Good evening, everyone, and thank you for joining us on Finolex Cables Limited's Q4 FY25 earnings conference call. Today, we have with us Mr. Mahesh Viswanathan, Director, CEO, and Chief Financial Officer from Finolex Cables. Before we begin, I would like to state that some of the statements made in today's discussion may be forward-looking in nature. We will begin the call with the opening remarks from the management, after which we will have the forum open for an interactive Q&A session. As a reminder, all participant lines will be in the listen-only mode, and should you need assistance during this conference call, you may signal the operator by pressing Star then Zero on your touch-tone phone. Please note that this conference is being recorded. I will hand the conference over to Mr. Mahesh Viswanathan. Thank you, and over to you, sir. Thank you, Neelav. Good afternoon, everybody. Thank you for joining on this call. I'm sure by now you must have seen the results, reviewed them, dissected them, and you will have questions. I'll be happy to answer them. By way of introduction, the quarter has been decent. After a difficult second and third quarter, I think we have pulled back with a growth of about 14% quarter on quarter and 35% from the immediately preceding quarter. Profit numbers are also good. At INR 208 crore, the profit before tax is the highest that we have seen so far per quarter. Margins were under pressure throughout the year. There has been a lot of volatility on the commodity side, and that, together with a few changes in the mix, has resulted in a lower contribution, lower margin during the year. Some of it we will be able to catch up. Those are timing differences which we will be able to catch up. The rest, the product mix and so on, we will have to see how to manage those in the future. Barring these short comments, I do not have much more by way of an introduction. Let's go straight into the Q&A session. I am open to questions now. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and One on their touch-tone 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 a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press Star and One to ask a question. The first question is from Vidit Trivedi, Asian Market Securities. Please go ahead. Yeah, hi. Thank you for the opportunity. I have two questions. First is, could you please elaborate on the commercial potential and the margin profile of the e-beam products which were launched during the year? Second is, any guidance for the CapEx for this year and the coming year, and any update on the BharatNet opportunity? Thank you. Okay. Three questions, actually. On the eBeam project that was commissioned early this year, January, and we have launched two sets of products in the market. One is on the construction side, building wire, which is our most premium wire. It has all the features: halogen-free, flame-resistant, as well as eBeam cured. In terms of life, minimum life of about 25 years, and in terms of performance, far superior to everything else that we have got so far. That was launched towards the end of February. Simultaneously, we also launched the solar cables. There was a little bit of delay in getting the BIS approval, which we now have. These are two offerings that are available at this point in time. We expect the plan to generate revenue when it is in full steam of about INR 500-600 crores per year from these two products. Newer products will add on to that revenue stream. That is one question answered. Your second question was on the CapEx. Last year. The second was on—sorry, to interrupt you, the second was on the margin profile of these new launch products. Okay. We still have to find the right pricing spot for it. They have just been launched. At the moment, the launch prices are quite attractive, but I think over the next three to four months, as we see demand picking up, that is when our final pricing policy will emerge. I think it's a little early to talk about that at this moment. The second part of your question was on CapEx. For 2024, 2025, our CapEx has been about INR 236 crores. We had announced a INR 500 crore plan two years ago, out of which about INR 160 crores was spent in 2023, 2024. INR 236 crores was spent in the last fiscal. The remaining part will be spent in the current year, most of it. All those projects should get closed by the end of this fiscal. Additionally, always there is a reinstatement CapEx of about INR 40-50 crores. That is something that will be spent. We're working on a few other plans, but not ready as yet to make an announcement. Once those are finalized, we'll come back. The last part of your question was on the BharatNet project. We had participated as a consortium partner. We had taken part in—we had placed bids in two of those circles. Unfortunately, our consortium did not get any position in those two bids. However, many of the winners across the 16 circles have used our manufacturer's authorization to place their bids. We are in discussion with many of those winners, and we are hopeful of a decent level of business in the current and the next years. Got it. That's helpful. Thanks a lot. All the best. Thank you. Participants, you may press Star and One to ask a question. Next question is from the line of Sonali Salgaonkar from Jefferies, India. Please go ahead. Finolex, may I request to unmute your line and proceed with your question, please? Yes, sorry. Sorry, I was on mute. Thank you for the opportunity. This is Solani. So my first question is regarding the mix change that we were talking about in your initial remarks. Maybe I understand what exactly have we changed in the product mix, as in what and what% does each end-user segment account for now? I mean, construction wires, they account for the majority of sales. What has changed in terms of mix is the standalone sales in the form of standard boxes. That has come down vis-à-vis project sales. As you know, project sales is where the price is discounted to some extent. The