Ladies and gentlemen, good day, and welcome to HFCL Limited Q3 FY 2021 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nirav Dalal from Maybank Kim Eng Securities. Thank you, and over to you, Mr. Dalal. Good afternoon, everyone, and a very happy New Year. Welcome all for the HFCL Limited third quarter FY 2021 results conference call. My name is Nirav Dalal from Maybank Kim Eng Securities. At the outset, I would like to thank the management for giving us the opportunity to host this call. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and a financial overview of the quarter under review. Now, I would like to introduce you to the management participating in today's earnings call. We have with us Mr. Mahendra Nahata, Promoter and Managing Director, Mr. V.R. Jain, Chief Financial Officer, and Mr. Amit Agarwal, Head, Investor Relations. I will now hand over the call to Mr. Mahendra Nahata for his opening remarks. Thank you. Thank you, Nirav, for your kind introduction. Good afternoon, everyone, and a warm welcome to the earnings call of the company for the third quarter and nine months ended 31st December 2020. Please note that quarter three FY 2021 quarter results, press release, and investors presentation have been mailed across to you, and these are also available on websites of the company and stock exchanges. I hope you have had the opportunity to glance through the highlights of the performance for our third quarter of financial year 2021. Our focus has always been on growth avenues and to invest in innovation, thereby creating value for our stakeholders. I would like to start by highlighting a few key milestones achieved by your company in the last quarter. During the quarter, we commenced production of optical fiber cables for fiber to home applications from our newly set up FTTH cable manufacturing facility at Hyderabad. I take pride in stating that with commencement of this production facility, your company is now the largest manufacturer of FTTH cables in India, with a capacity of 6 lakh cable kilometers per annum. We plan to further expand this capacity in Hyderabad in next few months. We have also achieved the supply of 1 lakh units of Wi-Fi systems during third quarter of financial year 2021 within first year of manufacturing at a record pace. These systems are fully indigenously designed, developed, and manufactured by your company. We continue to witness great order inflow for our products from domestic telecom companies as well as other inquiries from outside India. We are quite optimistic about the opportunities that lie ahead in the wireless technology space as we believe that India is on the cusp of digital revolution led by transformational projects like the recently announced PM-WANI in conjunction with BharatNet. I would also like to share with you that we will soon have host of other Wi-Fi family products that will cater to 5G requirements as well. Another key highlight during the quarter was that we bagged an order worth INR 678 crores from Larsen & Toubro Limited. The order we bagged was for supply of IT equipment, software solutions, and cloud management solutions for setting up data centers, security operational centers, network operational centers, and various other equipment and systems. This is a testament of our capability to provide high quality products. Our order book has been robust and is maintained at almost 2x previous year sales, even during these difficult times of pandemic. As of 31st December 2020, our consolidated order book stood at INR 7,313 crores. On the back of catering to the growing orders, the capacity utilization in third quarter of the current financial year has been inching higher, which now stands at 95% for our cable manufacturing facilities. Our R&D team in Goa and Chennai have also developed various new types of cables for local applications as well as export requirement. I would like to add here that some of our new telecom and defense products, which were on advanced stage of field trial and are on the verge of being rolled out soon. To add to this, we have already designed Wi-Fi 6 systems, and is under testing by a few large telecom operators. I would like to applaud the efforts by our R&D team, which has enabled us to launch superior products in a reasonably quick timeframe. R&D is one of our key pillars as it not only helps us launch high-quality products, but also gives the edge to stay ahead of competition by innovating new products. Our focus on innovation has yielded a growing pipeline of products like electronic fuses, electro-optic devices, software-defined radios, switches, routers, intelligent antenna systems, ground service and radars to cater to global market demands. Our R&D team in Goa and Chennai have also developed various new types of cables for catering upcoming demand of such cables in India and abroad. Owing to COVID-19, there has been a thrust on digital transformation all over the world, which has advanced the need for high-speed communication networks like 5G. We believe that 5G will lead to a fundamental shift in the way we live and work. It will have a far-reaching impact on industries across verticals, more so when India as a nation is looking to become a $5 trillion economy by 2025. We will need transformation in India's digital infrastructure on a massive scale. All this put together will give immense thrust to telecom business. Driven by this demand, we aim to project India as a next generation innovation and manufacturing hub for telecom products ahead of the 5G rollout expected later this year. We as a company intend to be an integral part of India's digital transformation and a one-stop shop for digital and telecom solution for which we have laid down a clear path for ourselves. This includes providing world-class next generation products led by innovation. This will help us improve our margins and also stay ahead of the curve, along with fulfilling Prime Minister's vision for Atmanirbhar Bharat. After a challenging first half owing to COVID-19, when we still managed to achieve decent growth against all odds, we have now managed to keep our growth momentum. Now I would like to run past the consolidated financial highlights of third quarter of FY 2021 and nine months ended 31st December 2020. One, revenue for third quarter of FY 2021 stood at INR 1,277 crore as compared to INR 1,054 crore in the quarter two of FY 2021 thus recording growth of 21%. EBITDA for quarter stood at INR 177 crore as compared to INR 130 crore in the second quarter. EBITDA margin increased by 78 basis points and stands at 13.8% for third quarter FY 2021. For third quarter FY 2021, profit after tax rose to INR 85 crore as compared to INR 53 crore in the second quarter, recording a growth of 59.7%. PAT margins also improved by 160 basis points to 6.64% in third quarter compared to 5.04% in the second quarter. Segment revenue for telecom products during the quarter stood at INR 333 crore as compared to INR 279 crore for the second quarter. We expect revenue from telecom products to keep moving north from here onwards. Turnkey contracts and services reported a revenue of INR 944 crore as compared to INR 776 crore in the second quarter. For nine months ended 31st December 2020, our revenue stood at INR 3,032 crore and EBITDA stood at INR 398 crore and PAT stood at INR 160 crore. On the financial performance, I would like to add that our focus is to strive towards improving shareholders' value by maintaining our strong return ratios and keeping a check on our gearing ratio. Like I mentioned, focus on R&D and innovation coupled with robust manufacturing and seamless distribution with dual focus on domestic as well as international business will take your company forward to a sustainable growth path. With this, I close my remarks and leave the floor open for questions. Thank you very much, and wish all of you a very happy new year. