R R Kabel Limited ($RRKABEL)

Ladies and gentlemen, good day, and welcome to the Q4 and FY '26 Earnings Conference Call of RR Kabel Limited. [Operator Instructions] I now hand the conference over to Ms. Darshni Desai from MUFG Intime, their Investor Relations. Thank you, and over to you, Darshni.

Thank you. Good afternoon, everyone, and I extend a very warm welcome to all participants on the Q4 and FY '26 Earnings Conference Call of RR Kabel Limited. Today on this call, we have Mr. Mahendrakumar Kabra, Managing Director; Mr. Rajesh Kabra, Executive Director; Mr. Rajesh Jain, Chief Operating Officer; and Mr. Jigar Mehta, Chief Financial Officer. Before we begin this call, I would like to give a short disclaimer. This call may contain some forward-looking statements, which are completely based upon our beliefs, opinions and expectations as of today. These statements are not guarantees of our future performance and involve unforeseen risks and uncertainties. With this, I hand over the call to Mahendrakumar Kabraji. Over to you, sir. Thank you.

Hello, everyone, and good afternoon. On behalf of RR Kabel Limited, I warmly welcome all participants to our quarter 4 and financial year '26 financial results conference call. On this call, I have with me Rajesh Kabra, Mr. Rajesh Jain and Mr. Jigar Mehta. The quarter was marked by heightened geopolitical tension, which created some uncertainty in global trade conditions and volatility in input costs. Despite this, India continued to benefit from steady demand drivers led by infrastructure, housing and industrial activity. Industry demand remains supportive while export market continued to perform well. Against this backdrop, we are pleased with the way the business performed during the quarter as well as across the full year. We delivered our highest ever quarterly and annual revenue, supported by steady demand and disciplined execution across the business. Our Wires & Cables business remained the key growth driver for the company and delivered a strong performance and record profitability during the quarter and for the full year. In the FMEG segment, market conditions remained competitive, while demand trend continues to be selective. Revenue remained steady on a year-on-year basis, supported by stable demand across key categories and continued distribution expansion. We remain focused on optimizing the portfolio and improving profitability over time. In line with our history of creating value for our shareholders and considerably paying dividend, it pleases me to announce that the Board of Directors of the company has approved a dividend of INR 5.50 per share, taking the total dividend to INR 9.50 per share for FY [ '26]. With that, I would like to hand over the call to Mr. Rajesh Kabra for further insights. Thank you.

The Wires & Cables segment maintained strong momentum during this quarter, supported by steady demand across domestic and export markets. While domestic business has shown healthy growth, export growth also remained encouraging despite the disruption in the Middle East. This performance was supported by our wide distribution network, strong brand equity and diversified presence across retail, institutional and international markets. We continue to focus on scaling our B2B business by strengthening availability and distribution. Last year, we had set a 3-year road map under Project Rise with targets of 18% CAGR in Wires & Cables, along with 25% CAGR in FMEG, leading to a cumulative 2.5x EBITDA growth. Based on progress achieved so far and the performance delivered by the business, we remain on track towards these targets through focused execution. Looking ahead, we will continue to invest in our brand, deepen customer engagement and pursue growth opportunities across the domestic and international markets, while creating sustainable long-term value. With that, I would now like to hand over the call to Mr. Rajesh Jain for further financial insights. Thank you.

