Paramount Communications (NSE:PARACABLES) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Paramount Communications Limited Q2 and H1 FY 'twenty seven Earnings Conference Call. As a reminder, all participants' line will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Vanessa Fernandez from Investor Relations team at Factors PR. Thank you, and over to you, ma'am. Thank you, Ikra. Good evening, everyone. On behalf of Paramount Communications Limited, I would like to welcome you all to the earnings conference call for quarter two and H1 FY twenty twenty seven.

0:51 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. 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 forward looking 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.

1:39 Over to you, sir. Good afternoon, ladies and gentlemen. A very warm welcome to you all to Paramount Communications' earnings conference call for the second quarter and half year ended 09/30/2026. Thank you for joining us today and for your continued interest in Paramount. Our results, earnings press release and investor presentation have already been uploaded to the stock exchanges and to our company website. And I trust that you have had the opportunity to go through them. When we last spoke in August, I had said that we had started FY27 on a strong note and the two engines of our business, domestic and exports were both working for us at the same time.

2:27 I'm happy to report that the second quarter has carried that momentum forward. Let me begin as I usually do with a brief word on the environment we operated in, because I think that is what sets the context for the quarter very well. The bias in cable industry continued to navigate two familiar challenges this quarter, metal price volatility and the global trade environment that is still settling down. On metals, copper prices touched record highs during the quarter and moved quite sharply from week to week with the tariff decisions in The U. S. And supply disruptions at some stage of the large mines adding to the volatility. For a company like ours, that is exactly why we follow the discipline, which we have spoken about many times.

3:16 The day we receive a firm price order, the next working day we book the metal and mostly we do not accept firm price orders beyond three to four months delivery. That discipline has served us well throughout this period. It is pertinent to note, however, that the major metal consumed by us is aluminum, which is more than 75% of the metal value convention for the quarter. Aluminum has shown some price softening during this quarter. What has remained constant, however, is the underlying demand for our product range. Transmission and distribution investment, renewable capacity addition, railways and metro electrification and the build out of large data centers all remains supported throughout the quarter.

4:05 These are not one quarter trends. These are multiyear programs and we are seeing them reflected directly in our inquiries in our order flow. On the export side, the picture in The U. S. Has become clearer and importantly more predictable. As you know, the IFR tariffs were shut down by the U. S. Supreme Court in February. Today, Indian cables are at par with the competing exporting countries in Asia and Europe. One expects that the tariff framework in The U. S. Now rests on a more stable footing than certain changes that we lived through last year. Our customers and distributors are regaining governance and so are we. Now, Partha Raval will take you through the business developments first and then I will come back to the numbers. Over to you, Param.

4:56 Thank you, Sanjayji, and a very good afternoon to all of you. Our domestic business continued to build on the momentum of the first quarter, led once again by power cables and our B2B institutional customers. The structural drivers we have consistently spoken about, grid strengthening and transmission investment, renewables, railways and metro, construction and infrastructure, all remained active throughout the quarter. Our Thaduveira and Kushkira plants continued to operate at optimal utilization, which underlines why NMR is so central sorry, why Narmalapuram is so central to our next phase of growth. On the export side, the normalization of our U. S. Business that we spoke about last quarter has continued to progress.

5:46 With India now at par with our competitive position has been restored and our distributors are planning with more confidence. We continue to view The U. S. As a single largest and most important export market. Given the scale of grid upgradation and data center investment being planned there. At the same time, we have stayed disciplined, as we said we would. We are not chasing volume at the cost of margin and most of our customers now carry tariff changes to their account. Alongside The U. S, our customers' engagement and approval work in The Middle East, Europe and Africa is progressing, where we see medium term demand building from data center build out and grid upgrade programs.

6:35 Our approach remains the same to have approvals and customer relationships in place, So that when demand in these markets turns, Paramount is a natural participant. This quarter, I would like to spend a few minutes on two areas that we believe are increasingly important for us. The first is HTLS, that is high temperature low SAG conductor. Very simply, an HTLS conductor can carry significantly more current than conventional conductor at higher temperatures and with less SAG. This means a utility can increase the capacity of an existing transmission line on its existing towers without having to acquire a new corridor. In a country where right of way is one of the biggest constraints in building transmission lines.