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question, you may press star and one on your 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. Anyone who wishes to ask a question, you may press star and one. First question is from the line of Hardik Vyas from ET. Please go ahead. Good afternoon, sir. I have a few questions. To begin with, the order inflow tender pipeline, how is that looking because we have not been seeing any fresh orders apart from the L&T order that has come in the last quarter. We have not seen any orders come in. What is the tender pipeline? Look, our orders are not only from tenders. A lot of orders come from private sector and they keep on coming. Fiber optic cable orders, Wi-Fi, and these keep on coming. The reason they are not announced, because they are not of a big number so that we announce it publicly. These numbers keep on coming. Don't just go for large orders. Large orders, of course, last quarter we have received the INR 600 some crores from L&T. A number of small orders have come and they will keep on coming. Fiber optic cable, like yesterday we received an order for INR 70 crores from one customer. Another customer we are negotiating for another INR 70, 80 crores. They keep on coming all the time and that's why our order book is INR 7,300 crores. We do expect certain tenders we have participated and we are positioned well. I don't want to make You know, statement for future, but we expect a reasonably good amount of orders to come in the current quarter. We have been seeing a lot of large orders coming in 2018-2019. We thought that the orders have not been coming and we were wondering that. No, look, that specific year, large orders came from a particular project, for network, for a Spectrum project by defense services. That always does not happen in that level. We cannot always compare year- to- year. We really need to look at the overall order book. Overall order book, if you look, is twice the revenue of the last year. That's reasonable enough. Let me assure you, the way the market is right now, telecom market, in my opinion, is good at this moment of time because of various factors. The reason these factors, orders will keep on flowing. One, as you all know, 4G spectrum auction is happening. That will lead to further extension of networks, number one. Number two, after that, 5G would come by the end of the year, and that would propel the demand to a different level, which includes fiber optic cables. Because the number of cell towers, wherever the 5G is there, would increase by three times than what they are in 4G. They're being high throughput. You need lot of fiber optic cable or high bandwidth radios to be used for the connectivity. Huge demand for that would come up. There will be demand for a number of other products like Wi-Fi 6, which we have already designed and developed, which is 5G compatible. Fiber optic cable, microwave radios, Wi-Fi systems, there would be huge demand for those things when it comes to 5G. Third, FTTH, which is already being rolled out by various private operators, and I have told you that we are the largest manufacturers of FTTH cable in India. Yes. Further increase in FTTH rollouts would propel demands for fiber optic cables. Fourth, BharatNet, Wi-Fi, and FTTH put together as single unit, because BharatNet is being rolled out in next 1,000 days. Okay. All over the country, with a mandatory requirement of giving FTTH connections and Wi-Fi connection. Which means the demand of infrastructure, fiber optic cable, Wi-Fi, and FTTH cable, as well as electronic equipment, which we are also designing. The whole thing would generate a huge demand opportunity for telecom companies like us. If you ask me, I look at that demand very optimistically, and order book will continue to grow as much as supply and revenue. Sir, have we reached execution level at pre-COVID times and, in third quarter, have we executed any backlog of orders, that is why the service orders are up quite significantly? No, it's already almost up to the pre-COVID levels. Yes, that's why you see this kind of revenue, that we have clocked in INR 1,277 crore of revenue. Some places, which is still slow, it's not as much as for COVID. It was there for the second quarter. Third quarter, those areas are, because the execution could not take place in COVID time, now they are snowbound. You cannot do execution there. Leh, Ladakh, Northeast Tawang and all those areas where the defence projects are getting executed, they have slowed down because of the weather conditions, not for COVID. It is the impact of COVID in a sense that it could not be executed when COVID was there in the second quarter. Okay. The next question is for the Gram Panchayats. What is the size of opportunity that we see over the next 1,000 days, split between both the products and services? Look, I cannot tell you specifically split between products and services. If you ask me the overall opportunity, it's not only Gram Panchayats, it's all the villages. Prime Minister announced all the villages, not Gram Panchayats, all 650,000 villages. Out of which only 125,000 Gram Panchayats are connected, that's five lakhs are yet to be connected. I would say if you take fiber optic cable, Wi-Fi, equipment for optical network, FTTH network, and infrastructure, including services, putting the cable on ground or all those kind of things, it should be somewhere near INR 40,000 crore opportunity in next three to five years. Three to five years. Okay. Fine. That would include the PON products as well? Yeah, absolutely. That's why I said FTTH related equipment. That's what is PON. Okay. The execution has already begun, be it in a smaller way, but the execution has begun. You have to separate it out. One is what PM announced as a PPP project. That is yet to happen because I think government is now planning