composition of project sales to total has changed over the last few years, and this year was more pronounced. That is the major reason. If I recollect, we were about 65%-70% B2C or retail, and the remainder was B2B. Now, in that vein, where are we in B2B or projects now? Hello. We do not sell directly to any project. We sell it through our distribution channel only. In that sense, all sales are routed through the channel. However, we know that many of those sales are going to projects, and therefore there is a discounting on the prices there. Yes, very clear. What is the mix right now of projects versus say three years back? That would have changed maybe between about 8-10%. That would have been a shift. Incremental delta is 8-10% towards projects? Correct. Understood. My second question is regarding the BharatNet commentary that you made, that many of the winners—sorry, I do not quite understand that. Are you saying that many of the winners are going to use other optic fiber cables for that? See, at this time around, quite a few of the bidders are not actually producing optic fiber cable. They will have to source their cables from somebody. Therefore, they were allowed to use manufacturer's authorization to place their bids. This is not new. It has happened in the past as well. The numbers of non-OFC manufacturers have been more this time around. Understood. By when do you expect the volumes of OFCs to pick up for this BharatNet? I think the orders have recently been released. While the bid mechanics concluded sometime last November, the actual orders have gone out to the eventual winners sometime in March or April. The procurement process is on. They have three years to build and 10 years afterwards to service. It is that the procurement process has just started for most people. Understood. So my third question would be regarding pricing actions. Could you quantify what are the price increases that you're taking Q4? And from April to now, have there been any pricing changes in cables and wires? We had one day before yesterday. In the last fiscal, there were 12 times when prices were revised only on wires. It is almost once a month. There have been a few cases where, about six cases where the prices were revised downwards, and another six times when the prices went up. That is purely a reaction to the volatility that was there during the year on commodity prices. Net impact, I think cost would have gone up about 12.5%-13%. In the fiscal, FY25, right? In the fiscal. Yes. Between April and May, you mentioned that just about a few days back, you took a pricing decision. Yeah. Effective yesterday, prices have changed by 3%. Prices have changed, so upward? Yeah. Understood. My last question is regarding EHV. A lot has been talked about the solid opportunity in EHV. Any thoughts or plans to increase our exposure there? EHV, the growth prospects are still very good. There is concentration of requirements around the 160 kV plus range. As you know, these are projects which are very long in every part of that business, whether it is the tendering or the decisions on the tenders or subsequently on award and execution. Currently, I think the market size is approximately anywhere between $400 million-$500 million worth. Likely, improvement towards $1.5 billion-$2 billion is not far-fetched. I think at this moment, we are reasonably placed in terms of ability to get orders. The business being a long lead-time business, it takes more than 18 months-20 months to complete a particular project, and then more time to collect the monies around that project. That is the nature of this particular business. Currently, as of FY25, how much of our revenue is coming from EHV? That is in the JV. It's not in our books. On books. Got it. Thank you so much for your replies, and all the best. Thank you. Thank you. Participants, you may press Star and One to ask a question. Next question is from the line of Manoj Gori from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity. I have one question. If I look at the FY25 performance and then I look at the other companies reporting their numbers and their commentaries, probably somewhere we feel like we have underperformed in the wire space, especially in the B2C side. You just highlighted some of the growth in FY25 has been driven from the project business. What are the areas and what were the reasons which led to this underperformance versus peers? Probably, how should we look at things in the coming time? Are these issues behind us? Probably we'll take some time for this underperformance to arrest and probably then grow in line or better than the industry. Okay. My first statement was after a difficult second and third quarter. Second and third quarter was difficult for us. First quarter was across the board. I think everyone faced a problem in terms of the lack of enthusiasm from the market after the initial reports around the election. Subsequently, yes, others have gotten up the mark quicker than us. That is true. I think we've done a fairly good fourth quarter. In terms of growth, in the fourth quarter, our numbers are not very different from our peers. Some of them have larger volumes, yes, but the growth numbers are not very different. I think we had lagged in the second and third quarters but have caught up in the fourth quarter. I think that is something that is behind us right now. Sight. Then secondly, if you look at from the demand perspective, what we are seeing is probably from last two, two and a half years, we are seeing wires relatively growing slower than cables. Logistics. Wire-dominant company. How do you see demand environment panning out from, let's say, an FY26 or FY27 point of view if you can break it into two parts, FY26 and 27, both individually? What would be the triggers? Obviously, real estate, we have been talking a lot that there should be some pickup, but we are not seeing any major signs of revival of demand for wires as a category. How should we see this? I think there is, if you look at