Ladies and gentlemen, good day and welcome to the APAR Industries Limited Q2 FY 2027 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 touchtone phone. 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 H1 and Q2 FY 2027 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 the CFO, Mr. Ramesh Iyer. I will now pass on to Mr. Kushal Desai for the opening remarks. Thank you, and over to you, sir.
Thank you, Ambesh, and good afternoon, everyone. We are very glad to have you all with us for the APAR Industries Q2 FY 2027 earnings call. In terms of format, I will start off first with the consolidated performance, then take you through some recent industry updates, and post that, run through each of the individual divisions' performance. At the end of this, we can open up for questions. Our consolidated revenue for second quarter FY 2027 came in at INR 6,931 crores, which is higher than the previous year same period by 21.3%. Compared to the sequential quarter, it is higher by 5.2%. Domestic revenues grew 34.3%. Exports, however, de-grew by 3.3%. I did want to point out specifically here that we had approximately INR 800 crores of conductors and cables which are in transit and have been sold to customers on a DDP basis.
Some of the product has remained in transit, given the shipping timelines and the availability of containers that got pushed out to being a little bit later in the quarter. All of this product is actually scheduled to be sold in the U.S. market. As a result, the U.S. revenue shows lower by 29.7% compared to the second quarter of last year. However, the order books remain at a very strong level at the end of this quarter. With the realization of this DDP amount, you will find that by Q3, the picture will look a little bit different. All our businesses have delivered strong EBITDA margins year-on-year, with the biggest driver coming from the oil division. The EBITDA after open period Forex adjustments rose 57.8% year-on-year to INR 787 crores, and the margin improved by 270 basis points to 11.4% from 8.7% a year ago.
On the back of this strong EBITDA margin improvement, coupled with improved financial leverage, our overall net profits have risen year-on-year by 77.8% to INR 447 crores. PAT margins improved to 6.5%, which is an increase of 200 basis points compared to the previous year. If you now consider the first half of FY 2027, there has been a healthy growth, with this being the highest ever half-yearly revenue and profit. The revenue for H1 grew 25% to INR 13,522 crores. The domestic revenue was higher than the previous year by 35.5%, and exports grew by 3.7%, excluding, of course, this INR 800 crores that I spoke about earlier. The exports proportion in overall revenue stands at 27.6%. The U.S. revenue is down by 21.5% year-on-year based on whatever I explained earlier of the INR 800 crores in transit.
The EBITDA post open period Forex grew 60.2% to INR 1,602 crores, with EBITDA margins of 11.8% in the first half FY 2027 versus 9.2% in the first half FY 2026. Our profit after tax for the half year grew 77.7% to reach INR 915 crores. The PAT margin is also improved by 200 basis points. I will now cover some of the key industry highlights. During the first half of the year, India added approximately 8,775 circuit kilometers of transmission lines, which is up 153% year-on-year. In terms of transformation capacity, about 671,815 MVA got added during this period, which is up 52% year-on-year. In September 2026, the center has approved intrastate transmission systems to evacuate up to 135 gigawatt of renewable energy by FY 2033, representing an addition of approximately 51,126 circuit kilometers of transmission lines and transformation capacity of 228,903 MVA.
This is essentially the third green transmission corridor which has been announced, and the investment expected is to the tune of about INR 1.86 trillion. There have also been two other important announcements from CEA of setting a 10%-15% thermal margin limit for transmission lines versus the standard. If a transmission line, the standard operating temperature, for example, is 70 degrees, then this limit would apply to 10%-15% on 70 degrees, which keeps the upper limit at about 80 degrees on which the line can operate. And mandating an N-1 reliability in terms of the architecture of the transmission network. Given these two important changes, we expect that there will be an acceleration of reconductoring of lines taking place, especially in sections of the network where the electricity demand is growing.
When you look at some of the major programs outside India, in the U.S., there has been the announcement of the SPARK program, which is the Speed to Power through Accelerated Reconductoring and other key advanced technologies and upgrades, which was announced in September 2026 by the Department of Energy, where they have listed specifically 31 projects in 26 states with a capital allocation of approximately $1.9 billion of federal funding. This is expected to unlock 23 GW of transmission capacity and will cover reconductoring and rebuilding of about 1,500 miles of transmission lines and grid enhancing technologies of about 21,000 mi. Coming to the segmental highlights, I would like to now take you through each of the divisions' performances. If you look at the conductor division, overall revenue for the quarter has grown 21.1% to INR 3,753 crores.
This is led largely by the increase in the prices of commodities and underlying metals. Volume for the quarter dipped by 9.2% over the same period last year. Domestic revenue is up 22% versus Q2 FY 2026 and 8% versus Q1 FY 2027. Our exports increased by 18.3% versus last year and 29.5% versus Q1 FY 2027. Overall, exports constituted 23.6% of the mix for the quarter and 24.2% in the first half. On a sequential quarter, it has improved from 20.5% to 23.6%. The U.S. revenues for conductors grew by 12.2% in this quarter. The premium mix stands at 39.4% in Q2 FY 2027 compared to about 45.3% in Q2 FY 2026. The EBITDA post open period Forex grew 11.3% to reach INR 276 crore. The EBITDA margin improved on the back of execution of higher margin orders during the quarter, where the EBITDA per metric ton comes in at INR 48,241 per metric ton.
INR 48,241 per metric ton compared to INR 39,363 per metric ton a year earlier. On a half year basis, revenue is up 20.5% to reach INR 7,092 crore, whereas overall sales volume is lower by 8% compared to last year. Domestic revenue and export revenue have grown by 20.7% and 20%, respectively. The U.S. revenue is down 8.4%. The EBITDA post Forex is higher than the same period last year by almost 12.6%. So EBITDA per metric ton is at INR 50,739 per metric ton versus INR 41,421 per metric ton a year ago. So H1 witnessed a volume de-growth, as I mentioned, of around 9.2% as there continues to be a delay in manufacturing clearances as well as awarding of new conductor orders from customers and especially TBCB awardees.
As you can imagine that there has been a significant commodity inflation in the form of the price of both copper and aluminum on LME, a higher premium like MJP, for example, on aluminum is the highest it has been in the last four years. There has also been a sharp increase in steel for manufacturing of the towers. This is the second consecutive quarter in which we have seen this trend. However, it is important to keep in mind that TBCB orders have an execution period of not exceeding 36 months with extremely stringent penalties on delays. Hence, there is only a finite timeline in which some of this can be postponed.
