Ladies and gentlemen, good day. Welcome to the Q3 FY 2023 Earnings Conference Call of APAR Industries Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ambesh Tiwari from S-Ancial Technologies. Thank you. Over to you, sir. Hi. Good afternoon, everyone. This is Tiwari from S-Ancial Technologies. I welcome you all to the third quarter Q FY earnings call to APAR Industries to discuss the business performance and outlook. We have from the management side, Mr. Kushal Desai, Chairman and Managing Director, Mr. Chaitanya Desai, Managing Director, and the CFO, Mr. Ramesh Iyer. I would now pass on to Mr. Kushal Desai. Thank you, and over to you, sir. Thank you, Ambesh. Good afternoon, everyone, welcome to APAR Industries' Q3 earnings call. Let me start by giving an overview of our performance and follow that up with a short industry update. I would like to get into more details on the segmental performance of the three businesses. Post that, we can open up the floor to questions. During Q3 FY 2023, the consolidated revenue came in at INR 3,942 crores, which is 77% higher than the previous year. This was largely driven by volume growth across all divisions. Our export revenue grew by 144% year-on-year, and is today contributing 49% of the overall company's revenues. This is compared to 35% a year ago. The EBITDA is also up by 174% year-over-year to INR 349 crores, at an EBITDA margin percentage of approximately 8.8%. Profit after tax for the quarter came in at INR 170 crores, which is 210% higher than the previous year. It is at 4.3% versus 2.5% in the year ago period. nine months consolidated revenue stands at INR 10,270 crores, which is 63% higher than a year ago, and our export revenues have grown by 105% for the nine-month period. In terms of some of the key industry highlights, India's power consumption logged a double-digit growth of over 11% to 121.19 billion units in December 2022 compared to a year ago. The robust growth of the power consumption indicates sustained momentum of economic activity through the month of December. The peak power demand met, which is the highest supply in a day, rose to 205.03 gigawatts in December 2022, while the figures for the previous year at the same period were 183.24 gigawatts, and it was 182.78 gigawatts in December. Power deficit in the country rose slightly to 0.6% in the April-November period. India's power consumption logged a high of 9.6% to 343 billion units in Q3 FY 2023 compared to a year ago. These are all robust growth indicators and a clear sustained momentum in the economic activities that are a reflection of the amount of power consumption that the country is observing. The central government, as most of you may already know, has announced a very ambitious RDSS scheme, largely around improving distribution, power distribution of approximately 3 lakh crores INR. Of this, about 30% is allocated towards spend is approximately allocated towards cables and conductors. It will largely be cables and to a smaller extent, conductors. This spending is expected to be deployed in a period of approximately five years. Also, the total outstanding dues owed by the electricity distribution companies to power producers, that is to generation companies, has nearly halved to INR 675 billion as of December 2022, compared to INR 1,210 billion as of December 2021. This can be attributed largely to the various steps taken by the government, such as implementation of late payment surcharge rules and provision of a facility for equated monthly installments to utilities. If this trend continues, then it is a good sign of more discipline coming in terms of the distribution sector, which so far has been the Achilles' heel of the entire power infrastructure of the country. I would now like to specifically talk about the business highlights by each segment. Our conductor business revenues in Q3 FY 2023 grew by 103% year-on-year to reach 1,912 crores for the quarter, with a volume growth of about 99%. The export revenues grew by 288% year-on-year, contributing to 53% of the division's overall revenues. The premium products in our basket of conductors contributed towards 44% of the revenue mix. The EBITDA per metric ton post-forex adjustments came in at INR 49,942 per ton, which is a historic high. The conductor division has seen a transformational journey in the past decade, and I think today we are reaping the fruits of all those investments and decisions that have been taken and invested in during the past several years. The improvement in the EBITDA is mainly due to the higher share of premium products, the higher share of exports in the conventional conductors, where our realization is better than in the domestic markets. There have also been a couple of strong tailwinds where we've seen the price of steel having reduced, as well as the container freight costs having come down to most destinations at the pre-COVID level. During the nine-month revenues, they came in at INR 4,899 crores, so they're up 81% year-on-year. Volumes are up 51% year-on-year. The EBITDA for metric ton for the period came in at INR 37,900, which is 125% higher than the previous year. Our current order book stands at INR 4,885 crores, with 44% of that share coming from premium products. Overall, our conductor division has had a very good quarter, and in fact it's the best quarter that it's had in its all-time history. There the situation has been a little bit more difficult. In Q3 FY 2023, revenues came in at INR 1,245 crores, which is up 38% year-on-year. Volumes have grown by 9% in the quarter, backed by growth in the transformer oil business, both domestically as well as overseas. Exports contributed towards 43% of revenues. EBITDA post-forex adjustments came in at INR 1,646 per KL, and this is in line with the guidance which was given earlier, where there was a clear expectation of lower profitability given certain inventory corrections and price corrections which were expected. The lubricant revenues came in at INR 238 crores with a volume of 17,063 KL. Looking at the nine-month period, the oil division revenues are up 33% year-on-year at INR 3,489 crore. The volumes grew by 3% in the nine-month period. EBITDA post-forex came in at INR 5,190 per KL. Looking at the cable division, in the third quarter of FY 2023, revenues grew by 89% year-on-year to reach INR 921 crore. There were significant increases coming from the sale of our elastomeric products as well as exports. Our exports contributed towards 49% of the overall sales in Q3 versus 35% a year ago. The elastomeric cable revenues are up 29% year-on-year. We continue to see a robust business in the renewables energy space, both domestically as well as overseas. EBITDA post-forex for the quarter came in at INR 109 crores, which is 11.8% of revenues, compared to 8.7% a year ago. Looking at the nine-month period for cable, revenues are up 77% year-on-year at INR 2,320 crores. Again, the elastomeric business and the export business is what has contributed to the growth. The overall export business is around 52% of sales in the nine-month period. The EBITDA post-forex is at 9.8% for the nine-month period, compared to 4.4% the previous year. Our business is expected to hit the target which we had mentioned in our guidance of INR 3,000 crores revenue for this segment. Overall, we continue to be quite optimistic about the growth prospects of the company. All the key growth parameters seem intact. We are well-placed to tap into the benefits of power infra-led spends, both domestically and overseas in key markets like the United States, Australia, Europe, and Latin America, especially as there is this push towards renewable energy as well as the China Plus One benefit or opportunity for India continues. I would also like to mention that we have an updated corporate presentation with significantly more details on the company profile and performance, which has already been uploaded on our website. Specifically, I'd like to highlight that it carries more information not only on customer mix, but also on receivables and receivables funding that we have for the business. With this, I'd like to come to the end of my comments. I appreciate the time all of you have taken out for joining this call. I can open up the floor to questions now please. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Mahesh Bendre from LIC Mutual Fund. Please go ahead. Hi. Thank you, thank you so much for the opportunity. Sir, there is a dramatic improvement at EBITDA per ton for this quarter, so we are hitting around INR 49,000 now. Last year we were anywhere between INR 15,000-INR 20,000. Why this improvement has happened? As we explained in the opening remarks, the conductors division has seen this transformation journey, and the high margin is actually the result of, you know, two things. One is that the share of premium products is going up, which gives us a higher margin. Secondly, even on the non-premium products, the proportions of our overseas businesses has increased. Both have resulted in high margin. Also we have seen some tailwinds in the form of steel prices as well as freight, which has come down since the last one year, which has increased this margin to about INR 49,000 per metric ton. If you keep aside the benefit of steel prices and the trade costs, transportation costs, so what will be the sustainable EBITDA per ton could see going forward? In the short term, which is for the next couple quarters, you will still see EBITDA per ton, which is relatively high, in the INR 30,000 kind of range. We've given a guidance that sustainably it should take a longer period of time. This is the structural changes that have happened due to the premium products. We've given a guidance of INR 22,000-INR 24,000. As these premium products are growing, the EBITDA per ton will continue to edge upwards. One fundamental mix which has changed, Ramesh Iyer has already given you that 44% of the revenues have come from premium products. When you look at the balance, 56% of the revenues, a large portion of that is actually conventional conductors which has gone overseas as opposed to have been sold in the domestic market, where we have been seeing better realization. The domestic market, still realizations are quite poor because the standards itself expected from many of the EPC players are laid at a very low level. Whereas, you know, as you go into the more developed markets, which I mentioned in my opening comments, which are countries like the United States, Europe, Australia, Latin America, the standards expected are much higher from suppliers. We look at the market on a global basis. Wherever we see the best net backs in terms of profitability, then we focus on servicing those contracts. In the current situation, we are seeing good opportunities in these overseas markets for standard products, and we are focusing on the domestic market largely for the premium value-added products. That mix is what is helping, you know, drive this. Of course, the tailwinds, as Ramesh mentioned, there are two specific tailwinds which are there, which is that from the time that some of these prices were quoted, steel prices have moved up and some of the contracts are DDP contracts. We saw the brutal side of it, you know, last couple of years. In the last two quarters, these freight rates have been coming down, so we've been seeing now the benefit of that. I hope that kind of holistically answers your question. Thank you, sir. We have the next question from the line of Amit Anwani from Prabhudas Lilladher. Please go ahead. Hi, sir. First of all, congratulations for the great set of numbers. First question for the conductors business. Just wanted to understand in more detail, you mentioned that the non-premium products are seeing higher exports and HCC, we are largely focusing on increasing the volumes in domestic markets. Any color on two, three key geographies where you're seeing higher traction for standard products or any two, three geographies where you're seeing higher traction for HCC products. Some color on that and how the market is affecting your products in conductors business and which markets are affected. I'm not sure whether we understood your question exactly, but see the order inflow for high efficiency conductors and the copper products and all continue in the domestic market. You know, as I mentioned earlier, 44% of our INR 4,800 crore order book, INR 4,885 crore order book is these products. The standard products which are there, which your standard conductors, we have been increasingly getting opportunities to supply overseas where the profitability better than in the domestic market. That's the mix that we are Yeah. The question was like you said standard products. Just wanted to understand the major two, three geographies where the standard product. As I mentioned earlier, there's the United States is the largest market, and, following that, you know, Australia and some markets which are in, Latin America. Can we assume like these are contributing more than half of the exports for standard products? Yeah. Yeah, absolutely. Okay. My question for cables, are we still sticking to 20%-25% cable for next two years and that? Second thing is, you mentioned the elastomeric cables contribution is going up. If you can just highlight how much% it contributed in this quarter. Yes. We've, we continue our guidance about 25%-30% on the cable business, as we have been talking earlier also. Sorry, what was the next question on elastomeric growth? Contribution in the quarter in terms Yes. If the total growth is coming from our HT cables, as LT cables, as well as elastomeric cables, and it's a combination of domestic as well as export. What has happened in the cable business is that our share of exports has gone up considerably. If you look at the quarter three, we are close to about 50% in terms of exports, which was just about 35% last year. The share of export has gone up, which is what has resulted in the growth of this cable business. Right. The growth that we are seeing, it's a smaller growth, but a growth has also come from our, what we call live UV cables and, you know, the business which is a distribution-based business. We started off, you know, one first year we had INR 20 crores, then INR 60 crores, and last year was INR 100 crores. This year we should be close to INR 200 crores. The following year we are targeting INR 350 crores in that segment. That business is also growing parallelly with exports. Then you ask for the growth on the what is driving the growth on the elastomeric side. Right. That growth is being driven by the renewables energy space, the expansion happening. Mainly domestic? We were until two quarters ago, the business was all purely domestic, but now we have some of the increased capacities which I had spoken about even in previous quarters for cables that go into both windmill as well as solar. Now the export of those products has also started. Right. You will see actually as we get into FY 2024, more and more export of these renewable cables also happening. Cables going to renewable energy space. This elastomeric is a higher margin business? It's. Yeah. The elastomeric cables are very specialized cables. Therefore they, you know, they carry a higher margin. We are also one of the few vertically integrated players where we make our own, we do our own insulation, you know, the polymers that are used for insulation. We do our own formulation and mixing of those. My last question on RDSS scheme, which you mentioned in your opening remarks, and you highlighted that 30% might be allocated to cables and conductors over five years, which gives me about INR 18,000-INR 20,000 each year. If you could just highlight on the addressable market for APAR and how much APAR as an entity can grab out of this pie. Theoretically, we have products that cater to the entire basket of what is required. These are, you know, low voltage and medium voltage cables. It's a combination of underground cables and overhead cables slash conductors. You know, we are in a position to actually address all of these requirements which are there from a product standpoint. Now, it all depends then finally in terms of, you know, who the counterparty is and what are the terms and conditions. My main point of bringing this up is that there is going to be a good growth in the requirement of cables, both domestically as well as export. Right. Usually when they say five years, it means still another year or two, but, you know, the market is going to expand because of this RDSS in addition to whatever else is already there, you know, in terms of market segments. Therefore, the overall bullishness on the cable side is also quite high. Right. Last, if I may squeeze in. Can we assume that we will continue to see sustainable high growth in exports markets, at least in near term across conductors and cables? Yeah, absolutely. We expect the current momentum, you know, on the export side to continue not only for the next quarter, but also whatever we can foresee in FY 2024 as of now. You know, as you may be knowing that even in the United States the infrastructure build and all is already on its way, you know, to get approved and executed. The benefits of some of that have still not come in. This is pre the infrastructure build spend actually taking place. On the renewable side, as more assets are coming up, it requires not only cabling at the site and then evacuation to the grid, but then the grid is basically a conductor grid. That then evacuates the power into, you know, whatever is the grid in that particular country through which distribution to customers takes place. In, in short, you know, there may be ups and downs in terms of quarters, but if you look at the trend over the next three-five years, the trend is very positive because globally power infrastructure is being added. Thank you very much, sir. Thank you. The next question is from the line of Gopal Agrawal from HDFC Mutual Fund. Please go ahead. Good afternoon, sir. Many congratulations for great set of numbers. Thank you, Gopal. Could you speak up a little bit because we are, y our voice is a little soft. Sure, sir. Just wanted to understand the two segments have done well. Generally, what's the outlook on the lubricants? Because generally this quarter impacted by inventory and products. How do you see the trajectory? Thank you. Can you just repeat? Your voice was very low. Sorry to interrupt, sir. Yeah. Mr. Agrawal, I would request you to