Finolex Cables Limited (FINCABLES) Q4 2026 Earnings Call Transcript

Ladies and Chairman, good day, and welcome to the Phenolex Cables Ltd. Q4 and F526 All-Inx Conference Call. As a reminder, all participant lines will remain 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 the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Pranay Premkumar from Dentsu One Investor Relations Team for opening remarks. Thank you. And over to you, Pranay.

Thank you, Ryan. Good evening, and thank you all for joining us on the Finalex Cables Q4 and FY26 early conference call. Today we have with us Mr. Mahesh Vishwanathan, Deputy CEO and Chief Financial Officer from Finalex Cables Limited. We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&A session. I must remind you that the discussion in today's earnings call may include certain forward-looking statements and must be viewed, therefore, in conjunction with the risk that the company faces. Please restrict your questions to the quarter performance and to strategic questions only. I would now request Mr. Vishwanathan for the opening remarks. Thank you and over to you, sir.

Thank you, Pranay, and welcome, ladies and gentlemen, to this call. I'm sure you by now have seen the results, analyzed and dissected it at your ends. Briefly, I will go through the highlights as I see them. Revenue for quarter 4 It was up by about 22% both year-on-year and quarter-on-quarter. For the full year, revenue was up about 19%. EBITDA for quarter 4, there was 7% improvement year-on-year and 22% quarter-on-quarter. For the full year, it was about 14% better than last year. Pat for the year of water was approximately 6% better YOY, and 19% better quarter-on-quarter. And PAT for the full year was about 14% better than last year. So these are broad numbers. Of course, quarter 4, we, towards the end of quarter 4, we had the shock from the Middle East, which resulted in cost increases across the board. While the LME copper did stay low for a couple of weeks, the rupee depreciation as well as cost hikes in most other raw materials meant that at the end, we were left with a higher cost of production than before, and therefore margins were slightly under pressure. If I go into the individual segments for electrical sector, revenue was at 1,697 in the quarter was the highest that we have achieved, and it was about 22% higher YOY and 21% higher quarter on quarter. For the full year, about 22% higher than the previous year. EBIT numbers were also fairly strong, 30% higher on quarter-on-quarter basis and 17% higher YOY. So the full year EBIT was about 18% better than last year. Some comments on the sector, there were certain product lines which did extremely well, and certain product lines where the growth was slightly lower. And one product line where the growth was actually lower. So auto, batteries, flexible, industrial flexibles and power, all these sectors did extremely well, generating approximately high double-digit growth in volume terms. Auto was about 30% higher, flexibles was about 17% higher, and power was about 21% higher. Solar cables, which we introduced last year in the fourth quarter, has been very well accepted, and we are nearing capacity utilization at this point in time. We are looking at increasing the capacity going forwards. Building wire was steady, but had been impacted through the year because of constant copper price increases. And which meant that we had to pass it through to the customers. So, there were times when there were resistance from the market. But overall, in the year, a very marginal volume growth. Agricultural applications was one area where there was an issue. The pre-seasonal monsoon plus continued monsoon both impacted the volumes here. It was down by about 15-16%. The year-end Middle East disturbances, like I mentioned earlier, had some impact in terms of increased RM cost, and together coupled with INR depreciation meant that the overall cost of production was higher. Inventory costs crept up a little bit, and that, of course, impacted the end-of-the-year margins a little bit. We had, during the year, close to 14 price changes, all upwards, and the effective price change at the market was about 24-25% in most of the SKUs. This is on electrical. So, coming now to communication side, revenue, if you saw, was kind of flat for the year. Whereas, quarter 4, we did well. We were up by about 30% via way as well as quarter on quarter. Some background to this, fiber prices during most of the year, at least for the first 9 months, for the first 7-8 months were pretty low, but started hardening towards the end of quarter 3. And since then, I've continued to climb. Some of the reasons behind this. There is an explosion of data center applications in the US and in Europe, which is practically eating up all available fiber supply. So currently raw material availability is a constraint for everybody. Most capacities in China and Japan are locked completely. Added to this is the newfound military applications that have also pulled in a lot of fiber. Both the wars in Russia and in the Middle East have triggered newer applications and apparently fiber is getting consumed there. That has resulted in a large supply kind of a scenario at this point in time, which has helped the fiber prices harder. But I think the advantage to us in terms of improvement in revenue, we should see some during the second half of this year. Our commitments locally, domestically have been long-term yearly contracts, and those were at fixed prices. So until those contracts run out, we will not see the benefit coming into our financials. So hopefully next year, when we renegotiate the prices, that should change. On the fiber-related expansions part, we have commissioned the pre-form plant. I said in the last call that trials are likely to begin from February and end in a month's So, mid-March, we commissioned the plant. And the plan should take another two, three months to settle down and stabilize. But as of now, the performance is quite encouraging. The second part of that program, which was the fiber draw capacity expansion, that should get completed by, I think, July or so. So some capex will still come in the current year. But the pre-form related CapEx phase 1, where we were setting up the plant for 100 metric tons, that has been completed now. Coming now to CapEx, overall we have spent about 240 grows last year, including infusion into the JV with Sumitomo. In the current year, that is 26-27, we expect to further spend another 200 crores on capacity expansion plans and complete the opti-fiber reform-related capex, which is remaining. That will be another 100 crores. So that will be total spend in the current year. On cash flow, the cash flow from operations was about 50 crores, lower than last year. But towards the end of the year, like I mentioned earlier, after the disturbances started in the Middle East, we had to take additional inventory coverage. So if you looked at our numbers, balance sheet numbers, the inventory is up by about 300 crores. So part of that investment has gone in there. Because at that point in time, nobody was sure how long this war would last or what impact it would have in the medium or even short term. So we needed to protect ourselves to be able to run the plants in April, in May. So some amount of pre-buying, but at higher expenditure was done. I think we should be able to pass on the The other piece of information that I have is that the JV with Sumitomo, the extra high voltage JV with Sumitomo, that turned profitable this year. So on a revenue of about 450 crores, we generated a profit of about 21 crores. So, and the outlook is decent. We have, we start the year with an order book of about 380 crores. And so, I think we have turned around the corner there. So, this is broadly the comments that I had to make before giving the floor to you. So, I am now free to take questions if you have.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Manoj Ghori from Iquarius Capital. Please go ahead.

