Revenue
Margin
Demand
Guidance
Tone
Event Participants
Executives
3 Chaitanya Desai, Kushal Desai, Ramesh Iyer
Analysts
9 Amit Anwani, Ananya Rajan, Aria Biju, Ganesh Rajagopalan, Ganeshram, Natasha Jain, Siddhartha Biyanee, Umesh Raut, Vidit Trivedi
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹6,591 crore | +29.1% YoY; domestic +36.8%, exports +12.4%. Highest quarterly sales in company history. |
| Export Mix | 27.5% (vs 31.6% YoY) | Declined due to faster domestic growth; exports grew 12.4% YoY. |
| EBITDA (post-Forex) | ₹814 crore | +62.7% YoY; margin 12.4% vs 9.8% YoY. Driven by higher realizations and unit profitability across all divisions. |
| PAT | ₹467 crore | +77.7% YoY; PAT margin 7.1% vs ~5.1% YoY (+200 bps). Highest quarterly profit in company history. |
| Conductor Revenue | ₹3,338 crore | +19.9% YoY; volumes -6.7% YoY on delayed manufacturing clearances due to aluminum price surge. |
| Conductor EBITDA | ₹285 crore | +14% YoY; EBITDA per ton ₹53,418 vs ₹43,688 YoY. Premium mix rose to 50.3% vs 43.7%. |
| Conductor Order Book | ₹10,190 crore | Export proportion 56.8%; new orders ₹5,245 crore (65.8% exports), incl. ₹2,800+ crore from two large US/European utilities. |
| Oil Revenue | ₹1,701 crore | +34.7% YoY; volume 129,085 KL (-13.7% YoY), hit by Hamriyah Port closure in UAE. |
| Oil EBITDA | ₹329 crore | +214% YoY; EBITDA per KL ₹25,482 vs ₹7,004 YoY. Includes ₹93 crore provision for price declines. |
| Cable Revenue | ₹1,838 crore | +29.5% YoY; domestic +59.9%, exports -13.7%; US revenue +2.5% YoY. |
| Cable EBITDA | ₹194 crore | +36.7% YoY; margin 10.6% (+60 bps YoY), aided by strong domestic mix (railways, defence). |
| Cable Order Book | ₹1,925 crore | vs ₹1,653 crore YoY, covering near-term requirement. |
| Working Capital Days | 45-50 days | Maintained despite commodity volatility; conductor working capital improved in the quarter. |
Geographic & Segment Commentary
- Conductors: Revenue grew 19.9% YoY with premium products (HTLS, reconductoring, copper transport, OPGW) contributing 50.3% of division revenue vs 43.7% a year ago. Conventional conductor volumes were deferred by customers awaiting aluminum hedge clarity, but orders remain intact. APAR achieved all-time high reconductoring installations and received approval from a top US utility for 144-count OPGW. Export revenue grew 22.2%, export mix 20.5%.
- Oils: Revenue grew 34.7% YoY; UAE plant was restricted to local deliveries due to Hamriyah Port closure, dragging volumes down 13.7% YoY. India volumes were down only 4.4%. Auto oil (+6.6%) and industrial lubricants (+12.1%) grew, while transformer oil declined. A ₹93 crore provision was taken per accounting standards after sharp crude/gasoil price swings, yet EBITDA per KL surged to ₹25,482.
- Cables: Domestic revenue jumped 59.9% due to railways, defence, and channel expansion; exports fell 13.7% but US revenue grew 2.5%. Approvals from Meta, Microsoft and Google data-center contractors now allow copper LV/MV cable participation in the US, where the market is 66% copper. Order book improved to ₹1,925 crore.
Company-Specific & Strategic Commentary
- Premium product shift: Premium conductor products contributed 50.3% of division revenue (vs 43.7% YoY), driving EBITDA per ton to ₹53,418 despite lower volumes. Focus on HTLS, reconductoring, and copper transport continues.
- US data-center market entry: Completed approvals for Meta, Microsoft and Google supply chains during the quarter; started receiving orders and filling RFQs for copper cables (LV and MV, PVC/XLPE/rubber) in the US.
- Capacity expansion: Capacity utilization across product categories is 80-90%; ongoing CapEx is aimed at debottlenecking for growth.
- Working capital discipline: Maintained 45-50 days despite commodity spikes; inventory reduced in the oil division to limit reversal risk.
