Ladies and gentlemen, good day and welcome to Himachal Futuristic Communications Limited Q4 FY 2021 earnings conference call hosted by Arihant Capital Markets Ltd. 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. Abhishek Jain from Arihant Capital. Thank you, and over to you, Mr. Jain. Good morning, friends. On behalf of Arihant Capital, I welcome you all for the HFCL Q4 earnings call. Now I'm handing over to the management for the outlook going forward. Please go ahead, Nahataji. Thank you, Abhishek. Good morning to everyone, and thanks to all of you for joining this quarter four and FY 2021 earnings call of HFCL Limited. I'm sure that each one of you are keeping yourself and your loved ones safe in the midst of the second wave of COVID-19. The country ushers into a new financial year with surging infestation once again. Parts of the country are under varied lockdown measures. The pressure on healthcare infrastructure and vaccination drive keeps mounting. At HFCL, we have been adhering to prescribed guidelines and safety measures to keep both our people and our business protected. It has helped us deliver good growth for the quarter and also for the full year. I am sure that you have had a chance to go through our results and earnings presentations. Let me share key operational updates from the quarter. We have won orders for Kanpur and Agra Metro rail projects for their telecommunication network worth INR 221 crores. The order involves setting up of telecommunication system across 32.4 km length of Kanpur Metro and 14 km length of Agra Metro. Shipment of our indigenously developed wireless solution products crossed 1.5 lakh unit mark during the quarter. This comprise of WiFi access points and point-to-point unlicensed band radios. These products are being sold under the brand name IO. With increasing and accelerated digital shift, future demand of our IO range of products shall also accelerate. We have strengthened our portfolio wireless solutions with the rollout of new dual band WiFi 6 products in addition to the existing WiFi 5 range of products. In a promising diversification move, HFCL subsidiary company, HTL Ltd., has forayed into wiring interconnect solutions aimed at aerospace and defense and automotive and industrial markets. HTL has set up a dedicated production facility at its Chennai plant for this purpose. With this state-of-the-art wire harness facility, HTL stands equipped to deliver indigenously developed products to the defense PSUs and global and Indian OEM majors across the aerospace and defense value chain. Having sharpened our technological edge through a number of initiatives in the last five to six quarters, we have strengthened our prospects for aggressive 5G play. At a time when the 5G opportunity starts to unfold, we have established a new 5G business unit, which will consolidate our existing under development strengths towards developing a rich portfolio of next generation 5G compatible products and services. Implementation of 5G and associated technologies will help unlock the transformative power of digital communication networks and enable us to achieve the digital empowerment goal. Another area of our interest has been to explore system integration opportunities in the international markets. We have steadily been strengthening our engineering and product portfolio towards international standards and specifications. While our Optical Fiber Cable has been exported to 30+ countries, we are now confident our system integration footprints to beyond India in FY 2022. I take immense pride in sharing that we are walking the talk in becoming an integral part of India's digital transformation and aligning with government's vision of Atmanirbhar Bharat. As a first step, we have set up a model PM-WANI village in Baslambi, Haryana. The model village is providing high-speed WiFi to all its residents. The project is testament of HFCL's capabilities to supply PM-WANI compliant WiFi access points all over India. On the policy and reforms front, we believe that initiatives and schemes such as PLI for the procurement of telecom products and Make in India will provide strong tailwinds to domestic telecom equipment manufacturing in India. Coming now to the financial performance. We have succeeded in keeping our order book robust, quantitatively and qualitatively, both. As of 31st March 2021, our consolidated order books stood at INR 6,875 crore. On the back of strong order book and execution, our capacity utilization has also remained at almost optimum level during the fourth quarter. Let me now summarize the performance highlights of the quarter and the full year. Revenue for quarter four of the FY 2021 stood at INR 1,391.40 crore as compared to INR 1,277.48 crore in quarter three of FY 2021, recording a growth of 8.92%. EBITDA for the quarter stood at INR 187.77 crore. EBITDA margin slightly decreased by 30 points and stands at 13.49% for quarter four of FY 2021. This happened because of revenue mix during the quarter. There is slight increase in the operating margins. For quarter four FY 2021, profit after tax rose to INR 86.47 crore as compared to INR 85.11 crore for quarter three, recording a growth of 1.6%. PAT in absolute terms has also increased to INR 86.47 crore from INR 85.11 crore in quarter three. Our PAT margin has slightly declined by 45 basis points in quarter four as compared to 6.66% in quarter three, again due to revenue mix and interest cost. Segment revenue for telecom products during the quarter stood at INR 387 crores as compared to INR 300 crores for quarter three. We expect revenue from telecom products to continue this upward trend. Turnkey c ontract and services reported a revenue of INR 1,003 crores as compared to INR 944 crores for the quarter three. For the financial year ended 31st March 2021, our revenue stood at INR 4,422.96 crores. EBITDA stood at INR 585.71 crores and PAT stood at INR 246.24 crores. As against revenue of INR 3,838 of last financial year, that is financial year 2020, EBITDA in the same year was INR 516.17 crores, and PAT in the same year was INR 237 crores, which was year ending March 2020. Looking ahead, we intend to further accelerate and amplify our innovation speed with R&D breakthroughs, technological advances through in-house and collaborative efforts. We remain enthused and optimistic with promising order inflows from domestic markets and increasing inquiries from overseas. The pandemic has intensified, and we are ready with ever-updating and expanding suite of products and solutions. Clubbed with our business expansions, initiatives such as 5G and system integration exports, we shall continue to mind the opportunity landscape better and sustain our value creation drive for all stakeholders. I would like to conclude with the fact the Board of Directors have recommended a dividend of 15%, that is 15 paisa per equity share for a face value of rupees one each for the financial year 2021. With this, I close my remarks and leave the floor open for questions. Thank you very much, all of you. Thank you very much. We'll now begin the question and answer session. If anyone who wishes to ask a question you may press star and one on the 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 your questions. 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 the line of Sanjay Shah from KSA Securities. Please go ahead. Yeah. Good morning, sir, and thanks for the opportunity. Sir, congratulating on good numbers in this current pandemic situation and circumstances. My question was regarding, I've gone through the presentation, and it's really very informative. Sir, can you elaborate on the opportunity landscape in different segment? What are the progress on that side, and are we going for any benefit given by the PLI scheme to indigenize products? If yes, what are our plans on that side? Thanks, Mr. Sanjay Shah. Basically, if I divide opportunity landscape in the current scenario, there are four or five areas I can talk about. One, as you all know, additional spectrum has been given to operators for 4G. This will entail some expansion of 4G networks also. This is an opportunity for equipment and service providers like us. Large-scale FTTH rollout is happening, fiber to home. As you know, we are the largest producers of FTTH cable in India. That is another big opportunity for us. As the FTTH rollout happens, there will be huge demand for FTTH-related cables also. Third opportunity is upcoming BharatNet. As you all know, government has cleared BharatNet implementation of PPP model, and once fully implemented in three years timeframe, the total demand of fiber optic cable is projected to be 10 lakh cable kilometers. 