Ladies and gentlemen, good day, and welcome to the Q3 FY 2026 Earnings Conference Call of HFCL, hosted by ICICI Securities Limited. 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. Vikash Singh from ICICI Securities Limited. Thank you, and over to you, Mr. Singh. Thank you, Michelle. Good afternoon, everyone. Before we begin, I would like to read the disclaimer. The 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 future results, performance, or achievement 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 investment or other decisions. From the management side, which we have with us, Mr. Mahendra Nahata, Promoter and Managing Director, Mr. V. R. Jain, CFO, Mr. Manoj Baid, Company Secretary, and Mr. Amit Agarwal, Head HR. Without taking any more time, I'll hand over to Mr. Mahendra Nahata for his opening remarks. Over to you, sir. Thank you, Vikash. Good evening, everyone. I extend a warm welcome to all of you on HFCL's earnings call for the Q3 and nine months ended December 2025. I trust you have had the opportunity to review our financial results, press release, and investor presentation, which are available on our website and the stock exchanges. The quarter was characterized by a combination of near-term volatility and strong long-term structural opportunities. Globally, evolving tariff structures, trade realignments, and supply chain recalibration led to certain logistical and execution challenges during the early part of the quarter. However, these conditions stabilized from mid-December onwards, enabling smoother dispatches and supply flows. At the same time, the fundamental demand drivers for optical fiber cables have strengthened immensely, rising data consumption, hyperscaler-led data center expansion, AI, AI-driven network upgrades, and growing need for secure, high-capacity connectivity are driving a sustained global upcycle in optical fiber cable demand. In India, continued fiber focus on fiberization, digital public infrastructure, and defense indigenization provides long-term visibility across HFCL's core business segments. The optical fiber cable market has witnessed a sharp increase in demand on account of this massive increase in hyperscale data center creation worldwide. Moreover, after a period of inventory correction and deferred capital expenditures, the global optical fiber cable demand industry has also witnessed a clear restoration in demand over the last few quarters from telecom operators. Importantly, this recovery is structurally different from earlier cycles. Demand is increasingly skewed towards high fiber count, high performance cables, as required by hyperscale data centers. Supply of such cables remain constrained due to higher technology complexity, manufacturing precision, and scale requirements. As a result, the improving demand environment has translated into better OFC pricing and realizations, with customers placing greater emphasis on quality, consistency, and delivery reliability. Modern hyperscale and AI-focused data centers require extremely high fiber density, ultra-low latency interconnections, and scalable designs to support east-west traffic, storage clustering, and high-performance computing workloads. The Union Budget of 2026 has further enforced a policy focus on strengthening India's digital and data infrastructure ecosystem. Measures such as the extended tax holiday for foreign cloud service providers, who will set up data centers in India, underscore the government's intent to position India as a long-term hub for cloud data centers and AI-led infrastructure. Massive growth of hyperscale data centers has resulted in a meaningful ramp-up in hyperscaler-led orders, multilayer demand visibility, and sustained capacity expansion plans across the optical communication ecosystem. HFCL has been preparing for this phase through sustained investments in optical fiber and optical fiber cable manufacturing, combined with focused innovation. As a result, we are today amongst a limited set of global players capable of delivering very high fiber count and low latency solution at a scale. During the quarter, we successfully developed 3,456 fiber count micro duct IBR cable. Building on this capability, we are now in the process of developing 6,912 fiber micro duct IBR cables. Very few manufacturers globally possess the technology depth and manufacturing discipline required for such products, further strengthening HFCL's competitive positioning. These products are well suited for dense, space-constrained data center environments and has already seen encouraging customer interaction and traction. Based on current engagements and pipeline visibility, we are seeing continued demand momentum into the coming quarter, and we expect this trend to keep the same momentum for the next few years as data center and AI-led infrastructure deployments accelerate. In parallel, HFCL has moved beyond cables to data center interconnect solutions. We have initiated our Pre-Connected Solutions business for data center applications, enabling faster deployment, higher reliability, and reduced installation complexity for customers. We expect the PCS business to contribute INR 400 crore-INR 500 crore of additional revenues over 2026, 2027. Further, we have commenced production of MPO Cables, which are increasingly essential in high-density data center and AI environments. This is a fast-growing segment, and we are expanding capacities to scale this business meaningfully. Over the coming years, we expect MPO and related interconnect solution to generate INR 400-500 crores of revenue, strengthening HFCL presence across the full data center connectivity value chain. Taken together, these capabilities position HFCL not merely as an optical fiber cable supplier, but as a comprehensive solution provider for next generation data center and AI infrastructure, with visible demand momentum in the near term and strong growth runway ahead. Another important structural development shaping the outlook is the progress of the India-United States and India-European trade engagement. United States and Europe remain largest and most advanced markets for optical fiber cable, digital infrastructure, secure communication networks, supported by sustained investments in fiberizations and data centers. A more enabling trade framework has potential to improve market access, strengthen supply chain integration, and enhance the competitiveness of Indian manufacturers with scale and technology depth. HFCL already has a growing, growing presence in United States and Europe, and our recent export wins reflect increasing acceptance of our high quality, high fiber count solutions. Our fiber and cable expansion capacity expansion programs continue to progress steadily. Optical fiber and cable capacity, optical fiber capacity will rise from 30.5 million fiber kilometer to 42.36 million fiber kilometer by June 2026. Optical fiber capacity has already been doubled to, from 14 million fiber kilometer to 28 million fiber kilometer, with a balance 6 million fiber kilometer to be added progressively by December 2026. These expansions enhance our ability to support rising global and domestic demand while improving operational efficiency, automation, and cost competitiveness. With capacity expansion nearing completion and global demand condition continuing to strengthen, we expect the optical fiber cable segment to contribute meaningfully higher revenues from quarter four of financial year 2026 onwards. The combination of scale, product depth, and improving industry pricing dynamics gives us confidence that optical fiber cable will remain a key growth and value driver for the group. Exports remained a key highlight during the quarter and continue to be a structural growth engine for HFCL. During quarter three of FY 2026, we secured export orders aggregating approximately $192 million, largely driven by optical