Ladies and gentlemen, good day and welcome to the HFCL Limited Q4 FY 2026 earnings conference call, hosted by Arihant Capital Markets Limited. As a reminder, all participant lines will be in 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 zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Jain from Arihant Capital Markets Limited. Thank you, and over to you, sir.
From the man-
Abhishek, you are not audible. Abhishek? Abhishek? Abhishek? Operator.
Just a moment, sir.
Yeah. Hello?
Yes, you're audible.
Yeah.
From the management side, we have Mr. Mahendra Nahata, Promoter and Managing Director; Mr. V.R. Jain, CFO; Mr. Manoj Baid, Company Secretary; and Mr. Amit Agarwal, Head Investor Relationship. Before we begin, I would like also read the disclaimer statement. Statements management made by during this call may be forward-looking in nature based on management current beliefs and expectations. This must be viewed in relation to the risk of HFCL business faces that could cause its future results, performance or achievements to differ significantly from what is expressed or implied by such forward-looking statement. Investors are therefore requested to check the information independently before making any investment decisions. Without making further delay, I'll hand over the call to the management for the opening remarks. Over to you, sir.
Thank you, Abhishek , and good evening everyone on the call. I extend a warm welcome to all of you on HFCL's earnings call for the fourth quarter and financial year ended 31st March 2026. I trust you have had the opportunity to review our financial results, press release and investor presentation, which are available on our website and the stock exchanges. This quarter and financial year mark a defining milestone for HFCL, as we delivered a never-before quarterly as well as annual performance reflecting the strength of our strategy, improved business mix, and consistent execution across our core segments. I am pleased to share that we have successfully achieved a commitment of 20% revenue growth, along with expansion in margins, underscoring the structural transformation we have undertaken over the past few years.
The performance is broad-based, supported by strong demand across optical fiber cable, telecom, defense, EPC, and exports. As we move into the new financial year, backed by a very robust all-time high order book of INR 21,200 crores, favorable industry tailwinds, and our continued focus on high-value products and global markets, we remain confident of sustaining this growth momentum and delivering a similar trajectory in the coming periods. I would also like to highlight that HFCL has remained largely insulated from current disruptions due to geopolitical situation. Our supply chain has continued to operate seamlessly without any material impact on production or dispatching. At the same time, we have taken strategic step towards further strengthening our manufacturing resilience with backward integration by establishment of preform manufacturing facility.
The project involves an estimated capital outlay of around INR 580 crores, which will be funded through a balanced mix of internal accruals, debt, and equity. The facility will be state-of-the-art based on latest technologies. The initiative is not merely about backward integration. It is about strengthening HFCL's structural competitiveness. Preform will act as a key margin expansion lever and a long-term competitive advantage for HFCL. The global optical fiber market is undergoing a structural transformation, driven by hyperscale data centers, artificial intelligence workloads, and cloud infrastructure expansion. This is adding an estimated 100 million fkm-150 million fkm of incremental demand globally, over and above traditional telecom sector requirements. More importantly, this demand is concentrated in high fiber count, low latency, and high performance solutions where supply remains constrained. As a result, we are witnessing a significant improvement in realizations for such type of cables.
Our average realizations have improved significantly, and we expect this to be progressively reflected in our margins over the coming quarters. We remain confident that this favorable pricing environment will sustain over the medium to long term. Currently, the demand momentum is being led by hyperscalers in the U.S., which we expect to be followed by Europe and Asia, including India, indicating a multi-year growth cycle ahead. HFCL has strategically positioned itself to capture this opportunity through its advanced product portfolio, including high fiber count cables up to 6,912 fibers. I am proud to inform you that these high technology cables have been designed and developed by our in-house R&D team. In addition, we are seeing strong traction in our data center interconnect solutions, including pre-connectorized systems, which are becoming increasingly critical for high density AI infrastructure deployments.
We have decided to increase on a multi-fold basis our manufacturing capacities for data center interconnect solutions in our subsidiary, HTL Limited. Data center interconnect solutions are expected to contribute significantly to our performance going forward. It is expected that data center interconnect solution will contribute about INR 400 crore additional revenue in financial year 2026-2027 and about INR 800 crores in financial year 2027-2028. During the period under consideration, we secured a landmark long-term global optical fiber cable supply contract valued at approximately $1.1 billion, equivalent to INR 10,159 crore, providing strong multi-year revenue visibility. This is probably the highest ever single contract secured by any Indian telecom company. Other multiple export and domestic orders being continuously received by us reflect sustained optical fiber cable demand traction across markets.
Friends, the company's order book stands at all-time high at INR 21,200 crores, including export orders worth INR 12,250 crores, constituting 58% of total order book. This sound order book provides strong sustainability and growth momentum in company's revenue and profitability. Exports continue to be a key pillar of our strategy. We are witnessing a steady increase in the share of OFC export orders and revenues, driven by growing acceptance of our products in global markets. Our strategy is clearly focused on diversifying geographies, reducing dependence on any single market or customer, and building a resilient and globally competitive business model. Our focused export strategy has delivered strong results during the year. Today, more than 70% of our cable production is being exported. Consequently, our export revenues
have increased to 41.36% in financial year 2026, compared to 12.23% in financial year 2025, underscoring the growing contribution of global markets to our overall business. Over the last few years, HFCL has been steadily building strong capabilities in defense sectors. We have already indigenously developed and commercialized several land-based defense products, including thermal weapon sights, high-capacity radio relay systems, and multiple variants of surveillance radars. In addition, a few more defense products, such as multi-mode hand grenade, compact transhorizon communication systems, are currently in pipeline. Building on this foundation, and in line with our long-term growth strategy, Board of Directors at its meeting held on March 25, 2026, approved a major strategic initiative to expand and further strengthen our defense business, while also enabling HFCL to meaningfully participate in opportunities emerging in the defense aerospace segment.
The core objective of this proposed transaction is to create a focused and scalable and a future-ready defense and aerospace platform by consolidating complementary defense capabilities under our subsidiary, HFCL Advance Systems Private Limited. Strategically, this allows HFCL to operate across both land defense and aerospace defense domains, creating a comprehensive and integrated portfolio. The aerospace business being acquired operates in a high entry barrier segment characterized by stringent qualification requirements, high precision, long approval cycles, and a limited global supplier ecosystem. Importantly, this business comes with established capability-based certifications, long-standing customer relationships, and a confirmed export-oriented order book of approximately INR 1,930 crore, providing immediate revenue visibility. We believe that the proposed structure will sharpen execution focus, improve capital efficiency, and drive sustainable growth from defense vertical.
The definitive agreements for this proposed transaction are expected to be executed on or before May 31st, 2026, and the closing under such transactional documents is expected to be completed within the current calendar year. We are also progressing with the expansion of our defense manufacturing capabilities, including the establishment of an ammunition focused facility in Andhra Pradesh. This facility is proposed to support a range of ammunition products such as electronic fuses, multi-mode hand grenades, and 155 mm artillery shells. A land of 1,000 acres has already been allotted to us by Andhra Pradesh government for setting up this facility. Once operational, it is expected to make a significant contribution to company's overall performance.
