Paramount Communications (NSE:PARACABLES) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to Paramount Communications Limited Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Ms. Vanessa Fernandez from Investor Relations team of AdFactors PR. Thank you, and over to you, Vanessa, ma'am. 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 one FY twenty twenty seven.

0:50 Today on the call, we have with us from the management, Mr. Sanjay Agarwal, Chairman and CEO Mr. Parth Agarwal, President, Marketing Mr. Shambu 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 and A session. Please note that 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.

1:39 I will now hand over the call to Mr. Sanjay Agarwal for his opening remarks. Over to you, sir. Good afternoon, ladies and gentlemen, and a very warm welcome to all of you to the Paramount Communications earning conference call for the first quarter ended 06/30/2026. 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 we 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.

2:28 The wires and cables industry 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 supportive 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 U. S. 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 encouraging.

3:29 Against this backdrop, I am pleased to share that Paramount has started FY '27 on a strong note. 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, Pat. Thank you, Sanjay ji, 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.

4:20 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 U. S. 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 U. S. Business.

5:14 We continue to view The U. S. As our 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 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 center.

6:01 On the operations side, our Dharuwara and Kushkera plants continued 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 Narmadapuram is central to our next phase of growth, and Sanjay Jee will cover that in more detail. Overall, we remain convinced that this is a multiyear structural expansion phase for the Indian wires and cables industry and that organized by 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.

6:53 Thank you. I will now hand back to Sanjeejee for the detailed financial performance of the quarter. Thank you, Pat. Let me now take you all through the numbers for quarter one of FY twenty twenty seven in some detail. Revenue from operations for Q1 FY twenty twenty seven grew 17.4% year on year, although it declined 7.7% Q on Q to INR529.4 crores as against INR450.9 crores in Q1 FY twenty twenty six and INR573 crores in Q4 FY twenty twenty six. I think this is I would like to mention here that is a annual trend, the last quarter of every financial year tends to be a pretty high volume quarter and opening quarter of the next financial year normally is a bit lower than the Q4 of the previous year.

7:47 EBITDA including other income was INR37.8 crores with EBITDA margin at 7.1%, an improvement of 44 basis points over Q4 FY twenty twenty six and three basis points over Q1 FY twenty twenty six. Even more encouragingly, our operating profit, excluding other income, grew by 129.2% year on year to INR34.7 crores with operating margin expanding by three twenty 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.

8:35 PAT profit after tax for the quarter stood at INR19.7 crores, 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 have set out in our last call was to get back to the FY twenty five level of margin by the Q4 of this current year. I'm 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.

9:26 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 have spent more nearly a decade of building up from two distributors in FY 'twenty two to '8 as of now. That patience is now paying off. Exports for the quarter stood at INR 125 crores, contributing more than 29% of the revenue, up approximately 77% quarter on quarter against the tariff compressed Q4 FY twenty twenty six in which only INR 87 crores of U.

10:23 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 $3.74 crores, contributing 70% plus of the revenue, led once again by our Power Cable segment, which alone accounted for 57.2 percent of the Q1 quarter one revenues.

11:09 Within domestic, our B2B industrial business grew 90% year on year to INR296 crores, B2C retail and distribution grew 15% to INR44 crores and our B2G government and PSU business stood at INR35 crores, reflecting the normal execution timing across the government segment. Our order book as of 06/30/2026 stood at INR $6.15 crores, a healthy uptick from INR $5.83 crores at the end of March twenty twenty six, comprising INR $5.18 crores of domestic orders and INR 97 crores of exports.

11:57 Power cable orders alone stood at INR $4.55 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 our working capital. Our cycle stood at ninety six days for the quarter, which is an improvement over the one hundred and one days that we got in Q4 FY twenty six and receivable days improved to sixty four days from seventy nine days at the end of March twenty six. The elevated receivables position we had planned last quarter has substantially normalized as we had expected.