Thank, Rajeshji. The quarter witnessed a mixed but supportive environment for the wires and cable industry. Domestic demand remained healthy, while export demand was relatively stronger during the quarter, benefiting from our established global presence, product quality and diversified market reach. At the same time, raw material prices, particularly copper, aluminum and PVC remained volatile during the period, while currency movement and freight cost added pressure across the value chain. In this environment, timely pricing actions, disciplined procurement and effective -- efficient execution remain critical for sustaining performance. Against this backdrop, RR Kabel delivered its highest ever quarterly and annual revenue. Revenue for Q4 '26 stood at INR 2,964.1 crores, up 33.7% year-on-year. Full year revenue stood at INR 9722.4 crores, reflecting growth of 27.6% over the previous year. Growth was supported by strong performance in the Wires & Cables business across both domestic and export markets. EBITDA for the quarter stood at INR 263.5 crores, up 34.6% year-on-year, while PAT stood at INR 168 crores, up 30.1% year-on-year. Profitability improved on the back of operating leverage and disciplined cost management despite raw material volatility and global turmoil. For the full year, EBITDA stood at INR 789.1 crores, up 61.8% year-on-year. And PAT stood at INR 492.2 crores, up 58% year-on-year. Now coming to segment performance. The Wires & Cables segment remains a cornerstone of our business, contributing significantly to revenue. In FY '26, 90% of our revenue was generated from this segment, while the FMEG segment contributed the remaining 10%. Revenue for Wires & Cables in Q4 FY '26 stood at INR 2,666.4 crores as compared to INR 1,956.2 crores in Q4 FY '25, reflecting 36.3% year-on-year. For FY '26 revenue stood at INR 8,763.7 crores as compared to INR 6,688.8 crores in FY '25, reflecting 31% growth year-on-year. Segment profit for Q4 '26 stood at INR 257.3 crores compared to INR 194.1 crores in Q4 FY '25, up 32.5% year-year. For FY '26, segment profit stood at INR 775.6 crores compared to INR 496.5 crores in FY '25, up 56.2% year-on-year, supported by scale benefits, effective management of price volatility and operational efficiency. In the FMEG segment, revenue for the quarter stood at INR 297.7 crores as compared to INR 261.6 crores in Q4 '25 with growth of 13.8% year-on-year. For FY '26, revenue stood at INR 958.6 crores as compared to INR 929.5 crores in FY '25, a steady growth of 3% year-on-year despite seasonal headwinds. Performance was supported by stable demand across key categories and expansion in distribution. Importantly, FMEG losses have reduced as compared to last year, and we remain on track to achieve breakeven in FY '27. Our balance sheet and working capital position remained healthy during the year, supported by tight control on inventory and receivables. Our INR 1,200 crores CapEx program for FY '26 to FY '28 is progressing as planned. The program is currently focused on expanding cable capacity along with wire capacity and improving operating efficiencies. Once fully commissioned, this expansion is expected to support higher volumes, faster executions of cable orders and better operating leverage over time. Going forward, our focus remains clear to further strengthen our position in the wires and cables industry, improve margins through scale and mix and move the FMEG business steadily towards profitability. We remain committed to delivering consistent operating performance while executing initiatives under Project Rise. Through disciplined execution, we remain confident of achieving the growth and profitability milestone set out in our strategic road map. With this, I now request to open the floor for the question and answers.

[Operator Instructions] We take our first question from the line of Manoj Gori from Equirus Capital.

Sir, just wanted to understand, we have definitely clocked strong revenue growth in difficult business environment, if you can throw some light like how the quarter panned out, especially on the exports business? Domestic, we were hearing that there was a lot of channel inventory correction. But if you look at the volume growth seems to be still in double digits during the quarter. So probably how the quarter panned out? And how should we look at from a near-term point of view, especially from -- for 1Q, if you can highlight over there?

Thanks, Manoj. Actually, if you see always Q4 in this industry remains with the higher volumes and the same repeated this year also. And whatever initiatives we are taking to increase our volume growth, we were able to achieve this kind of volume growth. And in near future also, it remains to be positive and we remain on our growth rate. Of course, since there were some disturbance in our export segment and since now this war is also prolonging, so there may be some impact in short term. But in long term, we are quite positive.

But should we expect probably high single-digit to low double-digit volume growth to continue in the coming quarters as well?

So for -- particularly now, quarter-to-quarter might be very tough to predict. But on a yearly basis, whatever prediction we have given on our yearly basis, volume growth will be like -- always remain better than -- we'll still have better than industry growth and whatever we have projected in our [indiscernible] in the range of 16%, 18%.

Sure, sir. Sir, one bookkeeping question. If you can highlight inventory in absolute terms has gone up significantly from roughly around INR 10.1 billion to INR 17.7 billion. And so if you can highlight -- on the other hand, payables have also increased. So if you can highlight what's happening over there, that would be helpful.

So one thing, like our SIT [ linkage ], not many exports remain in transit also during the period. And as you know, in international business always till this material reaches to customer, it remains in my sales in transit only. So my inventory is a bit high. And when you compare it with last year figures, of course, metal prices have, like, rise by almost 20%, 30%. So there is impact on value side also. But otherwise, in volumes, we are quite on track with our normal inventory records as per increasing volume side of the business.

