Ladies and gentlemen, good day and welcome to the Polycab India Limited Q2 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Gandharv Tongia, Executive Director and Chief Financial Officer, Polycab India Limited. Thank you and over to you, sir. Thank you, operator. Good afternoon, everyone, and thank you for joining us. I hope all of you are staying healthy and safe. I am Gandharv Tongia, Executive Director and CFO at Polycab India Limited. On this call, we shall discuss the second quarter results, which were approved in the board meeting held today. We will be referring to the earnings presentation, financial results, and condensed financial statements, which are available on the stock exchanges as well as on the investor relations page of our website. Joining me today from the management team, we have our Chairman and Managing Director, Mr. Inder Jaisinghani, our Executive President Finance, Mr. Niyant Maru, and our Head of Investor Relations, Mr. Chirayu Upadhyaya. Let me now hand over the call to Inder Bhai for his comments. Good afternoon, everyone. I am happy to share that we had a strong Q2 FY 2026, marking yet another milestone in our growth journey. This quarter, we saw the highest ever second quarter and half-yearly revenue, reflecting the strength in demand and our execution capability. Our profitability also reached new heights, with the PAT touching approximately INR 700 crores for the first time in the second quarter, contributing to record half-yearly performance. I would also like to take the opportunity to welcome Mr. Niyant Maru, who will join us as the Chief Financial Officer from October 31, 2025, following Gandharv's resignation. He will serve in the role of interim CEO for nine months until a suitable successor is approved. With over four decades of financial leadership experience and confidence, he will further strengthen our financial strategy and support the company in the next phase of growth. With that, I would now like to hand over to Niyant for his initial address. Thank you, Inder Jaisinghani, for this warm welcome. I am actually privileged to join the leadership team of Polycab at such a very exciting time in the company's journey and also look forward to contributing meaningfully to Polycab's continued growth and value creation. The company has strong fundamentals, has shown consistent performance, and also has a commitment to excellence, which is very exciting. I am also excited to work very closely with the leadership team to further strengthen the financial strategy and continue delivering sustainable long-term value to all our stakeholders. Gandharv, I think it would be correct to hand over to you to take the call ahead. Thank you, Niyant. Before we move forward, I would like to take a moment to acknowledge an important transition within our leadership team. This will be my final earnings call as the Executive Director and CFO, and I wanted to briefly reflect on what has been a truly remarkable journey. I joined the organization as Deputy CFO in 2018, and it has been a privilege to contribute to its transformation from a privately held company to one of the top 100 listed companies in India today. When we went public in fiscal 2019, our market capitalization was around INR 8,000 crore. Today, it stands at over INR 110,000 crore, a testament to our strong execution, disciplined growth, and the trust of our shareholders, customers, and partners. Over the years, we have delivered consistent growth across every key metric, becoming the largest company by revenue and profitability in the electrical industry and a sector leader in margins, driven by our focus on efficiency and excellence. These achievements reflect the collective effort of our teams, the guidance of our board, and the spirit of collaboration that defines this organization. I am deeply grateful for the trust and support I have received, and I leave with immense pride in what we have accomplished together. Thank you, and I would request you to extend the same support to Niyant and the company as it continues its next phase of growth. Before I turn to the macroeconomic update, I would like to share a brief update on the income tax matter. As you would recall, in December 2023, the Income Tax Department had conducted a search at the company. Following the search, assessment orders for FY 2014-FY 2015 to assessment year 2023-2024 were issued during fiscal 2024-2025, resulting in a total tax demand of INR 525.63 million and interest of INR 175.58 million. The company appealed these orders. During the quarter ended 30 September 2025, the CIT appeals allowed the company to appeal in full, resulting in nil tax demand. The order giving effect to the CIT appeals decision is currently pending before the assessing officer. Now turning to the macroeconomic environment, major global economies are beginning to show signs of a slowdown in economic activity. In the U.S., indicators across the labor market, manufacturing, and services sectors are into easing momentum. In the Eurozone, manufacturing is being weighed down by softness in both Germany and France, where reforms are progressing more slowly than expected, affecting business sentiment. In China, manufacturing activity improved slightly in September 2025 but remains in contraction territory, constrained by weak export orders. In contrast, India continues to stand out as the fastest growing major economy. While external challenges persist, particularly around territorial uncertainties, India's strong domestic consumption base provides a significant buffer. The recent GST rate revisions are expected to further boost consumption, especially as they coincide with the festive season. While rural consumption remains down, supported by last year's good monsoon and this year's above-normal rainfall, urban demand has seen some moderation in wage growth. However, the combination of GST and income tax cuts and soft inflation is supporting consumer sentiment. Despite a rise in industrial metal prices and weaker