Ladies and gentlemen, good day, and welcome to the Apar Industries Limited earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and 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 touch tone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Ambesh Tiwari from S-Ancial Technologies. Thank you, and over to you, sir. Thank you. Good afternoon, everyone. This is Ambesh Tiwari from S-Ancial Technologies. I welcome you all to the Q1 FY25 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. Chetan Desai, Managing Director, and the CFO, Mr. Ramesh Iyer. I would now pass on the mic to Mr. Kushal Desai for the opening remarks. Thank you, and over to you, sir. Yeah. Thank you, Ambesh. Good afternoon, everyone, and welcome to the Apar Industries Q1 FY 2025 earnings call. I would like to start by giving a quick overview of our performance, and then follow it up with short, with a short industry update. We can then get into more details on the segmental performance, and then finally end by, opening up the floor to questions. So for Q1 FY 2025, the consolidated revenue came in at INR 4,011 crore, which is up 6.5% year-on-year. The domestic business actually grew by 43.4%, versus last year. The export revenue de-grew by 25.9%, essentially due to the high base of U.S. revenues in Q1 FY 2024. Export shipments across all three divisions were affected from the tenth of June onwards, due to a sudden issue with containers, ships, and freight, resulting in lower dispatches, especially on the FOB shipments, where customers were to put up their containers. The EBITDA is up 6.8% year-on-year to reach INR 394 crore, with a 9.8% margin. Our profit after tax came in at INR 203 crore, which is up 2.6% year-on-year and is 5.1% in terms of margin. In terms of key industry highlights, data from the Central Electricity Authority reveals that the total transformation 35 MVA. On a quarterly basis, the transformation capacity added during FY 2024-2025 is expected to be 10,260 MVA. Looking ahead, India is likely to witness a record increase in transformer capacity addition. As per the CEA, the current fiscal year, FY 2025, which is from April 1, 2024 to March 31, 2025, is expected to see as much as 116,490 MVA of substation capacity coming on stream. If this materializes, it would be by far the highest substation capacity addition in any year compared to the previous five years. In fact, it would be fair to assume that this would be the highest transformer capacity commission in any financial year historically, in India. On the transmission line addition, during Q1, April to June of FY 2025, the CEA reported that 973 circuit kilometers of transmission lines were commissioned, which is representing only 16.7% of what has been targeted in this year, which is 5,839 circuit kilometers. The conference is now being recorded. The state utilities were the main contributors, but fell short of expectations, adding just 921 circuit kilometers out of a planned 4,494 circuit kilometers, achieving only 20% of their target. Finalization of tenders were delayed due to national elections and elections in some of the states. In terms of the renewable energy sector, the country has made significant progress, with increase in the installed capacity, going up by more than twice, in the last eight years. As at the end of June 2024, the total renewable energy capacity stands at 195 gigawatts, of which 85.47 gigawatts comes from solar, 46.7 gigawatts comes from wind. The total capacity in the pipeline, which is being added, is 134.85 gigawatts, with 85 gigawatts coming from solar and 30 gigawatts coming from the wind side. I would like to also now get into more details in terms of the individual business segments and their performance. Our conductor business revenue in Q1 FY2025 grew by 9.1% year-on-year to reach INR 1,936 crores, with a volume growth of 6.7% in the quarter. Export revenue contributing to 29.5% of the division's overall revenues, versus 52.4% in Q1 of last year. The exports were down versus last year due to delays in regulatory approvals in competition, and then, as I mentioned earlier on the call, due to container availability, which created delivery challenges for export shipments. The premium products contributed to 37.1% of the revenue mix. EBITDA per metric ton post-Forex adjustment came in at 38,532 per ton on the back of execution of higher margin product orders, especially with a higher amount of HTLS conductors getting executed in that period. Under the conventional conductors, the more premium variety of AL-59 continues to replace gradually the entire quantity of HTLS. Overall, our order book is at INR 6,725 crore, with premium products contributing towards 41% of the order book. There was a new order inflow in the quarter of INR 1,794 crore. Coming to the oil division, Q1 FY 2025 revenues came in at INR 1,265 crore, which is 6.1% higher than a year ago. The volumes grew by 5.9% in the quarter. Global transformer oil volumes grew by 20% over the last year, driven by strong demand and a gain in market share globally. Exports contributed towards 45% of the oil division. EBITDA post-Forex adjustment came in at INR 6,935 per KL, which is 15% higher than last year. The automotive oil volumes recorded a strong growth of 29% year-over-year, and the industrial lubricants business grew by 7.6%. Coming to our cable business, we saw revenue growth of 7.8% versus last year. If you exclude U.S. revenues, ex-U.S. revenues, we grew by 23.9%. The domestic revenue grew by actually 48.4% year-over-year, and exports, we grew by 30.5%. The export mix currently stands at 33.2%. Export is lower than last year due to the higher base of U.S. sales in Q1 FY 2024. The EBITDA margin came in at 10.3% in Q1, which is down 110 basis points versus last year. And this we can attribute to lower level of exports as well as the geographic mix. The overall order book came in at INR 1,571 crore. In conclusion, the global supply chain continues to be a bit challenging as delivery shipments were affected in June due to container