It is also interesting to note that this past quarter, execution of existing contracts has been at a high. As I mentioned in my earlier part of the opening remarks, in exports, international freight rates had gone up very sharply in Q2, and there was also a very heavy demand and divergence of containers for China along the Europe and U.S. freight lane. As we move into Q3, however, this freight trend has already started showing signs of reversal, and as a consequence, we should see a better situation in this quarter. What is also interesting to note is that the order book at the moment is at an all-time high of INR 12,025 crore as of September 30th. The order book consists of new orders received during the second quarter of FY 2027 to the extent of INR 4,725 crore, which is higher than the same period last year by 82%.
The order book includes several prestigious and new type of orders from utilities in the U.K. and the U.S. of about INR 3,000 crores. This includes the first Z-shaped conductor order from Scandinavia, which is actually very resistant in high wind conditions, and this is for an evacuation from an offshore wind farm off the coast of Scandinavia. We have also received a new set of HTLS orders from overseas markets, which include countries in Africa, South America, and Europe. on the OPGW front, we received our single largest order and the first of its kind with a 48 fiber OPGW from KPTCL, which is Karnataka Power Transmission Corporation Limited, of about INR 960 crores using a new communication technology, which is IP-MPLS, or it stands for the Internet Protocol Multiprotocol Label Switching system that improves not only the speed but also the security of data transfer.
We also received our first OPGW order with 144 fiber in it from a customer in Central America. This is an extremely important strategic milestone because higher OPGW fiber count is going to be the order of the day with the data centers coming in and the amount of transmission of data exponentially likely to increase. Approximately 25% of this INR 12,025 crore order book will be staggered over two to three months, with the rest of the order book likely to be executed in a period of less than 18 months. It is also our expectation that the second half will see much more aggressive execution in transmission lines, and we are gearing up for the higher volumes in H2.
To sum up, the structural demand drivers remain intact, and it is only a matter of time when the flow of order execution will take place to catch up to the final delivery schedule of the transmission projects. Coming to the oil division. Revenue for the quarter came in at INR 1,819 crores, which is up 35.6% year-on-year, 6.7% sequentially, led by higher realization on the back of higher base oil prices. The operating revenue continues to be extremely challenging and volatile, characterized by record refining margin spreads. This is having an overall impact on the business, especially considering that the value of billing has almost doubled on a unit basis.
It is more prudent to actually limit the sales to whatever is the maximum exposure limit set up and limited by the number of days of outstanding, given the fact that clients today have to pay double the cost of what they were paying earlier, and the fact that it is not easy to get double the financial limits. So considering this prudence in terms of how much you would be willing to bill to customers and what exposures you would be ready to take, we see that the overall volume is down to 128,590 KL for the quarter, which is about 20% lower than the same period previous year. Our business out of the Hamriyah plant has substantially reduced because of the logistics of bringing products in and out.
Some of that export has been transferred actually to India, and we continue to execute those orders from India. Exports as a proportion in the oil business is currently at 37% compared to 43% a year ago, and 36.4% last quarter. EBITDA post foreign exchange grew by 185% to reach INR 299 crores. The EBITDA margin stands at INR 23,262 per KL in the second quarter FY 2027 versus 6,517 KL a year ago. On a half-yearly basis, revenue has reached INR 3,525 crores, growing at 35.3% versus last year. Volumes for the same period have fallen by 16.9%. Export has grown 23.5% year-on-year, and the export mix stands at 36.7% in the first half of FY 2027.
Since the inception of the Middle East conflict, we have changed the operating philosophy to focus on executing higher margin orders with customers who have been consistently buying from APAR and ensuring that they receive consistent quality with uninterrupted supply. This has led to a reduction of spot buying of base oils and the reduction of sales to customers who are significantly more price sensitive, have an erratic purchase pattern, or where we feel that there are limitations in terms of cash flow. By following this, the margins have increased even though the volumes have dropped to some extent, but we have protected ourselves quite significantly in such a volatile environment. Now moving to the cable division. Revenues reached INR 1,875 crores, which is representing a growth of 22.1%. Copper is about 30% of the overall revenue mix, as compared to 20% a year ago.
Copper prices are up by almost 50%, and aluminum prices have gone up by almost 35% during this quarter. Consequently, the metal prices, along with volume, has led to about a 35%-40% increase in the sales value. However, our U.S. sales number de-grew by 50% over last year, which brought the overall growth down to 22%. This quarter, as I mentioned earlier, we have an unusually high value of cable, which are amounting to over INR 440 crores, which are in transit, for which the sales revenue could not be recognized as the incoterms are on a DDP basis. The incremental excess transit value, that is the transit value of the INR 440 crores minus what existed at the beginning of the quarter, represents almost 20% of the sales value.
Considering this number, it will put the entire manufacturing dispatch and the lower recognized U.S. and overall Q2 revenues in the right perspective. If you look at the domestic business, there the revenues have increased by 71.4% in cables, and 14.1% sequentially. Exports came down to 45.2%, and is down 29.8% compared to the first quarter. The export mix stands at 19% of Q2 FY 2027 compared to 42.3% in the last year. The EBITDA margins have improved by 80 basis points to 11%. Moving to the half yearly performance, revenue has grown 25.7% year-on-year. Domestic revenue is up 65.8%, but the export revenues are down by around 30.2%. The EBITDA post-Forex stands at INR 401 crores, representing a year-on-year growth of 34.2%. The EBITDA margin stands at 10.8%, which is 70 basis points higher than last year.
The cable order book also remains very strong at INR 3,000 crores of orders compared to INR 1,653 crores, and bulk of these orders are expected to be executed before the end of the year. We have also received almost INR 1,000 crores of orders from Google Data Center in the U.S. and Amazon's largest data center, which is coming up in India. During the quarter, we successfully completed another round of QIP, raising INR 2,500 crores. The proceeds of this will be deployed towards improving working capital and strengthening the balance sheet, thereby enhancing our financial flexibility and supporting our future growth initiatives. As a consequence of this fund raise, our rating has been improved by one notch from AA- to AA, which is an important development to help us access larger finance limits and also rationalize borrowing costs.
