Paramount Communications Limited (PARACABLES) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Paramount Communications Ltd. Q1 FY27 Earnings Conference Call. As a reminder, all participant clients 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 touchtone phone. I now hand the conference over to Ms. Vanessa Fernandez from Investor Relations Team of AdFactors PR. Thank you, and over to you, Vanessa.

Thank you, Huda. Good evening, everyone. On behalf of Paramount Communications Limited, I would like to welcome you all to the earnings conference call for Quarter 1 FI 2027. Today on the call, we have with us from the management, Mr. Sanjay Agarwal, Chairman and CEO, Mr. Parth Agarwal, President Marketing, Mr. Shambhu Agarwal, Chief Financial Officer, and Mr. Narendra K. Gupta, President, Accounts and Finance of Paramount Communications Limited. We will begin the call with brief opening remarks from the management, followed by a Q&A session. Please note that the certain statements made during this call may be forward-looking in nature. Such statements are subject to risks and uncertainties that could cause actual results or projections to differ materially from those statements. Paramount Communications will hold no responsibility for any actions taken based on such statements and undertakes no obligation to publicly update these forward-looking statements. I will now hand over the call to Mr. Sanjay Agarwal for his opening remarks.

Good afternoon, ladies and gentlemen, and a very warm welcome to all of you to the Paramount Communications running conference call for the first quarter ended 30th June 2026. Thank you for joining us today and for your continued interest in Paramount. Our detailed earnings release and presentation have already been uploaded to the stock exchanges and to our company website. I trust you have had the opportunity to go through them. Let me begin with a brief word on the environment we are operating in, because I think it sets the context for the quarter very well. The wires and cables industry continue to operate against a backdrop of metal price volatility and global trade uncertainty. These are conditions our industry has been navigating for some time. What has remained constant, however, is the underlying demand. Power infrastructure spending, the pace of renewable capacity addition, and continued momentum in construction, railways, and industrial projects, all activity remains supported throughout the quarter, and we saw that reflected directly in our order flow also. On the export side, following the resolution of the IEPA tariff uncertainty that had weighed down the US market through much of the last year, we are also seeing the initial signs of a more stable, more predictable trading environment, which is quite in Belzee. Against this backdrop, I am pleased to share that Paramount has started FY27 on a strong We delivered one of our strongest quarters on record with healthy improvement across revenue, EBITDA, and profitability. Before I take you through the detailed numbers, I would like to hand over to Parth to walk you through the key business developments and demand drivers behind the quarter because I think the context is important. Over to you, Parth.

Thank you, Sanjeeji, and a very good afternoon to all of you. Let me start by saying that the growth this quarter was broad-based with momentum across our domestic business as well as exports. More importantly, the underlying demand environment remained healthy across several of the end markets we serve. Our domestic business continued to build on the momentum we spoke about last quarter, with growth coming mainly through the domestic power and infrastructure sectors. The structural drivers we spoke about consistently, the grid strengthening and transmission investment, the ongoing renewable energy build-out, the early but growing pull from the data center infrastructure, continued momentum in railways and metro electrification, and steady real estate and construction activity, all are translating into firmer order inflows than we had anticipated at the start of the year. Following the US Supreme Court's invalidation of the EPA tariffs earlier this year, and with India now placed at par with the other exporting nations, we are seeing the initial stages of normalization in our US business. We continue to view the US as a single largest and most important export market, given the scale of the grid and data center investment being planned there over the coming years. And we remain focused on deepening our Relationships in that market. Alongside the U.S., we have also stepped up customer engagement and approval work in the Middle East and other regions like Europe and Africa, where we see medium-term demand building from data center build-out and grid revamp programs underway across the regions. Our approach is to be positioned with approvals in place and customer relationships established so that when the demand cycle turns fully, we are a natural participant than a late enter. On the operation side, our Dharuada and Khushkheda plants continue to operate at optimal utilization through the quarter, consistent with the trend of the past several years. This continues to underline why our new investment in Narmada Puram is central to our next phase of growth, and Sanjay Ji will cover that in more detail. Overall, we remain convinced that this is a multi-year structural expansion phase for the Indian wires and cables industry and that organized players with diversified product portfolios and export relationships are best positioned to capture a disproportionate share of it. We are equally encouraged by the return of a more stable trading environment with the U.S., which removes a meaningful overhang from the last year. Thank you. I will now hand back to Sanjeevji for the detailed financial performance of the quarter.

