APAR Industries Limited (APARINDS) Earnings Call Transcript & Summary

Open the floor to questions.

So we are into this business of manufacturing products that are there in transmitting electricity from places of generation to the places of distribution of -- our products are conductivity products and therefore it helps into this particular transmission. We broadly have 3 divisions: Conductor division, Cable division and the Oil division. Our turnover last year was about INR 14,000 crores. About 50% came from the Conductor division, about 20%, 22% was in Cable and close to about 30% was from the Oil division. About 50% of the products we export through the company as a whole and almost pretty much similar ratio we have for each of the divisions. We have manufacturing facilities in Mumbai, New Mumbai, Silvassa, Gujarat, Orissa and in the Middle East. Currently, broadly, the macro environment is conducive in the current space as we see as -- sort of impetus been happening on renewable forms of energy, solar and wind. Lot of government initiative is happening, especially in India, if you see schemes like RDSS schemes are there, which improves the electricity for the last mile distribution. Public transportation in terms of mobility, rail infrastructure is getting increased, expanded. And all these are conducive to the kind of products that -- business that we are actually in, plus a lot of geopolitical situations are also favorable to us, things like China Plus One is favoring companies in India and industries like us in particular, the Russia-Ukraine war with -- happening with European Union wanting to look at other alternative forms of energy is also helping us. So a combination of macro environment and geopolitical is actually giving us a lot of benefits that we have seen in the last year and seeing in the foreseeable future also. Broadly, what has played for us, clearly, is our focus on premiumization. We've been coming with the premium products especially in the Conductor division, in the Cable divisions and few in terms of Oil division itself. As a strategy have improved the profitability in the conductor division to make it much more profitability than what it was 3, 4 years ago. Also, our strategy on globalization asset we -- earlier, we used to be about 25%, 30% of our export ratio. Now it has inched almost to 50%, where we're able to tap the opportunity that is available in the global space there. And also in terms of innovation also because we've been constantly innovating new and much more improved products than what is available in the market. We are able to look at the requirements and understand this -- requirements of the customer and then [device] various products, especially in conductors and in cables. We are almost first movers in terms of getting into the solar and the wind segment of renewal thing. And we -- As we speak, we continuously look at innovation for your brands, things we actually planned much in advance of the products that are going to come to the market. And that said, our tagline is also tomorrow's solution today, it fits into that. So the combination of this premiumization, globalization, innovation and it's really played the cards very well for us in the last year. And we see it's a kind of a journey with macro environment and geopolitical also supporting us and with the internal strategy that we are following. This puts us in a good position for our business in the medium to long-term perspective. Overall, our Conductor division has turned completely high profitable because, as I said, it's a combination of premiumizing exports. Cable division also is running at very high growth rates. Oil division is being also maintaining the volume and profitability. And with that, we saw a very good exponential rise in the financial critical numbers. This is a very brief background, but if there are any questions or any clarifications you need. I'm open to answer that.

Sir, conductor side actually, like the high voltage to low voltage actually, And a part of that there is HVDC cables, where conductors being used and where HVDC being used? Because both can carry the 1200 kv kind of thing.

Yes. So no, the applications are different. It depends on what the requirements of our customers are there in terms of [indiscernible] applications. So we are into this conventional conductors and also this HTLS, which is the high [transmission] low sag conductors, copper conductors for railways and also in our OPGW. So that's a space where we are. And the properties are different across different -- they're close to about now more than 200, 300 different types of conductors within that. So these are overall bucket of conductorizing that happens. So what happens basically now very briefly from the pace of generation to the pace of distribution, the application of conductors and cables are different. You actually use conductor, use cables, you also use oil from the entire journey of the place of generation to distribution. To give you a simple example, if there are this solar cables, which are there, they actually generate where the sun is very strong there. But that power has to be then transmitted to, let's say, office or industries or place of residence or place of use. That's where the application of conductors, cables and in many cases oil also because you need to step up and step down the voltage level, because it passes through your substations and various junction boxes and various places there. So it all -- it's the application of the conductors that cables are actually determined that they are different products actually -- and all these are actually done by the EPC players who actually put this. We just supply the conductors to them. We have a very small EPC in India, which takes some of the [indiscernible] but by and large, we end up supplying the products.

Do we have capability to manufacture HVDC cables?

Yes, we have.

Are we manufacturing it?

Yes. I'm not too sure about the specific HVDC type. I'd like to check and get back to you.

Now what is the mix in terms of export and within conductors?

Export would be about close to 45% to 50%.

And which countries mainly?

We are spread out, we supply in U.S It's there in Africa, it's there in Australia. But the U.S. will be the large portion.

So this margin expansion moving to almost 35,000 per tonne. I think it almost even touched 50,000 right? From earlier we used to have 15,000. And we are still gearing around 15,000. So just in premiumization and export, how the export at high margin, can you just give us news?

So 2 reasons happened. One is premiumization of the conductor portfolio with conventional conductors getting into the premium conductor. And we also talked about HTLS, copper and OPGW. That's a premium conductor. The second thing is that FY '23, the export of conductors, the standard conductors were very high margin than what we get in India. And the reason is that because of, as we said, the strong demand push that is happening in the overseas conductors, getting into renewal space, more transmission line getting added. You see Inflation Reduction Act being signed in countries like U.S., the requirements of conductor is much higher than what it was earlier. Plus due to pent-up COVID demand, people wanting to fill up their warehouses. And due to supply chain inefficiencies, they wanted to ensure that they have stock ready over there. So there was an element of very high margin that we got in FY'23 definitely, which we don't expect to be sustainable at that particular level. We also read somewhere about INR 55,000, 58,000 per metric ton. We don't expect that level to reach there. But what we expect is that because our mix of the product has changed we are still guiding at 25,000 plus tailwinds. Because tailwinds could come from all these macro environment and geopolitical things that we talked about, in terms of this requirement is going to go up and renewable thing is going to go. So we actually need more and more conductivity properties needed plus because of China Plus One countries like India would be favorable. So you -- the base premium, which was about INR 8,000 to INR 10,000 2, 3 years before has definitely gone up to INR 25,000. On top of it, we expect tailwind to happen depending on various macro and geopolitical things.

And China is a big supplier for this U.S. and all?

China is there. It's still there, but then they also want to gradually bring it down. So you can't just switch off China overnight, but it has to be over a period of time. And that's where we've seen our volumes going up for the rest of the China.

So this 5-year CAGR went from 21% for this Conductor business. So next 2, 3 years, if you say with these tailwinds?

So what we expect in terms of conductor volume growth, we expect about 10% to 15% is what the number given guys, 21% maybe I'm sure it's in wider range value CAGR. Better to look at volume numbers in Conductor because value depends on the price of aluminum also. So we only look at volume numbers and EBITDA per metric tonne. So volume CAGR, we look at the next few years, about 10-odd percentage is a number that we are getting.

And the capacity expansion for that?

That happens debottlenecking and capacity expansion happens before that. So we have sufficient capacity for FY '24. And before FY '25, we'll be putting up more capacity.

Who are the global competitors for this?.

So there are companies in -- so one, there is Sterlite Power who are there in India. Then, there's a company in Middle East, I think Midal Cables. They also supply and I think there are companies in the U.S., I think Southwire [indiscernible] but not too many companies are there in the conductor thing. They are more organized than their products.

Top 3, 4 will have how much market share?

So we are the largest in terms of alloy -- manufacturers of aluminum alloy, and I don't have the exact numbers of Midal Cables and the Southwire exactly how much would be their share.

Since expanding capacity is not so much of an issue in terms of cost per time, lot of these margins can actually go back a lot more than anything. Is there a risk like that? That we [indiscernible].

So that's what we have actually reset our base margin to INR 25,000, which used to be to be INR 8,000 to INR 10,000 earlier.

That's what i'm saying. Since it's not so difficult to put CapEx and expand capacity, is there a risk that INR 25,000 again go back to?

No. So because since INR 25,000 is coming from a premiumization product, for which, there are not too many organized players there. If you look at -- we have some slide in our corporate presentation, which actually talks over the competitive advantage of this conductor thing. It's there in our corporate presentation, it's there in slide, here it is in the slide #5. But this actually talks about what are the competitive advantages that we have from the premium products as well as the conventional products which are exported. So if you look at conventional products, which are going to be exported, the customers are looking at criteria of having a reputed supplier there. They don't -- they want people who are reputed, who have good capacity in place. They have a very good risk management framework in place. So there are a lot of unorganized players who do not hedge this aluminum and metal. And then they are not able to deliver the products on time. So these customers who are there in export market, they not only look at price, price is just one criteria, but they also look at quality, reputation, reliability, risk -- people who have strong risk management appetite. That's where companies like us stand out and are able to differentiate us compared to unorganized players. Of course, they will always be competitive with the organized player, but that is lot more limited than that. Then if you look at some of the premium products that we are doing, it's not so easy for any other company to replicate that because it's not only a supply of the product, it's also the designing of the product. The product should be there in the towers. Actually conductors are there in the towers, which are there. So you cannot have a product and -- product there and then because of high transmission, the tower itself collapses. It is not only supply of the product. It is also the designing of the product to suite the particular infrastructure, which is there. This particular stringing mechanism that is needed over there. This is an ecosystem of labors that needs to stage over there. Sometimes your conductors goes over railway lines, over mountainous terrains, et cetera, which are very difficult. So this is what is not so easy for some other local player to just copy and replicate that. And hardly there are competition here in the Indian market when it comes to premium products. So that's where we feel that our baseline, which used to be INR 8,000 to INR 10,000 that was a time when we used to manufacture only conventional products, largely. Largely, it was conventional products. And that competition has just gone up a lot. It's commoditized now. Now in the premium segment, we are coming, that's where our base margin, we are increasing to INR 25,000.

How do we define a premium product in [indiscernible] terms? Is it like...

So in terms of the product characteristics like HTLS, this high transmission low sag, where you can actually carry very high transmission and still the conductors would be on top. It will not sag down. If it sags down, then it will hit all the vehicles and the people moving down. So that conductivity property is a very unique and differentiated product that has to be done. Then you have this copper conductors that goes to railways. It's also very unique and differentiated, OPGW that we supply. So currently, we have these 3 baskets that we call [indiscernible].

What is the percentage of premium right now?

More than 40% about 40% to 45%. Largely, this premium takes care in my domestic market. The standard products, which are there, the rest 50%, that we are exporting. And therefore, your -- the entire Conductor division profitability has gone so high. So, one, you are selling premium products in the domestic market and the non-premium product you are exporting and then that.

Export premium products, don't have scope?