to issue the PPP EOIs and all that in next couple of months. BharatNet as such is getting executed in different states. Right now, execution is going on in various states. Maharashtra, where we are supplying fiber optic cables. Telangana, where again, we are supplying fiber optic cables. Chhattisgarh, where we are supplying. Jharkhand, where we are supplying. Kerala also some execution is going on by Bharat Electronics. There also we are supplying fiber optic cable. Recently there has been a tender in Tamil Nadu that is expected to be awarded sometime from now. There also, we are in a good position to get order and supply fiber optic cable. Execution of BharatNet is going on, not in the shape The balance part of BharatNet by Prime Minister. The earlier part of BharatNet exhibition is already going on. Okay. Sir, last two questions from me. The first is, can we get a split of the product revenue from Wi-Fi and ex-Wi-Fi? I can send you the number which I have right now. Okay. Product revenue, I would say, product revenue has been INR 333 crore. Okay. Turnkey revenue, INR 944 crores. Okay. No, that we have. I just wanted the product segment revenue split between- Yeah. There are two kind of products. One is OFC and another is Wi-Fi and all that, their accessories and all that. That would be out of INR 333 crore in the current quarter, INR 80 crore is in Wi-Fi and accessories, and OFC is INR 253 crore. Second quarter Wi-Fi would be lower than INR 80 crores, right? How would that be? Yeah. Second quarter was lower. Wi-Fi products was about INR 54 crores. Okay. We have seen about 40% growth in Wi-Fi Q- Wi-Fi and accessories. Okay. Wi-Fi and accessories. Could you tell us what was the number of Wi-Fi that we sold? We sold, I think, 1 lakh over the second and the third quarter. Yeah. Could we get a split between the second quarter, how much and how many? Well, that number I don't have right now. Yes, we sold second and third quarter, and it is increasing. Every quarter, it will increase only. Okay. Sir, last one question. Our Defense Minister had some INR 48,000 crore procurement for made in India defense products. For drones and all the other products, how are we placed to take advantage of that? I mean, we had drones and other defense equipments lined up for trials. How are they likely to be Two kinds of equipment lined up for trial. One is electronic fuses, which is already developed, and we are the only Indian company to have our own design of electronic fuses. Only Indian company. Okay. All our others are doing some kind of a TOT and all that. We are the only Indian company which has got fuses of our own IPR. They're ready, and whenever army asks for samples against a tender which we have already participated, we are ready to supply the samples for field testing. They're already there. Night vision devices, couple of types which are already ready. We have participated in tenders and a couple of TECs, technical evaluation. On paper and field trial, we have already passed. Now the tenders will be open, and we would see the orders, how they come up, who wins it. Couple of few tenders we have participated. Some trials are already there, have been happened, and we have passed those trials. Some are yet to happen. Night vision devices and electronic fuses, these are the two products we have started with. Okay. They're ready. Fuses are completely ready. Night vision device, 2 models are ready, 2 are in the stage and would be ready next two months time. Okay. We have participated in another program for upgradation of armored fighting vehicles, which are being used by Indian Army. That EOI stage we have participated. Now, shortlisting is to be done, and then we would participate in RFP. Similarly, we have taken up the project for developing by R&D, software-defined radios. There also, we participated in EOI. I'm happy to report that we have been shortlisted there also, and that development is ongoing, in Chennai, in a company where we have taken 50% equity. That company is developing it for us, and IPR would be owned by HFCL. Okay. These are some of the programs which we have done for defense, and we are not deviating from our area of operation, which is communication and electronics. We are very precisely focused on that, the communication and electronics. Even upgradation program for the armored fighting vehicles, our scope of work for HFCL is going to be this electro-optic devices, these night vision devices and telescopic devices and all those kind of things. Rest of the work would be done by our partner, which is a foreign partner, and they would be doing the rest of the work, which is really not electronic or communication. Okay. We could see execution, I mean, order booking and translating to revenues after two or three quarters from these things. I would say, looks like, yes, two quarters, at least looks like. Okay. sir, last question. What is the status of BSNL? Look, BSNL's status, though we haven't done much of the business with BSNL as BSNL. What business we have with BSNL is for NFS, which is really BSNL is only a pass-through agency. If you ask me status of BSNL, I think we see that it should improve in future. Thank you very much. Sorry to interrupt you, Mr. Vyas. I'll request you to come back in the question queue for the follow-up question. A request to all the participants. Please restrict to two questions per participant. If time permits, please come back in the question queue for a follow-up question. Next participant is Vibhav Poddar from Sapphire Capital. Please go ahead. Yeah. Thank you very much, sir, for the opportunity. Now, sir, we are talking about the telecom sector, the buoyancy in the sector and next two, three years should be quite good with the 4G, 5G, and about other offerings as well, the 5G, FTTH and others. The kind of revenue that we are seeing, so do you see some sustainability in the kind of revenue margins that we are doing? In the margins, there are some things that- The cost is lower that will come back in the coming quarters. If you can throw some light on it, would be quite helpful. Good question, Deepan. Thanks a lot. One thing is clear, that there is demand, and demand is going to increase because of the various projects which I talked about. About sustainability, as I talked about in my opening remarks, our effort is to increase our revenue by our own design products, and that's why we are investing so much on R&D. We have a R&D center in Delhi, Gurgaon. We are doing partnership R&Ds, contract R&Ds with number of other companies. We have taken equity in companies which does R&D and getting them design products for us. We are to open a new R&D center in Bangalore, and hopefully this will be operational from month of April. The whole system is designed to have more of our own products, which has a higher profitability. In fact, as we go in for our own