fiber cable demand from international customers. Exports continue to gain share within the overall revenue mix. During quarter three of FY 2026, export revenues accounted for approximately 27% of total revenues, compared to 14% in quarter three of FY 2025, reflecting a significant structural shift in the business. Domestic revenues accounted for the balance 73%. This sharp increase in export contribution highlights HFCL's growing global footprint, improved acceptance among international customers, and successful execution of its export-led growth strategy. Development of new generation of Wi-Fi and UBR telecom equipment continue to be our focus. We are also in process of completion of delivery of eight rack units of units of 5G fixed wireless access customer premises equipment. We are also in continuous process of developing more advanced versions of customer premises equipment of 5G to be sold not only India, but worldwide. Production and supply of IP-MPLS routers has also started in bulk across the country from quarter three. These routers are being supplied all over India for the government's BharatNet program. We are in constant process of developing even the high-capacity routers, beyond the routers which have already been developed now. EPC project execution revenues remained relatively subdued during the quarter. However, it is important to highlight that while revenue recognition was slower, on-ground execution, planning, and preparatory activities remained steady and disciplined, which are expected to translate into a meaningful revenue uptick in the coming periods. HFCL continues to progress its defense business in line with long-term strategy and India's indigenization priorities. During the quarter, electronic fuses developed by the company underwent firing trials in January 2026, with further tests expected in coming months. HFCL secured defense orders across radars, electronic fuses, and electro-optic systems, including thermal weapon sights, reflecting growing acceptance of our indigenous capabilities. We also entered the UAV segment with indigenously developed thermal cameras for surveillance applications, supported by a domestic contract from a leading UAV manufacturer. Development work is in progress well across drone detection radar systems and foliage penetration radar, both of which are in advanced stage of validation. In addition, HFCL is actively working on specialized drone platforms through technology transfer initiatives, which is at an advanced stage of discussion. Looking ahead, the radar segment is expected to emerge as an important contributor over the coming years, supported by a growing pipeline and upcoming demand opportunities, including the expected RFP under the BMP program, wherein HFCL is one of the five shortlisted parties from countrywide. Our order book, as on 31 December 2025, stands at INR 11,125 crore, compared to INR 9,981 crore in quarter two of FY 2026, and INR 10,410 crore in quarter three of FY 2025, reflecting sustained order inflows and improved visibility. The mix of our revenue continued to improve. Product revenues constituted 60% of total revenues, while project revenues accounted for 40%, compared to 51% and 49% respectively in quarter two of FY 2026. Exports contributed 27% of revenues during the quarter, up sharply from 14% in quarter three of FY 2025, highlighting the growing global relevance of our product portfolio. During the quarter, we successfully completed an issue of INR 550 crore through qualified institutional placement. This capital raise will support capacity expansion, R&D investments, debt reduction, and funding our long-term working capital requirements, ensuring we remain well-positioned for sustainable growth. During the quarter, HFCL received ESG ratings from multiple independent agencies, all reaffirming the strength of our sustainability practices. We also published HFCL's first sustainability report for FY 2024-25, providing transparent disclosures of our environmental, social, and governance performance. For us, sustainability is central to every aspect of how we operate and build long-term value. It shapes our choices on resource efficiency, guides how we engage with communities and partners, and anchors the trust we build across markets. Our ESG efforts are therefore integral to strengthening HFCL's competitiveness, resilience, and reputation as we grow. Friends, coming to our consolidated financial performance for the quarter. Revenue for quarter three FY 2026 stood at INR 1,210.79 crores, compared to INR 1,043.34 crores in quarter two of FY 2026, and INR 1,011.95 crores in quarter three of FY 2025. EBITDA stood at INR 243.52 crores, compared to INR 203.36 crores in quarter two of FY 2026, and INR 171.89 crores in quarter three of FY 2025, with an EBITDA margin of 20.11%. Profit after tax stood at INR 102.37 crores, compared to INR 71.92 crores in Q2 of FY 2026, and INR 72.58 crores in Q3 of FY 2025, with a PAT margin of 8.45%. Revenue on nine months FY 2026 stood at INR 3,125.15 crore, compared to INR 3,263.8 crore in nine months of FY 2025. EBITDA stood at INR 489.82 crores in nine months of FY 2026, compared to INR 529.08 crore in nine months of FY 2025, with an EBITDA margin of 15.67%. Profit after tax stood at INR 144.99 crore in nine months of FY 2026, compared to INR 256 crores in nine months of FY 2025, with a PAT margin of 4.64%. As we move forward, our priorities remain firmly focused on enhancing our revenue mix, expanding margins, disciplined execution, technology-led differentiation, prudent capital allocation, and the continued expansion of our global footprint. Building on the strong momentum achieved, we remain confident of sustaining this performance in the coming quarters. With these foundations in place, we believe HFCL is well positioned to deliver consistent and sustainable value for our stakeholders. I would like to thank you, our employees, for their dedication, our customers and partners for their trust, and our shareholders for their continued support. Thank you. We will now open the floor for questions. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles... The first question is from the line of Dhaval Jain from Sequent Investments. Please go ahead. Am I audible, sir? Yeah, yeah. Yeah. So firstly, congratulations on good set of numbers. So I just needed help with Q3 as well as nine-month FY 2026 data of OFC as a percentage of total revenue. And if possible, can you provide me with the similar numbers from the last financial years and along with the margins? Well, OFC, as a percentage of total revenue, Right. A minute, because I've got products at INR 722 crore, and out of that, OF and OFC has... Roughly, it would be, I would say, no, this, of the product revenue, it is 80%, and the product revenue is 60% of the total revenue. So it would say that 48% of the total revenue has been OFC. Is this for Q3 or nine-month, FY 2026? This is 9 months. Just what I told you, the 9 months. Okay. So, what is the current margins on OFC that we have right now? Current margin on OFC would depend on different kind of cable, you know, what we manufacture, high quantity, high capacity cable, low capacity cable. But roughly, you can say 10%-12% net margin. Okay. So, can you repeat again? I just lost you on the line. You know, roughly, it would be about 10%-12% of, you know, margin as PBT, depending on what kind of cable we are manufacturing. Understood. So, again, on the, this front on the OFC, what is the current realization in this quarter that we had? Because I think last quarter it was INR 965 per... So what is the current realization? Current realization would be roughly about INR 1,065 per fiber kilometer, as against- Okay 964, which was there in the previous quarter. It has gone up by roughly INR 100, you can say. Right. So, we like, it's almost a 10-15% increase since the last quarter. So do we