Besides, we have also established capabilities in critical areas such as wire harnesses for defense sectors, and we have been recognized by Hindustan Aeronautics Limited with the Best Supplier Award. In addition, our technology collaborations, including technology transfers from DRDO, enable us to manufacture several products domestically that were earlier imported. Our defense order book currently stands at approximately INR 300 crores, comprising orders across thermal weapon sights, radar systems, technical communication cables, and wire harnesses for critical platforms. With the addition of aerospace business being acquired, this order book expands to approximately INR 2,230 crores, including a strong export-oriented order book of around INR 1,930 crores. We see defense sector as our strong pillar of growth in coming years.
Products for land systems as well as aerospace segments, coupled with strong export base, are expected to result in significant growth in our revenue in coming years. In our telecom and networking product segment, we continue to invest in innovation and product development aligned with emerging opportunities in 5G, private networks, and enterprise connectivity. This segment is expected to scale up progressively and contribute meaningfully to our overall growth. We are pleased to share that we are firmly on track to expand our optical fiber and optical fiber cable manufacturing capacities. Our current optical fiber capacity of 28 million fkm is expected to increase to 33.9 million fkm by December 2026. In parallel,
our optical fiber cable capacity, which has been scaling up in phases, currently stands at 34 million fkm, is expected to reach to 39 million fkm by July 2026, and to reach 42.36 million fkm by December 2026. In our EPC business, including projects such as BharatNet, execution continues to progress in a disciplined manner. As execution accelerates, we expect this segment to contribute more meaningfully while maintaining a sharp focus on working capital efficiency and capital discipline. Friends, we had articulated a clear set of strategic priorities to expand our global export footprint, rebalance our customer mix towards private sector clients, and increase the share of product-led revenues over EPC with margin expansion. I'm pleased to share that we have delivered decisively on each of these fronts.
Our export revenues increased from 4.54% in FY 2021 to 41.36% in FY 2026, reflecting a meaningful expansion of our global footprint. At the same time, our government order book exposure reduced from 51% in FY 2021 to 37% in FY 2026, with a corresponding increase in private sector participation, improving the overall composition and resilience of our business. Further, the share of product revenues in our mix rose from 27% in FY 2021 to 62% in FY 2026, underscoring our successful transition towards a more margin-accretive product-led model. Together, these outcomes mark a significant transformation in our business model, positioning us on a stronger and more sustainable and growth-oriented trajectory. We are also witnessing gradual improvement in working capital cycles, supported by better execution discipline and more favorable business mix.
We also remain committed to our ESG priorities. During the period, HFCL received ESG ratings from multiple independent agencies and published its first sustainability report, reinforcing our commitment to responsible and sustainable growth. Importantly, during the period, the board has approved a preferential issuance of warrants to the promoters aggregating to approximately INR 555 crores, subject to necessary approvals. This reflects the promoters' continued confidence in the company's long-term growth strategy and their commitment to supporting the next phase of expansion, including preform integration, defence scaling, and augment long-term working capital resources. Let me now quickly take you through the consolidated financial performance for the financial year 2026 and quarter four of financial year 2026.
For the 12 months ended 31st March 2026, the company reported consolidated revenue INR 4,949.27 crores as against INR 4,064.52 crores in financial year 2025. EBITDA of INR 826.75 crores as against INR 506.75 crores in FY 2025. Profit before tax of INR 427.68 crores as against INR 216.59 crores in FY 2025. Profit after tax of INR 329.44 crores as against INR 173.26 crores here in FY 2025.
Revenue for Q4 financial year 2026 stood at INR 1,824.12 crore as compared to INR 1,210.79 crore in Q3 FY 2026 and INR 800.72 crore in Q4 FY 2025. EBITDA for Q4 FY 2026 stood at INR 336.93 crore as compared to INR 243.52 crore in Q3 FY 2026 and negative INR -22.33 crore in Q4 FY 2025. EBITDA margin in Q4 FY 2026 stood at 18.47% as compared to 20.11% in Q3 FY 2026 and -2.79% for Q4 FY 2025.
Profit after tax for Q4 FY 2026 stood at INR 184.45 crores as compared to INR 102.37 crores in Q3 FY 2026 and INR -83 crores in Q4 FY 2025. PAT margin of Q4 FY 2026 stood at 10.11% as compared to 8.45% in Q3 FY 2026 and - 10.4% in Q4 FY 2025. Segment revenue for telecom products stood at 66% of total revenue in Q4 FY 2026, as compared to 57% in Q3 FY 2026 and 74% in Q4 FY 2024. As we look ahead, we believe that HFCL is entering a structurally stronger and very predictable growth phase.
We are not only experiencing a substantial expansion in our order book but also a meaningful uplift in its business composition reflected in a high share of exports, long-term contracts, and a greater contribution from high-margin products. At the same time, our strategic initiatives, including backward integration into preform, expansion in defense sector, increasing global footprint, and focus on product-led growth, are creating a powerful foundation for sustained margin expansion and return improvement. HFCL today is transitioning into a fundamentally stronger business enterprise, one that is more global, more technology-driven, more diversified, and structurally more profitable. Thank you, friends, for your taking time out to attend this meeting. We are now opening the floor for questions. Thank you.
Thank you. We'll now begin the question and answer session. Participants are requested to use headset while asking a question. Ladies and gentlemen, we'll wait for a moment while our question queue assembles. The first question is from the line of Aman Saifi from Stallion Asset. Please go ahead.
Hi, sir. I hope I'm audible.
Yeah, yeah, you are audible.
Yeah. Thank you so much for the opportunity, and congrats on a great set of numbers. Sir, I have two questions. Number one, if I look at the current trajectory, we are already having a $1.1 billion of orders from a hyperscaler, and along with the defense execution of INR 600 crore lined up for next year. When I triangulate this number from the existing base of INR 5,000 crore, it appears that our overall revenue could scale up to INR 8,000 crore next year. With our segment margins already at 30%, is it fair to assume that our profit next year can be north of INR 800 crore, INR 900 crore even after factoring a INR 100 crore annual loss from project business?
Well, Aman, you know, I would not like to give such a guidance at this point of time. You know, I can definitely say that over and above the revenue we have achieved in last financial year, we should definitely be able to scale it up by 20% to 25% at least. Well, you know, with the increase in capacity of fiber, optical fiber cable, defense products, there is good possibility that we would have a good increase in the numbers. Yes, I think 20% to 25% is not something which we cannot reach to in best of my expectation. Rest, I would not like to give guidance at this moment of time.
Yeah, yeah. Sir, our telecom product PBT margin should continue even inch up higher with the defense execution and improved margin mix?
Well, you know, what we believe that 3%- 4% increase in margin, you know, on a blended basis, on an overall basis is quite expected. 3% - 4% increase.
