HFCL Limited (HFCL) Earnings Call Transcript & Summary

This call hosted by Prabhudas Lilladher Private Limited. [Operator instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Saumil Bhatiya from Prabhudas Lilladher Private Limited. Thank you, and over to you, sir.

Thank you, Ayesha. Good afternoon, everyone, and a warm welcome to you all for the HFCL Limited First Quarter FY '22 Results Conference Call. My name is Saumil Bhatiya and I'm from Prabhudas Lilladher. At the outset, I would like to thank the management for giving us the opportunity to host this call. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's conference call may be forward-looking in nature. Such forward-looking statements are subject to the risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to take -- not to place undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and a financial overview of the quarter under review. Now I would like to introduce you to the management participating in today's earnings call. We have with us Mr. Mahendra Nahata, Promoter and Managing Director; Mr. V.R Jain, Chief Financial Officer; Mr. Manoj Baid, Company Secretary; and Mr. Amit Agarwal, Head of Investor Relations. I will now hand over the call to Mr. Mahendra Nahata for his opening remarks. Thank you.

Thanks, Somil. Thanks a lot for your introduction, and good afternoon, ladies and gentlemen. Thanks to all of you for joining HFCL's Earnings Call for the First Quarter of Financial Year '22. The quarter 1 of financial year '22 results, press release and investor presentation are all available on the website of the company and on the [indiscernible]. First of all, I hope you and your loved ones are healthy and looking forward for better days ahead since vaccination drive has intensified and also with the beginning of relaxation of lockdown restrictions in many parts of the world. A pandemic has brought the entire country in severe difficulty and has forced governments and companies to relook at the traditional ways of doing business. I am humble to inform you that HFCL has withstood the test of time with sustained business operations for which I'm grateful to all our stakeholders, especially to our employees for wavering this situation and managing to keep the operations going without any disruptions. Our actions have not only helped in ensuring smooth business operations but has also led to the steady performance reported this quarter despite COVID-19 restrictions. Then, as you all know, India is the second largest telecom market globally. Telecom is also the backbone of digital economy and digitally connected India. Initiatives taken by Government of India, such as performance-linked incentive scheme august very well to boost the indigenous telecom business. This will help our country in long way in making the country a global hub for telecom innovation and telecom manufacturing. The scheme has been introduced at the most appropriate time. Not only the domestic industry is geared up for starting manufacturing operations at increased space within India but also a large manufacturing giants from across the world are increasing their presence in India. HFCL through its wholly owned subsidiary HFCL Technologies Limited has also submitted its application under PLI scheme. Coming to our growth drivers trends, the Department of Telecommunication has allotted additional spectrum for 4G wireless services to telecom operators and recently concluded an auction. This will benefit HFCL as growth in optical fiber deployment would be critical to further improve the quality of telecom services and support a surging mobile Internet demand as well as have potential to bring substantial social and economic benefits to consumers, businesses and still governments. Currently, India has a fiber-based network spanning across 28 lakh kilometers as against the targets set up by National Broadband Mission to deploy as much as 50 lakh kilometers of optical fiber by 2024. Union Cabinet has recently approved BharatNet to be implemented on public private partnership models. A tender for the project are to be sorted very soon. This network is projected to have demand of 12 lakh kilometers of fiber optic cable, comprising of both overhead and underground cables. This massive demand of fiber optic cable, coupled with the demand of associated transport and access equipment like Wi-Fi and optical access equipment presents tremendous business opportunity for the company, both in equipment and project segment. Secondly, Union cabinet approving 5 megahertz 4G spectrum for Indian Railways is a great opportunity for us. With estimated investment of INR 25,000 crores that project entails to provide secure voice, video as well as data communication services for operational, safety and security applications of national transporters network. A 4G long-term evaluation technology specific to railways, which is called 4G LTR, R means railways will be used for modernizing signaling and for ensuring train protection safety and while also maintaining constant communication between loco pilots and guards. This sends tremendous opportunity opening for us from this modernization campaign of the Indian Railways. As you all know, trial spectrum for 5G has already been allotted to telecom operators, auction for commercial use of 5G spectrum is expected to happen in the beginning of 2022. Rollout of 5G networks will result in massive increase in demand of optical fiber cable, related radio access network and other required equipment. This again presents an excellent market opportunities for the company. Your company will be present in a large number of equipment and services segment required for 4G network. To name a few, as you all know, we are 1 of the largest capacity of manufacturing fiber optic cables in the country, which will see huge upsurge in demand when 5G networks are implemented. Secondly, we started development of 5G radio access networks, both for micro cells and small cells, which will be requiring very large network -- numbers in the 5G network. We are in process of starting development of transport network equipment, like routers, front out gateways and switches, which are also required for 5G networks in a large quantity. In short, 5G network implementation presents a very attractive and large opportunity for your company, both in domestic and the international markets. As I have been maintaining over the previous earning calls, it is imperative for HFCL to keep pace with capacity and capability buildup ahead of these opportunities. Having made significant strides, towers advancement of technological and R&D capabilities, we have gone ahead with ramping up of our manufacturing capacities across our optical fiber and cable businesses. We are on course to increase our capacities across optical fiber, optical fiber cable and FTTH cable by 25%, 22% and 20%, respectively. These capacities are coming up at our Hyderabad, Goa and Chennai plants. Estimated commissioning dates range from Q2 to Q4 of financial year '22 for various products. The Hyderabad facility expansion shall be manufacturing new types of cables including microducts, micro module, advanced ribbon cable, aerial cable, armored and unarmored cable amongst others. Furthering our thrust of technological leadership, we did inaugurate our new R&D center at Bengaluru during this quarter. With a view to accelerate development of new technologies and next-gen products and solutions, this is our dedicated R&D center for 5G and Wi-Fi products. Riding high on success of first PM-WANI model village in Hariana, we are pleased to update you on our next project in Baidebattu in Karnataka. This demonstrates the strength of our indigenously developed Wi-Fi products, which are PM-WANI compliant. The project will connect the residents of this remote village, the slew of digital services in affordable and accessible manner. We plan to implement such network in many more villages. We continue to enhance the quality of our order book with the desired tilt to products and focus on bettering our margin and cash flows. As of June 30, 2021, our consolidated order book stood at INR 5,884 crores. New orders for fiber optic cables and equipment are being received regularly by your company. Moreover, we have participated in tenders worth more than INR 6,000 crores, which are mostly for products which will get finalized in due course. We'll be happy that 75% of pledged promoter shares have already been released on 5th July '21. We are fully focused to get the remaining 25% to release in the next couple of weeks. Let me now brief you on key performance metrics for the quarter. Revenue for Q1 FY '22 stood at INR 1206.87 crores as compared to INR 699.76 crores in quarter 1 of financial year '21 thus recording an year year-on-year growth of 72.46%. EBITDA for the quarter stood at INR 191.54 crores as compared to INR 83 crores in quarter 1 of financial year '21. In fact, EBITDA margin increased by 403 basis points and today stands at 15.88%, a for quarter 1 of financial year '22. For Q1 for FY '22, profit-after-tax rose to INR 90.69 crores as compared to INR 21.34 crores for quarter 1 of financial year '21, recording a growth of 325.82%. PAT margin also improved by 442 basis points to 7.52% in quarter 1 of financial year '22 as compared to 3.04% of quarter 1 of financial year '21. Segment revenue for telecom products during the quarter stood at INR 375.40 crores as compared to INR 205.41 crores of quarter 1 of financial year '21. We expect revenue from telecom products to continue their uptrend. Our overall performance reflects sustained growth and strengthening our value proposition that we have achieved over the last few years. Looking ahead, our constant focus on innovation, a steady expansion of our product bookings, margin focus shift of the product mix, alignment of our offerings with emerging and future market opportunities, deepening of our market engagement in export geographies, added contribution from our under development capacities and pursuit of new products and opportunities by our recently constituted dedicated 5G division shall keep sailing our journey to our sustained growth in revenue and profitability both. Order and inquiries flow from domestic and also overseas markets remain healthy. I'm confident that we have done our homework well and laid a strong foundation for an exciting future. We're focusing on achieving the targets we have set for the next few years, and I'm confident to keep that growth momentum continue in the years to come. Thank you very much once again for your keen participation in our growth journey, and wish all of you good health. With this, I conclude my opening remarks and open the floor for question-and-answer session. Thank you very much.