Yes, thanks for the opportunity. So my first question, first, obviously, I would like to congratulate you on your new role. Thank you. So, my first question is on the communication cable segment. So, obviously, when we look at the quarter, this was the record quarterly performance on the revenue side. And even we saw some improvement on the margins, which would have been because of the scale benefit also. Now, preformed benefits are yet to kick in. And we have seen relatively better improvement on the margins. So, and as you highlighted in your opening remarks, that we given the... Demand, especially from the West market, and some supply challenges, there is a huge scope for business into communication cable segment. So, for our...

At the moment, like I mentioned, supply chain, there are still some challenges. Thank you. We have a military application, defense application, which is also... Thank you. We will get a little more clarity once there is some finite information about what's happening in the Middle East. That keeps poking the markets every other day. And to predict what we will end up with at the end of 27, even though it is not a long-term prediction, is a little It's really difficult at this point in time. Also, because of the exposure to defense applications, some governments have put in embargoes on export of certain raw materials. So, we need to work around and see how those challenges are overcome. While there is a big opportunity at this point in time, and the prevailing fiber prices are fairly high, At the same time, securing the required raw material also poses certain challenges. So we need to work around that. So at this point in time, I am not able to really commit to a number or even predict a number. But I think it should improve beyond what we have seen this year. This year, we ended the year with about, I think, EBIT numbers was about 6%. I think we should do better than that.

Sure, got it. So, my second question is on the JV. So, after a long period, we have taken a lot of efforts on the EHV side, and probably this is the first year where we have finally seen some numbers actually growing in. Right. So, can you highlight what are the steps that we have taken? How should we look at this business from a two-year, three-year view where we can actually end up by 28 or 29 in terms of revenue? Because PBT, when we look at 21 crores at 458 crores of revenue, close to around 5%. So, probably the things are looking relatively brighter here. So, what's the overall thought process on business?

