Ladies and gentlemen, good day and welcome to the Q4 and FY 2025 earnings conference call of R R Kabel Limited. 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 and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Darshini Desai from MUFG and team, the Investor Relations. Thank you. Over to you, Ms. Darshini.
Thank you. Good afternoon, everyone. On behalf of R R Kabel Limited, I extend a very warm welcome to all participants on Q4 and FY 2025 earnings conference call of R R Kabel Limited. Today on this call, we have Mr. Shreegopal Kabra, Managing Director, and Mr. Rajesh Jain, Chief Financial Officer. Before we begin this call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements, which are completely based upon our beliefs, opinions, and expectations as of today. These statements are not guarantees of our future performance and involve unforeseen risks and uncertainties. With this, I hand over the call to Shreegopal Kabra. Over to you, sir. Thank you.
Thank you. Hello everyone and good afternoon. On behalf of R R Kabel Limited, I extend a very warm welcome to all participants on our Q4 and FY 2025 financial results discussion call. On this call, I have with me our CFO, Mr. Rajesh Jain. FY 2025 has been a dynamic year filled with both challenges and meaningful achievements that have set up our resilience and positioned us for continued growth with revenue from operations and EBITDA margins reaching its highest level among all quarters of FY 2025. We have made a strong recovery from the previous quarter and an improved YoY numbers, making a significant upward trajectory. This momentum has been driven by substantial volume growth in both wires and cables and FMEG segment, solidifying our position as a leading player in the industry.
Looking ahead, we see strong potential for continued growth in wires and cables segment, driven by steady capacity expansion, targeting new markets, the launch of new products, and optimized product mix, all of which we are expected to contribute to achieve revenue growth and sustain margin expansion. We are equally focused on growth and profitability of our FMEG segment and have made continuous initiatives in strengthening our presence in this segment through enhanced advertising efforts and focused brand transition strategy. This past quarter, we significantly enhanced our brand visibility through a high-impact sponsorship, entering a multi-year principal partnership with Kolkata Knight Riders KKR. In addition, our brand proudly became the principal sponsor of UP Warriorz for the Women's Premier League, WPL 2025. This association underscores our belief in growth, progress, and pushing boundaries, amplifying brand recall and asserting our reach across key markets.
In line with our history of creating value for our shareholders and consistently paying dividends, it pleased me to announce that the board of directors of the company has accrued a dividend of INR 3.5 per share, 70% of face value. With this, I would like to hand over the call to Mr. Rajesh Jain to take this call further.
Thanks, Shreegopal ji. As we look ahead, we are optimistic about the broader economic environment, with India's GDP projected to grow at a healthy 6.5% for FY 2025- FY 2026. The wires and cables industry, which typically outpaces GDP growth, is poised for robust expansion. Currently valued at INR 90,000 crores, the industry is expected to grow at a CAGR of 15% and reach approximately INR 2 lakh crores by FY 2031. The wire and cable industry continues to experience dynamic expansion, reflecting the substantial growth potential inherent in this sector. With the industry growing at nearly twice the rate of GDP, the increasing participation of new entrants signals robust demand and a promising future. In this evolving landscape, every brand, including R R Kabel, brings a distinct value proposition, and we believe there is ample room for all the players to grow and succeed together.
Now, let's discuss the financial and operational highlights of Q4 and FY 2025. The wire and cable segment continues to be the cornerstone of our business, delivering strong performance and driving substantial growth. In Q4, this segment recorded the highest volume growth of the quarter at 24% sequentially and approximately 14% year-on-year, reflecting strong market demand. Wires and cables demand was robust in both domestic and export markets after two quarters of relatively subdued demand. For FY 2025, this segment contributed a remarkable 88% of our revenue from operations. Our revenue for Q4 FY 2025 stood at INR 2,218 crores, reflecting a growth of approximately 26.4% year-on-year. We have posted a consolidated revenue of INR 7,618 crores for FY 2025, marking a 15.5% annual growth.