use your handset to ask a question at this time. Yeah. Hello. Yes, please proceed. Yeah. Just wanted to understand your outlook on the lubricant business because generally this quarter had a negative impact of currency and inventory. How is the trajectory on this end? On the lubricant, let me address it specialty oil and lubricant, the two separately. In In the case of the specialty oils, which is your transformer oils, white oils, et cetera, the transformer oil volumes have been reasonably good, both domestically as well as export. We've had a bit of a cost pressure which is there. Part of it has come basically from base oils having fallen at a very rapid pace. Some of it is due to the lack of purchase from China, which is the largest importer of base oils in the world. All of us know the recent quarter problems which they've had, and that has continued into January of this year, because of, you know, COVID spreading and many establishments and factories not running fully normally. As a consequence, you know, there was a big drop that took place in spot availability, meaning pricing of spot cargoes of various base oils. The public sector refineries had a lot of surplus base oil for two reasons. One is the overall demand of lubricants has been a bit soft, especially the retail side has been a little bit on the soft side. I guess this resulted in an untimely or unplanned increase in base oil inventory which the public sector oil companies had. In addition to that, they've also had record production of base oils compared to previous periods. This put together resulted in them having excess product. Base oil is a very tricky item to store because you can only store it in specific tanks of specific quantity. If the volume is getting produced faster than you can evacuate, the only option is to crash the price so that people end up buying it. That's precisely what happened. We were expecting a little bit of that to happen, what actually ended up happening was much more brutal than had been envisaged. Now as we go into Q4, that situation is getting normalized. My sense is that by the end of this year, that's by March, the situation should come basically closer to normal, because I don't think, you know, fire sales will continue. There is also an industry view that, you know, Chinese demand may come out stronger. That's the reason why lot of the refineries around the world have actually cut production. Sure. It seems like a bit of a short-term problem. By the end of the year, I think, you should start seeing more normal economics. Lube companies which keep very low inventory of base oils and they buy on a just-in-time basis, obviously they have benefited because they could take advantage of these spot prices. Companies like us run 70% of our purchase on longer term contracts. Therefore, you know, it's taken longer for the tail to get cleaned out in terms of the inventory. Got it, sir. Really appreciate and, really, I'm very happy to see the volume growth and profitability. Just wanted to understand your focus on B2C side on the cable business, because your cable quality is quite good. How do we penetrate market? Just your strategy on that. Thank you. On the B2C side of the cable business, it's, you know, we've taken a strategy of wanting to build that on a step-by-step basis. I mentioned earlier that from a revenue of approximately INR 100 crore that we did last year, we'll be at close to INR 200 crore this year. We have a target of hitting INR 350 crore in FY 2024. That is largely coming. Our products are very well received. They're of the best quality that's there in the country by a margin. The key is actually adding distribution. We've been going about that. We today have distribution in the five southern states. We've added Uttar Pradesh. We've also added West Bengal and Bihar. You know, the rollout is happening. Our expectation is that, you know, this will slowly increase, you know, on a step-by-step basis. If there are some basic numbers you'd like. You know, if you look at March 2022, we had about 20 distributors. As we hit December 2022, we are close to 100 distributors. If you take our presence in retail counters, we were at 275 retail counters in March. We are at about 1,550 retail counters at the end of December. You know that spread is increasing, and our product The way we sell the product is by conducting demonstrations to electricians and specifiers. We were at around 6,000 demos per quarter. You know, in the March quarter, we've increased to 25,000 demos, you know, in the September-December quarter. You know, all of these is all grassroot level. For example, between electrician meets, we were at about 450 meets in the March quarter. We are at about 2,500 meets in the December quarter. It's a, you know, we want to grow this on a grassroot level basis with good distribution. You will see every year about INR 100 crores, INR 150 crores getting added in this segment year-on-year. Great. Great. Thank you very much. Thank you. Thank you. The next question is from the line of Charanjit Singh from DSP Mutual Fund. Please go ahead. Hello, sir. First of all, congratulations on great set of numbers. My first question is regarding the exports market. While, you know, these markets are pretty large and our opportunity size is pretty strong, you know, from the growth perspective in the export segment, how we can see from the next two-three years perspective? Do you see the overall mix of export versus domestic increasing further going forward in next two years' time frame? That's my first question. Yeah. In terms of overall growth, we expect that the domestic market will grow because of RDSS as well as, you know, industry growth and just general GDP growth. The good thing about wire and cable is that anything, any establishment that is built requires some wire and cable just because of the electricity that needs to be distributed. The domestic side, you'll see, you'll definitely see growth. That growth will allow us to do a little bit of cherry-picking in terms of who we want to service on the domestic side. Our sense is that the export markets for us, export sales will grow faster than domestic. We've actually invested a lot of money in approvals. You know, for example, the United States requires what is called a Underwriters Laboratories approval, U.L. approval. We have the highest number of UL approvals in, you know, the addressable segments out of all the Indian manufacturers, you know, as of today. We are still working on more approvals. We've now penetrated the European market for cables that go into solar and wind. We already supply a fair amount of cables into Australia, for example, that cover solar, wind, and where there's a big expansion happening on metros, underground metros and, you know, train lines. We've been a major supplier to the Sydney Metro. Now we are bidding on all the other metros over there. The overseas business, I think, will also continue, and my sense is the overseas business will grow at a faster pace than the domestic business. Got it, sir. The other thing is like, you know, you talked about a lot of these distribution reforms and what we are also seeing on the ground, you know, re-conductoring. If you can touch upon that aspect, you know, how these distribution reforms can, you know, add to the overall growth for the conductors business and even for our transformer oil business? As far as distribution reforms are concerned, it is much more cable-intensive than conductor-intensive. You'll see the cable business being able to address a large portion of that opportunity. There are a certain class of conductors called medium voltage covered conductors. Mm-hmm. Where you really make a conductor and then, you know, you throw an insulation on it. It's actually produced by our cable division, even though the alloys and conductors are originally designed by our conductor division. The finished product is sold by our cable division. We largely this will be addressed by the, by the cable division. In terms of transformer oil, you will have more and more distribution transformers going in, and you will also end up having some amount of power transformers which will bring in power to the grid, and then from that substation connect into the next level of distribution. Transformer oil demand will be kind of linear with the, you know, with the number of transformers which are being supplied. Most of these transformers, almost all of these transformers under RDSS will be oil-filled transformers. Excuse me. Got it, sir. Sir, last question from my side is on telecom and convergence business. We have seen, you know, some ramp-up from your side with new business head. How is that opportunity shaping up? Maybe it may not be, you know, in one-year timeframe, but in a longer term, do you think that would, getting bigger for us? It is definitely getting bigger. We've created a separate team within the company with a separate business leader and, you know, who's working across the synergy of the divisions that we have focused on this. There, you know, we have OPGW, which is a big, a big play for us, and you'll see within the conductor division more and more of this OPGW, you know, turnkey work which we are doing. In addition to that, you