[Operator Instructions] The first question is from the line of Ashish Dhawan from Ashish Dhawan & Company.

Mr. Nahata. My first question would be as to your order book. Can you elaborate a little bit on your order book, how much you received this quarter?

Current quarter order book, you know Ashish, orders keep on coming in bits and pieces for products...

Why is your order book amount reducing? Like in every presentation, it's coming down every quarter.

You have to understand 1 thing. I've been telling in every earnings call that we are going to increase our revenue from products rather than EPC projects. And product orders are not received in a huge quantum as such as an EPC project, you'll receive 1 order in a big quantum and then no order will come for 2 years. Product orders you keep on receiving which have to be delivered in the next 2 or 3 months. Now if orders are to be delivered in 2 months or so, then are receiving smaller quantities, not in a larger quantity. That's why when you see the revenue is shifting towards products from EPC, you will find that order book at 1 point of time is not very large compared to what we would have got from EPC. But overall order flow in the year and overall revenue will keep up its momentum of growth as we have already projected that we are going to have a growth of 15% to 20% in the current financial year. That is what we expected that our growth will be 15% to 20% in our revenue in the current financial year. So EPC orders going down because of execution of the project does not mean that overall revenue will go down in any case because, as I said earlier, we expect in the current year, 45% of our revenue will come from products and the product orders are not received, as I said, for a year or 2. They are received for 2 months, 3 months, 1 month kind of a situation. So therefore, you would find order book reducing, but overall revenue growing.

And you said that 15% to 20% growth per annum you're looking for this year?

That's what we expect looking at our order book...

And for the coming years...

And looking at the market....

And for the coming years in, let's say, 3 to 4 years....

We continue to expect 15% to 20% growth.

15% to 20% growth every year?

I'm talking about the current year.

And sir, a little forward-looking statement for 3 to 4 years if you...

I cannot give forward-looking statement, Ashish. But looking at the market situation, the way the market is growing, 5G, FTTH, BharatNet, I expect this growth momentum will continue. And not only India, as we are developing our own products and technologies like 5G, like Wi-Fi, like optical access network, like, for example, transport network for 5g. And these are our own IPRs, our own technologies. They have a huge market abroad also. And not only these technologies and products, we are exporting fiber optic cable also. And all this put together, there is huge market opportunity, not only domestically, but internationally also. So therefore, there is no reason for me to believe that this current growth momentum will be kept up in future also.

Sir, my last question would be, please, can you throw some light on BSNL's current position? And are you again participating in BSNL tenders?

Look, BSNL current position has improved from our receivables from BSNL have come down considerably. And as far as we are participating in BSNL current 4G tenders are concerned, we applied for doing proof of concept. Now first, let the proof of concept be completed. Let us qualify in that, then we will decide how to move ahead in that.

And in this quarter, sir, investors always complain about mutual funds not buying shares of HFCL. This quarter. Do you think there is mutual fund buying that has come about? Do you have any knowledge about that?

I cannot comment on that, who will buy or who will not buy. It is for the mutual fund...

But do you have any knowledge where some investors have come in or mutual funds have picked up stake?

Pardon me, I couldn't get your question.

Are you aware of any mutual fund buying...?

Some mutuals funds have bought, but I'm not remembering the names right now. But yes, some mutual funds have bought shares.

The next question is from the line of Saket Kapooor from Kapoor Company.

It's a steady set of numbers, sir. As you have articulated to us investors that the mix is going to change, and it will be more skewed towards the product side. So how is that half going to change? Is the first quarter number reflecting the same? Correct me on that because when we see the turnkey contracts and services, there, I think, so the revenue has declined on a Q-on-Q basis, but the margins have improved? And on the stock in -- purchase of stock in trade, there we see a figure in the vicinity of INR 400 crores to INR 500 crores. So how should 1 look at this revenue from operations part when we have a large sum in the stock and trade portion? So if you could explain this mix and the way forward? When are we going to see that change of 45%, 55% happening?