10 lakh cable kilometers is humongous demand. Added to that, with the demand of WiFi systems, fiber- to- home equipment, routers, switches, which all of these products are now going to be in the portfolio of HFCL. Not only the demand of fiber optic cable, but demand of all this equipment will result in very good market opportunity for HFCL in next three years to come. I expect only FTTH, this BharatNet-related market opportunity, is going to be more than INR 60,000-INR 70,000 crores. FTTH market opportunity, 4G related market opportunity are again not less than INR 30,000-INR 40,000 crores. Then comes upcoming 5G. As you know, 5G has taken world by storm. It is completely going to change the way the communication happens. 5G auctions are expected to happen in India, December, January timeframe. In this December, January timeframe, when auction happens, network rollout will start immediately thereafter. In fact, operators are already preparing. Now, 5G would mean many more number of cell sites because that is a very dense network. It needs a large number of cell sites, which results in more cell sites, more equipment required, and more interconnectivity, which is mostly going to be over fiber. Demand of fiber optic cable, transport equipment, microwave radios, all are going to increase immensely. That it would result in demand of more of 5G macro cells, small cells. What we are doing in 5G space is one, fiber optic cable we already have. Microwave radio, high capacity radio required for connecting cell sites of fiber optic is this 5G. We already have E-band radio. Most importantly, now we have embarked upon, this is a new development in our company. We have started developing 5G radio equipment, 5G cells. Macro cell design has already kicked off from yesterday only. Small cell is going to be started in the next couple of weeks. By the time 5G happens India, we will be ready with our own radios, macro cells as well as small cells for 5G in our bouquet of products. Those equipment are going to be required in huge numbers, thousands and thousands or lakhs in case of small cell all over the world. This we are doing for all frequency ranges. Frequency range of three gigahertz as well as, which is called mid-band, and the millimetric band, which is 26 gigahertz plus. This is our own technology. This is not only for India, we will be exporting it worldwide. These are major opportunities coming on telecom space in public communication. Demand because of 5G is going to be INR 3 lakh, INR 4 lakh crores kind of investment is projected in 5G network. With these equipments which we have, fiber optic cable, macro cell, small cell, routers, switches, I believe this is going to be another huge market opportunity for HFCL. In public communication systems, next seven, eight years, you can comfortably see the huge market opportunity is there for the products which we are manufacturing, number one. Coming to railway communication. As you know, we have a very good position in railway communication. Railway communication networks are also going to be expanded together with the signaling system. With the expansion of new railway lines, modernization of signaling and communication system, that also is a reasonably good market opportunity for us. Third comes the defense products. As you know, government pushes more and more indigenization and time to come 70% of defense equipment they want to source from Indian manufacturers. We have already our own design defense product. The important point is, either telecommunication products, most of which we are now going to bring in market are our own design, either routers, switches, small cells, macro cells, WiFi, and I can go on counting. These are all our own design products, which are effectively going to do two things. One, increase share of revenue from telecom products rather than projects in our overall top line. Number two, make profit margins better because our own products give you better profit margins. Expand the market horizon because your products you are able to export globally. Coming back to defense. We have Electronic Fuzes, already designed, samples are ready. I believe Army should be asking for these samples soon. We are ready to supply. We are the only Indian company to have designed that extra modern products by our own with our own IPR. Electro-optics, we have started, which is night vision devices. First order also we have received, though small order, but order we have received of INR 11 crores. Many more tenders we have participated, which should be opened up in next couple of months timeframe. Number of more tenders we are going to participate. As I told you in past, in my earning calls, demand for night vision devices is expected to be something like INR 40,000 crores in next six to seven years. There are huge market opportunity communication. There are huge market opportunities in railway communication. There's huge market opportunity in defense communication. Defense communication as well as defense electronics products. We're active all across the segments and which would, I expect, from the market perspective, India and abroad, there's enough market. We only need to have the right products and right strategy to sell, to take share of that market. In a small percentage, it would be INR thousands of crores. We are well geared up with the product design. We are well geared up with the expansion of our sales team, ability to market all over the world. That was the first. Second, the PLI scheme. We will of course be applying for the PLI scheme and whenever government gives approval, yes, that is going to result in advantage to indigenous manufacturers like us. For the percentage, 6% or so, whatever PLI they have announced, that is going to be a major advantage to manufacturers like us, and we are definitely going to apply for that. Thank you. Thank you, sir. Thanks for replying my questions. I'll come back in queue for you. Thank you. The next question is from the line of Dipak Rout from Arihant. Please go ahead. Sir, good morning. Good morning. Yeah. Sir, what is the kind of revenue hit you may incur because of this pandemic and the lockdowns? That is the first question. The second one is regarding can you have some highlight on the pledged shares, please? There are some 20% release or something has been given. Some highlights on that, sir. Thanks, Dipak. As far as first question of impact on revenue is concerned, till now, we have not seen any major impact on our revenue. Till now. Some impact, if at all it comes, it can come from if people are not allowed to move into cantonments and install and commission the system which you have put in because of pandemic. That may see some small impact. Otherwise, I don't see at this moment any major impact. Good thing about this time of lockdown and all that, they have not closed down the factories. All our factories are operational. Factories being operational, I don't see that there would be any major impact on revenue of the quarter one. We would maintain the revenues what we have been doing the past couple of quarters, that would be maintained in this quarter also. I do expect that. Coming to the pledged shares. Some quantum of pledged shares have already been released, as you know. The last leg of the release of the shares, where the eight banks are involved, six banks have already approved the release of shares. Two banks, the proposal has gone to their higher authorities for consideration. I have no reason, having the lead bank have approved that and having six out of eight banks have approved that, these two banks would also approve it, and this should be taking another three, four weeks or so, depending upon the lockdown situation, how the banks are able to move. In the next, I think four to six weeks, these pledged shares would also be released. Again, let me tell you, this pledge of the shares is not against any loan taken against shares, neither by promoter nor by the company. These are specifically as collaterals to the loan company had taken. As per the loan conditions, they have all been fulfilled. These shares are to be released now. Thank you, sir. Thanks for the update, sir. Thank you. Thank you. The next question is from the line of [Hemant] from Amwal Research. Please go ahead. Hello? Yeah [Hemant] Please go ahead. Yeah, sir. Congratulations for the great set of numbers. Sir, I just want to have view on R&D spend. How is the company going to spend on the R&D? Because in these kind of industries, we need to develop the very new technologies and the new equipment. What