12:45 Coming to the balance sheet and equity raise. During the quarter, we successfully completed a fresh equity raise of approximately INR122 crores, another step in strengthening our balance sheet for the growth phase ahead. Of the amount raised, approximately INR 65 crores has been earmarked for Ramadan Puram CapEx and the balance strengthens our working capital position, giving us a meaningful liquidity buffer to fund the growth without any near term pressure. As a result, our network strengthened from INR $7.78 crores at the end of March twenty six to INR $8.94 crores as of June thirty, six, with our debt equity ratio remaining comfortable at 0.15x.

13:37 On Nagwadapuram, 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 Nirvana Guram to partly commence in Q1 FY twenty twenty eight with revenue of approximately INR500 crores expected for FY twenty twenty eight from the Nagalamdul plant. This we hope shall scale up to INR1200 crores by FY twenty twenty nine as the current ramp up. We continue to expect this project to be funded through a mix of recent equity raise, internal accruals, a modest amount of debt.

14:28 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 Narmada Blum 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.

15:13 The broader industry backdrop continues to support our growth and we remain firmly focused on our five year vision of reaching revenues of INR5000 crores by FY21. 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 discussion and 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 1 on their registered on telephone. If you wish to remove yourself from the question queue, you may press 2. Participants are requested to use handsets while asking a question.

16:01 Ladies and gentlemen, we will wait for 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 based on focused on EBITDA numbers. So, earlier, you had mentioned that the first management to return on the... You know, EBITDA margins are for 25 levels With the potential return, you know, pre tariff margins also. So would we expect this margins to really move towards 8% now? And and question number two, sorry, and the question number two is, can we explain the three twenty bps improvement, like what are the factors which led to this? And can we sustain this going forward in FY 2027?

16:58 Okay. No, I think the Q1 result is actually 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 I think meaningful step for us to achieve the FY twenty twenty five levels that we hope to close within the current financial year by the at least by the last quarter of FY twenty twenty seven. So this progress towards that margin level is going to be of course maintained through this year. It's we to appreciate that last year our EBITDA margins went down dramatically because of The U. S. Margins having gone even into the negative territory.

17:53 It's only the strength of our domestic pivot that we were able to make that we were still 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 or rather the FY twenty twenty five levels in terms of margins. The factors that we can say broadly that will contribute to increasing these margins by 300 basis points plus roughly should be the normalization of U. S. Exports, which has already happened after the U. S.

18:46 Supreme Court invalidated the IEPR primitive 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 cable 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 FY twenty twenty six is also an indicator of the strong recovery which has started happening in the export market.

19:40 And I think more or less, we think that we are quite very well on track. Okay, sir. That's all from us. Side. Thank you. Thank you. You. The next question is from the line of from Share India. Please proceed. Hello. Sir, my questions are around Narmada Puram capacity expansion. So just wanted to know what is the status over there and any cost or time overruns that we are expecting? Thank you. I think this is something that we would also our sales also like to clarify.

20:29 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 longest line for delivery of the machinery. We have 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 recession part to be accomplished within a period of six to seven months, which is the timeframe that we have on our internal chart. So I think we should be hopefully very well on the as per the plan and we do not expect any major overheads. Some variations always take place while doing any CapEx project, any intra project, but more or less it should be all done. We don't expect any surprises.

21:41 Good to hear that. Sir, 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 INR 35 crores, INR 30 crores? INR crores. Crores. $3,030.30 plus we have spent on the Narmada Puram project, although we have been spending on CapEx in our existing plants also for the last three, four years, we have spent more than INR155 crores in both the existing plants also. So this investment is coming out of course 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. So it's a mix of the funding that we have already set up in place for project.

22:44 I'll just add to this. Basically, the debt to equity that you are asking about, Shambuji, I think you are going to be able to add. Yes. See, on debt, we have not taken any debt yet. Whatever we are spending on the Narmada Puram CapEx, it is just out of the internal accruals and the capital raised by 2020. And certainly, at the latter part, we are targeting some term loan also. But in any case, after completion of the 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. Understood, sir.