know, the 5G rollout will give a lot of impetus to not only the fiber optic side but also the copper side and hybrid products. The 5G rollout is going to happen in India, but it has already started happening in the United States and in some of the overseas markets. We have a set of products which are addressing this. We are in the process of getting a whole series of products. Which are under approval from some of the big players in these overseas markets. You will see this particular vertical also growing over a period of time, and it's pretty much going to be new growth that way. I mean, even though it involves conductors and cables, it's a different vertical and you're addressing a different market segment, which is basically telecommunication and, you know, 5G infrastructure. Got it, sir. Sir, thanks a lot for taking my questions. All the best for the future. Thank you. All right. Thank you. Thank you. The next question is from the line of Chirag Setalvad from HDFC Mutual Fund. Please go ahead. Sir, congratulations on a fantastic result. Just a few questions in terms of profitability. You mentioned on the conductor front that improvement in mix, steel prices and lower freight all contributed. I missed those numbers. I know third quarter profitability came in at INR 40,000 a ton. What do you think is a sustainable level in the near future, and what do you think is a sustainable level in the long term? You mentioned it, but I missed those numbers. Yeah. In the short term, the momentum can continue. Of course, the exact number will depend on the exact, kind of products that we execute, also depending on how much orders that we get during the period. You know, we expect in the short term, it could be in the range of about 30,000 odd per metric ton. On a sustainable basis, we clearly see to be in the range of about 22,000-24,000 per metric ton. What would cause it to drop? Is it the mix that will change? How much of this INR 40,000 can be attributed to the steel prices and lower freight? So the way maybe to say is that, you know, it really depends on your, you know, macro and geopolitical situation prevailing. Now, currently these situations are all favoring us. You know, you know, if this kind of situation favors us, possibly we could see this high momentum going forward. You know, we are able to give a visibility depending on what we can clearly see as of now. Chirag, just to just sharpen the sort of numbers or the view here, did you see what is what has been the transformation in terms of the of the margin per ton, is that the domestic business of South Asia, which is India, Nepal, Bangladesh, you know, all this has seen a lot of high efficiency conductor supplies as well as, you know, copper and the premium products? We and that's contributing towards about 44% of the revenue. The balance 56% today is largely going towards exports at good realizations into fairly developed markets like the United States, Australia, and to some extent Latin America. The realizations that are possible there and the kind of competitive intensity is very different compared to the domestic Indian market, because the expectations on the customer also are significantly higher. This mix is what has given, you know, that boost. If this mix continues, you will be in the INR 30,000 range. If things are getting fully normalized, there's also some China Plus One advantage which we have. If some of these things disappear, then you will still be at just because of the product mix that is available today, you will still be in that INR 24,000-INR 25,000 per ton range, simply because you are selling higher value added products. If you want to model it over the short term, you'll be in the INR 30,000 odd range. If you model it over a longer period of time, INR 20 thousand, INR 24 thousand, INR 25 thousand a ton can be taken as a base number. Whatever favorable situations are there will be a top up on that. Perfect. That's very helpful. Similarly, the cables business, where do you see sustainable profitability? The cable business, if you see in the last few quarters, our margins have gradually increased, and this quarter we had 11.8% as EBITDA. We see that, on a long-term basis, a double digit of 10% would be sustainable, with the product mix improving, with, you know, our geography mix improving and also getting high economies of scale. At this point of time, we are maintaining the guidance of about 10% on the cable business. Perfect. Great. Thank you very much, and all the best. Yeah. All the best. Thank you. The next question is from the line of Mihir Manohar from Carnelian Asset Management. Please go ahead. Hi. Thanks for giving the opportunity and congratulations on a great set of numbers. Sir, largely I wanted to understand around the premium conductor side. I mean, given the fact the premium conductor percentage is going up and even exports is getting incremental focus which is leading to higher profitability. I just wanted to understand, isn't the competition putting up focus over here, given the fact that this is this part of the business is turning out to be a bit profitability business. How do you see competition largely from Indian players, over looking at exports and only local players in these geographies? If you could throw some light around that. Are there any, you know, the capacities which are coming up from competition? Of course, there's some movement around that. That was my first question. Second question on the copper prices. I mean, of late, around the month, we are seeing copper prices going up by 10%. How do you see that impacting our profitability on the recent run up which has happened on the copper prices? My third question was on the U.S. infra side and given the, you know, incremental focus which will come on U.S. infra bills, what is your strategy here? What is your on ground, you know, on ground people there who get your quotes? What's your GPM strategy and what kind of business are you possibly looking at over the next two to three years specifically from the U.S. infra bill side of the things here? I'll take the first question first. The competitive advantage that you mentioned on the conductor division, if you look at this, our updated presentation, we have a separate slide that talks about our competitive advantage on conductor cable and oil division. Just to talk about it, what we feel is that our products, which are premium products as well as conventional products, we have some competitive advantage as compared to the competition, basically in terms of technology and the know-how that is involved in this product and design, which actually acts as a barrier to entry for the competition. It involves a special stringing mechanism as well as there is a lot to do with the design of the product, which is something that cannot be easily copied. It's just not a product supply, but it's the entire turnkey solution that is what we give for some of the premium products, which actually acts as a barrier to competition over there. In terms of conventional products in the export, you could see a lot of requirements that a customer demands is not only the product, but also in terms of reliability, quality, and also in terms of, you know, there is management exercises. We look at the holistic things instead of only looking at the product and the pricing there. Based on the years of experience that we have in this business, we are at a very advantageous position when it comes to supplying these products to the overseas market. Could you repeat your second question? I just missed out. Yes, sure, sir. My second question was on the copper prices. I mean, of late we have seen copper prices going up by 10% in the last month. How would that impact our profitability? If you could throw some light on what is our hedging strategy or how do we hedge it? Throw some color around that. The copper price there won't be any impact, you know, because the entire B2B side, we hedge the product on a back-to-back basis. The moment we have orders, we hedge. Now, just like we were running the hedging strategy on aluminum, we run a similar hedging strategy on copper. You won't see any major impact due to the movement of copper prices as such. The prices are high or low are getting passed on to the customer. In many cases it's actually fixed because the order has come at a fixed price, and the metal has been booked back to back on that. For example, all the deliveries which we do for solar cables, windmill cables, for your defense, for the railways, we follow the same strategy. Where the moment the order comes, you know, the forward cover is taken or the forward booking is taken and the metal is hedged. Where we are open is to some extent on the wire and cable side through the distribution network. There we've seen all the major players, they increase and decrease prices on a very regular basis. You know, their stakes are much higher. We are just a follower in terms of those changes which happen. The Polycab, Havells, KEIs and RR Kabel are the ones which move the price up and down, based on copper movement. You know, so we will just follow, based on the same proportions. Sure. There will be major impact on the copper. Sure, sir. Got it. Yeah. The third question was on the