Got it. Got it. Sir, my second question would be, we have constituted a strategic restructuring committee, which we believe is a very positive step. Are we demerging our project business? If so, what is the indicative timeline for that?
Look, Aman, you know, we have constituted the committee. Committee will be working and making decision what to merge, what to demerge. You know, we have done so to, you know, really every business has a completely significantly different capabilities and, you know, ability of execution required. Defense requires a different capability, different set of people. EPC needs a different set of people, and fiber business needs a different set of people. In some cases, we receive offer from strategic partners also to partner with us. Now, any strategic partner cannot come into such a mix of products, where Defense, EPC and cable and telecom all are mixed up. It is a good idea to consider that how this can be rationalized. With that objective, we have constituted this committee.
As and when any decision is taken to merge, demerge any business, we'll definitely come back to you.
Got it. Got it. Sir, just one last question, if I may.
Yes.
Is our $1.1 billion of orders have started to execute from this quarter instance?
Yeah. No, this is gonna start from Q2. No, no, sorry.
Q2.
End of Q1. I'm sorry, end of Q1.
End of Q1.
Yeah.
Sir, got it. Got it, sir. Thank you so much, and all the best.
Thank you, Aman. Thank you.
Thank you. A reminder to all participants, please restrict yourself to two question. The next question is from the line of Deepak Poddar from Sapphire Capital . Please go ahead.
Yeah. Am I audible, sir?
Yeah, you are audible.
Yeah. Thank you very much. Just a clarification first up, when you said 3%-4% increase in EBITDA margin, that you're talking about FY 2027, right?
Yeah, yeah, you are right. This is expected. You know, I'm not committing to anything. As per the current order book prices, raw material prices, I expect this. You know, tomorrow in this geopolitical world, something else happens, you know, you don't know. Which morning, evening, who says what, we do not know. That is my current expectation based on current raw material prices and current order book where the customer prices are known.
Understood. In terms of defense and data center, I think this year you're expecting INR 500 crores- INR 600 crores revenue from defense and data center around INR 400 crores. Can you throw some more light on the margin profile of these, this segment?
Look, you know, this data center business are two types. One is cable, which is not included in this INR 400 crores which I mentioned. That is completely separate. Cable is different. This is just the interconnect solutions, INR 400 crores. It may even be higher than INR 400 crores, but let's say minimum INR 400 crores. In reality, it may be much higher. I'm taking conservative number of INR 400 crores-INR 500 crores. Margin profile, again, you know, as you said, I said blended margin profile is 20%. Wherein this could be little bit higher than others because these are going on small batches. With the more value added, this could be little bit higher.
Yes, blended margin would instead of 16%-17% we have, it would increase by 3%-4% as expected because of these kind of products coming in. In defense, INR 600 crore, again, the margin, you know, because these are very high value, high precision products, and mostly coming out of our proposed execution, margin could be a little bit higher, couple of percentage higher than current rate of margins or expected rate of margins. It can be couple of percentage higher.
About 20%-25% margin in defense?
Something like that. Something like that.
Okay. Okay. Understood. On your backward integration, we are spending around INR 580 crores, right? What sort of advantage we'll get in terms of in terms of your increase in margins or what sort of, I mean, the backward integration that we are doing? By when it is coming on stream as well?
Look, you know, our current requirement of preform is 1,000 tons per year. We are setting up this facility only for 300 tons. This is just to have some sort of a control on preform availability. If our availability goes down, then our overall production will go down. Fiber production, cable production. We want some additional control that, yes, we have adequate availability of our raw material. The, you know, preform. That is why this facility being set up. Currently 300 tons, but we have a possibility we might scale up to 500 tons is Stage 2. Not now. After 300 tons is successful, we might take it up to 500 tons. Second point is that, of course, it is going to be cheaper. If you do a make versus buy analysis, we did a lot.
We did a lot make, you know, make versus buy analysis, and it reduces the cost roughly between 15%-20% of preform.
15%-20%. By when it is coming?
Well, you know, it will take at least two years.
At least two years. Okay, okay. Just one last thing if I can squeeze. This INR 21,000 crores order book that we have, what would be the average execution timeline?
Look, you know, these are divided in two parts. Order book is divided in two parts. Which is one is that, products which are to be delivered, and second is, you know, AMC contracts. The product which are to be delivered is about INR 18,000 crores, and AMC contracts are definitely about INR 3,500 crores.
Correct.
The INR 18,000 crore is to be delivered in, you know, depending upon contract to contract, within this year to about five years, you know, depending upon this.
About five years.
You know. This, INR 3,500 crore O&M contract are six to seven year time period. INR 18,000 crore of orders is in hand we have, but we keep on receiving regular orders, you know. You know, next five years, I don't know how many thousands of crores of orders will be further received. That's why I said, you know, we have very sustainable growth with this kind of an order book. More orders in pipeline. When I talk right now, thousands of crores of more orders are in pipeline. With some of them we are in a quandary whether we should accept or not because of the capacity constraint. There is a very sustainable order book we have at this point of time.
Okay. Understood. That would be it from my side. Would like to wish you all the very best. That's it.
Thank you very much.
Thank you.
Thank you. The next question is from the line of Rahil Dasani from MAPL. Please go ahead.
Good evening, sir. First of all, congrats on a strong set of numbers. Starting with the capacity part, of our total IBR capacity post expansion, which I believe is 19 million fkm, how much turnover can we achieve from this particular 19 million fkm at optimum utilization?
Look, Mr. Dasani, it's very difficult for me to break down the capacity of IBR and all that, and that is information, you know, which is.
Yes
... a bit, you know, commercially confidential to share.
Sure
... one thing I can say, 100% of that capacity will be achieved, whatever that capacity is. We are in fact expanding that capacity. Two new machines are already under installation. Few more new machines we have already ordered, which would be installed within this calendar year. Capacity will further expand and, you know, it is 100% utilized.
Got it. Can we also use the facility or machines that we have for our telecom optical fiber and convert that to IBR? Does that work or is that's not possible?
It can be done both ways. Some modification in machines are required. From telecom IBR, which is telecom, there's no IBR in telecom. This is a flat ribbon, you know. Telecom can also use IBR. They don't use normally, but they use.
Yeah.
IBR is intermittently bonded ribbon. Flat ribbon is a different kind of a ribbon.
Mm.
A flat ribbon machine can be converted into IBR with some modification.
Mm.
Vice versa also you can do it, but why would you do it vice versa? IBR machines are much.
Of course.
You would do from flat to IBR, not IBR to flat.
Got it. Yeah. Coming on to our EPC business.
Sorry for interrupting, Mr. Rahil.
Yeah, can I just ask my second question?
Yeah, Go ahead. Go ahead. Go ahead.