Thank you, Park. Let me now take you all through the numbers for quarter 1 of FY27 in some detail. Revenue from operations for Q1 F527 grew 17.4% year-on-year, although it declined 7.7% Q1Q to INR 529.4 crores as against 450.9 crores in Q1 F526 and INR 573 crores in Q4 F526. I think this is, I would like to mention here that it is an annual trend. The last quarter of every financial year tends to be a pretty high-volume quarter, and the opening quarter of the next financial year normally is a bit lower than the Q4 of the previous year. EBITDA, including other income, was INR 37.8 crores with EBITDA margin at 7.1%, an improvement of 44 basis points over Q4FY26 and 3 basis points over Q1FY26. Even more encouragingly, our operating profit, excluding other income, grew by 129.2% year-on-year to Rs. 34.7 crores, with operating margin expanding by 320 basis points year-on-year and 136 basis points quarter-on-quarter to 6.6%, which is the metric that best reflects the underlying business trend. Pat profit after tax for the quarter stood at INR 19.7 gross, up 3.7% year-on-year and down 4% quarter-on-quarter with a pat margin of 3.7%. Earnings per share for the quarter was INR 0.64. As I mentioned earlier, our first milestone, which we had set out in our last call, was to get back to the FY25 level of margin by the Q4 of this current year. I am happy to report that this quarter's numbers show that we are very well placed towards achieving that milestone. This has been a strong quarter across all metrics that matter. Coming to the U.S. and export business, a meaningful part of the improvement of our results has come through because of the normalization of the U.S. business scenario. As I have said, in the last quarter, we have made a deliberate call to hold on to our U.S. distributor relationships, even through the worst of the tariff disruption. Instead of exiting the market that we had spent nearly a decade building up from two distributors in FY22 to eight as of now, that patience is now paying off. Exports for the quarter stood at Rs. 155 crores, contributing more than 29% of the revenue, up approximately 77% quarter-on-quarter, against the tariff compressed Q4 by 26, in which only 87 crores of U.S. exports took place, despite the volume being so high overall. We expect this recovery in the U.S. market to continue building throughout the rest of the year. Coming to the domestic business, our domestic business has continued to accelerate, even as the U.S. market has also come back, which is exactly the kind of dual-engine growth that we have been building up. Domestic revenue for the quarter was INR 374 crores, contributing 70% plus of the revenue, led once again by our power cable segment, which alone accounted for 57.2% of the Q1 quarter 1 revenues. Within domestic, our B2B industrial business grew 90% year-on-year to INR 296 crores, B2C retail and distribution grew 15% to INR 44 crores, and our B2G government and PSU business stood at INR 35 crores, reflecting the normal execution timing across the government segment. Our order book as of 30th June 26th stood at INR 615 crores, a healthy uptick from INR 583 crores at the end of March 2026, comprising INR 518 crores of domestic orders and INR 97 crores of exports. Power-keeper orders alone stood at INR 455 crores, up 27% year-on-year, representing approximately 74% of the total order book and giving us a strong visibility into the coming months. Now coming to the working capital, our cycle stood at 96 days for the quarter, which is an improvement over the 101 days that we got in Q4 by 26. And receivable days improved to 64 days from 79 days at the end of March 26. The elevated receivable position we had flagged last quarter has substantially normalized as we had expected. Coming to the balance sheet and equity raise, during the quarter, we successfully completed a fresh equity raise of approximately Rs. 122 crores, another step in strengthening our balance sheet for the growth phase ahead. Of the amount raised, approximately Rs. 65 crores has been earmarked for Larmada Puram capex and the balance strengthens our working capital Giving us a meaningful liquidity buffer to fund the growth without any near term pressure. As a result, our net was strengthened from INR 778 crores at the end of March 26 to INR 894 crores as of 30th June 26 with our debt equity ratio remaining comfortable at 0.15x. On Narmada Puram, our greenfield project, this is going to be our third manufacturing facility, located now in Madhya Pradesh this time. Progress remains on track. Most of the critical plant and machinery has already been ordered. The mobilization of civil construction has already begun. We expect the operations at Narbada Guram to partly commence in Q1 FY28 with revenue of approximately Rs. 500 crores expected for FY28 from the Narbada Guram plant. This, we hope, shall scale up to 1200 crores by FY29 as the plant ramps up. We continue to expect this project to be funded through a mix of recent equity rates, internal accruals, a modest amount of debt. With our overall equity debt position remaining quite comfortable, we do not expect to cross the level of 0.3x at best by the time we complete the first phase of our Nandabagroon project. Coming to the future outlook, I think this has been a genuinely good quarter after the problems, difficulties, and the losses we faced on account of exports to the U.S. market last year. This quarter has been now strong on revenues, strong on margins, and there has been improvement in working capital with the U.S. recovery and the domestic momentum both working in our favor at the same time. The broader industry backdrop continues to support our growth, and we remain firmly focused on our five-year vision of reaching revenues of INR 5,000 crores by FY31. And I believe this quarter is a clear evidence that we are moving in the right direction. So, ladies and gentlemen, we now open the floor for questions. Thank you so much.

Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their question on 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 break through a moment while the question queue assembles. The first question is from the line of Suraj from Yes Securities. Please proceed.

Hello, can you hear me?

Yeah.

Yeah. Congratulations, sir, on the good set of numbers. My questions are basically faced, focused on EBITDA numbers. So, earlier you had mentioned that as a first milestone to return on the EBITDA margins are for 25 levels with the potential to return to pre-tariff margins also. So, would we expect this margin to really move towards 8% now? And question number two is, can we explain the, you know, 320-lips improvement, like, what are the factors which led to this, and can we sustain this going forward in FY27?

Now, I think the Q1 result is actually, you know, fully in line with the expectation that we had in the previous quarter. The 6.6% operating margin, which excludes other income, is quite a, you know, I think a meaningful step for us to achieve the FY25 levels that we hope to close with in the current financial year, at least by the last quarter of FY27. So, this progress towards that margin level is going to be, of course, maintained through this year. We have to appreciate that last year our EBITDA margins went down dramatically because of the U.S. margins having gone even into the negative territory. It's only the strength of our domestic pivot that we were able to make, that we were still, you know, able to close the year with a reasonable growth and a reasonable margin on the table. So, we are confident that by the end of this year, we should be achieving the pre, you know, or rather the F525 levels in terms of margins. The factors that we, you know, can say broadly that will contribute to increasing these margins, you know, 300 business points plus roughly, should be the normalization of U.S. exports, which has already happened after the U.S. Supreme Court invalidated the IEPA punitive duties, which had particularly been very harsh on India, and which has made our competitive position versus other countries very weak. So that stands nullified, and we are restored to our original competitive position. Second is, within the domestic market, we have quite a favorable product mix. Our power cables, domestic, were around 57% of the total Q1 revenue, And this is more towards the higher margin B2B institutional business that we have been doing. Exports coming back to 29% plus versus 15% in Q4 of FY26 is also an indicator of the strong recovery which has started happening in the export market. And, you know, I think more or less, we think that we are quite very well on track.

Okay, that's all for my second. Thank you.

Thank you. The next question is from the line of Bhavya from Share India. Please proceed.

Hello. Sir, my questions are around Narmada Puram capacity expansion. So, I just wanted to know what is the status over there and any cost or time overruns that we are expecting.

I think this is something that we would also, ourselves would also like to clarify. You see, the most crucial part right now in the cable industry is to arrange for the machinery that one needs Because with the expansion that is going on, there is a pretty good, longish line for delivery of the machinery. We have, you know, ordered most of the crucial machinery quite well in advance. And we expect that all to come absolutely on time that we need it to be. The building, as far as the building is concerned, the mobilization on the site has already started. We expect the construction process, the major construction part to be accomplished within a period of six to seven months, which is the time frame that we have on our internal charts. So I think we should be hopefully very well on the as per the plan, and we do not expect any major overruns. Some variations always take place while doing any capex project, any infra project, but more or less it should be online. We don't expect any surprises.

Good to hear that. So my next question is how much capex has we incurred till date, and if you can break that down between debt and equity mix?