As far as products are concerned, this year -- this quarter, we had a 31% revenue from the products -- If you compare with the financial year 2021, it was 27%. This quarter has increased to 31%. Overall, as I said, our endeavor is so take it to % 45% on a yearly basis. Now why would it increase? Number one, our capacity for fiber optic cable is getting expanded, as I have informed you in my presentation earlier also. And that revenue coming up will show increase in our product revenue, number one. Number two, as the new products which are being designed are getting completed, they will start giving us revenue. Number three, Wi-Fi products, which have already been designed, they will have increased revenue in the current -- remaining of the year. This last quarter also, that could have had higher revenue, but for, I don't know whether you people are aware of semiconductor shortage worldwide. Worldwide, there has been a huge shortage of semiconductor, which is the chips. And because of that, production of all kind of telecom equipment has suffered all around the world. This is expected to ease down from the mid of the quarter 2, and then you will find the Wi-Fi and microwave radio products, point-to-point and point-to-multipoint which we have designed will also show increased revenue. And all this put together, as I said, there will be increased revenue from the products during the current financial year.

[Operator Instructions] The next question is from the line of Hardik Vyas from ETT.

My first question was pertaining to the PPP that we are seeing a BharatNet project is likely to take off the Phase 2? Is it likely to take off anytime soon in the second half of the year?

Look, BharatNet Phase 2 has been already been approved by the cabinet under PPP model. And we expect the tender to be floated very, very soon, maybe within a week. And the target of the government is to finalize this in next 2, 3 months' time frame. And once it is finalized, it has to take up, take up very fast because there would be set time lines given to the PPP players who come and get business out of this tender to implement the network in a defined time frame. Because as you would recall, the Prime Minister has already announced that in 3 years' time frame, every village of the country would be connected via fiber optic cable. So I expect this tender to be announced soon, to be decided soon and to be implemented even in a faster speed because they already set guidelines for the parties which are working under PPP model. So I expect not only early finalization early implementation. But as I said in during my presentation, huge demand opportunity is coming up for fiber optic cable and all kind of associated equipment. And I am looking at BharatNet PPP tender, as a huge business opportunity for the company, as the supply of not only fiber optic cable, but all kind of equipment, which we are going to manufacture or we are manufacturing. For example, Wi-Fi equipment, whole reason for this broadband optical connectivity to the villages is to give broadband connectivity to the villages for which Wi-Fi would be required. Some cases, fiber-to-home would be required, for which we are preparing our equipment. Transport network would be -- router and all these things would be required 40gb routers but 100gb routers, we are designing that. So all put together, BharatNet produces a huge market opportunity to the company. And this opportunity would start certifying from next calendar year, maybe quarter 2 of next calendar year or maybe a little earlier also.

So sir, a follow-up question on that is after the 4G auctions, are we also looking at private telcos giving us orders on the services front?

Our services front, we have already -- we have been doing services for private operators in terms of optical fiber network being laid down by us. As I've told you many times, optical network for Geo in North India, including for mobile services and also for FTTS services is being laid down by us. So not that we will see revenue. We are already having revenue from 4G service providers currently in form of laiding their optical fiber network and FTTH network all across North India.

So we are currently in services. We are not having any BharatNet contribution, which will grow only from next year, second quarter onwards? That will...

In the BharatNet Phase 1, as you would recall, we have implemented Punjab network already. Jharkhand network is getting implemented. And in the current quarter, which is going on, we see that there will be some reasonable revenue coming up from...

Phase 1...

This Jharkhand implementation shadowing, which should be somewhere around INR 100 crores plus.

Okay. Last question on the product front. As compared to the last quarter, that is the fourth quarter of last year, what is the volume of products that we have sold? I'm asking this because of this being a COVID-hit quarter. so the product revenues were at par. But in volume terms, what is the difference that we have sold?

In last quarter, our revenue had 28% mix of products. This quarter, we have 31%. In terms of volume, it is almost the same. This quarter, we had INR 375 crores. Last quarter, we had INR 388 crores. This quarter, as I said little while earlier, could have been higher but because of shortage of chipsets, which were to be imported from Qualcomm, but from their committed supply, they expressed the inability to supply that quantity in the current quarter because of shortages of chipset worldwide. So -- which we are expecting this supply to increase in the current quarter hence therefore the increase in the revenue.

So more or less price increase that we have seen in the first quarter because the volume being sold has been more or less the same?

Pricing increase? I can't follow you.

Optic fiber prices have strengthened and that is how the...

Yes, that is on the fiber side. Optical fiber prices have definitely strengthened and it continues to strengthen further. But yes, there will be more or less limit now.

The next question is from the line of Abhishek Jain from Alliance Capital.

Congratulations on good set of numbers, sir. Sir, can you throw some light on the margins? We have seen like -- we are actually quite surprised positively by the margin performance how you see the margins are going to remain in what terrain, like what they're in -- what's exactly your outlook on the margins?

So let me first tell you the philosophy of the company. The philosophy of the company is to go for more of the product revenue less of the EPC revenue, the turnkey revenue. Reason being, one, when you sell products, it has involvement of less working capital. Number two, it has better margins also. Number three, you are able to sell worldwide because you are having same market segment increases. Now as we go for more of our product revenue, the overall philosophy that margin percentage should improve, would be there, it would continue. So in the current quarter, and moreover in the current quarter, what you see as the margin increase is again because of product mix. EPC contracts also some products have a high revenue, higher profitability, some have a little bit less than that. So quarter-to-quarter, you would find some variation. Quarter-to-quarter, some variation would always be there. Every quarter cannot be same or every quarter cannot have an increased trend or a decreasing trend. But on an overall basis, you will find margin percentage improving year-on-year basis. We cannot be categorical about quarter-to-quarter because quarter-to-quarter, there may be slight changes. But on a year-to-year basis, there will be increase.

And second question, sir, on the PLI side, are you applying for anything, anything update you want to do which...

Yes, we have already applied. As I said during my presentation, we have applied to 100% own subsidiary, HFCL Technologies Limited. They are already applied. A reason of framing this 100% owned -- our own subsidiaries that, as you would know, under the income tax act, the tax slab comes down from 25% to 18%. If the company is formed after a particular date, which was April 2019, if a new company is formed and profit comes into that company, then the tax level is 18% than the current tax slab of 25%, which we have incurred. So because of tax rate coming down by 7%, we have formed a wholly owned subsidiary under which we have applied for PLI.

And sir, last question, if you can throw some light on the new products, which are being mentioned in the house. what kind of opportunities there like small cell for 5G, engine, cool core, ground services, radar, EO products, software-defined radios. What kind of opportunity is there, sir?

