Good day. Welcome to the Q1 FY 2024 earnings conference call of APAR Industries Limited. As a reminder, all participants in line will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star then 0 on your telephone 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. Good afternoon, everyone. This is Ambesh Tiwari from S-Ancial Technologies. I welcome you all to Q1 FY 2024 earnings call for 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 for opening remarks. Thank you, and over to you, sir. Okay. Thank you, Ambesh. Good afternoon, everyone, and welcome to APAR Industries Q1 FY 2024 earnings call. Let me begin by giving you an overview of our performance, and then I'll follow that up with a short industry update. Post that, we can get into more detailed segmental performance of the three businesses. During Q1 FY 2024, the consolidated revenue came in at INR 3,773 crore, which is 22% above the same period previous year. We witnessed an overall volume growth across all our three divisions, both in the domestic market as well as overseas. Our exports grew by 53% year-on-year, and coincidentally contributes to 53% of the overall revenue of the company, compared to 42% from a year ago. The EBITDA is higher by 54% at INR 369 crore at a margin of 9.8%. Profit after tax came in at INR 197 crore, which is 61% higher than in the same period previous year, and is at 5.2% versus 4% in the year-ago period. In terms of some industry highlights, according to the Central Electricity Authority, the data that they published on their website, India has added 14,625 circuit kilometers of transmission lines in FY 2023. In the first quarter of FY 2024, further 2,796 circuit kilometers of transmission lines were added. By FY 2024, 2025, a total of 28,700 circuit kilometers of transmission lines are expected to be added, making a total reach of about INR 4.5 lakh circuit kilometers. This expansion initiative is part of the Prime Minister's Gati Shakti Master Plan, which aims to enhance and strengthen India's power transmission infrastructure. A record high investment of INR 75,500 crore, approximately, of transmission line projects has been approved by the Center. These will be awarded under the competitive bidding route. These projects are basically expected to connect the renewable energy zones that are being set up in Gujarat, Rajasthan, Maharashtra, and hydropower projects in Himachal Pradesh. The Ministry of New and Renewable Energy has a target of awarding 50 GW per annum of renewable energy capacity, including 10 GW per annum from wind energy between the years 2024 and 2028. Our belief is that even a portion of these aggressive plans get executed, the demand for conductors, cables, and transformer oil will all remain strong. Coming to the more specific individual business highlights, the conductor business revenue in the first quarter 2024 grew by 15% year-on-year to reach INR 1,774 crore with a volume growth of 27%. The export revenue grew by 58% year-on-year, contributing towards 57% of the division's revenues. The premium product market contributed to 42% of the revenue mix. The EBITDA per metric ton, post foreign adjustments, came in at INR 38,740 per ton. Overall, our order books remain reasonably robust at INR 5,356 crore. The conventional ACSR conductor in the tariff-based competitive bidding for the domestic market has now been upgraded to an AL-59, which is a high-efficiency conductor. This is a very positive development for the country, as there are significant advantages of using the AL-59 conductor type over ACSR, and is representative, is representative of the premiumization direction that the country is going in. We are also seeing a gradual shift worldwide to an increased usage of specialized/ACCC type conductors, as customers are building more robust and higher capacity transmission systems to evacuate power, especially from the renewable power sources. Coming to the performance of the oil division, in the first quarter of FY 2024, revenues came in at INR 1,198 crore, which is up 13% year-on-year. The volume growth was also 13% in the quarter, and this has been an all-time high volume sales for the first quarter of any year. Exports contributed to approximately 50% of revenues. The EBITDA post forex adjustment came in at INR 6,035 per kl, which is lower than last year due to a higher base in the last year of Q1, but is in line with the guidance which we have been giving. The lubricants revenue came in at INR 241 crore, with a volume of about 17,500 kiloliters. We expect that transformer oil and industrial oils, which saw an increased demand in the quarter, will continue to show increase through the rest of the year. The retail, automotive, and the agricultural lubricants demand was a bit subdued in the first quarter. Coming to our cables business. The cable business revenues grew by 52% in Q1 to reach INR 967 crore, with an increase coming from our elastomeric products as well as our exports. Our exports contributed towards 52% of sales in Q1 versus 43% a year ago. The EBITDA margin post forex came in at INR 110 crore, which is 11.4% of revenues, up from, by 3.8% compared to the previous period. All the sub verticals within the cable business have shown positive growth, including our B2C part of the business, which is the Anushakti house wires. In conclusion, I'd like to say that we had a positive start to FY 2024, with volume-led growth across all divisions. However, in the short term, we expect a bit of a slowdown in the export markets as there is a clear sign and signal of de-inventorization of excess inventory, especially in the United States and to some extent in Europe. Warehouses of many customers are full, and they are reducing inventory, considering that the supply chains have normalized and there is no need to hold higher inventory levels to compensate for uncertainty in deliveries, which are now available with significantly reduced lead time and with a much higher level of predictability along the delivery supply chain. There is also some effect of the higher interest rates, which has increased the carrying cost of inventory, and that is also partly contributing towards this effect. There are also some large projects, especially in the United States, that could be pushed back to allow for the widespread expectation of interest rates to come off in the next 12- 18 months, thereby allowing the total cost of the project to reduce for some of the developers. However, our discussions with various EPC players, customers, and asset developers indicates that even if there is some, some delays, the building of these renewable energy projects, transmission lines and other infrastructure are all on stream and will happen. This could consequently affect demand in the, in the short term, especially in the U.S. market. However, the domestic Indian market remains very robust, and as mentioned in my opening remarks, there are several projects which have been bid and will be under execution. We continue to be focused on the long-term prospects of the company and remain committed to not only service the domestic market, but also increase actively our global customer presence, thereby creating what we believe would be the best value for our stakeholders. We have a very detailed corporate presentation that has been uploaded on the company's website. I would encourage all of you to please look at the same as it carries much more information than what is possible to put forth, you know, in these opening remarks. With this, I'd like to come to the end of my comments. I thank all of you for joining our call today. With this, could we open up the floor to questions, please? Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question, may please press star one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ankur Jain from Future Investments Private Limited. Please go ahead. Hi, sir. Thank you for taking my question. I have a question with respect to the polymer division. Recently, you mentioned in your annual report that the product APARPRENE was approved by Hasbro, the world's largest mining company. What is the recent prediction do you see in this business and the overall loss in the polymer division? That is the first question. My question is in respect to the B2C business that we have. We have kind of late entrance in this business, but now we have around 2,000 retail touchpoints as compared to a competitor like Polycab, who has INR 2.5 lakh touchpoints. I want to know, like, what is the way forward for this business, and, like, our products are better than competition in terms of quality and prices? Thank you. For the first question, polymer business is relatively small compared to the other three businesses. Our recent approval with Hasbro will also open up, you know, doors for other toy companies everywhere in the world, and we see this business growing. The polymer business currently is about INR 100 crore revenue per annum, and over a period of time, with these approvals, we hope to get to INR 200 crore-INR 300 crore. We are making certain investments also in this polymer business, which is quite synergistic to our cable business. Your second question was with respect to the B2C side. Yes, we are late entrants, but as, as we've mentioned before, we have a very unique product. Our distributor network is constantly growing. Our retail presence is growing, and our whole focus has really been on educating electricians, contractors, and specifiers. So the level of demos and needs that we have in the first quarter is about 60% of the 50%-60% of the needs that we've had in the entire last year. So it's a gradual process of building brick by brick. And, you know, we don't want to buy business. We want to grow the business organically and in a systematic manner, because the product is a premium product. But if you see the growth trajectory has been very steady, and we expect it to continue over the next few years. Besides the Anushakti wires, you know, we are also selling through a distribution network, a whole range of, light duty, light duty cables, but Anushakti is our flagship product. What, like, the expectation we have in this business in the, like, time is on the line? I mean, I think I've mentioned in, in, in some of the previous calls that, we can see clear visibility of getting to about INR 500 crore, you know, in, in FY 2026. The business has been growing, right now it's been almost increasing 50%-70% a year. As the base number grows, you know, the percentage may fall, but you keep adding significantly. Yeah. Wherever we are able to demo the product, especially in front of decision-makers, we have a very high probability that they go in for the wire because of its properties. Yeah. Okay. Just creating one more question. We also have a wiring part. Two questions. You can probably, if you don't mind, come back in the question queue so that we can, you know, address everybody else's questions also. Yeah. Okay. Thank you. Thank you. We move on to the next question. That is on the line of Amit Anwani from Prabhudas Lilladher. Please go ahead. Hi, thanks for taking my question. My first question is on the conductors business. You highlighted two things in your opening remark. One was export slowdown, which can be sensed in the short term, and at the same time, you also highlighted move towards minimization with ACSR. I wanted to understand two things. Are we now, since export is the largest contributor, sticking to our guidance of 10% volume? We also saw realization dipping by 10%. Any sense on what we are expecting? Are we changing our stance in conductors business? Second, this ACSR opportunity, how that is going to pan out for us? What is the addressable market? Any color you can throw on that? We are not changing our guidance on, on all the three divisions. Conductor, we continue to hold a volume growth of, of about 10% in terms of volume. In terms of EBITDA, we expect it to be in the range of INR 25,000 per metric ton, plus the tailwinds that we get on a quarter-on-quarter basis. Because these orders are something that we get in domestic business as well as in export business. As mentioned in the opening remarks, the domestic business is quite robust and strong, and we don't expect a reduction in the volume at this stage. Also, in terms of profitability, we have been giving this guidance earlier also, that, we look at INR 25,000 per metric ton, and this quarter we had about INR 38,000 per metric ton, which is in line with our guidance. Right. My second question is on the cables business. So cables, as you talk about de-inventorization happening across supply chain, there, what is the utilization or CapEx trajectory, which we mentioned, any color on that? If you could just highlight the break up within cables, which, as we are already aware, that elastomeric is growing much faster. Any color on other divisions as well, within cables, if you would like to highlight, like power cable, XLPE? Yeah. Even cables, our CapEx guidance continues to what we've mentioned in the last quarter. Overall, our CapEx for this year, for the next 12-18 months, are likely to be about INR 350 crore-INR 400 crore. About two-thirds is going to be on cable, and that is unchanged. We're not changing any of the guidance now, because we believe the long-term growth prospects is very much on the card. It's just a temporary momentum may, there could be some slight slippages on that front, but the long term looks very promising, and therefore, the CapEx plan remains unchanged as of now. Right. For premium product contribution, did we saw any slowdown? I can see 42% versus 47% YoY, and HEC is just 20% versus 26% YoY. Yeah. You know, it, quarter on quarter, these percentages vary. It's very difficult to put that on a quarter on quarter basis. Typically, we look at the entire 12-month period. This