In conclusion, in spite of a challenging operating environment, business momentum is still strong, as reflected by the order books of our conductor, cable, and oil divisions. The data center CapEx cycle is still building up, both overseas and in India. We also see freight rates, which have sharply increased to Europe and LATAM, starting to ease, making exports to these geographies more feasible. The medium to long-term trend remains intact and could in fact accelerate in the months to come. At this stage, we are confident of our performance during FY 2027. I would like to conclude my opening remarks with this. Once again, thank you all for joining this call. Before we open the floor to questions, I'd like to extend a warm greeting to all of you and your families for the upcoming festival season. With that, we would be happy to start taking questions.
Thank you very much. We'll 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'll wait for a moment while a question queue assembles. The first question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Hi. Thank you, sir, for the opportunity, and very strong set of order book. Just first thing on the profitability on the aluminum side, because first half itself is pretty strong, averaging 48,000- 50,000. How we are thinking about this year profitability, because your guidance has been around 40,000 for this year. Also, if you can just articulate, apart from your guidance thing, the premiumization, because the few orders which you spoke about looks like a very premium end of the market, which is it coming from. So I know you guide every year for that particular year, your EBITDA per ton for aluminum. But directionally, if you can tell us a little bit that, given if my understanding is correct, ideally the profitability should improve or rather how we should think about it. So that's the first question.
Hi, Nitin. The premium mix has been high in Q2 as well as it was high in Q1. Within premium mix, there are different categories of conductor. Each has a different margin profile depending on where we sell, whether it is domestic, export type of customers, the margin profile varies. By and large, the more premium range of products we have, the margin should improve. But depending on specific cases of sales to customers, the margin profile within the premium mix also change. As we have been discussing in the past in terms of exactly estimating the EBITDA margins, it may be difficult, but we can give a range, which is what we have been always talking about, INR 35,000, INR 36,000 plus tailwinds.
These tailwinds keep on coming depending on the product service margin and execution as well as the geography in which it has been sold.
To just add to what Ramesh says, yes, there are some very premium orders and some of them for the first time, like the Z-shaped conductor which is going into Europe.
Yeah.
It is manufactured so far by only two other manufacturers of conductors in the world.
Thank you.
This is tending towards more premiumization. We have to complete execution of orders, get all these things installed, et cetera. Also, for the OPGW, which we got for Karnataka, it is a very big job on a complete turnkey basis, right from design to delivery. It is also going to incorporate this new technology for which APAR has tied up with Nokia. This is continuing to go there. My expectation is that margins from these products will continue to be better. However, the environment, as I said, there is so much volatility. You have suddenly MJP at a four-year high.
Yeah.
You have on certain freight lanes suddenly again LatAm and Europe multiplied by two to three times in the short term.
I think the strategy which APAR is following is, and you will see that even as I had mentioned in the operating philosophy of the oil business, that we are trying to be very selective in such a volatile environment of the quality of business which we are taking. Because if you work with lower margins, suddenly these impacts happen and it completely can wipe out whatever profitability that you had.
Fair point.
For things which are beyond your control.
Control. Yeah.
Yes, we hope that this volatility starts reducing and some of these wars and aggressions drop, in which case the volatility goes down and there is an automatic cushion that is built into the system that no longer needs to be used. But considering all that, I think I would just summarize saying that we continue to push hard and there is a lot of opportunity coming in for more premium products as we go forward. As you may have picked up from the opening remarks, these changes that CEA has made, they are actually very big changes in terms of the operating quality of the network.
Getting it
in India. By keeping a control on the amount, the temperature, you are controlling essentially the amount of power that is being transferred across the line, and you do not want overloading of the line to take place. A simple way of measuring it is by measuring temperature. They have also brought in the redundancy, the N-1 which I mentioned. Accordingly, you are bound to have secondary transmission lines coming up. You are bound to have reconductoring taking place. The U.S. for the first time has formally announced a program, which is SPARK, as I mentioned, with specific programs in place. This fund of $2 billion is going to help complete the CapEx on these wherever there is gap funding and things involved, and a higher technology to be picked up. There is a lot of excitement in terms of the way premiumization is happening.
I think time will tell how it actually translates into finally the EBITDA per ton.
Got it.
That's a very long answer to a short question of yours.
No, sir. It's very helpful.
I wanted to give you a proper overview of what is happening.
Yes. No, it's very helpful. This year the guidance still remains at 40 or because the first half is strong, so where we should land, how we should think?
Normally, Nitin, we don't give guidances for the quarter and for the year. Typically, a lot of order books are MTO based. We give a guidance from a medium to long-term perspective.
Sure.
Because of the nature of the business and the complexity, it's not easy possible that we give guidance for the quarter.
Sure.
We expect tailwinds to come, and that's where our margins are in line with our guidance.
Sure. Just one more question here, Ramesh, to you. When we look at point in time, we understand because aluminum is pretty huge, and we saw in some of our auto ancillary companies working with aluminum, the working capital bloat was pretty high this quarter specifically. Is this going to normalize? Is it the right understanding because of high inventory of aluminum? Aluminum also got reversed, so that would also have impacted you. If you can throw some light on this balance sheet aspect of working capital.
I'll answer the specifics on, we've been keeping an extremely strong control on both debtors as well as inventory. Aluminum is up by 35%-40%, copper is up by 50%, base oils are up by 100%. There has been a huge inflation on the raw materials. It's clearly not every customer has actually been able to build enough financial muscle and cash flow to be able to handle this. That is also one of the reasons why there is a little bit of a reduced volume sales, because you want to limit the way in which you run the business to make sure that cash flow is not coming under any form of pressure. It's not really had an impact on the amount of inventory which we hold, and we've pretty much controlled it in terms of the number of days outstanding.
The physical value obviously has gone up because of the commodity value. The way in which you handle dispatches and supplies to customers has necessarily had to change to make sure that the company is not put at any additional risk and the cash flows remain good.
Thank you very much, Ramesh. I'll come back in the queue. Thanks a lot.
Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Yeah, good afternoon, sir, and thanks for the opportunity. My first question is on the reconductoring opportunity. Personally, we used to think that reconductoring is likely to grow at a very fast rate. But we are looking at the IMR data for FY 2026, and I thought it was looking more like flattish or a decline. My question is, are you seeing improvement in the ordering flow outlook in the domestic market for HTLS? Is it fair to expect that the margin which you earn on the HTLS is much higher than the average margin you report for the conductor segment?
In the HTLS side, a lot of tenders have come out. Only thing is that some of them have taken more time to get formally processed through their utilities, board meetings, et cetera. Generally, we see a growth in this segment. There is more competition also coming in. That also is a factor. But overall, the size of the pie is growing. While our market share may reduce, we may still not have a reduction in our volumes and revenue on the HTLS side. Mohit Kumar, as I mentioned in the opening remarks, the amount of basic changes in the market which is favoring HTLS is increasing. Just now, the two changes that I mentioned that CEA has made, which is very recent, it is within the quarter.
It will take some time for it to percolate down, but it has very far-reaching consequences in terms of where this will be applied. Even as I mentioned in the U.S., even though these patents were all originally filed in the U.S., the market there was quite limited. Now, with this and with all this data center growth happening over there, you will see increasingly more HTLS going in there as well. I think being the largest player in the world on HTLS, we are actually in a very good position. Whereas we may not be able to predict quarter by quarter, the trend is looking very strong.
Understood. My second question is on the CTC conductors. I think the CTC conductor, I think we had just brought in the capacity. This particular segment seems to be seeing a very high growth. Can you just help us with the outlook here? Are you exploring the export markets for the CTC especially, and are the margins much better than the average margin you report, yeah?
Okay, so there are two questions of yours. I will take them one by one. A, the basic demand for CTC is continuing to grow. There has been a lot of capacity that has come on stream, both at APAR as well as at some of our key competitors. Having said that, the CEA is contemplating increasing where CTC can be used. Not only they are looking at more and more transformers which will need CTC in it simply because of the better performance that comes from CTC versus PICC. APAR has already started looking at exports. We have got some trial orders from customers in the U.S. We are at very advanced talks with customers in Europe. We had signed up a whole set of customers in the Middle East prior to the war breaking out.
And we continue to ship to some of them, but obviously their volumes also have to some extent been affected due to the current environment. In short, there is a good demand for CTC. I think the new addition of CTC capacity outside India is slower than the way the demand is going to increase in those countries. We are working towards that. We did have a little bit of a setback in Q2 as far as CTC is concerned because when the very heavy rains came and hit Silvassa, one half of our CTC complex was the one that was really badly affected compared to all the rest of our cable and conductor manufacturing. As a consequence, the capacity was down to the extent of almost equivalent of 20 odd days out of 90 days.
That affected a little bit in terms of what could have gone out in this quarter. But otherwise, yes, the export side is something that we are looking at, and I think we will see good traction coming from it.
I would like to add that some of the transformer customers expansions have got somewhat delayed. When that fructifies, then again, the CTC volume offtake will actually materialize to the extent that we had envisaged when we put up the CapEx for the expansion.
Kushal, are the margins, is the margin better than our average margins?
It is about similar. You will see a little bit of falling off of domestic margins just simply because there will be adequate capacity coming in place. The margins will improve for very specialized product. If you see when you go to 400 kV, 765 kV, there is more HVDC, which will come forward in the next five, seven years. That is where you will get higher margins. But for a like-to-like basis, given that the capacity has increased, supply has improved. The domestic side, you will see a little bit of a drop. The export side is about similar, because right now, some of this premium that you are getting is getting eaten up by freight and logistics. When those prices fall, then obviously your ex-factory netbacks will improve.
Understood, sir. Thank you and all the best. Thank you.
Thank you. The next question is from the line of Umesh Raut from Nomura. Please go ahead.
Hi, sir. Good evening, and congrats for very good set of numbers. My first question is pertaining to bookkeeping. If I look at probably trade payable, I think it has increased on a year-on-year basis from about, I think if I look at for March 26, it was about close to 109 days. Now it is lower at about 81 days. Basically, this reduction is largely because of deployment of raised funds into the reduction of customer acceptances, or is it pertaining to your higher payout towards vendors?
We have deployed the QIP money for the purposes for which we have raised, which is working capital. We have resorted to cash purchases of raw materials, and that is the way we have deployed the money, and therefore you are seeing that trade payable number of days is lower than what it was in the past.
Could you please give me the number for acceptances as on September 26?
It is around INR 3,500 crores.
Okay. Understood. Second, if I look at probably our CapEx for first half, it was closer to INR 500 crore. Given that you mentioned in the last call that total CapEx that you are planning is about closer to INR 15 billion, there is also a possible CapEx that you are exploring outside India. How should we think about CapEx number for full year FY 2027 and 2028, 2029?
We are looking at the CapEx around INR 1,500 crore. That was at the beginning of the year. That would have been spent over the 12- 15 months or so. Now we are close to about INR 500 crore have already been spent on that front. Once this phase of CapEx is over, then probably our CapEx spend would be less because we are stepping up the capacity and therefore we see a build-up of the CapEx amount. Probably once this INR 1,500 phase of CapEx is over, then on an annual basis, we expect that CapEx would be in the range of INR 300 crore or so, INR 300-400 crore or so.
It does not include any of the, meaning this INR 1,500 is a domestic CapEx. We are still in the process of looking at closing the loop for the overseas side of the expansion. It is at a fairly advanced stage, but we still have to close on that.
Understood. Is it fair to assume for this year, probably CapEx could be about INR 10 billion and remaining INR 5 billion kind of extending towards FY 2028, and then over and above this probable capacity expansion outside India?
We will stick to the India figures for now because that is what we have been talking. It is about, as I said, about INR 1,500 crores towards the beginning of the year to have been spent over the next 12-15 months or so. Sometimes the CapEx gets delayed by a quarter or so. That is where it could be. But largely it would be about INR 1,500 crore for over 12-15 months, and out of which we have already spent INR 500 crores as of now.
Understood. There is also a proposal to invest up to about $100 million now into PSPL. Earlier proposal was to invest closer to about $10 million. Any reason behind this change in proposal?
Yes. PSPL is our wholly owned subsidiary, and it also has all our operations under this Singapore entity. We are funding the entity at this moment. Is this an enabling resolution that has been taken, considering that we are looking at various options of expansion overseas? We have just taken an enabling resolution at this stage.