Look, all these products have huge opportunities. I'll come one by one. First, coming to this fiber optic cable first of all, which is new product in a sense, the newer type of fiber optic cables we are now designing and going to produce, which includes new type of ribbon cables, bonded cables, all kind of cables, high capacity cables. So these are various new market opportunities where we have not been there. We have very high count cable, fiber count cable, which we required in data center. IBR, intermittently bonded ribbon cable, which is required in European market. Microcable, which is a lower diameter, which is, again, required in European and U.S. market. So these are the new products we are coming up with. And these new products will, of course, have huge demand opportunities coming up in future, new kind of cables. Now coming to other telecom products. One, for example, I would start with 5G. 5G macro cells and small cells. Now as the 5G networks come up, the demand of radio access network, which is the macro cell or small cells will be a huge market, huge numbers, whether it's a mid band of 3.5 gigahertz or whether it is a micro -- whether it is a millimeter band of 28 gigahertz, it has got huge market opportunity because this would be required in lakhs and lakhs of numbers in India and abroad. And we are designing macrocells as well as small cell for this mid-band. This is 3.5 gigahertz band and 28 gigahertz band, which is a millimeter wave band. So demand is in lakhs and lakhs. It will be reaching the millions all over the world. So it's a huge market opportunity. Similarly, the transport network, which is routers or front-hall gateways, for 5G networks and also the routers for BharatNet kind of networks would also be required in huge number, 40 gigabit, 100 gigabit routers, which are also partly already designed by us and are undergoing now some modification to suit to BharatNet requirement are also requiring huge market numbers, 5G networks as well as BharatNet networks. Wi-Fi. We have gone into Wi-Fi 6 already, which is a new generation of Wi-Fi, which is compatible to 5G. Now that is, again, if a 5G traffic incoming and it has to be distributed to a subscriber, it needs that kind of a capacity as much as 5G. So Wi-Fi 6 would get it to that demand. Backhaul radios. Again, high capacity, backhaul radios will be required to do the backhaul for Wi-Fi 6 that we have already designed. So likewise, if you go on and on, these all products are a huge market opportunity domestically and internationally because of new kind of technologies, new kind of networks, new expansion of fiber optic networks and FTTH networks happening in the world.

The next question is from the line of Saral Seth from [indiscernible] Securities.

Congratulations on good set of numbers. Sir, my first question pertains to what would have been the second wave impact on the revenue as well as bottom line?

Look, Mr. Seth, there has been some impact, not like the first wave, in fact, has been about, I would say, INR 150 crore to INR 200 crores. Reasons are simple. Most of this impact came from defense side of our business. Entry into cantonments were restricted to us, many large number of cantonments, entry were restricted because of COVID situation and rightfully so, Army did not allow entering of outsiders in the cantonments the fear of forces getting into the grip of COVID. As a result of that, about a couple of months when this pandemic was surging in a huge number as we have seen in the country, unfortunately, restriction was there in the entry of our people in cantonments. And as a result of that, some supply could not take or mostly services could not be rendered to get into the milestone of the projects, which are required to be completed to us to bill for the services. So we could not do that for a couple of months. So that impacted, number one. Number two, the second impact, but a smaller one was that our customers, the operators were not able to execute large portion of their networks, fiber optic networks in the cities because of COVID restrictions. Work was -- construction was not allowed in the cities. And as a result, demand for fiber optic cable came down a bit because a customer was not able to -- customers who are not able to install the network, so they were not able to lift our products. So those orders were there, but revenue could not be achieved because the customers were not able to lift their products for their requirement because cities were not able to implement their networks. So some impact happens because of that. I would say something like INR 40 crores, INR 50 crores impact was there. INR 150 crores impact was there on account of services part of it. So there would be -- I would say, there was about INR 200 crore impact. And if I see the profit, I would say, if you take the PBT margin of [ INR 10 crores ] or so, PBT margin could have been higher by about INR 20 crores or so if that revenue had been achieved.

My second question would pertain to, sir, with regards to PLI benefits, would we be funding through internal accruals or would be requiring debt for the PLI benefits?

So this will be partially through internal accruals and partially through debt.

The next question is from Chetan Shah from Jeet Capital.

Sir, just 2 quick questions from my side. One regarding your opening remarks as you were explaining about the ongoing CapEx and timeline related to the CapEx, could you kindly share the CapEx for next 2, 3 years? How much will spending current financial year, which is FY '22 and how much '23 and '24? And a following question to that is once you're done with this CapEx, which is capacity expansion, -- After that, how much you think we will be able to take our revenue to -- I'm just trying to understand the gross book to revenue mix, what is our asset ton possibility non-EPC side of the business? If you can give some sense, that will be very helpful.

Chetan, the current year's CapEx is estimated to be about INR 210 crores, out of which INR 25 crores has already been incurred, rest INR 185 crores has to be incurred. All of this INR 185 crores, INR 145 crores is expected on enhancement of cable manufacturing facility, which I've described a little while ago, which is taken in Hyderabad, Chennai and Goa, all 3 places including some backward integration, and including expansion of fiber facility, fiber manufacturing facility also. Fiber is what we have a capacity -- 8 million fiber kilometer is being expanded to 10 million fiber kilometers and similar expansion in the capacities of cable expansion is going on. And some backward integration is also happening to reduce our cost, and competitiveness in fiber optic cable, number one. Number two, balance INR 40 crores is going to be incurred on creation of manufacturing facility for different products, for which separate facility is required as per the regulation, so which we would be doing in Hyderabad. Land is almost allotted to us maybe in the next couple of weeks or maybe earlier than that. So this manufacturing facility will come up in Hyderabad, which would cost us about INR 40 crores or so -- around INR 40 crores. The CapEx planned for manufacturing facility is INR 210 crores about out of which INR 25 crores have already been incurred. Now revenue, as I said, we are looking for a growth of about 15% to 20% in the current financial year, wherein entire year would not be utilized for increased capacity to earn revenue. It's only the part of the year because from quarter 2 onwards, this capacity expansion is happening. As a matter of fact, the first phase of capacity expression in Hyderabad is getting commercial in next couple of days. In the next couple of days it is going commercial, the first phase. Second, third phase will go commercial consequently. So the full impact of this capacity expansion of cable as well as fiber is going to be seen in the next year. Current year, no, half or less even. So in spite of that, we expect to increase revenue at 15% to 20%. Now in future, if I keep the capacity constant, what it is just now, still we see that revenue will see a growth of 15% to 20%. This trajectory would be maintained with the growth in the revenue in cable is also the different products. The trajectory will be in maintained 15% to 20%. Now coming to what would be the CapEx for next years 2, 3. Chetan, we're still not planned. We are under planning stage of that, and we will come back to you in the next earnings presentation that what could be the CapEx for the year 2 and 3. We are certainly working on that, planning that looking at the market size, looking at the future potential of different products we have, certainly, we would need some more capacity expansion to cater to the we demands are experiencing from our customers. Some more will be required. But -- Right now, I would say, yes, we are looking at that. And next earnings call, we'll come back to you for that. But current year, INR 210 crores, of which INR 25 crores is already incurred.