depends on the orders that we execute during the period, and in our business, there is a lot of testing requirements and approvals in place. Depending on the execution, this percentage shares can keep on changing on a quarter on quarter basis. All right. As we mentioned in the opening remarks, you know, the premiumization drive is generally taking place across the board. You know, as you start moving in time, like, for example, ACSR is now all the new building is coming with AL-59. In a year's time, you will see a dramatic change in the domestic market on major transmission projects, where AL-59 as a conductor will become the base product. Is it fair to assume that domestic market can deliver higher volume growth over the next two, three years versus exports? We are very flexible in terms of, you know, We look at the domestic and the export market actually as just one market, where wherever we get the best realization, carrying the least amount of risk, that's there we would like to focus. Our sense is that over the next one to two, three years, this mix is not going to vary very much, because there is a lot of work that's happening overseas. It's just the U.S. market, which for conductors has shown some amount of slowdown. There are all other markets also where there is a demand that's coming up, even from Latin America, from Australia, from many other geographies. You know, we thought it would be prudent to mention, and I think this is affecting all industries. It's not just, you know, our conductor and cable industry, where the inventory levels that people were holding, they're finding today that those levels are too high because supply chains have got pretty much normalized. Capacities which were in place but not being effectively utilized by manufacturers because of their own supply chain issues, so those also have got sorted out. You know, lead times and delivery times are much shorter than what they were, you know, during the COVID period. Plus, there is no uncertainty today in terms of calling up containers, loading them on ships, clearing them through ports, et cetera. It's a very natural de-inventorization, you know, process that's taking place. Okay, perfect. I'll give. Yeah. Thank you. Thank you. The next question is from the line of Maulik Patel from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity. A couple of questions. In the last two, three years, the export in the cable business has been very, very strong, and it, it has grown from, let's say, 20%-25% of the cable top line to now it's almost 50%+ top line. Is it because of, of, of, our relationship, with, in, cable, in relationship with Conductor and TSO segments are opening this product to the same customers, or is there something else which has been driving, this, this, this growth? There is a combination of two, two things at play. There are a few customers who are common in terms of conductors and cable, especially the, the very large EPC companies that have a division that builds transmission lines as well as, you know, these renewable energy, sort of supply and erection at renewable energy sites. There is one group of those customers, so there are many customers who we have opened up, you know, for supply of both conductors and cable, who are in utility. We are looking at, at that aspect also. You can't take away from the synergy value of both, you know, the conductor and cable. Though, you know, the two sales teams, you know, they collaborate with each other, but they call on customers individually. Got it. Got it. Got it. Second question is on the TSO segment. The volume growth has been strong, and you mentioned in your opening remark that, because of the various government initiatives, the demand, t he domestic demand across TSO and cable has been good. Is there anything else which has been driving the growth, any more new? We understand that the government and SEB started procuring more transformers. That is, that should be the one driver. Anything else which you may like to highlight? There are two major schemes which are there. One is the, you know, RDSS, which we had spoken about in the last call. Yes, there is a rollout taking place for, you know, the rural, distribution, you know, strengthening that's going on. There, the cable business will benefit, more, the power cable side. As far as this, you know, Gati Shakti is concerned, it is a transmission line initiative of building transmission lines, connecting all these different green, sites. The third effect, which is there, is that these green sites are coming up with, you know, increased combination of wind and solar, and both of them have a, a reasonable intensity of cables. You see all of these, you know, they are all drivers, and these similar effects are there, you know, in the overseas markets also. Where you've got new transmission lines being built, you've got, both wind and solar projects running. In every case, there is some requirement of transformer oil, because there is a substation that's involved, which carries a transformer. That's the reason why in the opening remarks, I did mention that over the next three, four years, you know, we should see a good demand coming forward for transformer oil also on a global basis. Just a bookkeeping question, what has been our acceptance for this quarter? Yeah. Our interest bearing LC, outstanding is about INR 3,700 crore as of June. That was quoted in INR 100 crore, sometimes in the end of March, right? Yeah. Got you. Thanks. Yeah. We come back again. Yeah. Okay, thank you. Thank you. The next question is in the line of Charanjit Singh from DSP. Please go ahead. Yeah. Hello, sir. Thanks for the opportunity, and congratulations on the good set of numbers. My first question is, you've talked about some weakness in the U.S. market. Can you the markets which you have talked about, like, you know, Latin and Europe, they'll be able to compensate for that in the near term? Where do you see that the U.S. market can come back again, because earlier you had highlighted the large mega projects which are going on in terms of the power infrastructure in U.S., and that could create some more longer-term sustainable demand. If you could touch upon this. Yeah. There is a, you know, a similar effect is there even in Europe, as in the United States, where there is a, a, you know, higher inventory levels in place. Most customers are talking about, you know, a three-four months period where, you know, ordering will be at a, a slower pace. Pretty much, it's not that there is no ordering. There's ordering to cover up for making sure that the mix of products is appropriate. You know that the free flow of demand should probably pick up, you know, in the next, say, at the end of this quarter, in three-four months sort of time frame. In terms of the mega projects and some of the larger projects that are concerned, as I mentioned earlier, none of them have been stalled. There