Okay. It has been a challenge for us over the last several years that we've been invested in this JV. Challenges were mainly around, you know, getting credentials for participation, showing experience, and some of the voltage grades becoming commoditized in the meantime. So, in the last year, our focus was more on the higher voltage grids, and also a mix of projects where there were only supplies, and projects which were turnkey bases. So, that gave us a little bit of the, I mean, once we started getting in purely supply orders. Then the cash turnaround times became smaller, whereas when you get into a project-based business, then the turnaround times are much longer. Typically, you are unable to clear your receivables until the entire project is completed. And with the EPC part involved, Getting clearances and right-of-way in many of our cities or even sometimes in villages becomes a time-consuming issue, which drags the project for longer periods. So this year we've been able to get an order blend of both pure supply as well as full turnkey solutions. So that improved the operations quite a bit. The second part was to ensure and see that the key equipment, the capacity utilization improves further. So, at this point in time, the most key machinery there. is occupied more than 80%. In fact, we are planning to enhance capacity there, so that that would help us in increasing the overall plant capacity towards the 70-75% numbers. So, utilization of capacity has been better this year, and that means fixed cost absorption is obviously better, and focus on the blend of orders that we were getting. So I think that is going to continue to drive the strategy. On the market side, there is a very large market. Currently, I think the size is about half a billion dollars to 750 million. But the requirements that we are seeing when we talk to utilities across the country, eventually in three to four years, that size could go up to four to five billion dollars. So that's the kind of market expansion that we are seeing, or we are likely to see. It is also backed up by the fact that many in the competition are today trying to, sorry, some are adding and some are trying to add capacity of similar technologies that we have. Until last year, they were not willing to spend that money. But over the last year, we have seen many more from the competition follow the same technology that we have in terms of the vertical insulation. So that is something that is catching up. So both from the market side as well as from our own experience, we see that there is scope for growth.

Sure, sir.

Anuj, I would request you to please chime back to the queue for follow-up questions. Thank you. Participants, we request you to reach me to two questions per participant and rejoin the question queue. We take the next question from the line of Vineet from Investec. Please go ahead.

Hi, sir. Good evening. I had one question in particular. When we look at housing wires, that hasn't been doing well for us as well as the industry as much as we would have liked, particularly considering how real estate cycle has been over the last few years, particularly post-COVID data, picked up quite sharply. So what is stopping wires as a segment to grow, at least, let's say, in high single digit in terms of volumes?

I think the runaway price escalation on copper, probably, in terms of trade stocking, is not at conservative levels. They are looking at it fairly tightly, because, like I said, we've had 14 changes over the last year, and we've had one more this year. So, I think that's been an issue. But where the material is going to projects, we don't seem to have a major issue. It's the retail part of stock and sale which is, I think, a concern. So, for a distributor or dealer to invest fair amounts of money, and... I hope that the price holds. I think that would be a challenge. That is a risk that less people are willing to take at this point.

Sir, I meant the tertiary demand. Now, given wires as a proportion of doing up a house is so small, why are we seeing volumes not picking up or people deferring their purchases as far as the tertiary sales and housing wire is concerned?

So, which is what I responded, saying when I meant project sales, those are the sales which are going into... ...builders or contractors or developers. That is... The other market or the electrical market and where the distributor is selling it or the dealer is selling it. That has taken a hit.

And do you expect similar phenomena to play out in FI 27 as well, given price increases, or we should see some bit of improved demand, let's say, in the next 12 months or so?

I am not going to put my neck out there. I do not know how to predict that part. It depends all on the price movement, finally.

Okay, understood, understood. Thank you so much, sir. Thank you.

Thank you. We take the next question from the line of Patanjali Srinivasan from Sundalam Mutual Fund. Please go ahead.

Hello, sir. Thank you for the opportunity. Congrats on your new role. I have two questions. So firstly, we showed our improvement in terms of margins for our communication cables business. So could you explain as to what cost this? Is it like a product mix or a pricing? What is the reason for this? And you'd also mentioned in your opening remarks that we have some contracts with customers, so the pricing may not change. So, will we benefit when the fiber prices have improved or will we not get a meaningful benefit there?

So, we should benefit, except that the time frame is probably around second quarter.

Got it, sir. And the first question?

First question was, how did we get 6%?

Correct.

Okay, there were a few orders besides the long-term contract, which were taken at current prices. So, that improved the numbers.