availability tightness. If you look at the total exports that got postponed across the three divisions, it is in excess of INR 270 crore. Also, demand from the U.S. and Europe have been affected to some extent due to delays in regulatory clearances, especially on transmission lines. We have been seeing an increased level of inquiries from the Western Nations recently and are hopeful for a further acceleration towards the second half of the year. The macro environment otherwise looks positive, with a thrust on renewable energy capacity additions, transmission line sector expansions, and we continue to remain buoyant on the robust growth drivers. That should help create more value for our stakeholders. Chinese competition, however, has increased considerably, especially in areas where there are no barriers to entry for Chinese products. Due to predatory pricing, however, duty on Chinese goods, which include aluminum conductors and cables, have been increased by up to 25% further in the U.S. This will likely make Indian origin goods more favorably positioned in the US market, and that's the reason why we have an optimism that business will grow in the second half of this year, continuing into the next financial year. We have a very detailed corporate presentation on the company profile and performance that has already been uploaded on our website, and we would encourage everyone to please access the same and go through it. So with this, I'd like to come to the end of my comments and open up the floor to questions. Hello? Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Maulik Patel from Equirus Securities. Please go ahead. Yeah, thanks for the opportunity. Good afternoon, everyone. Kushal, a couple of questions. One, on the conductor side, we are hearing that some of this player like KEC and the Diamond Power, they have started also the conductor manufacturing capability or about to start the manufacturing capability. Are we going to see a significant market? And if they are coming up with a new capacity, how long it generally takes for the new entity to take an approval from the relevant authorities, let's say, the PGCIL, or if they are trying to get an export in U.S., how many months it generally takes to get an approval? So, companies like KEC, who are EPC companies, they will be more, catering to their internal requirements because, there will be a conflict of interest with other EPC companies. So it's not, likely that they will be actually upsetting the marketplace. With regard to Diamond Power, also they are somewhat connected to Adani, in some way. So there also, it may be more gearing up for the Adani type requirements, which is a developer. So here again, there will be a conflict of interest with other developers. This is our, perspective. In terms of the barriers to entry, the product which is now being used in India, which is AL- 59, is not an easy product to manufacture for a new entrant. So it is possible that some of these companies may actually start out with the conventional ACSR conductors, and it may take some time for them to actually qualify and make the product, you know, as per the requirement of PGCIL and other, you know, customers. And in the export market, it's not just a question of price which wins the business. It is also a combination of reliability, past records of how much business has been successfully done in that geography. So to make this kind of inroads, we had to take several decades. So I believe it may be equally difficult for new entrants, and especially when the existing entrants are well, you know, sort of in the, you know, entrenched. So it's difficult for, you know, a new party to get space to enter into that market. A lot of these foreign utilities and foreign customers, they are not just looking for the lowest initial cost. They look at the total cost of ownership, and they are ensuring that their project is not getting delayed, or there's no problem on the quality as they execute the contract. So their philosophy is quite different from our Indian utilities. Also, they look at ESG compliant also, where you have, you have the significant investment in the past, right, in terms of an ESG compliant? Yes, especially in Europe, we are seeing a lot of that. Your order inflow was one of the lowest. Is that because of the election, that's been a decline in the new order inflow? Part of it was on account of the code of conduct, especially where we are directly dealing with the utilities. There is also previous quarter where we had a good inflow of orders and we have certain commitments for supply. So although we could have taken on more business, but some of the clients are looking for deliveries which are clashing with our existing commitments. So we have not overcommitted by taking on those orders and then not being able to supply those volumes. But Maulik, on a half year basis, you're looking at almost INR 5,000 crore. Yeah. If you take, Yeah. Meaning if- +50 by 2024. So there was more finalization that took place in the Q4. And then because of the elections and, you know, the state electricity boards have actually been running a little bit behind us, was mentioned in the, you know, in the opening remarks. Our sense is that the domestic market otherwise is fairly strong. There has been some impact on the export, as was explained in our opening comments, that because of the logistics disruption, the inflow of business from the export markets has been somewhat disturbed. Besides, our actual dispatches, which got affected, also inflow of new orders in certain export markets has got somewhat impacted because clients are hoping that, once this 1stst September starts, then the situation should start normalizing and, you know, container availability should start coming back into the, you know, the stream. Because the extra duties will start kicking in Chinese goods to the U.S. market from 1st September. So currently, there is a rush to supply all the goods to the U.S. market before 31st August. So it's a combination of these factors