Okay. Because when I look at the number of days also, in the presentation, we have highlighted like it has increased by only roughly around 8 days. But...

So that's what I'm telling since my SIT of exports have increased, so there may be some impact of 2, 3 days in that terms. And since we are export-heavy companies, always major part of our inventory is covered through SIT also. Otherwise, [indiscernible] only 8 days impact in my inventory days.

No, sir, the reason why I was saying is when I calculate in -- at COGS or even at revenues, the number of days seems higher versus what we have highlighted in presentation. So just wanted to understand how we calculate these inventory days.

See, inventory days are calculated on the basis of opening and closing inventory average days -- are calculated. And it is standard practice. Whatever we are counting is now -- it's like consistent practice. So there is no change or it's like accurate days.

Sure, sir. Got it, sir. And sir, on the margin side, we have been aspiring to improve margins by roughly around 100 basis points on Y-o-Y basis. And somewhere for FY '28, we have been targeting 10.5% margin, especially into Wires & Cables business segment. If you can throw some light probably that 100 basis points of margin expansion continues to remain on track. And also on the FMEG side, if you look at, we were looking to achieve breakeven a bit earlier. There has been some delay. Obviously, the macro environment also remains a bit challenging. So if you can throw some light on both the business segment on segmental margins? That's my last question, sir.

Yes. So if you see in Project Rise, we have planned to have improvement of 300 basis points in my Wires & Cables margins by FY '28. And if you see current year already, we are on track, we have achieved almost 130% kind of -- 130 basis point improvement in margins. And even going forward, we are quite positive to achieve our target of 10.5% EBIT margins in Wires & Cables segment by FY '28. Same way -- of course, in FMEG, there are some impact what we have planned to achieve back even in March '26 could not be achieved, and there were 2 major reasons. One, of course, the volumes what we were expecting due to bad weather and it could not be achieved. But at the same time, input cost -- there was a major impact in FMEG input cost, where, in that industry, it takes some more time to pass on. And therefore, our gross margins are impacted in Q4 to some extent. And therefore, now we have -- now we are targeting to achieve breakeven in FY '27.

Next question is from the line of Praveen Sahay from PL Capital.

So my first question is related to the volume. If you can give some color on the overall wire and cable volume, how has been, and especially the domestic one?

So in this quarter, our volumes were like around 10% in volume terms. And if I see in wires, it will be in mid-single digit, and in cables, it was in high teens. And if I see from domestic and export, then export volumes are a bit higher than domestic in this quarter.

So on the export side, the revenue also up by 39% around, if I calculate. So even after a disruption of the shipment or the cost increase, even after that, you had delivered very strong numbers. So do we believe that the impact of the export we will see in the Q1 more than the Q4?

Comparatively, when you will compare with Q4, of course, there will -- it seems there may be some more impact in Q1 of this year. The reason being that, in the month of March, we saw a major impact and since it still continues, so there will be a high impact in this quarter, it seems. But it depends how long this will -- war will go on.

Next question is related to the expense because if I look at, your margin profile has been quite strong. And as a percentage of sales, other expenses has gone down. So is there anything -- any expense item in the other expenses, which has restricted in the quarter?

No, no. Our business was as usual. And since there was more impact in value terms where prices have risen. So as a percentage, our expenses have come down. But at the same time, of course, we are working how efficiently we can increase our productivity, how can we have better controls of expenses. So these are normal exercise, but there is no one-off cut in my expenses or curtail down in expenses. So these are business as usual.

And lastly, sir, how has been the way forward, '27, the CapEx plan is?

We are on track, what we have planned, investment of INR 1,200 crores, out of which almost INR 350 crores we have invested in FY '26 already. And in this year also, there will be like a major expansion during this year where our CapEx outflow will be more.

Okay. Majority of INR 1,200 crores would be in this financial year.

Yes.

Next question is from the line of Achal Lohade from Nuvama Institutional Equities.

