Ladies and gentlemen, good day and welcome to HFCL Q3 FY25 earnings conference call hosted by ICICI Securities. Statements made during this call may be forward-looking in nature based on management's current beliefs and expectations. They must be viewed in relation to the risks that HFCL's business faces. That could cause its actual future results, performance, or achievements to differ significantly from what is expressed or implied by such forward-looking statements. Investors are therefore requested to check the information independently before making any investments or other decisions. 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 press star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Lohia from ICICI Securities. Thank you, and over to you, Mr. Lohia. Yeah, hi. Thank you, Ranju. Hi, good afternoon, everyone. Thank you for joining us today for Q3 FY25 earnings call of HFCL Limited. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Mr. Mahendra Nahata, Promoter and Managing Director, Mr. V. R. Jain, Chief Financial Officer, Mr. Manoj Baid, Company Secretary, and Mr. Amit Agarwal, Head of Investor Relations. So without further delay, I would now hand over the call to Mr. Nahata for opening remarks. Thank you, and over to you, sir. Thank you, Mr. Lohia. Good evening, ladies and gentlemen. I'm delighted to welcome all of you in HFCL's earnings call for the third quarter for the financial year 2025. I trust you must have had the opportunity to review our financial results press release and earnings presentations, which are available on our website and also on the website of Stock Exchange. Friends, the telecommunication industry is undergoing a profound transformation driven by both technological innovations like artificial intelligence and upcoming growth in demand for products required for hyper-scaling of data centers and optical networks. As digital adoption accelerates, countries like India are at the forefront of this global movement. Sovereign-ready initiatives that promise to shape a future of connectivity with strong emphasis on rural connectivity. India now boasts over 1.19 billion telecom subscribers, making it the second largest telecom market globally. This is a remarkable achievement, considering that just a few decades ago, the telecom landscape in India was limited to major urban centers only. Data usage in India has grown exponentially in the last few years. The country has witnessed a tenfold growth in data usage since 2018, and it is projected that India will reach 350 million subscribers by financial year 2026. Globally, the telecommunication market has valued at approximately $2.32 trillion in 2024 and is projected to expand it around $4.21 trillion by 2034, reflecting a CAGR of 6.15%. This growth will drive a surge in demand for broadband equipment, telecom networking products, and fiber optic infrastructure as telecom network operators work to meet the growing demand of data by the consumers. Hence, telecom networking products and fiber optics will play a key role in telecom, particularly as 5G networks roll out across the country. The 5G revolution is well underway, and we are seeing telecom operators invest heavily in fiber-based backhaul solutions to ensure that their networks are capable of handling the massive data loads that 5G delivers. Alongside these technological advancements, governments worldwide are implementing initiatives to enhance universal connectivity. Telecom operators are making significant strides in expanding broadband infrastructure in underserved areas, further boosting the demand. Over the past few quarters, the global optical fiber cable market had experienced a slowdown. This slowdown could be attributed to a variety of factors, including geopolitical tensions, large inventory builds with operators, and delay in major government-funded programs. Despite these challenges, we remain optimistic about the future. We anticipate the demand for optical fiber and digital network solutions is gradually picking up, driven by several key catalysts, including 5G acceleration, rural broadband initiatives such as BharatNet Phase 3, increasing adoption of artificial intelligence-enabled services, hyperscaling of data centers, and growing need for high-speed, reliable internet connectivity across smart cities, Industry 4.0, and remote education networks. At HFCL, we have been preparing ourselves for this resurgence in demand. Over the past few quarters, we have focused on enhancing our production capabilities, improving operational efficiencies, and developing innovative products and solutions to cater to the evolving needs of the market. By optimizing our processes, we are better positioned to deliver high-quality products on a scale and ensure timely deliveries to our customers. We are increasing our presence by appointing our own employees, distributors, and dealers in key global markets. Our goal is to achieve a substantial rise in export revenue from our products. Additionally, we aim for a considerable share of telecom segment revenue also to be export-driven. As we reflect on the past year, we would like to share some of the significant milestones that highlight HFCL's continued leadership in the telecom sector. As you are aware, Bharat Sanchar Nigam Limited had forwarded tenders for BharatNet Phase 3 across 16 telecom circuits, in which your company also participated. BSNL has already announced the winners for six telecom circuits, and I am pleased to inform you that your company has successfully secured an advanced work order worth INR 2,501 crore for the design, supply, construction, installation, upgradation, operation, and maintenance of the middle-mile network of BharatNet Phase 3 in the Punjab telecom circuit. In addition, the company has also secured advanced purchase order worth ₹2,167 crore from Rail Vikas Nigam Limited for supply of optical fiber cables, telecom equipment, and related accessories, along with maintenance of the telecom equipment for BharatNet Phase 3 in Uttar Pradesh East telecom circuit and Uttar Pradesh West telecom circuit. These wins indicate HFCL's growing dominance in the market and its capabilities to meet ambitious goals of BharatNet program. In addition to securing these orders worth ₹4,650 crore under BharatNet Phase 3, there is a significant potential to the company to independently supply fiber, optical fiber cable, and telecom equipment to other vendors in the remaining 13 telecom circuits wherein either contracts have been awarded or are in the process of being awarded. The BharatNet Phase 3 is finally set to link 640,000 villages in India with high-speed internet. The company is dedicated to executing this landmark project in line with the government's vision of a Digital India, aiming to bridge the digital gap, especially in rural and underserved regions. HFCL has been an important player in the success of BharatNet, especially in Phase 2, where our cutting-edge technology and effective execution led to transformative improvements in rural broadband connectivity in the states of Punjab and Jharkhand. In the Union Budget announced recently, the government emphasized the importance of digital connectivity by proposing high-speed internet access for primary healthcare centers and government-run secondary schools across