One follow-up question on the same. When we -- sir, while answering the question to a couple of previous investors spoke in which you talked about shifting your revenue mix to product side to about 45% in a year to come. Could you just help us understand how does this mix change in revenue will help to improve our working capital cycle because what I've been understood looking at our past financials that due to more tilt towards EPC side of the business, it not only reduces our margin, but also strain on our working capital. So does this mix change once we have almost close to 50-50 EPC stroke product mix in revenue? And just 1 more question added to that. If I see our FY '21 balance sheet, our receivable numbers are pretty high, it maybe due to end of the year number. But if you can just tell us that how much does that improved in the first quarter? And what is the trajectory? Because you explained about BSNL receivable is improving. How about other receivables, please?

Look, first of all, coming to your second question first. You're right. Last financial year, last 100 days, we had 45% of revenue. And as a result of that, you could see that the numbers of receivables are higher. That is number one. Number two, product and EPC. Let me tell you the differentiation. Product, when you supply a product, you start getting paid. It depends on on the terms and conditions, 60 days, 30 days, 90 days. In EPC contracts, you get paid on the basis of milestones, having achieved a particular milestone you get paid irrespective of the fact that you could have supplied earlier, but milestone has not been completed, you don't get paid. Now what has happened in the different EPC context. Though their profitability is reasonable. There's no problem with the profitability. So the problem is the payments. What happened last year and this year. Last year, pandemic, 3 months, no work, absolutely zero work in those EPC contracts. As a result, you could see the revenue were just INR 700 crores. Complete lockdown, nobody was allowed entering cantonments. Particularly, you would recollect, at that point of time, there was a flash point with China in our northern borders and that time a majority of our work was on the northern border. As a result of that, we could not do any work as if -- so you could see that revenue was only INR 700 crores. Now number of cases. So milestones could not get completed. Now a number of cases what has also happened in which issue I'm taking up constantly with Indian Army as well as BSNL. A network gets completed when all the aspects of the network or the issues involved in the network are completed. What happens, certain part of work is the responsibility of the customer. BSNL or army. Now what happened. For example, construction of buildings, where network equipment are to be installed. Construction of fiber where -- on which our equipment will be installed and connected. If buildings are not there, if fiber is not there, irrespective of the fact that I have done my work installation and commissioning of equipment, milestone would not be completed because the entire network has not been tested. How can the network be tested in absence of fiber? Or in absence of a particular building, where equipment has not been installed because the building is not there? So if there is a link of 1,200 kilometers, let me just give an example, which has 20 substations in between, and 1 substation not been constructed by Army in between, where I have to install my equipment and I could not install the entire link is not complete. In a chain, if 1 link is not there, chain link, chain is broken. It's that kind of a situation. I have done 90% of my work but milestone is not getting completed without any fault of mine. So we have taken this issue very vehemently with customer, Army and BSNL both and told them, please complete this as soon as possible so that my billing is completed, my payment is received. And we have taken it very strongly. I had a meeting with BSNL, combined meeting with BSNL, Army, Navy, Air Force, all of them, where I've insisted on this point, and I'm having now regular meetings with them so that these milestones are achieved and payments are received. So you're right. It is a contract because of these issues, see a higher receivables because supply has been made, but services have not been done, and the billing is not complete for services. As a result, the supply payment, which has been built is also pending. So that is the problem in EPC contracts. And apart from that, working capital investment, you have to really work in a completely different manner in terms of working all over the country to implement such contracts. So what we are trying to shift the revenue more to our products does not mean that we will be stopping EPC contracts. We would still be going for EPC contracts, but on a very selective basis where we believe that payments could be realized in a much easier manner. The payment cycle is better or where we see customers ability to complete their side of the work quicker. So we will be going for EPC contract, but revenue mix, we would like to ship our products which have higher profitability because of your own technology, higher catch-up area for customers because technology is having been your own, we are able to send it worldwide. So this is the reason why we are shifting our revenue mix, which you see lower working capital cycle and higher profitability. Sorry for the long answer, but I thought you must understand the whole thing.

Thank you for such a detailed explanation. Sir, just 1 last question. In your opening remarks, you were explaining about the new R&D facility at Hyderabad...

No Bangalore.

Sorry. Sorry, my apologies. At Bangalore and you also spoke about the focus on developing newer product opportunity. so I just wanted to get a sense that what kind of annual budget or how are we looking at? Or is there any ballpark number you have in your mind that we spend INR 10 crores, INR 20 crores a year or maybe more or how the product...

Much more than that, much more than that. Current year, our R&D expense is going to be about INR 150 crores out of which INR 15 crores has already been spent in the Q1. Q2, Q3, Q4, would see INR 135 crores, which will be spent on R&D. Part of that would be -- some parts like fixed assets buying test equipment and all that would be capitalized, all salary and all are being written off as normal expense.

[operator instructions] The next question is from the line of Neerav Dalal from Maybank.

Couple of questions. One, we disclosed that product revenues are about 31%. What will be the breakup in terms of optical and non-optical of this? And of the 45% that we are targeting, what would be the split?

Okay. Optical, non-optical in the current, this last quarter of the INR 375 crores optical was about INR 290 crores -- INR 295 5 crores and about INR 80 crores have been from non-optical, which is Wi-Fi and all that. And I may be wrong by INR 1 crore or INR 2 crores, but this is more or less.

That is fine.

And, this nonoptical could have been higher as I explained but for the shortage of chipsets, which happened in the last quarter, which is expected to improve from, I would say...

Second half.

September of the current quarter. This could have been higher, but unfortunately, it could not happen because of the worldwide chip shortages. But yes, the revenue mix has been INR 29 crores -- INR 295 crores and INR 80 crores.

And when we say the 45% would go up to 45%, would the mix be broadly the same for the year? Or...