U.S. infra side. Sorry, it was on? Yeah. The third question was on the U.S. infra side. I mean, given the fact that U.S. has come out with its infra bill. On the U.S. infra side, the fundamental growth is coming from, you know, three areas. Number one, you know, cable requirements which are going into the installations of solar farms and wind farms. Second is evacuation that's happening from that into the grid, which is the way the conductor comes into the play. The third piece is the actual strengthening of, or replacement of, you know, old transmission networks which are there. We are in a position to actually participate in all these three. Sure. Yeah. Understood. Sure. Just lastly, an extension to the earlier question which was there on the premium conductor side. Are you seeing competition putting up capacity from the premium conductor space? I mean, is industry putting up incremental capacity on that account? In that, you know, we have competitors who are also adding some capacity on that. You know, here it's just not a question of adding capacity like in a conventional conductor. Most of these are part of a solution that's provided. There's a design element of the conductor involved. There is a design element of the network that's involved when you do the reconducting. Then there is also stringing technology which needs to be in place. As a turnkey operator, you know, we actually have the most advantageous position because we have all these three elements with us. We have the product, we have the design of the network, and we have the ability to string and deliver the reconducting or new conducting projects involving these special products. Sure. That is all from my side. Thank you very much, and best of luck for the future. Thank you. Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead. Thanks for the opportunity and fantastic set of numbers. I think what we were discussing earlier, I think it's finally taking place for the conductor segment. Good to see that you are still having the confidence that this business will continue to grow. Couple of questions I think more on the balances side and on the products side. What's the acceptance as on Q3 of 2023? Our interest bearing acceptance is about INR 3,400 crore as of December end. Okay. The diet will be a government debt or the government debt, talking government debt? We have a long-term portion of the debt, about INR 200 crores. Mm-hmm. The current maturities of long-term debt is about INR 50 crores. Okay. Got it. What kind of CapEx this year you're spending more on the cable side and not on the other businesses. How much you have spent, and what's the outlook for the next year? The CapEx spend over the next, 15 months. Mm-hmm. we expect to spend close to about INR 300 odd crores between the cable division, which is the lion's share of it, and the conductor division. There'll be very little CapEx on the oil side. Our plan is that not only do we want to put in CapEx to meet the current growth, but now look at, you know, ensuring that we have some excess capacity or surplus capacity in place a little bit earlier than the demand comes in and hits. Right. As we are going around the world and getting approvals, and more and more projects are getting approved, we continue to see the growth taking place. You know, it's more prudent, we believe, to actually put the capacity a little bit ahead of time. We've looked at a new greenfield site for cables. Sure. On, in conductors, we've acquired some land right adjacent to our, one of our plants near the Silvassa area. Mm-hmm. Machineries are going in there. About INR 300 odd crores over the next 15 months. Mm-hmm. is what we expect the CapEx to be in. That should help, you know, keep the momentum going in terms of growth, both for cables and conductors. Sure. Sure. Sure. Out of the INR 300 crores, last part I assume that it is spent over the next 12 months, right? Yeah. The whole thing will go in the next 15 months. Sure. Okay. What's happened today is that the reason why the number looks a little higher, and the period also is about 15 months, is that if you place an order for equipment today. Mm-hmm. The equipment delivery times have substantially gone up, whether it is because of manpower or it's because of electronics. Many critical components for these still come in from overseas markets like Europe and the United States. Delivery times have gone up substantially. That's why if we want to make sure we don't miss opportunities, we need to invest a little bit ahead of the curve. Sure. I got it. I got it. Okay. Okay. Thanks. Thanks. Thank you. Thank you. The next question is from the line of Vivek Gautam from GS Investments. Please go ahead. Sir, congratulations on a excellent set of numbers. Few question is about the due to Ukraine crisis and now China opening up after three years of COVID, it is now, instead of the China Plus One policy prevailing, I've been told that exports to Europe and U.S. are suffering because China is able to supply at a competitive price. How come we are getting so good performance in exports? Secondly, is there a transformer oil shortage in India leading to high prices? Even black marketing, I've been told that of transformer oil and which is helping us a lot, sir. Well, let me address the two questions separately. In terms of the China Plus One, I think it's far more, it's a very strategic decision that many utilities and, you know, countries have taken. It's not related to, you know, COVID being there for the last three months and COVID going away. We have seen customers who have taken undertakings from us that not a single component that goes into whatever we supply to that country will have a product coming in from Russia or China, for example. I don't think this China Plus One is something in our industry at least that is going away in a hurry. It's here to stay. You know, Indian companies actually like us stand to gain because it's part of a strategic vision that buyers are having. As far as the second question, there is no shortage of transformer oil. We can deliver any quantity of transformer oil. There is no black marketing of transformer oil happening. I don't know where this has come from, but there is no shortage, in short. There is no shortage of transformer oil either in India or anywhere in the world at this stage. The growth which we have seen has largely been in volume because we've been able to address. We are approved pretty much everywhere, wherever the demand is taking place. On the contrary, because the raw material costs have fallen very sharply, as I mentioned earlier, people like us who work on longer term contracts have been hit in the short term because we've had to adjust our prices, lower than what the supply chain reduction would have normally allowed us. That will start reversing. The trend will start reversing in this quarter, probably normalize in the first quarter of next financial year. How is the opportunity size and what CAGR we can grow and how sustainable has been that good performance over the last two quarters, sir? In terms of sustainability, you know, especially in cables and conductors, you know, cables especially, we can see a 25%-30% growth to come for the next several years. In terms of conductors, we've seen growth at least for the next two-three years, we will continue to see a good momentum as all these transmission networks continue to be built. This is not a short-term phenomenon. I think it's a big structural play. Depending upon how much infrastructure is replaced in countries like the U.S. You have to keep in mind that a lot of infrastructure there went in between 1945 and 1970, before that big oil shock took place. As that infrastructure gets replaced. So far people have been somehow or the other pulling on. You know, there is a finite life that all these products have. They're designed to last for 30- 35 years. Already many places they've lasted for over 50 years. They'll finally give way. Depending on that, you will start seeing, you know, conductor demand growing. If you exclude any major, you know, just a steady growth, you will see at least for the next two, three years, you know, clear visibility is available. How has been the B2C performance and branding and that, how are we getting the response on the Sonu Sood brand ambassador? Our B2C response has been good. I've actually thrown up very specific numbers and against one of the earlier questions. Bottom line is that the business has grown. Last year it was about INR 100 crores. This year we will be at about INR 200 crores. Next year we are targeting INR 350 crores. Okay, sir. Thank you, sir. Thank you. The next follow-up question is from the line of Amit Anwani from Prabhudas Lilladher. Please go ahead. Hi, sir. Just a couple of questions on any targeted debt level which you are looking at in the medium term. I can see interest cost and finance charges at INR 2.5 crores for nine months, significantly higher than the last two full years. Any liberation on debt, how should we model out the interest cost in coming quarters? I think the SOFR rates have actually increased over the last seven-eight months. If you see every quarter our interest cost is going up. In terms of the rate increase, almost Q3 would