Congratulation for excellent earnings, very remarkable performance, given the current headwind. I just wanted a clarification. You said the inventory days went up because the goods are in transit for the exports, right? But at the same time, you also highlighted the impact will be more in this quarter. If you could just clarify, is it because we are assuming that it will be for the entire 3 months the issues, and hence, the impact? Or have I understood wrongly?

So Achal, there are 2 issues. One, since export could not take effect, physical, from my factory in the month of March, so whatever inventory we kept ready for those dispatches also increased my inventory. And at the same time, in February and what exports we made, that could not reach to their destination. So a few of -- now those consignments are on the way and will reach in this quarter also. But at the same time, since physical sales was not possible in the month of March to some extent and even in April, particularly related to Middle East area, so there will be some impact on my sales or revenue side. I hope this clarifies.

Just a follow-up on that, if I may, sir. Given it couldn't get delivered before 31st March, now that will also get accounted for in the month of April, right? And I presume that whatever volume loss or whatever issues we have on the West -- in the Middle East, that much capacity or volume could get diverted to other global customers. So in that case, the impact should not be very large. Am I -- is that understanding right?

Yes. To some extent, you are right. But what happened since -- in the month of March, suppose we could not make exports to Middle East, so this will not come to my revenue in the month -- in this quarter. At the same time, though we have diversified export market, even domestic market, and that is one of the reasons, if you see, in spite of very heavy sales to Middle East, still the impact is very less on our top line. So there will be some impact, I cannot deny because it's one particular geography is contributing to a great extent to your revenues. So there will be some impact. Of course, this will be compensated through some different product category also and different geography of markets also, be it domestic or export.

Got it. The second question I had was, is there any inventory gain, et cetera, in the fourth quarter?

So as you know, it's like always a continuous process where you keep having some impact of inventory either in the gain side or sometimes negative side also. So in this quarter, yes, we had some positive impact in my profitability, but it is in normal course of business.

Would you be able to quantify, sir?

No, Specifically, it is not -- because since it is continuous process, so not able to quantify. But it is positive impact marginally.

Got it. Sir, if you could call out the cables capacity expansion because wires -- given wires, we always have surplus capacity, I'm more curious to understand the cables capacity expansion time line. Would it be possible to know, since the Project Rise, when and how much capacity got added or getting added?

Actually, we have planned our CapEx plan in such a way that every 6 months, we will keep adding few capacities. It will be not like one overnight, I will add big capacity and -- because overnight, neither I can build sales side and neither capacity also. And when we have targeted like 18% volume growth year-on-year or in which also, majority will be through cable side, so it means -- and since in cables already, we are at optimum utilization of more than 90%. So to meet my growth plan, we will keep adding capacity. In every 6 months, we'll keep adding few capacities.

Understood. And just last question, if I may ask, particularly on cables front, how is the demand-supply situation? Do you see a risk of oversupply or because every single player is adding large capacity, so do you see a risk of excess capacity like in next 12, 15 months in cables?

No, no. Particularly for us, we do not see any such kind of challenge because, overall, we have -- we are establishing our B2B business line and particularly the growth plan in this area. And I don't find that there will be excess capacity looking to the overall demand in cable side of the business.

Next question is from the line of Rahul Agarwal from IKIGAI Asset.

Sir, just to get this number right, volume growth for Cables & Wires for fourth quarter was 10%. What was it for full year?

Full year, it is around 16%.

Okay. And just in terms of outlook for next year for Cables & Wires and FMEG separately. Cables & Wires, we should look at double-digit volume growth between 10% to 15%, and FMEG, purely because FY '26 was a weak year, and you've also mentioned that some price hikes will actually go through in fiscal '27, so what should be the revenue growth number we should expect for FMEG?

So in Wires & Cables, already, like we have projected, a volume growth of around 18% on CAGR basis. And we are on track. In this year also, we achieved on my targeted number also. So next year also, we are quite hopeful to achieve our targeted figures of 16% to 18% volume growth. And in FMEG, of course, last year was not very good, but still, I think it is like at par or better than industry average, whatever growth we have done, if I see 9 months figure of years also. So it seems, in this year, if everything remains same, then we are targeting a value growth of around 20% to 25% in FMEG business.