see, like, it going to keep on increasing further or, what cycle are we at in terms of realization? I expect it to increase further by at least another 10% or so. Looking at the demand from data centers, I expect it to increase at least 10% or even more. Right. And just one last question. So, in terms of, like, the OFC, what is our share in domestic versus international markets? Look, international market, I cannot say, because the data I don't have available. But the domestic market, we should be, you know, this is again, a very unsubstantiated figure, because these are never published by any authentic agency. But my estimation, we should be nearing roughly about 50%, roughly about 45%-50%. Very roughly, you know, this is my top of the head calculation, but I shouldn't be much wrong. But, this would be your shares, right? Yeah, I, my share. I'm talking of my share. Right. Right. Okay, sir. Thank you. I'll get back on the queue. Yeah. Thank you. The next question is from the line of Bala Subramanian from Arihant Capital. Please go ahead. Good evening, sir. Congratulations for good set of numbers. My first question, sir, I think these have been developed electronic fuses. I think we got initial approval also. When we can expect final approval, and what is the total addressable market in India and global level, and which are the players got approval in India, and how much average prices per fuze? And final- You are asking too many questions in one line, you know, I wouldn't even remember. So I rather reply one by one, you know? Yeah. As far as approval in India is concerned, there are only two companies who are manufacturing electronic fuses from long time, under transfer of technology from foreign companies. They are not their own developed fuses. Which is Bharat Electronics and ECIL, both government companies. They have a transfer of technology agreements, one from Israel, and another from, I forget the name of the company, of South Africa. So, we are the one who have designed the fuses indigenously. Firing, test firing took place on 20th January in Balasore this year. There have been some successes and some cases, some improvement is required in the fuses. So we are doing those improvements, which have been required by DRDO while testing. So those improvements are being carried out, and retesting of those fuses will be done in April. And I'm quite sure in the April testing, they will be completely approved. So that is as far as the Indian manufacturers and, you know, approval are concerned. There's no indigenous design and manufacturer who have got any approval. I am sure, I think we may be the first one to do that, you know. But these are, you know... One must realize, fuses are very, very critical components, you know, which makes the ammunition blast. Particularly, the proximity fuze has got a small radar in it, which measures the distance between the bomb and the ground at a speed which is faster than the speed of sound. You can imagine that what kind of criticality it has got. So it needs some more improvement, so which we are doing... But I'm happy that, you know, from this testing, we have learned few things which are getting implemented in the new set of design, and April testing should be final, and approval one. It looks to be like that. Now, in terms of demand, you know, I don't have number for the worldwide demand, but right now, India itself, I think, requires about 500,000 fuses every year, India itself. And globally, if you see, the demand would be much, much higher in multiples because of the wars going around, you know. This demand is directly proportional to the geopolitical situation. Right now, with the Russia-Ukraine war and ammunition of all European countries, United States, getting, you know, or, you know, many other countries going to Russia or Ukraine, getting consumed, these countries need to really build up their stockpile again and supply more to the warring countries, whether it is, Russia, whether Ukraine or any other place. So demand is substantial, you know. Proximity fuze demand is substantial for 155 mm, and that is the highest demand. It's a substantial demand. So I don't have the exact number, but demand would be multiple times more than what is required in India. Okay, sir. So follow up with electronic fuses only, and what is the current, like, average prices per fuze on the industry level? And, Depends on which fuze, which caliber you are talking. There are different fuses, different calibers. But just one example of a proximity fuze of 155 mm gun, would currently, in today's market, should be at least INR 25,000-30,000 per fuze. Okay, sir. And what kind of capacities we are planning to build, sir, for electronic fuses only? Yeah, well, when our fuses are completely approved, we would be looking at about 100,000 fuses per annum. Okay, sir. Sir, actually, we have guided 20% kind of revenue growth. We ended up nearly 20% kind of growth in Q3. I think we have to do, or to achieve, growth by doing nearly INR 1,600 crore plus kind of revenue. Is there any deferment in export order? Is there any delay in shipments in Q3 because of tariffs? Currently also, U.S. and India, the trade deal have been improved from 50% to 18%. I just want to understand how we can able to take advantage of this. And secondly, You know- Yeah. Look, you know, this tariff decrease has been announced last night only. Yeah. People are, you know, doing some guesswork, you know. Some clarity is still to be achieved in terms of whether it is immediate or whether there will be some gradual. But assuming it is immediate, of course, it opens up the environment for everybody and improves the situation for all in-country manufacturers. For, you know, all, particularly for telecom equipment, the tariff was 50%. So if it-- when it comes down to 18%, it's a substantial advantage to all telecom equipment manufacturers. Now, in terms of revenue, of course, you know, revenue shortfall was there in the Q3, particularly on the export segment, because of the tariff issue. Lot of shipments which were made by us to United States, for example, you know, to United States, which are the major part of export, all those shipments were stuck at the airports, you know, or the seaports, for the want of clearance because of the tariff issue. Because it was getting very extremely difficult at U.S. customs to determine the tariff, whether the tariff of India applies or tariff of China applies, because some of the part component or part has come into that equipment or cable from China. So, you know, this was really a big, big problem. So for two months' time, it remained a big problem for everybody, not only for HFCL, for everybody and many of the countries, you know, where this difference of tariff was coming. Whether a shipment arrives in a 25% regime or 50% regime, you know, all these kind of situations was there. 