is a widespread expectation that, you know, interest rates are now peaking, and there could be a likelihood that in the next six-12 months, you know, the rates will actually start maybe coming down. There are some developers who are, you know, contemplating that, and as a consequence, looking at, you know, deferring their projects. You know, I don't think that it is a matter of serious worry for us, simply because of the number of project sites, you know, all over the world, which are actively coming up. You know, if a developer was looking at wanting to develop three sites, they may focus on one or two sites and then defer the third site. Overall, I think we'll still see a good demand overseas. On the domestic side, there is none of that effect, because most of it is based on, you know, the government approving transmission lines for the green corridors that are coming up, as well as SECI and the Ministry of Renewable Energy approving, or, you know, approving tenders to go out for solar and wind farms. Overall, you know, Charanjit, I don't see any huge concern. You know, there may be a few months, a little bit here or there, but, you know, given the nature of the business, which is a bit long cycle, the long cycle is still pretty much intact. You know, the medium, the medium-term, long term is, is very much strong. In fact, looking stronger by the day, given the amount of commitments which people are looking at putting forward, you know, in terms of executing down this path. I must also mention here that in some of the tenders which we are filling in for conductors, already, customers are asking for the carbon footprint. They're not only asking for the Scope 1, Scope 2, but also we embedded this carbon footprint, you know, part of Scope 3, which is in terms of what is the carbon content of, you know, the aluminum that you're sourcing, et cetera. This whole ESG movement is really here to stay, and as long as that continues in this manner, there will only be an acceleration of, you know, execution. Like, for example, if you see that the power mix in India, it has improved from almost 78%-79% hydrocarbon- based down to about 71% hydrocarbon- based, and as the execution continues, we'll be in the mid-60s in another couple of years. I hope that kind of gives you an overall view of, you know, the question that you asked. Yes, sir. That's, that's very helpful, and thanks for the detailed answer. Sir, my other question is on the, you know, transformer oil part of the business. When we are looking at, you know, most of the transformer manufacturers, the outlook from their side is pretty strong, and they are, you know, adding significant capacities. In a way, then, create this transformer oil segment also in terms of volume growth can be much higher than generally single-digit growth, what we have seen with the kind of outlook with transformer manufacturers have? We expect that the volume growth should definitely take place. You know, the 5% growth that we are projecting is for the entire basket of products, as I mentioned in my opening remarks, that of that transformer oil and industrial lubricants are probably the two categories where we are the most bullish in terms of growth. Essentially, moment you have a, a solar farm or a wind farm that comes up, there is a substation that is required then, you know, to step up the power onto a transmission line. At the other end, another substation is required to step it down for, you know, the distribution to take place. With this activity that's happening here, the, the, the collateral benefit is going to come to the transformer oil side. We still maintain 40%+ market shares in the domestic market. We are by far the largest exporter from India on the transformer oil side. That part of the business will continue to grow. Sorry, sir. Thanks for taking my call. I'll come back in touch. Thank you. Thank you. The next question is from the line of Dhananjai Bagrodia from ASK. Please go ahead. Hi, sir. Congratulations on the great set of numbers again. What do you understand regarding your realization for the year for the segment? How do you see that playing along? The realization is actually a function of multiple factors, and it depends on the, you know, the price of aluminum, copper. It also depends on the price of the base oil that happens. We typically look at margins and also look at, you know, premium products and export products in terms to drive the per unit of profitability. You know, our realization will depend on, on the orders, and, you know, there are multiple factors that we take decide the realization levels. Example, our realization, is it, is it, let's say, for the contract, is it, is it A, is it variable or fixed, and B, is it pass-through? C, regarding that, do our OP return accordingly fluctuate, or is it more in a plan when we do our contracts? I'm sorry, go ahead. It's a combination of both variable and fixed. You know, we, we have all kinds of orders that comes through, and aluminum and copper are completely passed through. We take a back-to-back hedging for both the conductor and cable business. In the case of oil, it cannot be hedged, so we keep inventories of about two months. To some extent, we have sometimes we have inventory gains, some quarters we have inventory losses, which averages out over a long period of time. Your OP return, is that always in a bank, or how does that usually fluctuate? Sorry, what is that? For your OP return, for your OP per unit, how would that play along? We, we try to control the operating, or the EBITDA. In fact, we go above that, we try to control the value addition that we have or the gross margin on the product. As Ramesh said, the aluminum and copper are pass-throughs. If it's a variable, we would buy on the index that's part of the variable, and if it's fixed, then we take the LME position. Okay, cool. No speculation on any of the metals. Okay, so that way, our OP return would be, more or less, would be, consistently the same. We won't have too much fluctuations like maybe some other- Radiation is based only on your competitive intensity for that particular product, based on what the order has come in. As you get into more premium products, you have more pricing power. As you have more commodity products, then the competitive levels are higher. Okay. in nature. You could have a fluctuation in the operating margin, but it's not caused by generally a huge fluctuation in the basic metals, because those are either variable or they are hedged on a fixed price. Okay, that makes sense. Your question, you know, as Ramesh has tried to answer that question in terms of, you know, the revenue will depend upon which direction, you know, aluminum and copper moves in. Of late, we've seen commodities sort of strengthening a little bit, especially the crude and gas oil. Yeah. In that case, with a lag of two months, it pretty much gets passed on into the