products and selling those products in India and then possibly abroad also, I feel, that is my judgment, that our profit margins are going to increase only. If you look at the last few quarters, for example compare the last quarter to this quarter, our EBITDA margin has grown from 12% to 13.8%, almost 1.8% or 1.73% jump. PBT has grown from 8.11% to 8.9%. This margins growth is there because of this particular focus, as I talked about. An important point is that the products which we design are absolutely international class. For example, Wi-Fi systems, unlicensed band microwave radios, they are being used by large operators in India, and without any glitch, without any problem. Quality is as good as any world-class company. We have already designed the next version of this equipment, which is Wi-Fi 6, which is 5G compatible, and nobody else has attempted the design in India till now to my knowledge. Right. With the increase in our own product range, which I talked about, like Wi-Fi, like unlicensed band radios, routers we are getting designed, we are getting the switches, the software-defined radios, high capacity radio relay, ground penetration radar for border surveillance, so on so forth. As the revenues increase from these areas, the profitability will certainly be better than what it is today. That is the whole focus of ours at this point of time, to increase our profitability from our own design products. With fiber optic cable. Fiber optic cable, we have a competitive advantage. I would say, we are amongst the two largest cable manufacturers of the country, and maybe the largest also, but I don't know the fact how much other guy produces, so I wouldn't say that. Yes, we are definitely amongst the two largest. That kind of a large volume manufacturing gives us better handle on procuring the raw material. Whether it is fiber, partly we produce large quantity we buy from outside also, and other raw material. It gives us a better competitive edge. As we go on producing more amount of fiber optic cable by increasing, enhancing our capacity, we will have even higher handle on the volume of raw material procured, which will give us a price advantage. All these, our own products, large volume of fiber optic cable production, leading economies of scale, new designs of fiber optic cables which are for export market, those all would result in better revenues as well as better profitability and sustainability and revenue and profitability both. Deepan? Yeah, Deepan. Deepan? Deepan? Deepan Poddar, can he hear us? Deepan? Sir, there's no response. We move on to the next participant. Next question is from the line of Jimmy Shah from ICICI Bank. Please go ahead. Hi, sir. Thank you for the opportunity. Just have a couple of questions. First is on the working capital cycle, if I could get your comment on the debtor days currently and how have you seen the situation improving in the nine months? Yeah, I can give you that. The working capital cycle continues to be same what it was in the second quarter. I will give you the number. I have it. It's about 114 days. Net working capital cycle is 114 days, almost equivalent to what we had last quarter. If you compare with last financial year, it has gone up by 20 days. Because of the fact that COVID and all that have resulted in a lot of payment delays and those kind of situations, it has gone up. I think we would be able to correct this situation in next three to four months time, and this will again improve. Sir, debtor days currently, what are the debtor days, if you could tell me? Debtor days would be roughly about, I would say, roughly about four to five months. All right. Sir, second question is more from a sectoral point of view. Sir, all of us are aware that the government has come up with the production-linked incentive, and they've earmarked around INR 10,000 crores worth for telecom products. Considering our product portfolio and what the government is planning to do we see any scope in that from an HFCL standpoint or? We should definitely have that scope. I've not seen that scheme in detail, but any manufacturer which produces indigenously like what we do and have a strong focus on that, I think we should have a reasonably good advantage coming out of that, though I have not seen the scheme in detail right now. Okay. Thank you. I'll join back. Thank you very much. Next question is from the line of Karan Biron from UVI Investments. Please go ahead. Good afternoon, Mr. Nahata, and Happy New Year to you and the team of HFCL. My question first would be, can you throw some light on the fiber prices that are prevailing right now? Look, fiber prices could be different for different people. Not the same for everybody. Currently, the fiber prices, current fiber prices in the market, what we buy, is around INR 250 per fiber kilometer. Around. How much, sir? I didn't get you. Sorry. INR 250 per kilometer. That has reduced from the previous quarter. Yeah, previous quarter was a bit high. It has reduced a bit. I think now they have stabilized. I don't expect it to go down any further. Now it may be INR 250 for me, it may be INR 270 for somebody else, and INR 280 or INR 300 for somebody else. It all depends. Your quantity you buy and the volume discount you get from the suppliers. For us, it is around that, at this point of time. Is there any specific reason this quarter the margins have increased? Anything that you can point out? Margins have increased. One, as I said, one is that higher volume of revenue, because that also contributes. Our own products, Wi-Fi and all that accessories, that contributes to higher margin. Fiber optic cable also, certain orders are getting executed, which are at better prices. The decrease in fiber price and all that helped us to increase the margins. Is this margin sustainable? It is sustainable, and our whole effort is to take it northwards. Not only sustainable, our effort is to increase it. Okay. Promoter pledge issue? Promoter pledge issue, as I have been saying all the time, that this balance pledge of shares, what we have, is against the loan taken by company. It's not against any loan taken by promoters, not even a penny. Those conditions for which we had given the pledge long back, those have already been fulfilled. We have already applied to the banks to release that pledge. As I understand, the lead bank has already cleared that. Now it is going in the committees of other banks to follow what lead bank has already cleared. This is a process. As you know, banks to give away security takes a little time. It is in process. Lead bank has already cleared it. I hope by the time we meet next time, it should be so. Sir, you've decided to expand your FTTH production by 33%. Was the response very overwhelming that you had to take this decision, and what sort of revenue do you get from Bharti Airtel regarding FTTH? Look, I won't go