the country. This initiative will increase the demand for broadband equipment and optical fiber cables, further accelerating broadband infrastructure development across the country. Since these products are manufactured by your company, it expects to get reasonable market share in this increased demand. As you are aware, your company has secured orders worth ₹623 crore for supply of 5G fixed wireless access customer premises equipment. We have already supplied over 2 lakh such units, which are being successfully deployed across the country. The demand for our indigenously designed communication equipment continues to grow strongly, reflecting our product's reliability and market acceptance. We recently introduced two groundbreaking unlicensed radios designed to address critical needs in modern telecom networks. HFCL's unlicensed radios bring significant benefits to telecom operators by addressing the challenges of high capital and operational costs. HFCL has already achieved a remarkable milestone with over 350,000 successful UBR deployments. We have also made decisive progress in our defense sector initiatives, which are aligned with our strategy for diversification. We recently inaugurated a state-of-the-art defense manufacturing facility in Hosur. Our defense product programs are now in the advanced stage of trials, and we are optimistic that these will soon translate into firm orders. Furthermore, we are proud to announce prestigious orders in defense space, including supplying tactical optical fiber cables and fiber optic assemblies for critical naval applications received by our subsidiary, HTL Limited. In addition, HTL Limited has also secured orders for power distribution units for air defense systems, as well as multiple cable assemblies for missile systems and naval applications. In addition to this, HFCL today has been declared as the lowest bidder for a contract for INR 43 crore for supply of tactical optical fiber cables to the Indian Army. I would further like to update all the stakeholders that the Board of Directors in this meeting held on 21 February 2024 has granted approval for a strategic expansion into Europe by way of setting up optical fiber cable manufacturing facilities in Poland. Subsequently, the European Commission's landmark decision on June 14, 2024, informed that HFCL is the only Indian company that has not been engaged in dumping of OFC in European markets. As a result, while provisional anti-dumping duty was imposed on all other Indian optical fiber cable manufacturers, HFCL remains the sole Indian optical fiber cable manufacturer to have been exempted from this duty. Furthermore, the European Commission on December 16, 2024, announced the imposition of a definitive anti-dumping duty on all other Indian optical fiber cable manufacturers, reaffirming HFCL's exemption. Given this significant regulatory development, the Board in its meeting held on February 3, 2025, decided to temporarily put on hold the planned OFC manufacturing project in Poland. Instead, the company will leverage its competitive advantage and capacity to cater to European customers directly from its manufacturing facilities in India. This strategic approach will optimize resource allocation while reinforcing the company's presence in the European market. By utilizing existing capacities in India, the company can effectively meet European demand while saving INR 175 crore in capital expenditure. I'm pleased to inform you the company's current order book stands at INR 10,410 crore as compared to INR 6,151 crore in last quarter, which is a very, very significant achievement. In terms of our financial performance, I would like to highlight the key metrics for Q3 of financial year 2025. Revenue for Q3 FY25 stood at ₹1,011.95 crore as compared to ₹1,032.31 crore in Q3 of FY24 and ₹1,093.61 crore in Q2 of financial year '25. EBITDA of the quarter stood at ₹171.89 crore as compared to ₹171.82 crore in Q2 of FY25 and ₹163.45 crore in Q3 of FY24. EBITDA margin stands at 16.99% for Q3 of FY25 as compared to 15.71% for Q2 of FY25, and it stood at 15.83% in Q3 of FY24. For Q3 of FY25, profit after tax stands at ₹72.58 crore as compared to ₹73.33 crore for Q2 of FY25 and ₹82.43 crore in Q3 of FY24. Net margin stands at 7.17% in Q3 of FY25 as compared to 6.71% in Q2 of FY25 and 7.99% in Q3 of FY24. Segment revenue for telecom products during the quarter stood at 58% as compared to 52% in Q2 of FY25 and 35% in Q3 of FY24. Friends, as we enter 2025, HFCL is focused on resilience, innovation, and collaboration to achieve remarkable milestones. We are grateful for your unwavering support and trust in your vision. With your continued backing, we are poised to achieve even greater heights. Thank you very much, gentlemen. Now, the floor is open for questions. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question 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 a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ganesha with RSPN Ventures. Please go ahead. Yeah, hi. So thanks for the opportunity. So my first question would be, I just wanted to confirm that we got the order from BharatNet in January, right? And we had an order book of INR 10,000 crore as of December. So that is excluding the BharatNet orders. So if I include that, it is much more than that, right? Is that understanding correct? Includes BharatNet orders, definitely. It includes INR 10,000 crore BharatNet orders. Yeah, all BharatNet orders are included in this figure. Okay. All orders of BharatNet which have been currently received in order are included. And as I said, out of 16 circles, I think balance 13 have been awarded or are being awarded. Another three have been awarded. 10 are yet to be awarded. So we are working with those operators to get more orders for our equipment and fiber optic cables. So as and when we receive those orders, we will definitely let you know. But whatever has been received is already included in these INR 10,000 crores. Okay, okay. Understood. And just to add one more question to this, can you share the percentage of HFCL for the order that has been received in the portion of INR 20,000 crore? Mr. Shah, I'm not able to understand your question very clearly. There is a lot of noise while you are speaking. Can you repeat your question? Yeah, sure. We received an order of INR 167 crore in consortium, right? So I just wanted to understand the share of HFCL in that. Oh, is it totally HFCL? Consortium order was INR 13,000 crores. This INR 2,400 some crores which I have said, it is totally HFCL. 100%. Okay, understood. That's clear. And my second question is, can you give us a bit of OFC equipment telecom product segment revenue top line? Say that again. I wanted a bit of equipment and let's see in the telecom product segment revenue. Mr. Shah, operator, can you please clear his voice because his voice— Mr. Shah, your voice, there's a static behind your voice. Okay. Can you get a little closer to the mic and speak? Yeah, yeah. Is it better now? It's better. It's better. Yeah. So I just wanted to understand the bit of telecom equipment and OFC in the telecom product segment. Okay. You are saying that total percentage of revenue in OFC and telecom is the total revenue. That is the question? Yeah, that is the question. question is that the