be maxed out unless any further rate increase are there. Also it's a function of improvement in the business. If you see the business is growing, you'll see the interest cost also going up in line with the volumes there. But these will all be, you know, taken into consideration when we price our products to the customers, because we take the recent exchange rate and the recent interest rate at the time when we price to our customers. You'll see an increase in EBITDA, as well as you'll see an increase in finance cost as our volumes and interest rate go up. Q3 could be a good approximate at this level of business. On a unit basis, I think you're already at a, you know, nearing the max, depending on whatever the FOMC meeting results are. The number of days for modeling purposes, the number of, you know, the structure of the receivables inventory, et cetera, is reasonably steady. That is what can be used. In terms of long-term debt, you know, we have the balance sheet has the capacity to borrow. We have INR 250 crores of long-term debt, INR 50 crores we have repaid in this quarter. We intend to take some borrowings for the 300 odd crores of expansion that's in place so that the retained earnings are available for, you know, working capital requirements, et cetera. For modeling purposes, you can take the current NOD, you know, number of days for each of these, and they are, they should be reasonably representative of what will happen in the days to come. Got it, sir. Thank you. Thank you. The next question is from the line of Himanshu Upadhyay from O3 Capital. Please go ahead. Yeah, hi. Congrats on good set of numbers. My question would be on capital allocation. Okay. From here on, you have already stated that INR 350 crores is going for CapEx, okay? Can you elaborate how much capacity will increase through this INR 350 crores of CapEx? You know, the ratio for most of these is, you know, one is to four, one is to five in terms of, you know, the amount of product that can come out. Part of this is, you know, a whole greenfield site, which will be 40 plus acres of land. There's room to then keep throwing, keep adding machinery, you know, as the business continues to grow. The key thing here is to look at, you know, what will be the return on return on equity that you're able to maintain, you know, through this period. We are already close to about 18.5%-20%. I think for if you take the nine months, it's at actually 21%. Our idea is to not allow the ROE to drop substantially. Most of these projects have reasonably good payback because, you know, the market is already there, and most of the market development activities have already been done. You know, as you ramp up the production, we are already working on, you know, customer and channels to be in place. Okay. See if I break return on equity now. There are three sides, okay? Revenue to gross profit, which has been always very good for the company. The revenue to working capital, which has been generally on the higher side, and EBITDA margins on conductors, where we have always seen a lot of work which has gone and improvements are, I think visible and cables also. Is there some scope to improve EBITDA margins on the transformer oil sustainably or not just the transformer oil, the oils business, okay? With economies of scale, which is coming, is there something you can do on to improve working capital further on? Means, what can be the bigger driver of sustainable ROE for you from here on in the working capital side and the EBITDA margin side? Let me specifically address the specialty oil segment. The specialty oil segment, we are not seeing any spectacular growth. Growth will be there 5%, 7%. In transformer oil, the growth may be higher than that as transformer capacities get added both in India as well as overseas. You know, you've got white oil and some of these other segments where you may see even lubricants, particularly automotive lubricants as electric vehicles start getting rolled out, you know. Growth on some of that may slow down. Where the company's real growth is gonna come is on the cable and conductor side, where you can clearly see a lot of infrastructure getting added. In terms of the working capital, you know, there is a slide in the deck which gives you an idea in terms of secured receivables that we have. Wherever we end up giving extended credit to customers, it's usually backed by a letter of credit on the other side. You may end up getting payables for some of your raw materials, which is extended. On the other hand, you also have a whole lot of letters of credit or secured payments on the receivables side. Both payables and debtors are both, you know, we are working on both sides of it. one thing- In case there are interest costs associated with the extended credit days, they are factored into the pricing of the product. The customer usually has a certain number of days interest-free, and then they add the interest for the extended days of credit. One more thing. Generally, our dividend payouts have been between 20% to 30%, okay? With higher growth rate what we are visualizing, do you think the dividend payout ratios will remain the same, or do you think more cash will be required? I think which our board has to decide. As of now, the ratio that we have is between 25% and 30%. You know, given if there is continued growth taking place, then I think we probably would still remain in the same range, having a bias towards reinvesting back. You know, as I mentioned earlier, we don't see this growth as being a short term, and this market momentum not being short term. This is a clear opportunity for a company like us to grow not only domestically but overseas. It does require the right investments to be made, and those investments, if made correctly, you know, will have a good payback. The growth what we are expecting, is in those segments where my return on equity and capital employed would be upwards of 20%. That is what we are trying to get. Commoditized business you can get anytime. Even in the down cycle, whenever it will. ROE is in that range. I mean, you know, it's taken a lot of effort to get it to the 20% mark. Every time you have a capital block going on, you can have a short term drop because it takes a few quarters to, you know, ramp up the production and realize the full volume. I think we are at a momentum today where it is possible to be in that 18%-20% range, you know, through all the expansions, et cetera, you know. There is a clear economy of scale available both in the cable and conductor business. You know, as the volumes go up, there is a conversion efficiency which will clearly kick in. My question is, was this. If the segments where we are seeing growth because of currently because of high demand, it can be a good ROE. Even in the commoditized business, sometimes the ROEs can be high because of demand supply. Our focus remains on high margin or high ROC businesses only, for growth also. That should remain that on track. I don't think you'll see a big change in the mix of what we've got from today. The targets or the idea would be to keep improving the mix, i.e., which is, you know, more value-added products or premium products, and then where there are standard products moving to more premium buyers. Okay. Okay. In general. There are still some fundamental things. It'll put it in perspective. You see, when you go under, when you supply to Indian buyers, they really go essentially on a two-bid process. Once you clear a technical specification, then it becomes only price. If you are 41 on 100 or 99 on 100, you're almost equated. Whereas when you go into the overseas market, that 41 on 100 itself is in the 70s. The bar itself is much, much higher in terms of what we classify as pass or fail. That's where, you know, I say that, you're looking at premium products, and for standard products, you're looking at more premium buyers. Mm-hmm. One last thing. See, we are speaking about U.S., okay, where a lot of growth is visible. Okay? What is your sense on Europe? Because a lot of other capital good companies on the power side. Are extremely optimistic on Europe because of bills to heat and so many into the energy transition which is happening and the business growth which is happening. What is your exposure and what are you seeing? In Europe, we are also seeing demand in place. We've been successful in starting to supply cables, particularly into the non-conventional energy space, which is both largely solar and also some amount of wind. Our expectation is that I mentioned earlier that Europe is one of the target markets which we have. Okay. With the current issues that they have on both power and manpower in Europe, you know, it bodes well for India. Recently there was an industry meeting that our Commerce Minister, Shri Piyush Goyal, had with the top exporters of the country. In terms of laying out what is expected over the next few years, there is also, you know, they already have a free trade agreement in place now with Australia. They have put an agreement in place with the UAE. There's a free trade agreement under negotiation with the EU. If that happens, then you know Indian products have 3.8%-4% custom duty, which if that comes off, then that makes us