Okay, sir. Just one last question related to this. So, with our future orders, when we say we have contracts, what proportion of our business is contracted and what will be like unutilized or uncontracted capacity? And pre-form started only in this quarter. So, we'll start getting benefits from that only in this quarter. And we also have Q1 additional capacity coming for fiber. So, will all these things…

Yeah, it should change, but you will not see it in quarter two. The pre-form part of it, like I mentioned, we commissioned it in March. For any plant with this technology to settle down, it takes about three to four months. So, I expect that benefit to kick in from... The earliest I can talk about is the end of quarter two or maybe quarter three. And the draw capacity which will get increased will get commission towards the end of quarter two. So any benefit that we would get from that will only be after that. So the second half, provided there are no other hiccups on the supply chain part, should be much better than last year.

Got it, sir. And the last quarter, you mentioned that your revenue potential can be around 650 crores after this entire capacity comes. But this quarter, sir, you're clocking some 160 crores of revenue. So, if this largely priced revenue, so at current prices, can the revenue be like ballpark of 1,200, 1,300 crores?

Again, depends on the end user. On the, at the SKU level, depending on how complicated the construction of the cable is. So, for example, a cable which has got two fibers or four fibers, you are basically just paying for the, it's not a very difficult design to make, you are just paying for the raw material. But as it goes into multiple fiber counts or higher fiber counts, 144, 288, or even beyond that, then the revenue per kilometer changes and changes substantially. So, it depends on what that order configuration looks like. But yes, given the price levels that are existing today, It can be beyond 750 crores.

Got it, sir. Thank you so much.

Thank you. We take the next question from the line of Tushar Donde from Sanghvi Family Office. Please go ahead.

Hi, Tim. Thank you for the opportunity. Am I audible? Yeah, very clear.

Yes, yes.

Hi. First of all, congratulations on your induction to the new role. I have a few questions. First one means, sir, if I see the communication cable segment has a sort of good growth in this quarter of IOI basis. I was just asking you to what's our outlook over here in next week's orders. Could we expect similar or similar? Such growth coming over the next week as our pre-farm capacity is live. And on the pre-farm capacity, you did mention that we will try to consume it internally, and then if we are left with the capacity, we will also try to sell it outside. How are we thinking on that? Do we have tied up with the customers for the selling of that capacity? And then I have a follow-up.

No, at this point in time, right now, the situation is that, like I mentioned in my opening remarks, Fiber availability is a big issue at this point in time. There is no fiber to be had anywhere in the world. So any fiber that I can draw from my preform, I would use it myself. So selling a preform at this point in time, probably not the right idea. So that is today's case. How it might change three months from now, five months from now, that is something that we will have to look at at that point in time. The second part of your question was, sorry?

Oh, growth in the segment.

Yeah, growth in the segment. Look, as you are all aware, like in the West, there is an explosion of data centers coming into our country as well. And I think the government is also pushing to ensure that our data is posted within our country and not outside. So I'm guessing that will add to the number of data centers that get installed here over a period of time. So, yes, there is going to be growth. There is also going to be growth with applications around AI and similar technologies. So, it is, I think, the right time to be in this industry. Barring these hiccups around war-disrupting supply chains, I think it should be a...

Okay, that's great to hear, sir. I just had a very clarification on the EBIT margin, segmented EBIT margin that you calculated. I did see that communication table has a significant, I just wanted to make sure that have we included further income as a part of our EBIT margin calculation as well? Sir, I could not share it properly.

No, no, no, no. Other income is... doesn't get included in this.

Other income is not included in this?

No, no. That is shown as unallocupable items, no?

Okay, okay, okay.

At a company level, it gets included, but at a segment level, no. Is that clear?

So, at Kamsanila, the income is around 32 crores, and at Pernaluk, it's coming to be around 6 crores all. So, I'm guessing the 24 crores would have been already included in the book?

No, no. You're talking about the other income on the top line, right?

Yes, it is.

So, if you look at the total, that is around 237 crores for the year. Yeah, right. And if you look at the unallocable total, that is about 224 crores for the year.

Thank you. We take the next question from the line of Nikhil Purohit from Fiden Asset Management. Please go ahead.

Hi, thanks for the opportunity. Am I clearly audible? Sir, first question, what is our maximum revenue potential from the electrical cables segment? And currently, what is our utilization rate, and what is our target utilization rate for next year?

We keep enhancing capacities by rebalancing almost every year. So, within the CAPEX that we spend, there is a certain amount which is spent every year on adding two different lines. So, basis the capacity that was available, let's say, end of March, utilization... Utilization would be around the mid-60s. So there is some ability to grow further.

And the maximum revenue potential?