EBITDA for the quarter grew by 69.4% year-on-year, reaching INR 196 crores, with a margin of 8.8%, the highest margin during the year and among the highest in our company's history. The margin expansion was supported by favorable operating leverage and contained operational expenses, aligning with our earlier guidance of achieving double-digit EBITDA margins. EBITDA stood at INR 129 crores, an increase of 64% year-on-year and 88.3% quarter-on-quarter, with margin expansion of 133 and 197 basis points, respectively. For the full financial year, our EBITDA reached INR 488 crores and PAT reached INR 312 crores, reflecting growth of 5.4% and 4.5%, respectively. Overall, a strong Q4 has significantly uplifted our FY 2025 performance compared to the first nine months. Let me now turn to our segment-wise performance.
Our wires and cable business recorded a revenue of INR 1,956 crores in Q4 FY 2025 compared to INR 1,523 crores in Q4 of FY 2024, a growth of 28.4% year-on-year. For the full year, revenue stood at INR 6,689 crores versus INR 5,830 crores last year, up by 14.7%. Quarterly and annual growth in the wire and cable segment was driven by a balanced contribution from volume and value growth. On a sequential basis, growth was purely volume-led. Segment profit grew 47.1% year-on-year and 80.6% quarter-on-quarter, reaching INR 194 crores. Our export business contributed 26% to our total revenue in FY 2025, stable compared to FY 2024. In absolute terms, exports grew by 11% year-on-year, despite global uncertainties, a testament to our strong international strategy. In the FMEG segment, revenue reached INR 262 crores in Q4 and INR 929 crores in FY 2025, marking 13.3% and 21.5% growth, respectively.
As highlighted earlier, this segment has shown clear progress in both profitability and growth. We reduced losses in FMEG by approximately 33%, down by INR 23 crores from FY 2024, a strong sign of improving operational efficiency and effective strategy execution. We remain committed to achieving break-even in FY 2026. The company has also been consistently improving its working capital cycle, from 88 days in FY 2022 to 56 days in FY 2025. This was achieved through reduction in inventory and receivables and an increase in payables, driven by our long-term efforts to enhance efficiency. Now, I would like to talk about our strategic vision for the next three years. R R Kabel is embarking on a focused three-year growth journey under the strategic initiative Project RISE. This vision is anchored on accelerating growth in both the wires and cables and FMEG segment, with a goal of transforming our revenue and profitability profile.
Over the next three years, we aim to deliver a wire and cable revenue CAGR of 18% and FMEG revenue CAGR of 25%, together driving a 2.5x growth in EBITDA. This will be achieved through a multi-pronged approach, balancing organic expansion, export leadership, margin improvement, and capacity enhancement. A key part of our strategy is to grow our domestic wire and cable business to 1.6x by leveraging the resurgence in real estate, increasing demand from the data center, renewables, and industrial CapEx. We aim to scale our cable business while maintaining a high-quality, value-focused portfolio. Simultaneously, our FMEG segment will maintain its fastest growth position, supported by a shift towards premium products and better channel efficiencies. We are also strengthening our export business, targeting 1.x growth by leveraging our strong brand equity and India's favorable trade dynamics. Entry into new markets and categories will further enhance our global competitive edge.
To support this trajectory, we are investing in manufacturing, with a 1.7x increase in capacity at Silvassa and Waghodia. This will help us to meet rising demand efficiently while ensuring quality and scale. Margin improvement will be a critical driver of sustainable growth. In wire and cable, this will be achieved through a rebalanced product mix and scale efficiencies. In FMEG, our focus remains on higher margin products and efficiencies across procurement, factory operations, and supply chain. Project RISE represents a bold focus strategy to accelerate R R Kabel's growth trajectory. By driving strong revenue, global presence, and operational excellence, the company is laying the foundation for long-term value creation. With clearly defined initiatives and measurable targets, R R Kabel is poised to emerge stronger, more competitive, and future-ready.