that much more competitive. Okay. Thank you, and best of luck for the future. Yeah. Thank you. Thank you. The next question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead. Hello. Hi, sir. Thank you so much for taking my question, and congratulations on your great set of numbers. I'm a bit new to the company, so pardon me for some basic questions. As you said, our EBITDA margin, the conductor businesses which are at around INR 40,000, they will come down to INR 30,000. Could you just help me with how that works, so we would see a decline in our EBITDA margins? You know, what we feel is that, depending on the order book that we get, you know, the margin could change. We've got some tailwinds in this particular period. You know, definitely the profitable product mix has changed, and that's the reason you see higher EBITDA margin on the conductor division. How exactly this these orders will get executed, that will depend at the end of Q4. What we are saying is that if you want to build a model for a long period of time, or two years, three years, we don't know how the macroeconomic and geopolitical things will pan out in future. From that perspective, we feel that, you know, a conservative estimate of about INR 24,000-25,000 per metric ton would be there in the model. That's what we would tend to say. Definitely in the short term, we expect good order and profitability continuing in the near future. Okay, sir. In terms of our revenue growth, what can we expect next year? What is any target that we have that we want to reach that number or something, you know, that could help me? In the cable business we are talking about 25%-30%. In our conductor business we should see at least 15%-20% growth, you know, between this year and the coming year. The oil business will be closer to about 5%-7%. Okay, sir. That helps. That helps a lot, sir. With regards to the fluctuation in the finance costs, if I understand correctly that we pass it on in our EBITDA, and that's why we have a higher finance cost. As revenue increase, our finance cost will be a similar figure, will be dependent on that? As I mentioned earlier, you know, if you take the number of days for outstanding inventory, you know, all the components that contribute towards the business model is reasonably set. We don't expect any major change to be there, you know, in that. Really the movement will be up and down depending on where the interest rates are. I guess in the shorter term you'll have higher interest rates. When inflation and things come off, then maybe the interest rates will also start coming off. Oh. Okay, sir. We are pricing into our business at, you know, higher interest rates, you know, are being taken into account as part of the costing. Oh. Okay. Okay, sir. That helps. Our new CapEx, what kind of an asset turn can we, you know, expect from it? On the cable side, you know, you have, depending on the product, anywhere between 4-6x. If you go to house wires, it can be as high as about 8-10x. In conductors also it's around, you know, 5-6x, depending on the nature of the product. Okay, sir. Sir, if I may squeeze in one more question. What is would be our capacity utilization currently? Currently on most of the cable and conductor products we are running pretty much flat out, and that's the reason why, you know, this CapEx is being incurred. More equipments are coming in, you know, to support the growth. Okay. Okay, sir. Thank you so much for your time. All the best for the next quarter. Thank you. Thank you. Our next question is from the line of CA Garvit Goyal from Invest Research. Please go ahead. Hello. Good evening, sir. Am I audible? Yes. Good evening. My question is from EPS side. In last conversation, for quarter two you were mentioning that the overall EPS will be half two EPS will be in line with the half one EPS, but now, for the nine months it is 103. Where do you see the EPS laying out for entire FY 2023, sir? We have given an overall guidance, you know, which you build that model, we'll be able to know how much is will be the EPS. Specifically, we can't comment on exactly what could be the number in the next quarter, but based on the division top line and bottom line profitability, you'll be able to work out the EPS, how it will pan out. Each of the divisions have different growth rates, so you have to put that math to see how the EPS will move going forward. You are saying conductor business will grow 15%-20%, oil 5%-7%, and cable 25%-30%. This seems to be a little bit conservative, considering your first nine months growth. One side you are also saying that this high growth momentum will continue. That's why, yeah, I think little bit confusing regarding the growth guidance to that. Yeah. We're looking at the long-term guidance. That's what, if you want to put that in a model, those are the guidance numbers that you need to build into that. If you look at FY 2023, you can pretty much extrapolate, you know, whatever are in the first nine months. The first nine months, you know, can even carry forward into the, you know, into the, into the 4th quarter. We are looking specifically at what is expected in this financial year. It's basically in your, say, nine months. This nine months projection will continue in the. Your slide which is given in the new deck that addresses, you know, what the current structure is, EPS by businesses indicated also. Kind of momentum we witnessed in nine months, we can expect it in next one-two quarters, you are saying? For the next quarter. I mean, we are talking about this current quarter, that the average that you see over the first nine months will continue further. I mean, that's the visibility which we have as of today. Okay. Understood. That's all from my side, sir. Over to you. Thank you. The next question is from the line of Yogesh Bhatia from Sequent Investments. Please go ahead. Hi. Congratulations, sir, on very good set of numbers. Thank you. Sir, I wanted to know that, do you think the worst in the base oil business is behind us? What we saw in Q3, you know, high cost inventory, et cetera. Do you think it is behind us? At least in the current situation, I think the worst is behind us. Clearly. Okay. Okay. That's it, sir. Thank you. Thank you. The next question is from the line of Saurabh Patwa from Quest Investment Advisors. Please go ahead. Can you repeat the question? Am I audible to you? Sir. Yes. Yes, sir. Please proceed. Sir, congratulations on a great set of numbers. I think a lot of my questions have already been answered. Just two quick ones. On the conductor side, for a very long time, we used to give a guidance of around sustainable margins of around INR 12,000-INR 14,000. This is of higher margins in HCP, which used to be around INR 25,000-INR 26,000. Is there any possibility of going back to that situation? No, I don't think we'll go back to that INR 12,000-INR 14,000, because if you also look at the product mix that existed in that INR 12,000-INR 14,000 period, it was largely, A, conventional conductors, and B, it was being largely sold in the domestic market, which is very competitive. Fair enough. Right now, this is a structural shift in terms of the mix of product. At least as I have been saying over the last hour, you know, we see more premium buyers coming forth to buy standard conductors. Okay. Do we need to make any adjustment to the plans to have a higher share of these products? No, we made our manufacturing flexible. As a consequence, you know, as the, as the more premium products need to come on board, we already have capacity on the aluminum side. On the copper side, you know, we've been making adjustments and additions, you know, as the copper side is being, you know, the capacity has been going up. In terms of quality or premiumness of the products which we can produce, you know, that is, has always been built into our system. I think we're just getting more premium buyers who have a much higher standard of what they require. Especially when you go overseas. The minimum bar for passing is significantly higher than in the domestic market. Domestic market, anything that conducts current is good enough for use. True, sir. In the past, you used to highlight that, since there's been not lot of conducting happening in U.S. And other North American markets, and that's why the competition, there won't be any actually lot of players left there. Now when we see that opportunity actually arriving there, is the same true now as well? Or some Chinese player, other players have started getting into that business? No. I think that's holding true, that local manufacturing, there, you know, is not able to keep pace. I don't think we see investments going in for new capacity to be added at any huge appreciable pace in North America, Europe, any of these places. Because they're fundamentally not so cost competitive, you know, in terms of the operating cost over there. In terms of this Chinese player, you know, we don't expect anything sudden to happen because many of these buyers are actually quite strategic. In their in their purchase. They've laid down quite clearly their policies. I mean, you'd be surprised if it changes dramatically from what they've laid it out to be. Great. Just one last question if I may add. In