The revenue potential can be at about 80-85 if somebody is operating, they are doing a good job because none of these lines, this is not a single machine, one process. These are multiple machines with multiple processes. Not all of them are equally balanced. So, there will be always some bottleneck either at the beginning or at the end or in the middle. And therefore, if someone is able to achieve 80-85%, I think they are doing a fairly good job of running their plant. We are, there is a headroom, there is a headroom of about 10-12% at this point in time, or sorry, 66% is where we are operating, so about 15% headroom is still available. So, your revenues at current prices can go by another 15% without major investments.

Got it, got it. And could you give the sale versus project mix this quarter? How do we see this going again because of the margins that play out because of the share?

Retail versus project, you're talking about electrical wires? In the past, our retail-to-project ratio would have been 80-20. Now, probably, it's around 2-3rd, 1-3rd.

Okay, okay. And just last question on the communication side. So, what is our utilizable capacity for OFC right now, and when will we hit the 8 million fiber kilometer mark?

The draw capacity that we have currently is 4 million kilometers. That should cross to 8 by hopefully by end of second quarter. So that means 8 million capacity will be available from beginning third quarter. So, 4 million is what is available for us to operate at this point in time, and we are close to three and a quarter, I think, at this point in time.

So, sorry, are the utilization rates, you said, in Optic 5 agreements?

It will be about 3.2 out of the 4.

Okay, okay. And if we hit the 75% rate, we advised like 8 to 9% EBIT margins. We've already hit 6%. So, is it right to assume that with earlier you said that it should improve going in F527, we hit the 9% mark?

Yeah, subject to no supply chain constraints being there. There are supply chain issues at this point in time. Things that we import, especially things that we import either from Europe or China, there are difficulties or time lags in getting those. So, that needs to be resolved.

But the fixed contracts problem should not ideally stop our growth, right, apart from quarter one?

No, that should not. That should not. So, we will renegotiate with it. The contract is valid until June, and the next contract, when they come with the tender and the bids, we will renegotiate.

Got it. And within FMEG, what kind of code did we see in the PVC convoy and fans in this for FY26, just to understand?

Fan has been a difficult product line this year. Because in the initial part of the year, you had unseasonal rains, and towards the second half of the year, there were changes to the BIS norms, which meant that people were de-stocking any inventory that they had, and they wouldn't want to take fresh inventories. So that has been an issue. So Fionn actually did not grow in volume terms. Condutes have done very well. Condutes, we are now operating at close to 85%, I think.

Thank you. We take the next question from the line of Akshet Mehta from Seven Rivers Holding. Please go ahead.

Can you just let me understand in the communication table how much is coming from object?

Three-fourths would be Optifor-related.

Three-fourth would be. And, sir, just for an audience, if you just started, it would be too much if you started the preformed plant. You know, where are we getting it and how easy it is for us to get to Germany?

That is the challenge. That is, I kept referring to supply chain difficulties. That is the challenge. Fortunately, we do not require... Massive amounts, but it is a challenge that we need to overcome.

Currently, how much inventory of germanium would be there with us? For how many months?

I think that is sufficient to run a few months.

Any kind of, you know, that we have for the FMEG segment as well that we're going to grow, or we're focusing right now on Optic Fiber mode as well?

No, sorry, I didn't give you a question.

I just want to understand if there is any growth, you know, kind of outlook that you can give on the FMEG business as well.

Yeah, okay, our performance has been under par there. That is something that we realize and appreciate. So we are re-looking at the portfolio in terms of what kind of products are we having there, do we need to modify some of those. We are also looking at how to strengthen the teams. So, distribution is something that we've been working on, and that we will continue to engage with the distributors to ensure that both geography as well as products are fully covered. So, it is going to be a continuous exercise this year, and we have... We definitely want to make this a success in the same manner as the other product lines.

We take the next question from the line of Vidit Srivedi from Asian Market Securities. Please go ahead.

Yeah, hi, sir. Thank you for the opportunity. Most of the questions have been answered. Just one clarification. I remember we met you in the month of December last year, and you have said, you know, we are working certainly something in the exports area. So how the exports are shaping up for us, and what's the exports percentage this year?