Got it, sir. And because these new capacities come onstream every 6 months, it gets difficult for us analysts to calculate what is the new capacity and new utilization for the company. So, let's say, for example, as on 31st March, 2026, based on the CapEx you have done so far, what is the peak revenue for Cables & Wires for the entire company? Could we get that number? Assuming that we utilize 90%, 95% of capacity as of 31st March, what could -- based on current copper, aluminum pricing, what could be the peak revenue?

No. Rahul, it becomes very difficult to calculate because revenue depends on so many things. Of course, one is raw material prices. Second is product mix also. So it will be very tough to predict that kind of numbers.

Okay. Even if you assume current pricing, still -- we did INR 9,000 crores, Cables & Wires sales this year, INR 8,700 crores to be precise. So some indication...

So normally, there's always -- so that's why we always say, based on these figures also, we do not give annual in revenue -- in rupees guidelines because on volumes, what we are focusing and always we say like, now if we are having estimates of 16% to 18% volume growth, then revenue, we think about on same pricing terms also. So -- because on month-on-month, our raw material prices keep changing, so it is very tough to predict in financial terms.

Got it, sir. No worries. And just lastly on April 2026. I know it's just 30 days into the business, but qualitatively, if you could just share what's really happening on cable and wire in the domestic market? How is it behaving purely because there was too much volatility on demand, on costs, everything, right? So just some qualitative statements on what's really happening with the industry or with RR Kabel for April '26 for Cables & Wires separately?

So business is like on normal. Even in April, we have witnessed normal, whatever it was year-on-year basis. So it's a normal business environment. Apart from the export, what we could not make to Middle East, it's a quite normal business.

[Operator Instructions] Next question is from the line of Ashish Kanodia from Citi.

Sir, the first question is on the demand side. If you can highlight, how was the demand for domestic in March because, at least, what we understand is, I mean, domestic demand was impacted in March. So if you can kind of quantify that? And also, how the channel inventory was at the end of March? Have you seen any channel destocking? So that would be the first question.

Yes. So Ashish, if you see, my numbers are already reflecting that March, or particularly this quarter, we had a good growth and even March was also a normal month. Of course, we have seen so much volatility in prices. But if you see as an overall business, as a whole, then we did not find any major destocking or demand side even in domestic market.

Got it. And sir, when you look at April, again, just on the domestic side, when you say demand has been normal, so is this more channel filling line? Or do you see that even from an underlying demand point of view, from a CapEx point of view, the demand uptick has been kind of normal?

So what feedback we have from secondary market also, it seems that demand is normal. And that is -- if you see March or after that April also, sales is going normal. So I don't think there will be a major issue in domestic side of demand.

Got it, sir. And sir, just on the payables day, right, I think that number has increased meaningfully this quarter. So if you can just help us understand what led to this increase in the payable days?

So we used a letter of credit facility and -- so that we can effectively manage our working capital. So we used this credit facility more effectively in this quarter.

Got it, sir. And maybe just last question is on the pricing side. One, if you can highlight that -- in the 4Q, if we look at the gross margin profile, does it capture entire pricing, because as you said, right, the RM prices was pretty volatile. And if I remember correctly, in 3Q, the entire pricing was not passed on. So does the 4Q gross margin reflects entire pricing? And secondly, if you can also highlight, in April, has there been any pricing action?

So again, this pricing is continuous process in our business. So if somebody says entire pricing done or not done, it will not be a right statement. Here, more importantly, it is continuous process where we keep passing on this pricing, either positive side or negative side. And same thing happened in April also, where we came up with one price rise to match this price rise, whatever we are facing in my raw material side. So it is a continuous process. There is nothing extraordinary in last quarter or even in this month, April.

Next question is from the line of Yash Jain from AMBIT Capital.

Just wanted to get an understanding, what was the contribution to exports from the Middle East region in FY '26.

So normally, if I say, out of our total Wires & Cables business, 30% is our export. And within that, we have almost 40% is export to Middle East side. So if I see by the figures, then of course, it's around 12% in the overall top line on a yearly basis. But since last year, the impact was only for 30, 40 days, so you can factor those percentage.

And this has continued in April so far, right?

Yes.

Next question is from the line of Vidit Trivedi from Asian Markets Securities.

You just said you have a share of 40% in the Middle East exports. So I just wanted your comment on the overall outlook for the exports, especially in the Middle Eastern region for FY '27.