1.5 months, we all suffered, and unfortunately, we had to pay a lot of damages also at the ports or the airports, because not to our fault that shipments were not getting cleared, but because of ambiguity in the tariff structure, it was creating trouble, and we had to pay a lot of damages also. But anyway, that was out of our control. That problem, as I said in the beginning, has eased out from mid-December, and now the situation has become absolutely regular, there should not any impact going forward. Going forward, I think our revenue in this current quarter would also show some growth. Percentage, I cannot say very clearly at this point of time, but yes, it can be somewhere around 10%-15% or little bit more. But more important is the profitability. You would see the profitability percentage, profitability on an overall basis, has increased by year-to-year basis. You see there's an increase of 41% in the profitability. Revenue is still remaining around the same, but the profitability has increased by 41%-42%, which is a significant growth. You know, that growth has come because of our efforts to reduce cost, at the same point of time, innovation, new kind of products, and because of being able to manufacture, design and manufacture those products, which are not so easy to design and manufacture. You know, like high count, very high count fiber optic cable, not so easy to design and manufacture, which we have been able to do. As a result of this, there has been a better profitability. So key issues, I would like to say, there is some shortfall in revenue than what we expected in terms of growth, but there is considerable increase in the profitability. Q1 of the current financial year was a loss, but now we have come into profit. And as I can see, looking forward, you know, just as a, you know, perception of the management from current performance, when we come to the year-end, our profit would be much better than what we did in the last year. It would be much better. Even if we maintain the momentum which has been there in Q3, our profit will surpass the profit of last financial year significantly. Okay, sir. It's very clearly mentioned- Mr. Bala Subramanian, I'm sorry to interrupt you, sir. I will request you to kindly rejoin the queue for follow-ups, please. There are others who are waiting for their turn. Thank you, sir. Thank you. Ladies and gentlemen... Thank you, sir. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to only two per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Bajrang Bafna from Sunidhi Securities. Please go ahead. Congratulations, sir. Good set of numbers. Mahendra Ji, just would like to understand, because there are multiple media articles, and we are hearing from the industry sources that there is a severe shortage of raw material, which is your germanium and preform. And since we don't have those capacities with us, how the prices of these have moved, and what sort of supply arrangements that we are having, you know, for this preform and the other raw materials? If you could just guide us, will be really helpful, sir. Yeah. You know, very good question. But, you know, we don't manufacture preform, you know, so germanium and all these are required for manufacture preform. Preform we import from, mostly from Japan. More than 90% we import from Japan. Yeah, and whatever quantity we have contracted with Japanese manufacturers are being supplied regularly to us. We don't face any shortage. No shortage is being faced by us at all. They are supplying to us, as they have contracted. You know, our capacity requirements for our fiber draw, for which the preform was required, is being fulfilled by Japanese manufacturers. Yes, we are also now taking steps to move ahead in manufacturing preform. You know, this is another step company is working on, and we should be able to finalize our plans in very near future. Because with this kind of a huge capacity requirement, where we require preform to in such a large quantity, because huge capacity of fiber and cable both, we need to have some security for some raw materials also, some part of raw materials also. So we are working on that plan, but right now, we don't need germanium and all those things, you know? Our requirement of preform is filled up by our suppliers adequately. How the prices have moved, sir, in that preform? Look, prices, you know, will move up. You know, our contracts which were there are in process at this moment of time, you know, those prices, whatever we agreed few months ago. But as far as, you know, my opinion is that prices would move up significantly by at least 20%, at least 20%-25%. With the result, you know, as there is, I am seeing an increase in the cable price of 10%, and it will move up by another 10% or so in near future. Similar is the fiber price and similar would be the preform price. It would move up by some 20%-25%. Okay. And my second question is, on the new age cables, which are required in hyperscalers and in your rollout of data centers, which is either hollow core or multicore. So how are we placed in that technology? And, you know, how do we see that, you know, the demand that we capture either in India or in U.S. or European markets, so in terms of that niche? Very early stage of these kind of fibers. Multicore fiber, I don't foresee much of the demand happening, because multicore is... You know, it does not reduce the transport cost. It only reduces the space required by fiber. But, you know, already there are technologies available where we are packing, you know, up to 13,000 fibers into one single cable of a small dia. So multicore fiber, I don't see so much of a high demand in future. But hollow core fiber, yes, it may catch up. It is in very early stage of development. Very, very early stage of development. We have also tied up with two large institutions of R&D to develop hollow core fiber ourselves. So we are in, already in process of development of hollow core fiber. There is a dedicated team which we have put forward, put in place in the company, with certain R&D institutions to develop hollow core fiber, which we believe would catch up some attention of the hyperscalers, like Microsoft have bought this Lumenisity and all that. But it is still couple of years away, but we are already taking steps to develop hollow core fiber. Got it, sir. Thank you, and all the very best, sir, and will join in the queue. Thank you. The next question is from the line of Smit Gala from RSPN Ventures. Please go ahead. Yeah. Thank you for the opportunity. A couple of bookkeeping questions. To start with, I want to ask bookkeeping questions. Sir, you mentioned previously on the call that we will be growing 10%-15% on revenue. This is my understanding correct, that this revenue growth will be sequential? Secondly, we have seen a big uptick in the depreciation expense. So, what are the levels or the run rate going forward we'll see, or this is the run rate we should follow for the next couple of years from now? No, your second question on depreciation, you know, the fiber optic, new fiber optic fiber plant has come into operation, so that, you know, depreciation charged on that new plant, you see, so that's why the depreciation has increased. Seen some increase. What was your first question? Yeah, my first question is, you mentioned on the call that we will see 10%-15% growth. I understand this growth, it will be sequential growth and not- Yeah. Year-on-year growth. Yeah, it will be sequential growth, of course. Okay. Next question from my side will be, are we on track to expand our capacities as far as IBR cables are concerned? Because we have not seen any rise in capacity from Q1. So, had the expansion stopped for one quarter, there were some minor disruption or something like that? No, no. No, no. No, no. We are fully on track to develop IBR capacity, because that is the only way you can pack 3,600 or 6,900 fibers in one cable, you know? That is the only way. We have significantly expanded our IBR capacity, and it is continued to be getting extended. It will keep on happening till May, June, for which machinery orders are already in place, and machineries are arriving one by one by one. Because the machines are not available altogether. There, you know, there are very few manufacturers of those machines, quality machines. You know, non-quality, you can buy as many, which you don't want. So they're coming one by one. That capacity is under continuous enhancement, will be completed by May, June of this financial year. The current rate, current, you know, expected capacity, but if we find more demand coming up, which I am certain that it would come up, but fiber availability may become a constant, but cable demand would be there. But if we are able to solve the fiber issue, we would be expanding the capacity further. Okay, one last side question I'll squeeze in. Can you give me a split between the 