Okay, so this year, our team was completely revamped. So I think we've had our team in place for about six months of the year. And yes, they have made certain inroads, and they have done well. So earlier year, 2425 export performance was about 30, just around 30 crores, which went up to 52 this year. And I am looking at much higher numbers for the current fiscal. So the team is a completely new team with... We're better prepared, I think. And I think we should be able to show a larger revenue share from the export side. So, until last year, the revenue share was, let's say, about half a percent to just under one percent. I see it climbing to about two to three percent over the next two years.

Got it. That's helpful. Thanks a lot. All of us.

Thank you.

Thank you. We take the next question from the line of Sushil C. Choksi from Endos Equity Advisors. Please go ahead.

Congratulations on your new resignation and very good result. Thank you. My first question is, given the situation, boom in solar not only in India but outside of China also because of the energy crisis. And led by data center, defense, and other optic fiber also. What is the potential to maximize capacity what we have, but double the capacity or enhance our capacity and how much time will it take and what kind of capex is required for that? And current capex which you announced, what is the breakup of that?

So the current capex that I announced includes doubling the solar capacity. So, we are cognizant of the potential there, and we are going to double the line there. That would be helpful for us, not just on the fiber side, but also on the power cable side, both for ourselves as well as for the JV. So, we are engaging with all those customers. The gestation time for these orders is pretty long, so you need to... I think both the JV and us have a certain amount of capacity to cater to the data center needs on power cables. As I mentioned earlier on, when I was talking about the JV, We're trying to expand some of the capacities there also.

So, what is our potential or capability to go further backward where communication, optic fiber, cables are getting from, from where we are at preform?

So, we are at preform the next day. If I have to go back, then I have to make silicon tetrachloride or germanium tetrachloride. So, which I think is, at this point in time, a point which is moot. So, I think we are stopping here for the time being.

Sorry sir, I could not hear you what you said.

I said that going behind preform means that we will have to produce the silica. At this point in practice, not in our plans at this point in time.

Thank you for answering all my questions.

Thank you. We take the next question from the line of Patanjali Srinivasan from Satara Mutual Fund. Please go ahead.

Hi, sir. Thank you for the opportunity again. Just to confirm two things, sir. One is, you mentioned that the revenue potential from the expanded line can be around 750 crores. I think right now, based on whatever... Amen.

I meant including the existing stuff, the overall capacity. After we expand, then the capacity could be, I mean, the potential could be around 750.

Correct. That is for 8 million kilometers. Is that correct? Okay. And how will the benefit of pre-farm show up, sir? Will it show up as lower cost of production or how will that show up?

Okay. One of the earlier questions... One of the questions also was, are we going to earmark a certain capacity to sell preforms outside? Now, that is a possibility. It depends on what the market conditions are at any point in time. It's a flexibility that we will have. So, if I am short on cable orders or on fiber orders, then I will sell the preform. So it gives us flexibility. But I think overall, the intention is to use the preform to convert it into fiber, which again to convert it into cable and then sell it, which means our ability to participate in tenders where pricing sometimes becomes aggressive is available to us. Or depending on situations like today where the fiber prices are extremely high, we don't have to sell the preform. We can convert it into fiber and take that profitability into the books. So it is not a static one-time chart that I will have. It will be dynamic as the market demands.

Got it, sir. Just a related question I have, sir. So, here, when you mention that if you use it internally, like, versus previously you would have been buying from outside, what would the margin benefit be there from this?

I don't have the exact numbers in front of me, but typically, when you, once your production line stabilizes, You should be able to get it better than market. Whether I'm able to get it better than market at 5% or 10%, that would depend on how quickly I'm able to stabilize operations. So, that's about as much as I can say at this point in time. I don't want to stick my neck to a single figure.

No, sir. I was expecting only a range. I'm not trying to get a very specific number.

Yeah, so that's what I'm saying. So, depending on how quickly we are able to stabilize the operation, I think we should be better than market by anywhere between 5 and 10 percent because the pre-farm seller is also making some money, right?

Correct. Got it, sir. Got it, sir. Thank you, sir. Congrats on good set of numbers.

Thank you. We take the next question from the line of Milaj Shah from Samik Shah Capital. Please go ahead.

Thank you for the opportunity. Sir, if you could just repeat the case that you mentioned, is it 200 crores or 300 crores? That's my first question. Secondly, if you could also let me know what is your guidance for the coming years in terms of revenue and margins? And lastly, my final question is that, if you could, this quarter, we've seen our operating expenses as a percentage of sales come down. Now, and when I look at the past 12 quarters, we are in one of the sweetest spots. We are currently our employee expenses as a percentage of sales and other expenses as a percentage of sales. Both are lowest in the past 12 quarters. So do we expect them to continue in this range or do we expect it to revert back to normalcy?