also. You know, you mentioned that the duty has been increased from what% to what%? Chinese products into the U.S. from 35% close to 60% plus. Yeah. Applicable to both conductor and cable or only conductor? It's conductor or aluminum-based products are included in that, but the total range of products is going into many categories. Mm-hmm. Including a whole lot of gear that goes into, you know, your, photovoltaic cells, et cetera, et cetera. The increases have been between 20 and 25 percentage points. Kushal, you've been highlighting about, this slowdown in, US market from a cable perspective. There has been an inventory rationalization, which I think was taking place since last, couple of quarters. H ave we seen the bottom of that? I think so, because our inquiry rates have substantially increased, and even the order inflow has started increasing. So, you know, when you're looking at this first quarter versus first quarter of last year, first quarter of last year was still at a fairly high level. But the shipments to the U.S., in spite of this problem which having happened, is still higher compared to the previous quarter. So, I think it has already bottomed out, very clearly bottomed out, and shipments and inquiry levels have started increasing. Thank you. I will come back to the queue for more questions. Thank you. Thank you very much. The next question is from the line of Amit Anwani from PL Capital. Please go ahead. Hi, sir. Congratulations for the good set, and thank you for taking my question. First question on the volume. So you did highlight it on the export front, the contribution this time was about 30%, and last year and from recent past, the contribution was, especially in conductor, used to be 40%-50%. So, underlying the challenges which you highlighted now, what are the volume expectations? And second thing, I wanted to understand on the regulatory delays which you have highlighted, if you can elaborate more, is it because of the elections or any other factor which is there, in exports, US exports? So on the regulatory front, the foreign regulatory bodies are more demanding, and there are a lot of more procedure for their various permissions compared to our Indian counterparts. So to get the project clearances itself takes many years. So these are some of the things which have affected some of the projects. And in addition to that, the higher interest rates also have sort of forced some of these projects to get a little postponed in terms of the implementation in these foreign countries. That is what we were meaning when we said about the regulatory delays. And with regard to the future quarters, this Q2, which we are currently in, that is also obviously somewhat impacted because of the logistics disruption. And we are hoping that from Q3 onwards, things should normalize. Right. So are we expecting that the contribution will again come back to higher level of 40%. Yes. From exports? Okay. Yes. Yeah, the mix will be better. What we are also doing is that our product mix we are improving. As we've been mentioning from the earlier quarters, the ACSR type conductors are being replaced with AL-59 conductors. So even though they are conventional conductors, they are having a better margin than the ACSR conductors. Similarly, within the premium product portfolio also, we have better margin products in terms of CTC conductors, having a better, higher share than PICC conductors. So we're trying to optimize the better product mix, high margin mix within each category, and that is the reason we are getting a better EBITDA margin on a per metric ton basis. Now, it really depends on the kind of orders and the projects that get executed during the quarter. You may see the EBITDA margins, you know, moving in that direction, depending on the overall premium mix as well as premium mix within each category. But for the full year basis, we are expecting about, you know, volume growth to be anything between 10%-15%. Are we revising EBITDA per ton? Sorry? Are we revising EBITDA per ton? This quarter it was about 18. No, so we go with our annual guidance that we had shared last time, but we have been working on improving the product mix. So, depending on what gets executed in the quarter, our EBITDA margins will be improved there. Right. On the oil business, we did highlighted that, the global transformer oil volume have gone up by 20%. Is it for Apar? And if so, then, I think the overall, oil volumes, have been 6.7%. Is it affected by, you know, other verticals and transformer is doing great? If you could explain more, and then, if that is the case, what is the outlook for the, the oil, you know, business with respect to, EBITDA per KL and volumes, in the coming quarters? So the transformer oil, the 20% growth, is specific to Apar. The market is not growing at 20% a year, but the Indian market is probably growing close to about 8%-10%, and the overseas markets are growing at around 6%-7% a year, depending on which geography one is looking at. We have been gaining market share in several countries, which is why the figure of 20%, you know, with respect to Apar. As far as the product verticals are concerned, transformer oil, which is a target vertical for us to grow, has shown these numbers over 20% growth. Similarly, if you take the lubricant business, both the automotive and industrial also have grown. What has de-grown for us is the process oil business and the white oil business, both of which actually carry a lower margin profile. And, the main reason for the white oil business being lower is the foreign exchange issues that are existing in Africa, as well as the higher logistics costs, you know, shipping from India into Latin America and a few of these other markets, which typically we have been doing a good amount of white oil business. So that's the reason why, you've seen transformer at 20%, and, you know, the lubricant mix also double-digit growth, but overall growth at around 6%. But because the more profitable product line has grown, you see an overall increase of almost 