5G products and OFC for this quarter, for the three? It's about 80/20. Okay, so it is 80/20 of the 7/22, which we have provided. Yeah, yeah, absolutely. Yeah. Thank you. I'll join back with you. Thank you. The next question is from the line of Sanjay Shah, from KSA Securities Private Limited. Please go ahead. Yeah, good evening, sir. Good evening. Sir, thank you for giving fantastic understanding about the market demand and, growth trajectory of the HFCL. So my question was regarding, our plan, expenditure, what we need to do on 329 acres we have got at Andhra Pradesh, and which are the products that are we going to develop over there, and, how that, commercialization of that project will start? Mr. Shah, thanks a lot for your good question. First of all, this 329 acres would be eventually 1,000 acres. Balance 673 acres or so is still to be allocated by Andhra Government, which they are going to allot contiguous to our land, which is under their acquisition process and all that. That is number one. So total, it would be 1,000 acres. The plan to do is to manufacture ammunition there. Because ammunition needs a large space to manufacture, because there should not be any habitation near about places, because if any unfortunate accident takes place, human life should not come in danger, in any unforeseen circumstance. So you need a large open space by law to manufacture ammunition. For example, we already have taken technology for Multi-Mode Hand Grenade from DRDO, which has been successfully manufactured and tried by technology provider, DRDO. And now it is under the approval of clearance of DGQA, what we call from Army. Because of you know time frame, you can preserve this and all those kind of things, which is happening right now. And in next three months' time, we should be able to offer it to Army for the requirement. For the demand is immense. Lakhs of the grenades are required every year, just for practice. Every infantry soldier or the other soldiers have to you know throw three grenades as a practice every year. So you can imagine you know kind of a lakhs of the requirement which is there. So this is just one. We are also exploring the possibility of manufacturing more ammunition also. More ammunition means ammunition. Fuze, we are already in the process of development and final phase of development, after the current field trial and the next field trial. So we also wish to develop the shells for 155 mm gun, which we have fuze already we are developing. We are also working on some of the ammunition, but precision-guided ammunition. One is a dumb ammunition, which you fire, and it goes and falls depending upon your aim and all that. But then there are some precision-guided ammunition, which, which is fired, and it goes with some sort of a GPS or other kind of a, you know, technology, gets down to that precise area where it is intended to. So-... This land is predominantly for the ammunition purposes. That's why this is a large land required, as per law. So, what will be the CapEx required for that, and how we are going to re- Early to say that, Mr. Shah. Too early to say that at this point of time. Okay. So now, sir, we have grown and we have done a lot of CapEx in the last few years, and we have increased all the capacity on all the fronts. And now we are here to encash the advantage of that CapEx and make our company more profitable into utilizing all the CapEx. Now we need further CapEx of growth because we are going for this new project, plus we are going for expansion of our optic fiber capacity and all. And plus the business, where we require working capital inventories and all. So how do you plan to raise money? Do promoter intend to increase their stake from here at the current enterprise value, which is the lowest what we feel in the industry? Look, you know, first of all, increasing the capacity for optical fiber cable will not matter much, you know, will not require much of the money. Of course, when we go for creation of any large scale defense manufacturing capacity and all that, yes, that would require. Promoters have willingness to increase their stake. We have the willingness, but all depends upon shareholders' approval, regulatory clearances, it is all subject to that. Willingness is of course there. That shows great confidence, sir. Thank you very much, and best of luck for you. Thank you. The next question is from the line of Satya, an individual investor. Please go ahead. Hello, namaste, Nataraji. Yes. Nataraji, my question was on the services side. This time, we have seen a loss of about INR 11 crore on the services side. Why has that been the case, and how do you see that going forward? No, these are O&M revenues, and going forward, O&M revenues is going to increase significantly. First of all, Army's O&M phase is to start for the NFS, which we created, I think next couple of months or maybe by April maximum. So that would be about INR 170 crore per year. INR 170 crore. Then the O&M phase for other equipment we have supplied, you know, which, OTN or, you know, a couple of other equipment, UBR, and, you know, which we have supplied to BSNL. That O&M phase is to start. And some of the private operators, we have supplied equipment, that O&M phase is to start. So O&M revenue is going to grow significantly. In my opinion, after three years, our O&M revenue would be something around INR 450-INR 500 crore per year. Hello? Are you able to hear? Mr. Satya? Mr. Satya- Can you hear me? You are not audible. Yes. Yeah, yeah, yeah. We hear you. Can you hear me now? Now we- Sir, my question was also on the profitability side. This time we seem to have recorded some loss over there, so how are we expecting that to change over the future? You know, as you know, you know, it is when you are in the warranty period and all that, there is expenditure, but there is no revenue. Revenue starts after the warranty period is over. So in that kind of a period, you incur loss. But when you are entering into O&M phase of the AMC, the revenue starts coming up. Like as I said, in the Army project, we expect the revenue starts coming up from April, when the AMC contract would take shape and start. So then the revenue starts coming. Right now, we are spending money, but it's not going to continue for more than a few months now. Right. Good. Sir, one question on the 5G equipment side: How is the traction over there on the FWA and UBR products that we have? Look, you know, UBR is good for 5G, 6G, 4G, everything. And that is, of course, we are now moving into Wi-Fi and UBR, all put together, we are going to move into next generation, from Wi-Fi 6 to Wi-Fi 7, you know. That's the plan we have, and we should start the development pretty soon. As far as the FWA CPE is concerned, the in-country demand of FWA CPE seems to be reducing because people are using alternate technologies based on unlicensed band, point to multipoint unlicensed band, which we don't do. Of course, we are doing point to point only. However, routers, which are again required in 4G and 5G network both, that there we have got a significant traction, particularly in BharatNet, because U-router is required in all kind of networks, you know, whether 4G, 5G, wireline, wireless, every kind of network. There we have seen a significant traction. We have already got orders for over 100,000 routers, which would amount to be about INR 700-800 crores. We are in process of getting more orders. Right now, even we are not taking many orders for routers because we have a constraint of supply, because of component availability and all that, so we don't want to trouble the customers. We first want to deliver some good quantity, then take more orders. But routers have got good traction. They have already been installed in the field. Connections are already being given to customers by the people who have bought the routers from us, which are the private