currency, India's inflation outlook remains benign. Gold prices have risen sharply by over 40% this year, pushing headline inflation slightly higher, but core inflation remains moderate at 4.4% in September and even lower at 3.1%, excluding gold. With GST reductions likely to ease growth inflation further, it is expected that the overall inflation will remain under control. The real estate sector remains healthy, though with some sign of moderation. Meanwhile, government CapEx remains strong, growing 43% year- on- year till August 25, with around 38% of the FY 2026 outlay already spent. This provides confidence that full-year targets should be met easily. While some challenges persist, India's economic foundation remains strong, supported by sound fundamentals, proactive policy, and resilient domestic demand. The economy is well-positioned to navigate global headwinds and capitalize on long-term opportunities. I now hand over to Chirayu to take you through the financial performance for the quarter gone by. Thank you, Gandharv. Let me now take you through slide four of the earnings presentation. For the quarter ended 30th, September 2025, we are pleased to report that our consolidated revenue grew by a strong 18% year- on- year, driven primarily by robust performance in our wires and cables business, supported by healthy growth in the FMEG business. Our EBITDA for the quarter grew by 62% year- on- year, significantly outpacing revenue growth. This translated into a 430 basis points year- on- year and 130 basis points quarter- on- quarter improvement in EBITDA margins, which stood at 15.8%. The margin expansion was supported by strong profitability in the larger wires and cables business. At the PAT level, the company delivered its highest ever quarter two PAT at approximately INR 7 billion, reflecting 56% year- on- year growth. PAT margins improved by roughly 260 basis points year- on- year to stand at 10.7% for the quarter. Finance costs came in at INR 484 million, while other incomes stood at INR 454 million. A detailed breakdown of these line items is available on slide 19 of the presentation. We continue to maintain a strong balance sheet, closing the quarter with a net cash position of INR 29.4 billion. On working capital front, inventory days were marginally higher as we built up inventory in anticipation of strong demand in quarter three of FY 2026. Given the use of letters of credit for raw material procurement, payable days also increased correspondingly, resulting in the working capital cycle temporarily reducing to 33 days at the end of quarter two. We expect this to normalize to our long-term steady range of 50- 55 days over the coming quarters. Capital expenditure for the quarter was at INR 3.3 billion, taking the first half expenditure at around INR 7.5 billion, in line with our Project Spring guidance of investing INR 12-INR 16 billion annually through to FY 2030. On a half-yearly basis, I'm proud to share that our revenues, EBITDA, and PAT are the highest ever in the company's history for any half-yearly period. Revenues grew 21% year- on- year, crossing the INR 120 billion milestone. EBITDA grew 55% year- on- year, with margins strong at 15.2%. PAT grew 53% year- on- year, with PAT margins of 10.4%. Moving on to slide six, the wires and cables business delivered a 21% year- on- year revenue growth, supported by high team volume expansion during the quarter. The domestic wires and cables business recorded a strong 21% year- on- year growth, despite a high base from the previous year, which had witnessed 28% year- on- year growth. This performance was driven by higher government spending, improved project execution, and a favorable commodity environment. The continued momentum underscores our strengthened market position and suggests market share gains in the domestic segment during the quarter. Both cables and wires performed strongly. Sales across both distribution and institutional channels showed healthy traction, indicating broad-based demand. Regionally, the north led growth, followed by the west, south, and east, reaffirming our strong Pan-India presence. Looking at the broader environment, demand remains robust across key sectors. Central government CapEx spend continues to remain robust. Additionally, the Government of India released an extra INR 1 trillion in tax devolution to states on 1st of October, ahead of the festive season, to accelerate CapEx and welfare spending, a timely fiscal boost for infrastructure and development projects. India's private CapEx cycle is also showing early signs of revival after the period of subdued activity, supported by monetary easing, such as rate cuts and liquidity infusions, fiscal stimulus like front-loading of CapEx and tax cuts, and regulatory reforms. While the CapEx to GDP ratio remains below its historical peak of roughly 35% in 2004-2008, currently standing at 30%, the outlook continues to improve. The real estate market remains strong, following last year's record sales and launches, a trend that should continue to support wires demand in the coming years. Our international business continued its steady growth trajectory, recording a 25% year- on- year increase during the quarter and contributing 6.5% to consolidated revenue. With a healthy order book in place, we expect this growth momentum to continue. On profitability, EBITDA margins for the wires and cables segment stood at 15.1%, improving by 270 basis points year- on- year and 40 basis points quarter- on- quarter, supported by operating leverage and favorable business mix. Moving on to slide eight for an update on the FMEG business. The fans category continued to face headwinds due to the prolonged monsoon season and elevated channel inventory at the beginning of the quarter, registering marginal growth. Lighting business gained traction due to festival demand, registering healthy growth. In switches, switchgears, and conduit solutions, healthy demand from real estate continues. The solar products category was