No, the mix would change. I think numbers would go higher for non optical. Optical will also go higher because new capacities are being added. But generally, I would say it would be 70% for optical products and 30% for nonoptical products in the current year.

Got that. And 1 last question on the PLI. I don't know whether you disclosed any CapEx plan for the PLI scheme but just wanted your comments on that.

No, we have given it for approval, not really disclosed the CapEx plans. But as the approvals come on, in our next earnings call, as I said, we will come up with the exact number, and come up with a CapEx plan.

The next question is from the line of Ankit Babel from Shubkam Ventures.

A couple of questions. Sir, you did mention that the revenue from product business would be around 45% in FY '22. And your focus is also to continue to increase the share of product business in total revenue. So sir, I just wanted to know where do you see the share of product revenue to your total revenue in the next 2, 3 years, say, by FY '24?

I would say this year, it would be coming to about 45%. And with the increase in defense products revenue like software-defined radios, fuses and all that, this is expected to increase further. In my opinion, it should reach to about 60% in next 2 to 3 years.

So at that level of contribution from product business, that 60%, where do you see the operating margins of the company?

Well, they would increase significantly. I won't make a forward-looking statement that how much percentage that would be. But generally, as you see, the margins in this product business is higher than the EPC margin. So profit-before-tax, I would say, PBT, percentage in product business would generally be 13% to 15% -- generally, depending on product to product. It will generally be 13% to 15%.

And sir, what is the current debt on the books? And where do you see your debt by the end of this year and next year?

Current debt in the books, we have about working capital facilities and term loan and all put together is about INR 900 crores, a little less than INR 900 crores.

And where do you see it by the end of this year and next year, considering your CapEx plans and working capital improvement and everything and internal accrual?

FY '22, we expect it to become INR 800 crores.

And next year also, we can expect a reduction in that?

Next year, there would be some repayment and there would be some -- maybe some, and as I said, we have not framed up the plan for next year's requirement. But if we have CapEx -- or it may go up by a little bit again. So it may be around the same level or it will be a little bit down.

And my last question is, sir, you did mention about this INR 200 crores of CapEx in this year. So this is only for the existing business. So if you get any approval in the PLI scheme, so any CapEx there would be additional CapEx, right?

That would be additional, of course, but we do not know when the approval will come and when will be required to spend. And that spend is also to be done in 3 years. It's not required to be done in 1 year. It is 20% and then 40% and then 40%. It's something like that in 3 years' time frame. So once the approval comes, then we'll spin off the study, how much of that 100% is going to be in the first year, where it's 20% and then 40/40. So once we know that approval is coming, then we will be able to frame up the plan. Right now, a large number of people have applied. So we have to wait for the approval to come.

So your internal assessment, I mean, what kind of investments you are ready to make in that PLI scheme if you get an approval? I mean is it like a very big like INR 500,000 crores of investment? Or what is the quantum you people are looking at?

The minimum as per the scheme, minimum investment required is INR 100 crores, minimum. So how much we will make, we'll come to know once the approval comes. The minimum required is INR 100 crores. So whatever we do if the approval comes, it's going to be more than INR 100 crores. But once the approval comes, which I expect in the current quarter, we will definitely come back to you in the next earning call.

The next question is from the line of Rishabh Makhija, an individual investor.

Most of my questions have been answered. Just 1 question, sir. Can you just give some color on how the optical fiber and optical fiber cable prices have been shaping up? And they are like a sort of a comparison with respect to how they were last year at this time, quarter 1 of FY '21?

Look, optical fiber prices, if I take just firmed up worldwide because of the increased demand of increased demand of fiber optic cable and consequently fiber all over the world. I would say that earlier when we started this year a little before that, it was about INR 250, INR 255, it are going around INR 250 or so. Before that, it was about INR 280. Starting of the year, it was INR 280. It came down to INR 250 or so. It has again gone around INR 300 at this point of time. Around INR 300, sometimes a little bit more, a little bit less, but around INR 300 per fiber kilometers.

Understood, sir. And about optical fiber cable?

Optical fiber cable, it's a different price for different different kind of fiber cable. It depends upon what kind of fiber it is, cell fiber, 48-fiber, whatever. But generally, I would say they have gone up by roughly, I would say, earlier what it was about INR 850 per fiber kilometer of cable, it has gone around INR 900 or so. Again, this would be different in different count of cables. I cannot generalize that, but it's more or less.

The next question is from the line of Sneha Jain from SKS Capital.

Hello?

Yes, please go ahead, ma'am.

Yes. So I wanted to ask -- I was a bit late to the call. So I wanted to ask what is the order book currently? What is the pipeline you're expecting? And sir, 1 more specific question would be. There's a big order that Mazagon got recently of INR 45,000 crores in the submarine we have previously supplied. So do we see an opportunity there?

Look, at the Mazagon, order is for submarine, which is not part of our -- anywhere near our product range. So we don't see any opportunity in the submarine kind of products. But yes, we are in discussion with Mazagon Dock, and we have signed an MoU also, let me tell you. Since it was not a needed issue, we did not make any public information on that. But yes, the Mazagon Dock and we have signed MoU from our subsidiary called HTL Limited for development of wire harnesses for the ships. And the MoU has already been executed, and our people are in process of development of such wire harnesses. These wire harnesses are made out of either fiber optic cable, fiber or copper. So -- and we have set up a facility in Chennai for manufacture wire harnesses, very low CapEx but expected high revenues. This is going to happen for wire harnesses for telecom sector, which we are already doing. We are producing wire harnesses for telecom sector for connecting radiohead to the -- this baseband of base station by -- and these are made of fiber, so which are already being produced by us. What we have also done, kind of shifted from -- not shifted, increased our production range going for wire harnesses for automobiles, for ships and submarines will also come later, but for aerospace also. And Mazagon Dock MoU has been signed for designing wines harnesses for ships, which would be required in a very large quantity, ships are very large. And we expect revenue to start flowing from wire harness business in the current year. The very low CapEx, we have already executed this, and we expect about INR 50 crores plus revenue in the current year, which is just starting year, very, very starting years with just a few months of I think a couple of months or 3, 4 months of I think. But we see this revenue would go up in the next few months. Reason one, as you know, the automobile industry is turning towards electrical. Most of the automobiles are going to be electrical in years to come. And huge amount of wire harnesses will be required because this is electrical working and you need wire-harness in that. Similarly, we are working with the aerospace industry. We have already signed and held a discussion for development of wire harnesses for, I cannot name the project right now because it is confidential, for which it is being developed for Indian forces. And our HTL is already doing that work, and are designing wire harnesses for that application. So coming to that, this wire harnesses and this business is going to show a significant growth in future to come. But not Mazagon Dock, INR 45,000 crores, that's a separate project. But yes, with Mazagon Dock, we have another MoU.