parties. So, that has got a good traction. For CPE, we will now start working on trying to sell it in the international market. So would be UBR and the Wi-Fi systems. Sir, quick follow-up on the UBR. We were developing point to multipoint, right? I'm sorry to interrupt you, sir. Sir, I'm sorry to interrupt you, sir. Sir, I'm sorry to interrupt you. No, just, just, just a minor follow-up, ma'am. Sorry. Just a minor follow-up. Like, we were developing the point to multipoint, right, sir? Are we, where are we in the process of that? Look, point to multipoint, we have not yet started developing. We have not yet started. We are just looking at worldwide, how much is the demand, you know? In India, there is a significant amount of demand from one operator, but other operators are not using it. Worldwide, unless we see, you know, multi-country demand, we would really hesitate to do that, you know, because just because demand of one customer and in one country, we don't want to take an expensive development by like that. On the contrary, point-to-point demand is good, and the development expense is also less, and it's less risky. So unless we are 100% satisfied about point-to-point multipoint demand worldwide, we would not really go into that. You know, it's a spectrum issue. If you look at the large development in the United States and all that, operators have a much larger amount of spectrum, so they don't need unlicensed band radio. They are very happy within the licensed band, and they can give large capacity to a large number of customers using the licensed band. So that is the difference. Thank you, sir. We'll take the next question from the line of Rishabh Basa from Indsec Securities & Finance Ltd. Please go ahead. Yeah. Hi, sir. First of all, congratulations on a good set of numbers in 3Q, FY 2026. Sir, I wanted to know from an AI and a data center perspective, what are the kind of opportunities we are seeing for our products and services portfolio? What is our current position versus our closest peers? And also, what kind of benefits do we foresee from the recent favorable budget announcements? So can you just put some color so that it becomes clear for us? I would not put color. I will put the plain color as it is, you know. Okay. So, you know, basically, data center and hyperscaler demand is really propelling, the fiber optic cable and associate industry, as far as HFCL is concerned, to a very next level. Because if you look at the telecom operators, the cable required, you know, maximum 288 fiber, we never supplied more fiber count than that to any telecom operator. Now, data centers don't even look at 288. They are talking of 3,900 fiber cable, 6,800 fiber cable, you know, that kind of a capacity. So per kilometer cost is multiple high, multiple high, so revenue also would go up. Since those kind of cables are manufactured by very few people, because not everybody has the ability to design, develop, and manufacture those kind of cables, which is very good for HFCL, because we are one of the company who are designed, developed, have got capacity machines, to be able to manufacture those kind of cables, which has really lifted our optical fiber cable business to next level. So, it has provided a very, very large opportunity for companies who have got this technological and manufacturing capacity. Moreover, we did the expansion in right time. We could foresee this demand coming up. We did our expansion. As a result of that, not only expansion, but design also. As a result of that, today, we are able to supply to these customers who are using these kind of cables all across the world, you know. We are not supplied in India. Everything what we produce of this kind of cable is getting exported. There is so much of demand we have, and in fact, now we have to refuse orders because we don't have capacity to manufacture that kind of a requirement or a demand which is coming up. Now, second opportunity which this market has given is passive connectivity solution, like MPO cables, like other passive connectivity solution, which, as I said in the beginning, is going to get us at least, at least INR 500 crores of revenue in the next financial year, at least INR 500 crores. Our people have gone abroad, got trained on various kind of technologies, manufacture of those passive connectivity solutions, have come back pretty recently, and we have started receiving orders for those, those kind of PCS connection, connectivity solutions. Once we complete initial part of supply, you know, INR 400 crore-INR 500 crore looks pretty easy to achieve. So demand is there for fiber optic cable, demand is there for accessories, passive connectivity solutions, which has given us very good opportunity. Thank you, sir. The information was quite helpful. Thank you. Thank you. The next question is from the line of Abhishek Kumar Lika from Nest Wealth LLP. Please go ahead. Nahata, good evening. Congratulations on good set of numbers. My question is on fuze test. Management was quite confident on the fuze test outcome as per last many calls, and given that fuze test took almost 18 months to rectify and meet standards, what comfort can the management provide from here on its commercialization and timelines from here on? Look, Abhishek, you know, as I said, these are quite complex products. I might be very confident, but there may be still some improvement required because, you know, assuming the fuze malfunctions, you would have heard one incident in Lebanon, when that two thousand-pound bomb or some 20,000-pound bomb, whatever, the Mother of All Bombs what U.S. calls. They dropped, but it did not blast, and it was just lying there. You know, a bomb which could have destroyed the bloody entire locality, which just did not blast, was lying there. Why? Because the fuze did not function, and bomb did not blast. So fuze is a very, very critical piece. It requires a very, very high degree of precision, particularly the proximity fuze, which is where we had some technical issue. So which is being rectified, you know? When something goes at a speed more than the speed of sound, and it measures the distance, the radar inside measures the distance between ground and the bomb, you can imagine what kind of precision is required. So those things, you know, are going to be little more calibrated. So that is happening now. And I'm sure by April/May, when the next test phase of test takes place, it should be successful. But if you see, you ask comfort, I can only say that I am quite confident that it would happen. It has taken years for companies to reach to that level of precision, but we are doing it at a much faster pace. But it needs some patience, you know. Military products, you know, even they need very high degree of precision, particularly something like fuze, which is a small part of the bomb, but the most critical part of the bomb. I understand that. The only thing was, like, what was worrying was, like, it took almost 18 months to get the next date from DRDO timelines. So if, if- It was not the DRDO getting, giving time. Uh-uh. It was ammunition which was not available from the MIL, the Munitions India Limited. Yes, yes, yes. Sorry, on that, yeah. That ammunition is available with us now. So DRDO testing is not the problem. Problem was the ammunition, which is now- Okay Being available. Thus, it would not take that much time. Okay. So can you just provide some kind of revenue visibility for 2026, 2027, in case of defense line of products and all? Defense line of products, I think we can, should be something like INR 400-500 crores, something like INR 400-500 crores. Next year? Next year. Okay. Look at the defense. You must understand. So you know, it takes a lot of time to build a defense capability. Approval of product itself is a big issue. But once you get in, some product is approved, then you continue to sell it. The BMP upgradation, for