23:33 Sir, we are targeting a turnover of of around 500 crores in FY '28 and 1,200 crores in FY '27. Sir, what kind of capacity utilization can we expect to achieve this number? The roughly, this would be I would say that INR 1,200 crores expected for FY 2019 should be at 75% level of capacity utilization. Got it. And sir, lastly, any approvals in place for EHV cables? You see, this is a product that approvals would come gradually once the plant is established and the product is manufactured.

24:20 But let us understand that this plant is fully fungible with the eleven and thirty three 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, 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 we have the time taken to really get the final approvals and the major volumes of 132 kV, yes, sometimes it will 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.

25:08 There is no doubt in there about getting those approvals. It is a natural timeline that it will take after the production comes. 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 get the volumes that we need at much earlier days than what any new person might expect. You, sir. That was all from my end. Thank you. Thank you. The next question is from the line of Pratamesh Sawant from Abacus Investment. Congratulations on a great set of numbers. Just one question from my end, sir. Our exports although have grown 30% of the orders, but our order book, I could not see, you know, a strong growth in exports. So any reason you could explain or there, you know, what is happening typically how the order book builds up in the export?

26:08 You see, export, typically, we were having much larger order books. Now after this last year's disturbance, both on one side, we have become more careful. The other side, our distributors also are a bit more careful. The sort of risk that one not only risk that realization of it 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 the duty, any change in tariff being 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

27:38 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 INR 155 crore in quarter one, I'm more than sure that we'll easily do INR 7 crores to 800 crores in export again this year to The US. Okay. Because it it... Will it be right to understand that the, you know, the full supply chain has shifted to a much shorter than it is up here? Otherwise, you know, what we were doubting was that the margin improvement that you were expecting, export would be a key trigger like that.

28:24 So so views on that. You see 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 hit with us. So 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 starting from the pain. So we all are gaining confidence and going ahead, but we want to take some firm solid steps.

29:16 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 h two, we have a smaller export component, and that's why the margins kind of retrace from where they are now. So that is not a risk that is... You see, let me just tell you again. You see, we as our guidance used to be very clear till FY 'twenty five that on the export front, we were 1.5% higher compared to the domestic margins, right. Now FY 2026, 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.

30:18 So these things that now we are overcoming and we are getting over them and we are 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 us very interesting chart in our earnings presentation in which we have shown the revenue mix that how it has changed over different periods and the market trends how like if you look at FY 2022, we did 22% of our revenues was export to The U.

31:08 S. In FY 2023, 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 FY 2023. So in actual numbers, the exports became INR132 crores of exports became INR400 crores. Out of INR130 crores, U. S. Was only INR100 crores, INR30 crores was other markets, which we have thereafter decided not to service mainly. So INR100 crores to The U. S. Became INR400 crores in FY23, which was 50% and then in FY 2024, the demand in U. S. Went down. So we did only INR276 crores, which was 26% and we covered that by 74% of domestic, which became INR771 crores. So practically by domestic revenues, I was able to nearly double in just one financial year from INR396 crores to INR777 crores.

32:10 So that was a pivot again. So while we have absorbed the shock of grown by 30% again. So that is what we have done. And again, if we come to FY 2025, 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? INR900 crores. INR98 crores, how much? INR878 crores. INR878 crores, out of which did INR381 crores in U. S. Exports alone. But in the next quarter, when the heavy 25% reciprocal and 25% Russian oil tariff was imposed on us, we had to go down to just INR169 crores.

33:05 But that does not mean that Paramount's turnover did not grow. We maintained and we increased our turnover again. The INR497 crore of domestic turnover in H1 became INR $8.64 crore in H2. So this is what shows that the fungibility of our capacities and the strength of Paramount, not only in The U. S. 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.

33:51 If you see in our quarter four in March order book, exports was much smaller, even much lesser than what we did, which we are today at INR 92 crores. So and we still achieved INR 155 crores. So that is not a problem. Even we are very positive that we will be able to do INR 700 crores to INR 800 crores of export 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 Paramount's books. And the reason for that is that we try and mostly we do not accept orders more than three or four months delivery when it is at a firm price basis.