market. Okay. Generally, when there's an increase, then we tend to gain. When there is a decrease, then prices tend to fall a little sooner because customers get overly anxious to negotiate down. Overall, you know, we don't see a very a complex environment on commodities. You know, whatever movements are there, they'll be sluggish or they will be gradual. That, that's our sense. Sure. One question regarding competitive intensity. See, since our factories now might be running at higher utilization, so we're able to pass on some of the cost advantages, maybe around the lines that were happening globally in terms of competitive intensity, intensity. Globally, the competitive intensity has increased. In the last earnings call also, I mentioned that, you know, China, a lot of supply related issues in China also have got straightened out just like the rest of the world, because these COVID effects are behind us. The competitive intensity has increased, that is the reason why, you know, we have been talking about a guidance on conductors of, you know, 25,000 per ton from a higher level that existed last year. Sure. Having said that, you know, we are quite confident that we'll be able to, to live up to whatever guidances we've given. Sure. Thank you so much. Thank you. The next question is from the line of Riya Mehta from Aequitas Investments. Please go ahead. Thank you for the opportunity. My question is basically predominantly in the cable division. We are seeing a sequential decline in the cable order book. Where is this coming from, and could you guide us in the pipeline for the same? You know, the, in the cable business, you know, the order book is not as critical as in the conductor business. Because the conductor business is a much longer cycle than cables, where there is a lot of inquiries and, you know, transaction flow that's taking place. What we are seeing today is that the orders coming from the United States have slowed down, and as I mentioned, will be a soft for the next few months until, you know, inventory levels start straightening out. Against that, the offtake in the domestic side has been stronger, and there the order cycle is much shorter. You know, you get an order and you start executing within days of getting the order. The order book, I don't think on the, on the cable side actually is a measure of, you know, of that. Having said that, you know, we do have an order book of almost INR 1,000 crore. Right. It's covering at least one quarter worth of, worth, worth of sales. How much is the exports in the this cable order book? About the 50% would be exports. In terms of margins, should we expect further decline in the margins, considering that the export% would go down and domestic would increase in the cable division? Yeah. We are guiding a margin of 10%-12%, which should be around that, that levels. Okay. In terms of oil division, since green crude going up a bit, on a quarterly basis, how does this impact our margins? This will actually happen, over a period of time, because, you know, it depends on what inventory you are carrying. In the short term, usually when prices go up, you know, there is a benefit that takes place. What? When you buy your base oil on a contract basis, then the contract formula takes, it's a backward-looking formula. You get a breather in terms of time, you know, before it comes and hits you. On the reverse cycle, you know, when prices come down, the reverse happens, where the contract formula takes the same amount of time longer for it to come down. That's why Ramesh has been saying that, you know, up and down, it kind of negates each other. This cycle, if prices go up, then you get to benefit at least in the short term. Got it. Thank you very much. I will join back with you. Thank you. The next question is from the line of Pratiksha Daftari from Aequitas Investment. Please go ahead. Thank you for the opportunity. Just wanted to understand the order book for the conductor division. This would be for six months? Yes. Typically it ranges about six-seven months. Of course, there are still some, some orders within that order book, wherein the exhibition time happens over a period of one year also. Otherwise, generally it's about six-seven months, with the exception of few orders having long execution period. Okay, what would be the contribution of value-added products, specifically HEC and OPGW, in this order book? It's about, just one, about 45%. Both put together? Yeah. The premium products that we call, these could be about 45% of the order book. Okay. Just, you know, the whole idea of basically de-stocking or lesser demand or that we are seeing, that would be predominantly or completely in export market, right? How do we look at order pipeline in domestic market? You know, Pratiksha, the domestic side. See, even in the export side, you know, the PV cable, the solar and PV, et cetera, the demand still fundamentally remains strong. It's just a de-stocking where people realize that they don't need to carry that level of inventory anymore, you know, for servicing their project size. The domestic side, the demand has been strong. The competitive intensity is a bit higher than in export, because in export you need a lot of approvals, especially if you want to export to the United States, you need a UL approval. If you want to export to Europe, you need a CE or a VDE approval. The domestic market is a bit more open and more competitive, but you know, we are finding that not only power cables, but demand has been growing for wind and, you know, some of the more specialty cables also. So I think as Ramesh Iyer has mentioned that we are looking at a 25%-30% growth. For the business as a whole, and an EBITDA guidance of, you know, between 10% and 12%. Okay. Just one last question. You mentioned Gati Shakti, and you mentioned RDSS as policies. How do you look at BharatNet as an opportunity for the our product? BharatNet is also an opportunity for our optical fiber side of the business. You know, some of that is just still getting crystallized in terms of. It's very clear that there is a huge, you know, about INR 35,000 crore worth of turnkey projects that are going to come on stream for BharatNet. The modalities of, you know, how it will be executed is still not completely finalized. That should come out in the next few weeks. Okay. That opportunity is absolutely there. Okay. That will again, in competition intensive, right? Well, if it's on a turnkey basis, yeah, it will be. Then, you know, each package is INR 2,000 crore-INR 3,000 crore, and it generally entails about 10% of cables, and then, the remaining 90% is accessories, right of way, seeing, you know, all these other aspects. Okay. The ticket size of each will be over INR 2,000 crore, each INR 2,000 crore-INR 3,000 crore, each package. The competitive intensity is there, but it cannot be that high because the players only with a requisite balance sheet would