It has scope. But currently, even the standard products are have that margin. Because when you design the line, you can design the line even with a standard product. Premium products are also there, but you can design the product with a standard line. And there, as I said, it's not only price. It's price, quality, reputation, reliability, risk management for which customers are able to pay a premium than the standard.

Sir, looking at your financials 10, 12 years. What has really changed from FY '19? Let's say -- the period between FY '10 to FY '19, period from FY '19 to let's say '20. From '19, 20, and then things have suddenly gone to the roof in '21, '22 and '23. Can you just walk us through what has really changed? Your margins were pretty volatile. Now you've got a top line growth and margins also being like almost about 30% plus. So what really transpired on this?

So basically, there's just -- If I had to sum up all the things that has happened, I will bucket into 3 things, which I was mentioning. One is clearly premiumization. Second is globalization and third is innovation. These 3 things actually sum up. And just to give you examples, in premiumization, you saw our Conductor business division getting that margin which are never there earlier. Because we have actually premiumized the products there. So we were there in the conventional space, and way back the management realized that if that's going to be the future of the conventional thing, the competition is going to be intact, and then unorganized players could be there, and there is no preference to organized players, and the same product can be manufactured by any supplier there. So we premiumized our product and therefore, we kept competition at the bay, and we are able to command a much higher -- we are able to penetrate a market which is not there. In fact, we are able to supply products which are suitable for the market there, and that has really helped us on the Conductor division there. Similarly, if you look at our Cable division, we are able to premiumize and innovate in terms of venturing to solar space and so as going to wind space. Very few players are there in the wind market in India. And if you see renewables, we are the largest manufacturer of renewables cables in India. So innovation has paved way here and globalization is because during COVID time, we took lot of all this UL approvals and we have the largest number of UL approvals as compared to any other company in India. And we are able to tap the opportunities coming up in the U.S. market. With that, FY '23, we are the #1 exporter of cables and wires in FY '23. So it's a combination of your premium products going into a combination of globalization that we are seeing there, 50% of the exports come from overseas, which used to be about 30%, 35% in earlier periods. Innovative products that is coming up. All this combination adds up, plus you see the macros are also [indiscernible] industry is growing with a lot of trust on renewables sort of [indiscernible] transmission line. We see metro lines going up. EV is going up. So the requirements on one side is increasing. Within our part, we are able to see -- keep your infrastructure ready to meet the requirements for the next year. Right now premium margin was -- the broke on premium margin of conductor started way back in mid-2005, and for the product to develop, to be able to hit the market growth -- if you see, we have given a transformation journey of a conductor division in the quarter presentation, where we started from what's happened in the last decade. So the premium product conductors was visualized way back in 2005, when the market was not even there. And it took us time to develop that product and finally in 2014, we launched it and now we are seeing continuous momentum there. So -- and that's why the tag line of APAR [indiscernible] tomorrow's solutions today, where we are able to look at what could be a solution for tomorrow and how we build it today. So theme of premiumization, globalization and innovation has actually changed what APAR was 10 years earlier than...

In this Specialty Oils, is other division? Just on that, can you give a brief what is the mix there how the volatility of margins and all...

Specialty Oils about 1/3 goes into transformer oil, about 15% to 20% would be auto lubricants and industrial lubricants, another may be 1/3 maybe white oils. And then we also have rubber process oil, we have some process oils et cetera. There, the margins are volatile because oil cannot be hedged. We buy oil on contract, in some cases, some time we buy on spot. And the selling prices change depending on how crude changes. So till that time, it depends -- profitability will depend on the selling price prevailing the market and your inventory cost. If you're holding inventory cost at a higher rate, then you will see actually margins coming down till the time that inventory gets liquidated. So if you see last FY '23, our margin swing from INR 9,000 in first quarter to INR 4,500 to INR 1,600 in third quarter and again back to INR 3,500. So we look at a 12-month margin per kL rather than looking at a quarter number. So we are still guiding about INR 5,000 to INR 6,000 per kL as a sustainable margin going forward.

One more like conversion -- time for conversion [indiscernible] crude purchase to blending?

Blending, yes, we do blending.

What is the ratio for premium and regular products?

For conductors?

Yes.

Premium products will be about 40%, 45%.

What is the ratio of -- percentage of government orders? [indiscernible]

So we have one slide that actually talks about where we are actually selling. It's also there in our investor presentation. Our customer mix. If you see this. Here it's Slide 12, but it's the same thing that we have in the corporate presentation. This is our mix often on the products that we have. And export is close to 50%. We have some industries and corporate, which is largely cosmetics, pharma, rubber where 16%, 17% of the APAR products are here. And there are very specific industry group like rail, defense, shipping, mining, telecom at about 8% to 9% of the product goes, and there are OEMs, transformer OEMs et cetera, thereabout 7% goes. Then there are these transmission companies in the [indiscernible] thereabout 5% plus 7%, 12% of the product goes. These are transmission companies, again, different than the electricity board. These are pure transmission companies, which are there. Renewables largely the domestic section, about 3% goes. And the Electricity Distribution Board, which is the state run distribution, there's about 1.6% goes, and then there are a few others.

Generally in exports, how does it work? Do you have distributors or you directly sell it to the client?

Both distributors and EPC, both we have.

Any new countries, which will be adding?

[indiscernible] number.

Because renewable asset is [indiscernible].

Yes. So already, we are at 140 plus some countries and the [indiscernible] number. So we're not restricted to any particular geography.

In general, is there a margin difference between export?

There is a margin difference because, as I said, people export, they not only look at a price, but various other things quality, reputation, mainly risk management appetite, all those things.

Better margin?

Better margins, even for the products that is low margin in India. The standard products has a better margin.

And within the regions also, is there a difference? Africa to North America?

It is actually, so last year, it all depended on the various requirements like the urgency to get the product there. So the price was different. But going forward, it will depend on their requirements and things. And also depends on the type of products they need, like cable will be some 1,000 products, which are there. So depending on application-specific products, things would...

Any thoughts on railway opportunity?

Sorry?

How will be the railway opportunity?

So railway opportunity is quite big, and we have been already supplying a lot of cables for railways that has happened already. Plus, we also see things like your metros coming up now. We see Vande Bharat new forms of train coming. We are almost supplying more than 90% of all the cables that goes into Vande Bharat trains. Then you will see high -- bullet trains coming up, freight corridors, et cetera coming up. So this -- and we would have already seen in this union budget, the spend that is happening on the railway infrastructure, station upgrades. So everywhere, we will see actually the requirement of cables and conductors will be there, at different time. And also on where the source to distribution, you'll see that thing, opportunity we are seeing in the railways as well.

And how about the defense? [indiscernible].

Yes. So we supply to multiple industries. Rail, you're saying. We have defense. We have shipping, we have mining, auto cables are there.

We supply to which all companies in defense?

So for defense, all these defense companies we supply.

Globally, what percentage of market share Chinese company would have? Is there any data on this?

We don't seem to be having that data [indiscernible] but you can actually look at U.S. imports possibly the data is there, [indiscernible] from where they import actually.

Who are the big Chinese conductor and cable companies? Are there some names who are listed or something?

Not sure about [indiscernible] but specific names I am not aware.

This Cable business, the retailization we're trying to enter with the brand, we have a brand ambassador. The cable and the housing wire, what is the strategy next year? Because that's a growing space.

Yes. So that's a very unique strategy we have to grow the light-duty cable. So we are largely in 2 states, even by FY '20, '21, largely in Kerala and Gujarat. Now we are exploring in more than 13 states, and we are going to a few more states in this year. We are actually creating a channel of distributors and retailers, and trying to increase our share of presence there. Again, we have a very unique and differentiated product, which is powered by E-beam technology, which is able to carry 50% more current than some of the other products that are available in the market, which means that it is much more short circuit resistance. It is [indiscernible] resistant. . These things actually are a very differentiated products, and that the USP that we are having, and that's what we are actually demonstrating to influencers like electricians. And once they are able to see this difference, the success ratio of people buying APAR Anushakti cable is much high then. Because once you put wire inside your house, you don't want to again redo your house. So if we're able to get this protection safety, it is very important to household. So it is E-beam cables has a unique property of having 50% more current than some of the other cables in the market. So that's the USP we have. And then as we said, we are this brand ambassador. So we are very focused on that particular segment of the business, and we are actually targeting some about 500 odd crores by FY '26. Currently, it is about 175 crores last year.

Retail?

Retail.

We will be competing with Polycab and KEI?

Yes. Correct.

So it will be -- INR 500 crores will be like low hanging fruit only, in housing wires? And the remaining cables, it was almost the exports and...

Domestic, yes.

Low tension, high tension.

Yes, yes, yes upto 66 KB.

That is B2B?

Yes, B2B.

Any plans for CapEx?

CapEx our target is about INR 400 crores in the next 12 to 18 months, 2/3 will be in Cable division, about 25% would be in Conductor. And very few CapEx we will need in the Oil division, there could be some maintenance CapEx.

So adding to his question about the railways this thing. If you see railways as one revenue source, what is your guidance? Like if we just consider orders from the railways and PSUs in general, What is your guidance like if we see only that because railways has a huge opportunity because it has just started. As you rightly said, there are many new trains are coming up. So already, you have capitalized like you were saying [indiscernible] new cables. So in terms of -- can you give some light in terms of numbers, like how much only railways contribute to your?

We don't give specific industry-wise numbers, we don't give that. But if you see the opportunity would be there as you see and you're seeing all these trains coming up, bullet trains coming up, Vande Bharat coming out. But we don't give out specific -- industry specific numbers.

Any ballpark figure?

What happens is some of this is also order-specific. So you may have 1 number now, the number now could be different. And they still grow disproportionately, whether on the lower side or on the higher side.

And in the Transformer and Specialty Oils space, which you have been dealing. Like what is your share in the transformer oil?

Transformer oil will be about 40%.

I think you will be the leader, I think.

Yes, we will be the leader. You will see about 40%, 45% will be our share in transformers.

[indiscernible]

Sorry?

Transformer oil, now we got some transformer oil that don't need this lubrication or something like that?

No, all transformers will need lubrication. It is like [indiscernible] working in there. The transformer will need that lubrication.

Who are the big competitors, globally for [indiscernible]?

So we have this, globally, we have [indiscernible] as a competitor. In India, we have Savita and Raj and different companies.

What are the globally new geographies you are like?

We already represent 140 geographies. We are just expanding.

But last 1 or 2 years with [indiscernible].

Last year, if you see Cable has gone [indiscernible] into the U.S. that's clearly different. And therefore, we see Cable business, I think was some INR 1,200 crores in FY '21, going to 2,200 crores in FY '22, going to INR 3,200 crores in FY '23. That shift has happened largely because export has exponentially grown. And that's what I said during COVID time, we took all the UL approvals and tapped the opportunity that was there.