15% in the EBITDA, you know, quarter on quarter. Right. Lastly, sir, on cables business, so this quarter we did about 7.8% top line growth. So with the comeback in the exports business, are we still guiding more than 20% growth for the cables business and similar kind of margins, 10.5%-11.5%? Yes. Yes, we are. You know, margins are likely to be in the range of 10%-12%. And, and in overall, value, also we are looking at about 25% growth on an annual basis. This is primarily when the U.S. comes back, or, again, this business is displaying much faster growth in domestic market? Any color on the domestic market, you know, with respect to optic fiber and Light Duty cable, how the growth and contribution is happening from all the fast-growing businesses and cables? So domestic business is showing very strong growth. If you see even this quarter, domestic business has grown by more than 40%. Of course, 25%, we are assuming that U.S. also comes back. Our domestic business looks strong. Our LDC business has also grown 50% in this quarter, to about INR 70 crore in this quarter. So apart from that, all the other verticals on domestics took strong growth in this quarter. How was the Elastomeric Cable growth? Elastomeric Cable was, I think it was. over 15% growth year-on-year. Yeah. The renewable energy side actually has grown even more, which is the solar cable side. Okay. The supplies that went into the railways and defense, the growth was a little bit lower, but that also is picking up. From this quarter onwards, quite a lot of railway orders, et cetera, coming in. So overall, domestic growth is very strong, and as the inquiry levels have increased, even the order conversions have improved with the U.S. So our sense is that you will see both export business going up and the domestic business going up. So, you know, by the half year, we will know better in terms of, you know, how much this export logistics is actually affecting shipments. But otherwise, you know, if you take our view in terms of for the year and then going forward, none of the critical growth drivers seem to have got adjusted, you know, in the wrong direction. They're all still positive. Great, sir. Thank you for taking my questions. All the best. Thank you. The next question is from the line of Riya Mehta from Aequitas Investment Consultancy. Please go ahead. Thank you for giving me the opportunity. So my first question is in terms of railway. So, in the budget also, the electrification numbers have reduced, and I think we are on track for the target of around 80%-90% electrification. So going forward, what kind of railway orders are we seeing? So, the railway electrification side has already, as you said, you know, 90% is already done. The inflow of orders for copper conductors is down. However, for certain special copper alloys, you know, that business has started for the higher speed trains. But the growth which we have seen that I was referring to, previously, is fundamentally with respect to the cables that are going into the trains for the locomotives as well as for the coaches. Uh- So that part of the railway business has been continuing to grow. We are the major supplier into the Vande Bharat train. And, you know, as the manufacturing and execution of that is increasing, you know, our supply to the railways will also increase. However, what is compensating in the conductor business for a reduction in copper conductors to the railways, we have seen a major jump in our copper transposed conductors going into the transformer side of the business. I think in the last earnings call also, we had mentioned that all transformers which have more than 400 amperes of current coming out of them, have been mandated by CEA to have the copper transposed conductors. So that's one major area of growth. The second area where we've seen growth happening is in the busbar. So these busbars are also increasingly being used, especially in high-rise buildings and larger complexes, which is a norm, you know, in India. So between these two, it's compensating for any reduction that's been there on the railway conductor side. Got it. And my second question is, a lot of players who are vertically forward integrated who are using conductors and into the P&D space, a few of them have started their own conductor facility because there was serious shortage previously. So, do you see the competition increasing or our target area decreasing? So I think we've addressed this same question. Fundamentally, KEC has put in specific conductor capacity, and that will probably come into. Okay. Yeah. They need another six months or so. So, in fact, it may be a backward integration for them, Mm. To some extent. However, as Chatan mentioned that, you know, the base conductor today has moved to AL- 59, which is not the simplest product to manufacture compared to ACSR. So, it has alloying and it has technology requirements, you know, attached to it. Besides that, you know, they'll have to get approval from PowerGrid, which is one significant number of new TBCB lines. That approval process is not a trivial process either. Also, the export side of the business requires a much, much longer approval cycle, so we really don't see that, you know, upsetting the apple cart. In addition to that, you know, why would another EPC player buy from a competing EPC player? Right. Right. I mean, yes, there, there would be a lower demand coming in from KEC, but I don't think that's necessarily going to affect the overall position that Apar has on the conductor side. For the conductor, what percentage of the order book is currently coming from exports? Exports, this quarter was less about, exports in conductors about 30%, but earlier it used to be about 40%-45%, but this quarter has been 30%. This quarter, this is as a percentage in Order Book, right? This is also for the quarter one. Yeah. So Q1 order bookings. Right. Hello. And, what, in terms of cables, U.S. would form around 50%-60% of our exports mix. So going forward with domestic overcompensating for the lackluster