You see, we have roughly spent around 35, 35 crores, 33 crores, 30 crores, 30 crores plus we have spent on the Narmada Puram project, although we have been spending on CAPEX in our existing plants also for the last 3-4 years, we have spent more than 155 crores in both the emissing plants also. So, it's a mix of the equity that we have raised and at the same time the internal accruals and the debt that is also going to be a part of the mix that we have already set up in place.

Can I add to this? Basically, the debt to equity that you are asking about, Shambuji, I think you are able to add.

Yes, see, on that we have not taken any debt yet. Whatever we are spending on the Narmadapuram Capax, it is just out of the internal accruals and the capital raised by us recently. And certainly, at the later part, we are targeting some term loan also, but in any case, after completion of the Narmadapuram project, our target is to keep the debt equity ratio below 0.3% only, Not to put extra burden on the company to our interest or reformatability.

Understood, sir. Sir, we are targeting a turnover of around 500 crews in FI-28 and 1200 crews in FI-27. Sir, what kind of capacity utilization can we expect to achieve this number?

You see, this is a product that approvals would come gradually once the plant is established and the product is manufactured. But let us understand that this plant is fully flexible with the, you know, 11 and 33 kV product that we are already selling extensively in the market, and even 66 kV. So 66 kV, we have the approvals in place, but 132 kV, for example, the approvals would be required. So, practically, you know, this plant, we are going to hit the ground running. We are going to start manufacturing and selling from day one. That's not an issue at all. But, yeah, the time taken to really get the final approvals and the major volumes of 132kb, yeah, some time would definitely be there on cards.

But I think we are pretty confident given our track record in the industry, our experience, and the very experienced manpower that we have. There is no, you know, doubt in there about getting those approvals. It is a natural timeline that it will take after the production.

And in addition, you see, the amount of confidence that the customers have on Paramount is going to be a big factor for us being able to, you know, get the volumes that we need at much earlier dates than what any new person might expect.

Thank you, sir. That was all from my...

Thank you. Thank you. The next question is from the line of Prathamesh Savan. From Abakus Investment, please proceed.

Yeah, hi, sir. Good afternoon. Congratulations on a great set of numbers. Just one question from my answer. Our exports, although have grown 30% of the orders, but our order book, I could not see, you know, strong growth in exports. So, any reason you should explain over there, you know, what is happening, typically how the order book builds up in the export?

You see, export, typically, we were having much larger order books. Now, after this last year's disturbance, both, you know, on one side, we have become more careful. The other side, our distributors also are a bit more careful. The, you know, the sort of risk that one, not only the risk, the realisation of risk that we saw, the problems that we saw last year. We all want to be careful. We have a steady pipeline. We are not afraid that we are going to have some bottlenecks on the way. So we are happy to keep our order book at a lower level right now. And as we gain more and more confidence, we will try and increase it. Because there is no pressure on us to have a larger order book. That's where we stand on this issue. You see, almost all our customers have now shifted to, you know, the duty, any change in tariff being, you know, to the account of the buyer. Rather than the earlier position where we were absorbing, we were supposed to absorb the full impact, but because of the huge value of the impact that was happening, we were able to convince our customers to share that hit with us. Now, the customers want, because they were seeing more of an upside in the sense that duties were coming down, so they said, okay, now we want to take the full plus or minus to our account. We said, we are happy to do that. Not a problem. So most of the customers doing that also removes, takes away our risk, and we are comfortable. So we also do not want to jump into a situation where we try to press the accelerator too hard. We don't want to do that. Without doing that also, having done 155 crore in quarter one, I am more than, you know, sure that we will easily do 700 to 800 crores in export again this year to the U.S.

Okay. Because the, will it be right to understand that the, you know, the supply chain has affected to a much shorter run, it is up here. Otherwise, you know, what we were doubting was that the margin improvement that we were expecting, export would be a key trigger like that.

You see, margins definitely are on an uptick. You see, there's nothing better to explain this uptick than the fact that last year we were actually at EBITDA minus substantially. I think we had 4, 4.5% of loss at EBITDA level on the U.S. exports because of the tariffs that we were having to bear, despite the customers sharing the, you know, hit with us. So, you know, right now we have got a good quarter and we expect to consolidate it because, you see, the customers also have been hit. Our distributors, they also shared the tariffs and they are also smarting from the pain. So, we all are gaining confidence and going ahead, you know, but we want to take some strong, solid steps. No, I agree, sir.