But is it fair to assume that these enabling provisions are more of pertaining towards probably expansion outside India or organic opportunities?
It is pertaining to expansions outside India, which we are looking at the moment. For the details of that, we will say as and when it is required to be done. But for now, it's an enabling resolution for investment funding the subsidiary of the company.
Understood. Last question is on strong orderings that you had in the quarter gone by for cable as well as conductor business. Especially, I think cable, where your order book has now gone up to almost INR 30 billion+ . It was hovering always in the range of about INR 16- 19 billion in the past. What explains this? Because we also mentioned that there is material room for improvement from export market and cable business, which is yet to come. How should we think about ordering number on cable side, probably one year down the line or two years down the line when that piece of business ramps up for us? And on the conductor side, any large order that you booked in the quarter gone by, because your number was again higher, closer to INR 50 billion for Q2.
I think on the cable front, we are pretty much on track to grow the business 25% year-on-year. The higher order book has come from the single largest component in there is data center, products going into data centers. I specifically mentioned about Amazon's new and what is going to be their largest data centers in India. It's two locations, for which we have received orders. Execution will happen between now and the end of this financial year, and we are expecting more orders from that same site. We also received about INR 1,000 crores between that AWS and the Google data center that I spoke about. Besides that, there are more orders that have come in for renewable energy, both solar and wind. The railway order book is up.
Generally, all the sectors which we have been talking about, that APAR is focusing on, we've seen improved order book in all of those sectors. But products going into data centers or cables going into data centers being the largest chunk of this. And you will see the U.S. side of the business picking up because the order books coming in from there have now started filling in. And the execution, as I said, there's already over INR 440 crores of cables, which is in transit, which will physically hit the books in Q3. And there is a good pipeline of orders that is there, including orders that have been booked as part of the INR 3,000 crores.
Understood. On the conductor side?
On the conductor side, we have won a few big orders. One is already mentioned about the OPGW from the Karnataka Power Transmission Corporation Limited. Also some export orders have been won, both in the U.S. and in Europe. That also is included in our order book, and staggered delivery will take place over a couple of years in that case.
Understood. If I look at probably EBITDA margin for copper cable business as well, I think it is now closer to 11%. If I look at probably, as you mentioned, incremental orders which are from TC or from export markets, probably margins could be even higher. Is it fair to assume that our cable segment is also moving towards 11%-12% EBITDA margin profile going forward?
Well, our target is to get to between 11% and 12%. We are trying to move in that direction. As I said, the volatile environment is creating a set of leakages, especially with respect to freight and premiums on metals, and even steel prices have suddenly shot up, et cetera. But in spite of all those challenges, you will see that in the quarter, we have delivered 11%, and clearly the aspiration is to be between 11% and 12%. We have actually publicly stated that. We are actively working towards that.
Got it. Thank you so much, and wish you a very happy Diwali in advance. Thank you.
Yeah. Thank you.
Thank you. The next question is on the line of Vidit Trivedi from Asian Markets Securities. Please go ahead.
Hi, sir. Thank you for the opportunity, and congratulations on great execution. Firstly, on the cable side, you have mentioned that you have secured close to INR 1,000 crore of orders linked to Google's U.S. data center and Amazon's upcoming India data center. Just wanted to check, how significant could these data center related cables become in the overall busines two to three years down the line? And wanted to know, do these projects offer a better margin than the company's conventional cable portfolio?
The end target segment is data centers. But as I have mentioned in various public forums and conferences, the construction and composition of the U.S. market is completely different than the Indian market, even if the same name is involved. The U.S. data center cables definitely offer a better margin profile compared to a similar product being sold in India, because they are much higher spec. The Indian data center side, you are getting a very large addressable market, but the competitive intensity is much higher there, and the margin profile is much lower than in the exports, just simply arising from the nature of the construction of the cable and the complexity that goes into manufacturing. But it will remain, and it will be one of the largest segments which are growing. So you will see increasingly a presence.
Keep in mind that really in India, there are no AI data centers of any size that are operating yet. As these come on, you will start seeing some of the U.S. type specifications also finding their way into this market. Time will tell what are the final premiums or margins that you land up with. But I see that over a period of time, especially the GPU based data centers, which are used for AI and training, they require a much higher spec given the amount of current electricity and the utilization that the data center has relative to an enterprise data center, which is largely CPU based. So, even though in data centers, there is a lot of variation and variety in that, depending on the geography and depending on the type of data center.
But it will be a large addressable market, and the U.S. side will be at a premium compared to India simply because of the complexity of its construction.
That is very helpful, sir. Thanks a lot. Secondly, on the conductor business, you in your opening remarks mentioned that the manufacturing clearances and the fresh order awards, there is a delay, particularly from the TBCB awardees, as a key reason for the decline in the volumes. With the order book already at INR 12,000 odd crores, have you started seeing any improvement in clearances and the order awards? What sort of volume growth can we expect in the second half?
We are seeing a reversal of the trend, and we expect that because Q3 and Q4 are the peak seasons for completion of various projects, and there is a finite timeline beyond which customers don't want to delay. We feel that this trend should reverse. This decline should get arrested by next quarter, and we expect that quarter three and quarter four should be strong than quarter one and two in terms of the volume numbers that we talked about.
I did mention in my opening remarks that when you get a TBCB award, you have basically 36 months end to end. There is a little bit of leeway, but there is a finite leeway, because if you don't complete execution at the end of 36 months, the penalties are very, very severe. You may have picked up that what also is actually available is that the execution of existing orders and the delivery of transmission lines during the quarter of older contracts has been at an all-time high. It's 153% more than it was the same period a year ago. It's clear that a lot of people have focused on executing and completing their existing projects. They have delayed some of the work on new projects because of the inflation. But there is a finite timeline, beyond which they will just have to press the button.
I think that is the lay of the current situation.
Got it, sir. That's pretty helpful. Lastly, on the oil business. Let's say if the base oil prices remain elevated, could we expect volume to remain subdued for the longer? Second, continuation of this, are we still sticking to the growth guidance which was given a couple of quarters back for all the three divisions?