once again the standout performer, driven by robust demand under central and state solar rooftop incentive schemes. With continued policy support and encouraging demand visibility, we expect this demand to continue. Our continued focus on premiumization, as well as operating leverage benefit, helped the FMEG business achieve its third consecutive profitable quarter, despite increasing AMP spends. Now moving on to slide 10, which provides an update on our EPC business. During quarter two, EPC revenues declined 19% year- on- year to INR 4,024 million, primarily due to project execution cycles, same as was the case in quarter one of FY 2026. Segment profitability stood at INR 730 million, translating to a margin of 18.1%. This includes a one-time gain of approximately INR 330 million, excluding which margins would be at around 10%, consistent with our mid to long-term guidance. Our EPC order book remains healthy, providing strong visibility for future growth. Moving on to slide 12, which provides an update on our Project Spring. Under Project Spring, we continue to make steady progress in line with our FY 2030 strategic guidance. Within wires and cables, growth in the first two quarters since the project's launch has been ahead of guidance at 1.5x- 2x of the industry growth rate, with margins above the guided range. While export contribution appears lower, exports have actually grown 25% year- on- year in H1, and the relative decline is due to stronger domestic growth, expanding the consolidated base. We remain on track toward our greater than 10% export contribution goal. In FMEG, we continue to outpace industry growth in line with our plan of growing 1.5x- 2x the market rate, while maintaining focus on margin improvement and progressing towards the 8%- 10% EBITDA target by FY 2030. We incurred INR 7.5 billion in CapEx during H1, consistent with our annual guidance of spending INR 12 billion to INR 16 billion annually. For FY 2025, we raised our dividend payout to 26.3% from 25.5% last year, in line with our goal of crossing 30% dividend payout by FY 2030. Overall, we've made a strong start to Project Spring and remain confident of achieving our long-term objectives. That was the update for the quarter. Thank you, and we are now 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 their touchstone 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 Sonali from Jefferies Group. Please go ahead. Yes, firstly, thank you for the opportunity and congratulations on a great setup number. My first question would be, in this 2017 year-on-year sales growth in cables and wires, approximately how much would be volume? If you could further categorize them between cables and wires, that would be great. Thank you so much, Sonali. As far as the growth is concerned, the 21% revenue growth is on a base of high teens volume growth, and the remaining is the value contribution. Both cables and wires have registered strong growth. As far as the revenue growth in both cables and wires is concerned, they are pretty much equal. Again, on the volume terms, the growth will be a bit higher on the cable side, a bit lower on the wire side, but that is because of a very high base of wires in Q2 of previous year. If you would recall, in September of last year, we had seen an upward trend in copper prices in the last 15 days, which had led to a lot of pre-emptiveness from the distributor in terms of stocking up. As a result, we sat on a very high base as far as the wires are concerned. Even on that, we were able to register double-digit volume growth as far as the wires business is concerned and inline growth as far as revenue is concerned with the cable side. That was the breakup of volume versus value. Thank you. Very helpful. My second question is regarding the EPC segment. We understand that there could be a time deferment between the execution and the time that we are going to receive the order for the money from our RDSS server. Going forward on an annualized basis, how should we look at the revenue and the margin profile of the segment? On the EPC front, specifically till quarter two, we were just executing the RDSS projects. Q1 and Q2 were quarters wherein we had the execution phase of the project. There was a limited supply portion that we had to do. In Q3 and Q4, or the second half of the year, we will also have a cable supply portion within the RDSS contracts that we are executing. That means the second half of the year should see better revenue inflow coming from the RDSS projects. Over and above that, we would also start executing the BharatNet project from quarter three onwards. That will add up to the overall top line as well as bottom line on the EPC part of the business. Overall, I think the second half of the year should be much better as far as the EPC business is concerned. Understood. What was the one-off component in the margins? If you could quantify that in cases? The one-off was of about INR 30 crore. If you remove that from the margins of the EPC business, you would end up at around 10% of EBITDA margins for the quarter, which is in line with our guided range for the segment. The second part is about. Sorry, I'll just give out the reason. The reason for the INR 30 crore one-off was because of change in terms in one of our contracts. Understood. Got it. Just one last question. Any update on our EHV segment, Suresh? That seems to be quite a good demand driver going forward for the industry as a whole. The EHV plan continues as per the timeline. We are expecting that plan to get commissioned by the end of next calendar year. Perhaps we'll be able to start seeing benefit from the EHV sales only in FY 2028. Understood. Got it. Thank you. All the best and happy Diwali to the team. Thank you, Sonali, and same to you as well. Thank you. The next question comes from the line of Ashish Jain from Macquarie, India. Please go ahead. Hello. Hi. Chirayu, my first question is, you know, on the growth in cables and wires, like this year also, we have seen a