So let's say, Cables in U.S. would have grown at what rate?

We were hardly present there till second half of FY '22. Second half, I believe H2 of FY '22 is where it started happening. Before that, we were already present in hte cable sale and most of...

What is the run rate now? Like [indiscernible] per quarter?

So it's U.S. We would be what about 65% to 70% of our exports of Cable will be from...

INR 1,500 crores would be export, sir? That is 3,200 crores is...

Out of that 1,500 crores is export, at 65%, 70%.

This could be a little pent-up [indiscernible] suddenly renewable [indiscernible].

So pent-up, it is pent-up and we expect to continue also because the renewable push has just started. This is not a pent-up that we expect to come down.

[indiscernible].

Yes. That's what has been happening. Plus -- so one is that is happening. The second thing is that the overall demand is growing up. We have never seen this kind of renewable push happening earlier. Solar, wind [indiscernible] we've never seen that happening up. And as I said, U.S. transmission lines, redoing has to be done. Infrastructure, inflation reduction, that talks about infrastructure spending there. But this kind of push has never happened in the past, plus you add all these geopolitical things, China Plus One and all.

Cables, when you supplying to utility in U.S., do you see Indian competitors like KEI, Polycab? or you see mostly friendship...

We have Indians also.

Locals also, but the Chinese we're not seeing.

It's there, but we are seeing gradual reduction, also the duty differential between India and China being there. So we see a gradual reduction.

U.S. has put additional [indiscernible] and number in U.S. actually what kind of investment they are like, they -- only transmission or the conductor, cable [indiscernible] what kind of budget we can expect from those?

So there is a lot of data available on spends, like global spends on renewables, it's there in public forum. And this -- we don't have an exact number. As of now, I don't have [indiscernible] kind of how much gigawatt of solar and wind they want to do, how much percentage of electricity to come from renewables is there, mainly in various electricity [indiscernible] and forums.

So renewables [indiscernible] talking about the transmission...

Transmission lines, as of now, I don't have it handy, how much they want to do. But their transmission line is the old ones, which are there.

Upgradation or whatever.

Upgradation [indiscernible] talked about, that's the only thing which is there.

So in India, incrementally is the transmission CapEX slowing?

It is increasing, not slowing. When you see all things, so many initiatives are being there, the RDSS schemes are there to improve the connectivity for distribution, then you have public transportation going out. Electric vehicles are there. We need to create infrastructure for metros happening everywhere, High-speed trains are happening. So this is actually...

[indiscernible] CapEx is not going down?

Sorry?

The power grid's CapEx?

So power grid is there, now it's all distributed across various states. So each state transmission companies also have role to play.

Cable business, the third one, what will be the growth target? Overall level...

Looking at about 25% growth rate in Cable.

That should be the fastest.

Yes.

Is this value?

Value growth.

Conductors will be 10% volume growth and oil will be?

5%.

So this [indiscernible] CREs for how many years?

We feel that a foreseeable future, it is that we see a long runway would be there exactly a number of years, we won't be able to say, but clearly, we see for the foreseeable future, we are able to get this 25% growth.

That means 4 to 5 years, we can maintain on that?

Yes.

Will the export to domestic and cables change a lot you think?

The mix will change. So we look at where the per unit margin is high. Per unit margin is high in exports and accordingly capacity will get diverted, it depends on where the profitability is.

But demand is there on both sides?

Demand will be there on both sides. So that's why we are also doing CapEx to increase our capacity and to optimally utilize our capacity, we see where the per unit margin would be high.

At this point, exports are better?

Yes, but even domestic market is also there. I find a lot of this renewable thing, the domestic margins are, so we also do domestic cables. It's just that where the product is commoditized, that's where the margins in domestic is less, and that's where it commands a significant part, like we talked about these conventional conductors, which is to commoditize your margins in India is less, but the same product overseas is at much higher margin.

In general, the conductors and cables required for a renewal project, are they more higher end than thermal project?

The intensity is just high there because you need different types of cables for the panels and then from the panel to bring it down. And similarly, in the turbine -- turbine that means around is there and there's a tower cable. So there's a lot of intensity of cable application overall, which is higher than the thermal.

Cable then for transmission, both the opportunities, will be there?

Yes. And then that has to then transmit to the place of distribution. So you need conductors there, you need again transformers. So -- and if you see our portfolio, it's all about conductors, cables and oil is 1/3 is transformer oil. We fit into that basket where this flow of electricity is needed.

Balance sheet on net -- net debt or net [indiscernible]?

We don't have debt too much on our books. Yes, it's very less, very low debt.

And the working capital cycle of this whole export and all?

So export, yes, bit high but overall, we have about 40, 45 days of working capital, net working capital.

One more on this, not on your company, but a lot of expansion is happening as we said [indiscernible] Any idea on that investment? [indiscernible] cables and all? I am not talking about [indiscernible] because of this whole growth story...

Macro thing, we're going to be there for all that this is not you think only to APAR and macro environment and [indiscernible] there for all the cable companies. Tell something or [indiscernible] if you have any questions we can start of it [indiscernible]. So APAR Industries, we are in the business of manufacturing the products that cater to electricity transmission. -- transmission from the place of generation to place of distribution. So power is generated at a particular place, it gets utilized at another place. And there are products that are involved into this transmission. So we -- we make products that help transmit transfer electricity from the place of generation to place our distribution. We basically have conductors, cables and oils and our turnover last year was about INR 14,000 crores, 50% came from conductors, about 20% to 22% came from cables, about 30% from oil. We have about 50% from -- coming from export business. And we have manufacturing facilities in Mumbai, in Silvassa, in Middle East, Gujarat and also in Orissa. Certain macro environment things that is conducive to our industry, basically there's a lot of trust you see in the renewables front with Solar and wind energy picking up and these forms of energy calls for product -- products and intensity of products is much higher than earlier. Globally, also, there's a lot of trust on infrastructure spending happening. Different countries have been spending more on public transportation, on infrastructure building, transmission lines are developing which acts as a benefit to our industries. Government in India, there's a lot of schemes coming up. We have this RDSS schemes to improve last-mile connectivity and strengthening the distribution network in the power sector. Electrification of railways is happing in a big way in India. At the same time, we are public transportation and mobility. So all these cases are conducive to our industry. Some of the geopolitical things are also favoring us in terms of China Plus One happening, which is clearly an advantage for new countries including India and also our industry and our business, in particular.

Is that helping the export market?

It is helping us. It is helping us definitely because countries are looking at alternative vendors to China. So in some of the countries like U.S., the duty structure in China, import duty in China is much higher than in there some places. So you have this Russia-Ukraine war wherein the Europe is looking at alternative forms of energy going to renewable things. So some of these geopolitical things plus macro environment are conducive. At the same time, within APAR, a lot of -- internally, we have also positioned ourselves to tap the opportunities available largely to premiumization. So our products, we have premiumized a lot, especially if we do get the conductor decision, what used to be the conventional conductors a few years ago, a 40% of the business comes from premium conductors, which have a much higher margin than the standard connectors. We have entered into solar and wind cables. When it comes to cable division, these elastomeric cables have a much higher margin than the normal power cables. We also looked at globalization, where our export mix, which are about 25% to 30% earlier, now has reached almost about 50%. We have a lot of approvals from countries like U.S., who have very stringent audit mechanism to grant approvals. So globalization premiumization has helped us. In addition, innovation also is very core to us. We've ventured a lot of innovative products in the conductors, in the cable division, also in the oil division. Whereas in the renewables, as we talked about, that's moving space there. So within APAR, you can see a lot of premiumization, globalization, innovation has been happening. Macro environment is conducive and also a lot of geopolitical situations are favoring us. So combination of all these things has acted very well for us in last financial year FY '23. And of course, we feel that some of these things will definitely continue -- as we progress in the future. Now some of it could be that -- could not diminish like, for instance, last year, people were willing to pay a higher price and our margin was very high because customers in U.S. wanted to stock up their warehouses. So they were willing to pay a high price for the product. The freight rates were abnormal. Some of those things may not continue, but a lot of macro, geopolitical and internally, what changes we have done in APAR are likely to continue as you see this business on export side.

Are you seeing any sort of slowdown was happening in Europe and U.S.?

So basically, the slowdown we are seeing, but it's going to be momentarily. It's just going to be for a quarter or 2, because last year, what had happened is that due to pent-up coal demand, a lot of customers were stocking much higher. And you all know there were the supply chain issues last year, with the freight rates went 10x higher. So people wanted to keep the stock in their warehouses. So they were willing to pay a much higher price for the products to be delivered at their warehouse last year. Now with all this COVID things settling down and its freight rates normalizing, we suddenly found that the inventory levels are high, so that's where the deinventorization is happening. And it's slow across many other sectors, of course you may also be reading this and it's true for many sectors, and it's something that we expect maybe a quarter or 2 phenomenon, wherein margins may get neutralized and we may have some deinventorization impact of that. But in long term, things look quite positive for our industry with these developments.

So the U.S. and Europe, for example, inflation is going up and the economy is potentially slowing. You're not seeing it for order on the back of that, for restocking.

Not on that. We are only looking at deinventorization, because the economy and -- they have a very strong push on renewal, infrastructure. Like in U.S. they are passing this inflation reduction act, about infrastructure spending there. Also, Europe post this Russia war, they wanted to have an altered form of energy. So they are pushing very strong on renewables. So these are the areas that we see the focus is going to be there. It's just the impact of inventorization is what we feel that maybe a couple or 2 quarters could be there. But otherwise, the positive side looks quite robust.

So a couple of renewables and all of this. I mean, we keep talking about the environment.

It's largely solar and wind.

But what kind of revenues will you now be generating from the renewal segment?

See, if you look at cable exports, close to about 65%, 70% would be renewables of the cable exports. And out of that, cable domestic business, we are about 20%, 22%, which should be in renewables.

You spoke about the China pacific. So how is it playing? Can you give some detail on it?

It's playing out in terms of customers wanting alternative vendors to China. So that's what largely is playing out. And countries like US, their duty structure -- important duty structure from China to U.S. for some categories of products in cable and conductor, the variation is at 15% to 20%. Same product imported from India as compared to the product that's imported from China, duty variation is as 15%, 20%, so that's what it's playing. Countries like Australia, where the duties in India was high as compared to China, now is at the same level -- 0% percent duty. So that's how it is playing.

Duty differential is 0%?

Duty difference is 0% in Australia. But in the U.S., we have an advantageous position about 15% to 20%.

Out of other verticals, oil is one. So what has happened in the history so that the Indian companies have went -- have grown so fast rather than the international companies? What has happened in the oil segment as well?

Which particular segment you're saying?

The oil segment.