So we see clearly the conductor business, you will see a catch-up in the second half in terms of volume. The cable business, we have been guiding 25% value growth. We are quite confident that we will meet that or exceed that. If you take factory dispatches, the figure looks very different because of this 400 odd crores of in-transit products. On the oil side, that is the one area where, as I said, in terms of operating philosophy, we do not want to chase volume. We want to fundamentally chase the quality of the business, which consists of higher performance grades, good customers, focusing on making sure that they receive the right quality of product. You see, refineries are being forced to switch the crudes that they are using as well.
So it is no longer like whatever you got from a refinery for the last 10 years, in this last quarter, you are getting exactly that. Because if they have had to change some of their crude input, the base oils coming out of them are bound to receive some variation. So the whole focus that we have today is to preserve the quality part of the business. We know clearly that there are a whole range of our customers who, A, are price sensitive. B, do not have the financial capability of maintaining the same payment terms and things like that, given the fact that product prices have increased. So our whole operating philosophy has changed to margin ROCE and focusing on the quality of the business as opposed to the volume of the business.
The lubricant side of the business has done all right, and it has grown at more than the 7% that we were targeting. So that is the industrial lubricant and the automotive lubricant side.
Got it, sir. Thank you so much, and Diwali greetings to the team. Thank you.
Yeah. Thank you.
Thank you. The next question is from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Good afternoon, sir. Thank you for the opportunity. First question, if you could give us some sense in terms of the utilization of our conductors, cables, and the oil division, please, for Trupti.
On the cable side, the existing capacity has been largely utilized other than a few areas. Overall capacity utilization is in excess of 90%+, with some sections running at 100%, 105% capacity, especially those where we use copper products that service the data center orders. That part of the business is running quite flat out. Conductor business utilization, it should be about 80%. And keep in mind that CapEx is going in and expansion is taking place as we speak. Every quarter there will be increased capacity coming in. So capacity constraint is not the main. It will not be a constraint. We have made sure that we invest a little bit ahead of the curve, and the capacity is there. Today, it is the operating discipline that actually is limiting the way in which we are doing business.
In some cases, on the conductor side, it is the customer having to press the button on when they want the manufacturing clearance to be given, based on what they can afford. I would not look at physical capacity as being a constraint. Even oil business too, it is not a constraint. Even in conductors, it is not a constraint. In cables, it is there in certain sections, which we are putting in new expansion in. As you end this year and move into next year, I think capacity should not really be the biggest problem.
Got it. Is it possible to get some sense in terms of the industry growth from a medium-term perspective for the conductors, domestic conductors, cables, and the oil division, please?
In general, we expect the conductor division from an industry perspective, of course, excluding some of these aberrations that we a re seeing in this metal price moment. But in general, we expect the industry also to grow by about 10%, excluding all this one-off effect that we are seeing.
How about other divisions?
The growth can be measured only by INR terms. If you look at constant metal prices, you are looking at around between 15%-odd growth. There are some companies which have strong brands, strong distribution, a good product portfolio, where the percentage of growth is a bit higher. Small scale and some of the other guys who have very commoditized offerings are actually seeing a drop-off. Overall growth is around anywhere between 15%-20%. In the case of oil and lubricants, transformer oil is probably in that 5%-7% range. The other products are under 2%-3%. Overall, that is why we have been guiding 5%- 7%. Though in the current scenario, we are limiting the business based on whatever operating discipline we want to employ.
Got it. In terms of the export markets, if you could talk a little bit about the competition, particularly from the Chinese competitors, how the scenario is playing out there.
There is still a significant arbitrage between the Shanghai Futures Exchange and LME, which gives a fundamental benefit to Chinese conductor exporter for that matter, or even a cable exporter. That competition is quite severe. I mentioned that in our opening remarks as well. Having said that, there are these other pockets from where we are concentrating on. Customers in the U.S., customers in Europe, Latin America, where the level of either the type of product or the type of the transaction is something that is not so suitable to do with the Chinese players. For example, we have these contracts, INR 3,000 crores worth of contracts from utilities in the U.S. and Europe that are on a rate contract, literally, spread over two to three years.
Those sort of deals are something where APAR has built a very high level of credibility relative to some of the other international suppliers, and therefore it puts us in a better position to sign such type of contracts. Otherwise, if you look, meaning standard products, shorter delivery cycles, things being quite simple, the Chinese competition is definitely very aggressive.
Got it. Just last question, if I may, with respect to the oil division. This quarter also, we have had a substantial margin, slightly lower than Q1, but substantially higher than the past average. Could you please clarify how do we see it going forward?
There is definitely a positive spin that's there in terms of unit margins. Because what we have done is we've largely been concentrating on buying on contract versus buying on spot. These spot prices are fluctuating all over the place, and as a consequence, as I mentioned, we changed our operating philosophy. We've been taking the contracted volumes and the best quality raw ingredients that we have and focusing on the highest quality of customers and business that we have. Going forward, there is clearly a premium that is there on the margins in the shorter term. I can't really tell what will happen if the war gets over. Having said that, it doesn't look like anything is slowing down right now. The same operating philosophy will continue. We will limit the amount of purchases we have, and we'll focus on the quality of the business.
Because the lower end of the business, in terms of lower quality applications, lower quality customers, and lower quality I mean by the price they're ready to pay and the payment terms, et cetera, it's quite dangerous to put too much emphasis on that segment, according to us. Given that this volatility is not likely to change.
Got it. Does that mean that-
Does that help answer your question? We are not looking at a volume game at all.
Fair point. What I wanted to understand a bit more clearer is that, Q1 had the inventory gains, right? Is there an element of Q2, or we should assume this is a new normal margin at least for the time being focusing on that.
There is some amount of gain that has happened in Q2. But there was also a massive If you see, the oil had dropped very substantially just before the quarter. In the second half of June, it had fallen very dramatically, and then after that it has really bounced back. When you buy on contract, you have a more steady supply and a steady price. When you buy on spot, you end up buying cheap for a few days, and then right now you are buying very expensive. So there is a little bit of benefit that is coming from the way in which APAR has been conducting its business. So by no means are these are normal margins which are there.
Got it. Thank you. Wish you all the best. Thank you.
Yeah.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Amit Anwani from PL Capital. Please go ahead.