the registration and other data that is there, there is definitely inventory reduction on the unit side. Simultaneously, new projects are getting announced. As the near completion is when the demand for wires would pick up. As you said, we were expecting the pickup to happen over at least the second half of last year, which has not. I think with the kind of construction activity that is going on, it would not be far-fetched to say that the current fiscal from the second half, you should see a revival in demand. Hopefully, the level of volatility that was there last year does not continue through this year. If there is stability, then I think things would pick up. Yeah, this is what I believe at this point in time. I think you should see growth next year for sure and probably from the second half of this year. Sure, sir. Lastly, if I may touch upon the margins. In Q3 and Q4, we have relatively done better on margin delivery. Should we assume that probably those margin pressures which we were witnessing, probably the worst is behind us from here onwards? Either this should be the base case margin profile, and probably we might see gradual improvement. I would say that there should be gradual improvement. I think if you look at our numbers over the last five, six years, this 2024, 2025 was probably the first year when the margins have taken a dip and then come back to not yet come back to where it was, but going towards that. I do believe that most of the margin pressure-related issues are behind us. We have addressed them as best as we can. I think that from now, one should see a stable to reasonable growth over the next period. Sure, sir. Thank you and wish you all the best. Thank you. Thank you very much. Next question is from line of Kaustav Bubna from BMSPL Capital. Please go ahead. Yeah, hi. Thank you for taking my question. Just wanted an update on the optic fiber cable capacities that were supposed to come up. What's the update over there? Okay. So on the optic fiber business, there were a few measures that we were taking. The first one was to set up a preform facility. So the facility is ready. It's been mechanically installed and completed. We are waiting for the production trials to start. That is slated for sometime this month. When that is over, then that should take about two to three months before the trials are over and the plant stabilizes. From then onwards, I think we have the product in the market as well as for our own consumption. That would be the preform. The second step was on the fiber capacity increase. Fiber capacity, the machine is expected sometime towards the second half of this year, I think somewhere around December timeframe, and would take another two to three months to install and commission. When that is done, fiber capacity will go up from the current 4 million kilometers to 6 million kilometers. The last stage was for adding another line to the cabling capacity. The building is ready. Once the fiber line is commissioned, that's when those equipments would come in. Those are fairly simple to install, should not take too much of time. Within six months, that can be made ready. Could you speak a little bit about what's happening with pricing on the fiber side and guidance? Okay. Fiber side, the last fiscal fiber prices went through one of their lowest numbers, partly in view of the excess capacity as well as excess stocks available in China. While India had brought in additional duty, the prices kept falling, and I have even heard of $2.5 a kilometer kind of numbers, at which price it's really unrealistic to produce. Having said that, over the last two to three months, we have seen a change in the way the fiber market has been developing. Globally, the consumption and demand-related activities in the U.S. have strengthened very quickly, and there is a lot of demand in North America. There is also additional demand coming in from Europe. We are seeing prices firming up now. It's closer to $3.5 right now as opposed to $2.5, which was prevailing for most of the year last year. Understood. Thank you so much. Thank you. Thank you. Participants, you may press Star and One to ask a question. Next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Yeah. Namaskar, sir. Thank you for the opportunity to take the discussion forward on the OF and the OFC prices. You were alluding to the fact that the prices for OFC have moved up from an average of $2.5-$3.5. This is what, sir, just. Yeah, that's the fiber. That is for the fiber. That is the fiber price. Okay. What are the fiber cable prices or OFC's prices? That would depend on the design of the cable, right? So you might have. Sounds under the. Two fibers, four fibers, 288 fibers. The design makes the price change. Okay. So far. I mean, there is no standard single price for all the cables. Sorry, sir. Come again? I'm saying there is no standard single price for all the cables because the price of the cable would depend on the design of the cable. Okay. Sir, if we take the utilization levels for the optic fiber cable for our company and also for the country domestically, how have the utilization levels been for the last fiscal? What kind of upticks have we seen in the utilization levels for the current two months of this fiscal? Last year, I think, was fairly low across the board because government orders had been delayed. Like I mentioned earlier, while the tendering process for the BharatNet Project got completed sometime in November, orders have been released only sometime in February or March. Orders to the cable manufacturers had not, there were not much. The utilization levels would have been fairly low last year, around 50-55%. This year, I think that should change because the delivery of those 16 circles is required to be done in three years. While there is fiber capacity, cabling capacity will have to catch up because peak capacity may not be sufficient. I think the utilization levels will improve in the current and the next fiscal for sure. I'm just coming to