Yeah. Yeah. Just on our EPC business. Our EPC business has turned a bit loss-making in the last few quarters. If you can share why has that happened suddenly and how will that change? The second part to this question is, even with our EPC business dropping, our unbilled revenues have been increasing a lot year-on-year, from INR 300 crores to INR 600 crores and now maybe even higher. Why is that happening, especially since all our OFC customers are now primarily global MNCs and our EPC business has been dropping?
No, no. I think you're mixing up two things. Global OFC customers and EPC are completely different.
Mm.
EPC business loss was majorly due to this army's network which we constructed, and it was undergoing warranty period where we were incurring costs but nothing was received from the customer.
Mm.
AMC contract is shortly be to be signed with Army. Once we start AMC, that would be nullified totally. Now we have started executing BharatNet kind of EPC project where there is profitability. As the billing starts, profitability will keep on coming. For your second question of unbilled revenue, my CFO would answer that.
See, it is not increasing totally in EPC contract. Part of it, I mean, significant part of it is because of this OFC supplies. Because of some compliance is pending, it cannot be, I mean, invoiced. We cannot raise, we could not raise the tax invoice at the year end. Those invoices are getting raised in April, May, and that will convert into. A significant part will get converted into formal revenue, and will set off against those unbilled revenue, which we have booked in last financial year.
Got it.
EPC also, significant part will get converted into taxable, I mean, revenue during course of this financial year. You will see the significant change at the end of this current financial year.
Got it. Next year, EPC business should be profitable for us.
Yeah, yeah. Because next May.
Yeah. Maybe, maybe means, second, third, fourth quarter from this financial year it starts.
Second year, second quarter from it. You know, because this, we expect this AMC contract with Army would be signed, and the sizable expense is coming in that contract. Because of warranty, which are known, you know, nothing new. That will get converted into AMC. Once it is AMC, then you will find it, you know, about INR 170 crores or so AMC.
Mm-hmm
being received every year. That will nullify this loss. With the EPC contracts to BharatNet are being profitable, Current year we should be profitable.
Got it. I have a few more, but I'll get back in the queue. Thank you.
Thank you. The next question is from the line of Saurabh Jain from Sunidhi. Please go ahead.
Am I audible?
Yes, sir.
Yes.
Congratulations, sir, for the great set of numbers. I have two questions. First, since you mentioned to the previous participant that capacities are kind of fungible between telco and IBR, is there any possibility in future for another such mega deal following the new capacities that are going to come up by the end of this calendar year?
Your voice is echoing too much, you know. I really can't understand what you said, you know. You have to probably take the speaker little bit away from you and then speak.
Okay. Sir, since you mentioned that capacities are kind of fungible between telco and IBR, is there any possibility in future for another such mega deal? Especially, we have new capacities, you know, coming up by the end of this year.
Look, you know, fungible in, you know, not in two ways. Fungible technically, yes. IBR machines are very costly machines. You would not like them to be used for telecom, ribbon kind of an application. Those machines are much less costlier machines. You would like to have those machines separate than the IBR cable machines. It's not fungible. You have to have additional equipment put into that telecom kind of a ribbon equipment machine that will convert into IBR machine. Now, downscaling an IBR machine into flat ribbon is not something which you would like do. That is converting a bigger
Right
machine into a smaller machine, you know. That is not economically viable. One would not do that. We are expanding the capacity of IBR. Well, you know, as far as the such mega deal is possible or not, well, you know, right now we don't even have the capacity to really go for such a mega deal at this point of time. You know, we can do that. We can do that, you know. We don't want to lose the opportunity of taking spot orders also. Spot orders are sometimes more profitable. We don't want to pre-sell 100% of our capacity.
We want to keep some capacity in hand to be able to give it to our regular customers who buy regularly from us, maybe in small quantities, and also to take advantage of spot market, you know, where you get the higher profitability. Why would I book the total capacity of mine when there is a huge demand and there are opportunities of spot pricing, spot deals which are more profitable? We have done a couple of deal like this in recent past.
Absolutely. That brings me to my second question. Since you mentioned that, of course, you would like to, you know, keep capacities for spot orders also. January to March, we kept on hearing sharp jumps in fiber prices, both standard fiber and of course, this high frequency, high fiber cables also. Just wanted to understand two things here. How is the momentum right now? Is there any cooling off happened we saw recently, and how it is going to, you know, play out, in probably next two, three quarters? Secondly, we saw, we heard that $23- $24 were the prices, prevailing prices for high fiber, high frequency cables.
There were some articles that were talking about prices going to $30 also in April to June quarter internationally.
I tell you, the prices have gone up for certain type of applications, you know, where they are ready to pay any price, which is mostly for application in drones, military drones, which is happening in U.K. Sorry, Russia, Ukraine and all those areas. That is additional demand of roughly about 50 million km to 100 million km has come in. We are not supplying to those kind of, you know, war kind of requirement. We are not at all supplying. Not even 1 m we have supplied. That is one area where even our suppliers of preform don't want us to go in for. We are not supplying in that area. I hope that demand is there. It is going to continue, but may not increase further.
There is a, you know, with the bulk consumer side data centers, telecom operators, there is a level to which it is economical for them to keep on buying fiber optic cable. I think right now, in my personal opinion, the prices have reached to their almost the final level. There may be few % increase may be there, but there will not be any further increase in the prices, in my personal opinion. That's my personal opinion but, you know, opinions may go wrong. I've been thinking of this since last one month, but it keeps on going up. But really, in my personal opinion, it will not go further in a major way.
Sir, in your PPT you have mentioned that, we are expecting kind of 25% improvement in the realization for FY 2027, so that would be primarily because of the product mix, right?
Because of the product mix and because of the high, density cable and, you know, because this price rise has started from last one or two months. When you take into the full year, of this kind of prices, then it naturally it will go up on a year-long basis.
Right. Sir, one last question. What would be the CapEx number for-
Sorry to interrupt, sir.
Just a small question. CapEx number for FY 2027 and FY 2028. That's it. That's all from my side.
The current FY is 2027, could be roughly about INR 600 crores. Part of which has already been incurred, in fact. Which includes for fiber, for optical fiber cable, defense, part of the preform business. All put together would be roughly about INR 600 crores.
Sir, for FY 2028?
INR 350 crores.
Okay. That's all, sir. Thank you. Wish you all the best.
Thank you.
Thank you. The next question is from the line of Bala subramanian from Arihant Capital. Please go ahead.
Good evening, sir. Thank you so much for the opportunity. Congratulations for good set of numbers. Sir, what is the strategic reason behind Defsys Solutions acquisitions, and how do you look at defense business next three to five years? You also talked of a strategic restructuring company for evaluating business realignment. What is your thought process on that?
Look, you know, rationale for acquisition of defense business are very simple. This company is in aerostructure business, we did not have aerospace aerostructure business. This really expanded our defense business in another area from land systems to aerospace. Aerospace is much more difficult business to enter in from a, you know, a greenfield situation. The approvals for aerostructure is very critical. It takes years, five to seven years to get any particular component approved for aircrafts, you know. You know how critical they are for aircraft safety and all those kind of things. This company already had approvals, certifications, and export order book of almost INR 2,000 crores. Export order book from large international companies, you know. It was very much within our realm of our ability, requirement to acquire this business.