I think it will be very tough to predict in such a scenario because nobody is aware whether this war will finish tomorrow or maybe 15 days or 1 month. But of course, we know there will be -- it will be not very long problem, and we can compensate through other geography also. And this year also, whenever this war will finish, again, we'll retain our sales from that region.

And sir, how is the overall shipping routes in this region? I mean we have heard that the insurance costs have shot up, the freights have gone up. So as of today, are we facing any issue with respect to the exports?

No. Apart from Middle East, we are not facing any issue. And since, in our case, freight and insurance and everything is passed through to our customers, so there is no direct impact, I will say.

Got it, sir. Sir, and lastly, on the overall pricing actions. So if you could just give us some sense on the pricing action for the overall year and during this month as well, if there's any?

Yes. So, as you know, in our case, whatever prices in our raw material prices, we pass on to our customers by changing our selling price and, as a thumb rule, whenever there is plus or minus raw material prices by 2% or 3%, then we change our selling prices also. And since this is a continuous process, and we see average of last 15, 20 days, so based on that changes, we keep changing our selling prices, and this is a continuous process.

Next question is from the line of Natasha Jain from PhillipCapital.

Congratulations, sir, on a good set of numbers, especially given the macro volatility. My first question is on Wires & Cables only. So what we got to know from the ground was that there is continued stress in [ Morbi ] because of which ceramics is having a problem and then wires is an ancillary to that. So when we spoke to a few channel partners, they told us that there's destocking, downtrading, metal volatility problems and all of that. And despite that, you've clocked in a volume growth of 10%. And I think wires have seen more pressure than cables. So just want to know what is it that you're doing different? Are you indexing yourself to newer markets where growth is coming out for you? So could you throw some detailed color on that? And I apologize for reiterating this question.

No, but rightly said by you, of course, there are some impact. And if you see, in my 10% volume growth, my wire growth is single digit -- mid-single digit, while cables is on high teens. So in that sense, there were some pressure. But at the same time, we are doing so many initiatives to establish our business by B2B side also and wire side also. And this is again a continuous process where we keep looking to new geography or increasing our distribution or monitoring our secondary sales. So this is a regular process.

All right. Sir, just a follow-up on that itself. You said definitely cables is doing better for you. So first off, could you just give a little detailed color as to how cables business is scaling up for you, both on exports and domestic? And because we have a low base in terms of the trailing quarters for cables, can we expect you to beat industry growth for cables and can that drive strong growth for you in the coming quarters compared to incumbents?

So when you see our business plan in earlier -- in our commentaries also, we have said that we are planning to increase our B2B base and expanding our cable capacity also, which means my growth will also come from cable side also, be it domestic market or export market. And at the same time, if you see, still we are a small player in terms of cable and with this capacity expansion and with our established -- already established network, we are quite confident to beat the industry average and we are planning to grow more than industry average, particularly in cable side of the business.

Next question is from the line of Chirag Muchhala from Centrum Broking.

Congratulations for the excellent quarter and year. Sir, first question is on the cable side. So sir, after the CapEx that we have done in FY '26, what [indiscernible] cable portfolio is ready, and over the next couple of years, how is the, I mean, pipeline to scale it up further?

So right now, we can make up to 66 kV of cable, and with new CapEx plan, we'll be able to achieve capability to build up to 220 kV, which is like lower end of EHV or higher end of HV side of the cable with this CapEx plan of INR 1,200 crores.

Correct, sir. So partly, it will be ready in '27, or this is likely to come up towards the end of '28?

No, it will be -- some part will come in mid of FY '27 also, by end of FY '27 also. So it is a continuous process, but it will get completed by FY '28. But every half yearly, we will keep adding a few capacities.

Okay. And sir, for FY '26, what was our Cables & Wires sales mix?

Product mix?

Yes. So cables -- contribution of cables and wires in the Cables & Wires segment?

So this year, my mix was around 73% in wire and 27% in cable. And reason being since copper prices have risen more, so it reflected more in revenue side. So this mix is -- as of now, it is 73% versus 27%.

Okay. And lastly, sir, on FMEG, as you mentioned, we are targeting 20%, 25% growth in FY '27, so just a color on individual key product categories like fans and lighting, regarding how the current summer season is panning out and the outlook for overall FY '27?