Yes, that's helpful. And sir, what is the pipeline that you're looking for?

For this kind of order?

For the entire like HFCL?

Entire, right now, we have an order book of INR 5,900 INR 5,800 crores, about INR 5,900 crores, and which will keep on increasing. What is happening, as I said earlier, since you joined late, we keep on receiving orders for products on a very regular basis. They don't come in a big order like INR 1,000 crores. They come INR 50 crores, INR 80 crores, INR 70 crores, INR 100 crores, such kind of orders are received regularly and supply is made regularly, that is number one. Then we have participated in tenders with more than INR 6,000 crores already, and which are to be decided 1 after another. So we will receive orders from that also. A large number of opportunities are coming up now, BharatNet opportunity. There are opportunities in railways, there are opportunities coming up in various other segments where we are going to participate. So orders will keep on flowing -- And with those orders in this market, what is there now with an increased market, I expect our revenues will also keep on growing in the steady state in the same pace, which it is going now.

The next question is from the line of Mangesh Kulkarni from Almond Global.

Yes. I just wanted to know about the plans for releasing the remaining pledged shares.

Remaining pledged shares. In fact, this whole 100% could have been released instead of 75%. One bank said 75%. All banks said 100%. 1 particular bank says 75%. And we have to go pari-passu with every bank. So unfortunately, we didn't have the time to go back to the bank and stop every place to be released until the time entire 100% happens. So we said, "Okay, let's release 75%. 25% to that particular bank, we have gone back again. And we hope that within a month or so, or less than that, we will get that release of 25% also." But I had promised to all my investor shareholders that pledge of the shares to be released, the 75%, which is very, very large quantity has already been delisted. So mind you, even this 25%, there is no loan taken by promoter or the company against share. These are all collateral against the working capital loan or term loan which had been taken by the company.

The next question is from the line of Swapna Kamat from Narotam Family Office.

So I just have 1 question. Your presentation was very insightful. So most of the questions are answered. But just turnkey contracts during the quarter, we have seen a very sharp margin jump. So was there some milestone achievements that led to this EBITDA margin improvement for that particular segment?

Swapna, it is more of a revenue mix. As I said earlier, some products have a higher profitability, some have a lower profitability. As we have done, kind of delivered the more of software products in a particular month or a particular quarter, they have a higher profitability than a hardware product. So the revenue mix keeps on changing. And consequently, there is always some variation in the margins also. Every year, every quarter, they cannot remain constant. But 1 thing is sure with our stress on more products, higher profitable business, margins will keep on growing at a steady state rate. But quarter-to-quarter, it can be different.

Sure, sir. So I understood about your product division, but I was a little curious about this turnkey contracts because there is -- the jump is almost 400 bps from 10% to 14% or 14.5%. So that's why I was a little curious as to what is next to...

It's a product mix. It's a product mix. Purely product mix. Nothing else in that.

The next question is from the line of Ravi Nehta an individual investor.

Sir, I want to ask you about the defense order. When do you expect some sizable orders from your defense electronic uses or the software defined radios?

Look, software-defined radios are in development right now. Any order from them will take time. It will take time. But electronics fuses tender has already been participated. Sample have arrived for offering to the Army. We expect Army to come back and asking for samples anytime soon. I think it is being decided at the highest level. So once the sample are asked for and they are tested, then order would come. But any sizeable big order is expected only after few months. But yes, some other products like night vision devices, which we have already participated in the tender, we expect those to be rolled out sooner because the testing is currently going on. Tests are going on in a different Army facilities, and we expect those orders to be received a little sooner than the fuses.

So in this year, we can expect night vision order?

Yes. This year, we can expect. Some small orders have already come, but the larger orders, we can expect it, yes, absolutely.

The next question is from the line of Deepak Mehta, an individual investor.

I want to congratulate, first of all, management and you for walking the talk what you have been talking. I think we have been executing very well. And I think our company is on the inflection point and we are -- we can say that we have already started the HFCL 2.0 and it will it will go long long, long way. So my question is around the 5G first. For 5G, what kind of products we will be offering? I think we have optical cables, which will be used in 5G. And second, we have 5G cell points. So if you can sow some light on the product and service offering? What will be the role of R&D offices and how we are set against attracting the right talent for right eduction, sir, on 5G points?

Thanks a lot for your praise, walking the talk. I really appreciate that. I said that product mix will change, it is changing. I said that margin increase will happen. It is happening. I said from -- the pledge of the shares would be released, it has happened. So it's walking the talk is really the right word. And thanks for saying this phrase. I thank you very much, number one. Number two, for 5G, as I said earlier, fiber optic cable is 1 of them. What we have done in the company is tried to create a range of products, which would be required for 5G business, 5G network. Number, one fiber optic cable, which would be required in large market. Number two, cell site radios, which is access -- radio access network, what we call it, which is fitted in the towers, which you see in different places, which includes macro cells which is the large cells, which includes the small cell, both indoor and outdoor. Those would be recording huge use numbers as I explained earlier. Then the routers and the cell site routers, which we call frontal gateway. These are some of the products which we are designing which are required in large number in 5G networks. So this is not the end of the list, there are many more products supplied, but this first would require in huge quantity, and this is what we are working on, this is what we are really offering to our customers. That is #1 in terms of products. Second, we are also going to do, which I could -- did not talk earlier in my presentation, but let me tell you now, we are also going to develop a system integration division totally devoted to 5G. Now -- and let me tell you, this is highest -- just 1 second. Sorry something stuck in me. Again, why this system integration division now? Because as you would have read in many newspapers or the magazines or Internet, 5G network is going towards open RAN, open Radio Access Network. Earlier, it used to be same supplier, supplying core and the access network. Now this has been disaggregated. Networks are disaggregated. Radio access network can be from 1 supplier, core could be from another supplier, transmission could be from third supplier. Now if you have multiple supplier in a network, then you need a good system integrator to integrate the entire network and make it work as a singular network. That capability we are developing now because we believe in an open RAN environment of 5G, the very large amount of services would be required for system integration. And let me tell you, I am already in touch with a number of multinationals also who want that kind of system integration services from us in India and abroad. And we would be in touch with operator also in the coming time to offer these SI services. And these SI services right now, I'm not projecting any number but I have very high expectation from this division, which would start operational by the Q3 or the beginning of Q4 of this year. And though we have not projected any number in our AOP from this division, not in this year, definitely, we do not know what it will be in the next year, but we have -- I have good expectations from my SI division to get reasonable revenue and profitability from India and abroad both, particularly dedicated to System Integration Business or 5G network for the reason which I explained to you, open network, where there are multiple suppliers, so you need a good system integrator.