So oil particularly, if you see our volumes have been about 5% to 8% a year. That's what it has done.

What in the business change it has happened? What led to this growth?

So I think if you look at the oil business, about 1/3 is transformer oil and transformer oil is used in the transmission. So as you see more transmission lines coming up, more electrification coming up, you need transformers for stepping up and stepping down the voltage. So that's purely linear with the transmission line that is coming. That's about 1/3 of the business. Apart from that, we also have industrial oil, we've process oil, which goes into various industries. So if your industrial output goes up, which is what we are seeing, various manufacturing industries, various tire manufacturing industries and than other industries where machineries are involved, where you need a lot of metal working fluids and all. So as your industrial productivity goes up, the requirement of these lubricants that goes into these machines go will go up. And that's where you see growth coming.

So the consumer [indiscernible] recurring?

We are recurring.

So is there a regulatory of growth on that [indiscernible] how should we think about the growth there?

So for the oil segment itself, we are looking at a growth of about 5-odd percentage, of which now we feel that some of this transformer oil will be much higher than that, and some of it could be less and it is at about 5% to 6% growth.

I think one of the large players [indiscernible]. They had some significant disruption where a lot of share was lost. So I am curious if you were able to beneficially now.

No, I am not. I am not aware.

There's another company called [indiscernible], which is also in that space.

Yes, there are many companies -- a lot of companies but I'm not aware of what you are specifically talking in terms of that.

Specific context was that last was market leader in [indiscernible] and they were acquired by a European dealer who couldn't manage their [indiscernible]. So then that business had shrunk. So I was wondering if you've seen tailwinds of Raj loosing market share, because that was a very sizable business of well over INR 2,000 crores, INR 3,000 crores.

Our business has been growing sort of -- I don't know how much to attribute because of this fact or because of various. We have been growing our business year-on-year basis.

[indiscernible].

Bought a 1/3 of the total oil portfolio.

So we've been focusing on the premiumization a lot, like what we have done in conductors. Any strategy for the oil segment?

So oil, we have a strategy for each vertical, different verticals have different applications. So if you see transformer oil also get different grades. We have special grade and we have standard grade. Some goes into power transformer, some goes into distribution transformer. So the margins are different there. So special grade is a premium product over there. So this has been there for quite some time. This is not suddenness. It has been for -- this has already been premiumized in the case of transformer oil. Then as the industrial oil, there's no area of products that goes into that. We supply oil to the rubber industry. They are process oils. They're exposed into the cosmetic industries. Auto lubricants is a big area that we have brought up for engine oil. We have a brand -- license brand from Eni Italy to supply it's Eni brand in India. The engine oils are there. We supply all the greese, lubricant. So it's actually wide -- and to a large extent, a lot of this premiumization that we are seeing has already been done in that thing in the past.

So we started to push or scale up the lubricants side?

It's already natural. So now it is just about growing volumes and growing volumes profitably. So that's what we do for oil.

In the conductor space, can you list out a few international competition?

International, I guess, it would be this Midal Cables from Bahrain and Southwire in U.S.

And in terms of capacity also, they will be having more capacity than us or we are the largest?

So we are the largest in terms of aluminum and alloy conductors, I don't know about their capacity, how much be that related to us.

Last year, obviously was a very good year for you, your top line jumped quite a bit, your margins jumped quite a bit. Do you accurate it is primarily to get extent of the export market where you said the stocking happened.

No, so there are 2 things. So one thing is that what has changed in last year is that if you look at -- largely been driven by the conductor division, where the portfolio has become premium and exports. So even earlier term, the premium proportion was increasing. Last year, we also got opportunity to export at a much higher margin. So we sell the premium products in the Indian market, having a very good margin, about 40%, 45% of the products are premium. And the standard products, we are actually selling in the export market. So the standard products selling the export market is at a much higher margin, because overseas customers, they not only look at your price, but they also look quality, they look at reliability, they look at whether the company has a good risk management appetite or not. So there are multiple teams that they see there. And one part of it is also the stocking up of that, but that's just one part of it, because the other part about products being sold in the export market, standard products having a better margin there. So it's a combination of various things that has led to the FY '23 being soft.

This one going with this is traditionally, your margins are around 7% plus/minus. The EBITDA margin is now at 9%. Is this sustainable going forward? Do you see it reverting back to 7%?

What, so what we look at it is when you look at the margins, we split into division-wise, and for the conductors and oil, we measure it on a per unit basis. The reason being is that if you look at percentage to sales, the aluminum and copper price fluctuates, the oil price fluctuates a pass-through for us. Then your ratios get distorted. Aluminum price is increasing, the EBITDA constant, the percentage looks low. So if the price come down, the EBITDA looks right. So typically, we measure it on a per metric ton basis. So the per metric ton in conductors used to be about 10,000 per metric ton around 3, 4 years ago. Now in FY '23, it has reached to almost 44,000 per metric ton. And that is something in terms of guiding. We're guiding, it could be 25,000 plus some of the tailwinds that we've guided.

Can you repeat the numbers again, what was it?

3 to 4 years ago, it was about 8,000 to 10,000 per metric ton. Because of premiumization, because of export mix going up, in FY '23 is as high as 44,000.

That's huge.

Yes. So that's because the portfolio has got premium, so that's a big story, and we are talking all this in our corporate presentation, in our investor con calls. The big story is about that we were able to premiumize our conductor division, because of which it is so high as 44,000. Plus, we are also are exporting more. In the standard products, which are low margin in India, instead of selling in India, now we are exporting. So that is giving us a better margin.

So currently, it is at 50%, right? The export?

Yes.

So how much you want to take it to?

So no, in terms of our strategy, we are looking at expanding the per unit margin. If the domestic market gives me as high as margin will do that. Our focus is going to be on margin, not in terms of the mix of percentage. Whoever gives us the highest margin per unit, that's what we will prefer.

What's the differential in the export and conventional?

That's something is very difficult to give because there are some 500 different products.

For conventional?

Even conventional, there will be no less of product, because it all mix products. It depends on the design, specification. There's no thumb rule in terms of what could be the margin for the domestic business and what could be the margin for the export business?

But export ideally will be -- it will be highest?

As I said, it's difficult to give that.

If you want to look for the 3 years of line, last year, we had INR 14,000-odd crores on top line. Do you see that growing by 15%, 20% or any internal targets that you can share?

So in the oil business, we are looking at a 5% volume growth. For the conductor division, we are looking at about 10% volume growth. In the cable business, we look at about 25% -- 25% to 30% value growth.

Overall what do you do?

So it will be a mix of this plus the aluminum price difference. So it depends on how the aluminum and oil price goes volatile, because it all depends on that, because that's something we're -- it's a pass-through for us.

Orders are actually with the pass-through?

Yes, pass-through because we do 100% hedging of aluminum and copper. The moment we get an order, we do that hedging. So that price is fixed. We don't take any risk on aluminum and cooper.

Could you just list out top 3 challenges which you are facing in the business?

I think right now, the time is more about opportunities as we see. If you see all these macro opportunities, there are plenty. The thrust is on infrastructure spending and government schemes -- it's all this positive as this thing. We don't earn too many challenges. There could be momentary challenges in terms of this deinventorizing, but that's also we expect to last about a quarter or 2. But from that short-term thing, there doesn't seem to be any other challenge. Because we have done a long way to come out of those situations. As I said, now, if we did not do any premiumization in conductor, then possibly we would be at a situation where we had to worry about the competition and all. But after this premiumization of the contractor division, we have created a separate market for us. Solar or cable division, we have a range of cable that goes that we have. So we supply to solar, we supply to build cables. We have this cable that goes to railways. We have this cables that is going to shipping, defense, mining industries, lot of harnesses goes there. There's a lot of power cable supply. Now we have market in India, we have market in overseas. So the way we have diversified, premiumized and spread out, there is no single risk that we have across our product divisions.

Any CapEx plan in near future?

Next 12 to 18 months, our CapEx would be about INR 400 crores, of which 2/3 will come from the cable division and 25% will come from the conductor division. Then you just minimal CapEx -- maintenance CapEx in oil and some other maintenance.

How much is export and how much in India?

50% is export.

In oils, you also have a plant in Sharjah. Is there a specific reason for it for specific clients?

It helps us in terms of cost of reaching to the customers. A lot of these Middle East countries, we get the products in Sharjah. So the freight differentiates. In some cases, the freight from Sharjah to other place is much less than in India.

So you'll be sourcing the oil from Aramco?

Yes, and also U.S.

Sourcing oil from U.S. for Sharjah, as in...

We import the oil. So it comes to India, and it also can come there.

No, they make their own oil, right? So why would you want to import from the U.S. or in Southeast?

What we are getting is the base oil. We get from Aramco also.

And. And then you process it and...

Yes, you blend it with our own blending and additives, we do that thing.

Why company is not forward integrating to it? Using the base oil to -- because it's a single process, right?

Yes -- I'm not sure about that. I can't answer about that. But it depends on -- what I understand is that it's a residue of some form that comes and then it gets processed. But no, I'm not the right person to answer for that.

Right now, are you looking for any organic growth?

So it depends on our opportunity that. Now there's -- nothing is on cards, but it all depends on how opportunities stand out. But there's a lot we can do organically. If you see the kind of growth that we are seeing, there's plenty, we can do organically, the kind of product advancement that we're doing, with the kind of product tappings, we are doing. It's all organic growth, and there are much more PC potential in the organic space itself.

We will have the capacity. We have the....

Capacity we have and we also invest behind capacity. So wherever we see strong orders coming, we invest, we invest ahead of time to be able to meet the capacity. Capacity will never be a constraint for us. We can always build capacity.

What are the utilization levels currently?

Cables will be about 85%, 90% and similar would be in conductors. Oil, we don't have capacity constrained. We just spoke about 2 shift, and we can always increase it by another 1 shift.

So I have a crazy question. What's the difference between conductor and electrical cable?

So conductor is aluminum. So the -- what conduct -- the purpose of this conductor is to transfer electricity. So aluminum and copper are good conductivity. If aluminum and copper are just -- it's just aluminum and copper is for the conductor. But if you look at this wire that you see here, it has an insulation. So if the aluminum and copper is covered with an insulation material, then its called a cable. Inside this, as you see here, you will have a copper. So that you can actually touch it. You can see it. But the conductors, you cannot have conductors here. You can't touch the conductors. Conductor plus an insulation becomes a cable. So conductors are typically overhead. You can see conductors on the ground here without the -- nobody should touch it. But cable, you see every where, underground and in the office and everywhere. The conductor is actually a raw material for cable.

So is the cable segment, we still see revenue will be how much?

It's about INR 175 crores in FY '23, and we target to make it about INR 500 crores by FY '26.

Are we making margins at these levels in the B2C segment?