7:25 This is a very powerful proposition. The opportunity is large and visible. The National Electricity Plan projects an investment of around 5 lakh crores in the transmission for EHV and between 2027 and 2032. Sorry, I'll read that again. The National Electricity Plan projects an investment of around INR 5 lakh crores in the EHV transmission lines between 2027 and 2022. As per our internal assessment of the tenders announced by multiple utilities, state government and central government authorities, the management projects, the market size for the conductor projects of HTLS to be approximately INR50000 crores in the next five years.

8:14 Paramount is well positioned here. We are the first company in India to provide an indigenously designed, developed and manufactured product that is authentically Indian from core to surface. We offer both carbon core and gas type HTLS conductors, which allow us to address the full range of the tender specs and we have the capability to manufacture conductors up to seven sixty five ks. Most importantly, this is not future story. We have already secured an HTLS order book of 200 crore plus as on date and the capacity augmentation for specialized conductors is planned at our new plant at Narmadapura. The second area is data centers. India's data center capacity is expanding rapidly and we are seeing strong demand for our power and specialized cables in these projects.

9:10 We have established approvals with leading data center developers and the customers where we are approved represent a substantial share of the hyperscale and co location CapEx being planned in the country. Approvals with other leading developers are also progressing well. Overall, we remain convinced that this is a multiyear expansion phase for the Indian wires and cables industry and that organized qualified players with a diversified portfolio and established relationships will capture a disproportionate share of it. With that, I hand back to Sanjeeti for our financial performance. Thank you. Thank you, Pat. Let me now take you through the numbers for Q2 and H1 FY twenty twenty seven.

9:59 For Q2 FY twenty twenty seven, the revenue from operations for the quarter stood at INR560.4 crores, a growth of 31.1% year on year and 5.9% quarter on quarter. EBITDA, including other income was INR44.7 crores with an EBITDA margin of 7.9%. As I said last quarter, the metric that best reflects the underlying business is our operating profit. Operating profit for the quarter was Rs. 40.9 crores with an operating margin of 7.3% as against 6.6% in Q1 FY twenty twenty seven and 1.3% in Q2 FY twenty twenty six.

10:47 PAT for the year for the quarter stood at Rs. 24.2 crores with a PAT margin of 4.3% and earnings per share was Rs. 0.74 for the quarter. As regards H1 FY27, for the first half, the revenue from the operations was Rs. 1,089.8 crores, up 24.1% year on year. EBITDA, including other income was Rs. 82.5 crores and operating profit was Rs. 75.6 crores with an operating margin of 6.9%. PAT was INR43.9 crores. On our last call, I had said that our first milestone is to get back to the FY twenty five level of margins by the last quarter of this financial year after having suffered the shock of sudden shock of U. S. Tariffs last year.

11:48 With the first half behind us, I can say that we remain firmly on track towards that milestone. Exports and domestic, when we look at the breakup on the export side, for the quarter the export for the quarter stood at Rs. 158.1 crores, contributing 28.2% of the revenue and INR313.1 crores for the half year. The decision we took last year to hold on to our U. S. Distributor relationships even though the worst of tariff disruption continues to pay We expect U. S. Exports to constitute 25% to 30% of our revenues for the full FY 2027 and we will continue to grow U. S.

12:35 Revenues in a measured way rather than pressing the accelerator too high. Domestic revenues for the quarter was Rs402.3 crores, contributing 71.8% of revenue, led by Power Cables at 55.9% of the revenue. Within domestic, our B2B institutional business was INR296.7 crores, B2C retail and distribution was INR53.7 crores and B2G government and PSUs was INR51.9 crores. Coming to order book, our order book as of 09/30/2026 stood at INR731 crores comprising INR632 crores of domestic orders and Rs. 99 crores of export orders.

13:27 Power cable and specialized conductors orders stood at Rs. $5.75 crores. As I've explained before, you will rarely see a very large order book on Paramount's books that is by design. We do not accept firm price orders with long delivery periods beyond three to four months because that is how we protect ourselves from major volatility. Coming towards working capital and balance sheet figures. Our net working capital stood at 108 days versus one hundred and one days at the end of FY '26. This reflects basically the accelerated supplier payments post our equity raise. Our inventory and receivables discipline is intact.

