year.
Right. Lastly, on the U.S. sales, how was the U.S. sales for this year? What are the expectations you're building in for FY 2027 in terms of U.S. sales?
Last year was obviously a year that was very badly affected because of that 20% premium that India had to pay, or a penalty, because of the Russian oil purchase angle. Currently, the duty structures have got rationalized. The total duty that you pay on Indian products is 25% for both copper as well as aluminum cables, because it falls under the Section 232. It does. The pricing is at that level. We feel that our business will go up in FY 2027. It will further go up in FY 2028, because we are spending a lot of time in getting approvals there and started getting from a much wider range of customers initial orders. You'll see a significant growth over the previous years in the U.S. market on the cable side.
Similarly, we see that the conductor side also will be higher than what we have seen in last year's numbers.
Right.
The short-term factors are not looking good because of higher freight costs and the product cost itself being high. As I mentioned a couple times on the call so far, everybody in the world is pushing out decisions to the extent that they can. Moment the war gets over and energy costs come down, you will automatically see an impact happening, especially on aluminum.
Understood, sir. Thank you, sir. Thank you so much.
Yeah.
Thank you. The next question comes from the line of Amitoj Singh with 360 ONE Capital. Please go ahead.
Yeah. Thank you so much, sir, for taking the question. My first question was on the U.S. tariff scenario.
Yeah.
Recently, U.S. has changed the Section 232 tariffs. There is a flat tariff for 50% on conductors and 25% on cables. How do we see the pipeline evolving due to these tariff changes? Is it beneficial for APAR, and how has the customer reaction been? My first question, sir.
What actually it has done under 232 is, with whatever rationalization has been done, it seems like that now this is here to stay for a while. The uncertainty which was really the big problem that existed in the last financial year, that problem is now, at least the visibility is there. You can do a proper computation in terms of what the landed cost will be. In that sense, it is positive. I guess India is still continuing to have discussions with the U.S. government, and I don't know whether there could be reduced tariffs coming in. Otherwise, in the meantime, whatever plans and whatever I'm discussing is considering the current tariffs under Section 232. We see that at these tariffs, we will grow significantly in FY 2027 over FY 2026, as far as the U.S. market is concerned. Yeah.
Please bear in mind, even an American producer will incur the duty on the aluminum of 50%. Exactly. The U.S. imports close to 90% of its aluminum, whereas it imports less than 5% of its copper. The impact on exporting products to the U.S., which are aluminum-based products, is not as high as a barrier which exists when you export copper-based products.
Makes sense. We export largely aluminum to the U.S., so that is fair. Okay.
Yeah.
Makes sense. Yeah. Sir, second question was on the competitive intensity in the domestic market. I think there's a private player who is almost coming up with their carbon core technology for conductors and is, I think, close to getting a PGCIL approval. Any comments on that or any R&D that we are doing apart from our HTLS segments that would negate that effect? Just your comments on that, sir.
Even earlier on, actually. In all these tenders with Power Grid and others, there is a requirement to have past performance successfully. If the parties who are coming up new, they will not be given that easy access to sell and be acceptable or eligible in the tenders. They may come in vendor development type program, but it may take time for them to get established. The ACCC conductor is up to three times more expensive than the ACSR, which is the cheapest base conductor.
The difference between the two is more than made up based on two aspects. One is lower line losses and significantly higher amount of power that you can transfer on the line. Unless those two are actually proved in field conditions, there is no easy way of taking a risk on the higher cost of the conductor. If someone comes up with a new composite core, it is not easy to actually just start getting large scale orders on that, because if you fail on these two counts, then the conductor has become very expensive, number one. Number two is that most of these jobs are for de-bottlenecking. Like for example, I mentioned earlier about Navi Mumbai. APAR has de-bottlenecked one arterial line coming into Mumbai and about four or five smaller lines.
This has enabled more than doubling the amount of power that has been able to come into the city. Now you see the stakes are so high in terms of a project like that you can't try out new products that easily. The entry barriers are extremely high.
Makes sense. Thank you so much for taking my questions. Those were my questions. Thank you and all the best.
Thank you. Ladies and gentlemen, we would take that as the last question for today. I would now like to hand the conference over to the management for their closing remarks.
I'd like to conclude by essentially saying that, as in my concluding remarks, that we see at the moment that there is a little bit of uncertainty because of the war situation, the prices of metals, high premiums, high freight costs, et cetera. Some amount of postponement in decision making as a consequence of this or ordering of materials which have been ordered. As you look at the fundamental structure and the energy infrastructure, it continues to remain extremely strong. We are very bullish and based on that, we have increased our own CapEx programs, and preponed it because we see that there is a strong runway available over the next three to five years. I'd also like to take this opportunity to thank all of you for joining this call, and I know today is a public holiday, and thank you very much for being with us.
Thank you, sir. Ladies and gentlemen, on behalf of APAR Industries, that concludes this conference call. Thank you for joining us, you may now disconnect your lines.