reply is that 58% of the revenue has come from telecom products and 42% of the revenue has come from turnkey projects in this quarter. No, no. I just wanted to understand the state of OFC and equipment. Okay, okay. Understood. That is roughly about 50% each. Okay, okay. Got it. And just to follow up on that, can you just talk about the market of OFC at a macro level because we talked about that we saw an uptick in Q2 or Q3, and then we should be seeing a good movement in the OFC market as well. But we are still—that is not seen in revenue terms if we month-wise. So can you just talk about what you should expect in the coming quarters, when it should be normalized and should be reflected in the P&L? I understand you are talking about OFC market. It has already started showing some signs of growth with the orders we have received internationally. In India, the growth is yet to come in a sense that orders have been received, but implementation of BharatNet is yet to start. So growth in India is also there with BharatNet. Internationally, also market has started looking up with more number of inquiries being received and some orders also being received from foreign operators. Particularly, demand is significantly growing from data centers because internationally, unlike India data center, people are allowed to interconnect their data center across the cities where they require very high-capacity cables. There also, the demand is increasing. And we have started supplying to data center people also with high-capacity cables. So it has started looking up, not to the extent where we would expect it to be. I believe this quarter would see some growth in demand, definitely current quarter. From the last quarter, I would say roughly about 15% growth in demand would be there. Q1 of the next financial year would see even a better improved demand, particularly coming from data center areas and rural connectivity areas. That improves India also because BharatNet Phase 3 implementation would start. So definitely, we can now see green shoots in the increase in the demand of optical fiber cable. Thank you. Mr. Shah, please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Balasubramanian with Aryan Capital. Please go ahead. Good evening, sir. Thank you so much for the opportunity. My first question: In the recent budget, the Union Finance Minister has announced broadband connections for all government and secondary and primary schools, healthcare centers, and rural areas. So what's your view on this budget and what kind of benefits we can expect in the overall industry? Good question. This is a kind of extension of BharatNet. Once BharatNet is put to the gram panchayats, which is the current program, that the BharatNet will go up to the gram panchayats in a ring topology. Earlier, it was in a linear topology, which was not so reliable. Now, the next step is to connect the villages and within the gram panchayats with different public utility organizations like primary healthcare centers, schools, or government institutions. So this additional program of connecting all the schools and primary health centers, which was not announced till now, would definitely increase the demand of the connectivity equipment, which are mostly, in my opinion, to start with, going to be wireless like Wi-Fi or different other kinds of equipment, which would be UART, UBR, those kinds of equipment would be used for this point-to-point or point-to-multipoint connectivity. Fortunately, whichever equipment they use, whether they use Wi-Fi or UBR or even fiber optics, we have all those equipment available with us designed indigenously. So definitely, it is going to have some increase in the demand of this equipment. And also, naturally, since we have all this equipment available, we will be benefited. Got it, sir. Sir, and the second question regarding recently, the US have imposed a lot of tariffs on Mexico, China, and Canada. Right now, China has the higher capacity for OFC side. So is there any impact on U.S. tariffs and what kind of benefits are expected to Indian companies, especially HFCL? And how much exposure do we have on the U.S. side, sir? Look, China's increase in tariffs on China by U.S. market doesn't impact much as far as telecom is concerned because U.S. does not allow import of equipment from China in any case. They really don't allow. So therefore, this tariff increase on the Chinese products of 10%, which has just recently been announced, would not impact the Indian manufacturers because as it is, they are not allowing import of Chinese. Got it, sir. And sir, on the optical fiber and optical fiber cable realization side, how is the status in this quarter, sir? And the price side? You're talking about the price? Yes, sir. Realization per fiber kilometer. Realization per fiber. Yeah. In terms of realization per fiber per kilometer of cable, I'm talking fiber per kilometer of cable, has been about INR 840 as compared to INR 893, which was there in the last quarter, and INR 1,073, which was there on 31st December 2023. So it has come down considerably. But similarly, price of fiber has also come down. Fiber is now INR 266 per kilometer, which was INR 291 on 30th September, and on 31st December 2023, which a year ago, it was INR 329. So as the price of cable has come down, price of fiber has also come down. Thank you. Mr. Balasubramanian, please rejoin the queue for more questions. Next question comes from the line of Manoj Jethwa with KSS Shares and Securities Private Limited. Please go ahead. Good evening, sir. This is Manoj Jethwa from KSS Securities, and many congratulations for the good sense of numbers in these challenging times, so my question is regarding the defense sector, which we have come out with a new facility in Hosur. Could you please add some color on it, sir? And what could be the growth prospects as far as defense opportunities concerned with HFCL? Well, as far as color is concerned, color of army is green, air force is blue, and navy is white. As far as color is concerned. But anyway, defense, as I've always been saying, approvals and all that take a lot of time. And approval processes are pretty long. And at the same point of time, a lot of impediments. I would not tell you the numbers. We have a large order for electronics, large alloy, lateral wind fence for supplying of electronic fuses from one of the NATO countries. Now, that NATO country wanted a certificate of testing from an Indian government agency, which is DRDO. We applied for testing. We got the firing range sanctioned by DRDO. We needed ammunition for testing. And would you believe we have been given a delivery date of nine months for supply of ammunition because we shall produce with government factories only. As a result of that, we have not been able to test our fuses as per the requirement of that particular country, and we have not been able to start supplying. This is a travesty that we have a large three-figure order reaching near to four figures. Order alloy, lateral wind fence, subject to this testing and all that. I have not been able to do so till now because of delay in supply of munitions by government companies. So these are some of the difficulties. Nevertheless, we have now started working on, after successful testing of our radars, thermal weapon