34:44 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 can at handling 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 customers, the next working day we book their metal and that's how we are covering our risk of volatility in metal. You got a pretty long answer for that single question. Covered. Yes, no, yes, that was very helpful.

35:30 And just one minor detail, what's our current capacity utilization, sir? Capacity utilization, see in our existing plants, What I would say is that it's practically 100%, nearly 100 throughout because 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 is switched on. So because 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've 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.

36:29 Okay, thank you Sanjay sir. Best of luck. I'll get back in the queue. Thank you. The next question is from the line of Jigar Jani from Nuvama. Please proceed. Yes. Hi, sir. Thanks for taking my question and congratulations on the great set of numbers. Sir, continuing to my to the previous participant's question, you mentioned you are near optimal capacity utilization in existing facility. So what kind of top line growth do we expect the what you have delivered in Q1 to continue and then the majority of the ramp up to come in FY 'twenty eight once the Naramadhapuram kicks in? Absolutely. You see, I think you have answered the question yourself.

37:14 The current year, we expect to do 15% to 20% roughly in terms of revenue growth because existing plants are 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 Nirvana Puram capacity kicks in, I think we should be growing at a much faster pace. We have set ourselves a target of crossing INR 5,000 crores in revenues by FY thirty one and we rather hope that we should be able to better that target to the extent possible. We have been if you look at our previous years, we have been growing 30%, 35% in one year, 40% even.

38:01 So that is a 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'll 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 EBITDA margins by end of the this financial year, ending quarter of this financial year. Right? Sure. Sure. Sure. Sure. That is 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, if we suddenly have very high volumes, much higher volumes all over market, it takes a bit of time to stabilize. So both things are in process.

38:50 Understood. And sir, lastly, data keeping question. What was your metal throughput this quarter? And what was it in the same quarter last year and in Q4, if you can share? You see, roughly, I think if I'm not wrong, offline, can say it was 29,000 tonnes worth of metal throughput last year. I think this quarter, 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? Yes, yes. And you won't be able to share the absolute number. I'll take it offline. No worries. Yes. So these were all my questions. Yes. Thank you so much for answering. Thank you.

39:35 Thank you so much. Thanks a lot. Thank you. 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 increasing your export share growing steadily. So we primarily see the demand coming from your power cables. I wanted to know if you want to give any color or guidance on more margins optical fiber or optical fiber capacity, if you can give any guidance or plans for the next two, three years? I think optical fiber part will give you some flavor on the... I think you were talking about more markets or more margins? Sorry, we just wanted to clarify that.

40:24 No. Like what I meant is optical fiber is like higher margin product compared to the power, wire and cables, right? So that's what I meant. Is there any plans? Because we are seeing multiyear demand in the North American regions and primarily our export is coming from power driven, right? Yes, I'll just explain that. So optical fiber cables, see, we are not the largest player. And 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 since the market is in a very, I'll say, golden phase, where the data center driven requirement is in a boom, We see the requirements coming to us as well. And we will be a participant in that scenario.

41:18 There are some specific items in the data centers, 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 accretive to us. If we add that in HTLS, we've already made some very good progress. We already have INR100 crores worth of business in hand. And the capacities that we are building up should be not only giving us extra revenues, but they should be highly margin accretive.

42:11 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 volumes that we are able to get, even in the domestic market, we might be getting some very good margins. So every segment, every pocket has its own different characteristics and one has to try and 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 my side. Thank you. The next question is from the line of Nikhil Kanodala from Credit Suisse. Please proceed. Yes.

42:57 Good afternoon, sir, and congratulations on the great set of margins that you 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, like, sir, on the facility that you have said. So, yes, we... You stated that you will get into the approvals for the 132 kV 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 PHV class cables coming into our books?

43:53 Okay. Now as regards The U. S. New products is concerned, we are 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 this 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 going to 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 fortify that into real direct demand from these.