in U.S, what kind of growth do you see in other geographies in export market apart from U.S.? So, we are, you know, in fact, in the U.S., as far as the cable side is concerned, we have started seeing, as I mentioned earlier, we have started seeing increased inquiry levels as well as an increased conversion. So the order book for the cable side has already started growing. On the conductor side, is what was being referred to that, you know, the, some of these regulatory approvals are taking longer than, than had been indicated earlier. So the conductor ordering from the U.S. has been a bit slower. The cable side has actually started growing. So you would see a significantly higher amount of execution taking place of cable sales to the U.S. in the second half compared to the first half of this year. And, even then, you know, comparing with the second half of last year. So the trend is a clear upward trend. Got it. That's it from my side. I'll join the queue for further questions. Okay. Thank you. The next question is from the line of Mahesh Bendre from LIC Mutual Fund. Please go ahead. Hi, sir. Thank you so much for the opportunity. Sir, in recent past, I mean, the prices of copper and aluminum has dropped significantly. So what impact this will have on us in coming quarters? So copper and aluminum rates doesn't affect our margins, because now we run a full hedge hedge book for all the orders that we have. The only impact possibly you could see is that the interest line item may go up or come down, depending on our copper aluminum going up or down, but that also we factor in the selling price of the product. So at a net margin, we don't expect any significant impact of copper or aluminum price going up or down. Also, Mahesh, you do need to keep in mind that both copper and aluminum had shot up in the recent past and then now have reconnected downward, but they are still at a higher level than they were, you know, a month and a half, two months ago. But then having said that, as Ramesh has mentioned, we run a pretty much hedged book, and the changes in the price of aluminum and copper essentially affect working capital or could affect future business, given that the CapEx cost may go up for a particular project. Sure. Sure. So, some of our customers may defer their deliveries if they have not hedged, but it will not impact us directly. Okay. Sure. And, sir, domestic side, the transmission CapEx seems to be very strong. This is indicated by PowerGrid and all transmission companies. So over the next five to seven years, do you think the domestic market could be much more, I mean, attractive for us compared to export? Or is it that both market will be flourished for us? Yeah, in the medium to long term, we see the both markets being strong. In the short term, the Indian market has actually done quite well, and it has helped us, you know, take care of the reduction in the export demand due to this logistics disruption issues. Also, you know, we tend to think that, you know, everything in India is very slow. But, you know, as Apar is executing in 140 countries around the world, actually the speed with which Indian regulatory authorities have been acting on new transmission lines, on new infrastructure is actually faster than, pretty much most countries around the world. So that's the reason why in the shorter term, the U.S., you know, regulatory clearances are taking a bit longer to come through, so some of the demand has actually got pushed back because of that. But the Indian transmission line side, you know, should be looking up. If you see currently, PGCIL's, you know, CapEx addition level is relatively low in the last quarter, as they've reported in their financial numbers. But going forward, they want a number of lines. So we see demand in the domestic side actually increasing. Sure. Thank you so much, sir. Yeah. Thank you. The next question is from the line of Himanshu Upadhyay from Bugler Rock PMS. Please go ahead. Yeah, hi. My first question was on this 30% growth in auto industry or the auto volume. Have we added new OEMs, which is leading to such high growth? Because last year, we had a pretty flattish numbers, and we're not seeing so much growth on the OEM side. So what led to this high growth? What would be the mix of aftermarket versus OEM sales? Yeah. So this, the growth has really come from the B2B side of the business, where the sale has come through B2B distributors, it's come through OEMs and, you know, sales that have gone in directly into industries and end consumer. On the automotive side, besides these three channels, you know, the OEM portion, Apar, has actually gained market share or share of business from some of the existing OEMs. And that has also resulted in, you know, the higher numbers coming in on the automotive side. Some of the key OEMs that we service also had a quarter-on-quarter base effect. So they bought lower number of lubricants, especially for their SPD, you know, spare parts division in the same period, previous year, and they've bought a larger quantity in the current year. So it's a combination of, higher level of purchase, a higher share of business from, you know, existing OEMs, and some new product lines being added to, some of the OEMs, which, you know, we have, completed, all the R&D testing, et cetera, et cetera, and have had acceptance for, which some of our competitors in the account haven't, been able to cross that barrier yet. So it's a combination of these things. But can we assume that it will over the year normalize to 4%-5%, or you think this high momentum is? So the OEM side will, we will see a double-digit growth over last year. Okay. And one more question on this, we have this UAE facility. If we take out consolidated minus standalone revenue and EBITDA, we are not seeing much traction there. Can you give some thoughts on what is happening in UAE? And, is it a potential—it should have more benefits of exporting as it is much more nearer to Europe and all those markets, especially under oils segment, okay? So what