sights, we have started working on receiving orders. Recently, our people had gone to some of the foreign countries, and they received good inquiries for this product. We expect to start building order book from coming quarter. We expect that some small orders may start from this quarter and start building a better order book from the next quarter itself. So in the overall, say around one and a half year, how do you see the defense business to pan out in the total revenue-wise, EBITDA-wise, or monetary? I'll tell you three or four projects. One, electronic fuses with testing and whatever has not happened. We are trying our best to make it happen by April, May. So once that happens and test results, which I'm sure would be positive, would give rise to possible orders for those electronic fuses. Radars, we are expecting a reasonably good demand to come for radars. Thermal weapon sights, again, small, small orders are being received. And some of the tenders also we have participated, which are under evaluation. Then BMP II, as I've been informing, five companies have been shortlisted for a project, which is multi-thousand crore project. And HFCL is one of them. Others are, of course, one of the government companies, and L&T, Alpha Design, and all these kinds of companies, Tata Projects, which have been shortlisted. So we, again, have high hopes that they are also we are very, very hopeful that we should be able to be a key player in that segment also. So one and a half year, I think we expect to receive reasonable size of orders from all this. Revenue should also start flowing in from the next financial year. Apart from receiving orders, revenue flowing should also start. I would not like to give you a number, how much it can be, but we are very hopeful that revenue would start flowing in from defense in the next financial year. Thank you. Mr. Jethwa, please rejoin the queue for more questions. Next question comes from the line of Tanuj Kiani with Ventura. Please go ahead. Hello, sir. So you're invited for a defense follow-up work with BRANDT. Mr. Kiani, sorry to interrupt. Your voice is breaking. Can you just come a little closer? Is it clear now? Yeah. Go ahead. You had guided for the defense order, which didn't come through yet. Mr. Kiani, once again, sorry to interrupt. Your voice is breaking. Hello? Yeah. So you had guided 800 defense order. Didn't come anything back? Mr. Kiani, I would request you to dial us back once again because your voice is breaking. Thank you. Sure. We'll take the next in line, and that is Rohan Vora from Envision Capital. Please go ahead. Hello. Thank you for the opportunity. Sir, so the first question was, as I understand, around the order inflow for this quarter was around INR 5,300 crore, of which around INR 4,600 crore was pertaining to BharatNet. So just wanted to understand what was the balance order from? What kind of products and what kind of projects are we seeing? These were balance orders for various equipment, either for fiber optic cable, unlicensed radios, Wi-Fi equipment. It's a mixture of different equipment and cable from a very large number of customers. This could be indigenous. This could be export also. Got it. And sir, so the order book that we have today has around INR 2,500 crores of product. So what is the breakup of equipment in this? In the order of INR 2,000, which order you're talking about? So our current order book, as it stands, is around INR 10,400 crores. Okay. Okay. I can tell you. In order, it would be roughly about INR 2,525 crores for equipment. And that would be about INR 4,197, would be roughly about 20 projects, which includes BharatNet of INR 1,400 crores, of course. Thank you. Mr. Vora, please rejoin the queue for more questions. Next question comes from the line of Ruchita Gadge with iWealth. Please go ahead. Hello, sir. Very good evening. So my question was on the telecom product side. So during the year, we had told that we'd be doing around the 2,000 crore revenue. So currently, if I see, we've done around 1,000 crore. So do we expect another 1,000 crore by the last quarter, or there has been some issue with it, and it'll come going ahead? Just wanted a little understanding on that. Good question. We definitely had expected about 2,000 crores or so. Until now, this has been about 1,000 crore or so. In the current quarter, we expect roughly about reaching to 350-400 crores in the particular quarter. Something around that. I'm not 100% sure, but 350-400 crores kind of a will reach. Now, reason of this shortfall is that some of the equipment which we were to supply earlier, that delivery got delayed because of customer readiness and customer trials, and they're approving the product. A lot of times, they wanted a lot of software changes to be done suiting to their requirement, which was not expected earlier. So that delayed the supply of roughly about INR 250 crores or so. Then demand for some of the export market, which we expected to happen, that also got delayed. So all that delays contributed this INR 500-600 crore shortfall in this particular financial year. One is customer wanted some changes. Second, there was less demand from export markets because we had expected the RAN networks to come up more quickly, like BharatNet and all that, when we started the year, which would have increased the supply of equipment to BharatNet project also because there is a significant demand in BharatNet. But BharatNet also got delayed by six to nine months. So that part of supply also could not happen. So all these factors put together really led to unexpected slowdown in the telecom networking segment, which we believe this year, BharatNet would come up again. It has come up. So increased demand would be there from BharatNet. We have significantly good products for BharatNet program, routers, and all that. In fact, we are one of the major recipients of the order for routers, which is one of the critical equipment of BharatNet requirement. And moreover, we expect more orders to come in from the, as I said, in the balance 13 circles, which are three of which have been awarded and 10 more are to be awarded, and eight more circles that tenders are to be supported by state governments. We expect more orders to come in. So this year should show better performance in terms of order booking, in terms of delivery. Again, BharatNet particularly will depend upon how the people who receive orders, they are able to implement the BharatNet project. From export side, also, we expect to have better demand this year because rural connectivity emphasis is being put on by different governments, and we are manufacturing those rural connectivity equipment. So this year should see better prospects for telecom equipment market as well as fiber optic cable because fiber optic cable had also considerably slowed down, as I said in the opening remark, worldwide. Every fiber optic cable company had lower revenue compared to what they had done two years ago. And we were not the only company affected by that. And as a result, fiber optic cable also had slowed down considerably in the current financial year. Thank you. Mr. Gadge, please rejoin the queue for more questions. Next question comes from the line of Rohan Vora with Envision Capital. Please go ahead. Hello. Sir, thank you for