into customer that which customer gives how much revenue. Yes, we had overwhelming response. That's why we increased our capacity first by establishing a factory in Hyderabad, 30,000 kilometers per month, and then expanding it another one-third by another 10,000 kilometers in next two months' time, two, three months' time. We have large queries from export also, for export requirement also. I'm pretty hopeful that we should be able to export also in a large quantity. Sensing that kind of a demand, we have increased our capacity. Because if you don't increase, an order comes, and then you tell the customer that, "I will supply you six months later," that doesn't work. It is better to increase the capacity in advance and make sure that these orders, when they come, we are able to supply, for which we are in reasonably good stage of negotiation. Is Bharti Airtel also one of your key clients, or you mainly do Jio? For fiber optic cable to them, yes, we supply. Okay. Thank you, sir. Thank you very much. Next question is from the line of Deepan Srinivas from Aryan Share and Stock Brokers. Please go ahead. Good evening, sir. Are you able to hear me? Yeah. Yeah. Okay. Sir, regarding the receivables, has it been reduced, or is it maintaining the same level? Because we had an increase in the receivables last time. It is still maintained at that level. Maybe there could be some increase only because of a lot of supplies has been made in the last 15 days of the last month. It has increased a bit, but reason of increase is nothing else but the payments are milestone-based. As the milestones get completed, we can keep on receiving our money. It is a very temporary phenomenon. I expect by the end of the first quarter of the next year, this receivable would be starting showing a decrease. Okay, sir. Sir, is there any bad debt, new bad debt? No. We don't have any bad debts at all. All receivables, there may very small amounts, negligible amounts, which should not impact anything. Okay. I think only there could be one small bad debt could be possible, but nothing substantial. Okay. Thank you, sir. Thank you very much. Next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Namaskar, sir, and thank you for the opportunity. Sir, firstly, can you give the idea, sir, when you say that you are preparing the roadmap for margins moving northward. On a blended basis, what is our next topic for the margins to stabilize? Mr. Kapoor, it should not be wise as a forward-looking statement that where the percentage is. Okay. I can only tell you, we are taking steps to definitely increase margins, and I've also outlined that how they would increase from the product revenue. Like for example, innovation, R&D, our own products, our own IPR, which can be sold in India and abroad. Fiber optic cables, because of economies of scale, better sourcing of raw material because of economies of scale, and better expense control because of economies of scale. These are the reasons why the margins would suddenly increase. To put a number would not be the right thing for me to do right now. Right. It will be mainly the product part that is going to contribute to the accelerated margins that we are anticipating. Products including fiber optic cables. Yes, you are right. Okay, sir. Sir, including optic fiber cables, sir. That means that value-added cables, you are talking toward the plain because the OFC prices, I think so, are still hovering in a narrow lower band only. have not moved. Yes, we are talking all kind of cables. All kind of cables. Yes. cables, normal cables. We are talking of all kind of cables. Right. Sir, your investor presentation articulated about this O&M, operation and maintenance of, I think the INR 1,600 crore or INR 1,580 crore. Yes. Sir, what has been the contribution for this nine months? Sir, plan out? Look, you know- Current quarter, INR 60 crores. Current quarter, it was INR 60 crores. It's nine months. Sorry, current nine months was INR 60 crores. These would increase in future because the O&M kicks in after some period of execution. The major projects which are under execution, O&M would kick in as the projects are finished. I would say major revenue from O&M will start coming from two years from now. Two years from now. Yeah. Sir, currently, that INR 7,000 crore order book, INR 1,580 is inclusive of that, or that is a separate? Yeah, you are right. Where I'm right, sir. It is inclusive of INR 1,580 or exclusive of that? Yes. Inclusive. It is inclusive of that, sir. Sir, now, a very small one more point, sir. As has been the case, sir, that you are speaking to investors and guiding us in the business verticals of the company. Sir, as a prudent management, we'd also request you, sir, that the board should also try to come up with dividend distribution. That means that how are you going to utilize the cash, going forward? If you could give the investors a ballpark. The board will decide, I can't say. Yes, sir. The proposal should move from the promoter, sir. You have walked the talk, sir. No, it can move from the promoter, or it can move from any other board member also, not necessarily from the promoter. Every board member is free to give his view. Right now we haven't had any discussion about that. Whenever we have any discussion, I would definitely let all the shareholders know, and that would be mandatory for me to inform stock exchange and all that. Whenever any such thing is happening, everybody will be able to know. Right now, there has not been any discussion, either this side or that side. Thank you very much. Return back to Mr. Kapoor. I request you to come back in the question queue for a follow-up question. Participants, please restrict to two question per participant. For a follow-up question, please come back in the question queue. Next question is from the line of Chetan Cholera from Pragya Equities. Please go ahead. Yeah. Good afternoon, sir. I guess, whether rightly or wrongly, there is a wrong perceptions created about the company because of the last tech boom. What steps we are taking to change the perceptions, sir? Look, I don't know. You are talking the which period tech boom, which was 20 years back. Well, I cannot say anything what happened 20 years back. Last 20 years, I don't think you have heard the name of the company for any wrong reason or any wrong perception. Number one. Number two, I think perception clearing is by the work you do. If I start advertising about myself, I don't think that's the right thing to do. It's the work you do which clears the perception. As we look the work of the company, the result is in front of you. The kind of revenues we are making, kind of profitability we are making, kind of order book we have, kind of reputed customers we have. That speaks for itself. I don't think it's good for me to start going around and say, "I am good." The work will tell you