fairly sharp rally in copper prices, right? Some of our channel checks are indicating a similar stock up and all by the dealers. What is our sense on that? Does this volume growth reflect that? Ashish, as on date or in the first half of this year, definitely we have seen better traction as far as the volume growth is concerned. All of this is largely linked to the fundamental demand. We don't perhaps see a lot of inventory buildup into the channel right now. To a certain extent, maybe in wires, we would have seen that buildup happening towards the end of September. The same was the case towards the end of June, and all that inventory got liquidated because the fundamental demand remains strong. We don't believe that the high volume growth that we are witnessing this year has anything to do with the copper movement. I think the fundamental demand remains quite strong. The government, as you would have seen in the numbers, is front-loading their CapEx. They've already spent 38% of their yearly target. We are also seeing a lot of green shoots in a few of the private sectors as far as CapEx is concerned. All of those put together are helping in terms of the volume growth on the cables and wires business. We continue to expect the second half of the year to remain strong. That is something that is also visible as far as the inventory that we have created, which is expecting strong demand in the third and fourth quarter. Right. Second is on, you know, again, on sticking to cables and wires, like in what explains the margins there? Is it purely operating leverage, or, you know, or there's something else also? An extension of that is where are we on price hikes given the sharp copper price rally that we have seen? On a sequential basis, the margin improvement in cables and wires is only roughly around 40- 50 basis points. This improvement is largely because of operating leverage. Year- on- year, it's a mix of operating leverage as well as cross-margin expansion. That's the reason for the higher margins. As your second question was, as far as the pricing pass-on is concerned, you are aware 90% of our business is through distributors. For distributors, we devise prices on a monthly basis. Whatever movement happens in a month, we pass it on in the consequent month. The uptrend in copper prices that we witnessed was towards the end of September. We would have passed on that increase in prices only in October, the first week of October. If you look at the September prices, the average copper prices, and look at year-on-year growth, largely, if you would see, the average is pretty much similar. It's kind of flat year- on- year. Right. Okay. Okay, good. Thanks a lot. I'll come back. Thank you. The next question comes from the line of Natasha Jain from Phillip Capital. Please go ahead. Thank you for the opportunity. My first question is on wires and cables. If I see your top line growth, this has historically grown much larger than 19%, with margins lower than 15%. This time, it's at a lower top line growth, a higher margin. I want to understand, does export have anything to do with this, given that there was a period of 20 days when a lot of players front-loaded U.S. exports? Has that also come into our margins? Having said that, what about exports from quarter three onwards to the U.S., given it's a high-margin business? First question's that. Natasha, on the top line of the wires and cables business, we've actually grown 21% in this quarter, year- on- year. That, too, as I mentioned in my opening remarks, is on a very high base. Last year, we had seen 23% growth in wires and cables, and the domestic business has actually grown 28% year- on- year in quarter two. On that, we have registered a 21% year-on-year growth. Definitely nothing amiss as far as the top line growth is concerned. The percentages, maybe you might be comparing it with 25%+ kind of, but you also have to consider the base when you are looking at the percentage growth. As far as margin increase is concerned, it is a mixture of a lot of things. Operating leverage is definitely one of them, but also the business mix change is one of them. Year- on- year, if you look at the exports mix, it's not very different. Quarter- on- quarter, yes, it is better. The margins in exports are definitely better, but unlike some of our peers, we don't operate through distributors when we do export. We operate mainly through institutional agents. Irrespective of the tariffs or how the prices move, institutional players don't prepone their buying. It's the distributors who resort to stocking. In exports, we didn't see any kind of pre-stocking because of whatever tariffs or copper-related movement or any of that sort. All of this is pretty much execution of the order book that we had. Understood. This is helpful. In terms of exports, can you break the salience geography-wise? It's a mix of all these six continents put together. We would have good contributions coming in also from the U.S., which would be close to around 20% odd. The other geographies of Europe, Middle East, Australia, as well as South America, all of them contributed to this growth. Can we expect this 20% from the U.S. to continue in the future, or has there been proper billing post August 27 to the U.S.? The U.S. is a developing situation, so it will be very difficult for us to comment at this point of time what we can expect. Perhaps by the end of this quarter, maybe in the next quarter or so. We don't know what will be the tariff number by next month as well. Hopefully, the trade negotiations which are ongoing should get resolved by the end of November, and we perhaps see a reduction in the tariffs which are levied on us. Based on that, there might be some changes in what visibility we might have from the U.S. It is very difficult to comment as of now as far as the U.S. is concerned. Fair enough. Just one last quick question. One of your peers had mentioned on their con call that their EHV plant is facing issues in terms of non-availability