the opportunity. So sir, my question actually was that, as I understand, 2,500 crore is our order book for products. I wanted the breakup of equipment and cables between this. Give me a second. Yeah. Out of 2,500 crores, 1,100 crores would be for fiber optic cable, and about 1,400 crores would be for different equipment, which includes routers for about 800 crores, 500 crores for 5G products, and rest is a various product. So it is a division. Answering your question is 1,100 crores and 1,400 crores. Understood, sir. Sir, and one more on this line was that over a longer period of time, we said that we want 3,000 crores of revenue to come in from equipments alone. So just a broader idea on what we— I never said 3,000 to come from equipment alone. When did I say that? So sir, on our order call, what we said was that when we reach 10,000 crores of revenue, we want 30,000— At that point of time. At that point of time. Yes. At that point of time, what we had said is 3,000 would come from equipments. Yes. Yes. So sir, I just wanted to understand what kind of equipments will drive our growth going forward. One is the 5G-related equipment, where we already have a 600 crore order, which is under supply at this time. Routers is, again, which, as I informed you, we already have orders worth about 800 crores for routers, and we expect to receive much more orders for routers from the balance telecom circuits. And also the international market, then Wi-Fi and UBR, unlicensed band radios, because that's one of the key products which we are manufacturing. We have already supplied and installed about 350,000, more than that, rather, radios all over. So that is another area we will receive reasonably good orders. Moreover, within the next one or two years, we are designing a few more equipment, which includes in the UBR right now, we are point-to-point. Now, we are trying to go for point-to-multipoint because point-to-multipoint would be when government completes this BharatNet Phase 3, which is connecting 250,000 gram panchayats. Next step would be to connect the villages, where either overhead fiber optic cable would be used, or they can use point-to-multipoint, unlicensed band radio also. Where rural areas, interference-free spectrum is very easily available, and where the government does not have to pay a license fee for a spectrum, even to itself. So that would give rise to demand for point-to-multipoint radios significantly. If I look at the world market, 80% of the demand is for point-to-multipoint radios, which we are not manufacturing at this point in time. We are doing only point-to-point radios. So that is another area where we expect good demand to come up. So Wi-Fi access points, switches, routers, unlicensed band radios, 5G equipment, these are all put together. We expect that we should be able to - we are aspiring to reach to a 3,000 crore kind of revenue from national and international market when we reach to a 10,000 crore revenue in total. Thank you. Mr. Vora, please rejoin the queue for more questions. Next question comes from the line of Tanuj Kiani with Ventura. Please go ahead. Hello, sir. Am I audible? Yeah. Yeah. Go ahead, please. So you had guided for a INR 800 crore defense order, which didn't come to, any guidance on that? And regarding our 25%-30% growth, are we on track to achieve for the. Well, go ahead. We had received the LOI for INR 800 crores for the defense order. But unfortunately, they wanted test results from, we had to submit test results from government facility. And as I just now explained how it got delayed. And now we are thinking to, we are trying to complete it by April, May. Then we have to submit the test results to the potential buyer, and let us see what happens at that point of time. It was there. But because of ammunition supply getting delayed by government facilities in India, we had to—we had no option but to sit quiet and wait for ammunition to come. And when the ammunition comes, we test it and supply the certificate to the foreign buyer, and then order could be confirmed. But unfortunately, that hasn't happened till now. Okay. And regarding the growth guidance, are we on track to achieve the 25%-30% mark that you have guided? Please say that again. Regarding the growth guidance, you had guided for 25%-30% year-on-year growth. So how are we going ahead with that? Really, guidance. What I had said that we aspire to have a 25%-30% growth. Definitely, we aspire that. but sometimes what happens, the market, like fiber optic cable market, no, that's worldwide, which was out of our control, and therefore we could not reach to the required revenue. and we still aspire that, yes, this kind of a growth should be there in the company. so 20%-25% growth has to happen. but sometimes, despite the best of the efforts, what we aspire may not come true, particularly market situation, geopolitical situation, and those kind of things happen, which results in the aspiration not reaching to the level we wanted it to be. so that's the situation. but yes, we definitely aspire at that kind of a growth. And right now, looking at the current market situation and the growth in rural connectivity, BharatNet, and those kind of things, I'm sure that we'll be able to overcome those hurdles which we had faced in the current first three quarters. Thank you. Mr. Kiani, please rejoin the queue for more questions. Next question comes from the line of Hitesh K. Patel from K Patel & Company. Please go ahead. Thanks for giving the opportunity to ask a question, sir. My question was regarding that how much of the PLI amount claim would be there from the government, and when can the amount be received? The production linked incentive. PLI amount, we are still not able to claim because as we discussed a little while ago, that the amount of revenue we thought would come from telecom equipment, which will make us PLI available to us, would not be fulfilled in the current financial year. So we expect to start claiming PLI from the next financial year. And what will be the tentative amount, sir? Tentative amount, I can't say at this point of time. But if at all we are able to claim, we should be around INR 40-50 crore. For the entire year, sir? Next? Yeah, for the entire year. Okay. And my other question was that, sir, you already told that in all 16 circles, BharatNet tender was there, and only 6 have been opened yet. So when can the next 10 will be opened or will be available? Who has got the tender and all the information? All have been opened. There are two parts I will tell you. 16 have been centrally done by BSNL on the instruction of DOT. Funding has to come from DOT. So funding is not an issue. Other 8 states, the tenders are yet to be announced. One has been announced, Gujarat. Others are yet to be announced, which are to be implemented by state government, funded by central government. The funding, again, is not a problem. Of the 16, which have been done centrally, all have been opened. But only 6 have been awarded. Out of 6 have been awarded, 2 are in consortium with HFCL, wherein, as I said, HFCL received orders worth about 2,500 some crores from Rail Vikas Nigam Limited, who were the prime bidders. Now, in Punjab, we are the sole bidders, and we have received orders worth about something like INR 2,100 crore or