I think we are fortunate to get into in this aerospace business through an existing acquisition. If we had tried ourselves, it would not have been possible for next five to seven years. With an order book and with a certificate, certified products, and with possibility to get more orders.
Yes, sir. Sir, what is the update on electronic fuses and what are that defense products?
They're tested in Balasore. Some, you know, shortcomings or, you know, requirements upgrade has been noticed, which we have to upgrade. That upgrade is going on. A couple of months we will give it for testing once again with all those upgrades done.
Okay, sir. Thank you.
Thank you. The next question is from the line of Tanmay from 360 . Please go ahead.
Hi, can you hear me?
Yeah.
Yes, you're audible, sir.
Congratulations on a great set of numbers.
Tanmay, we can't hear.
Can you hear me now?
Yes.
Can you comment on the capacity utilization of the optical fibers, the preform prices and the end product optical fiber prices?
Look, you know, as far as capacity utilization of fiber optic, optical fiber is concerned, it is 100%. We're trying. You know, we're trying to increase the production by doing various optimal, you know, innovation, innovative things. That if it can increase by even 5%, 10%, that would also mean very additional profitability, but that is not always possible. It is 100% utilization. We are trying to make it 110%, you know. That is one. As far the preform prices are concerned, I don't have any idea what kind of preform price are existing today. We are not really buying from open market. We have already contracted prices. I don't think preform are being sold in open market in that quantity because all preform producers are producing their own fibers.
I don't have much idea. Probably for D Fiber, preform price could be today $140/kg-$150 /k g. This is my rough estimate because there is no such prices I have heard in recent past. As far as the fiber cable price is concerned, very difficult, you know. Cables are a different construction, different fiber kind, you know, different density of fiber. I really can't put a finger on how much is the per fiber price. Earlier when I used to say price per fiber kilometer, when a similar type of cable was there, loose tube cable were there, armored or unarmored. There are 100 different kind of fiber optic cables. You can't really say that this is the price of per kilometer of fiber. It could be INR 1,000, it could be INR 2,000.
You know, it's very difficult to put your finger in that way.
Okay.
would be very wrong.
Okay. In defense for FY 2027, can you tell us what percent of the revenue will come from defense and which products will be highest?
In which year you are talking? The current financial year?
Yeah, FY 2027.
FY 2027, I think, you know, about 10%, 10%-12%.
Which products specifically?
It would be aerospace.
In defense.
Yes. Largely aerospace and the land systems.
Okay. Got it. Do we see margin increases coming from the first quarter itself, or will it be towards the quarter third and fourth quarter?
I think it would start from the first quarter itself. That is what we expect. Again, no guidance, please. This is expectation that it should start from this quarter itself, because we know the sale prices mostly of the customers, and we know the raw material prices also. Now, if something catastrophic happens in the world, which is none of our control, we can't say anything, but this is our best of our expectations.
Are we keen on demerging the defense business soon?
I can't say demerging. We are currently trying to consolidate it under one roof, which is HFCL Advance Systems. A restructuring committee has been formed precisely to look into such aspects, whether it is efficient to demerge the businesses into their specialized areas so that some strategic tie-up or even if that kind of a thing is required can be done. Really, let this restructuring committee, which has been formed today itself, do the study and come out with its recommendation.
Okay. Thank you. Thank you so much, and all the best.
Thank you.
Thank you. The next question is from the line of Rishabh Shah from iNSEC. Please go ahead.
Yeah. Hi, sir. Congratulations on a good set of results. Sir, I'm basically looking at the next three to four, three to five years for HFCL. When we look at that kind of a vision, what are the kind of growth rates and the margin improvement trajectory which we can, you know, envisage? What will be the optimum level of margins which we know we can achieve in the medium term? To support this, what will be the key focus areas, you know, to drive this thing? Any target mix if you can help us with will be helpful, because we have various dimensions to our-
Sir-
like export versus domestic and product versus services. We have already done a lot of improvement in terms of product mix, export mix. Is there any more firepower left where we can actually see things moving? What will be the key risk during this period of next three to five years? Yeah.
Rishabh, in one question you have asked 10 questions. Very difficult. You know, as per the, as I said earlier, revenue growth in this particular year, I can say around 20%- 25%, something like that. Again, no guidance. This is just expectation on the basis of current run- rate I'm talking about. You know, we can expect and, as against the current run rate of, you know, the way the margins are accruing, we can expect some 3%-4% expansion in the margin also. That is the way the things are at this point of time, unless something unknown happens. As far as four to five years, you know, revenue expectation, our aspiration is to reach to INR 10,000 crores. Aspiration is to reach to INR 10,000 crores.
First aspiration was INR 5,000 crores, which this year we have reached INR 4,900 something, you know, which is anyway INR 5,000 crores. I hope we would have done some billing we would have done on 1st or 2nd April. We could have possibly tried to dispatch it quicker on 31st March. INR 5,000 crores would have been there. Anyway, nevertheless. Risk factors, you know, I don't see any risk factor as such, except some geopolitical event which is out of our control. Otherwise, I don't see any risk factor at this point of time because, you know, data center revenue is going to grow up because every day you hear billions of dollars of data centers being announced all across the globe.
Even in India you hear INR 1 billion this company, another INR 1 billion that company, you know. It's happening on a daily basis. I don't feel that there would be any major risk. Data centers are being announced, cable will be sold, connectivity solutions would be sold, no doubt for that. Geopolitical environment has turned this way in the world in recent past. Every country is going to increase their defense expenditures. With defense expenditure increasing, our defense business becomes more secured, export and indigenous requirement also, because there is a Atmanirbharta kind of a mantra in our country, or every country, you know, is increasing its defense expenditure. Defense business is also quite, you know, on a progress path. Similarly, EPC business with BharatNet and all that happening next three to four years, it is quite secured.
I don't find any major risk involved in implementing these businesses. Accept any unknown, you know, political, geopolitical thing happening. Somebody closes Suez Canal tomorrow, or somebody closes Panama Canal and something like that happening, somebody dropping a big bomb somewhere, target going haywire. You know, that's not in my control. Otherwise nothing big unforeseen is seen at this point of time.
Sir, what will be the optimum margins which we can, you know, see? We are currently at around 16% odd. We're targeting something around 20% by next year. May or may not achieve, that is another thing. The point what I'm trying to make is that is the margin trajectory, like can we, can we aspire to have something like 25% in the next five years or something like that?
I don't say-
Is that a possibility?
No, no. I don't say that at this moment of time. I'm just saying that in this year there is a possibility of 3%-4% increase in the margin. Year next, very difficult to say. You know, every year you cannot have 3%-4% increase, you know. That is impossible. Nobody can do that. The current year I see there is a possibility 3%-4% increase.