We have already begun executing our INR 1,200 crore CapEx plan in FY 2026 to FY 2028, primarily aimed to increase cable capacity to support a 15%-20% volume growth and margin improvement. These initiatives reflect our commitment to delivering high-quality, environmentally competent products while building a robust, scalable platform for the future. Looking ahead, our long-term growth will be supported by structural drivers and expanding share to the organized market and government initiatives. We are focused on operational excellence, smart innovation, and future-ready products. At the same time, we are strengthening our brand recall through targeted marketing and strategic visibility. Our commitment to distribution expansion and electrician enhancement positions us well to capture emerging opportunities and sustain growth. Encouraging macro signals combined with our internal strength give us confidence in our outlook for the years ahead. With this, I would request to open the floor for questions and answers.
Thank you so much.
Can we have questions and answers now?
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Praveen Sahay from PL Capital. Please go ahead, sir. The current participant has been disconnected. We'll move on to the next participant. The next participant is Naushad Chaudhary from Aditya Birla Capital. Please proceed.
Hi. Thanks for the opportunity and congrats on a decent set of numbers. First, on the CapEx announcement of INR 1,050 crore with 36,000 capacity. So this, despite being brownfield expansion and assuming, in a best case, we reached a full utilization of 36,000, assuming INR 1,000 per kg realization, we get around INR 3,500 crore of revenue. So looking at our historic number versus our peers, the asset turnover of this investment looks very low. How should we look at this? If you can explain?
So see, you have to see our expansion plan in totality. We have announced CapEx at Silvassa as well as Waghodia also, which is a combined of around INR 1,200 crores new expansion. Apart from 500 CapEx, what we have already announced, and it is on the verge of completion in this year. The majority part was already executed. And with this CapEx, we are targeting a top-line growth of around INR 4,500 crores, which is around 3.5x. See, if you see within wire and cable, wires have different asset turn, and cable has lesser asset turn. So with the combination of this, we are targeting to achieve 3.5x asset turn.
Okay. Second, was there any inventory gain in this quarter, sir?
I will not say inventory gain, but since the copper prices, or rather metal prices, were on upward trend, so always whenever there is upward trend, we get some. First, it is always good, and we see a very good upliftment in demand, stocking of traders. And sometimes, since we have capability or we need to pass on this price impact, so there is a little bit always the working capital is always positive or helpful to us in improving margins. But the majority of the margin improvement is due to our volume growth only.
Okay. And your staff cost also looks substantially improved. If I look at sequentially also, last quarter, INR 90 crores employee cost, which has come down meaningfully despite such a big volume growth. How do you explain this, sir? And should we look at this as a new normal for the company?
So staff cost, first, we cannot compare in percentage terms because it depends on the throughput, my volume may increase and the fixed cost may remain the same. So at that level, in percentage terms, it may have come down, but optimally, it will be on current levels only.
Even in absolute terms, it has come down, sir?
Yeah. There may be some changes in some provisioning or something like that. Otherwise, it is normal norms only.
Sure. I'll come back in the queue. Thank you so much.
Thank you.
Ladies and gentlemen, in order to ensure that the management is able to address the questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Charanjit Singh from DSPIM. Please proceed, sir.
Hello, sir. Yeah, I'm out.
Good afternoon.
Good afternoon, sir. So first of all, congratulations on a great set of numbers. First question from my side is in terms of the volume growth. When we are talking about 18% kind of CAGR going forward in the wires and cable segment, if you can touch upon maybe for the next year itself, how is the kind of volume growth expectation and what are the key drivers? Because we have more dependence on the wire side versus cables. That's my first question. And second is, on the cables, we had started increasing our portfolio in terms of bringing in new SKUs and starting to penetrate further into the cable segment. How is that journey going on for the cable segment? So these are the two questions from my side.