so. No, INR 2,500 crore or so that we have received. And Rail Vikas Nigam has been about INR 2,200 crore. Now, that takes 3 out of 6. Balance 3, which have been awarded, we are already in talks with them to supply our fiber optic cable and equipment like routers and unlicensed band radio, etc. And that discussion negotiation is going on. Some of them have come and seen the POCs that testing and all that of our routers and all that. Fiber optic cable, they know that we produce from years. So that discussion with 3 of them is going on. The rest 10 have still not been awarded for two particular reasons. One, there are some high prices by some three or four of them, which are still being negotiated by BSNL with the L1 bidders, which are maybe out of the budget range of BSNL. Some three, four, five are stuck in some technical issues. Some technical issues are there, which exactly we are not aware of. I expect that these issues to get resolved for the tenders which have already been opened, which are 10, but not awarded in February or by 15th March or so, in my opinion. That would be awarded one by one as the issues get resolved, particularly the pricing issues, which are under negotiation, may get over quickly, quicker than those technical issues where they are stuck up because of some of the technical issues. By 15th March or so, I expect by the rest leaving government, it may happen. At least it may happen a little late. But yes, ultimately, it will happen. Of the remaining eight states, which are to be done by states themselves, which includes Maharashtra, Tamil Nadu, Gujarat, Odisha, Jharkhand, Chhattisgarh, only Gujarat has announced a tender. The rest are in process. Maybe another couple of months, they would also come up and announce their portion of BharatNet Phase 3. Gujarat has already announced it just a few days ago. So that is the situation. And we expect that the three circles, which have been awarded, 10 which are to be awarded, eight where the tenders are to come from different states to receive significant amount of orders because fiber optic cable and equipment we produce most economically, most competitively, quite competitively. I would not say most, but quite competitively. So we should be able to receive a reasonably good size of orders from those 10 plus 8, 18 circles. Right now, it has been not 18, 10 plus 8 plus 8, 21 circles. Right now, ordering for only 3 circles have happened as far as we are concerned. There's a lot more to go. A lot more to go. It is only 3 out of 24. Thank you. Mr. Patel, please rejoin the queue for more questions. Next question comes from the line of Akash Goel with Tara Capital Partners. Please go ahead. Hello. Mr. Goel, please go ahead. Hello. Yeah. Hi. Is everyone audible? Yeah. Yeah. Yeah. Yeah. Hi. Congratulations on a good set of results. Sir, just a few questions. I wanted to have some clarifications on the strategy. Sorry, I have not been following the company for a long time. I think strategically, we have been talking about increasing our product-based revenue mix and reducing the service-based revenue. Is that correct? Yeah. That is right. The current quarter, if you see, the mix has been quite reasonable. Current quarter, it has been 58% products and 42% of turnkey, which used to be reversed earlier. The current quarter, we have made significant progress with 58% being the products. I think trend should continue with more orders being received in BharatNet for products. Okay. Sir, do we have a target mix in mind here regarding the services and the product mix that we want to achieve over a period of time? Target is 70/30. 70 for products, 30 for EPC. That is the target. Again, let me qualify it a little bit. If I receive a profitable turnkey project, I am not going to deny it. At that point of time, you may find this percentage may change a bit. But that would be on account of depending upon if you receive a good profitable project, you are not going to refuse it. Thank you. Mr. Goel, please rejoin the queue for more questions. Next question comes from the line of Rishab with IndSec. Please go ahead. Yeah. Hi, sir. Hello. Yeah. Hello. Yeah. Am I audible? Yes. Yes. Yes, sir. Sir, I wanted to understand basically the opportunities, what we are seeing for our product division in the international scenario. That kind of means what are the upcoming opportunities where we are targeting for the products? And currently, what kind of challenges we are seeing in securing these things? Also, I would like to understand now the OFC prices are in a declining trend. So where it will stabilize and what kind of an outlook do you foresee going ahead for the OFC cables, fibers, etc.? And the third question will be regarding the market share. How are we doing on the market share in terms of the domestic market as well as the international space? Yeah. Fiber optic cable and products. I will mix up those two questions together. Yeah. For the pricing, fiber optic cable and fiber prices have been coming down pretty recently. And that has been because of the lower demand, as I have been saying, for fiber optic cables. That lower demand has been the result of worldwide kind of a trend where more stock was there with the operators and less consumption was there because of delay in government-funded programs. And there was overcapacity built up in expectation of these things to happen, but did not happen. There was a consequent decline in the prices. The price today, average price for good quality fiber, I'm not talking of very third-grade kind of fiber, so the price could even be lower. But December 31st, 2024, average price for the quarter for fiber has been roughly about INR 266 per fiber kilometer, which was INR 291 a quarter back and INR 329 a year back. This trend to INR 66 or so, which has come up, I think this should be almost at the low end. Almost. There may be some more variation coming up. But with the increase in demand, which we can see now, I think may not go down further, except a few rupees here and there. That is number one. Cable prices have consequently come down as the raw metal price goes down, the copper price also goes down. It is INR 840 per fiber kilometer for cable on an average, which was INR 893 three months back, INR 1073 a year back. And again, with the fiber prices, if they come down a bit, this will also come down a bit. But again, I don't expect to be a major decline happening any further now. Not a major decline. Some decline may still be there, but not a major decline. But the decline would be raw material and cable both. Another point I can give you, preform, which is the raw material for fiber itself, we used to buy roughly about $82-$85 a kg. Now that has come down to $58 a kg. So preform prices come down. That is the raw material for fiber. Fiber prices come down, which is the raw material for cable. And consequently, cable prices also come down. But I don't expect now that trend to continue to a very larger extent. It should stabilize now with some possible changes which may happen. That is one. As far as the international demand for product and telecom equipment are concerned, including fiber optic cable is concerned, I think fiber optic cable market has already started looking up. We already see better orders coming in, better orders coming in, better