So we will achieve major growth in -- of course, fan is our major contributor, but apart from fan also, switch, switchgears, appliances, and all segments are -- still we are a very small player and we expected to achieve this kind of value growth in FY '27 by focusing on all of these sectors where we are present in FMEG.

All right. So sir, specifically for fans, if you can highlight how the summer season is playing out? And I mean, for the full year, what kind of growth are we targeting?

So in fan, also if you see, we have seen mixed season in April also. In a few parts of the country, there are like rain, but in a few parts, there are summer also. So it's a mixed season. I'll say now it is picking up -- fan season is also. For initial few days, there was some disturbance, but now it is picking up. And for full year basis, there will be good growth in fan side also.

We'll take our next question from the line of Naman Parmar from Niveshaay.

So just wanted to know, any new products that we are adding because currently we're seeing a very good traction on the data center and the BESS market? Any product that we are able to cater to that market?

So data center is one of the area where this wire and cable, we are looking at the growth. But since -- our B2B, still we are very -- we are focusing on all product range and sectors also. So data center is one of them, apart from infrastructure or wind and solar energy. So -- but of course, data center is one of the very big areas where maybe in next 3 to 4 years, there will be huge demand, and we will target that market also.

Okay. So any time line on that, when the product will get commercialized?

So in data center, the normal wire and cable only goes.

So we need not make any specific [indiscernible]

Yes.

We'll take our next question from the line of Tanay Shah from DAM Capital.

Congratulations on a great set of numbers in Q4. So I just wanted to understand our margin improvement, which we are speaking about over the next couple of years. Given that we're entering FY '27 with stable but elevated copper prices and, obviously, now inventory gains would be diminishing on a quarter-on-quarter basis, to some extent, and given the high base of last year as well, not to mention competition sort of entering in the second half of this year, what are our thoughts on how we want to improve our margins? I do understand that we want to scale cables up to a greater extent in our portfolio. But what do we think about our efforts on increasing the margin from our current levels to the margin which we've guided?

Yes. Thanks, Tanay. But if you see, whatever margin guidelines we have given, based on normal business environment. So when we say that from -- in 3 years, our margins will improve by 300 basis points. And if you see last year, already we have done 130 basis points. But still we are guiding for 9.5% for FY '27. So it means this -- considering that whatever business plan we have made based on our volume increase or better product mix or more efficient utilization or benefit of scale, by this, we will improve our margins to this 9.5% this year.

Sure. And sir, if I got the number correct, we spoke about a 16% to 17% volume growth for FY '27, right?

Yes. 16% to 18%.

16% to 18%. And FY '26, for 4Q is what we did a 10% volume growth.

Yes. Because our base was quite high for Q4 '25.

[Operator Instructions] Next question is from the line of Khadija Mantri from Capri Global.

My question is regarding data centers. So I just wanted to know if we have the required products to cater to data centers, and what could be -- is it going to be distribution-led or we will be approaching the customers on our own? And does these approvals take a lot of time?

So it's always a mix approach where we approach to end customers, but we may supply through my distribution network also or direct also. And again, this is a continuous process where we'll keep approaching to data center, take approval and start supplying. So since there is no new product for which we are waiting, but this is only existing products, so it is a continuous process where we are approaching to customers and quite hopeful to enter this segment effectively.

Sir, is it true that the requirement of cables in our data center is much higher as compared to, let's say, putting up a factory?

No, you cannot compare directly because it depends on what kind of scale that factory is there. But of course, since data centers, where like continuous power supply or electrical supply is very important, they cannot afford even 0.01% of power failure. So they have 4 or 5 kind of power backup and therefore, there is -- lot of cables and wires are supplied.

Okay. So is it a substantial part of our revenue as of now or no?

No, no, not as of now.

Next question is from the line of Saumil Mehta from Kotak AMC.

In terms of the prevailing April prices versus the quarter which went by, what would be the ballpark increase in spot markets or at least contracts where we'll be supplying in May or June?

No. Again, this is like continuous process and wherever we have like PV clause -- so it depends. If I have a very big order, then that order may have PV clause where we're selling on the last month price. And in our case, majority of our business is like on order basis only, and it is continuous process. Like in the month of June, mostly we will supply on the average of May or something like that. So there is no relation between Q1 price or...