And my last question is around the product side. So you have said that is around 50% of all total revenue. So I'm not sure if you can address the -- what is the total addressable market for our products because I know...

Addressable market is thousands of crores, I can say it is thousands of crores. Addressable market worldwide would be billions of dollars. So that's not relevant for us that we are not looking for that kind of a market worldwide or that. But in India also it's thousands of crores.

And I believe that we will be competitive in terms of globally...

Yes.

In terms of price...

Absolutely, absolutely.

And product quality.

I will give you 2 examples -- why this cable business, we are competitive. We are exporting. We are selling in India, most competitively. Wi-Fi, for example, We have designed. We are selling in good quantity in India, good quantity, and competing with multinationals, no problem.

Sir, what will be the role of Qualcomm partnership in the 5G space?

Qualcomm partnership or technology in shape of chips and all that, that all means the basic chipset, the basic semiconductors comes from Qualcomm. And the entire product is designed around that. Qualcomm or in some cases, it could be some other suppliers also, not necessarily Qualcomm, but yes, Qualcomm is being the main developer in the wireless technology. Chipsets and the semiconductors come from Qualcomm, around which you build up the entire box for the equipment. Well, Qualcomm gives you help and support.

The next question is from the line of Ankit Pande from Quant Money Managers.

Many congratulations on a good quarter. But just taking a step back, if you could just tell me what was the underlying growth rate that we are experiencing right now during the last...

I could not follow your question. Your voice is not very clear. Can you say it again?

Yes. I was just saying that if you could just talk about the underlying growth rate that we're experiencing in the business right now, of course, comparables for us is a little bit hard to decipher. But let's say, in the month of June and through this month of July, what is the underlying growth rate. Are we experiencing like 10%, 15% or higher growth rate? What is the growth rate in the business right now?

Look, on overall year-to-year basis, as I said, 15% to 20% growth rate would be there. Quarter-to-quarter, it could vary. Reason being, for example, this is the rainy season. Some part of the country would have monsoon rains and execution of network may suffer. So growth may not be as much as you could -- would be able to see in quarter 3 or 4. Quarter 4 normally see higher revenue because then the time -- at that point of time, the working conditions are much better in what happens all around the place. So quarter-to-quarter, they may be somewhat less or more, but on an overall basis, you would find this year, we would -- we expect to get a growth of 15% to 20% in revenue.

Also sir, what is the receivables position right now? And do we expect to significantly improve upon the situation by the end of the financial year, let's say?

I can tell receivables right now remains at about INR 3,053 crores as against what we had INR 3,056 crores at the end of March, which means practically, you can say whatever was the revenue of this current quarter has been realized, not the same revenue, but last quarter, before that quarter, it has been realized. So current working capital cycle, what we have is right now, it's about 90 days. But as I said, the milestones need to be complete for realizing revenue. Now we are in that phase, trying to complete the milestones as soon as possible in the different contracts. I cannot name the commands and the course for security reason, but I can tell you, we have set up our target 15th August, 30th August, 30th September, 30th October, like up to December, to complete various parts of the network for the defense forces and realize our revenue out of that. I think from quarter 3 onwards, you would see a significant amount of receivables coming down because of these milestones getting completed and many being received. Significant amount of receivables will start coming down from Q3.

That is much appreciated. Could you just repeat the receivables number exactly now versus March?

It was -- it's all about the same, INR 3,053 crores now, which was INR 3,056 crores in March. So whatever is the revenue of the current year has been realized. Not the same deliveries, but last quarter or before that quarter. But realization is about INR 100 crores in the current quarter, you can say that.

And if you could just talk a little bit about the receivable situation in the BSNL account, standalone BSNL account? and also the traction that we're receiving in exports and whether we can meet the targets that we have stated before in exports to the financial year?

Yes, I can talk about that. Current receivables from BSNL is around INR 50 crores, or to be precise, it is INR 53 crores which were earlier about INR 160 crores, this has come down to INR 53 crores. That is one. And this INR 53 crores, I think this quarter we should be able to realize most of it. But coming to export target, Current year, we have set up an export target of INR 300 crores for us, out of which I believe we have already done export of about INR 66 crores. INR 66 crores has already been exported. And we are well on way of achieving our target of this INR 300 crores from the current financial year because there is a good demand of fiber optic cable as well as other products, which are producing like these Wi-Fi radios and accessories and including railway communication networks, which are executing in Dhaka and Mauritius. So current year's target of INR 300 crores, we are well set to achieve that target. I don't find any problem in that. Next year, financial year '23, we have set up a target of INR 500 crores which also I believe we should be able to achieve without much of a problem because the expansion for the fiber optic cable, which we are doing at Hyderabad, large part of it is directed dedicated towards export products. So we should be able to increase our exports out of that. And number two, our new products coming in shape, which we're designing, that should also be able to export. So INR 500 crores, I also believe we should be in a good position to achieve in FY '23. But the current year's INR 300 crores, as it is about INR 125 crores or so, which we did last year. No, I think we did INR 200 crores last year. We should be able to achieve INR 300 crores without much of a problem in the current year.

Thank you -- That was the last question. I would now like to hand the conference over to Mr. Saumil Bhatia for closing comments.

Thank you, sir. Thank you for giving us this opportunity to thanks to you. Thank you.

Thank you very much Saumil, Mr. Bhatia and thank you to all participants for spending your time and being with us in this earning call, and let us all meet again in the next earnings call for our Q2 and wish you all very best for health and well-being. And please take care, get vaccinated. That is most important so that even if a third wave is there, none of us are impacted. Thank you very much. Thank you.

Thank you. On behalf of Prabhudas Lilladher Private Limited, that concludes the conference. Thank you, everyone, for joining us, and you may now disconnect your lines.