example, we are one of the five shortlisted parties. Trials will take place, the tender would happen, and open... Assuming we win, assuming, I'm not saying that we will win, assuming, then we straightaway get thousands of INR crore order, and consistently we are supplying for seven, eight years. So takes time, but I'm sure, you know, larger tenders also will come in our way. Yeah, we look forward to that day when probably what is being envisaged is actually getting achieved. Yeah, sure. Yeah. And just one last squeeze. The active communication devices and the data centers and the huge cloud that is expected over the next few years because of the income tax holiday that has been provided by the government, what kind of opportunity that HFCL can get it from there? Look, you know, basically, when new data centers are getting created, all whatever we are supplying to data centers would be in demand in India also. Right now, we are exporting, then there will be demand in India. Right now, data centers are coming up in India. Some of the key players are putting up data centers, but not, still not to the level what is happening worldwide, you know? If you look at the United States, for example, one company just announced that they are going to spend $150 billion in CapEx on data centers. Just, just one company. The scale is much different. But yes, with these concessions, I expect that data centers will come up in India, because data generation is huge in India, because of our own population and usage of mobile phones and the data generations out of that. So there is a lot of data generation, a lot of storage, and those capacities are required in India. So when that happens, so the same product which we are exporting will be required in India also. That is an increase in market size for us, and we can increase our capacity to serve our own country's requirement. Okay. Yeah, thank you so much. Thank you. The next question is from the line of Pushkar Jain from Milli Capital. Please go ahead. Congratulations on good set of green numbers. I just wanted to know, what is the current average realization for bare optical fiber? Bare optical fiber, currently the price would be different for different type of fibers. But I will tell you, you know, as a general, from the point of view of comparison, what we have been doing previously, the price is, was about INR 250 per kilometer in December. Right. Now, February... You know, this December number I'm giving you because that was the price we purchased on average price in that particular quarter. Now, if you see, these prices has gone up. This would be nearly about, you know, I would say, INR 300 plus. Okay. Do we also sell bare optical fiber, or we just use it for our internal? We don't sell. We don't have the capacity to sell. We are rather buying bare optical fiber from other players. Right, sir. And also, in light of so much capacity coming on stream next year, can you give us some guidance on the numbers? How do you see it? Look, you know, I would not give a guidance. I can only give my perception and expectation, because guidance would be a wrong word to use. Yeah. But fiber optic cable, you know, but we have been looking at about INR 2,400 crore of revenue from fiber optic cable business this current year. Next year, I think it should be able to cross INR 3,500 crore. This is not my guidance, but my estimation on the basis of current demand, what we have in the country and export, and also at the same point of time, the passive connectivity solution demand, which I expect, and also the shortage in the market. That is my best, you know, very, I would say more or less conservative expectation that we should be able to reach to INR 3,500 crore in fiber optic cable business in the next financial year. Right, sir. And on the margins, you can- I'm sorry to interrupt you, sir. I would request you to kindly repeat. No, no, just I will answer him. Just, I understand. Okay. Margins, you know, I think it should remain around 10% PBT margin should always be there. Okay, thanks. On EBITDA, it will be like 18 then, somewhat in this range only? Yeah, EBITDA would be same range, you know. PBT is the same range, EBITDA would be in the same range. Right, right. Thanks. Thanks a lot, sir. That clarifies a lot. Thank you. The next question is from the line of Amal Ahir from Radon Capital. Please go ahead. Am I on mute? No, sir, your voice is breaking, actually. Is it now? Please use your handset. Yes, please proceed. Yeah. So what I want to ask is the optical fiber cable and optical fiber production capacities that you are adding by, is that going to increase? And what will be the revenues they'll bring in, sir? Yeah, mister, your voice is broken again and again. I could not even understand your question. Is it okay now, sir? It is right now okay, but please tell your question again. Yeah, sure. The optical fiber cable and the optical fiber production capacities that you're going to expand, when will that commence, and what revenues will that bring in? No, I already said that, you know, that production capacity enhancement is already in process. It is already happening. It is happening step by step, because all machines are not delivered at the same time. So it is already in process. The cable capacity enhancement, what is the current stage we have planned, would finish by May, June this year. And the fiber capacity expansion would finish by December this year, because our machines delivery is a longer timeframe. So that will finish by November, December this year. So that is as far as capacity enhancement is concerned. As far as the revenue is concerned, I just now said, you know, to the best of my expectation, depending on the current situation and best of my knowledge and expectation, we instead of INR 2,400 crore, which we have planned for the current year, we should be able to reach INR 3,400-INR 3,500 crore in the next financial year for the fiber optic cable business. Okay, sir. Thank you so much for answering my question, sir. All the best. Thank you. Thank you. The next question is from the line of Arun Malhotra from CapGrow Capital. Please go ahead. Yeah. Mr. Malhotra, I'm sorry to interrupt you, sir. Your voice is breaking basically. Yeah. Am I audible now? No, sir, you are not audible. I'm- You'll have to use your handset, sir. Yeah, yeah, I am using my handset. Am I audible now? Now, now- Yeah, yeah, now you are audible. Go ahead. Go ahead, Mr. Malhotra. Yeah. So what I was saying, when the outlook for the OFC business and the defense business is so good, why are we diluting the existing shareholders? We have done equity raise in 2021, 2023, and now again in 2025. So... And our debt to equity is still quite low. So why the equity raise at such low valuations? You know, you need money for growth. Now, question is, if you need money for growth, more working capital, and what else you can do? You have to raise money, no? You have to raise money and also you- But you can always raise debt, because debt is always cheaper. No, it's not necessarily that we will raise debt only. We raise debt. We have raised some debt also. We have raised equity also, both. Combination. It's a combination of both. Okay, because your stake has come down from 39 to 28 in the last 3 years, when the prospects of the business are the best. So that's my- No, but we have diluted our stake to be, you know, we have invested our own money in the company. Okay, I was saying promoter shareholding. Okay, I got your point, sir. Second point was, the percentage of the order book towards government is right now close to 70% as per the presentation. Yeah. But percentage of the current revenues is only 20%, because 80% is private. Am I- Yeah, yeah, that is right. You know, that is right. You must understand. So that means the mix in the future will change? No, no, no, no, no. You know, government, and