Okay, so let me answer your question one by one. Your first question was on the CAPEX. So I said capacity enhancement is about 200. Additionally, the plan of, you know, The expansion on the optic fiber, optic fiber cable slide, which we had announced two years ago and which is ongoing, there is a balance of about 100 crores to be spent. Because, like I said, the expansion to 8 million kilometers of fiber will get over in July or August. So, all that will cost another 100 crores. So, totally 300, out of which 200 is completely new, which is for capacity enhancements. Is that clear? Yeah, yeah, please. Okay. Your second part was on guidance. I actually do not give out any guidance, especially in a situation like today, where you do not know whether the war is ending tomorrow, because you keep hearing that today is ending, know that it's not ending, and tomorrow I have an agreement, no, I don't have an agreement. It is a very volatile situation, so I don't think I should be predicting anything. All we do is internally, we have targets that we are working towards, and that is subject to certain constraints not being there or certain level of constraints not being there. So, at this point in time, I would not like to talk about any guidance numbers. And that was the third point that you wanted. What is that?

Are there expenses and employee costs? I think

on an annual basis, it should be similar. In between quarters, you might see differences, but overall, at an annual level, we should be similar to what we have today.

To what we did in FY26?

Yeah.

Perfect. Great. Thank you and all the best for the future, sir. Thank you.

Thank you. We take the next question from the line of Pratik Srivastav from Nivesh Milstam. Please go ahead.

Yes. Thank you for giving me this opportunity, sir. First of all, congratulations on your promotion. Thank you. Yes, sir. My question again is, sorry, again on the OFC side of things. So, sir, if I see it from the first half of FY25, sorry, overall FY25 and overall FY26, I see the revenues from our communications being the same, around 500 crores. And I understand that, sir, that you are saying that, you know, in the first half of FY26, prices were depressed. They only started recovering towards the second half. So can you give in terms of volume, what was the volume growth between FY25 and FY26?

About 7%. About 7%. Okay.

And what are we targeting, sir, moving into the next year in terms of volume growth?

Again, we made our budgets two months ago. At that point in time, the expectation around what is happening in the Middle East was that it should settle soon. But it's been three months. Since that act started, and no two days are different, you go back and forth, back and forth, back and forth, so there is no clarity as yet, which means some of the, quite a bit of the supply chain is impacted. And then you heard someone ask a question about Germany. Again, the supplies have to come either from China or from Europe, and both have put serious restrictions on exports from their side, because they themselves have extremely high demand, and the fact that it can be used for defense purposes is, I guess, worrying most people. To be able to predict which way things will move at this point in time is kind of difficult. I think I would like to avoid making that prediction.

Is this problem faced by the entire industry or is it just with...

No, it is faced by many people in the industry. Anybody that is producing pre-farm would face it. So, anybody that is buying preform and drawing the preform would also face it because glass is not available for any kind of money. There are very few people who are able to get glass from outside and only those that are signed on long-term contracts, where again the price is going crazy. It is a problem that is being faced today. Now, how it will pan out in three months, I am not able to. I hope it turns out for the better, but at this point in time, I am not able to.

Yes, sir, that we can understand. And my last question, sir, on the order book on this side of things, can you throw some light on the order book we have?

So, like I said, there is one major contract. Which will come up for renewal in, I think, end of June. I don't see why we should not be able to renew it, because we've been their suppliers for the last eight years. So, product-wise, they are very happy with us, and quality-wise, they are very happy with us. So, I don't see why that should not repeat. Beyond that, and that takes up about slightly more than half of the capacity. The balance is sold to other customers. So in terms of volume, I don't see why we should do, why we should not do something similar or better than last year. And the size of the order book, sir? I don't have that number in front of me, but I am quite comfortable with saying that it should be better than last year.

Okay.

Thank you. Thank you. Ladies and gentlemen, we take that as the last question and conclude the question and answer session. I now hand the conference over to the management for their closing comments.

Thank you. Thank you for all your good wishes, and thanks for participating in today's meeting. Thank you.

Thank you. On behalf of Innolex Cables Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.