Hi, sir. Thank you for taking my question. First question on the volumes. Sir, despite volumes decline and in terms of value also, the premium coming down, we are still able to maintain a very strong EBITDA pattern. At least on the volume side, wanted to understand, is the volume contribution from premium continues to grow and non-premium is kind of moderating despite the volume decline, which we have reported in H1. You also highlighted winning few contracts of HTLS in the overseas market, which I believe is premium, and premium was not used to be the big part of exports. Can we expect in H2 and maybe next year, the volume-wise premium portion will continue to increase in the volumes?
Yeah, Amit. As we have been saying that this trend, we expect it should get reversed because utilities will have a finite time up to which they can postpone. Clearly, as you've been seeing or hearing us, we have a very strong order book, and it's very clear that these are temporary phenomenons in which, because of high metal prices, the volumes are low. There's no change in the structure or the demand per se, but it's just about timing. As everyone is expecting the war to get over and prices to come down, customers are evaluating whether they should complete the project now at a higher metal price or wait for a few months, by which the price will come down. They do evaluate between the prices of metal and the damages that they need to pay for delayed completion.
These are temporary phenomenons, clearly, and the strong order book is a reflection that there is good demand in the market. We do hope that second half of the year should be better than the first half of the year from the point of view of customers wanting to complete their various projects. Otherwise, they would be saddled with a huge LD, and therefore we expect this execution to turn. We expect this trend to reverse in the second half, but we'll have to wait and see how exactly it will happen and how the order of lifting will start from the customer's point of view. Regarding the premium product and margin, yes, we have been saying that there is a volume decline and a large part of volume is also relating to non-premium products because the premium products have a little bit of service element also.
But we are seeing both decline happening in the first half of the year. Despite that decline, whatever the remaining volume is available, that gets split into various premium categories. As you know, there are multiple premium products that we have in our basket. We are able to deliver a good mix during this particular quarter that has helped to compensate the drop in the overall volume numbers in Q2, so that at an EBITDA level, we are still able to be above what we reported last year.
All right. In terms of the overseas pipeline in premium, you mentioned HTLS win in Africa. How one should look at the overseas pipeline now for the premium conductors?
Yeah. It is also increasing. We are increasing our product lines in overseas market, and we will see growth coming in in future as we make more inroads into the overseas market with the premium offerings. As you saw that there is a lot of focus in the U.S. on this SPARK program. It is all about reconductoring line and improving the current carrying capacity, limiting losses. So we see that trend will increase in the marketplace in times to come, and our expansion of product offerings in these developed countries will also increase over times to come.
All right. Second on cables, we have won the Google and AWS orders. In terms of capability and capacity, are these orders going to be met from the current capacity expansion which we are doing this year? Or will there be any capacity capability addition which is going to be required? Since the pipeline of these orders is going to further increase, any thoughts there?
We have adequate capacity currently for the orders which have been taken, and then for executing this order book. Between the capacities we have now and the new equipment which are under commissioning, we should be able to handle this.
Right
Our capacity to handle larger and larger orders is also increasing. Because you see, some of these AI data centers, a single package coming from the U.S. would be between INR 400 crore and INR 1,000 crore. Single package. We are slowly gearing up. The Google piece was over INR 500 crore, single order. As our credibility starts getting established on delivery of these, we will see more and more of our participation in these sort of RFQs. And capacity is being built up. As we speak, there is equipment under installation, commissioning, et cetera. We are pretty much on plan, plus/minus one quarter on the CapEx program.
Right. There is INR 1,000 crore enabling in the Singapore entity. Any clarity as to I think you have mentioned that maybe it will be equity, pref or debt. Are we not funding through internal accruals? Second, what exactly this relates to? Any expansion, any particular division, if you could give more clarity on this.
We will reveal the details at appropriate time, probably once we intimate to the stock exchange first, obviously, and then we would reveal the details. Currently, as I said, it is an enabling resolution to infuse that, and as and when we intimate to stock exchange, then we can have more discussion on that.
Understood. Lastly, on the cables business, earlier we used to guide in terms of the growth in elastomeric E-beam and B2C. How has that shaped up in H1? Second, in terms of power cable, we were trying to improve our capability and product profile to 132 kV and higher. Any sense there? That is it. Thank you.
The elastomeric side of the business is growing. The data center market in the U.S. is predominantly elastomeric cable, where they use EPR, which is ethylene-based polymer. That part of the business is continuing to grow. On the power voltage front, currently we are at 66 kV, but some of the new equipment going in will enable us to go to 132 kV and finally up to even 220 kV. That is in the pipeline, but I do not think you will see any business coming in in the financial year 2027. It is really more a financial year 2028 play when that equipment gets installed and we start executing. Otherwise, 66 kV business is we are regularly doing business up to 66 kV.
Thank you. Thank you so much.
Thank you. The next question is from the line of Natasha Jain from PhillipCapital. Please go ahead.
Just one question on the global, rather macro side. If domestically we see the power and transmission spend given by the government, that comprises both of copper, aluminum, wire, cable on value terms. Copper is definitely increasing. I know we do not do a lot of wire or copper. The overall budget is indexed to that. The geopolitical side, the macro side does not seem to be moving on the war front. My question to you is, has it happened historically? Can it happen that the entire T&D budget, there could be a deprioritization in that spending? What risk do you see? We all know the strong tailwinds in cable, but from a very medium-term structural point of view, what is the risk that can disrupt this segment?
First of all, for us also, the copper portfolio is continuously growing, both in the cable side as well as even on the conductor side. In that sense, copper is becoming, as a physical percentage of the total metal that we process, is increasing. We really don't see any major impact on the T&D side at all. There's in fact shortage of power. We've had a horrid time, when suddenly the temperature went up in the month of September. In fact, again, there were a lot of stability issues in the grid and in the system. As a consequence, we don't see any slowdown. We actually see, as I mentioned to you, new legislation coming in, which is going to actually grow demand. The same thing is there overseas.
You see that more and more products are going in, more and more systems are coming in, HTLS is starting to go in. That whole program of SPARK is looking at unlocking 23 GW of power delivery by reconductoring and upgrading the technologies on existing transmission corridors. I don't really see anything. There may be a little bit plus minus, but if you look at the trend, there's no indication of the trend going down. There's a lot of noise about data center spending in the U.S. It may not be 50 GW in a year, but even if it is 15 GW, 20 GW in a year, it's really big. The total value is also going to be very, very big.