Thanks, Charanjit Singh. If you see our three-year projections and our strategy, of course, we are targeting 18% CAGR growth, which will be largely driven by growth in cable. And the reason behind that, if you see these industries balanced at around 65% market is for cable and 35% is for wire. And since we are a wire-heavy company, so in our case, it is almost 70% we are getting revenue from wires and only 30% from cable. And this gives us natural opportunities to grow at a much higher pace than market also. And in cable, we can grow at a higher pace. And if you see even our expansion plan, we are targeting major expansion in cable only. And already, you have seen that whatever CapEx we have done, this will give additional capacity in this year.
We are quite confident in getting this growth of 18% year- on- year in our wire and cable segment, which will be majorly driven by cable growth only.
Okay. And sir, the second question in terms of the SKUs in the cables, what are new products we are introducing? What we are lagging in terms of the product gaps we had?
So as of now, we are very small in LV HV both, but particularly in HV, we have seen a very good demand. But we were having manufacturing capacity constraint, and this we are in the process of removing. And we have already enhanced our capacity. So within cable, the majority of the growth will come from export SKU as well as MV cables in the domestic market also, which ranges from 11 kV to 66 kV.
Okay, sir. And just if you can touch upon the exports market, how has been your discussions with the customers? Because you have 26% of revenue mix coming from exports. How is the outlook specifically? And which geographies are driving the exports market? And do you see that in the near term there could be some weakness in the export market because of all these tariff-related issues or any kind of issues related to freight or those kind of factors?
So now, since I already have that normal whatever disturbance we had in the first two quarters of previous year, and since we are the largest exporters and have seen a very good demand in this year also, we are getting good demand from our Europe market, and even though things are not certain in the U.S. market, there is a lot of uncertainty, but what we believe is that whatever things happen, it will be more favorable to Indian, particularly wire and cable industry, and our majority of the export is distribution-driven where we have set up our market in the last 20 years to a greater extent, and we have seen a very positive improvement in demand-supply chain situation, and we see very positive growth in coming years.
Got it, sir. So thanks for taking my questions. All the best for the future. Thank you.
Thank you. The next question is from the line of Praveen Sahay from PL Capital. Please go ahead, sir.
Yeah, thank you for the opportunity and congratulations on a good set of numbers. So my first question is related to the capacity. If you can give in metric terms how much of the capacity you have right now and at what utilization you are operating at, and also the CapEx for yearly basis FY 2026 and FY 2027.
So if you see, already we are at around 75% capacity utilization on overall level, and that's around 70% in wires and almost 90%-95% in cables. So fairly very good utilization of capacities. And already now we are what CapEx we did in last year that will give me full capacity in this year. At the same time, we have already announced our next three-year expansion plan, which will give us almost 1.7x of our capacities what already we have. And this will be majorly driven by expansion in cable segment, of course, supported by wire also where we are targeting good growth. So this capacity is what we are announcing will make a good base to meet our year-on-year growth targets. And this will suffice our purposes.
2026, 2027 CapEx number, if you can, how you are dividing this INR 1,200 crore of CapEx?
See, what happens is this is a very big expansion plan. So out of this, in first year, whatever we invest will give me capacity maybe after the mid of the FY 2027 or onwards only. But for this year's growth plan, we already have extra capacity what we built in previous year or the completion of our previous CapEx plan, what we will complete in this year.
Okay. And the last question is related to the EBITDA margin guidance or the EBITDA guidance of two and a half times you are expecting, and that leading to around 300 basis points improvement. So how you are expecting to achieve these numbers if you can drill down some of the benefits out of that, which we are in this sizing to reach to?
So we are targeting our EBITDA margins to improve and get double-digit margins by FY 2028 in the range of 10.5%. And this will achieve by yearly sequential growth of almost 100 basis points year on year. And this will be achieved by higher volumes, better product mix, and even improvement in our profitability in FMEG segment also, where we have seen a good improvement, almost 400 basis points improvement. Our losses were reduced by almost 400 basis points in this year. So in the same way, we are targeting to achieve a higher and better margin improvement in this year and even next three years also.