Khatalwada, I think we are adding conductor side. I believe you mentioned it's in Gujarat. I think in Odisha, where we have another conductor plant, we have some arrangement where you could get liquid metal buckles. Any specific reason you would be getting it from Gujarat and Odisha? The capacity for rods that we are adding is being added in Odisha. Okay. The conductor making capacity we are adding in Silvassa. Simply because, you know, if you see a higher and higher percentage of export taking place, we are today exporting from both the Silvassa plants as well as the Odisha plants. Export, logistics out of Odisha are not the best. Whereas, we are getting more and more options for export out of Silvassa because you have the ICD Tumb, which has now been taken over by Adani Logistics. They are increasing capacity there. There are more ports coming up in and around Gujarat. Silvassa is a, is a very good location for manufacturing for export. Understood. Understood. On oil side, how is our Murbad plant doing? That plant is bulk export from there. Murbad plant has been doing quite well. In fact, their volumes have been consistently growing. We are at almost 18% above the same period, previous year for this particular quarter. The Middle East has been doing better because of, you know, the current oil prices, et cetera, and they're able to weather the whole energy situation also better. Our expectation is that growth from that plant will continue to come, especially on the transformer oil side. The white oil, et cetera, is in trouble because the, you know, the three largest countries that buy in Africa don't have foreign exchange. This is Egypt, Nigeria and Ethiopia. The transformer oil side is coming from the more industrialized countries. We have the whole GCC, you have, Latin America, Europe, everywhere, power conductors going in, distribution conductors, I mean, transformers going in. The transformer oil side seems quite good. Understood. Thanks a lot, and all the best. Okay. Thank you. The next question is from the line of Dhavan Shah from AlfAccurate Advisors. Please go ahead. Yeah. Thanks for the opportunity. I have a question on the conductor side. In the slide you mentioned the revenue mix between exports and premium products. Would it be possible to share the volume number, volume mix between exports and premium, of the out of the overall 44,500 tons for this quarter? You see, if you take premium products are 44%, if you take exports, that is also almost 50% of them. The amount of standard conductors sold in the domestic market is very, very low. Volume wise, it will be the same? Any, the revenue mix will be the same in terms of? It's not really volume because there are so many different types of products, you know, shapes and sizes. Mm-hmm. Okay. Basically, I think the value mix will give you an idea of what's happening. In fact, that would have been one of the major reasons why the profitability has also been a bit higher. Okay. In terms of the EBITDA per ton, can you please share the differentiation between the exports and premium products? Against, you know, the INR 49,900 a ton, what we have done in- We don't want to go down to such a granular level because along with you, we have competitors who are also looking for that information. Okay. I think, I mean, you know, to the extent that's possible for us to give information, I think we've already displayed it. Okay. Suppose, let's say, I think you also mentioned that some input inflation is off and the lower freight cost, which has helped to improve the EBITDA per ton. If you exclude these two things, then what could be your EBITDA per ton against the INR 49,900? No, we put a base case of 24,000-25,000 per metric ton. Then we've also given what could be tailwinds which are there, which is, i.e., if standard product export continues, you know, at a, at a higher pace, then that is an add-on. If steel prices remain, you know, steady, then that helps. You know, our expectation is that in the short term, it'll be around in the 30,000 in terms of value addition. In terms of a longer period, you can take 24,000-25,000 per ton. Okay. That forms like a base number, you know, going forward. Against the base number, would it be fair to assume that the premium product EBITDA per ton would be roughly 1.5-2x against the base business? Depending on the product, you know, we've classified a basket of products. Mm-hmm. If you look at that range of products and, it is, you know, compared to typical, if you compare it to domestic transform, conductor that we sell, it's at least 2x of that. In terms of the overseas conductors, it's a you know, it's somewhere in between. Got it. Got it. It's mostly order to order, country to country, et cetera. That's why we've tried to simplify it by giving EBITDA per ton considering a certain product mix. Right. This premium products is entirely for the domestic market, right? 44%. Yeah. Largely going into India, Bangladesh, Nepal, you know, mostly because it's being done largely on a turnkey basis. Right. What is our overall market share in this segment, do you think? On the premium, depending upon, of course, if you look at the copper products, we may be in the 15%-20% range. The railways, we are much higher. We are at about 40%-50%. If you look at ACC, high efficiency conductor, et cetera, we would be at least 40%, you know, 40%-45% market share. Because it's dominated currently by APAR and Sterlite Power. There are obviously, over a period of time, more players will come in. So far we've been able to hold a fairly good market share. Got it. Got it. Okay, sir. Thank you. Thank you. Yeah. The next question is from the line of Bobby Jayaraman from Falcon Investments. Please go ahead. Yeah. Hello. Do you do EHV cables? We don't do EHV cables. We basically go up to 66 KV. That's actually considered as medium voltage or in some cases high voltage, but not extra high voltage. Any plans to get into that? Not at the moment, because the products which we have at the moment, you know, where we have the approvals, we have the expertise in place, we see a fairly large addressable market there. Our current focus is to address extra high voltage situations by medium voltage covered conductors or by conductors. Okay, got it. The other thing, you said the U.S. is a major market for exports, right? I was wondering, these countries have a lot of local procurement rules. How is this gonna impact you? They all want it locally manufactured, right, ideally. How is that gonna impact your export trajectory? I don't see any emphasis on local manufacturing coming from, for example, the United States, because there just isn't enough local manufacturing. If you look at the unit cost of production there relative to a place like India, it's much cheaper to produce here and ship. There is some pressure in terms of having availability of stocks. We do have many large distributors who buy and stock our products and then resell them to utilities there. We've also been investigating, looking at setting up a manufacturing facility at some point, which is nearer to the United States, you know, to service the U.S., Latin America, et cetera. Once you have a size there, then you can have some production going from there, and then also production coming in from India. At the moment, for whatever our immediate plans are, we can easily service them from our plants in India. You see a lot of the project sites which are there, they don't need overnight delivery. They have a planned project delivery schedule. When a solar plant is being built or a wind farm is being built, there is time available, you know, to manufacture and deliver the product to the site within the window that the customer defines. Right. No, that's perfect because I thought the Inflation Reduction Act specifically asked for products to be locally manufactured. Right now it's not, it's not hurting us. We are examining manufacturing in geographies like, you know, Mexico, Colombia, these sort of places. Where Mexico, of course, has an advantage because it falls under NAFTA and it's considered, you know, as a local manufacturer. Most of these cases, just the physical availability of product itself, you know, is not there. The cost of manufacturing there is relatively very high compared to what would happen over here. Okay. Got it. Right. Thank you very much. Yeah. Thank you. As that was the last question for today, I would now like to hand the conference over to Mr. Kushal Desai for closing comments. Over to you, sir. Yeah. Thank you very much for being on this earnings call. Just in conclusion, I'd like to say that, you know, the opportunities that we see in our business will present itself, you know, not only in the short term, but also in the medium term. We will continue to remain focused on the products and markets which we have established ourselves in, because we see good growth coming in, you know, from those areas. With that, you know, our objective and aim would be to continue to sustain, you know, a good momentum as we go forward. Thank you very much for being on this call and look forward to interacting with you all in the future. Thank you. Thank you, sir. On behalf of APAR Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.