is the spend on the R&D side? Is there any benchmark, that percentage to sales or percentage of profit or kind of visibility? Look, I tell you. Sorry about that. Our R&D spend in this year is going to be over INR 150 crores. Okay. As I said in the answer of last question. Yeah. R&D is the key to our growth. It's key to our growth. Lot of equipment we have designed, lot of them are under design. Like for example, first equipment we designed was WiFi and this point-to-point radio, and now point-to-multipoint radio is also going to come in. That resulted in good success. First year of the production, in less than a year, we were able to sell 150,000 of those units. More orders are in our hand. Already we have orders for about 40,000, 50,000 units in our hand from various operators. Own product design has improved and will also improve further as we go in and designing more products and sales increase from that. Our profitability, working capital cycle, and also revenues. Current year's R&D expense is going to INR 150 crores. We are opening up a new R&D center in Bangalore. This would have opened by now, but with the pandemic and lockdown and all this has got a bit delayed. As soon as it opens another 15 days after that or maybe two or three weeks, the new R&D center in Bangalore will be open. We have already started hiring people. One R&D is being done by our own R&D people, Gurugram and Bangalore. Moreover, we have a tie-up with various R&D organization, engineering companies, which design equipment for us, and the design is passed on to us, and the further development for version two, three is done by our own company. There are two, three such R&D tie-ups where people are designing equipment for us, nationally and internationally, both. Okay. Third, we have taken equity in couple of companies, which are R&D companies, which are designing products for us, which include one example is software-defined radio is being designed for us. There is an R&D happening in cable business. That also you must understand. Cable business is also not so technology-intensive as communication products, but still there is a new kind of cable you have to design, less weight, less diameter, less raw material, consuming less space. All are being done, micro module cables, IFR cables, and mostly those cables are required for export market. That also is being done by us, and that R&D is being done by our Chennai and Goa plant. Put together, R&D expense will be about INR 150 crores-INR 160 crores in the current financial, which is a reasonable number. It would be something like a reasonable percentage. I don't want to say percentage, otherwise I would be talking about the expected numbers of the current financial year, which I don't want to make a forward-looking statement. INR 150 crore-INR 160 crore will be our R&D expenditure in the current year. Okay. One more question on the defense side. How the working capital will like, payment cycles and working capital and order adjustment period and order execution period for the defense? Is it the same as a telecom equipment side, or it is a different ball game altogether? Defense, for the product side, the first order has been received, and we will supply and we will know the payment cycle. As a product, it is reasonably good payment cycle. On the project side, there have been some hiccups. Hiccups is not because people don't want to pay or there are any problems in payments, but because of pandemic last year. I mentioned a little while ago, last year what happened, throughout the year, there have been a lot of pandemic issues. Because of that, restrictions were put on movement of people inside cantonments, particularly in Northern and Eastern Command. Okay. Reason was not only pandemic, reason was the China border situation. Entry was completely restricted. Pandemic and China border situation both contributed to very little access to the cantonments where the most of the equipments are going to be put. Not most of them, well, most all of them, probably 80% of them. The entry was completely restricted. Rightfully so, you can't blame defense forces for that, because they cannot afford pandemic spreading in cantonments, particularly in the border situation, which we had last year, which all of us know, in northern and eastern areas both. That resulted in not being able to achieve the milestones. The payments are based on milestones. These are milestone-based payments that. Yes. To do this particular percentage of completion of work, then you get so much payment. Milestones could not be completed, not because of our fault, not because of customer's fault, because of situation at that point of time. What result happened as a result of that our working capital cycle increased, debtors increased. Billing we did, but we could not receive payments. Some billing was done because equipment was supplied, part of services are rendered. Billing was done, but the entire milestone, like regional completion was not being able to achieve. Certain places you could not go inside the cantonment. That resulted in longer elongated working capital cycle. Now that situation has improved, barring some small issues right now because of pandemic, but which we believe we'll be able to overcome that in next couple of weeks' time. It's not as bad as what happened last year in terms of going inside cantonments and all that. Maybe there may be some restrictions coming up in next couple of months also. By September, this cycle will get corrected and whatever elongated working capital cycle or debtor cycle has become because of this kind of a situation where milestones could not be completed, it will get corrected by the month of September this year, where most of the services part of that installment commissioning would also be finished, and lot of milestones will also be achieved. There has been some turbulence in between, but we will overcome it by September. Okay. That's great. Sir, on the last question on the margin side, do we see any margin, like a fall in margin because of the rise in raw commodity prices and raw material, mainly copper and all, or we will able to get a pass-through in the coming quarters or in a lag effect, if you would know? There is a small dip in the margin percentage, if you could see in the Q4, which was basically because of product mix and some increase in the commodity prices, not as much copper, because copper does not impact much. More impact is because of rise in the plastic raw material like HDPE, LDPE and those kind of and the jelly and all that, which is our product requirement for fiber optic cable. That did happen. Again, that has started easing out. Even if they remain at the same level, now it has been passed on to the customer because we work on the in between margins. Cable prices have also been increased. Wherever it is a cost plus model, the price has increased. For the time being, it impacted, but now that has been neutralized. Okay. Okay, sir. Thank you very much and all the best for the future. Thank you. Thank you. The next question is from the line of Rahul Porwal from Marathon Capital. Please go ahead. Hello? Yeah, Rahul, go ahead, please. Yeah. Congratulations for this set of numbers, sir. I have three questions. What is the revenue and EBITDA target for FY 2022 and FY 2023? Second question is, are you looking for any technical collaboration? Third one is, how much revenue can we achieve through our existing capacity? What was the last question? How much revenue? Can be achieved through our existing capacity. Whatever capacity you have for telecom equipment manufacturing. Okay. How much revenue in the best case scenario you can achieve? Sure. I understand. First of all, as you very well know, I cannot make any forward projection of revenue of current year or the next year, but I can only say that we will maintain the same growth trajectory, which you have seen in the last financial year, and on account of strong order book, and also number of more orders expected. Orders for the products keep on coming small orders. In products, you don't receive order up to INR 2,000 crore in one go. Some order INR 100 crore, another order INR 50 crore, another order INR 80 crore. They're kept on being received by us. With that strong order book, good pipeline of orders, we will maintain the growth trajectory, what we have seen in the past. Same growth trajectory would be maintained. In terms of margins, we are hopeful that with our own design products coming in, they have been becoming increased part of our sales revenue. I believe that margins could also become better than what we have seen in