Okay. Thank you, sir, and all the best.
Okay. Thank you.
Thank you. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Hi. Thank you so much. Very good afternoon. Congratulations on a good set of results, so I've got two questions, and then maybe I'll get back in the queue. Firstly, on the three-year vision, I just wanted to know, along with this, these are more hard financial targets, but any gaps that you would have noticed to achieve these targets over the next three years? Let's say hiring in the team, technology, maybe R&D investments for new product development, anything like that which you want to fill up as you achieve these targets is question number one, sir.
Thanks, Rahul. So rather than challenges, we see as an opportunity based on our last so many years of experience in domestic and international markets. We have identified our growth opportunity in terms of geography as well as product segment also. And now it is a matter of scaling up our capabilities and capacities and getting higher margin improvement as well as market share also. So of course, this is a continuous process where we will keep adding our work on R&D side. And at the same time, we have a very clear vision that how to get and from where to get the higher growth in sales as well as profitability also.
Sir, I just wanted to be more specific. Maybe I'll flip the question. What would be the risk in terms of achieving these targets? I understand volatility in raw material and general industry risk. But from a company perspective, what I was referring to more gaps that we need to address to achieve this growth. So if you could help me with some specific points, that will be helpful.
So, see, in this scenario, we have to focus for achieving these growth targets. Of course, we have to be our presence in market should be increased and noticeable by way of our brand expansion and covering more and more areas. And at the same time, getting more market share in cable segment, as I explained in the last question also, since we are very small and there is a lot of opportunity. So how I structured my business in such a way that I can capture each and every business at a higher pace and make my growth higher than industry average. So our focus will be on making more robust market and production capabilities also at the same time.
All right, sir. I got it. Secondly, on balance sheet, that's my last question. This increase in payables has been pretty consistent since last three years. The INR 760 crores of creditors at the end of March 2025 doesn't appear to be very normal. Any changes to credit terms, or should we expect this to stay here? Is it sustainable? Any comments on that, please?
Yeah. At least on the payable system, it will be on a stable basis because whatever credit arrangements we have done with our suppliers, and these are working good, and we have seen good improvement in our working capital side still based on this. It will remain stable on this side.
So there is no one-off sitting there in the INR 760 crore number, right?
No, no, no. Nothing one-off. It's our regular trend. Though since we were at a very high volume at the year-end, so figure it seems large, but if you see in days terms, it is normal only.
Okay. Fine, sir. I'll get back in the queue. Thank you so much, and all the best for your three-year vision.
Thank you very much.
Thank you. The next question is from the line of Natasha Jain from PhillipCapital. Please go ahead.
Thank you. Good afternoon, gentlemen, and congratulations on a good set of numbers. Sir, one clarification. You mentioned in your opening remark that your sequential growth for wires and cables is completely volume-led, right?
Yes, yes. Though there is some balance between value and volume, but yeah, it was measured by volume basis only.
Okay. And, sir, I heard you earlier today in a TV interview. You had said that for FY 2026, you were planning a volume growth of 18%, and your three-year plan, per year, your CAGR is 18%. So, is it fair to rather deduce that in this industry, it will mainly be volume-led growth and pricing advantage only there, especially given the competition coming in?
Natasha, whenever we talk about our growth in future, it is based on volume growth only. If I'm talking about 18% growth, it means we are assuming that this metal prices will remain the same while making the projection. We know things are very uncertain, but we measure our growth in terms of volume only. Whatever we are guiding, it's based on volume growth only.
Understood, sir. So my second question is on FMEG. Now, your numbers have been very, very strong on that side. As we head into the year, you also mentioned today morning in your interview that you will probably break even in the first half of this year itself, this financial year. So when I listened to your peers' commentary, they mentioned that the season has been quite tepid. And in fact, Q4 numbers were not that great because the takeoff of cooling products has not been strong. And when I see your numbers, you've outperformed both on top line as well as margins. So sir, I wanted to know what is it different that we are doing from peers? If I benchmark you on aggressive marketing, digital, physical marketing, geographical indexation, everybody else is also doing that aggressively. So where are we really outperforming our peers here?