be in a position to bid for that business. They need to provide bank guarantees and, you know, all these other things, which are not the easiest to come by. Okay. Besides that, we see, also, you know, as the 5G roll out, right now, you don't see a big amount of 5G rollouts. Around the world, 5G rollouts are starting to take place. where you have a combination of fiber optic and copper. Because the pipelines which are laid, it's much faster to lay. You don't have to lay a separate fiber optic line and a separate power line. Right. When you, when you have the combination in a single cable, you end up cutting your laying cost by half. They play a significant role in the U.S. and some of these other markets. That's another area which we are looking at. You know, the various products are under testing, approvals, et cetera, on the fiber optic and power side. Okay. Thank you so much. Thank you. The next question is from the line of Kishan Tosniwal from Polar Ventures LLP. Please go ahead. Yeah, good evening. Congratulations and great set of numbers. I have one question. As you mentioned that in the Conductor division, the premium conductors will become the new norm or the new normal, why are we guiding for INR 25,000 EBITDA realization when we are seeing that the premium products will become the new normal, then why so low guidance on realization of conductors? Typically, ACSR conductors carried guidance for decades, which were, you know, in the INR 8,000, INR 9,000, INR 10,000 per ton. Getting to INR 25,000 plus is a good step up, you know, to that. Our expectation is that it should be in that, in that range. This move is a relatively new move, is of CEA having approved this AL-59, which is one of the high efficiency conductors in there. You know, over a period of time, we'll be able to determine exactly where, you know, that, that margin level will fall. Because today there are five, six major players who can do AL-59 versus about 30, 35 players who would have bid against ACSR, you know, sort of, contract or tender. I'm sure some of those 30 players who don't make this cable will also try to make. Sorry, the conductor, will try to make this conductor. All I can say is that it's in the positive direction. In continuation to that, in the last quarter, you were guiding between 25,000-30,000. Now you are saying 25,000+. Now you are not saying 25,000-30,000, that range can be maintained. That- We've always guided 25,000+ any tailwind effects which are there. Those tailwind effects do happen, you know, where you've got sometimes more favorable freight, sometimes you've got, you know, certain execution that happens sooner and faster than had been anticipated. We've not changed our guidance. It's still remaining at 25,000+, you know, any tailwinds that actually come by. You know, as you go quarter by quarter, some of the freight benefits and all will obviously level itself out. You'll be done then down to the basic intrinsic strength of the margins on the underlying products. Thank you. Thank you. The next question is on the line of Himanshu Upadhyay from o3 PMS. Please go ahead. Yeah, hello. Good afternoon. Congrats on good set of results. Am I audible? Yes, yes, we can hear you. Yeah. See, I, in the starting of thing, we said the slowdown we are seeing or expecting in terms conductor, is there in the expo. Do you expect that similar slowdown can also come in the cables business? Because b oth are the end markets would be similar, okay? Even on the DSO, should not this slow down be for the all the segments? Means why only conductors? Any thoughts of yours on that? Yeah. As I mentioned that, there is an effect, you know, on both cables and conductors, and it's an effect that's happening across almost every product line that's being exported to the United States. Because they were all holding higher inventory levels due to all the uncertainties, and lead times for delivery. Those are normalizing, it's natural that, you know, the deliveries, I mean, the inventory levels fall. Today, especially with the high interest rates, the cost of carrying higher inventory is also a big burden. That is also catalyzing some level of de- inventorization. We are seeing it in, in, in both product categories. Fortunately, the domestic demand has been quite robust. That's the reason why we're not changing guidance really for the, for the year. You may have a temporarily fall in exports as a percentage of total revenues, but, you know, Once this process in the next few months gets settled, you'll find the demand in both the sectors, both domestic as well as export, continuing to be quite strong. The exports will be majorly, predominantly to U.S. only? The U.S. is the largest export market that we have. We are seeing a good demand from Australia and we have some amount of demand coming and growing even from Europe. There are projects that are still continuing in Africa, which are African Development World Bank-aided. You know, it's we, we export product to multiple countries around the world. Even though the U.S. is the largest, and there is a bit of a temporary slowdown over there, we expect, you know, overall the market to still be good, the export market to still be good. Other geographies are starting to pick up. Okay. The last, the transformer oils or the oils business, do you think the numbers are sustainable and the market is, the pressures of, high price inventory and all those are now far behind? The INR 6,000 is sustainable on. I think the INR 6,000 per kl, I mean, you know, we've guided at INR 5,500 a kl for the year. I think, you know, as you run through the remaining three quarters, we should be able to. I think today, we should be able to reach those numbers. Okay. Thank you, folks. Yes, thanks. Thank you. The next question is from the line of Sujal from Girik Capital. Please go ahead. Hello, can you hear us? The line for current has dropped off. We move to the next from the line of Vishal Kediya, an individual investor. Please go ahead. Hello, can you hear me? Yes, Vishal, please go ahead. How much exports are contributed from U.S. in the conductors and cable segment? How much exports are contributed from U.S. in conductors and cable segment? What is the percentage of U.S. out of our total exports, total cable quarter sales, U.S. would be about 25%-28%. Total sales. Yes, Vishal. Any other questions, Vishal? It's a cable segment, sir? Cable is what I mentioned. Cable is around 28%. Conductors? Total sales. In the case of conductors, it is also in the 20s. Yeah. Okay. Thank you, sir. Thank you. The next question is from the line of Pawan Nahar, an individual investor. Please go ahead. Thank you, gentlemen. Once again, congratulations. My question is, we have a very robust order book for conductors, more than three quarters of current quarter revenue. We would have a good sense how many more quarters the tailwinds on stretch are likely to continue. If you can