- Multi-year utility wins: Two overseas utilities (US and Europe) placed orders exceeding ₹2,800 crore for conductors, with deliveries spread over several years.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Formal business guidance | Not provided | Management declined all guidance/forecast questions due to regulatory restrictions related to pending securities issuance; only qualitative commentary shared. |
| Conductor volumes | Recovery expected as clearances resume | Customers who delayed manufacturing clearances on conventional conductors are resuming as aluminum prices have cooled; delays were temporary. |
| US cable business | Ramp-up in copper cable orders | New approvals enable participation in data-center copper cable RFQs; initial orders received in Q1 FY27, growth expected as contractors place monthly/order-wise contracts. |
| HVDC order flow | Multi-year build-up | HVDC-related ordering has started (small in Q1); more orders expected over time from domestic and overseas transmission projects. |
| Order book execution | Majority executable in ~1 year | Conductor order book of ₹10,190 crore; barring two large multi-year utility orders, most backlog is deliverable within about a year. |
Risks & Constraints
| Risk | Context |
|---|---|
| Metal price volatility (LME & MGP premiums) | Aluminum/gasoil price swings disrupted customer clearing and inventory valuations. MGP premiums cannot be hedged; company partially locks in premiums with suppliers but remains exposed to swings. |
| Geopolitical/logistics disruptions | US-Iran war and Hamriyah Port closure hit oil volumes and export logistics; Strait of Hormuz situation remains fluid. Management noted secondary demand held up, but primary sales were affected by customer de-stocking. |
| US tariffs | Section 232 imposes 50% duty on aluminum conductors and Section 301 adds 10% for India. Customers are currently absorbing tariffs, but elevated costs could pressure future demand or margins. |
| Oil inventory provisions | ₹93 crore provision taken in Q1 FY27 due to sharp crude/gasoil price reversal; further price movements could necessitate additional provisions. |
| Customer order delays | Conventional conductor customers postponed manufacturing clearances due to unhedged aluminum exposure. While orders remain, sustained high metal prices could extend delays and hit volumes. |
| Regulatory/communication restrictions | Company is unable to provide forward guidance or commentary on funding plans due to securities issuance notice, limiting investor visibility. |
Q&A Highlights
Oil margin sustainability and provisions
- Question: Should the ₹25,482 per KL EBITDA be considered sustainable? (Amit Anwani)
- Answer: The high margin resulted from selling inventory procured at historical costs while spot prices rose. The company buys ~65% on contracts and 35% spot; in rising markets contract prices lag spot. Management declined to guide on future margins but noted ₹93 crore provision has been made per accounting standards as prices fell from peaks. (Kushal Desai, Chaitanya Desai)
Conductor premium mix and US export timing
- Question: Which products drove premium growth and why are US exports soft? (Amit Anwani)
- Answer: Premium growth was across HTLS, reconductoring, copper conductors, railways, and busbars; conventional AL.59 deliveries were postponed by customers, lowering volumes but lifting mix. US shipments lagged due to Section 232 confusion in prior quarter and DDP revenue recognition timing; approvals and new orders in Q1 indicate stronger US deliveries ahead. (Kushal Desai, Chaitanya Desai)
Order book composition and execution
- Question: What is the executable timeline and geographic mix of the ₹10,190 crore conductor backlog? (Umesh Raut)
- Answer: Excluding two large multi-year orders, most of the backlog is executable in about a year. Exports (56.8% of backlog) are concentrated in Americas and Europe, with the remainder domestic. The two large orders are from major US and European utilities. (Chaitanya Desai)
HVDC ordering and capacity utilization
- Question: How much HVDC/premium business is in the order book and when will it contribute? (Vidit Trivedi)
- Answer: HVDC ordering has only just begun in small quantities; more is expected as multi-year transmission projects progress. Capacity utilization across product categories is 80-90%, with CapEx under way to debottleneck. (Kushal Desai, Ramesh Iyer)
Premium vs conventional export margins
- Question: Are conventional export orders lower-margin than domestic premium products? (Ganesh Rajagopalan)
- Answer: Margin levels vary by product specification; HTLS is highest, followed by domestic premium. Conventional products exported generally carry better realizations than domestic conventional due to stricter quality standards. The company strategy is to focus premium domestically and conventional exports. (Chaitanya Desai)
Cable copper shift and US data-center approvals
- Question: What is driving cable margins and how will copper approvals change the business? (Natasha Jain)
- Answer: Domestic mix (railways, defence) lifted cable EBITDA margin to 10.6%. US approvals from Meta, Microsoft and Google now allow participation in copper LV/MV cable RFQs; this is incremental to existing aluminum cable exports. Wires business grew 46% with 25% more distributors and 51% more retail counters. (Kushal Desai)
MGP premiums and hedging
- Question: How does APAR manage unhedgeable MGP premiums over LME? (Siddhartha Biyanee)
- Answer: MGP premiums cannot be hedged in the market; APAR mitigates by locking in premiums with suppliers through mutually agreed contracts. Premiums have risen quarter-over-quarter and remain elevated. (Kushal Desai, Chaitanya Desai)
Oil inventory cycle and reversal impact
- Question: If prices fall, will EBITDA per KL reverse? (Ganeshram)
- Answer: Yes - when prices decline, contract prices are generally higher than spot, reversing the benefit. APAR reduced oil inventory levels to limit this risk, and the ₹93 crore provision reflects accounting standards at quarter-end after prices retreated from peaks. (Kushal Desai)
US tariff impact on conductors and cables
- Question: What tariffs apply and are customers absorbing them? (Ganeshram)
- Answer: Aluminum products including conductors carry 50% Section 232 duties; Section 301 adds 10% for India. Bare aluminum products (ingots, rods, conductors) are all at 50%. Customers are currently paying these tariffs, and the entire US supply chain has absorbed higher input costs. (Kushal Desai)
Data-center approvals – India vs US
- Question: Do Meta/Microsoft/Google approvals cover India or only the US? (Amit Anwani)
- Answer: US data-center cable standards are entirely different from India; APAR had to build US credentials from scratch. All approvals and manufacturing assessments are complete, and the company is now eligible to supply US data-center contractors. (Kushal Desai)
Key Takeaway
APAR Industries delivered its strongest-ever quarter with consolidated revenue of ₹6,591 crore (+29.1% YoY), EBITDA of ₹814 crore (+62.7%) and PAT of ₹467 crore (+77.7%), driven by higher realizations across all divisions and a favorable premium product mix in conductors. The conductor division saw volumes dip 6.7% as customers postponed conventional order clearances amid aluminum price spikes, but premium products rose to 50.3% of mix and order book reached ₹10,190 crore, including ₹2,800+ crore from two top US/European utilities. Oils delivered a 214% EBITDA jump despite a ₹93 crore provision and UAE port disruptions, while cables grew domestic revenue 59.9% and secured US data-center approvals (Meta, Microsoft, Google) for copper cable entry. Management refrained from formal guidance due to regulatory restrictions, but expects conductor clearances to normalize, US copper cable ramping, and multi-year HVDC demand. Key watchpoints include metal price/MGP volatility, US tariff pass-through, and oil inventory provisions in a volatile crude environment.