Fair to assume that the current prices would be higher than the Q4 average prices? Would that be a fair assumption or not really?

Mathematically, you may assume that it will be higher side.

And versus the entire FY '26, would there be a decent double-digit pricing, which has happened?

Till now, yes, we have seen more than double-digit price rise already.

So ballpark, if I were to assume prices stay there, there is stability, obviously, it will have a slightly up and down, but broadly, if there is not much meaningful increase or decrease in the commodity prices, FY '27 as a year can be a 30% top line growth, assuming 16% to 18% volume growth is what you have highlighted in terms of guidance.

Again, it will be very tough to predict. But mathematically, if you go by my volume growth versus price rise, what we have seen on an average basis, 30%, you can assume.

Sure. And in terms of the total mix of cables in maybe for FY '27 or '28, once you commission the entire INR 1,200 crores CapEx, ballpark in terms of range, what would be the cable contribution in the Cables & Wires segment?

So, though, this year, my contribution is around 27%, again, it depends on the pricing of copper and aluminum also because both are moving in different direction. But by normal means, my cable contribution can increase by 3% to 4% in overall business. So if this is 27%, on a normalized basis, by year-end, it can become 31%.

And the overall contribution of cables would move towards more value-added. As in, erstwhile, if you would have sold more LV, you would have -- you'll start now selling more HV cable. Would that be a fair assumption?

No, no. This is nothing very specific role in that terms because it depends on product mix and how you will quantify that, I don't know. But otherwise, that is a fair assumption that my HV role will increase or HV contribution in my top line will increase. That is fair assumption.

Next question is from the line of Deepak Lalwani from Unifi Capital.

Sir, I wanted to understand what is the Wires & Cables mix in domestic and export separately? And a connected question to that is that I wanted to understand the macro, the end markets that we are servicing, the use cases that we are servicing and what kind of growth that you're envisaging for both the products across geographies, domestic and export, if you can elaborate on the macro also, please?

So our product mix is largely same in my export versus domestic, which I have shown like 73-27. Largely, it is quite similar to that only. But if you see at a smaller level, then in cable, we see higher growth when I compare to wire side for next 2 years. I can figure out, in wire, our growth may remain around 11%, 12%, while in cable, since our base is small, so we are expecting growth of 25% in terms of volumes. And since we see many opportunities in B2B side, be it infrastructure or data center or wind and solar, and at the same time in the export market also, we have seen huge opportunities in cable side of the business.

Sure. And sir, going -- this year, RR Kabel has performed remarkably well. So if you have to pick out 2, 3 pointers as to what has exactly changed in the way we do business or the strategic changes that you've brought in the company, if you have to pick up 2, 3 pointers that has mainly driven this, can you please spell out the strategy that the company has undertaken? And also going forward, we see that this industry is going to have many new players. So how are we internally placed to tackle this?

See one of the biggest thing, if you see, we have planned our business to grow structurally, particularly in B2B side, where we are focusing a few segments -- since this Wires & Cables business is quite big, and we are focusing a few segments, few geographies so that we can achieve structured growth. Same time, we have taken various operational -- operating projects also to improve our margins. And these are working well, what you have already seen now in this year's results, and we are confident to remain on track in next few quarters and years. And as much as your question regarding competition. So again, of course, there are new players and -- but we think the competition is always part of our business. So we keep driving our business based on our quality business structure and focusing on exports and B2B side of the business.

Okay. Can you please elaborate on your strategy on expanding margins as to what exactly you've done so far and the outlook on margins of 100 bps expansion despite having the inventory gain this year, how will we be able to expand on the margin side?

So if you see our Project Rise, we have seen that based on our operational efficiencies and product mix and expanding export business, so there are multiple things which are working well and we have planned and even this future margin improvement will be achieved through these measures only.

Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Mr. Rajesh Jain for closing comments. Over to you, sir.

Thank you, everyone, for taking some time out of -- to participate in this call. In case of any queries, reach out to us or our Investor Relations agency, MUFG Investor Relations. We wish you all the best and hope to interact with you soon. Thank you so much.

Thank you, members of the management team. On behalf of RR Kabel Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.