We are making, but we are also investing behind a lot of BTL activities, a lot of manpower, we are building up that. So the margin is getting reinvested back into the business. Because we are just -- we are just about 2 states, even a couple of years ago. Now we're expanding to 13 states. The channel we are improving. A separate team is looking at those things here. We had the first advertisement in Women's Premier League. Sonu Sood is there as a band ambassador. So the money is going back to build the brand, the channels and the infrastructure space -- it's going to be growing business every year.

How has been the response so far?

Very good. So this product has a USP in terms of differentiators. It is actually E-beam cable, so -- E-beam wire. So it has 50% more current carrying capacity than any of the other wires. And it's melt resistant, it is short circuit resistant. So that is what is a premium benefit it has as compared to the other buyers. So we are actually demonstrating this uniqueness to the electricians and the people -- the success rate of people buying is much higher and they actually see this. About INR 175 crores. But then as I said, the margin is going to develop the brand itself, and retail activities and channel expansion and going to fund the brand itself.

You stated there was slowdown in the conductor business in the export side. Was it only the export -- in the conductor business or as well as the cable as well.

Conductor and cable and that too largely in the U.S. We are seeing U.S. doing this destocking thing. It could be there for about a quarter or 2, we expect. So it's been conductor and cable for -- momentarily for a quarter. We don't anticipate more than that, because these have huge spending there. And also possibly, they may be expecting the interest rate to come down, they don't want to lock in at such high interest charges there. So I believe that by that time, they should be able to pick up further investments.

So for the company, can you just give geography-wise the export breakup? How much is U.S., how much is Europe or Australia?

The U.S. will be a bigger portion of that, almost, as I said, about 65% of our exports largely -- cable exports goes to U.S. In the case of conductors, we got 25-odd percentage total conductors will be U.S. And we also sell in Bangladesh. And there is Australia is there. Specific numbers, I don't have ready at the moment. But no, these are the large markets and then the entire oil goes to Middle East and Africa, and there's a 140-plus countries where there is still different grades of oil.

So intervened also, in the export, growth will come from these or we are targeting for?

Already 140-plus countries.

So is that one specific region, like Europe or something like that?

It looks the pan global. If you see now, this infrastructure and these things are happening across the globe. The U.S. is there. We have a lot of metros coming up in Australia and Latin America. Europe will go into a renewable thing. So it's not going to be a country-specific phenomenon nor is going to be your specific -- it would be short-term mismatches some time, but if you look at long term, it is going to be pan global and over a longer period of time. That's the runway that we see.

And the demand in the domestic market -- so in the call, Kushal bhai was quite bullish on that. So what is driving this?

Same thing. If you see -- a lot of schemes are coming up. You have the RDSS scheme that is coming up in India. Then you have this public transportation, mobility space going up. Railway is getting so much spending thrust, which is there. Electric vehicles are there, you need so much conductivity, so much electrification thing. So transmission lines are setting up new cities, the requirement of electricity is much higher than we don't know what it can come. That's where all the premium conductors are helping us to get more supply of conductors into the city than what can conventional conductors. So if you look at this thing, the domestic demand is very robust. So if you see industries growing. So if the industrial output is more, the lubricant volume will go. So now we are all talking about per capita GDP increasing. With all this thing, your industry is manufacturing is going to grow up, you will see all the related products expanding. So domestic demand looks very robust at the moment.

And just this HTLS cable. Do you see export demand also picking off for this?

We can. So as of now, people are buying more standard conductors, but HTLS conductors also can be sold.

On the cable side, are you all competing with KEI and Polycab?

Yes.

There's competitive intensity in the domestic market. So these high-end products, do we see competition of theirs also?

Competition is there, but for premium products, the competition is much less, because it's not something that can be easily manufactured. You see on our corporate presentation, we have given some competitive advantages of this conduct or you would have seen this slide in the corporate presentation, where for the premium products, what are the barriers to it? Or export products also, what are the barriers to it. So there will be competition in some other good organized players but not from the unorganized segment, because there are a lot of competitive advantages that we see in all the 3 divisions that we offer.

If you could list 1 or 2?

So if you see the export thing where the customers are not only -- in India? Here, we have conducted -- Sterlite Power and then I also talked about Midal cable is also there from Bahrain. And cable, we have all this. So I am not going to talk about it. Oil also, we named few, Savita, Raj, and Gandhar [indiscernible]. Nynas Is there globally.

Any guidance for the next 2 or 3 years?

So guidance on oil is that we are looking at a volume growth of about 5%. Conductors, we're looking at volume growth at about 10%. Cables in terms of value, we're looking at about 25% volume growth.

So this is for the next 2 to 3 years.

Yes. Largely, yes. That's what currently we're looking at for medium to long term.

On the renewables side, have you had any orders to export?

It's all exports, largely exports. Almost -- so out of the U.S. exports, a large proportion is into the renewables only, 70%, 75% is renewables or the cable exports.

Going forward next 3 to 4 years, what would be your top 3 priorities?

Top 3 priorities would be -- the priorities that we just laid down, which is now focusing on the premium products and improving the margin, because we feel that the market -- but it would be focused on that because what's going to happen is that you will see the demand will be strong, but we don't want to focus on where the margins are higher. Don't want to get into places where the volumes are high, but the profit is marginal. Secondly, to leverage our core strength scenario, this renewable space that we have. We have a very strong wind manufacturing capabilities, that's something we'd like to push more, very less competition in the wind space currently. And this -- the range of products is so wide that we want to improve our global space. Like U.S., we just ventured 1.5 years ago. There's a lot more opportunities that will come by getting into newer markets and newer products. And also, synergy between the conductors and cables. Because now we've seen the cable is also going to customers in U.S. Conductor is also going up and transformer oil has also gone. So now we would like to create a synergy where now -- where cable is sent, whether there's an opportunity for the conductors. And therefore, is there an opportunity for the transformer oil. Because all these 3 are stitched and in linear proportion. So we can actually cross synergize our products.

Transformer oil -- is that -- what percentage of your oil is your just transformer oil?

1/3. You know, that is where we would like to prioritize there. So even today, we do that. Like, if any significant order we are getting in 1 sector that communication happens to the other divisions, so that now, we can pitch for. But premiumization and innovation, of course, will continue. We have been innovating products for that. Now today, we are at this stage where a lot of competition is away. So the same innovation we'll do. So that now in the next few years, we are in that always ahead of the comp.

If given an option, what you'll pick for -- higher volume or higher margin?

Higher margin, obviously. Volume today is not a challenge for us. So volume -- if you look at our oil business, around 3, 4 years ago, we actually cut down a lot of volumes to improve the per unit margin. So if you see volume growth, take a 5-year CAGR for oil business, it will be flat. But the quality of our customers has gone.

You have EBITDA breakup between 3 divisions?

EBITDA for conductors is already there in this presentation, about INR 40,000, INR 44,000. There in our investor presentation, corporate profile, everywhere is there, earnings call update is there.

What's the plan with Europe, of course U.S. is also important, what about the Europe?

Approval that is needed. We have applied for that thing, and we feel that the renewables would be a very big market in terms of Europe.

What's your current exposure to Europe -- revenue from exports? How do you expect it to change?

So we expect that the renewables, the solar and cables would be a very big push there. So already, we are seeing that companies wanted to -- they are importing a lot of solar panels. Once they do that thing, then the wiring and those things will happen. So Europe will be a very big market when it comes to use of renewable, solar and cables.

And are we competitor? And what's about China on this, exports from China?

I believe China exports may continue, but we will also be competitive there, because the requirements will be as huge, because they want to get into this renewable, so requirements will be there. Then if China is there, we believe that we'll also be there. We're also already getting -- we're already supplying cables to Europe, so that we feel they will continue, and we will actually grow.

What's the Chinese difference between the Indian and Chinese [indiscernible] and Europe?

There are so many types of cables. It is very difficult. There is no thumb rule there. We can't put that in. But we feel that we are as competitive as the Chinese.

You are into optical fiber also, right? So what is the outlook over there?

Currently, we are just about INR 200 crores there, in terms of revenue, but that's an opportunity we see very strong in the coming years because with all this IT data centers coming up and now the network connectivity increasing, that's a very big opportunity we see going forward. So -- there's a separate team who looks after that where to grow that vertical. And then we feel that will be a business to gradually try and add it there.

But there are too many competitors in this space, like Polycab and KEI.

So they're not in OFC. They are there in the power cable. OFC has Sterlite Technologies, HFCL and those types of things.

Polycab is there. Very small portion is coming.

Competition will be there everywhere, but what's going to happen in the cable market is that the market is going to be huge. And we don't want to really worry about competition. It is there for everyone, because the market is going to be huge.

But is that [indiscernible] to your power significant to telecom cables?

So what we have a unique synergy is that we have -- we can also make a hybrid case, which the OFC has [indiscernible]. Because we are into the copper and aluminum business. Copper and -- there's something that -- hybrid cable is something that we can create a separate market.

[Foreign Language].

[Foreign Language] conductivity and the data [Foreign Language]. So even today, if we have this OPGW, which does -- for every tower, you see we need an earthing [Foreign Language] -- so earthing actually brings on the ground. So there, we also do an optical fibers, so that data transmission and earthing both source together. Same thing can happen here also. So it's a hybrid cable.

Can you margin by segment -- by each segment?

So we actually talked about the total margin itself. But directionally, I can tell you that some of these elastomeric cables will have a higher margin than the power cable. Export will have a higher margin than the domestic business. The transformer oil will have a better margin than some of the other freight oils. But overall...

Transformer oil [indiscernible] kind of margin. They are on the higher side.

As I said, we'll be on a per kiloliters. Percentage will not give a right figure. Our 5,000, 6,000 per KL that is the rate. And oil, what happens at cannot be hedged. So you will see different margins in different quarters. You need to actually see the 12 monthly number to see what is the picture. Because if the oil price is high and if you are stuck with no inventory, the margin will be very high. If the oil price falls, then you stuck with high inventory, margins come up.

How to derisk that inventory bar?

There is no way to derisk, because it cannot be hedged. So the only way to derisk is just to keep unlimited inventory.

You sell on spot or you can do long-term contracts?

No, we do on spot -- sell is on spot.

Both spot -- both transformer oils and power oils, everything is a spot market.

The only way to do derisk is to keep inventory at the minimum, which we do -- about 2 months -- see, this does not affect, because if you look at a 12-month period, it neutralizes actually. If you just look at last year, first quarter was 9,700 per kiloliter, then it went to 4,500 in quarter 2, then it went to 1,600 in quarter 3, then it came back to 4,500. So somewhere, you'll get a very high margin, somewhere you'll get low and then it just gets average.