of technicians for vertical lines. I understand Polycab is also setting up vertical lines for EHV. Are you facing any such issues in terms of non-availability of technicians and therefore any delay, or are we on track for it to commission in December 2026? Natasha, we are not facing any such delay in acquiring of technicians. We are pretty much on track. Got it. Thank you so much, and happy Diwali to the team. Thank you, Natasha. Same to you. Thank you. The next question comes from the line of Archer from Newarma.ie. Please go ahead. Yeah, good afternoon, everyone. Thank you for the opportunity. The first question I have, you know, with respect to the demand. I understand, basically what you're saying is very strong domestic and export outlook. How do we see in terms of volume, you know, sustaining? You think the volume growth of high teens can continue in the remaining part of the year, particularly when you are talking about the inventories? What kind of growth are we building when we are building the inventories? If you could clarify on the same. As you are aware, we don't give out yearly or quarterly guidances. I would refrain from giving specific numbers on the volume growth expectation. We are on the ground, witnessing a lot of traction in execution. Q2 in that way generally is hampered because of monsoon season. This time around, we actually had an extended monsoon season. In spite of that, you've seen the numbers that are being delivered. We believe that now, since the monsoon season is over, the execution will actually pick up pace. Looking at what the government has done in the first half of this year in terms of their spend and whatever traction is available, visible from the private side, we definitely believe the second half should continue to be a good effect. We have a very positive outlook as far as the growth for the second half is concerned. I won't be able to give you any quantum of growth numbers. All right. The second question I have, with respect to the margins. Given what we have delivered, the number, I presume, basis, of 14%, 15% margin, the implied EBITDA margin is 16%+, while we continue to guide for a lower margin. If you could quantify, if there is anything specific which you are currently, which is helping this extra margins, which you think may not be sustainable, anything you want to call out? The guidance of 11%- 13% of margins is a five-year guidance. It is not something that we believe will be the case immediately next quarter or the quarter after that. Currently, we are seeing very good traction. The liquidation rates are quite good. We believe perhaps we could be able to continue to deliver maybe at the higher end or perhaps even better than that. A longer-term guidance of five years, you have to be a bit conservative when you give out those guidance, and that is what we have done, as far as the margins of guidance is concerned. Got it. Just last question, if I may, with respect to the industry demand supply in terms of capacity and demand, are you seeing any stress emerging in terms of the pricing, etc.? I remember last time you had talked about the price premium, yeah, for some of the products. If that premium sustained, or is there any moderation in that premium? We are not seeing any particular increase in competitive intensity, and that is perhaps visible in the gross margin that we are delivering. Our pricing premium compared to the other players in the industry continues to be as is, and we don't expect there to be any material change in the near term to that. Perfect. This is very helpful. Thank you, and wish you all the best. Happy Diwali to all. Thank you. Thank you, Archer. Thank you. The next question comes from the line of Jay Chauhan from Trinatra Asset Managers. Please go ahead. Yes, good afternoon. Thank you for the opportunity. I'm on this. Yeah, you're audible, Jay. Please go ahead. Yes. My question is on the FMEG segment. With solar products now being the largest category, could you elaborate on the margin profile of the solar business versus the rest of the FMEG portfolio? Looking ahead, what are the key strategic levers beyond solar that will drive segment margins from the current low towards the ambition of 8%- 10% under Project Spring? Jay, we don't particularly give out product-wise margins, neither at the breakup of our FMEG. Having said that, solar is a profitable business for us, and that will continue to be the case. The other products that we have in the FMEG segment, which are switches, switch gears, conduits, all of them are profitable. Perhaps one of the segments that we would want to be profitable in, in the near to midterm, is the fans segment. Over there, the utilization rates continue to be a bit lower, which is what is hampering our operating leverage and hence the bottom line. As and when we scale up that business, perhaps that growth in terms of the bottom line in the FMEG business will see a material pickup. Over and above that, gross margin expansion as well, based on the premiumization drive that we are undertaking across the product categories, will be the other driver. We are also focusing on increasing the contribution of higher margin products like switch gears and switches in the business. As and when that pans out over the course of the next five years, that should be a booster to the bottom line of the FMEG segment. These are the three levers that we are working on to finish the journey from the current margins to 8%- 10% in the next five years. Understandable, sir. On the FMEG side, what I have seen around the industry is like if you take an example of France, they typically, you know, if you see Attenborough as well, they're focusing on marketing, distribution, and everything, and then they are outsourcing their contract manufacturing. What was the rationale behind you, you know, doing everything in-house? Jay, you will be aware that we use the same brand, Polycab, within our FMEG business as well. Polycab as a cables and wires brand is considered