Okay. Okay. Okay. Thank you, sir.
Thank you.
Yeah.
Thank you. The next question is from the line of Satya, an individual investor. Please go ahead.
Yes.
Hello, sir. Congratulations on a great set of numbers, and thank you for the opportunity. Sir, I had a question on the defense products that we've been talking about. Anything, any other progress on the radar side? On the electronic fuses side also we had, sir, semi approval of sorts. Any commercialization of that? On the BMP upgrade as well. If you can give some color on those products.
No, I don't give any color. I will give you plain white truth. Color I don't have. You know, on BMP, we just received a letter yesterday that by 26th June they want us to submit our upgraded sample for evaluation, so we would be doing that. We have already put our BMP, we've then given it to us. We have already sent it to Babina, the firing range in Uttar Pradesh, near Jhansi, which is army firing range for armored vehicles. It's already sent there. 26th June it would be submitted to army for evaluation. We are one of the five shortlisted parties, of course. Fuses, as I said, you know, it underwent trial in Balasore in DRDO range. Some upgradation is required in couple of kind of fuses, which is currently being done.
Another couple of months' time it will be resubmitted for evaluation because DRDO wanted us to do some upgrades as per army's requirement, which we are doing at this point of time. In other defense products, yes, you know, as I said, we are going for ammunition business. I am happy to inform you, and that is what is current information, and I am informing you on that basis. The ammunition, you know, factory which we are going to set up in Andhra Pradesh, where, as I said earlier, 1,000 acre land has been allotted to us. Honorable Defense Minister, together with Andhra Chief Minister, Honorable Defense Minister Rajnath Singh and Andhra Chief Minister Chandrababu Naidu, will be laying foundation stone for our factory and another factory for another company on 15th of May.
This 15th of May, foundation stone will be laid down for these two factories. We will start construction for ammunition factory. For which, the first product is going to be multi-mode hand grenade, which is a technology from DRDO. Technology transfer has happened. DRDO has already tried, there's a lab called TBRL of government. They've already tried the samples. It has been found successful. Aging certificate which is required, you know, that this would not, you know, this will last for three years at least. That has also been done. We are now, in my opinion, qualified for participating in tenders, and I expect a very, very large tender to come up in another one month or one half months' time, where we will be participating.
There are only three licenses at the moment, two private companies including us, and one government company, MIL, Munitions India Limited. Two out of three will get the order of this large tender. Let us see. We are first, second, or third . We don't know at this point of time. Yes, we are going to bid, and this is going to our first product in this new factory which we would put up after Honorable Rajnath Ji and Chandrababu Naidu lays the foundation stone on the 15th May of this year.
Great, sir. Congratulations. Sir, second question is on the telecom product side. How is the traction over there? We haven't spoken much about it, but what are we expecting in the next couple of years?
I tell you know, telecom is a very peculiar, you know, in a product business, it is a very peculiar segment. You know, sometime what happens, you know, a new technology comes, the demand all of a sudden goes up. 4G came. Suddenly in India, for example, demand of INR 1 lakh crore, INR 2 lakh crore, something like that. For some years 4G expansion happens, it becomes a stable network only wherever there are holes or where there are more subscribers required, filling the gaps are done. The demand is low. Comes 5G, the demand comes up again. Huge demand comes up again. 5G is spread out all over the country, optimum level of rollout happens. The demand stabilizes only filling the gap demand happens. That's the situation right now with 5G.
Now biggest part of demand will come when the 6G comes around 2029, I would say. A lot of work is going on. We are also working. Right now the demand is kind of a demand just to filling the gaps kind of a thing. We're not a very big demand is there, either India or anywhere else in the world. Big spurt in demand is expected in this sector another two to three years timeframe. By that time, data center demand will compensate or more than compensate lower demand of telecom sector, which is a normal cycle in telecom.
This quarter, how much did we do in the telecom product side?
Telecom, you know, I don't have a separate number. Including fiber optic cable, we did INR 1,200 crores. Just a second. About INR 150 crores.
Got it. Thank you, sir. That's it from my side.
Thank you. The next question is from the line of Ajinkya Jadhav from KRIIS Portfolio PMS. Please go ahead.
Yeah, thanks for the opportunity. My question is regarding the 1,000-acre defense plant that we are putting in Andhra State. Like, this is a very big plant, how much in total CapEx that we will be spending here? Year-wise, how it will be distributed, and how it will be funded?
Look, you know, we have still not planned. The foundation stone will be laid on 15th May. We are in process of preparing, you know, DPR and all that, depending upon the which products in the initial stage. If we do just a multi-mode hand grenade kind of a product which we are looking at, I think, as I said, you know, total CapEx of this year is INR 600 crores, out of which budgeted about INR 125 crores for this facility, including land and building. Next two years should be another INR 250 crores.
Got it. It will be, like, self-funded or, like, we have to take the debt or some partnership with other player too?
No, not partnership. There's no plan of any partnership in this at this point of time, you know. Partnership, equity partnership cannot be done when you are a mix of a telecom, defense and, you know, fiber optic. That's why this restriction committee. You know, it would be a mixture of debt, internal accrual and debt.
Got it. The last question is, like, in the defense, do we want to be a subsystem player or system player? Like, what will be the sequence of our products to be commercialized, like, say, thermal imaging, MMHG, electronic fuse? How we want to place ourselves?
What do you mean by system and subsystem?
Like the final part that we'll be supplying to the defense platforms.
We are supplying final parts only, you know. Thermal imaging sight, for example, is a full system. Any radio we are supplying is a full system. Radar we will be supplying is a full system by itself.
Got it.
it can also be integrated with a larger system also. It can function as a system. It can be part of an integrated system also, you know. It can work in both ways. Like, Thermal weapon sight is a system by itself, but it has to work with a rifle.
Sure. Hmm.
It is still, it's a system. Everything can be system or a subsystem.
Got it. Like, in terms of, like, electronic fuse, if you see, if you are manufacturing only the fuse, then the artillery shell.
Yeah.
Yeah. That I was thinking of.
Yeah. The fuse by itself is a system because it's a independent equipment. Again, fuse by itself is not a armament by itself. It has to be fitted into a shell. Same is for shell. If I do shell, not fuse, again, I'm not doing the full system. You know, it's everything can be system or a subsystem, both.
Got. Got it. Yeah. Thank you.
Thank you. The next question is from the line of Smit Gala from RSPN Ventures. Please go ahead.
Yeah. Thank you for the opportunity, and congratulations on the great set of numbers. My first question is germanium, which is our key raw material for our fiber business. Is there a near-term worry around it regarding its supply?
No. Germanium is not a raw material for myself, for a fiber business. It is a raw material for preform. If somebody who manufactures preform, for him, germanium tetrachloride is an issue and in shortage. Our suppliers of preform have not raised any such issue and, you know, germanium tetrachloride is creating a trouble for them. We have not heard anything from them like that. We are receiving our supply of preform as per their commitment, you know.