inquiries coming in. We have been shortlisted by a couple of companies for supply. Though firm orders are yet to be received from them, but yes, LOI kind of documents have already been received, and we are in process of finalizing contracts with them. If they are able to finalize contracts for which LOIs have already been received, there would be significant amounts of contracts to come for multiple years. So, market is certainly looking up, certainly looking up for fiber optic cable as well as equipment. We see that fiber optic cable, which saw a major slowdown of revenue internationally, not only HFCL, but internationally, should show much better improvement in the next financial year. We expect that it should show good improvement in the next financial year. Okay, sir. Yeah, and regarding the market share, if you can give any color on that. Well, the market share for India, internationally, it would be pointless to talk market share. But in market share in India, for fiber optic cable, I would say we have a highest market share. Percentage, I would not be able to tell you right now. It's difficult to tell the percentage. As in India, HFCL should be having the highest market share in the country. In terms of equipment, different equipment would have a different market share. For FWA CPE, 5G SA 5G CPE, we are the only Indian producer. As an Indian producer, we are the only 100%. But the rest is coming from outside India, countries like Taiwan and all that. So if you mix up all that, then our market share could be 15% or so. But as an Indian company, our market share is 100% because there is nobody else producing that as an Indian company. UBR, unlicensed band radios, which is another major product which has been designed by us. I would say as an Indian company, we should have 90% market share in the country for point-to-point UBRs. We should have 90% share. All operators, we have supplied point-to-point radios. To BSNL, we are supplying. To Vodafone Idea, we are supplying. So point-to-point radios, we have 90% market share. We haven't seen any other independent manufacturer manufacturing that in India, those point-to-point UBRs. Thank you. Mr. Rishab, please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to one question. Next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead. Namaskar, Nahataji, and thank you for the opportunity. Sir, just a question on it is heartening to see that you guided for a higher mix of telecom product to the turnkey. But when we look at our margins, they are lower for the product segment. So what should be fencing in going ahead? And also, sir, for the turnkey part, are there one of any receivables pending or one of any payments that have been included in the profitability? I'm just referring to our nine-month number rather than the quarter one. Just to elaborate the same, sir, for the nine months, we find the telecom product at 1863 and turnkey project at 1400, whereas the profitability is 128 for telecom product and 300 for turnkey. So what explains and what should we fence in going ahead? Look, without going into the numbers, since the capacity utilization was low, profitability has been lower. Fiber optic cable, for example, capacity utilization roughly about 50% in the current year. So when the capacity utilization improves, definitely the profitability is also going to improve. There's no receivable included in the profitability in a sense. Receivable and profitability are two different numbers. So I don't understand that part of the question. As far as profitability is concerned, when the capacity utilization improves, the profitability is definitely going to improve. Particularly, fiber optic cable segment, we already see green shoots happening in this quarter itself. We should do better than the last quarter in the current quarter, which is quarter four from the quarter three. We should do better, in my opinion. Then, as the orders come in, quarter one should even be better. We have started receiving orders. Today itself, we have been at just L1 in tender for tactical cables, which we would be supplying in this quantity for the first time. Earlier, we had supplied a small order for tactical cable, but now it's the first time a 43 crore order has been received by us. Another major tender for the similar cable is coming up, as we expect, very soon. As we have won this tender, our effort would be to win that next tender also. Internationally, also, we have started receiving LOIs, where we have been L1, the lowest in the tenders quoted by those telecom operators. And of course, once they test our cables and approve them, that supply would be starting for a multi-year contract. But yes, LOI has been received. I don't think there would be a problem in the testing at all because cables we have been manufacturing since many, many years. It shouldn't be a problem. So, capacity, and then don't forget BharatNet. BharatNet is a major part of consumption in India for the next three years, and our expectation is to receive reasonable orders from that part also. So that should also help us improve our capacity utilization and consequently the profitability. Thank you. Mr. Kapoor, please rejoin the queue for more questions. Next question comes from the line of Hardik Vyas with ET. Please go ahead. Sir, I had one question. For the telecom products, we have executed about 2 lakh numbers for FWA and 3.5 lakh for UBR. So do we have capacity to cater to the domestic market as well as export markets when the demand comes up for these telecom products? And what could the demand look like in terms of numbers? Look, Hardik, let me tell you how we manufacture these telecom products. Telecom products are essentially we get manufactured on a contract basis. We don't manufacture them ourselves. We do the integration of those products. The PCB assembly, PCB assembly, which is the starting point of manufacturing and the key point where the maximum amount of CapEx and all are required, are manufactured on a contract basis, which is a trend worldwide. Worldwide, everybody, all major companies get it manufactured on a contract basis by EMS houses. Like you have Flextronics, you have Dixon, you have Jabil, and many, many, many, many such names you would have heard, including Apple and all that. They get it manufactured from such contract manufacturers. We also do that. System integration is then done in our own premises. And system integration capacity, you can increase very quickly with the increase of the test equipment. You just need the test equipment and workers. You can increase your capability to do the system integration and final testing of equipment. So if you have an EPC house which has less capacity, you can engage another EPC house, contract manufacturer, to manufacture your equipment. And system integration, you can keep on doing at your own place. So capacity would not be a constraint in terms of this, whether it is UBR or whether it is going to be fixed wireless access. It would not be a constraint. Constraint can come in PCB assembly, but then you can go to another contract manufacturer. Thank you. Mr. Vyas, please rejoin the queue for more questions. Next question comes from the line of Ruchita Gadge with iWealth. Please go ahead. Hi, sir. So my question was on the order book