the point by the comment by one of the leading optic fiber cable manufacturers in the country wherein in their release, they mentioned about utilization reaching the optimum level of 90-100% by the month of July on the basis of what the tendering process has been. Are we also expecting those high levels of optic fiber cable utilization by the first or the second quarter? What's the outlook currently for the same, sir? Okay. My gut feel says that it will be more later than earlier. I think July is probably, from where I stand, it's probably a little optimistic. Later for sure. Okay. For the later half, we can expect higher utilization levels. That's for sure, yes. These are on the device of both the global demand from the data centers and also the domestic demand coming up from the BharatNet tendering. These are the two demand drivers, the key demand drivers. Correct. The BharatNet project, which has been tendered out recently, only completes 16 circles. This is phase three. There are other states which are doing it on their own. For example, Gujarat, Maharashtra, I think Karnataka, not Karnataka, Tamil Nadu, Andhra, they are all doing it on their own. That is still expected to come shortly. Those DPRs are, I understand, currently being made. Gujarat had come out with the tenders, but the others not yet. That demand is going to drive the requirement of cables over the next two to three years. Besides that, of course, there will be consumption in data centers. There is also consumption happening at the last-mile connectivity. As the 5G rollout happens or as the acceptance happens, there will be more fiber-to-home applications. That will also consume different kinds of cables. Okay. So in just a summary, we can conclude that the worst for the optic fiber cable demand and utilization levels are behind. Going ahead, what seems to be coming two, three years, they are going to run at full steam depending upon how and when the projects get opened up and for the process to continue. Yeah, I think it is a positive outlook for sure. Okay. Just a small question on the total capacity of optic fiber cable in the country. Taking into account the type of capacity addition that has happened over the last few years, what is the total capacity and where are we in terms of our market shares for domestically? Our shares have been around 11% in this market. Total capacity, I would be guessing if I make a number. I think I'll have to look up at those numbers before I say something right now. I can come back to you later. Yeah. Now on the electrical cable part of the story, sir, how are we seeing the demand drivers for the EHV cable and also the new setup being for the renewable segment that is leading to the new distribution line being set up? How are we seeing the demand drivers from there? What portion of our revenue is derived from the EHV segment, the extra high voltage? Like I mentioned earlier, the EHV part of the business is being done by a joint venture. Those numbers are not included in our standalone results. Only the profit or loss is accounted in our consolidated results. EHV as a segment seems to be growing. I earlier mentioned that current level of the market is about $500 million US. We see that it can grow up to $2 billion in the next four to five years. That is the potential that is there. Players, there are multiple players in India also now. Some of them are now entering the field with technology that we brought in 10 years ago or what Universal brought in 15 years ago. There is definitely a place for multiple players at this point in time. The difference between the traditional wire business as well as this is that the gestation period in this business is fairly long. Each project takes anywhere between 12-24 months to complete. Your sales recognition is not at one point in time. It spreads over 24 months. That is the challenge. That is the business. From an existing level of $500 million to a potential of $2 billion is the market size. I think that's the question. Yes, sir. Sorry. I interrupted you, sir. You wanted to conclude? That is on the EHV part. You had another question, which is on the renewables. Like I mentioned earlier, we have introduced wires and cables which are cured by e-beam. The application primarily was to address the solar power industry. These are cables with an extremely long life. If you expect, for example, a panel to last 25-30 years, you would also expect the cables to last the same number of years. Otherwise, you'll have to keep changing the cables every so often. Once they're cured by e-beam, that results in a very long life for these cables. We have launched them in February, and we have recently got our certifications through BIS also. We expect this industry to grow. I think currently, the volume of these cables that are sold are anywhere between 20,000-25,000 km per month. That can only increase given the fact that our government's target to improve the power generation from solar and wind generation is climbing. The targets for the future years are even higher than what they are today. We do see a large potential in this space. Additionally, the e-beam facility, we have also launched a premium wire product. This will go into construction where we expect the life of the wire to be a minimum of 25 years. That would also add to overall volumes. Plus, it would add to the premiumization of the product. Right. Sir, in this space, are these the e-beam crosslinked solar PV cables? Or what are the product portfolio? These are crosslinked polyethylene. Come again, sir? These are XLPE cured by e-beam. Okay. So these are different electron beam and the one you mentioned are two different types. No, no. The curing is done by an electron beam. So the cable is finished with XLPE, but after it is finished, it is cured through an e-beam process. Okay. So we have the entire setup too. Yeah, we have the setup. We have got two accelerators, one at 1 MEV and the other one at 1.5 MEV. We can cure multiple sizes of products through