So, what we have done in our previous years, it is now we are getting execution and getting good results. And the good thing, we have seen a very good acceptance in market of our new products and premium and mid-premium category. Earlier, whatever contribution we were getting, now we are getting almost 20% of our revenue from premium and mid-premium category, which gives you brand presence also and improvement in profitability also. So, in that front, whatever strategy we made in previous years, it is giving good results now.
That's fair. So just one last quick question. So if I ask you a very near-term question, we've seen copper price, again, beginning to fall. Now, first quarter, usually, or rather first half, is seasonally a weaker period in terms of wires and cables, and plus there is a copper price fall that's happening. Last year, we were sitting at a low base because of not so much great execution on account of elections. So how do we see this first half panning out? Will we get benefit of a low base here?
See, it will be too early to predict now, though 35 days of this quarter is already over, but still things keep changing also. Of course, historically also, whenever in this industry, you see Q1 is always very light when you compare with our other three quarters. So it seems that this quarter may remain subdued or stable kind of demand. But it is in routine basis only, nothing abnormal in growth or reduction in growth also.
Understood, sir. Thank you very much, and congratulations once again.
Thank you.
Participants who wish to ask a question may press star and one. The next question is from the line of Shrinidhi Karlekar from HSBC. Please go ahead.
Yeah. Hi. Thank you for the opportunity and congratulations on a great set of numbers. So a couple of questions from my end. Firstly, given some capacity concerns that you have in the cable business, may I ask how much volume growth you can achieve in the cable business over the next two years?
Yeah. Yes. So we are targeting almost 25% growth in our cable business on a year-on-year basis. And this will be balancing between my capacity also and having favorable market share also.
Do you mean the capacity allows you to grow 25% in volume term?
Yes, 25% in volume term.
So both FY 2026, FY 2027, yeah?
Yes. Yes.
Okay. Great. And sir, the second question is on the profitability of your business across domestic and international business, export business. Would it be possible to give us color how are the margin differences between your domestic business and export business in cable and wire segment?
So, of course, we have seen a good improvement in margins in export business also driven by a very good now our focus is more on getting good businesses in cable where we have higher margins. So if we see sequentially in coming years, our margins, even from export market, are getting better. Of course, there is some difference between domestic and export margins, but with this product rebalancing, we hope and expect to get a very good improvement in margins in both domestic as well as export markets.
Great. And sir, last one, if I may. So you have a very strong aspirational start in terms of improvement in the margins. And this, you are guiding in the context that your export business, which is typically lower margin, growing at a faster clip than domestic. And second, within the domestic also, your relatively subscale cable business growing faster than the wire business. So are you assuming, sir, a substantial relative price hikes in your portfolio as your current pricing is lower compared to peers, and you plan to bridge some gap?
So these are mixed with two things. One, as I said also, we had informed that in our export market, we have comparatively very higher margin when I compare with wires. But since we were a wire-related company, so in our export, wire was contributing more. But now, as my cable share is increasing in export, my margins will improve. Same way in India, since our scale was very less earlier year, I was not having sufficient capacity. Waiting period to my customer was very long compared to peers. So once I improve at the supply side, and at the same time, if I get the skills also, so I will improve my sales margin, sales prices also, and margins will also improve. So combined level, this is very favorable and positive progress towards margin improvement.
Great. Thank you for answering my question, sir, and all the very best.
Okay. Thank you.
Thank you. The next question is from the line of Nikhil Purohit from Fident Asset Management. Please proceed.
Hi. Thanks for taking my question. Sorry if I missed this question earlier, but what was our volume growth for the full year and this quarter?
Yeah, so our volume growth for the year was 7%, but for the quarter, it is 14% on YoY basis.
Okay, and could you give me the volume growth for both the segments separately?
Wire and cable is almost same, almost 13% in wire and 15% in cable.