that whether I'm good or bad. Work is in front of you. It's for you to judge whether the company is on the right track or not. That's the way I would put it. Yes, definitely. We have started having regular earnings calls. We are releasing information about the company, whatever happened in the company, any investment, any increase in any capacity, order books, larger order books, we are all releasing to the general public, shareholders, stock market, so people should be aware about the company. We are improving our website, those kind of things we are doing, but not that we are going to advertise that we are good, and everybody should listen to that we are good. Nobody would agree if I say. People believe it. That's what my effort is to do good work, do better management, better results, better revenue, better profitability. That would tell people that, yes, companies are good or bad. Yeah. Sir, it will be, but I just have a simple suggestion. I think if you give some 10% to some of the good strategic investors, that whole thing will change the perception of that. This is suggestion from my side. You can take whatever way you think. No, Mr. Cholera, I have noted your suggestion, and any good opportunity comes, any good investor proposal comes, we'll definitely work on that. Thank you. Thank you. Thank you very much. Next question is from the line of Virender Verma from IvyCap Ventures Advisors. Please go ahead. Yeah, thank you. Good evening, sir, and congratulations on good set of numbers. Thank you, Mr. Verma. Sir, just wanted to, from a preceding question, last two decades, telecom sector has gone through a lot of changes, from 2G to 3G to 4G, now we are talking of 5G. Now, what kind of assurance you give to shareholders that the company is on a right growth path? The only way I can answer that question, that whenever the technology is changing, we are improving our product range also to keep pace with the technology. 2G, 3G, 4G, 5G. Maybe five years from now, you'll hear 6G. Companies have to continuously upgrade their product range, and I'll give you examples. Wi-Fi is a current example. Wi-Fi 5, which is also the current product in the market, which everybody is using, you are using, I am using. That is there. 5G is coming. Wi-Fi 6 is going to be compatible to 5G. We have already finished design of Wi-Fi 6. It's already under testing with operators. This is one example how you keep pace with technology. Fiber optic cable. You used to have 12 fiber, 24 fiber, 48 fiber cables. We are designing fiber optic cables for more than 2,000 fibers. This is required for different new upcoming applications. We are designing those kind of cables. FTTH. Earlier, there was no FTTH. As FTTH came, we have a separate production line for FTTH cables. Microwave radios. 5G would require high bandwidth microwave radios. We have high bandwidth microwave radios in our product range coming up very soon. Military radios. Technology is shifting to software-defined radios for better sustainability, better secrecy, better encryption. We are designing software-defined radios. Routers. For 5G, there would be application of routers and switches. We are designing them. You have to keep ahead, or you have to keep yourself at par with the upcoming technologies, only you will be having a sustainability and profit and revenues both. That's what we are doing. It had another good advantage, that it creates a barrier also for entry. For anybody and everybody coming to this market and make revenue and profitability would not be so easy, because you have to have good R&D, you have to have good technology capability. Customer connect, where customer believes that you will be able to improve your product range, keeping pace with technology so that he can rely on you as a long-term partner. These are definite attributes, and we are constantly following them, and that's why you see that there is sustainability in our revenue and improvement in profitability. Sir, one more question. We have a stake in a media company, AB Corp, that investment is lying for almost two decades. Neither this investment is our strategic fit, nor it's adding value to our business. What are your plans for this investment? Sir, we have already written it down to a very low level. Some INR 30-INR 35 crores is the remaining amount we have kept in the company. We will wait for disinvestment. Whenever the opportunity arises, we will try to disinvest it. We have already written it down. Okay, sir. Thank you. Thank you. Thank you very much. Next question is from the line of Vivek Gupta from GEPL Capital Partners. Please go ahead. Yes, sir. Congratulations on a very good set of numbers. Just, sir, wanted to understand this new plant of FTTH. By when will it reach, say, 95% capacity? How is the business looking like for this segment for you? Vivek, thanks a lot for your good question. Look, plant is already working on that kind of a capacity from this month itself. Of course, initial stabilization takes some time. When you talk to 95% capacity, I would say it would be up in 95% capacity from the February month itself, not too long. Your second question was, what do we look at the prospect of fiber optic cable, FTTH business, isn't it? Yes. Well, this is a very good opportunity. There are two, three reasons. One, telcos are rolling out FTTH network in the larger cities where there is a good demand. Jio is rolling out, Airtel is supposed to be rolling out. I'm sure looking at that, and if investment permits, Vodafone Idea would also do at some point of time. Apart from that, as I said in my answer to previous question. That BharatNet would also have a large-scale FTTH connectivity in all the 650,000 villages. That would also lead to a good demand of FTTH cables and equipment associated with that. Equipment also would be required, electronic equipment. Third, there is a huge expansion of fiber to home network going on all over the world, Europe, U.S., Middle East, South East, and Africa would of course follow. There would be increased demand for FTTH cables from all over the world. I see good prospect of FTTH cable market for next some years. That's why, apart from our Chennai facility, which was falling short of requirement, we added capacity in Hyderabad, and we are increasing it further by about 30%, because we see a good demand forthcoming. This kind of demand forthcoming, we believe that we have to increase the capacity in advance, because when the supplier wants it, you have to be ready to supply him. That's why we are increasing this capacity. There's a good demand prospect for this now and few years still. Can I ask one more question? Sure. Go ahead. You had mentioned areas of defense like electronic fuses and night vision devices. Okay. What is the opportunity size like in either of them? Look, for the night vision devices, the opportunity is projected. Now, how