Okay. Our margins for this quarter specifically dropped a bit. Was there something to do with the ongoing crisis in the war compared to the last quarter?
Nothing to-
I'm talking about sequential margins.
Blended margin, you know. Like cable-
Yeah
it would have gone up because of EPC, particularly that Army contract where we are incurring expenses and not getting revenue, which would probably start from this quarter or maybe in the worst case, the next quarter. This has, you know, shown a little bit decrease, but that's a very minor. This quarter, we believe that the margin will go up.
Okay. Thank you. That was helpful. Thank you. Well, that's all from my side.
Thank you.
Thank you. A reminder to all participants, please restrict yourself to 1 question. The next question is from the line of Tejas Patil from Niveshaay. Please go ahead.
Yeah. Hello. Am I audible, sir?
Yeah, yeah.
Yeah. Thank you so much for the opportunity, and congratulations for the results. Sir, since you said, you know, you know, I think we are operating at full utilization since last quarter. Is it right to assume the incremental growth coming for the telecom business, apart from, you know, a little improvement in volumes is all led by price, right?
Well, it is all led by price, but continuous increase in capacity. While we talk capacity increasing, two new machines are getting installed. you know, by the time we do the next call, there will be another couple of machines getting installed. you know, it is.
Volume increase.
it is going on for both reasons. Volume increase because of new capacity expansion taking place, and also the price increase. Both are contributing to it. Hello?
Thank you. The next question is from the line of Deepesh Sachdeva from Manea Finance. Please go ahead.
Yeah, sir. Am I audible?
Yep.
Okay, sir. I just wanted to understand, what was the realization of OFCs in this quarter, average realization?
Average realization. No, I think I answered this question earlier also.
You mentioned that there are different types of OFCs.
Yeah.
That's why, it's a bit difficult.
Very difficult to say.
Just wanted-
You know, because there are OFCs of 7,000 fibers per cable, and there is a OFC one fiber per cable or two fibers per cable. You know, how do I give you average realization? It is very difficult.
Thank you. The next question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead.
Hello. good evening, sir. Thank you so much for taking my question, sir. Just one small clarification. In terms of our revenue growth, we are kind of saying around 20%-25% growth. With the data center, you're expecting around INR 500 crore. Even if I, if I see our Q4 revenue, that was also around INR 1,800 crore. are we, you know, kind of being conservative in our revenue guidance? Because even if I annualize our, you know, Q4 revenue, we can maybe look higher revenue for the full year, sir. is it possible we can over-perform our guidance by, like, we can do 30%-35% revenue?
Give me any guidance, huh? Please avoid the word guidance.
Yeah, expectation. Sorry, sir. Expectation, sir. Can we over-perform the expectation?
No, no. It's just my estimation, first of all, that must be very clear. Number one.
Okay.
Number two, when I say 20-25%, I said on the year-to-year basis.
Year to-
Quarter-to-quarter basis. No. Year-over-year basis, I expect 20%-25% increase in the revenue. This year we had roughly about INR 5,000 crore. 20% would mean somewhere INR 6,000, 25% could mean INR 6,250 crore. When I give a number, of course, I try to be on a conservative side.
Yeah.
It would be good that if we can over-perform. Conservatively, you should take 20%. Yes, there is a good possibility of, you know, it becoming better. Conservatively, you can estimate 20%-25%.
Thank you.
Based on today's market conditions.
Thank you. The next question is from the line of Rajesh Gautam from Leo Capital. Please go ahead.
Hi, sir. Thank you for taking my question. I wanted to know what was the AIDC linked IBR cable revenue as a percentage of optical fiber segment revenue in FY 2026, Q4 FY 2026, and what is your outlook for it in FY 2027?
Well, you know, I have not got the number of this IBR, and that would be little bit of a commercially confidential information also to share revenue breakup in that way. Yes, it contributed a major part of revenue of fiber optic cable. That much I can tell you.
Would major be +50%?
You can say that. You can say that. What was your second question?
What is your outlook for this percentage to increase? To how much can this go in, up in the mix?
Well, you know, it all depends upon kind of customers and all that, but I think it will still constitute a major part.
You ideally want, expect to maintain the + 50% mix in your overall OF, optical fiber cable revenue.
Yeah, more than 50%. Sure.
Okay, sir. Thank you. Thank you.
Thank you.
Congratulations.
Thank you.
Thank you. The next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Kapoor sahab,[Non-English content]
Hope I'm audible, sir.
Yeah, you are audible.
For the opportunity. Just to harp on the point that when we look at our margins for telecom product for this quarter. They are, on a revenue of INR 900 crore. We have done INR 360 crore. That is a 40% PBT number. For the year as a whole, INR 2,930 crore and INR 765 crore. That translates into 26%-27%.
Yeah.
So-
Let me just wait a second, you know. Note down what you have said and look at my numbers.
Yes, sir.
Yeah. Which number you are talking about?
Sir, I'm talking about firstly this quarter we posted revenue under the telecom product category at INR 901 crore and profitability at INR 361 crore. That translates into a margin, PBT margin of 40%. We look at our annual number, the telecom product category posted revenue of INR 2,931 crore and profitability of INR 764 crore. That is a 26% PBT margin.
Mm.
Once we club the turnkey business losses, the margins, EBITDA margins, are lower to the tune of 16%-17%.
Just say up next year, 3%-4% increase.
If you could give us some color key for this year, we have some exceptional telecom margin product of 26%-27%. This will go down or?
Upgrade the incremental head, 3% - 4%. How will that play out in the category, sir?
I tell you, there are two factors. One, these telecom product margins are expected to continue and maybe with some improvement maybe there. Second, these turnkey losses will go down because as I said multiple times in this call that, you know, NFS has been a warranty period where we don't receive any money causes a lot of drainage into revenue, which will cease from current financial year, maybe Q2, and then that loss will be evened out. That will result in increase on blended mix of profitability. Some percentage is expected to improve in the telecom also because on a...
What you see is a increased, which happened more from the Q3 and Q4 of the last year. Q1 and Q2 was not that great. This year from Q1 it has started. If this continues in the same manner, there will be some margin improvement in the products also on a overall blended average basis. Reduction in the loss of this turnkey EPC. All put together, I expect 3%-4% increase.
You are correct on that front. Percentage one-off for this quarter for the telecom product.
Say that again, please.
Sir, for the 40% post here for this quarter at INR 360 crore profitability in the telecom product on a revenue of INR 900 crore, this 40% is a one-off that we have exhibited.
Sir-
Because of some product mix only? Yeah.
No, no, Kapoor Sahab, you just have a look at the consolidated number.
Okay
which is INR 1,206 crore from telecom products, where the margins are 31.75% during this quarter. We have to evaluate it from the consolidated.
Yes, sir. 31% also, sir, Jain Sahab-
Uh-
31% will hold good for the going quarters also?