Please wait a moment. The participant's line got disconnected. We'll proceed to the next participant. The next participant is Vidit Trivedi from Asian Market Securities. Please proceed.
Yeah. Hi, sir. Thank you for the opportunity and congratulations on a great set of numbers. My first question is with respect to the channel activity. Any channel activity during the quarter and any price action during the quarter? And second is that if you could please give me a break-up of the margin profiling in terms of wires and cables, both on the domestic front and on the exports front?
This channel activity is a continuous process. We have continuous programs for engaging our electricians and retail partners. And since in this quarter, we have done a very good activity in IPL by sponsoring KKR and same time WPL for FMEG business. We have seen a good improvement and enhancement in our channel activity. But these are on similar lines of what we do continuously.
So any price action during the quarter?
Sorry?
Any price action during the quarter? Price hike or price cuts?
Price hike or price cut are since these are based on our metal prices, so these are in similar lines to that only.
Okay, and could you please give me a break-up of the margins, both in the cables and the wires segment, on the domestic and the export front?
So as you see, in India, we have very good margins in wires in compared to cables, and in export markets, it is the other way round. But these are whatever we have historically, margins are on those lines only. The only thing product mix is, it changes favorably. We get more exposure of cables in export, then our margins will keep improving.
Actually, I was asking in terms of any ballpark number. For the wires, let's say 12, 13 kind of a number, if any number would be helpful.
So it's almost 12% in wire while in domestic wire, while 5%-6% in export wire. The reason being there, we are distribution-led business, and we do not have marketing and every kind of expenses. And there, we have very stable business in export wires. Same way in cable, export cable market is very highly profitable in the range of 12%-13%, while domestic cable is in the range of 6%-7% for me only. Though on normalized basis, it will be in the range of 9%-10% once I get the scale and availability.
Thank you, sir. That's helpful. All the best.
Thank you. The next question is from the line of Aryan Jain from Groww Mutual Fund. Please proceed.
Yeah. Hi. Thank you for the opportunity and congratulations on the great set of numbers. So my first question is a follow-up on one of the previous participants' questions. So this reduction in the working capital cycle, is it sustainable? And also, how will it change going forward with the growth in cable exports and FMEG business?
Though on this quarter basis, we have achieved 56 days, but normally our working capital-based cycle is around 60 days, and we expect to remain maybe plus or minus one to two days, but in this range only.
Okay. And second question is, can you highlight what would be the mix of domestic wires? So as you mentioned that the breakup was 70/30, 70% wires and 30% cables. So of the 70%, what would be the share of domestic wires?
In export and domestic, both we have similar ratio only. 70% is wire and 30% is cable in both the segments, be it domestic or export. Almost similar.
Okay. Thank you. That was the question from my side.
Thank you. The next question is from the line of Nikhil Purohit from Fident Asset Management. Please proceed.
Yeah. Hi. Sorry, I got disconnected back then. I wanted to confirm, what was the volume growth in absolute number for wires and cables for this quarter and for the whole year? Could you please help me with that? Thanks.
So for this quarter, our volume growth was 14%.
No, no. Absolute number.
Similar 13% in wire and 15% in cable. While on a yearly basis, our volume growth was around 7% only, where wire was almost flat, having 1% or 2% growth, while cables grew by almost 19% on a yearly basis. I hope this answers your question.
No, I understand that. Thanks for that. I was asking more on the lines of the absolute number amount, I mean, the quantity, absolute number.
No, no. I think that I do not have that figure handy, but this will give you a fair idea about our growth.
Okay. Got it. Okay. Thanks.
Thank you. The next question is from the line of Naman Parmar from Niveshaay Investment. Please proceed.
Yeah. Good afternoon, sir. Thank you so much for the opportunity. First, I wanted to understand on the new capacity that is getting built up in this Silvassa. So it will be for cable or majorly it will be for wire only? And how much kV of cable will be producing in that facility?