much they would buy, I don't know. Budget and those constraints would always be there for the government. It's about INR 40,000 crores in next seven years. INR 40,000 crores. That's the projection. Now, actual buyout would be how much that would depend upon how much money they are able to spare for defense and within defense, emergency procurements, which happened couple of times this year because of Chinese issues and so many other issues. That is very difficult to comment. Size of demand requirement is about this much. Now, this may happen in five years, this may happen in eight years. Total opportunity size roughly of INR 40,000 crores. Fuses are also required in huge quantity, and opportunity in that segment would be, in my opinion, would be roughly about INR 1,000 crores every year. Roughly about INR 1,000 crore+ every year. This is a continuous opportunity because the border situation as such, which is there, and lot of trials and firings take place, these are all the time required. We are looking at export market also. All right, sir. Thank you so much. Thank you. Thank you very much. Next participant is Srinivas Deepan from Aryan Share and Stock Brokers. Please go ahead. Good evening, sir. Good evening. Sir, we have been seeing that some promoter entities have been picking up some shares from INR 8, INR 9 to up to INR 18. Yeah. MN Ventures. Yeah. On the insider trading. On insider trading? Yeah, that picking up in the market. Yeah, picking up in the market, it's not insider trading. Yeah, that's what. It comes in SAST. It comes in the SAST and BSE. Yeah, it's open market purchase with the. Yeah. It's open market only, but it comes in the insider SAST. That's how they put it in the BSE website. It's not insider trading. Not at all. It's free and foremost. Yeah. Okay. Sir, this promoter thing, will further pickup will take place, sir? I don't know at this moment of time. I can't comment on that. Okay. Okay, sir. It inspires confidence in the company. That's the reason, sir, we are asking this question. Of course. Confidence in the company would be there as you see the results and the performance of the company. Promoter picked up substantial amount of shares. Last few months, substantial amount of shares have been picked up. I think more than two crore shares have been picked up. That's the reason, sir. We are already reaching to some level of limit, which is prescribed by SEBI for creeping acquisition. Oh, okay. Okay, sir. So nice. Sir, all your pledged shares are released, sir? Can we take it as all the pledged shares have been released? No, look, as I informed last time. Hello? Ladies and gentlemen, please stay connected. Line for the management is dropped. Participants, please stay connected while we rejoin the management back to the call. Ladies and gentlemen, thank you for your patience. We have the management's line connected back to the call. Sir, you may go ahead. Yes. Mr. Srinivas, sorry we got disconnected in between. Yeah. Sir, please go ahead. Yeah. The pledge which was there for certain facilities which company had taken, which was about 15% of the total equity, 18%, which has already been released. 51% of the equity of the promoter which is pledged with banks for facility which company has taken, and this is additional security which company had given long back. Okay conditions have already been fulfilled, and we have already requested banks to release that pledge. Okay. Lead bank has already agreed. Other banks are taking up to their committees for release. As I said earlier, I hope by the time we meet next time, we should have got the release of that pledge. Okay. That means then by next time you should have no pledge for the company. Yeah. I hope so. Okay, sir. Thank you, sir. They've been picking up stakes, so I saw that the pledge had been released also. That's the reason, sir. 18% is already released. I hope this would also release. There's no risk of this pledge being invoked because this is an additional security for the loan taken by the company, which has got primary security, additional securities, and all that. There's nothing which should worry any investor that this pledge could be revoked at any point of time. There's no question. Okay. It will not flood the market. That's what we wanted to know, sir. No way. How can it be? It's the loan which company has taken, not promoter has taken any loan. That too, our gearing is only 0.43%. How can there be any flooding the market by this pledge? This is not a primary security against any loan. Okay, sir. Thank you, sir. Thanks for the clarity, sir. Thank you. Thank you very much. Next participant is Devang Visaria from Atharva Wealth. Please go ahead. Good evening, sir. Congrats on a good set of numbers. I think, just one suggestion. One gentleman said, how would you change the perception? Are you looking at having a consolidation from INR 1 face value to INR 10? No, we don't have any such proposal on the table right now, Devang. Okay. Thank you, sir. Thank you. Thank you very much. Next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Yes, sir. Thank you for the opportunity again, sir. Sir, coming to the P&L part, about our employee cost and the finance cost. Sir, if you could give an idea of how are these going to shape up? There have been an escalation in the employee cost with the improved turnover. For finance cost also, what is our blended cost of funds, sir? Look, employee cost has increased with the improved revenue and also improved recruitment for the R&D resources. It has increased. Yes. It can increase little bit more further because we are recruiting more resources for R&D. There may be some little bit increase further also because of no other activity but R&D. 9.5. It's about 9.5%. The line for the participant dropped. We move on to the next participant. Next question is from the line of Kamlesh Kumar Jain, an individual investor. Please go ahead. Yeah, hi. Thank you very much, Mr. Mahendra. My questions are already answered. Thank you very much. Thank you, Mr. Jain. That was the shortest question and shortest answer. Thank you very much. Thank you. Next participant is Raju, an individual investor. Please go ahead. Thank you, sir, for the opportunity. Firstly, congratulations for great numbers and Happy New Year to you and the team. I have just two questions, sir. First one is, will you be able to advise revenue estimate for next quarter or next couple of quarters? Mr. Raju, thanks a lot for your question, and good evening, and Happy New Year. I can't give a forward-looking statement. Only thing I can say is that we would have sustainability in our revenues. Okay, sir. My next question is, what is the future expansion plans and impact to revenue? The future expansion plan, as I already stated, is looking at increasing revenue from fiber optic cables, as we talked about, by increasing our product