to be the superior brand as far as quality is concerned. We didn't want to dilute our brand name when we manufactured the FMEG products. That was one of the reasons why we chose to manufacture our products in-house because we can control the quality of our products. Over and above that, it also gives you a better handle on availability, which is something that faces a lot of pressures when you outsource and the other partners might not have or might be going through some rough patch. Both of this put together is one of the rationales. The other rationale is that there is a lot of synergy as far as the manufacturing process is concerned. We use the same raw materials, largely copper, steel, plastic, etc., which are used in the cables and wires business to manufacture our FMEG products. Since we have the scale benefit on the cables and wires business, perhaps we can leverage on that scale benefit, lower cost, and optimize our manufacturing cost on the FMEG side. All those three things put together is the rationale behind us manufacturing our products in-house. Understood, sir. Thank you. That's it for myself. Thank you. Thank you. The next question comes from the line of Umang Mehta from Kotak Securities. Please go ahead. Yeah. Thanks, Chirayu. Thanks for the opportunity and congrats on a good set of numbers. Chirayu, the question was on gross margin in wires and cables on a Y-o-Y basis. Now, if you compare this quarter to the base quarter, if you can just highlight, I mean, what helps us to show this strong expansion? I believe in the base quarter, you had highlighted the high-ten competition in wires. I believe even this quarter, we've seen, you know, copper price inflation and some stocking up in wires. What has exactly changed if we were to compare both the quarters like for like? Similar to Q1, we saw the expansion on the gross margin levels. Pretty much the same continues in Q2. We didn't see a similar heightened competitive intensity on the wires this time around. Last year in September, the upside that happened in copper was within a very short timeframe of three to four days and towards the end of the quarter, which led to the higher competitive intensity. This time around, the increase in copper prices was over a longer period. Perhaps that is why we might not have seen a similar behavior from the competitors this time around. That is why the margins even in wires were pretty good. Over and above that, our own internal initiatives are working quite well for us. For example, in the wires business, we are focusing on selling of class two or premium wires, which is where the margin profiles are better. Over the last few quarters, we've seen an improvement of mix of those premium wires in our sales, and that has helped us in terms of improvement of gross margins as well. Similarly, in cables, we have seen the sales of better margin SKUs, gross margin SKUs go up, and that has again helped us to improve our overall margins year- on-y ear as well. The remaining is obviously the operating leverage part. These are all variables put together, which are helping us in this increase in the margins on the cables and wires side. Understood. Just as a follow-up to this, because you have a hedging and your contracts, you have these embedded contracts, a gradual up move in copper price, like it benefits the other peers who do not hedge, it doesn't really benefit you in that sense. Is that a right way to think about it? Right. See, for us, hedging is a tool which helps us maintain margins. We are not looking at it in terms of improvement or the wrong. There will be certain cases wherein we might see it might be helping us in terms of margins, or in the other case around, it might be decreasing. What it helps us to do is create a relatively stable margin profile, which is what our aim is at. We'll continue to use the hedging mechanism in our business, and we will not look to deviate away from that irrespective of what the copper or aluminum or the USD/INR movement is. Understood. Sure. Thank you so much, and happy Diwali to everyone. Thanks, sir. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Adipta Ghosh from Investmate Insights Private Limited. Please go ahead. First of all, congratulations for your great numbers. My question is, major players like Adani Group and Digital Group entering the market, how do you see the competition evolving? Do you expect any margin pressure in coming quarters or new entrants? The announcements of entry by both these large conglomerates happened somewhere around the beginning of this year. It will obviously take some time for those players to enter in the industry. One of the players has given specific plans and timelines by which time they expect their plan to get commissioned and then to enter in this particular industry, while the other player has not given any clear plans of what they wish to do as far as this business is concerned. Even for the player which has given the plans, this is something which will happen after one, one and a half years. At that point of time, we'll have to see what is the demand environment and the competitive intensity. This player has given a plan that their focus will be largely on wires. Wires is, in particular, an industry where we have always been in poor supply. We have always been competing with other large players as well as large unorganized players. We've continued to grow in that environment and continue to gain on market share. From our point of view, we'll continue to focus on our initiatives, our strategy, our products, and different geographies to continue to gain our market share. As and when we have the newer players entering the market, we'll perhaps look at strategies to compete with them as well. Okay. My next question is, what's your current capacity utilization in the cables segment? Utilization will be in the mid 70%. Okay, thank you. Happy Diwali. Thank you. Thank you. The next question comes from the line of Prathamesh Rane from Elaraka Securities. Please