But what I want to say is, let's say, if you understand that, you know, since we have a smaller order book, so it should not happen that, you know, in H2, we have a smaller export component and that's why the margins, you know, kind of retrace from where they are now. So that is not a risk that you see.

You see, let me just tell you again. You see, we, as our guidance used to be very clear till FY25, that on the export front, we were 1.5% higher compared to the domestic margins, right? Now, FY26, everything totally changed. As I just mentioned, that we, in fact, had losses at EBITDA level on the exports. So, that was not our guidance at all, right? Now, coming to what is happening in the current year, we are gradually improving our export margins, because, you see, we were at a huge disadvantage last year compared to our competing countries, especially countries like Vietnam or South Korea or even, to some extent, Cambodia. So, these things that now we are overcoming and we are getting over them, and every quarter we expect to improve our margins. At the same time, we have to appreciate that Paramount can pivot very, very fast from domestic to export and export to domestic. This has already happened twice with Paramount. We have given a very interesting chart in our earnings presentation, in which we have shown the revenue mix, how it has changed over different periods, and the market trends. If you look at FY22, 22% of our revenues were exported to the U.S. In FY23, when demand in the U.S. was booming and there was a very heavy pressure on us to supply more, we went up to 50% of our revenues from exports in FY23. So, in actual numbers, the exports became 132 crores of exports, became 400 crores. Out of 130, U.S. was only 100 crores. 30 crores was other markets, which we have thereafter decided not to service mainly. So, 100 crores to the U.S. became 400 crores in FI23, which was 50%, and then in FI24, the demand in U.S. went down. So, we did only 276 crores, which was 26%, and we covered that by 74% of domestic, which became 771 crores. So, practically, my domestic revenues, I was able to nearly double in just one financial year from 396 crores to 777 crores. So, that was a pivot again. So, while we have absorbed the shock of our revenue, it has grown by 30 percent again. So, that is what we have done. And again, if we come to FI 25, this was a year of extreme shock, in which H1, we had touched 43% of our revenues again in exports to the U.S. In H1, we had done a total of roughly, you have the number, H1?

900 crores.

How much? 878. 878 crores, out of which, you know, we did 381 crores in US exports alone. But in the next quarter, when the heavy, you know, 25% reciprocal and 25% Russian oil derrick was imposed on us, we had to go down to just 169 crores. But that does not mean that Paramount's turnover did not grow. You know, we maintained and we increased our turnover again. The 497 crore of domestic turnover in H1 became 864 crore in H2. So, this is what shows that the fungibility of our capacities and the strength of Paramount, not only in the US market, but also in domestic market, which is able to give us double the volume in a single year. That is the strength of Paramount's, I would say, positioning in the domestic market also.

Okay, I'll also just add one thing. I think what you had asked regarding the order book, if you see in our quarter four in March order book, exports was much smaller, even much lesser than what we did, which we have today at 92 crores. So, and we still achieved 155 crores. So, that is not a problem. Even we are very positive that we will be able to do 700 to 800 crores of exports in the current financial year. And it helps us maintain orders at better margins by not taking orders at lower margin just to fluff up our order book.

One more thing that I would like to add here is that you usually will never see a very large order book number on Karamang's books. And the reason for that is that we try and, you know, mostly we do not accept orders more than three or four months delivery when it is at a firm price basis. The reason is that on a firm price, if we accept long duration orders, it is A, not very easy to hedge, and B, hedging also cannot having its own risk. So, B, usually, either it's a variable price order, which is fine, if the aluminum goes up, the price goes up, and otherwise in the opposite direction. But as far as firm price goes, we try to stick to our three to four point policy. The day we get the order from the customer, the next working day, we book their metal, and that's how we are, you know, covering our risk of volatility in metal.

You got a pretty long answer for that single question, but I hope it has covered.

No, but yeah, that was very helpful. Thank you. And so just one minor detail, what's our current capacity utilization, sir?