So, at Silvassa, we are coming with capacity expansion in wire only. And since cable facility is complete, we have at our Waghodia plant only.
Okay. Waghodia, yeah, there will be cable.
It's Baroda. Waghodia is Baroda. Yeah.
Okay. And so currently, what would be your gross block for FY 2025?
It's around maybe INR 900 crores at Waghodia basis. Gross, we need to refer to our balance sheet, but that is available, our balance sheet now.
Yeah. I just wanted to know how much total revenue potential you can do with this gross block and with the new capacity coming in. It would be around INR 8,500 crores-INR 9,000 crores?
Yes. We have enough capacity to cater the demand of 18% volume growth, what we are targeting on year-on-year basis. So we have sufficient capacity with this coming expansion and even the new CapEx, what we have announced.
Means asset turn of 3.5. You're talking right now?
Yes. For new expansion. But already in our old CapEx, it says that was wire-led heavy, so we have higher asset turns in our wire CapEx, which is what we have built till now.
Okay. And lastly, how would be your margin? This will be the period because big competition is coming in this segment. So how do you think the margin will be going ahead? Even though 80% is your raw material or aluminum and copper, which is majorly passed on, then also what margin you are expecting that will be a sustainable?
So as I explained also that based on our increased capacity, getting more scales and getting more efficiency and getting better product mix, we are expecting to improve our margins by 100 basis points in coming year. And this is quite achievable.
Okay. Yeah. That's it. Thank you so much for answering all the questions.
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Thanks for the follow-up. Just one question, sir. On the sponsorship for IPL and WPL, any costs which were booked in both quarters?
Yes. For WPL, it was completely booked in previous year since event ahead while over. For IPL, it will be on pro-rata basis as per accounting notes.
Okay. Would you mind sharing how much the cost is booked?
No, that we cannot disclose, but it is absolutely in agreement with whatever accounting notes are there, and it is completely on pro-rata basis.
Perfect, sir. Not a worry. Thank you so much.
Okay.
Thank you. The next question is from the line of Naushad Chaudhary from Aditya Birla Capital. Please proceed.
Yeah. Hi. Two clarifications, sir. First, with the new investment, if I heard it correctly, capacity would expand by 1.7x. This is on the Waghodia and not on the blended capacity, right? Or will this be on blended?
It's on blended. See, when we talk about our capacity and everything, it is on company development because we cannot be that much specific about plant by plant.
But INR 1,000 crore is adding only 36,000 tons capacity, right?
Yeah.
But if we calculate reverse, today, FY 2025 closed with INR 6,700 crore of turnover, assuming roughly INR 9,950 of realization, and we are running at 75% of utilization, this would bring roughly 1 lakh ton capacity, rough calculation, on which if you're expanding 36,000, it would be 36% only. How would it be 70%?
No. So you have to take care of the weightage between wire and cable also. There is different product mix also at wire and cable segment. And at the same time, we have capacity expansion at Silvassa also. So it is not only 36,000 tons, but it is a combination of 36,000 tons + 18,000 tons.
Okay. 18,000 at Silvassa?
Yes.
Okay. And second, just curious on the outlook point of view. Historically, if I see last three years, five years, despite the industry had, you had a low base, industry had a capacity constraint, we have been able to grow at 13%, 15% our volume CAGR of three years, five years. And now, though a lot of capacity is coming in industry and we have a high base, what gives us so much confidence that we will achieve better than what we have achieved in the past despite high base?
There are two things. One, of course, we were also having capacity constraint in cable, which lowered our growth to some extent. At the same time, whatever work we are doing in our export market by entering into new geography and new products, same way in India also, we have done a very good work in the last three, four years to enhance our dealer network and our electrician network. So this will give us good results in coming years.
Okay, sir. Okay. All the best. Thank you so much.
Thank you. In the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir.
Thank you, everyone, for joining this call. We appreciate your participation. If you have any questions, feel free to reach out to us. Thank you.
On behalf of R R Kabel Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.