the machine. Okay. Are we also in the submersible cables and the coaxial cables, sir? Electrical cables. Yes, we are in submersible cables. We are in what we call three-core flats. Those are basically meant for submersible applications, so water and so on. You talked about coaxial. Yes, we have lines both in Goa as well as in our Urse factory. We are long-term suppliers to Tata Play, to Sun TV, to Airtel, to most of the DTH operators. Right, sir. Thank you, sir. We can conclude that at least for the segmented reporting for the OFC part also, we are going to see improved margins going ahead with the utilization levels improving. Also, the price is also for OF improving by $1, as you mentioned. In all, there are both the price as well as the demand pull that we are going to witness going ahead. Yeah, we should see those things. Okay. Sir, for the EHV cable, what is our—I'm just concluding, sir. For the EHV cable, what is our market share and who is the dominant player? You did mention a name. Okay. So like I said, again, the EHV part of the business, we do through a JV. We do not do it directly in this entity. Yes. There, the dominant player in India so far has been Universal Cables. Currently, Universal is there. We are there. KEI is there. Polycab is there. Havells is there. So far, only Universal and us. We have the vertical process. The others use a horizontal process. All of them are acquiring equipment to put in vertical processes. It takes time. It takes about two years before it can get implemented. Things are moving there. Lastly, sir, in the harness cable segment, are we also a player there? We participate? We supply wires to the harness manufacturers. Yes, we supply our wires. What portion of our— Sorry? What portion of our sales, sir, do we derive from this segment? What kind of a market share do we have? Or what is the size? The target market? The size currently, our size in this market is about INR 400 crore-INR 500 crore. Most of the harness manufacturers are our customers. The overall market size would be much larger. The dominant player here is Motherson. Motherson. Thank you, sir, for all the elaborate answers and for allowing me to put forward to them. All the best to the team, sir. I joined the team. Thank you. Thank you. Thank you, sir. Thank you. Participants, you may press star and one to ask a question. Next question is from Rana Swayam Ranaghat from Pinpoint X Capital. Please go ahead. Yes, sir. My question is related to optic fiber. Like you mentioned, that demand is picking up from domestically also and internationally, and prices have moreover bottomed out. Like I said, what could be the capacity utilization for our company in preform and fiber capacity going forward? If you can give any ballpark percentage going forward. It will depend on how many projects get announced. The comment that I made earlier was with reference to what is happening on the BharatNet project. Therefore, I do see that going forward, the requirement of cables would firm up, which means that downstream requirements also would follow similarly. You want the utilization to be as high as it can be. We had, when the project was being announced, said if we operate at 70%, then the payback is in about four and a half years or so. Right now, the preform factory is, while it is mechanically completed, production is yet to start. The trials are going to start this month. It will be another three months before the product is available. Initial usage will be lower because as people get used to the production formalities, the processes, and only then they'll be able to ramp it up. The first year was not going to be very high. From the second year onwards, I expect at least a ramp up to initially 60-70%. Got it, sir. Sir, given that our capacity utilization will increase in future, can we see some margin improvement over there? If yes, then on that. That is the reason why we went into this business because it is, in a way, backward integration. It reduces your dependency on someone else. It reduces imports. Today, when you buy the product, you have to buy it for a certain period of time. Say your inventory levels are much higher, whereas you make it on your own, then your inventory levels can be managed with lower numbers as well. Those are all savings that you will get. We definitely expect this project to result in accuracy to the margins. Got it, sir. Sir, if I'm correct, then our capacity would be finalized by this step by itself? When you say finalized, what do you mean? You need to commercialize it. Like, it will be used for selling the products. Our intent when we set up this factory was the output of this factory would be used to make fiber on our own. Currently, we are importing the entire set of preforms from overseas. Once this factory goes live, that import would stop. Our initial requirement, I mean, our requirement would be met by internal production. That is how you get the margin accuracy. If there is excess capacity available, of course, we could sell the preforms out in the market as well. Sir, you mentioned that 60-70% fiber utilization would be by next year. No, preform, I said. Okay, okay. Sir, are we looking for export side also? So far, we have been looking, but we have contracts with our suppliers who are also in that business overseas. There are certain territories where we have mutually agreed that we will not compete in. Therefore, we have not been active there. If I'm making the product myself, then those agreements are no longer relevant, and we could. Okay, sir. Got it, sir. Thank you so much, sir. I'll get back in the queue. Thank you. Thank you very much. If there are no further questions, I would now like to hand the conference over to Mr. Viswanathan for closing comments. Okay. Thanks, everyone, for participating in the conference. I hope I've been able to respond to your queries adequately. Thank you. Thank you very much. On behalf of Finolex Cables Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the lines. Thank you.