the last few years. I can tell you what we expect to be the share of products and turnkey services in our revenue mix. In the last year, FY 2021, we had 73% revenue from turnkey and projects, and 27% from products. Year before that, it was 78% from projects and 22% from products. In the current financial year, what we are in, I expect this 27% to become 45%. Out of total revenue, 45% will come from products, as against 27% of last year, and projects will go down to 55% from 73%. This is a major shift happening, and I have been talking of this in all my earning calls, that the focus of the company is to increase revenue from products. You would see a clear shift in the current financial year, that 27% is going to become 45%. Almost double, not exactly double, but about 80% increase in the revenue of the product. This is going to be a major shift. Coming to your third question and mixing it with that second question. One of the shift is going to come from fiber optic cable. What we expect the revenue from fiber optic cable business and accessories put together, has been about INR 1,050 crore in the last financial year. We expect it to double. Our hope is to get it doubled in the current financial year to the INR 2,000 crore. Some part would come from wire harnesses business also, but major part is going to be from fiber optic cable, FTTH, and accessories related to fiber optic cable. This INR 1,050 crores we expect, we are hopeful to make it INR 2,000 crores. Of course, that would need some CapEx. Some CapEx would be required for that purpose. We have already budgeted for that and some of those projects are already under implementation. Total CapEx expected on fiber optic cable and in an enhancement of capacity for optical fiber also. We produce 8 million fiber kilometers right now, which we are going to enhance this year. Total CapEx expected to be around INR 170 crores in fiber optic cable business. There is some CapEx going to be in starting manufacturing of defense equipment. As I said, now we have started receiving orders for defense equipment. We would have to expand our capacity to create new capacity rather for manufacturing of defense equipment. That would have also some CapEx. About in terms of achieving current year's numbers, I would say fiber optic cable and fiber business would see a CapEx of roughly about INR 170 crores. Okay. Okay, sir. Thank you. Thank you. I will come back for any future. Thank you. The next question is from the line of [Jigar Valia] from OHM Group. Please go ahead. [Jigar Valia] go ahead please. Congratulations and thanks for the opportunity, sir. I have a few questions, sir, all linked to the exports. First question is, which are the geographies that we export to, largely? Well, in terms of geography, if you see our presentation, which is put on our website. We are exporting to about more than 30 countries w hich includes, Middle East, like U.A.E., Saudi Arabia, Oman, Egypt. Then you would have countries in Europe, which includes U.K., which includes Spain, Czech Republic, Lithuania, Ukraine. Some broader breakup in terms of how much is Middle East, Africa? Well, I don't have the breakup at this point of time. Africa is very little. Middle East is there, which are very quality conscious. Europe is there. To the North America, we have exported, and some part in South America. I don't have breakup of each country wide, but I think major exports would be to Europe. [crosstalk] we are seeing more traction. Okay. Other is, with regards to exports, is it mostly government or is it telecom companies, or what are the- They're all telecom companies. No government. No government. All telecom. Okay. Exports is all largely OFC or you export products as well? Largely, it has been OFC. Some exports has been there in railway communication area also. Okay. Since these would all be just your product exports, right? No services with regards to exports. There are some pro services. When we implement the Mauritius Metro project, for example, for communication, Dhaka Metro for communication. There are some part of services also, but major would be equipment only. Okay. Broadly, the margins and working capital cycle both would be better as compared to the domestic piece? Yes. When I say fiber optic cable, yes, margins are better. Working capital cycle in exports, some cases it is better, some cases may not be. In some cases, in fiber optic cable in India, we receive very quick payments. Very, very quick payments. About a month, 30 days payment, which may not happen in export. Some companies, yes, otherwise, mostly the cycle of payment is about 60-90 days. It will be much better than the project business, generally. Yes, absolutely. Right. Sir, can we have the export numbers for FY 2021, and maybe some color on margins for export versus the company. Look, again, FY 2021, we had export about INR 200 crores, as against INR 123 crores of FY 2020. Of course, I don't have the percentage of margin on exports, but typically I would say this would constitute a net profit margin. I don't have those numbers with me, but I'm just talking from the top of my head what I know from my business. Something like 8%-10%. 8%-10% net margins? Yeah. Got it. The current year, we are of course targeting to increase our exports for cable as well as our products. Our current year's export target is at least INR 350 crores from the INR 200 crores what we had last year. Understood. Very helpful. Every year we want to increase our exports, every year. As I said, in fiber optic cable also, we have bought some very expensive machines to cater to the demand of European and American market, which are pretty expensive machines, but yes, we have done that. And those machines would be exclusively for the production of cable, which are required in these countries. We are putting a lot of emphasis and a lot of efforts on the development of export market in the current year, as well as the next year. Our current year's target is to reach to a number of INR 350 crores as against INR 200 crores what we did, OFC and other things put together, in the FY 2022. Got it. Thank you. Sir, given that you're putting all these new machines in, can you give some idea on the longer term as to what is the level that we would be looking at over a three to four years period? In terms of numbers, revenue numbers? In terms of revenue numbers, how much could revenue number or as a percentage, how much could export be for us or something like? Absolute revenue number, maybe can this INR 350 crore be a INR 1,000 crore business for us? What I'm saying is, revenue numbers, I can't look a forward-looking projection. Yes, looking at the market opportunity, what we have and which I described a little while ago, I have no doubt that growth trajectory would be maintained with increased profitability because of more of our own products coming in play, more of our own products having share in the revenue and the product revenue going up to estimated about 45% in the current year from the 27% last year. It would definitely result in increase in revenue profitability both. In terms of export, as I said, our current year's target, we hope to reach to a level of INR 350 crores, and same kind of a numbers trajectory of growth I wish to maintain in the next financial year also. Next two years, we know what we have to do. Once we reach to the targets what we have planned for these two years, we'll be looking forward. This year we want to make it INR 200-INR 350, same growth trajectory in terms of numbers we want to maintain in the FY 2023 also. Understood. Thank you so much, sir. Thank you. Thank you. Thank you. The next question is from the line of Nalin Shah from NVS Brokerage. Please go ahead. First of all, I would like to congratulate for excellent numbers, Nahataji, in spite of this COVID situation. You have given us a fairly good idea about various distinct opportunities, and I'm sure that you would continue to perform very well. Since you have said, sir, that the product component is likely to be around 45% from 27%, and services, the projects, will be around 55%. Can you give us some idea about what is the difference between the margin between these two groups? Look, Mr. Shah, there are two issues. One is margin, another is the working capital cycle. Correct. Third is the overall working capital involvement. Correct. In the project business, working capital involvement is higher than the product business. Okay. Because project business, what happens, you get paid on the basis of milestone achieved. Correct. If you do this part of completion, then you get so much and so much and