Understood, sir. At least there is no risk that we see on deprioritization in terms of spending on power T&D.
Yeah. I think that's quite remote from our standpoint.
Understood. Sir, just one last question on cables. Your margins have improved despite the fact that higher margin exports have significantly reduced. Is it a contribution because of premium products? If that, can you please call out what was the mix last quarter versus mix this quarter from premium products?
The product portfolio on cables, we have constantly been looking at all the elastomeric cables, which go into all these premium segments. It's at the upper end of what we've seen in the last few quarters, but there's nothing unusually that major that's come in. As we continue to push for higher and higher applications and things, our target is to actually settle between 10% and 12% in terms of EBITDA margin on a 25% year-on-year growth, with stable metal prices. We are still pushing for higher margins than what are existing today.
Got it. Understood, sir. Thank you so much.
Thank you. The next question is from the line of Sanjeev Zarbade from Antique Institutional Equities. Please go ahead.
Hello, Sanjeev. We can't hear you yet. Can you hear us?
Yes, sir. Congratulations on a good set of numbers.
Thank you.
Sir, just wanted to take your. How do you read the emerging demand-supply situation in the conductor side? Because smaller players are also adding capacity, while in the first half, the volumes have contracted for you also. How do you read the situation maybe in the medium term?
Yeah. In the situation for conductors, on the conventional conductors, there are few players who have come in who are having their own EPC or they are already in the downstream. In those cases, there is a certain part of the market which is kind of now carved out, which is not that accessible to us in the domestic market. On the HTLS side or the other premium type of products, there are new entrants who have come in. But there again, the challenge is not just on manufacturing, but also in terms of meeting the quality specs and also end-to-end completing the projects, which requires engineering design as well as on the performance of the product and meeting the tough requirements of an HTLS product.
While there may be new entrants and some market may be taken by either the new players for HTLS or some of the EPC players who have done the backward integration by making the conductors, the overall pie is growing, and we don't see that we will have a reduction in our volumes. The other thing is that APAR is always having a lot of more innovative products. With that, we always will be a leader in the marketplace, and we'll be able to drive these innovative solutions, and we'll be able to maintain our volume and leadership as well as maintain our profits. For example, I mentioned specifically that we got our first Z-type conductor order from a large Scandinavian utility that's evacuating power from an offshore windmill. Now, those sort of products over a period of time will also find its way to India.
Now, the east coast of India has a cyclone. There's another cyclone building up as we speak in the next few weeks. These type of products are ideal. The Z-type conductor allows the flow through of air to take place within the conductor itself. It flows right through it, so as a consequence, it doesn't move as much as would move with a conventional product. So, there'll be more and more players coming in, but that's fine. They are trying to premiumize their portfolio, but we are trying to further premiumize our portfolio with these sort of solution-based products. So, I don't think we are really worried about competition and stuff in that sense.
Great, sir. Thanks.
We will find the green grass either in locality A, B, or C.
Okay. Thanks, and all the best.
Thank you.
Thank you. The next question is from the line of Mahesh Patil from ICICI Securities. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. My question is on the DC thing, data centers. Out of the current order book, how much would be pertaining to these data centers?
We have about 1,000 out of the 3,000 approximately. They are from the two large ones. There may be a few hundred crores more from other data centers. But it is a constant flow. I specifically mentioned these two because the order which we got from a contractor that is flowing into a Google data center in the Midwest in the U.S. is the largest single order that we have got from the U.S. It is over INR 500 crores, and it will be fully executed by around Diwali time. In the case of Amazon, it is the largest Amazon award which is there. But the orders are being issued piece by piece, depending on the availability of the infrastructure on the ground. We expect all of that also to be done by March. These are two very large ones.
There will still be a couple hundred more coming in from smaller data centers right now in the order book, and there is a big pipeline of discussions going on.
Okay. Sir, in Q2, I think we have recognized some of the U.S. tariff refunds, right, around, I think, $430 million. Is that it, or are we expecting some more?
No, so we have kind of closed the book on that. Most of the refunds have come in prior to September 30. There is a little bit that is coming in post that. The bulk of these refunds have actually been passed on to clients based on the contractual obligations that were there. Whatever we are recognizing today is because we have taken the hit previously, and it is getting reversed in today's situation. So it is more like a one-off thing against those supplies. We will not see anything recurring coming from that.
Okay, sir. Sir, lastly, I see on the premium side in conductors, I think we do not consider AL59 in this premium mix that we give. Can we get the AL59 mix or, let us say, premium plus AL59 mix, what would be the share?
We generally share consistently the premium and non-premium so that it is consistent across the quarters.
AL59 is. We do not track that separately in the premium bucket. There has been some amount of toggling going on between AL59 and standard ACSR because simply when the war broke out, the price of aluminum shot up, but steel had not reacted. Now steel has reacted. So again, AL59 is a much better option than your conventional ACSR. There is a little bit of a flip-flop that has been happening depending on the relative price of aluminum versus steel. We just consider that in the bucket of conventional products. The premium which was there on AL59 is no longer that huge a premium. What has significantly happened is that the number of players who can produce AL59 versus ACSR is a fraction.
As time will tell, a lot of the newcomers producing AL59 are actually not able to produce the right quality of product, which may result in higher line losses and things like that. Whereas we have a very established AL59 technology, we have been making this for decades. We do not track it separately, but I think that AL59 story will still remain in terms of it being significantly better than just having ACSR and all these sort of products.
Got it, sir. Thank you. Thank you, and all the best.
Operator, I think that's the last question I think we have. I think that's the last question we have, so we'll close the call for now.
Hello? Just some closing comments, but is the line dumb?
No, line's good.
I'd like to close by first just wishing everybody for a festive season. As I signed off last in terms of my opening comments that we see that the business trends remain strong. Even though there may have been some volume degrowth, two things, one is we expect the second half on the conductors volume to be stronger than the first half. There is this unusually high amount of conductors and cables that are in transit currently to the U.S. on a DDP basis. So actually, our manufacturing data and dispatch data looks very different than the sales realized data. That should catch up pretty much in Q3. Considering the strong order books which we have, I think the rest of FY 2027, FY 2028 looks quite bullish. With that, I'd like to close my remarks. Thank you everyone for attending our-