side. So on the product and the turnkey and the O&M, so what is the execution cycle for the same? I'm currently in O&M. What is the kind of revenue that we are doing? O&M, I think this quarter, the revenue was negligible. Just let me just check. Give me one second. So the O&M revenue in the current year, not the quarter, would be roughly about INR 500 million. But it will increase once the BharatNet goes into a mode of operation after implementation. All our NFS projects, which we are implementing, the warranty period for that ends, which is under discussion when that warranty period would end. This discussion is going on at this point in time. So that is as far as the O&M is concerned. Is that the question or any other question from you? Look at the turnkey order books, sir. What is the execution cycle for it? Like there's INR 4,000 crores in turnkey and INR 2,500 crores in products. By when can we execute this? Yeah, yeah. This should be executable in three years of signing of the agreement between us and BSNL, which is in process. But our effort is to complete quicker than three years because then we receive better revenue. But yes, contracted cycle would be three years. Thank you. Mr. Gadge, please rejoin the queue for more questions. Next question comes from the line of Lakshya Agarwal with Growth Sphere Ventures LLP. Please go ahead. So thank you for taking my question. So as you have mentioned that in our optical fiber cable segment, we can see that in the current quarter and the following quarter also, we see some growth. So I wanted to understand that is there any specific optical fiber cable which is required to cater to the data center orders which are coming in? And specifically, how much in terms of the contract value are these orders for? It's not from my end. I guess someone else is unmuted. Mr. Agarwal, it's coming from your line. It is not coming from my end, definitely. Let me just check. Just hold on. Just give me a moment. Mr. Agarwal, if I understand well, your question was, are we making any specific cable for data center? Is that true? Yes, I just wanted to understand that is there any specific optical fiber cable which is required for it and in terms of the contract value which we get from these from the data center customers? As I said, we have started working on getting orders from data centers. Now, different kinds of data centers need different kinds of cables. This all depends upon what particular customer wants. Some of the customers would need traditional loose tube kind of cables with multiple fiber. Somebody would need about, let us say, somewhere near 400 fiber cables. Some of them need 800. Some of them need 1,700. Now, as you keep on going higher, the design changes. The recent trend is IBR kind of cable, intermittently bonded ribbon cable. In a lower volume of size, you are able to pack in more fibers. So it has, again, depends upon what a particular customer wants. IBR cable is the most recent trend which has started for higher volume of cables. We already manufacture IBR cables in Hyderabad, and we are increasing our capacity for IBR cables now because, as I said, data center people are asking for more and more cable now because they are interconnecting their data centers, and their high-capacity cable are required. So we are increasing our capacity to manufacture IBR cables. We are almost more than doubling that capacity. Thank you. Mr. Agarwal, please rejoin the queue for more questions. Last question comes from the line of Abhi Mewawala with Vice Capital. Please go ahead. Mr. Mewawala, please go ahead with the question. Mr. Mewawala, if you have muted your line, unmute yourself, and please go ahead with the question. Hello. Am I audible? Yes, yes. Yes. So I have only one question. Optical fiber business is currently in a down cycle. So when earlier the business was in good terms two or three years back, so compared to that time and recent time, what are the margin impacted in terms of percentage? Well, margin impacted is quite significant. I think margins have gone down by almost 50%. Almost 50%. OFC prices have gone down, and also capacity utilization has gone down. Margin has gone down by roughly about 50%. Okay. Thank you. Thank you. Ladies and gentlemen, due to time constraints, we will not be taking any further questions. You can connect with us individually. I would now like to hand the conference over to the. Can I have one more question, operator? Can I have one more question? Sure. All right. So the next question comes from the line of Jinesh Shah with RSPN Ventures. Please go ahead. Yeah. So thanks for the opportunity again. So I just had this question that we can see significant improvement in the gross margins. So is it because of the product mix, or what is the reason behind it? I just wanted to understand that. In turnkey, better margins can happen contract to contract basis. Sometimes when the contract is good and the supply portion is higher, you can have better margins. So it all depends upon which portion of the contract you are executing at which point of the time. Certain portion, you have higher margins. Certain portion, you may not have. It really depends upon the contract to contract and phases of that contract. So can we expect that it should be around 29-31% or 32% maybe? Not always. Not always. Not always. Yeah. Average should be sometimes something coming around 15% or so on an average. Thank you. Mr. Shah, please rejoin the queue for more questions. One last question comes from the line of Rohan Vora with Envision Capital. Please go ahead. Hello, sir. Thank you again. So sir, just a couple of questions. One was on the capacity expansion for fiber and cable. So when is that expected? And the second was on RAN products. So what is your view on the market size? Because it appears that the market is pretty large for that. And how do we expect to get orders in the RAN side of the telecom equipments? Thank you. Again, that capacity expansion of fiber will be completed more or less by 31st March. It is already happening in Hyderabad, so it should be completed by 31st March or so. As for RAN products, RAN products is a very broad thing. RAN could be 5G RAN, RAN could be UBR, RAN could be Wi-Fi. Radio access network is a very wide terminology. Any specific area you are asking? Our competitor delivered a large project for BSNL recently. So the similar product. That is for 4G RAN. That is for 4G. 4G, I don't expect any major demand to happen in the future because 5G has come. 4G, I don't foresee major demand to come up. As you are talking of BSNL project of 4G, I think worldwide 4G is more or less finished. I don't expect major orders for 4G to come any longer. Thank you. Ladies and gentlemen, due to time constraints, we will not be taking any further questions. You can connect with us individually. I would now like to hand the conference over to the management for closing comments. Thank you. Thank you very much, ladies and gentlemen, for being with us for this investors' call for the quarter three of financial year 2025. And we look forward for your continuous support, and we definitely aspire for better growth in the coming quarter and the coming year, and we'll stay connected. Thank you very much. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your line.