so much. Though you have supplied the products, you get paid 50%, rest 50% comes in stages. Correct. What happens, working capital cycle becomes higher and involvement of money working capital becomes higher. Correct. In a product business, it doesn't happen that way. In product business, you have an order, you supply the product, there's nothing called milestone there. Nothing called milestone. You get paid once you supply. Your payment cycle is quicker. Overall working capital involvement is also much less, because what you do, let us say payment is 60-90 days. Right. You are also able to take back to back rate from the suppliers also. Your working capital involvement goes down. It goes down. With less working capital, less stress on your funds, less stress on working capital, and quicker payment. We are able to do more revenue with the same working capital. You can put it like that also. Either we are able to do the same revenue with less working capital, or with the same working capital, we are able to do more revenue. It is always better. Profit margins in the projects and the products, it all depends. Different projects can have different profit margin. More or less, if it is our own design products, profit margin would be higher than projects. Definitely, it would be higher than projects. If the project is 8%, own products could reach to 12%, 13%, 15% also, depending upon case to case. Correct. That is the kind of situation you have. When you have increased revenue from products, you have a higher profitability, particularly when they are your own design products, number one. Correct. Number two, your working capital involvement becomes less, and working capital cycle also becomes better if it is product than the projects. Correct. That is why I have been stressing, if you would have attended our other earning calls. Yeah. That we want to increase our revenue from products, and that is showing results. 22% has been 27%. We are hopeful that this year it should become 45%. Correct. It's a major shift. Excellent. Now, since you have defined so many opportunities which are running into thousands of crores, in the first your presentation, around five different segments you have defined the opportunities. Which are all very large opportunities ranging from INR 30,000-INR 40,000 crore up to maybe INR 3 lakh- INR 4 lakh crore, as you said, in 5G sectors. Can we just have some idea, because these are spread over long-term situation, can we have some idea about when do you feel the maximum kind of a momentum you may gather, when this different cycle stages you reach in 5G and other areas also. Where is the maximum in next three to four years, where is the maximum momentum is likely to be gathering? Very high momentum would be there. Right now also it is going on very well. Yeah. Absolutely no issue. If you ask me when the storm is going to come. Storm, I'm talking in the sense that huge opportunities would going to come. Yeah. This could happen, I would suspect, end of the current calendar year and going into the entire 2022, 2023. Excellent, sir. Excellent. Tell you why. Thank you very much. Tell you why. One, because 5G rollout would have started. Correct. It's going to change the landscape completely. Okay? Okay. Number two, BharatNet would have started. That is going to raise a huge demand opportunity. Correct. These two major things happening, which is expected to start from end of this year to continuing in the next two years. Those two years, which I say 2022, 2023. Yeah. Calendar year. Yeah. Are going to be major shift in terms of demand, requirement, and all that. That shift has already started in terms of cable, for example. Cable prices started firming up. What you had the fiber prices earlier and what you have now, have changed. If I could give you some data points on the fiber price, you will be surprised. Yeah. For example, if I start from financial year 2019/2020. Yeah. In quarter one, fiber price was INR 351 per fiber kilometer. I'm talking our purchase price. Market prices could be different, I do not know. Correct. I'm talking my purchase price. Correct. Quarter two came down to INR 329. quarter three and four, which came down to about INR 315. INR 351-INR 315. Quarter one of the current financial year, and the quarter two of the current financial year, it came around INR 280. Oh. Quarter three and four it came down to INR 250. Okay. That's why you see reduced realization per fiber kilometer of cable. What it was about, I would say, INR 1,200, came down to INR 800 or INR 900 per fiber kilometer. Okay. With the same quantum of production, I was making less revenue. Though we increased the quantum of production and our revenue increased, that's a separate issue. Per fiber kilometer, revenue came down. Now it is INR 250 per fiber kilometer, the fiber price, it has already shot up to INR 275-INR 280 range. INR 280 range, it has already come up. Correct. INR 280 range, which means I am talking about what was in the beginning of the year that it started coming back. INR 280 became INR 250. Now INR 250 has again become INR 280. I expect this would go up by another INR 20 or so because there is a good demand in China. There is a good demand in India and many other countries because FTTH, 5G, and all kind of things. This INR 280 could go up to INR 300, INR 310 also. This would result in, again, the realization per cable kilometer, which is about INR 900, going up to about, I would say, INR 1,100 or so once again. That would contribute to increase in revenue, which we have not factored in. When I say INR 2,000 crore, I've not factored in this INR 900 to become INR 1,100 crore. I've not at all factored in. I have factored in the OpEx at the current prices, what it was in the end of the last financial year. Correct. With that happening, even it could increase. It has the possibility of increasing. That has not been factored in, and our margins would remain unaffected. We are doing, b ecause of this increase in demand of cable. We are increasing our cable manufacturing capacity in the current year, as I explained, there is going to be considerable amount of CapEx, roughly about INR 170 crore. For the cable and fiber. We are increasing our capacity for fiber. This, in my opinion, is going to be demand scenario and the two years 2022, 2023, calendar year I'm talking about 2022, 2023, they're going to see huge demand opportunity. Current demand opportunity is coming from expansion of 4G networks, FTTH networks, which are the ongoing things which are happening all the time. There is the current demand opportunity. Excellent, Nahataji. Thank you very much. My last question is that since this is the kind of situation of you going up to maybe some different kind of heights of this thing, top line, bottom line, et cetera, will there be any plans in the near future to raise any equity funds to just have a good ratio of debt equity, which you already have a very comfortable debt equity? We have 0.43, which is very comfortable, and right now we have no plans, Mr. Shah, to raise any equity. Yeah. Thank you, sir. Thank you very much, and all the best. Thank you, sir. Thank you. 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. The next question is on the line of Chetan Shah from Jeet Capital. Please go ahead. Yeah. Hi. Good morning, sir. Just two quick question. While explaining the OFC business and railway business and defense business, you gave some flavor of expected CapEx. You said that OFC required some INR 170 odd crore of CapEx. Can you give us some highlight that how much CapEx we did in FY 2021 company as a whole in total, and what is the target for 2022 and 2023, just to get some sense of cash flow? FY 2021, our CapEx was roughly about INR 100 crores on a consolidated basis, about INR 100 crores. I may be wrong by a few crores here or there. Yeah, sure. About INR 100 crore. Just one second, yeah. In terms of CapEx for the current financial year, as I explained, INR 170 crore odd is going to be from OFC and optical cable business. There is going to be defense equipment manufacturing, going to about INR 40 crore. That CapEx is going to be there. Of course, R&D expense is going to be there, which I've already mentioned. This entire R&D expense is not capitalized. All manpower expenses and all that kind of things are put in revenue, but only the equipment we buy from R&D or infrastructure we create for R&D or any technology fee which we pay to R&D partners or investment we make in their companies, they are capitalized. Okay. That would be another INR 120 crores-INR 130 crores. Sir, this INR 120 crore, INR 130 crore of R&D