is happening there? And so. So, you know, there has been, if you, if you see, there have actually been two adverse areas that have affected, you know, exports coming out of the UAE. One, which you probably know very clearly, is the issues in the Red Sea, because the proximity to the European markets, to West Africa, to all of these, happens through the Red Sea. So with the Red Sea pretty much closing down, freight rates have gone up both from here as well as from, you know, from the UAE. Secondly, a lot of export was happening from there into Africa. And with the foreign exchange issues on the white oil side, which I spoke about earlier, there has been some impact, you know, in the Middle East operations there. Having said that, the transformer oil side of the business continues to grow quite strongly over there. So, you will still see in this year, a better performance coming out of even the Middle East operations as compared to, the same period in the previous year. So FY 2025, we expect to do better than FY 2024, in spite of these issues, because the transformer oil side of the demand remains very strong, even in the Middle East. And one more thing. Are we seeing delivery challenges only in conductor or transport challenges? And how is the situation in oils and wires? Because the rates you are saying have increased even for oil shipments. The logistics, I mean, the export logistics of the freight has affected all the three divisions. The number which we mentioned of INR 270 crore of shipments having got stranded, which would have otherwise been planned for dispatches in Q1, are largely comprising of FOB shipments, where the clients were supposed to actually provide for the logistics and the container costs. And this is something that we have been pushing for, to isolate ourselves from, you know, the movement in the freight prices. So there is a challenge which all our three divisions have faced, and I think every exporter out of India has also faced. Because it just came in too fast and without adequate warning, a huge number of containers got diverted. Many ships which were supposed to call to India actually bypassed India with empty containers and went straight to Chinese ports. But having said that, that the effect of this whole China piece is by very nature likely to be short term because of the higher duties which are kicking in from first of September onwards. So Chinese manufacturers are trying to move the inventory or that they held into the U.S. market before the change in the duty structure happens. So, yes, when you have a disruption like this, it takes a few months for it to get normalized, but it should get normalized. You said that in the oils business, the transformer oil and auto oils have been doing better, and they are the higher margin products. Do you think the mix of product will, for the year 2025-2026, remain similar, or you think it will mean revert to that what historically it has been? So we will definitely see higher growth rate in both of these product lines, in transformer oil as well as in, automotive oil. On the more commodity side, which is, you know, the technical grade, white oils and some of the process oils, which go into raw materials in the manufacture of goods. In fact, the margins have been very bad in that, in that area. So overall, you will have two positives and two negatives, but, overall, the positives should outweigh the negatives. So I think we will be able to meet the guidance or possibly exceed the guidance through, the year. The CapEx, are we on time to complete all the CapExes, which we had committed in last year? So on the CapEx front, we are progressing as per, as per plan. The delivery cycles for critical equipment have all been very long, and there have been further delays coming in. Delays as in a longer lead time than has been indicated, but we have planned quite well to ensure that, you know, we spend the CapEx money keeping a buffer, you know, in terms of time. That is the reason why we've actually been accelerating some of this CapEx going in and trying to build a buffer. So we still should have most of the CapEx coming in within the indicated time frame. Okay. Thanks from myself. Thank you. The next question is from the line of Mohit Motwani from Nuvama Wealth. Please go ahead. Hello, am I audible? Yes. Yeah, hi. Thank you for the opportunity, and congratulations on a good set of numbers. My first question is on the cables front. So, you know, you mentioned that you are maintaining the guidance of 25% growth for FY 2025. So this is factoring in the slowness in Q2 that you mentioned, right? I, I, if I understand correctly. Yeah. We expect that, you know, the demand from the U.S., coming up, and we should be able to catch up with the growth numbers. So this is assuming that, you know, your, the export, demand also completely comes up. That's where we expect a 25% growth in the annual numbers. Okay. And, can you, you know, elaborate a bit on the competition that you are seeing in the cable segment? So have you seen, you know, because some of your peers have also started exporting to the U.S.? So have you seen any pressure on the market share or maybe pricing pressures which could, you know, mean, some, some negativity for the margin front? So any color on that, you can share with us? So, the U.S. imports nearly $20 billion of cable in the year, and the aggregate import from India of all the cable companies put together is, you know, last year's numbers were close to $400 million. So the real competition is still not just from, necessarily from other Indian cable manufacturers, but is against, imports that are happening from, China, from, Indonesia, you know, Southeast Asia, Middle East, Europe, Mexico, Colombia, and some of the Latin American countries. So, I think the market is so large and the Indian share is so small, that even though others may want to start exporting from India, other manufacturers, I think, we still, are, quite, focused in terms of the market and increasing our client base over there. So