44:50 I think we are working on that. So that U. S. In any case is a market where Paramount's quality is already had a lot of traction for the last four, five years. We are a respected brand there. So we whatever product we launched there, I think we already have a bigger advantage by now. Coming to the Indian market, we are approved up to 66 kV in a way, 66 kV, 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 Narmadaburam, that should become much easier. So up to 66 more or less we are all set.

45:37 132 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 six to eight months. But that's all from the date we actually start manufacturing. So one should expect by the end of FY 2028, we should have we should start having some approvals in hand. And by FY 2029, 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 two twenty KV and 400 KV also because Mirvalaparam is right as sufficient space and to accommodate sales. So so but 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.

46:38 Okay. So sir, can it be, like, if the understanding is correct, so from the phase one of around INR 300 crores, so INR 1,200 crores could be the peak revenue potential of four times a second. So that could be the case with Naramara? You see INR 1,200 crore is the initial one can say 4x multiple that one is expecting. But 4x is never the actual multiple that really 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. So the CapEx, the multiple improves and one starts as I said, we are looking at something like INR 1,200 crores at 75% capacity utilization.

47:29 As one goes forward, small additions are going to give us revenues. So at the end of the day, we expect to be steady at something like 5.5, six multiple after the second phase of the after the second phase is completed. 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 good demand in India for solar sector. There is we don't see any major part of that happening in The U. S.

48:15 Currently at least. Those are non EV cable. But in India, there is expectation of some good solid demand. I think PARAC would like to add something to that. Yes. See, EV and cable is something which is definitely a part of the Phase one CapEx that we're talking about INR300 crores. And it will be the new product for us. So in a way, we have to get approvals and certification for that product. So it will be a longer gestation product. And but the product will be definitely because it's high barrier to entry, it will be higher margin accretive. And by end of FY 2029, we hope to certification that we can start supplying, but the major certification should start coming in a year after that, which is for defense and railways and shipbuilding, etcetera.

49:10 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. You. The next question is from the line of Mandira, an individual investor. Hello? Yes, ma'am. Please continue. Hi. So I just had a few questions. So I wanted to know your status on the new launch in The US market, And what do you think the margin profile of these products would be? I'm sorry, new launch? So you see, there's no particular new launch as such because we have these approvals for some time.

50:03 We are only we were having limitation in terms of our manufacturing capacity that was why we were restricting 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 field also and that's where exports have already started in solar cable. And the margins should be 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. And what is the current run rate of The U. S. Export? Current run rate, we have done around INR155 crores in Q1.

50:52 And if you just multiply it by four, you get a number of something like INR620 crores, INR8 but we should be doing better than that. We are expecting something between INR700 crores to INR800 crores. I think that should not be a problem at all. Okay. What do you think is the competitive landscape also like the other countries other than U. S. Or like any other Indian peers? No, no. U. S. As a buyer or U. S. I didn't quite understand. You're saying other countries competing with us in The U. S, right? Is that what you're saying? Yes. Okay. 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.

51:46 And there are some smaller competitors who might gain ground, Egypt is there in the weakening, Ecuador is there. To some extent, Turkey has also started taking interest in this market now. So there are various countries who are doing their things. Our problem last year was that we were the worst hit. My competitors, 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 have 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.

52:34 Two months worth of material was on the sea, right? What I described. 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 Thank you. The next question is from the line of Saloni Shah, 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.

53:20 Any colors on whether we should expect improvements there going forward? You see, as far as aluminum volatility is concerned, as I just explained earlier, we do not accept any firm order, firm price orders beyond three to four month delivery, and we book our mission 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 variations, so that happens, but more or less one is covered, I would say. So we do not take any middle risk as a policy not today, but for many, many years.

54:17 Sorry, what was the second question? It was on the working capital cycle. If you could throw some color, if we can expect some help from that? Our CFO, Mr. Shambo 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. This Q1 also, we have kept our working capital cycle at ninety six days. And hopefully, gradually, we still be targeting it to keep within that level only 9,200. Okay. Got it. Thank you. Thank you.

55:07 Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to miss 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 analyst 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 Thank you, everyone. Thank you. On behalf of Paramount Communications Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you, everyone.