that's what I... You must understand. A good question and good observation. Look, you know what happens? The government orders have come in a bunch. BharatNet, for example, which is a 3-year order, but is a multiple thousand crore order. So when you see the order book, it looks large, but execution is in 3 to 4 years. So execution takes time. So percentage of revenue goes down, whereas the private sector orders come in smaller numbers, INR 200 crore, INR 300 crore, INR 100 crore, INR 50 crore, and that execution is also faster. So private sector order booking will remain always lower than the government sector, but revenue would always be higher from the private sector than the government sector. And again, another point you should see, the O&M revenue is also in the part of the government revenue, government order. So O&M revenue bunched with the, you know, the order book of the current equipment and all that becomes even higher. So, you know, the current order book for the O&M itself is about INR 3,000 crore. So because of O&M, it looks higher. Sure, sir, sure. Thank you. That's it, sir. Thank you. Thank you. Before we take the next question. Hello. I'm sorry. Before we take the next question, we would request all the participants to kindly limit their questions to only one per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Saket Kapoor, from Kapoor & Company. Please go ahead. Yeah. Namaskar, Mehta Ji, sorry- Sir, [Foreign language] When we look at our revenues on a consolidated basis, the revenue is at INR 1,211 crore. And when we look down at the profitability, the profit from the telecom product is at INR 202 crore, with revenue of telecom product at INR 722 crore. Jain? [Foreign language] [Foreign language] [Foreign language] standalone basis is that it has multiple businesses, including optical fiber cable, telecom product, turnkey projects and all that. When we come to the consolidation, it is mainly HTL Limited and HFCL Inc., which is 100% subsidiary in US. So these two companies are exclusively into optical fiber cable business, where the margins are also higher. So what happens eventually, HFCL and HTL manufactures product here, cable here in India, and exports to HFCL Inc. In turn, HFCL Inc. sells materials to various respective customers. So, this last quarter, December ended, a lot of inventories got stuck there, so this revenue has not increased substantially, but the profitability is increased because of the revenue mix. So HTL and HFCL Inc., they are 100% optical fiber cable. That is how it is on a consolidated basis. Profitability looks much better than the standalone. Okay, so going ahead, the sales will get reflected and then at that time, the profitability will not be there. So we have booked the profitability for this quarter. There will be- Profitability will be there. Profitability is booked only when the final sale takes place to the end customer. Okay. Better would be, sir, I will take it offline. [Foreign language] You know, because, you know, when we sell it to our own company, we don't book the revenue or profit. It is booked when it goes to the ultimate customer. So with this unfortunate incident of tariff and all that, this all thing got stuck and, you know, that's how you see this anomaly. Okay, sir. And Jain- Yeah, yeah. We, it is... Sir, can you give me the net debt number and the cost of fund currently, or [Foreign language] [Foreign language] but we will try post this December quarter result, we can approach again to the rating agency. [Foreign language] Sir, approximately INR 1,500 crore, including term loan, working capital facilities, some bill discounting and all that, some payment to these MSME vendors and all that. They all taken together it is INR 1,500 crore. [Foreign language] Where, the level of work that we are doing, currently and the type of businesses we are, we should also look at people like CRISIL or ICRA or India Ratings as our consultant for evaluating our credit rationale also. That's a humble suggestion from my side, if that could be looked ahead in the near future, sir. Yeah, we can consider that with CARE. We are associated with CARE for a very, very long time. So, but we can explore all those, I mean, possibilities. Yeah. Okay, sir. Thank you, sir, and- Thank- We hope, yeah, for good performance going ahead. Dhanyavaad, sir. Thank you. Ladies and gentlemen, we'll take the last question for today, which is from the line of Parth Mehta, an individual investor. Please go ahead. Sir, my only question was, could you please throw some light on the guidance for 5G businesses for the next year and on the revenue front? And this sense you have guided, but the 5G product side, the revenue guidance for the next year. You know, some, there are products which are used for 4G, 5G, 6G, everything. So routers, for example, you know, that's used for everything. The UBR is used for all 4G, 5G, everywhere. So I would not be saying 5G products, but telecom products, I would say. So I would expect something like INR 500 crore. Okay. Okay. And sir, the services business, I understood that you said that O&M is also going to start contributing, and that is the reason why we have made losses, that because we are spending money at the moment. But, any guidance for service business going forward as well? No, no. As I said, Army alone, we should be getting INR 170 crore a year. There are BNG, OTN, UBR, all this. In three years' time, we say two to three years' time, INR 400-500 crore would be our revenue from O&M. Ah, okay. And O&M, normal service business, we are not, we are not continuing with that, is it? No, we are not doing any other normal service business except doing EPC construction and all that, but no other service business we are doing. It's the O&M. Sir, EPC business guidance, would you be able to give? I would say roughly about INR 1,000 crore. 1,000 crore a year? Yeah. So that is much- In the next year. Yeah, yeah. So that is much lesser than what we have been, we have been doing in the past, is it? No, past this year we would be doing INR 1,500 crore. We are intentionally not doing much of EPC, because that's not the area we are much interested. We are more interested in defense business, fiber optic cable business, telecom equipment business. EPC is not our priority business. So I would have got more contracts for EPC. Even if I want today, I can get another INR 1,000 crore contracts for EPC, but I am not taking that. Okay, sir. Got your point. Thank you so much, sir. All the best. Thank you. Thank you. As that was the last question for the day due to time constraints, investors may reach out to the investor relations team for any further clarification. Ladies and gentlemen, I would now like to hand the conference over to Mr. Nahata for closing comments. Thank you, and over to you, sir. Thank you very much, all my friends, shareholders, for this earnings call of quarter three. I am quite sure, based on the current order book and current demand scenario of the products which we manufacture, and the turnkey contracts we are in process of executing, that we'll continue to maintain the momentum which we have shown in Q3. The same momentum should continue to happen in the coming quarters also, because the demand of our key products, like fiber optic cable, and also some of the telecom equipment like routers, is very, very good, you know. It's a very good demand, and we have got confirmed orders in hand from large players. More orders are expected in near future and midterm and long-term future also. We will maintain the momentum what we have shown in the Q3, and I expect that, company would be able to show even further improved performances in the coming quarters. Thank you very much, gentlemen. Thank you for being with us today. Thank you, members of the management. On behalf of ICICI Securities Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.