we don't see the increased Indian competition as actually being the issue. The real issue will be whether we are able to compete against existing channels of supplying into the U.S. Sure, sir. And, sir, on the gross margin front, you know, I understand that, you know, you have a complete hedge book, hedge book, so the movement in the copper and aluminum prices don't really affect them. But, if I look at gross margin in this quarter, versus the last year as well, or even the previous quarter, so it has been down. So can you give a sense on how does your gross margin move, and how does it depend on these raw material prices? I know you had it, but just a little bit, if you can elaborate on that. Yeah, this quarter, it has been down largely because export mix has also been less, and you know, the margin profile has been lower because the US sales has been down and overall export mix has been less. So overall, we are looking at about 10%-12% EBITDA margin. And once the scale of the business goes up, we can expect improvement in a few basis points due to your factory manufacturing overhead conversion costs getting spread over a larger volume. But yeah, if you theoretically put it, the copper, aluminum going up as a percentage to sales. It may marginally come down because we, in this thing, you're looking at a per unit sales, but as the scale improves, we also expect the cost to come down as well. Okay. And right now, in terms of conductors in the domestic market, for the Indian transmission lines, so is this, this is more of AL-59 conductor that is going into these transmission lines, or is there more of, any reconductoring that has started right now, or if you can give a color on that? Yes. Yeah, no, it's primarily AL- 59, the conventional, product. But there is some HTLS or the reconductoring business also, which is going on, which was, mentioned in our remarks also, that after this, you know, election is through, we expect now the momentum to pick up there. Sure. And so this container availability issue that you spoke about for conductors, how long do you expect it to persist? I mean, I know you said that Q2 may be impacted, so after that, you expect this to normalize from Q3, the container availability issue? The container availability issue is normally in the conductor division, across our three divisions and across every single exporter from India. As I mentioned earlier, so I'm sure as you attend other companies' earnings calls and people who export, you'll find that this has affected everybody. As I said, you know, it's short term, the duration by its very nature, is short term because of a lot of movement from China into the U.S. to beat that deadline. Now, how long it will take for it to normalize? You know, it will take a few months. I don't know whether it'll be three months or six months, but it will normalize, because these containers, once the delivery happens, the U.S. will get these stuff and come back into circulation. Got it. Thank you for answering my questions. I'll get back to you. Thank you. Thank you. The next question is from the line of Mukesh Patil, individual investor. Please go ahead. Hi, sir. Thank you for the opportunity. Just want to know cable and wire business volume growth for this quarter. Sorry, your question was not clear. Can you repeat? What is the volume growth for cable business this quarter? So in the cable business, we don't report the volume numbers because there are a wide variety of different products there, so here we only report the value numbers. Okay. 7.8% is the value. Okay. And, what is the CapEx plans for this year and next year? We are looking at CapEx of about INR 300 crore-INR 350 crore in this financial year. Next year? It should be in the similar range. It will be mostly towards? Largely towards the cable and the conductor division. Okay. Thank you, sir. Thank you for that. That's it from me. Thank you. The next question is from the line of Saurabh Patwa, Quest Investment Advisors Private Limited. Please go ahead. Good evening, sir. Hope I'm audible. Yes, we can hear you, Saurabh. Yeah. So just wanted your thoughts on a medium-term volume outlook for transformer oil. Given the context of the increased investment in new power generation capacities, as well as transmission, especially given the solar, which will require the increase in transmission line to much more extent versus thermal. So as I mentioned earlier, Saurabh, we expect that there will be a good demand for transformer oil. There is a number of substation, you know, with every generating site, every renewable energy generating site, a substation goes in to step up the power, and then a substation is required, you know, to step it down. So this entire renewable energy journey or transition that's happening is also becoming more substation intensive. Okay. As a consequence, you know, the value of transformers in the whole chain is also increasing. That has a direct, you know, linear bearing on the demand for transformer oil. It also has a linear bearing in terms of the demand for copper transposed conductors or CTC conductors. Right. And so how does the data center-led demand can impact, especially if the localization has to happen in India, will this drive another set of demand? It is absolutely. Not only in India, but around the world. So, there are a number of global studies which are out there on data center relations. The highest of which is happening in the United States. India is actually a distant, like sixth or seventh, at the moment. But these data centers are extremely power intensive. If you take the data centers which are being added in Navi Mumbai alone, once this current set, which has been announced, are added, we may need in excess of 3,000 megawatts of power to, you know, to service them. So- Is the product profile different for that? It is the single largest, it's like 75%-80% of the operating cost. Right. So is the product requirement different in terms of transformer oil? No, no, no. So, see, the transformer oil will go into the