talk a little about that. One quarter, two quarters, three quarters? Yes. Some of the orders, Pawan, is, you know, execution happens over a period of time. It's not that all these orders come on a first-in, first-out basis. We take these orders, some of the order execution, in fact, can even start one year down the line. What is reflected here is the entire order book that we have as of now. The bulk of, I would say 75%, 80% of these orders are to be executed over the six-seven months. As Ramesh had mentioned earlier, there is a few which actually run longer. Our sense is that within this period, you know, there will be new orders which will come up. It's a completely moving number. Yeah, it's a moving number. If you take the U.S. market, Pawan, you know, there are a bunch of utilities, almost about 30 utilities, which are very large utilities. There are 3,000 utilities which are much smaller utilities. Those smaller utilities for their maintenance and CapEx requirements, they rely on distributors. Now, these distributors have high level of stock. As their, you know, as their stock depletes over the next three to four months, they will come back into the, into the market to stock and carry. The stock levels will not go up to the levels that they were, because they don't need to. Then the demand flow will start coming based on, you know, the way the execution is happening. For the larger utilities, they have now been, you know, they've moved towards, you know, direct purchases. Even they are reducing their stock levels because they don't need to carry as much stock. Our sense is that the most of the de-inventorization process will be a three-four month process. It's not going to be like a one year sort of situation. I had also mentioned that there are a certain big asset aggregators that are there, like we have even in, in India, a few. Some of them, if they've got multiple projects running, they are reducing the number of simultaneous projects that they're executing today, waiting to deferring a few projects since the interest rates may come down. They're concentrating on accelerating a certain set of projects and slowing down some others. As far as final demand equation is concerned, we don't see any huge, you know, impact or change taking place. Since you mentioned the demand side, actually, I want to say congratulations for me, because I've been watching you all over a decade. I mean, U.S. is 20% less of a conductor. That's, like, huge. I, I'm sorry I missed it. This is more than 25%, so that is, so sooner or later, they'll come back. My question was more on the spread side, that, you know, we are seeing conductors, INR 25,000 is the normal plus the tailwind. My-- What I'm saying is we have a certain amount of order book. We know what will be executed in the next two, three quarters. For how many more quarters can we expect this tailwind to continue before it goes to INR 25,000? That's the question. You will find, you'll find that, you know, that the, the, you know, the tailwind is, the velocity of that is reducing, because as you execute orders where you carried a higher freight than, you know, current freight, et cetera, as the execution is getting done, you're monetizing that, and the new orders that are coming in are more in line with, you know, current freight and current cost structures which are in place. Our sense is that you will finally get to that 25,000 level. The tailwind also comes not only from freight and things, but also on the product mix. There are a whole lot of, you know, projects which have been built upon, and then, you know, as they get fructified, then, you know, you could have the mix altering on a positive side. Otherwise, considering all factors, you know, 25,000 is what we had thrown up as a long-term sustainable number. This is right. Oh, yeah, I understand that long-term 25,000, this is amazing. All I'm saying is we have a certain amount of order book. We will have some sense about next two quarters, right? So can we, like, you know, all I'm trying to get to is incremental, I understood 25,000, but the scaling from is, is there in the existing order book, from my understanding. So can we expect the scaling to continue for the next two quarters? Yeah, yeah. There will be, there will be, some effect of that for the next two quarters. It will start, you know, the effect will start tapering off, but there will be an effect over the next two quarters. It will not be a steep fall. It will wean down gradually. That is enough. Yes, anybody. Thank you so much. Thank you, and all the best. Thank you. The next question is from the line of Mihir Manohar from Pantheon Asset Management. Please go ahead. Yeah, hi, thanks for giving the opportunity, and congratulations on a good set of numbers. Sir, just lastly, wanted to understand on the export side, I mean, given the fact we are seeing some amount of slowdown in the exports, just wanted to understand profitability improvement, which has been right from INR 17,000-INR 58,000 per metric ton, and started getting normalizing. Just wanted to understand, you know, what was the profitability gains, which was driven by higher, higher exports? You know, if you can throw some light as to what is the realization difference, in every realization difference per metric ton, for US business and for domestic business, that will be really helpful. Just my second question was on the competition side. I mean, last time you had mentioned that some of the Chinese suppliers have once again started to get to see, especially in the U.S. conductor business. What is the stand as of now? I mean, you know, how is the Chinese part playing out, specifically on the U.S. conductors? Just wanted to understand that. Yeah. You know, this INR 17,000-58,000 per metric ton is a combination of various things that has happened. You had all your tailwind, which includes this, your supply chain disruption that happened, China Plus One happened, and then you have the renewable energy push, in the U.S. Also, you know. Right. Yeah. Also, a lot of, you know, distributors wanting to just fill up their warehouses. It's a combination of multiple things that has gone up. In addition to that, we had our own premiumization that happened within APAR, where we moved the premium conductors there. It's a really multiple combination, and there's no one number that can be attributable to, you know, what, what actually increased. That's the reason we are still guiding a 25,000 plus the tailwind, because we expect some of the tailwinds will definitely continue over the next two, three quarters, and some may even continue in perpetuity. Depends on, you know, the competition intensity and, and China Plus One strategy. The U.S. is not- Your second question was that, China Plus One with respect to the U.S. The Chinese players, as I mentioned earlier also, are not the biggest threat in the U.S. market, because we currently the