go ahead. Yeah. Hello, sir. Congratulations for the Q3 quarter. My question was on how your wires are doing in the market. Prathamesh, your voice is breaking up. Please get a little closer to the microphone. Am I audible now? Set mode. Yes, please. Sir, just a question on the Atira and the Maxima, the Suprema wires, how they're doing in tier two, tier three cities. I wanted to get an insight on that. For tier two, tier three, tier five cities, we have the Atira brand, which we introduced three, 3.5 years back. This is a wire range which competes very actively and very competitively with the unorganized players and their offerings in this market. Suprema, Prima, and the other ranges that we have are more premium in nature, and they are largely used in metro and tier one cities. As I had mentioned in my beginning remarks, just in the previous question, we are seeing very good traction as far as sales of our last two wires are concerned. That has been one of our focus areas, and we have seen very good traction on that front, which is again resulting in improvement of our margin profile on the wire segment as well. Largely, wires for the last four or five quarters, we've seen almost 20%+ growth each quarter, and all of those ranges that we have, they are panning out quite well. Thanks, sir. Thanks, sir. Thanks, sir. Thank you. The next question comes from the line of Rahul Maheshwari from Dolat Asset Management. Please go ahead. Hello. Good evening. Am I audible, sir? Yes, you are audible. Thank you for the opportunity. Just one question from my end. We are hearing a lot of HVDC as an opportunity, which is till 2035. For my clarification, HVDC as an opportunity is similar to what EHV cable would be coming, or it's completely different? Or Polycab is looking at such opportunity going ahead. Thanks, Rahul. The EHV plant that we are putting up will be largely utilized for only the EHV opportunity. As of now, we are not looking at the HVDC opportunity. Perhaps, yes, as you rightly mentioned, it is an opportunity which will perhaps be there in the longer term. If you take more of a decade or two decades kind of review, perhaps there will be more demand for those kind of cables. As of now, there are very limited projects in the country which require HVDC cables. None of the players in the country have the tech to manufacture that, and whatever cables are being utilized or will be supplied for those projects will be imported. As of now, perhaps it is not something that we are looking to do, but maybe in the next few years, that might be an area that we develop the tech or maybe acquire that tech for and then look to gain from the opportunity over the larger period. How big can this TAM be for the next one decade, specifically for HVDC? That was very difficult to quantify the market size for a specific type of cable. We'll have to see what kind of order contracts are being given out by the government, and that is how perhaps we'll get to know the TAM for that. Just a follow-up question. I know defense as a part is too minuscule compared to what the cables are being put for the power and other industries. Is there anything which we are catering to the defense sector? We definitely cater to the defense sector. We have a vertical which is called special purpose cables, wherein we cater to the defense sector. The thing to do over here is, first of all, you need to develop the products which are required in defense and which are very different compared to the normal cables which are used in the other industries. Once you've done that, you have to secure approvals from the various end customers, and then you start supplying. Over the last two to three years, we've worked on developing those products and securing those approvals, and we've now been consistently improving our supply to the defense industry. Going ahead as well, whatever new investments on the defense side are being done in the country and whatever type of cables will be required in defense, we are kind of an approved player for that. Going ahead, it should be one of the areas, developing areas, which should kind of see quite good growth as far as the cables business is concerned. Thank you. Thank you. The next question comes from the line of Sanjay Satpati from Ampersand. Please go ahead. Yeah. Hi, Chirayu. Just two questions. One is that you said that you have already taken a price hike in October. Is it possible to share what kind of price hike you have taken? Sanjay, you can look at the movement of copper and aluminum along with the USD in our movement in the previous month to this month and take the average, and perhaps that is the increase that we would have taken. Okay. That essentially tells me that you are protecting your margin despite this stock capability. Thanks for clarifying that. My second question is that this CapEx, which you have done like INR 750 crore and you're planning to do somewhere around INR 1,500, INR 1,600 crore this year, can you spell it out for us? Like what all exact capacities that have gone up? Sanjay, again, this is a capital expenditure that we continue to do every quarter. Not necessarily we'll have facilities coming up for the spend that we did in the previous quarter. It takes time for the plants to get commissioned and then come up. We've been doing much more capital expenditure since the last couple of years. Last both years, we've done INR 850 crore and INR 960 crore of capital expenditure. This year as well, we are at INR 750 crore in the first half, and we'll perhaps do somewhere between INR 1,200 crore- INR 1,600 crore for the year. All of these capacities come up gradually. Some of them are brownfield, which will perhaps come up in one to one and a half years, and some of them are in greenfield, which will take a bit of a longer time. The spends are done across the different types of cables. A part of this is also done on EHV. The other spends are done on your normal high voltage or low voltage or medium voltage cables and so on and so