capitalization is over and above the INR 150 crore which you are going to invest? No, it's not capitalization. No. That is included in that. Yeah, that's included in that. Total INR 150 I talked about, part capitalized, part is going to be OpEx. Understood. Sir, one last question from my side. In terms of the working capital cycle and the mix, when our revenue mix is likely to change in FY 2022 onwards, which will be more tilted towards product and less towards the projects. Do we expect this to improve than what we had in last couple of years? Yes. How do you see our balance sheet getting changed and return ratio getting changed in next couple of years? I believe that our cash flow is going to be better. I tell you why. One, the projects getting completed, and by September, as I said, these payments which got delayed because of milestones not being able to achieve because of the pandemic and border situation, that would be eased out. That money would be available, so cash flow will become better. Products becoming more part of our revenue, this will also increase our cash flows and the better working capital cycle. I expect this would definitely improve in the current financial year and that this. Ladies and gentlemen. Hello. Please stay connected. The lines of the management is strong. Participants, please stay connected while we rejoin the speaker back to the call. Ladies and gentlemen, thank you for your patience. We have the line from Mr. Nahata connected. Sir, you may go ahead. Sorry, this got dropped. I don't know why this happened. You were very much frozen. It should not have dropped it. This cycle would start improving, I would say, from the month of July, August timeframe. Understood. Sir, one last question from my side. Somebody asked a similar question, but in terms of our existing capacity and the CapEx which we have already done till 2021 and by end of 2022, what kind of the optimum utilization and revenue one can generate without major CapEx? I am not talking about the normal CapEx which we are doing, say, INR 200 crore, INR 300 crore a year. If you can give some sense on that on a big picture. I am not asking for any future guidance, but just to get a sense that how nicely we can sweat the existing asset which we have in our portfolio. That is it from my side, sir. Look, in terms of manufacturing the cable business or fiber optic cable business, as I said, including the CapEx, which we are doing in the current financial year. I'm talking the prices which were prevailing when we did our annual operating plan exercise in February beginning March, when it was completed. The prices were lower and which are going to increase now. Even at the lower prices, we estimated that we would be able to have a capacity utilization of 90%+, with a revenue of roughly INR 2,000 crores in the fiber optic and fiber business. That's the kind of a CapEx you can see vis-à-vis revenue in cable manufacturing. Now, other manufacturing of telecom products which we do, which we are now getting them on a contract basis, WiFi and all that, we don't manufacture ourselves. There's no CapEx required there. We get it manufacturing contract, which is much easier for us because you don't have to bother about sourcing hundreds of components and the issues and all that. That's a worldwide trend. There are no CapEx required for manufacturing additional telecom products. What is CapEx required in the defense communication, because defense authorities want you to do your own manufacturing rather than doing it on a contract basis. We would be starting that. It would be too premature to say that with the current CapEx of about INR 40 crore or so we would do, how much production it would achieve. That will depend upon numbers and all that, order to receive, but it would be reasonable enough to reach to a four-figure number. Sir, normally you give a breakup between government and non-government revenue. What is the status in the last financial year? In the last financial year, if you see the revenue mix, as I said, in the product mix, I have already explained. In terms of order book, I can say right now, government, non-government, I think it would have been 50/50. Mostly 50/50 kind of a thing. I think government could be 60 and non-government could be 40. Going forward it is going to become better in favor of non-government, with the increase of products and all that, and less projects. In terms of order book right now I can talk about, the government and non-government is roughly about 50/50. Thank you. The next question is from the line of Chetan Vadia from Pidilite Family Office. Please go ahead. Hello. Yeah, Mr. Chetan, go ahead. Hello, sir. My question is on the CapEx fall on the 5G by the telecom companies. What kind of trend are you seeing in that? Is it they accelerated it in the last, let's say, one year or so, how does it look for the next two, three years? Secondly, in terms of your own production run rate, because of this lockdown, everything here and restriction elsewhere, are you seeing any kind of blocks in your production efficiency delivery at this point in time? Thank you. Your first question, replying. 5G, no question of picking up because 5G is to start now. 5G major CapEx is going to start when the spectrum is auctioned early part of next calendar year, as I said. Right now preparation of 5G is happening. Some small expenditure in fiber optic cable enhancement and those are being done. Major CapEx on 5G going to start from the time when the auction takes place. That is number one. In terms of our production and all that, because of this pandemic, there's hardly any impact. Any impact which has happened is very small, is because of some of the people, your workmen falling sick because of COVID-19 and they had to be kept out, and their primary contacts had to be kept out. There have been small deviations in our Goa plant in the last couple of weeks, but there's no such major deficiency or major stoppage of production in either of the place. All right, sir. That's it from my side. Thank you very much, and all the best to you. Thank you. Thank you. Next question is from the line of Nilesh from Envision Capital. Please go ahead. Hi, sir. Thanks for the opportunity. I had one broader question. As far as the optic fiber cable is concerned, in India, what could be the share of domestically sourced and imported? Second question on the same itself is, what would be our market share in the domestic market, and who are the other players in the optic fiber cable, whom we compete with? Question, Nilesh. First of all, in terms of import of cable and domestic, I think more than 90% is domestic production. Hardly there is any import of cable, and even 10% I am saying with a pinch of salt, it may not be even 10%. Now, our market share. First of all, I have a lot of pride in saying that we have highest market share in domestic market in fiber optic cable business. Highest. Now, exact percentage I wouldn't know because these datas are not made available, but primarily I can say, and this is again, these are the estimated numbers which we have, but our market share should be 50% or more. 50% or more in the domestic market. It can be reaching to 60% also, but in absence of numbers being available authoritatively, I cannot say that. What I know of the market, who is buying what and all that, I think our market share would not be less than 50% in the domestic market, which is a very credible thing. There being 18-20 manufacturers in the fiber optic cable business, and if I'm able to maintain a 50% market share in the domestic market, I think that's a reasonably good thing to do. Understood. This 50% would be largely because we have a higher volume share with Reliance Jio? That is one of the reason, but not the entirety of it. Jio, yes, of course, and they're very good customers. Quantitatively good requirement, good payment cycle. They're very good customers. We are proud to have Jio as our customer. We supply to a lot others. We supply to Larsen & Toubro as they are turnkey players. We supply to Tata Projects. We have supplied to Bharat Electronics. We have supplied to BharatNet in Punjab, Jharkhand, Chhattisgarh. We have supplied in Maharashtra for their BharatNet project. We supply to Airtel also. We have supplied to all operators. Understood. Sir, last question would be on the 5G deployment side. We say there is a huge opportunity as far as 5G deployment is concerned, but we are also saying at the same time, our share of products will increase going ahead. Are we talking about that we won't take lot of EPC projects going ahead in the 5G deployment, and