How confident are you of maintaining this 28,000 -plus EBITDA in conductors?

Conductors, yes, we are very confident, because the product mix has changed. The conventional products, which were there, we are with HTLS, we have OPGW, we have all, but product mix has changed. The 25,000 is the base thing that we can do. We can do plus that, as I said, all the margin we are seeing is 25,000 plus tailwinds. If you see first quarter, we were close to about 38,000. That tailwinds will come because all this macro geopolitical things that we talked about, those would favor us, but not -- 25,000 -- the reason why it has come is just because premiumization of the product. If you look at our transformation journey of conductors that we've elaborated in the investor presentation, in 2014, we were largely conventional conductors. And now the share of premium is going to be back to 40% -- that's the strategy that was done during that time because of what we are reaping the benefits now currently. You want me to give you a brief background about APAR or you are familiar with the company assets.

We need brief background in the last [indiscernible]?

As you know APAR, we are into the business of manufacturing products that caters to electricity transmission. About 85% of our products goes into this particular transmission business. We have 3 divisions, broadly conductors, cables and oils. And total turnover last year was about INR 14,000 crores, 50% came from conductors, about 22% came from cable and about 30% came from oil. We have manufacturing facilities in Mumbai, Silvassa, in Sharjah, Orissa as well as in Gujarat. About 50% of our products we are exporting and that is an initiative that we took to expand our export proportion, of 50% of the products we export. A lot of macro environment, economic factors, which have been conducive to our business in the very recent last 1 to 2 years, and some of the reasons are -- due to which you are actually seeing good results in FY '23. So -- there's a lot of thrust on renewables when it comes to both Indian market and the global market. The countries and the nations are looking at increasing the renewables spends and want to push towards those renewables over there. A lot of infrastructure spending is happening. It is happening in some of the developed countries, developing countries, a lot of transmission lines are being relayed, which actually throws up opportunities for the power industry. The Indian government is also -- there's a lot of schemes coming up where things like RDSS schemes are there, our rail network infrastructure is improving, a lot of metro trains, fast speed trains are there. So in the Indian government also, there's a lot of initiative to improve your infrastructure requirements that is helping us from a macro point of view. In addition to that, there are a lot of these geopolitical situations which are favorable currently. This China Plus One is really -- is a very advantageous positions for us. You have Russia and Ukraine war happening. Europe is seeking an alternative to energy. A lot of push towards renewables. Those are beneficial to us. And in the midst of all these things, even within APAR, there is lot of strategic improvements or I would say [indiscernible] that has happened, which has led to this performance for instance. So a lot of focus within APAR has been on premiumizing our product portfolio. So if you look at our conductor division, the profitability per metric tonne has increased considerably from what it used to be 3 years ago, which is the result of purely premiumizing the product portfolio.

Still you are very lower.

Yes. So I'll come to that. I'll come to that thing. So that's purely a reason of premiumizing the portfolio.

So what do you mean by premiumization?

So what we mean by premiumization is that to go back 7, 8 years before, the conductors that we are actually selling was largely convention conductors, which is now ACSR-type conductors, which are not so difficult to make, which can be done by a lot of unorganized players also. And it had -- but it had limited current carrying capacity. But if you look at places in cities and urban areas where the requirement of electricity is more, you cannot carry high transmission on the conventional conductors. Which means that if you in Mumbai, you want more electric current inside Mumbai, the supply of electricity into the city has to be more. So either you create a parallel infrastructure, which means either you create new towers, new write-off way, which is no practically is difficult or in the existing towers, you had to remove that conductor and put a high transmission conductors. So this high transmission conductor is what we call is the premium conductor because it has in the same tower, you can actually transmit a much high electricity within the same infrastructure which is. So it's very -- it's not that easy as I said, because your conductors has to be designed so that there is no pressure on the tower. So very high transmission relentlessly flowing within the same tower infrastructure and the towers should be able to withheld that high transmission, because these all towers are all built for the conventional conductors. That's where the specifications and the design, the technical know-how of it actually is so relevant. And we have been pioneering this HTLS, which is premium conductors, which is able to transmit such a high current within the same towers, we are going to pioneer them.

In the layman words, what does that...

In the layman words, it is just that very high voltage of current.

What changes in that? More copper or...

No, the formulation build out metal completely is different. So it's true that we have a composite core, which is inside, which actually holds this thing. But the formulation build-out metal is completely different than the conventional conductors. And you need actually very different equipment to actually put the conductors there. Because these conductors can have go over in way lines or [indiscernible]. It's not difficult for anybody just to put over there, because every where the transmission will happen at a fast speed. The towers should be able to be withheld it. So no, it needs all the sophisticated equipments to kind of reconductor. And also in places like Mumbai, you can't have power outrages. So if the line is there typically is [indiscernible] live by. So that's the specialty of this.

And that outside selling price. How does it defer?

It is a premium product and with margin that you see increasing is because of this premium on that income.

It's a covered conductor right?

No, it's not covered. Yes, that's a different product on innovation, that covered, but this one HTLS is not covered.

Is HTLS I think so in India. How much demand is there? In [indiscernible] are demanding it now?

So all the transmission companies -- we are selling to our transmission companies. And especially it is used more in urban cities where the concentration of the demand is more and the supply is less.

So I'm saying suppose INR 100 worth of tendering happens for conductors. How much of that happens for...

So now it is increasing. So this thing is started way back in 2014. And the implementation of this product started way back in mid-2000. That's where the management of APAR's decided that the conventional conductors cannot be the game of the future, because it's getting too commoditized. Margins are going to be less. It's going to be a pricing. Unless there's a differentiation you will never be able to cross to overtake the market. And therefore, the work on this has started to be back in mid-2000. And finally, by 2014, we are able to deliver that product. And until there even 2014, 2019, the volumes were less. Now we are seeing a...

[indiscernible].

Sterlite power. We are the only company.

Is there anything -- in terms of [indiscernible].

So there is no -- the entry barriers in terms of the capability [indiscernible] because this -- as I said, if you see you here -- there's a slide which is there in our corporate presentation. It talks about the competitive advantages of conductor in the premium product. If you see how this technology and knowhow involved in the product design is actually a barrier entry to competition. It's not so easy for and a small player to replicate this product where this talks about special streaming mechanism, this equipment to protect the core. Because you -- despite the high transmission, you don't want the conductor to sat down because there will be vehicular movement, people going there. We still want the conductors on top, right, on top there, despite the high transmission. The customers look at life cycle costs. They don't look at reducing costs there. So there's a lot of fee specifications for the purchase.

What kind of transmission change you are doing in capacity of 400 to 700..

765 absolutely. Upto 765.

Which is conventionally 400 clearly that converting into 765. And then in terms of urban cities, what percentage you covered or what is the potential?

So potential is there. Research has just been started a few years ago. They'll be increasing. But now if you look at now pan-India potential will be...

Focus will be on urban cities right now?

Focus will slowly, slowly it will get into.

For example in Bombay city, 25% of the lines are converted or 30%?

I don't have the exact number, but if you see the number, this -- currently, we are doing it now in this play that is coming from [indiscernible]. There's a substation there when all these lines are getting converted. So it's an ongoing process there. I don't know the exact number of how much they have completed in Mumbai and how much they are potential. But this is something we'll be there because if you see that the demand of electricity is going to increase. So many things happening. Work from home is happening. The standard of living is improving. But you are right of base that your tower infrastructure is still there. Its an old infrastructure there. How to get more power is...

Can we say that at the cost of conductors, actually, the transmission companies are able to save on the tower cost. So otherwise, they would actually have a set of new towers. And also the whole right of way in...

Which is not practically possible. So that's where this advantages is...

Suppose any new guy who is trying to do this?

As I said, [Foreign Language], it's not only the product. It's actually the -- also the EPC work, which is involved. [Foreign Language] actually, we are doing like a [indiscernible] EPC work. Only for the tower reconductoring. [Foreign Language].

So that is -- means that -- why not competition coming there?

Because, as I just said, no, these advantages. So it is -- you use it people and manpower and the gangs to do a live wire reconductoring is not so simple. Railway station [Foreign Language], mountain [Foreign Language] you have to do a high transmission over there. It's not a simple thing for any unorganized fair to go. Of course, big companies like [indiscernible] do this and maybe some few more companies can come in a few years.

[Foreign Language].

Correct. So there could be a few companies coming. But if you look at the conventional conductor. [Foreign Language] bloodbath [Foreign Language] few more companies, a handful of competition there.

This is for 9-kilometer basis, you were to compare it with normal conductor vis-a-vis other conductor. What will be the value difference?

Value different is actually transferred into the EBITDA. It's a very ball park if you see 3, 4 years before, we were around 8,000 to 10,000 per metric tonnes. We're talking about 30,000, 35,000, 40,000 metric tonnes. So this entirely increase in FY '23 largely come from premiumization and globalization, which is what I was talking like macro, like geopolitical. Within APAR, we have been moving towards premiumization. Within APAR, we were moving towards globalization. Within APAR, we've been going through innovation. The combination of what is happening within APAR plus macroeconomic plus, geopolitical is all actually seeing this FY '23 results.

People are not buying from China.

China Plus One. So China Plus One is actually benefiting...

[Foreign Language] EPC player, I think it's -- that you have been because of that also.

Correct. Yes.

[indiscernible] Are there any foreign competitors here or I mean a really layman person like what staff someone from reporting [indiscernible].

So India [Foreign Language] foreign companies which are not there also, like actually banned so like how India can is -- in some countries, India is not able to export from those countries, India can't and that's our...

So if I look at the 2020 presentation or 2021. Our premium product contribution was also at 40%. But EBITDA per tonne was roughly INR 12,000, INR 13,000. Now also the premium product contribution is just 40% to 45%. But EBITDA per tonne has been improved to INR 55,000. So is there any role where you know because of the higher realization, because in the China Plus One or maybe the higher demand, which we are already witnessing across the different markets, that has given this alpha and is that sustainable?

The 2 things that has happened, is that one is premiumization has happened, second is that our export mix has also gone up. In FY '23, what has happened is that not only the premium product has being sold in India as it used to happen earlier. But the non-premium products, we are actually exporting, which earlier used to be sold in the domestic market. The non-premium products in the domestic market was with the lowest margin. What we are doing there is non-premium products, we are exporting. And the same non-premium products exporting is getting much higher margin because the customers don't only look at price there in export market. Unlike in Indian market, this is a price game. There they look at price, they look at quality, reliability, durability, companies having risk appetite, most of they are actually see. Plus, there was a lot of COVID pent-up demand coming. People are also wanting to fill up their warehouses. There are so many reasons that has actually came in FY '23. Some of it may not continue like COVID pent-up demand may not continue. People paying a higher price to fill up their warehouses may not continue. But some of the other things like the export opportunities, the demand going up there, China Plus One thing, those are something that will continue.