range. We are designing more products of ourselves, which will increase sales India and abroad, and profitability both. We have plans to introduce more products and acquire more customers to increase our revenue and profitability both. Okay, sir. Thank you, sir. Thanks a lot. Thank you. Next question is from Deepan Mehta, an individual investor. Hello. Good evening, sir. Good evening. Can you hear me? I hope everyone is doing well in your family and company. Absolutely. Right now, everybody is well. We had some COVID cases a couple of months back. Okay. It's all under control now, and God willing, this pandemic will get away from us in next couple of months. Yes, sure, sir. I wish everyone to stay healthy and safe at your end. Thank you. Wish you the same to you also. Yes. Thank you so much, sir. Sir, you talked about the total market opportunity of INR 40,000 crores. This is for FTTH, that one? No, I talked about INR 40,000 crores for the BharatNet. Okay. That's for the BharatNet, which includes long-distance fiber, its infrastructure, laying of cables, electronics, Wi-Fi, as well as passive optic networks. All put together, for BharatNet alone, I talked about INR 40,000 crores market opportunity. Okay. What can be the market opportunity for 5G plus FTTH, and what kind of market? How big would be the market opportunity would depend upon when the spectrum takes place, auction takes place, and how many operators come in. It's very difficult to say how big would this market opportunity. Right for this 5G. Yeah, it is going to be substantial in the same order of what I talked about. This BharatNet opportunity. It could be much larger, but I am talking about domestic suppliers. It could be something around INR 30,000 crore-INR 40,000 crore. It's a very rough guess from my side. Final numbers are yet to come in. Yeah, it could be as large as that. Okay. Talking about how competitive is our company in terms of price and quality, or in terms of- We are as good as anybody else in the world. There's absolutely no issue in quality of our products. Okay. Our telecom products, fiber optic cables, or anything. In terms of competitiveness, yes, we maintain our competitiveness, otherwise we would not be receiving orders. Thank you very much. Sorry to interrupt you, Mr. Mehta. Request to come back in the question queue. Request to all the participants, please restrict to two questions per participant. If time permits, please come back in the question queue for a follow-up question. Next participant is Utkarsh Somaiya, individual investor. Please go ahead. Thank you for the opportunity. I just wanted to know what are the current prices of fibre and optical fibre cable per kilometer? Fiber, I already mentioned, for us it is around INR 250. How much are the price of others, I do not know. Okay. It could be INR 270, INR 280, INR 300, I do not know. Fiber optic cable depends upon what kind of fiber optic cable you're talking about, but it's a common denominator of per fiber kilometer of cable, it is about INR 900 right now. INR 900 per? Per fiber kilometer of cable. Okay. I'm a little confused. If I remember correctly, last quarter it was around INR 4-INR 5. Am I getting the metric wrong? No. Okay. You are mixing up fiber and fiber optic cable. Okay. Fiber optic cable, I am saying, when you put all the fibers in a cable, 48 fiber, 96 fiber, all. Cable price would not be a common denominator because cable size is different. If you divide it by fiber count and do an averaging, it comes to about INR 900 right now, which used to be thousand plus earlier. Okay. We have grown our revenue despite fall in realization per unit. Sure, because of higher quantity. Okay, basically all growth is volume-based. Yes. Nothing is value-based. Is that the correct interpretation? Volume-based, value-based. Yes, you're right. It has to be volume-based. The market prices go up and down. Still there is a market price that have gone down, so we have a higher volume. That's why this growth is there. You're right. Okay. Just to get one more thing clear regarding the promoter pledge. By the end of the quarter, will it come down to zero from around 38% currently? Say that again. Sorry to be repetitive. The promoter pledge, currently it is around 47%. Will that come down to zero by the end of the quarter? Did I get that correct? Yeah. Look, banks, whatever pledge we have done, as I have been saying again and again, is against the loan of the company, and the pledge conditions have already been fulfilled. We have already requested banks to release the pledge because the conditions are already fulfilled. Lead bank has already agreed. Other banks have taken the matter to their own committees for internal approvals. If they all agree, it would come down to zero. I have no reason to believe it will not. All the conditions are fulfilled. I cannot make a promise to you right now that it will definitely come down to zero by the next quarter or so, because the banks have to approve it. Knowing that lead bank has approved it, we are quite positive that it would be approved. There's no condition which is unfulfilled, and banks should release the pledge now. Thank you very much. Mr. Somaiya, I will request you to come back in the queue for a follow-up question. Request to all the participants, please restrict to two question per participant. Next question is from the line of Ketan Shah, an individual investor. Please go ahead. Hello, sir. Happy New Year to you and all the team members, sir. Sir, revenue mix India growth story export opportunity? [export Quarter three export Quarter two INR 39 crore]. Okay. Nine months as against INR 75 crores in the same period, which is nine months in the last year. Export next year onwards. Fiber optic cable sale Germany, France, England, Dubai representative. Many countries we are now working on to export cable, and some of the places were direct recruitment of the sales people. With the whole idea export. Next year export fiber optic cable and other products export. Our internal plan is to go up by 300%. Okay, sir. Thank you. Thank you very much. Ladies and gentlemen, that will be the last question for today. I will now hand the conference over to Mr. Nahata for closing remarks. Thanks to all of you. I believe you would have got a good summary of the way we are working, where we are trying to maintain a sustainability and improvement in the revenue and profitability. The focus we have put on research and development, innovation, resulting in more and more products coming from our side, from our company, and which would be sold not only in India, but other countries also, in export market also. Thanks, everybody. Thank you very much, and we'll be in touch. Thank you very much. Thank you. On behalf of HFCL Limited, we conclude this conference. Thank you for joining us. You may now disconnect your lines. Thank you.