we will only supply products to the 5G requirement? There are two opportunities we are going to pursue in 5G. One is the product, of course, which is our ongoing business. New products are going to be added in the 5G radio equipment, which is macro cell and small cells, both, which are under design right now. Second, we have opened up a new division in the company this time, system integration for 5G. 5G system integration, which includes not really turnkey projects. Equipment may be supplied by us, equipment may be supplied by Ericsson, Nokia, Samsung, whoever. Right now, as you would have heard, time has come for Open RAN. What we call Open RAN means different equipment would come from different suppliers. Earlier it used to be, if you are putting up a network, Nokia, most of the equipment are Nokia, because they won't interoperate with others. Now it is Open RAN. You can buy core from somebody, radio network from somebody else, second part of radio from somebody else. What it results in, with multiple suppliers, you need somebody to integrate all that, system integration. What we have done, system integration unit in our company just pretty recently. We are going to expand that and make it a full-fledged unit for value-added system integration business, more geared toward 5G, more geared toward different components of 5G. It would not be turnkey projects as such, but it would be more of a system integration where equipment could be supplied by us or somebody else, but it would be high-value system integration. Of course, a product business. As I mentioned, products would include switches, it would include fronthaul gateways, routers. It would include small cells, macro cells, all those kind of things. Understood. Okay, sir. Those are my three questions. Thank you. Thank you. Thank you. The next question is from the line of [Malai Shah] from Intec Securities and Finance. Please go ahead. Hi. Good afternoon, sir. Thank you for the opportunity. Just a couple of questions, sir. One, if you can throw some light on the demand and supply scenario in China and help me understand what is the major deterrent for them to import products in the optical fiber cable products in a larger quantity to India? Look, as much as I understand China, now new tenders are coming from China Mobile, China Telecom, and demand is picking up in China. Particularly in fiber optic cables, I have seen demand picking up in China. If fiber optic cable is going to pick up, everything else is going to pick up, because fiber optic cable is one part of the network. 5G, FTTH, lot of that is happening in China. 5G has also started in China, and 5G demand is going to be very good in China. Fiber optic cable, there are, first of all, 15% custom duty, so it's not that they are 15% higher any case. Even in terms of cost of production, we are as good as Chinese. We are able to compete with them in the export market. Most of the case. Unless they do dumping, one is able to compete. With the 15% custom duty and our cost being similar to that of China, because we also produce fiber, they produce fiber, we produce cable, they produce cable. There's no reason that we cannot compete with Chinese companies in the world market. We are doing that. Very much so we would be able to do in indigenous local market also. If you look at the last five years even, Chinese companies have not been able to put any fold in the Indian cable market at all. Okay. All right, sir, that's really helpful. Sir, the next question was around macro cells and small cells. Can you help me understand what would be the market size, say two or three years down the line, and what are we looking at? Market size, if you look at India, I've not estimated particularly for those cells, but it is going to be thousands and thousands of crores. Thousands of crores. Just let me put some number, in terms of number of cells. If somebody has got 200,000 cell sites for 4G network, assuming, it would be easily 600,000 for 5G network. That is only macro cell. For macro cell, for the small cell, it would be many more because that would be required for inside coverage and all that. If we just say macro cell, and again, I am talking just estimated numbers. If one cell site costs $5,000, assuming $5,000, and 600,000, you can multiply and see what numbers comes in dollars. Multiply it by three or four operators, you can get the number, $5,000 into $6,000, including three or four in India. Multiply that by 5x, or 6x, or 10 times for the world over quantity. You'll get the numbers. It's a humongous number. Understood. Where are we in the development stage currently for these particular products? We have just started. macro cell has just started. Last week only, we did the start of the macro cell, and small cell will be starting in a couple of weeks from now. We are just finalizing our chipset and all that, which chipset to use and all that. A company or B company, we're evaluating that, and that evaluation should be done in the next couple of weeks, and we will be starting small cell also. Okay. What would be the timeline for us to finally come up with the ready product? We have estimated roughly about, I would say, 10-11 months. All right. Thank you so much, sir. That's all from my end. Thank you. Thank you. The next question is on the line of [Harvick Yas] an individual investor. Please go ahead. Good afternoon, sir. I had a couple of queries. To begin with, you have crossed about 150,000 shipments of WiFi in numbers. In the fourth quarter, how much could we do? I think it should have been about 50,000, in my opinion. I think so. Exact quarter number I don't have, but it should have been around there. Okay. The run rate would be the same for the coming quarters as well, 50,000 every quarter. Can we look at about 200,000 or more for the current financial year? That is what is our plan. Okay. Sir, the second question comes as the capacity utilization of our Hyderabad plant. Has it come on stream more than 90% or 80%? It is 100%. Right now it is 100%. Okay. We are increasing capacity. It is 100% capacity utilization. Rather, we are doing more than the rated capacity. You have a rated capacity and you have actual production. We are doing more than the rated capacity. Rated capacity was, let me just put my calculator there, 6.4 into 12. We are doing a little more than the rated capacity. It's 100%, you can say. Okay. Sir, you guided for CapEx of about INR 170 crore for optic fiber and fiber cables. From 8 million fiber kilometers, we are likely to go up to how much for the optic fiber? This is for optical fiber. We are going to 10 million fiber kilometers from 8 million fiber kilometers. Okay. Go ahead. Optic Fiber Cables, that also would go up? Yeah, optical fiber cable would go up by about 4 million fiber kilometers. Okay. Fine. Sir, one last question I had. What is the status of our BharatNet apart from Punjab and Jharkhand, where we have done a lot of work? GPON, if you could put some light on GPON as well. Yeah. BharatNet, Punjab and Jharkhand. Jharkhand is almost getting finished. Punjab is already done. Yeah. BharatNet next phase is going to come on a PPP basis, as I've already explained. Whoever becomes the winner, we would surely like to supply cable and equipment and all those kind of things to them. This is going to happen, in my personal opinion, as I said, government should come up with tenders in the next two, three months. With this pandemic, things have slowed down a bit. Next two, three months, the tender should come, and real implementation should start from the end of the year or the beginning of the next financial year, calendar year. That is BharatNet. What was your second question? Sir, GPON, if you could throw some light on it. Oh, yes. On GPON. What we have done, because GPON is not the right word, I would say PON. PON has got many variations which includes GPON. GPON, XGS-PON, NG-PON, NG-PON2. There are various versions of PON equipment. We have already tied up with C-DOT for transfer of technology and then a partnership to improve upon that technology, which would then, improvement would be specifically ours, for development of this PON equipment, which includes GPON, XGS-PON, NG-PON, all variations of that. Okay. We would be supplying those equipment to the players? Yes, absolutely. Okay. That would also be a huge opportunity for us? Absolutely. BharatNet and all FTTH players would need it in good numbers. Okay, sir. Sir, one last question I had, that is about our order inflow. We have been having Agra and Kanpur Metro order inflow of INR 220 crores. Apart from that, have we had any other order