transmission side of the system. You're. If you're talking about liquid cooling, then, for the data centers, that is still a category that is still being developed and is slowly increasing. There are, you know, standards which are slowly evolving in terms of data centers. And it would be a combination of using mineral oils and synthetic oils. Just, one more question related to oil only. So you highlighted you've gained market share in the export. So is it from the local firms or is it, are these global firms which you've taken market share or the local domestic players? Global firms. If you, if you take the share of export that's happening from India, you know, anyway, Apar is the lion's share of the export, portion. So it's really, you know, as, new avenues have opened up, we've been able to pick up a larger share of, of the business. Plus, one of our, competitors out of Europe, which was once one of the largest supplier of transformer oil, they've still been, affected with, you know, financial problems and things. They're in a better situation than they were a couple of years ago, but, not the kind of force, to reckon with, you know, before. So we've managed to gain share. Most of our share gain has been in Southeast Asia, Australia, South Africa, Middle East. These are the regions where, you know, Apar has been strong, and a fair amount of growth has also been happening. Great. Yes, thanks a lot, sir, and all the best, sir. Okay, thank you. Thank you. The next question is from the line of Gaurav Bhutani, IIFL Securities. Please go ahead. Sir, thank you for the opportunity. Sir, could you just highlight, like, what would be the revenue contribution from ACCC conductors in our conductor division? ACCC, ACCC or HT? We, we don't have a specific breakup of that, but in the overall context, it is a very minor percentage of our conductor business. Okay. So my point of asking this question is that, CTC Global has added one other player in the domestic market to supply these conductors. So are we expecting any decline in volumes or distribution of volumes between the two of us, like? Well, actually, there is no net increase in the, you know, the partners. There was one partner which currently has gone into NCLT, so there's another one which has now come in place. Okay. We don't see much difference, yeah, in our future offtake. In fact, the overall pie of the market also is growing, so we may not have a, you know, problem in any case, even if there are more players. Okay, sir. Got it. And sir, any idea, revenue share between domestic and export, which we are targeting going forward, like it would be 60/40, 50/50 or 60/40, in terms of if you could highlight a directional sense in terms of export, which we are seeing, largely in conductors only? In the past also, we have actually clarified that we are generally agnostic to where we sell. We try to optimize our net realization. Of course, current market in the export is somewhat affected, and in India, there's a good offtake. But in the medium to longer term, I think it may be more like 50/50. As already explained, we anticipate growth both in the local market as well as in the international markets, both. Okay. Okay, thank you, sir. That, that's all from my side. Thank you. The next question is from the line of Mukesh Patil, individual investor. Please go ahead. Thank you for the opportunity, sir. Just want to know capacity utilization, product-wise for us? Can, can you repeat? Utilization. Capacity utilization for cables and cables, conductors, and- Capacity, we are running over 90% on our cables and conductor division. Okay. What is the margin profile for our export business? There are multiple products, which are there, you know- Specifically for export, cables. Yeah, again, there are export products. There are, you know, multiple products. Overall, the EBITDA is in the range of 10%. Exports are typically higher than the domestic margin. But because of multiple products involved, we don't give an individual EBITDA margin for the division. Okay, okay. And, are we. So our domestic business are growing very fast in last few quarters, so in cable business, so are we looking to, increase our product portfolio? Increase our sorry, what? Product portfolio. Are we increasing our product portfolio? Portfolio. Yeah, we have a wide variety of products already in our, in the current kitty, so. And we are also looking at you know, opportunities to increase the product portfolio wherever there is demand and products that are ancillary to the current portfolio. Okay. Thank you, sir. That's it from my side. Thank you very much. Parties who wish to ask questions may please press star and one at this time. To ask a question, please press star and one now. Ladies and gentlemen, as there are no further questions, I would now like to hand over the conference to Mr. Kushal Desai for closing comments. Yes. I'd like to take this opportunity to thank everyone for joining our Q1 FY 25 earnings call, and thank you for your time and attention. Just in conclusion, I'd just like to reiterate that, you know, all the growth drivers that we've been talking about for the last couple of years, they remain intact, and in fact, our conviction in the growth continues to remain fairly strong. There have been a few factors that have disrupted in the short term, the latest of which has been container shipments going from China to the U.S. to beat a certain tariff deadline. And then prior to that, you know, the Red Sea kind of problem. But we feel that, you know, these are not going to remain forever. They will be overcome, and the growth will continue. Fortunately, the backdrop of domestic demand continues to remain strong, and the Indian market is maturing and premiumizing in terms of the requirements that they have in terms of the infrastructure within the country. So we continue to remain reasonably optimistic and see a good growth profile in the medium to short term. Thank you so much. Thank you. On behalf of Apar Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.