Capacity utilization, you see, harvesting plants, what I would say is that it's practically 100%, nearly 100% throughout, because, you know, as I said, we have been investing, we have been doing CAPEX for the last three years continuously, and practically every machine that lands up in the factory starts producing from day one, the moment it's fixed on. So, because, you know, for Paramount, the problem is not selling. The problem is manufacturing because our capacity has been constrained. And now that we are adding our capacity continuously, we are able to grow. And that is why you have seen those growth numbers which far surpass anybody in the industry, 30% plus, 35% CAGR. All that is possible only when you have such a huge customer acceptability.

Thank you.

The next question is from the line of Jigar Jani from Novama. Please proceed.

Hi sir. Thanks for taking my question. Sir, continuing to the previous participant's question, you mentioned your near optimal capacity utilization in existing facilities. So what kind of top-line growth do we expect what you have delivered in Q1 to continue and then the majority of the ramp-up to come in FY28 once Narmadapuram kicks in?

Absolutely. You see, I think you have answered the question yourself. The current year, we expect to do 15% to 20% roughly in terms of revenue growth because existing plants are, you know, as I said, really up to the neck. We are still doing some more capex in those, and there are some new products happening, so we should be able to do 15-20%. And the next year, once the Nirmadapuram capacity kicks in, you know, I think we should be growing at a much faster pace. We have set ourselves the target of crossing 5,000 crores in revenues by FI 31, and we rather hope that we should be, you know, able to better that target to the extent possible. You know, we have been, if you look at our previous years, we have been going 30-35 in one year, 40% even. So, that is the sort of growth that we are very confident that we should be able to do. Our problem has always been capacity, and as we build capacity, we are very sure that we will be there.

Sure. And just a follow-up on the margin guidance, you said that we will be back to pre-tariff margins, which is about 8% or a better margin, by end of this financial year, ending quarter of this financial year, right?

Sure, sure, sure, sure. That's our expectation, because, you know, there has been some gradual improvement in the U.S. market. Domestic market, it's steady, but still, you know, if we suddenly have very high volumes, much higher volumes out of our market, it takes a bit of time to stabilize. So, both things are in process.

Last year, one data-skipping question, what was your metal throughput this quarter, and what was it in the same quarter last year, and in the new course, which you can share?

You see, roughly, I think, if I'm not wrong, off-hand, I can say it was 29,000 tons for the metal throughput last year. I think this quarter, we, on a year-to-year basis, I think we have some, around 4% metal throughput increase.

4% compared to the same quarter last year, right?

Yeah, yeah.

And you won't be able to share the absolute number. I'll take it off, Frank, no worries. Yeah, so these were all my questions, yeah. Thank you so much for having me. Thank you.

Thank you so much. Thank you a lot.

Thank you. So, the next question is from the line of Siddharth Venkatesh from Bayou Capital. Please proceed.

Hello, sir. Thank you for the opportunity. So, I had a question about, you know, you increasing your export share growing steadily. So, we primarily see the demand coming from your power cables. So, I wanted to know if you want to give any color or guidance on, you know, more margins, optical fiber or, you know, optical fiber capacity, See if you can give any guidance or plans for the next two, three years.

I think optical fiber part will give you some trigger, Abdi.

I think you were talking about more markets or more margins. Sorry, we just wanted to clarify that.

No, like what I meant is optical fiber is like a higher margin product compared to, you know, the power wire and cables, right? So that's what I meant. Is there any plans? Because we are seeing multi-year demand in the North American regions Yes, I'll just explain that.

So, optical fiber cables, see, we are not the largest player, and, you know, the players that we're competing with today, they have a reverse integration where they're also making the glass. So, it's a high capex model which they have gone for. That's the business model. But, you know, since the market is in a very, I'll say, golden phase where the, you know, data center driven requirement is in a boom, we see the requirements coming to us as well. And we will be, you know, a participant in that scenario. There are some specific items in the data center which are very high fiber count cables, which currently we are not doing. But our products are also seeing a good market demand. And as it stabilizes, as the requirement stabilizes, we are seeing, we are confident that we will be a participant in that also. But our driver, our growth drivers remain power cables, our new products like the specialized conductor that we are doing, like most likely HTLS, which are also more value accredited to us.