inflows as well? Yes. These are major orders I talked about, but small orders like INR 50 crores, INR 70 crores, INR 80 crores, we keep on receiving. Fiber optic cable or WiFi and all that. We keep on receiving those orders all the time. Okay. You guided for 45% product contribution to the revenues growing gradually from there as well. We are also going to grow our services business as well, right? The product is not eating away into the services business. Not eating. Project business would also continue. I'm not saying that it will not. What I'm saying is the share of product business will go higher. Overall revenue will also increase, but the share of product business would, from 27%, will become 45%. Okay. Thank you so much, sir. All the best. Thank you. Thank you. The next question is from Deepesh from Maanya Finance. Please go ahead. Hello. Yeah, Deepesh, please go ahead. First of all, sir, congratulations on excellent set of numbers. I had just a couple of questions. One was regarding the trade receivables. Our trade receivables have gone up almost about INR 1,000 crore. Wanted to know exactly what is the reason for that, and how much of this trade receivables are good. Has any of them turned bad or above 360 days or something? Look, all are good. Absolutely, there is no receivable which is bad. There are a couple of them, which are small ones, which are more than 360 days, particularly from BSNL and TCIL. These are both government companies. BSNL is paying that back slowly. It is taking time, but slowly they are paying back. Earlier it was INR 150 crores. Now I think it should have come down to some INR 60, 70 crores. TCIL again, has receivable from BSNL, and they will pay to us on back-to-back basis. As they receive from BSNL, they will also pay us. Those are the ones which are more than 360 days. There may be some small INR two, four, five crores here and there, which may be more than that, but there's no bad debts. These are all good receivables. There are no bad debts at all. If you recall what I explained in the beginning of my question and answer session, why it has gone up. Because those projects were not able to achieve the milestones against which you will receive payments, or large portion of payments, because of this pandemic situation in the last year. First six months are very grossly impacted. Also the border situation, where you could not go into the cantonments and execute projects, particularly north and east border. That situation would start easing out from July. By September, it would completely ease out. When you see the September, the situation would have changed completely. Okay, I actually missed out on the initial discussion. No problem. Yeah. Thank you for this. My second question is regarding the finance cost. Now, our finance cost every quarter has been consistently increasing. Going ahead, what. Yes. Good question. I will tell you why. Two reasons. One, in the current year, we have taken a loan of INR 140 crore for the establishment of fiber facility in Hyderabad. You find increased cost there. Most important reason, because of pandemic, six months in the beginning of the year and later on also, the payment cycle got really disturbed from our customers, as I have explained little while ago. As a result of that, what we had to do, and which was allowed by RBI, we had to increase the duration of LC stabled. If the supply schedule of 30 days, we took it to 90, 120, 180 days, of course, we had to bear interest for that. Then non-fund limits were converted into funded limits as allowed by RBI to the banks. That interest cost also increased. As a result of these two incidents, what happened, interest cost has gone up. One is INR 140 crores of loan for the factory in Hyderabad. Then also as the same point in time, increase in the LC duration because of this pandemic situation, and also the non-funded limits for the time being converted into funded limits. This resulted in higher CapEx higher interest cost. What you would find this year, as the working capital cycle eases out, as I explained, this cost would reduce in the current financial year. Great. In the next few quarters, we would see it constant or are we looking at any substantial reduction? I would say quarter three onwards it will start coming down. Start coming down. Okay. Are we looking at any debt reduction also in coming future? Debt reduction, we keep on paying our debt as and when it becomes due, term loan and all that. Debt reduction would also happen in terms of working capital loans we have taken specific to the projects, which are the defense projects. As these projects start being completed, that loan will also come down. Thank you so much. Thank you. I'll come in the next time. Thank you. Thank you very much. Ladies and gentlemen, due to time constraint, that will be the last question for today. I will now hand the conference over to Mr. Abhishek Jain for closing comments. Abhishek Jain, may I request you to unmute your line. Maybe if there are one or two more questions, I can handle. If there are one or two more questions. Sure, sir. The next question is from the line of [Naman Dongre] from Imax Trading Company. Please go ahead. Good afternoon, Mr. Nahata. Thank you for accepting my question. I would like to know all this CapEx and the R&D funding. I would like to know the funding process of the company. Is it going to be internal funding, or all the acquisitions in R&D, how they're going to be funded? Good, Naman, good question. There are two, three ways. There could be some term loan for the CapEx. A term loan would be taken to some extent. Internal funding. Internal funding coming from two sources. One, internal cash accruals, which you do because of your profit and all that. Second, we have two, not unusual, extraordinary cash flows coming in, which is income tax refund of about INR 75 crore in the current financial year. Hyderabad plant, when we started, we had a subsidy from central government and state government. That would also disburse in the current financial year. That would be another about INR 78 crore, let's say INR 75 crore. INR 150 crore is going to be available to us in terms of income tax refund for which assessments are complete, and INR 75 crore. INR 150 crore of that additional money would be available for doing CapEx. If there is an INR 300 crore CapEx, you would say INR 150 crore loan, INR 150 crore. These two amounts which we would be receiving. If we take INR 150 crore loan, but we may not take INR 150 crore, we may do part from internal equity also. These are the three ways we will be doing our one, some term loan, and which is available at a very reasonable rate of interest. Two, this fund of income tax and subsidy of INR 150 crore and internal accruals. My second question is, I've been following your results for the past 8- 12 quarters, and there has been some kind of inconsistency, be it whether due to the pandemic or there was some Kashmir temperature issue in between. Can we take this quarter's results as base moving forward, and can we expect some consistency going forward? Frank, I think, you're a little uncharitable in saying that it's inconsistency because if you see Q1 of this year and Q4 of last year, it happened with every company. Because the pandemic, you couldn't handle. Otherwise, we have been pretty consistent. As far as the current situation is concerned, I have no reason to believe that there will be any inconsistency in my results this quarter. If the whole country is locked down and any such event happens, neither you can help, nor I can help, nor any other company would be able to help. I don't see any such thing happening, frank. Thank you so much, sir. Thank you. Thank you. Good. I think any one more question I can. I said two, so one more. The next question is from the line of Dipak from Arihant Stock Broking. Please go ahead. Yeah. The question has been already answered. Good. Thanks a lot to all of you. Thank you very much. Abhishek Jain would like to make any closing comments? Thank you, participants, for being there on the HFCL call. For any queries, we'll be happy to help you on any other further queries also. Thank you for being there on the call. With this, I'm concluding the call. Yeah. Thank you very much to all participants being on the call and taking such a lot of interest. Any query, any question you have, kindly let us know, let Abhishek know, or our advisors know. We'll be very glad to answer all those queries. Thank you very much. Thanks a lot. Thank you very much. On behalf of Arihant Capital Markets Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.