forth. It's a mix of all of those. As far as the capacity which is coming up, I wouldn't be able to quantify it at this point of time. If you are looking at what incremental revenue potential this capital expenditure generates, you can take a four to five asset turn on the capital expenditure that we are doing. Perhaps with a lag of one to one and a half to two years, that is the kind of incremental revenue potential this capital expenditure will be generating for us. Sorry, how much did you say? 4x-5x? 4x-5x, yes. Okay. Okay. I just wanted to know how the mix between wire and cable versus others. The capacities are largely fungible, so you can use the same capacities to manufacture any type of cables, or you can use the cable capacity to manufacture wires. There is nothing that stops you. Depending on the kind of demand which is there or the kind of product that you would want to cater to, you can use the capacities to manufacture any type. Got it. Thank you and all the very best. Thanks, sir. Thank you. The next question comes from the line of Natasha Jain from Phillip Capital. Please go ahead. Natasha, please go ahead and unmute your line in case you're on mute. Yes, am I audible now? Yes. Thank you so much for the follow-up. Two questions. One, Chirayu, can you give us the breakdown in terms of order book for RDSS and BharatNet as of today? Natasha, the order book for RDSS currently stands at INR 33.5 billion. For BharatNet, since the execution will only begin from next quarter onwards, the order book is similar as it was at the end of previous quarter, which, excluding the GST part, stands at about INR 80 billion. Understood. One last question. In terms of fans, there is a daily rating change in the offering, right? Are you expecting any kind of pressure in terms of pushing volumes and therefore at the risk of margins for fans in third quarter? We didn't see any such pressure when the previous PWE change happened one and a half years, perhaps one year, nine months back. Perhaps we wouldn't see a similar pressure even this time around. Obviously, you can't guarantee that. We'll see how the next quarter pans out to know if there is any competitive intensity or higher pressure on the margins to perhaps liquidate the inventory and all. Is there any kind of price cuts that you are seeing? As on date, we haven't seen any price cuts. In fact, in the previous quarter, the industry actually took price hikes. Let's see how the next quarter pans out. It will depend a bit on the demand environment as well. Got it. Understood. Thank you so much. Thanks, Natasha. The next question comes from the line of Rahul Maheshwari from Dolat Asset Management. Please go ahead. Am I audible, sir? Yes, you are audible, Rahul. Yeah, sorry, my line got disconnected. Just that question, can you quantify the special purpose opportunity and currently how much it contributes? Without going into details sector to sector, but for next capital expenditure, which in upcoming two, three years, which you're planning, what quantum can go towards a special purpose kind of structure? Thanks. Within the special purpose cables vertical, we cater to three types of opportunities. Defense is one of them. We also look at automobiles, and we also look at railways, railway coaches specifically. These three put together form part of our special purpose cables vertical. As of now, the contribution of the special purpose cables vertical to our overall cables and wires would be in single digits, low single digits. Perhaps looking at the kind of investments which are happening in those sectors, it can be one of the fastest growing verticals for us. As far as the opportunity size is concerned, you can track the announcements of government as far as defense is concerned. Similarly, on the automobile side, you can look at the investments happening on the EV side, as well as on the railway coaches side. Those are government projects, and the numbers are pretty much available in the market. You can apply a percentage of about 2.5%- 3% to the capital expenditure which is currently getting committed in these sectors, and that is the demand for cables which has been generated from those sectors. That is how you'll be able to quantify the demand expected within those sectors. How much is Polycab targeted in the next five years? This current single-digit contribution which is there, what can be the targeted contribution you expect going ahead from this segment? Is the margins 200 basis points, 300 basis points better in special purpose cables? Rahul, all three of these are institutional orders. Over there, of course, as I was mentioning, these are new sectors where you have to develop the products and get yourselves approved. It takes a lot of time for you to secure those approvals from a number of clients. Perhaps it takes those initial number of quarters or years for you to go through that process. Once that is done, the scale-up is much faster. We do expect the special purpose cables vertical for us to grow at a faster rate compared to the other types of cables. Again, it is very difficult to quantify the contribution that we will generate from the special purpose cables vertical for us five years down the line because even on our normal types of cables or wires that we are manufacturing, we are seeing very, very good traction. The focus is on all types of cables and wires and not looking at specific contributions from a specific vertical as far as our business is concerned. Sure. Thank you and best wishes. Thanks, Rahul. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Gandharv Tongia for the closing remarks. Thank you, everyone. Thank you for your time and attending the call. Thank you for your trust and support over the period. We take this opportunity to wish you, your family members, and each and every member of your family a very happy Diwali. Thank you. Take care. Bye-bye. Thank you, sir. Ladies and gentlemen, on behalf of Polycab India Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.