No, see, it depends on the product mix we are having. This telecom product also have some telecom product, optical fiber cable, a couple of other products also.
Generally, yes.
Generally, yes.
Generally, yes , it will hold good for the current quarter also. Generally, yes.
Okay, sir. Thank you, sir. If anything else, I'll take offline with Amit Ji. Thank you once again for the elaborate discussion and hope for sustained set of improved set of number going ahead also. All the best to the team, sir. Thank you, sir.
Thank you. The next question is from the line of Raj Vyas from Bonanza Portfolio. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. Just wanted clarity with respect to the optical fiber. You said that you are running at 100% capacity utilization, right? You have close to INR 13,400 crore order book. Like, are we still taking fresh orders as well? Because my assumption is that if we are already running at 100% capacity and we have this kind of order book, if we have new orders coming in, are they coming into the backlog or what is the timeline? Just wanted clarity on that front.
New order, as I said, 100% capacity utilization is there. When we are supplying orders which are existing orders, we have not booked our entire capacity. We have left some capacity out for our regular customers and spot orders, you know. If I sell my 100% of capacity, I cannot take advantage of spot prices, which are, at this point of time, kind of a market are better than the long-term prices. We need to take advantage of that also. Number two, there are some customers, which are my customers since 10 years, 15 years. They give orders in small batches. I can't forget them that, you know, at this time I will not supply you. We supply to them also, and we have reserved some quantity vacant for them also. Mostly for the spot orders. We are taking new orders.
Why not? We are taking new orders, but we are very hesitant to take large new orders because unless we expand our capacity, which is happening right now, we will be very hesitant to take large new orders. We have orders, INR 200 crores, INR 500 crores, those kind of orders we are taking.
Thank you. The next question is from the line of Pragyam Ladda from Omni Securities. Please go ahead.
Good evening, sir. Congratulations for a good set of numbers. Sir, we are seeing that preform prices are also continuously rising. Given a 20%, 25% increase in the preform prices, what compression would you see on your EBITDA margin or say net margin?
Look, you know, as I said, preform price, we are already, you know, we have long-term contracts. For me, I don't know what is the increase in preform prices. I have no idea. Yes, preform prices may rise. My future, when the long-term contract finishes, I don't think I will get it at the current price. You know, with the preform rising, you know, the price of cable will also rise. You know, it's not only preform. You know, every go to everything happens in tandem.
Would we be able to pass the increase in full?
Oh, yes. I think yes. No doubt.
Okay. Thank you, sir.
Thank you. The next question is from the line of Tanmay from 360 . Please go ahead.
Hi. Sorry for letting me ask again. I just want to know, because the price of helium and polymers both have been increasing sharply, what % of our cost of goods is from both of these things? Do we see disruption coming in because of that?
There's no disruption, but I think, total cost of helium and, you know, polymers all put together in our final cap, you know, product of cable should be around 20%. It should be around 20%.
Yeah.
There's no disruption.
Considering we sell in long-term contracts, the cost of acquiring these goods must have increased by a lot, pushing our margins down, or that's not a problem right now?
The prices have also gone up, huh? Our sales price have gone up.
Okay. Okay. Even for the long-term contracts, you're able to adjust the prices, the contract that was signed before the price hike?
You know, look, price hike, you know, polymer and helium has taken place in, let's say, last one month or so. Some contracts we've signed earlier, some have been signed later. Later, the margins may be much higher than the earlier ones. As a mix, what you see is the margin is there, you know. Can't calculate by, you know, contract to contract. You know, that's why I say spot contract, the margins are much higher. The contract which was signed before this price hike, maybe margin goes down by 1% or 2%, but these are long five-year contracts. Five-year contract, these prices may again come down.
Thank you. The next question is from the line of Nitin Mohanta from Secquin Investment. Please go ahead.
Hi, sir. Good afternoon, and thank you for the opportunity. First of all, congratulations on a great set of numbers. My question is on the overseas front. If you could throw some light on realization for optical fiber cable. I think so in last call we had mentioned that our blended realization is around INR 1,055 crore/ fkm. How would that have panned out in Q4? What does it look like going forward?
You know, look, it has gone up, definitely. You know, again, as I said three times on this call, that I cannot put a number now because in the last few months, the type of cable has changed so much with hyperscalers and all that buying, you know, cable from 800 fiber to 7,000 fiber and telcos buying two fiber to 288 fiber. Different kind of constructions. I can't put a number to a per fiber cable, fiber kilometer price. That's not possible now. The constructions are different, technology is different, density is different. It's very difficult to put a number to per fiber kilometer price. Yes, it has definitely gone up. Yeah.
Right, sir. Understood. It would be fair to say, like, the prices would have moved at least by 15%-20% for us in quarter four.
More than that.
More than that. Okay, sir. Thank you. My second question, sir. We had, I think we have repeatedly mentioned that we have a long-term contract for the preform that we acquired. Given your guidance of almost 20% EBITDA margins next year in this segment, does this also account for the increased price of this preform? What is the nature of our contracts? Like, do we do it for six months, for annually, or how are they repriced from the customer end?
Can't answer that question. Very commercially confidential, but it has taken into account any increase in the prices, of course.
Okay. Lastly, sir, the receivable number on our balance sheet, like Almost more than INR 2,000 crores of receivables. Could you give a split how much of these receivables is from the EPC segment, and how much of the receivables are more than six months?
I don't have the detail immediately available. If you can send the question to me in writing, I can answer this. Right now, immediately, I don't have that breakup available with me.
Fair, sir. Fair. Thank you. Thank you, sir.
Thank you.
I think, this is enough. We have taken up all the questions. Now any further questions that can be sent to our, you know, company secretary or chief, of, you know, investment officer, who will reply to them immediately to you. Please send them in writing. I thank you. Thank all of you who have participated in this call today and spared so much time, to be with us. I honestly thank you all very much. I can assure you that company is on solid foundation, doing well. It has got a very diversified product range, all of which have excellent demand opportunities. Some have higher profitability, some have lower profitability, you know, because all the products cannot have the highest or the lowest profitability. There is a mix always.
With a very robust order book, which includes largely from optical fiber cable, which has got a better profitability today, and the demand trajectory which you can see in data centers and all, which is going around the world. With this kind of long-term contracts with a reasonable profitability and also the different sectors ramping up with acquisition, given this opportunity in the aerospace sector, that will also increase revenue. Data center interconnectivity business, which will increase our revenue significantly this year and next year. We have a very robust performance in front of us. As I said, we expect that this year again, we should be able to have a 20-25% increase in revenue.
Looks like that we can have a 3% - 4% increase in our profit margins also, predominantly because of, one, better realization from products, second, our turnkey losses getting away because of this NFS contract getting converted to AMC contract very soon. Thank you very much, gentlemen, and I really appreciate your participation. Any questions you have, any further questions, please address us directly on our email and you will be immediately given answer. Thank you very much.
Thank you. On behalf of Arihant Capital Markets Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.