If we add that in HTLS, we have already made some very good progress. We already have 100 crores worth of business in hand. And the capacities that we are building up should be, you know, not only giving us extra revenues, but they should be highly margin accretive. So, it's not a given formula, it's not a standard formula that always exports will be giving me higher margin. It's possible, quite possible, that in some segments, and depending on the volume that we are able to get, even in the domestic market, we might be getting some very good margin. So, every segment, every pocket has its own, you know, different characteristics, and one has to try and, you know, be there and have maintained the presence in all the sectors that one is doing business with.

Got it, sir. Thank you. That's it from myself.

Thank you. The next question is from the line of Nakel Kanodia, Non-Sunidi Securities. Please proceed.

Yeah, good afternoon, sir. And congratulations on the great set of margins that we have posted this quarter. So, my question was that now that we are commenting that the U.S. market is kind of continues to be a strong market now. So, like, are we launching any new markets over there? And, like, what is the status on that front? Like, if we have any approvals for the change? So, that is question number one. And the second question would be, sir, on the Madhya Pradesh facility that you have stated. So, EHV, you stated that you will get into the approvals for the 132kb class as well. So, just wanted to understand what, like, on a practical basis, like, what could be the turnaround time for getting the approvals? Like, when can we see the revenue contribution from that higher EHV class cables coming into our books?

Okay. Now, as regards the U.S. new products is concerned, we are, you know, increasing our products on offer into the U.S. market. The one major thing that is coming is that till now we have been exporting all cables up to 600 volts only to the U.S. market, for which, of course, Paramount is the largest exporter from India to the U.S. But now we are coming up with solar cables, which are higher than 600 volts, and that is also a very big market because of the renewables investment, which is happening in a very large scale in the U.S. In addition, there are one or two other products, which I would not like to name, but are being part of the data center demand, and we already hold the approvals. It's only a matter of how one is able to, you know, fructify that into real direct demand from these. I think we are working on that. So that U.S. in any case is a market where Paramount's quality is, you know, already had a lot of traction for the last four or five years. We are a respected brand there. So whatever product we launch there, I think we already have a built-in advantage by now. Coming to the Indian market, we are approved, you know, up to 66 KB. In a way, 66 KB, you know, we were not doing too much because the plant was not really fully equipped to give large volumes of 66. But we are doing that from time to time. In Narmadapuram, that should become much easier. So, up to 66, more or less, we are all set. 132, of course, we'll have to produce a sample, and one should expect approvals to come in, start coming in within, I would say, one year approximately. Maybe some one or two approvals might come even in 68 months. But, you know, that's all from the date we actually start manufacturing. So, one should expect by the end of FY28, We should have, we should start having some approvals in hand, and by about 29, we should have all the approvals. And the next stage, of course, will be that we are currently itself looking at the possibility of going into 220 KV and 400 KV also. So, that all working is there. I think that is not anything that we are officially mentioning at this point of time, but it's just something that we are looking into.

Okay. So, sir, can it be, like, if the understanding is correct, so from the phase 1 of around 300 crores, so 1,200 could be the peak revenue potential of 4 times set time. So, that could be the case with Nirmala?

You see, 12-13 crore is the initial, one can say, 4x multiple that one is expecting. But 4x is never the actual multiple that really, you know, happens in our industry. What happens is, you have done your initial capex, you have spent your money on building everything, and thereafter you keep on adding things and then the revenues come from those. Kirtes, you know, the multiple improves, and one starts, you know, as I said, we are looking at something like 1,200 crore at 75% capacity utilization. As one goes forward, you know, small additions are going to give us revenues. So, at the end of the day, we expect to be, you know, steady at something like five and a half, six multiple. After the second phase of the time. After the second phase is completed, yeah.

Okay, sir, understood. And, sir, you mentioned that you are getting into solar as well. So, just wanted to understand, does the E-beam cables also constitute under your plan?

You see, E-beam cables are going to have a full demand in India for solar sector. We don't see any major part of that happening in the U.S. currently, at least. Those are non-E-beam cables. But in India, there is an expectation of some good solar demand. I think parts would like to add something to that.