So this non-premium product is roughly 65% of the overall revenue.

About, yes, premium would be about 45%, 55%.

And export how much we are exporting this month.

45% to 50% export.

Everything is non-premium?

Yes, export largely is not -- about out of export about 85%, 90% would be non-premium.

Okay. And what is the data we are getting right now in the non-premium market?

That's really difficult because we don't have an apple-to-apple comparison. All the products are different. All the products are made to order. So you cannot compare this margin vs that margin. How much export will get. Home domestic will get. As I said, last year was also a reason where people wanted to fill up their warehouses, supply chain inefficiencies, freight cost were off the roof and got stabilized. So it's very difficult to put a comparison cost.

And this non-premium product we are exporting to which market majorly?

We're exporting to U.S. is there, Australia, Africa, many countries.

So because of the China shutdown, was there any incremental benefit that came to us in the export business and now the China is opening now...

Actually China shutdown, but China Plus One has an impact. Because China Plus One, the U.S. wants to have an alternative vendor other than China. So in the U.S., the import duty from Chinese product is some 15%, 20% more for certain categories of product as compared to import from it. So that's a clear China Plus One benefit game.

And that import duty will last till I mean...

As long as China Plus One is there, U.S. China tension will be there. And as of now, we are seeing it will be there. The duty change happened post COVID. Till that Chinese were dominant. This is what we are taking as a geopolitical thing. On all this, macro is actually favoring us unlike many players whether this geopolitical will be there. [Foreign Language] China shutdown is all favoring us. Plus there's so much focus on renewables, so much focus on public transportation. Most of this all giving way for our electricity this thing.

So just on the -- can you just detail like how renewable -- ship to renewable itself is growing demand for conductor. Because already, there will be some infra that is already set up for the conventional electricity.

So in renewables, what happens... Yes. So this -- you will need a different infrastructure because take an example where you can get solar power, where sun is there? Where you get wind, where wind is there. From that place to the place of distribution. Distribution place will be common. But that place and this place to do it, you need a special type of cables inside the wind turbine in which rotates the torsion kind of cables. And then there are tower cables, which now brings wind from there to the ground. Then from there, it goes to, let's say, a junction box, from there it goes from an inverter. It goes in this transformer.

[indiscernible] Is there more cable intensity or?

Absolutely more. [Foreign Language]. It's all different kind of cables, [Foreign Language] string cables [Foreign Language] low-voltage cables [Foreign Language]. And also you need a conductor also. Because if you were to transmit, let's say, this wind power is in a particular place in a country. From there to get back to a substation, you may need a conductor also or maybe underground cable also. And then from there, again, you need a transformer to step up, step down voltage. Then again, you have to go back to the blade of distribution. The intensity of this is to be used. Very different and very high as compared to thermal. Similarly, wind, there would be offshore wind, there will be onshore wind. See, the application from the place of generation to place on distribution, all our products will be there, Cable [Foreign Language], Conductor [Foreign Language], and also transformer oil [Foreign Language]. Transformer will be needed at every step-up, step-down stage and in every transformation you need transformer.

So simply, the intent is to be [indiscernible].

So we see this renewable push, application of products.

And just on the renewable like this is for [indiscernible] How does it work when in a nuclear is basically if the cable in the intensity higher or lower...

Yes. I'm not exactly aware of this thing, but that's also one form of your renewables itself. It also comes under the redeemable.

So India is already moving to the premium conductors. So why U.S. and Australia and other countries are still importing?

They can see when you're designing a new line, you can design that line with your conventional conductors as well as higher co-efficiency conductors. If already a line is there with your standard conventional conductor, you have put some 40, 50 years ago. [Foreign Language] time nobody had thought some high transmission would be needed. That line is designed -- that towers are designed for the conventional conductors. Now, you cannot put this HTLS without the same steel, then you have to go other designing thing. But you can put up a new line, you can design the way you need.

So here in the U.S. and Australia, right now, the deal is coming for new lines?

Whenever they want to change the line [Foreign Language].

so what is the new line infrastructure that is still to be incurred over the next 2 to 3 years in those countries.

There is no figure as such. We don't have an exact figure how much they're going to do that. Maybe there in some public forum, but no, we don't have the exact number of how much they are..

Commodity [Foreign Language].

Hedging [Foreign Language]. We don't keep any aluminum and copper risk open. The moment there's an order. [Foreign Language]. So whether it's a gain or a loss. Conductor or cable [Foreign Language]. Because it can not be hedged.

Sir, what we heard in the con-call of the other transformer companies. Like in the U.S., there is the refurbishment and the new -- anything -- the new capacity also coming on, that's why the transformer capacity -- transformer demand has been increased, right? So is there anything in the conductor side, the refurbishment of the old capacity is -- will be required.

[Foreign Language]

[Foreign Language]

[Foreign Language] You need a conventional conductor. Anyway, the transmission ...

[Foreign Language] Then you will be requiring premium conductors or the old conductor will be suffice?

Both depending on the application. You will need to -- if anyone work, the standard conductors are also there because [indiscernible] to transmit there. So you can design it with the standard conductors also. We need standard line transmission. So any transmission line will need that conductors, transformers, and different type of cable depending on what exactly is a requirement.

Coming to margins, you [indiscernible] whether you adding?

[Foreign Language] So margins [Foreign Language]. The journey from INR 10,000 to whatever INR 60,000 is a combination of so many things or INR 44,000 -- if some of it -- we even touch INR 55,000. It's a combination of premiumization. It's a combination of export mix going up. It's also, as I said, the combination of post-COVID pent-up demand. And because of this freight issue that we saw in the last year, people are just wanting to fill warehouse at whatever cost. They are not getting material. Even the freight costs are ten times higher, they wanted to have the material in their warehouse than having a lead time of 60 days. Containers availability was not there. So last year was a mix of so many things because of which the customers are willing to pay a very high price for the material in hand. Now what we are seeing is that some of these things may not continue in the future. Like freight rates have been normalized. COVID pent-up demand is all over. So those 2 benefits, we may not get. Also, we had also locked in prices and assuming a fixed price at freight rates and the freight rates came down. So we got a benefit. [Foreign Language] may disappear. That's why now what margins of INR 55,000, INR 48,000. That had various combination of that. But what can continue is macro. Because of [indiscernible] demand will be the renewable. [Foreign Language]. China Plus One would be there. Your geopolitical tensions could be there. So the overall infrastructure spending would be there. So that the macro demand would be there, which would be driving growth, which would be driving a better prices would be there. But some of things may go away. And that's the reason we are saying that if you want to still put a number, we'll get INR 25,000-plus tailwind. So we are not seeing to do INR 25,000. We are see INR 25,000 [Foreign Language], which is all the HTLS [indiscernible] plus I will get some tailwinds. [Foreign Language], it will depend on that particular situation. So on volume, we are looking at people are seeing so much -- [Foreign Language], quarters, momentarily that could be there, but we are looking for about 10% growth in volume.

Based on your feedback or you get from the [indiscernible].

Yes, you're looking at about 10% growth, year-on-year volume growth. And margins should be about INR 25,000 as I said, plus tailwinds. I mean, where it will settle it will really depend on execution of the projects there. The product mix that is coming and all those.

[Foreign Language]

That [Foreign Language]. So that looks a very abnormal number, but it could be somewhere INR 25 and above.

10% in conductors? 10% in overall company growth? Or...

[Foreign Language] only conductor 10%.

That is also domestic plus export.

[Foreign Language] conductor volume, we were at 10%.

[Foreign Language] Sunlight power. We tested this with the IR team. [Foreign Language] INR 40,000 -- INR 35,000 to INR 40,000. And we are already doing 55,000. So what is the...

Product mix will be different than [Foreign Language] product because all this will depend on the product mix. I think they are also doing a lot of EPC related work. So whether the product profile, and this is same [indiscernible] in large-scale EPC also. So it will depend on our apple-to-apple compare [Foreign Language]. Then only we will know how it is.

So that is actually the realization difference between India and foreign countries becomes important because premium conductor was anyway, I think it was 40%. Now it is 50%, 55%. So the premium part is not that much of a change for the difference in EBITDA to be there. Lastly [indiscernible] just to the realization[indiscernible].

No, it has to be both. Even premium conductors also -- it has actually improved because when you see year-on-year, we've also been improving the productivity efficiency of these. It is also improved on the margins. So a lot of plant debottlenecking we have done, which has also resulted in bring margin. So that also has a role to play.

On the non-premium side, if the realization will be 50% higher [indiscernible] the non-premium side.

Percentage wise, as I said, it's difficult to put that number. It will be definitely high, but percentage will depend on various things, right, what order it is. What time they need, urgency they need [Foreign Language] depend.

You mentioned the site some competition coming from Chinese on the last call.

We are seeing that. So Chinese will be -- are active. Where in U.S., of course, there's a lot of barrier in terms of differential, but non-U.S. They are trying to make a lot of imports. But what we also see is that volume growth would be there because so much spending there or they'll be active in the non-U.S.

And non-U.S. is 30% of the business.

Yes. About exports.

In conductors and cables.

So in cables, if you cut out export, we will be about 65% will be U.S., 65%, 70% U.S. The conductors if I'm not wrong about 40%, 50% of U.S.

Capacity wise now we are, increasing right?

We are increasing capacity. The CapEx plan is about INR 400 crores over the next 12 to 18 months.

Is conductors is growing?

Conductors will be 25%, INR 100-odd crores. Cables where we spend about 2/3.

[Foreign Language]

Conductor already, we are just about INR 2 Lakhs, INR 2.1 Lakhs, that will go over INR 2.5. Good capacity will not be a constraint because we'll always keep on debottlenecking investing ahead of the time. Even as of now, we are sufficient capacity available for FY '23.

Is the Chinese competition that you called out, Is it significant to be looked at or no.

So Chinese competition Yes, it would be there. But currently, in the U.S., we don't have that.

just on the long [indiscernible]. I mean is it like your'e required to the profitability that the business profit business that you were quoting earlier next say, 6 months back or a year back? Thing itself while quoting, what is the change in that..

so yes, we are quoting very aggressively because we want to ensure and maintain that particular market. So they are quite competitive in terms of quoting in the non-U.S.

Which all countries, they don't prefer which major regions. [Foreign Language]

[Foreign Language] China is actually gradually coming down. It's not a switch-off, switch-on [Foreign Language]. Now China, [Foreign Language] gradually, it should come. U.S. is very clear. Other country Europe [Foreign Language] we're not seeing that thing. So because like U.S., you are not seeing that strong, negative.

Your export, give region wise breakup.