tariffs for Chinese products still remain higher than for Indian products. The competitive inten-intensity of Chinese manufacturers is showing up in other geographies, where they do not have any potential tariffs, and in some cases they actually have a more favorable tariff than Indian companies, which are in certain Latin American markets. The Chinese competition has definitely increased, but it's not in the U.S. It's in the United States, Australia, et cetera, kind of staying away from Chinese suppliers. It's more in Europe, Latin America, et cetera, maybe in Africa, where, you know, their presence is being felt today. Sure, sure, sure. Just wanted to understand the realization difference for non-premium products. I mean, what is the realization difference for U.S. and non-U.S. or domestic market? You know, it's, there's, there's just so many orders, and it's very difficult to pin any such number. All I can say is that the strategy has been to take standard products and sell them as much as possible in premium markets, and take premium products and then sell them as much as possible in the domestic market, especially on the conductor side, by selling a turnkey solution, you know, for the HTLS and ACCC, et cetera. The copper products, which are there, they are inherently carrying a higher margin and are more specific in their application. You know, such a level of granularity is something that, you know, we would not be able to provide. Sure, sure, sure. That's it from my side. Thank you very much. Thank you. The next question is from the line of Pujan Shah from Congruence Advisers. Please go ahead. Hi, Sir. Only one, not a clear way, but it would be, if you look at the specific HEC component, which has been decreasing the total mix, if we assume that the total mix would remain the same as the last quarter, would we get to achieve the same EBITDA per metric and what we have achieved in the last quarter? The EBITDA, it depends on the HEC as well as exports, you know. If we assume that. Execution over there. Okay. If we assume the same, would it be the? Reduction in HEC, you know, you've got HEC contributes towards some 20 odd% of the total basket. The remaining products also, it's a, it's a, it's a moving, mix which is, taking place. Okay. Inside, HEC will be in the same, in the same vicinity, ±3%. Okay. Second question would be on the polymer business. How much total capital we like to invest in this specific for this year and the next year? Yes, we are assuming that it will grow to INR 200 crores. Are we mainly focusing for, like, is it for the cable business so that polymer can be used, or is it to use specific for the reason of the, for purpose of the sales only? Our investment will be in the tune of about INR 35 crore. Part of it will be to grow the polymer business, partly for the in-house requirement for cables, and also to sell those same products outside our in-house requirements. Other than, for cable industry also. Okay, got it. Thank you so much. Thank you. The next question is from the line of Aditya Khandelwal from Securities Investment Management. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. I have a couple of questions regarding our oil business. If you could bifurcate the volume share of different products like transformer oil, white oil, and industrial process oils in our total volumes. You know, we've never given a guidance in terms of the exact breakup of, you know, the transformer oil, white oils, et cetera. We've given the details in terms of, you know, of the lubricant side of the business, which is at INR 241 crore and at about 17,500 kiloliters, out of a total of about 135,000 kiloliters in total. I just wanted a rough breakup of the 130,000 kl, which we sold, what will be the proportion of transformer and white oil? Just a rough proportion. Yeah, transformer oil is, yeah, about a third, yeah, about 30%-35%, and white oil is, about 30%, 28%-30%. Got you. The lubricants are forming. INR 17,500 out of INR 130,000. Got it. For the 13%, we witnessed with lubricants, showing a flat growth and white oil being a slow-growing segment, would it be fair to say that you would have grown by more than 15% in the transformer oil segment? We, we've had a double-digit growth in that quarter in transformer oil as well as in industrial, on the industrial lubricant side. Okay. But, you know, I would see these businesses, it's difficult to just take a quarter and, you know, you, if you look really at, you've got to really look at 12-month periods to be able to, you know, make a call. Our general sense is that transformer oil volumes will grow given the amount of infrastructure on the power side that's going in, not only in India, but around the world. Sure, sir. The lead, the lead product in, o ne of the lead products will be transformer oil. Sure. I just wanted to, you know, get a better understanding of the workings of industrial lubricant business. Are these products, you know, sold directly to the customers, or they are sold through distribution channels? Are they sold primarily on price or is there some element of branding also involved? We larger accounts are sold by us directly. Smaller accounts, we have an extensive distribution setup because industrial oils for some customers, they would buy just 1 bbl or 1 bbl, so distributors take care of that. In terms of performance, branded and non-branded, you have fundamentally multiple categories. You know, the performance products, high-performance products and products which you've got to sell along with the service, are the two which are more sticky in nature. They either carry OEM approvals or, you know, they are much high performance products, where the lubrication requirement is, you know, lubricating a machinery of very high value. That segment is a branded segment. There is a. All of it is branded, but, you may have hydraulic oils and some of these which are, you know, which are less critical. Within hydraulics also, if you are running high injection molding machines and some of these more expensive equipments, then they would carry OEM approvals. Got it. Thank you. I know that. Yeah. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Kushal Desai for his closing comments. I'd like to thank all of you for joining our Q1 FY 2024 earnings call. Just in conclusion, I'd say that we've had a good start to FY 2024. We expect that, you know, all the long-term indicators, the medium and long-term indicators remain intact. In the short term, there could be some adjustments in demand in a few export markets like the United States, but the domestic market remains robust. We continue to be very optimistic of our business in the quarters and years to come. Once again, thank you very much for joining our call. Thank you, members of the management team. Ladies and gentlemen, on behalf of APAR Industries, let me thank you for this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.