Yes, see, e-beam cables is something which is definitely a part of the phase one capex that we're talking about in 300 crores. And it will be, you know, it will be the new product for us. So, in a way, we have to get approvals and, you know, certifications for that product. So, it will be a longer gestation product, but the product will be definitely, because it's high barrier to entry, It will be higher margin accredited, and by end of FY29, we hope to have a certification where we can start supplying, but the major certifications should start coming in a year after that, which is for defense and railways and, you know, shipbuilding, etc. Our niche requirements, which are also growing at a very good pace.

Okay, sir. Understood. Fair point. Those are my questions. Thanks for answering, and all the best.

Thank you. Thank you. The next question is from the line of Mandira, an individual investor.

Yes, ma'am, please continue. Hi, so I just had a few questions. I wanted to know your status on the new launch in the U.S. market, and what do you think the marginal profile of these products would be?

I'm sorry, a new launch?

So you see, there's no particular new launch as such Because we have these approvals for some time, we are only, you know, we were having limitations in terms of our manufacturing capacity. That was why we were resisting ourselves till now to the cables up to 600 volts. Now that we are finding some extra capacity available, we are going into this solar cable, you know, field also. And the exports have already started in solar cable, and the margins should be, you know, similar to what we are having right now. Maybe they will go up a bit as the demand strengthens because of the investment that is happening in that sector in the U.S.

Okay. And what is the current run rate of the U.S. export?

Current run rate, we have done around 155 crores in Q1. And if you just multiply it by 4, you get a number of something like 620 something, but we should be doing better than that. We are expecting something between 700 to 800 crores. I think that should not be a problem at all.

Okay. What do you think is the competitive landscape versus like the other countries other than U.S. or like any other Indian peers?

No, no, U.S. has acquired or U.S., I think, quite understood. You are saying other countries competing with us in the U.S., right? Is that what you are saying? So, you see, we have been competing with many countries, but the major competitors, as it turns out now, have become South Korea, Vietnam, to some extent Cambodia, and there are some smaller competitors who might gain ground. Egypt is there in the reckoning, Ecuador is there. To some extent, Turkey has also started taking interest in this market now. So, you know, there are various countries who are doing their things. Our problem last year was that we were the worst hit. My competitor is, somebody was having 10, somebody was having 15, somebody was having 18, and I was having 15, I was having 25% plus 25, 50% duty on my product. Right? And there was a huge pipeline of orders which my customers had given to me, which I had started manufacturing, which were lying in my, finished in my factory, and the biggest part was goods on the ship, on the sea. Two months' worth of material was on the sea. Right? What I respect. So, all of that, you know, was the difficulty that we had to navigate through.

Okay.

Okay. Thank you. That's it from my side. Thank you. The next question is from the line of Salonisha, an individual investor. Please proceed. Hi.

Thanks for the opportunity. Just two questions from my side. Firstly, I wanted to understand what percentage of your current order book is, you know, effectively protected against the aluminum volatility, and second is on the working capital cycle, any color on whether we should expect improvement there going forward?

You see, as far as aluminium volatility is concerned, as I just explained earlier, we do not accept any firm price orders beyond C2-4-1 delivery, and we book our metal the very next working day after we receive an order. So practically, at least in theory, there is zero risk, but in reality, yes, sometimes pluses or minuses happen. There is also that the variable price orders to some extent are there. In variable prices, again, you are protected, but again, in actual terms, there might be some variation, so that happens, but more or less money is covered, I would say. So we We do not take any mental risk as a policy, not today, but for many, many years.

Oh, sorry. What was the second question?

It was on the working capital cycle. You know, if you could throw some color, if we can expect some...

Our CFO, Mr. Shambhu Agarwal, would like to take that.

See, as we explained during our last call also, the company is making all the efforts to keep its working capital cycle between 90 to 100 days. This Q1 also, we have kept our working capital cycle at 96 days, and hopefully, gradually, we shall be targeting it to keep it in that level only 90 to 100 days.

Okay, got it.

Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the contents over to Ms. Vanessa for closing comments. Over to you, ma'am.

Thank you so much, Huda. I thank the management for this insightful session with our investors and analysts community today. Thank you, everyone, for taking the time out to join us, and we look forward to your participation in the next call as well.

Thank you. Thank you very much. Thank you, everyone.

Thank you. On behalf of Paramount Communications Limited, that concludes this conference. Thank you for joining us, and you may now visit Connect Your Lines. Thank you, everyone.