No, no, we don't give that. But we've been exporting to Europe also [Foreign Language].

U.S. should be what portion of this.

U.S. as said out of the cable export, 65% will be U.S. And conductor as I said, out of the total export 40%, 50% would be U.S.

Can you just talk about your B2C side of the cables. How that has been doing and what are your plans?

This B2C, we actually introduced a very differentiated product there, in reducing cable, which is [indiscernible] buyers. And we are the only player in the house wire segment who has [indiscernible]. What it actually does is that it carries 50% more current than otherwise. So your -- it's more melt resistant. It is short circuit resistance, and it has been -- we claim it has about 50-year life of the product. So in terms of competition, also they don't have this technology. So as compared to the competition, we have this USP. And with that USP, we are promoting this product. We've hired Sonu Soodh as a brand investor. We went on air for the first time in the women's premier league over there. We were active in just about 4 states even in FY '22. Now we've already gone to 13 states, planing to go to another 4 more states. Our distribution and retail count has increased. And the way we are promoting this is actually by showing this demos to all this electrician meets and local [indiscernible] which you see here. The number of demos have actually gone up from 6,000 to 35,000. Electrician meet has gone some 8x to 9x finally to 3000. With that if people are able to see the difference between [ Anusha C ] cable and other cable, how it has 50% more current than question. And the success rate of people buying this is much higher. But once you put inside the wire -- wall, then you don't want to again break and everything rebuy. And if it is the requirement of electricity in the house is increased. So you need much more current carrying capacity. So that's the USP that we have. It's currently about INR 175-odd crores in FY '23. We plan to make it to about INR 500 crores by FY '26. And the channels and the distribution, everything is continuously increasing.

And what makes you think that other cable players will not compete to this line.

They can do that, but they're already at a very significant number. We are the very small player here. The other companies are in already thousands of crores, the they would want to do or not want to do is they need to see.

But if it's a billions of market then I'm sure.

It's the same market, but it's a different USP that we have.

[indiscernible]

Yes, it can. So it can be because it is the superior product, much superior product. But as I said, competition can also come into that, but whether they would like to do or because if you're on small scale, then it's easier to do that. If you already have a big scale and changing the product, so we need that manufacturing capacity and this E-beam is not so easy to replicate that. It takes sort of testing time, quality and the lead time is much higher. So whether competition be able to do that or not for that large scale is a question.

Is this technology used in retail some other [indiscernible].

It's actually used in all the solar cables and we were the first one to copy that for the house wire. So now that the solar radiation is there, you need that high current carrying capacity. And we are the first one to use it for the house wire business.

But then is it safe enough to be used in the house.

It's more safe because it will carry 50% more current. So it will be more shock proof and short circuit resistance. The short circuit happens when there are no -- the insulation -- increases insulation, it goes off, and that's why short circuit happens. And if it takes more time for this installation to go away, it's more safe. With E-beam wires, it has 50% more capacity to absorb current before this installation goes off.

What is the price difference?

It's about 2%, 3% percentage more, but we are not now focusing on the price we are focusing on increasing our reach. The awareness of the product because people are not aware of this different product and it will not penetrate.

Melt resistant means it will not melt?

[Foreign Language] at least you will come to know various things as compare to other.

Say, in the conductors for the premium products, we are classifying 4 conductors, HEC, copper conductor OPGW and CTC. HEC roughly contributes about 23%. So out of the 20% incrementally, what is the revenue contribution of this be.

Approximately, this copper would be about 15% and rest could be OPGW and CTC and all.

[Foreign Language] , if I look at the FY '23 [Foreign Language] because the changes in the product mix [Foreign Language].

All these three HTLS, OPGW and copper, all these three. Specifically exactly numbers, I don't know but all three would have...

And copper conductor is mainly going to?

Railway.

Is there any metric [Foreign Language] line kilometer install [Foreign Language] these many number of conductors will be installed.

Yes. This ratio, there will be some metric -- that conversion metric would be there. But no, one is railway [indiscernible] other is all these the fast-train and bullet-train that will come. So that is an opportunity going forward we have.

And what about the EBITDA per tonne were tuning the same across the 4.

It will all be different, but the weighted average will be what I gave us a guidance [Foreign Language].

Generally what is the [indiscernible] in terms of pass-through copper pricing, et cetera?

No, because we hedge it. We run a full 100% hedge book.

So whenever you the get the order you will...

Whenever we get an order, we hedge it. So that price is fixed. Delivery can happen after 8 months, 9 months whenever. But this is -- the price is back to back hedge. There's no risk on metal. We can't afford to take.

Revenue of INR 3,263 crores in cable. I think more are B2B only.

Correct. It is INR 175 crore, everything [indiscernible] [Foreign Language].

Sir, how do you see growth in the -- over the medium like in the next 3 or 5 years?

The same thing. On the conductor, we look at about 10% volume. Cables we're looking about 25% to 30%. Oil [Foreign Language] 4% to 5%. What we look at the medium.

Is there any other line of business, promoters of that.

[Foreign Language] so much thing to be done yet. [Foreign Language] the application of cables [Foreign Language] like on cable I tell you, we give it for solar, wind, railways shipping, defense, mining, automotive then there are some power car different cables, OFC, house wires [Foreign Language]. And I'm sure I'm missing out 5, 6 other cables because the opportunity so immense that [Foreign Language] so much potential. Conductors also that what we talk about conventions is one word. There are some 100 types of conventional conductors ACSR, AAAC, AL59. And within that, there were so many variants. This is a core. The electric transmission is core. And if you see the macro and geopolitical, it's all talking about that. Core is so strong, then why you want to...

[Foreign Language]

We put it back in the business.

How percentage of the revenue come from [indiscernible].

[Foreign Language] if you [indiscernible] slide that is there in the corporate presentation also. Government is largely transmission companies and this electricity distribution both. So -- we will buy 6%, 12%, 13% out of it, 12% is transmission companies. [Foreign Language], but distribution board is this only, that difficult board, which is where about 1.6 percentage. Transmission companies are very different. People earlier used to confuse us with distribution board. But if you see this distribution board we just said about 1.6% hardly.

Sir, top 5 sectors, which are growing at a double-digit rate according to you just like in cables, you talked about a couple of sectors of the end segment, but currently top 5 sector which are [indiscernible].

Solar, renewables, solar wind is growing at a fast pace. Defense, you will see growing at a fast pace. Then auto cables would be there. So many wiring needed inside the vehicles, electric vehicles [Foreign Language], that would be there. buses, electric buses [Foreign Language]. We supply to electric buses also [indiscernible] we supply. Olectra we supply. All the places where we see push average.

Electric vehicle is safe but 3 times [indiscernible].

So there is some wired network in the charging station. Charging station to vehicles that would be one thing. And then inside the vehicle will be multiple wire [Foreign Language]. We are supplying them. Buses -- Electric Busses we supplied. Vande Bharat Trains we supplied. Most of the cables in Vande Bharat is from our.

Just to famous question differently. I mean which are the top front sectors which are contributing to cable in terms of revenue.

As I said these renewables, I mean growth in exports. In 2 things in India, you can see, renewables are there, railways are there, and defense sector is there. Look that export is complete now. Your new markets like U.S. and where the opportunity is immense and we never tapped it earlier. U.S. you were practically in cables, you were not there until the first of FY '22. And this increase that you are seeing is largely because U.S. we are able to tap that market.

That is largely through distributor or...

Distributors or -- and to utility companies EPC.

The shortage [indiscernible] huge demand [indiscernible]. [Foreign Language]

Yes. [Foreign Language]. Transformer cost is very huge in this. And oil is used at the last stage [Foreign Language].

Over the period of next 3, 4 years when the demand is going.

The transformer is linear to your -- this transmission lines and basic area, transformer demand will also go up. [Foreign Language]. Conductor, table and transformer oil all 3 are same trend, but the for other. [Foreign Language].

You just mentioned of medium-term goal, talk about next year[indiscernible].

One year. About the same -- similar reason. See because I'll tell you this growth is not India-specific things or no one particular country specific thing. Nor it is a particular year specific thing. I mean renewable, they have some targets to do something by 2017, 2030, it's going to be a decade-long opportunity. The second thing is that it cannot be done by one country across the globe, people are doing. So what we able to witness in this decade is not a nation specific thing or year specific thing. It's going to be planned global and for the whole decade post [Foreign Language] temporary, there could always be destocking [indiscernible]. But the long-term looks very good. And therefore, you've seen across the industry, people are all spending capital. It's not a now where you see the CapEx spending happens. So it's a global phenomenon, over the decades.

Conductors [Foreign Language] in this year versus the last year [Foreign Language].

I think a lot of it has been happening in the last year in terms of getting into exports. So we just want to continue that momentum. [Foreign Language] but yes, of course, [indiscernible] quarter, there could be de-invetorizing and everything. Apart from that, we would like to just maintain that position.

Sir, [indiscernible] like -- on the margin front, are there [indiscernible] to improve it further?

As of now, we are guiding these numbers. But as we go further, we'll come to know how it is. As of now this number, we look at for the medium term. And at some point in time, we'll get scale efficiencies.

[Foreign Language]. In terms of the orders closed. [Foreign Language].

Cable looks so most fastest because cable market is [Foreign Language]. Conductors you cannot put here and there [indiscernible]. Cable and that's why you see 25% growth, we are ready in the cable. Now it's already, FY '21 [Foreign Language] INR 1,200 crores FY '22 INR 2,000 crore, FY'23 INR 3,200 crores, only added INR 1000 crore every year. Now we are still guiding at 25%.

These underground conductors. These you call as conductors or...

Anything on the ground and this is cable. Cable is not the conductor plus an insulation. So conductors can only be overhead, should not touch that. [Foreign Language]

[Foreign Language]

[Foreign Language] anything with insulation, underground vicinity is all cable.

[Foreign Language]

That's what we are guiding 10% to 12% over a 12 month.

Operating leverage [Foreign Language].

We'll get [Foreign Language]. But as of now, we have to see that [Foreign Language] 12-month period 10 to 12 percentage is the number.

Risk [Foreign Language].

[Foreign Language], but opportunities [Foreign Language]. Risks, like a lot of these things, we are also seeking internal things like China Plus One will not be opposite. The kind of variation that we have in the product profile. It is -- we are not concentrated limited to one particular thing. The products where we are, [Foreign Language] lot of stress is there. Solar, wind [Foreign Language]. So looks limited, at least at this stage. Momentarily, there could be also De-invetorizing and all this thing, long term looks [indiscernible].

[indiscernible] those cash [indiscernible] Or CapEx or something.

It's also used for working capital and also may be using for some part in movement CapEx and it's a collection that keeps on rotating the [indiscernible]. Okay thank you so much.