14:14 We expect to normalize in H2 within ninety to one hundred days for FY 2027. Our net worth stood at INR $9.20 crores as of 09/30/2026 and our debt equity ratio remains comfortable at 0.14x. The equity that we raised in the first quarter continues to give us a healthy liquidity buffer for both growth and the Narvadapuram project. Now on the Narmalapuram project. Let me give you an update on this project, our greenfield project coming up in Madhya Pradesh, which will be our third manufacturing facility. I'm happy to report that the project is progressing as per plan.

15:01 Foundation and civil works are well underway and moving in line with our planned schedule. As I mentioned last time, we placed orders for the critical machinery well in advance precisely because delivery lead times in our industry are long right now. Apart from the critical positions that have already been filled, hiring for operational and plant level roles has also begun with a phased ramp up aligned to the commissioning timelines. We continue to expect partial commissioning in Q1 FY twenty twenty eight as previously guided. Our expectations from the plant remain unchanged. Revenue of approximately INR500 crores in FY twenty twenty eight scaling up to INR1200 crores in FY twenty twenty nine as the plant ramps up.

15:47 Merbodhapuram is what allows us to move up the value chain with EHV cables up to two twenty kV, specialized conductors including HTLS and EVM cables. These are exactly the products where we see the strongest demand from transmission and grid modernization cycle that PARAC spoke about. Outlook. To sum up, ladies and gentlemen, the first half of FY twenty seventeen has been about consolidating the recovery that we began to see in the first quarter. The domestic business continues to grow. U. S. Business is steadily normalizing and we are building our position in newer, higher value segments like STLS and data centers, while Ramadanpur on progress is on schedule.

16:34 We remain firmly focused on our five year vision of reaching revenues of Rs. 5,000 crores by FY thirty one through capacity expansion at Nirvana Korom, deeper domestic penetration and broader export presence. I believe the first half of this year is clear evidence that we are moving in the right direction. With this now, ladies and gentlemen, I open the floor for questions. Thank you so much. Thank you very much. We will now begin with the question and answer session. Session.

17:30 The first question is from the line of PARAC PARACABLESHARYA:] So my question was on our utilization. So I think our plants are operating at near full utilization. So what would be the most effective opportunities to improve our throughput and our utilization before, you know, the new facility reaches us, the scale that we need? You see, the as you rightly said, the current plants are running at optimal utilization. And we are in any case still doing some CapEx in both the existing plants, which is going to help us achieve some better revenues from these two plants.

18:21 But in any case for the next financial year, we are expecting a INR500 crore contribution to come from Nirvana Puram project also. As far as the current financial year is concerned, we still expect to reach between 15% to 18% of increase in our revenues. Yeah. So following up on the Narmada Puram plan, so other than commissioning, what are the key sort of prerequisites that we have to achieve the planned revenue ramp up at Narmada Puram? Like, any customer approvals or product qualification and capacity utilization plan? You see, the plant that is going to come up in Nadhapuram, the major investment is going to be into the two twenty KV HD power cable line.

19:18 And there is a timeline which is always involved in getting the final approvals to go up to 132 and then to $2.20 KV approvals. But the plant itself will not be lying unused because we still have a substantial order book on eleven thirty three and sixty six KV cables. So the plant will still be utilized, although not to the full extent or not to the extent of the largest size voltage ranges. So from that point of view, we hit the ground running at LMR plant from day one practically when we start manufacturing. And also like you see, we have already a healthy order book for HTLS product. So we'll be expanding our capacity for that product in the new plant. So that will also be in the ground running.

20:10 Okay. Understood. Thank you and all the best. Thank you. Thank you. The next question is from the line of Paramount Jain from JMP Financial. Please go ahead. Yeah. Thank you so much for giving me an opportunity. So my first question is regarding beyond The US, which export market or the consumer relation are in progress for qualification to meaningful orders? And what are the contribution could they make over the next two to three years? You see, we actually moved out from various other markets of exports to focus entirely on The U. S. Over the last four, five years. The reason was that we were doing exposed to more than 30 countries in the past and these were our regular customers, but the individual orders were fragmented.

21:03 The markets were not that large. And it put a more bigger strain on our production capacity, especially when we were under pressure because of the limited production capacities. It was far more important for us to focus on The U. S. Where we could generate much larger volumes and put also produce also in much larger volumes from the same plant. Now after these setback of the tariff in probably last year, we have again started focusing on various other markets. And we are hopeful that within the next two to three years, we should be having some substantial contribution from other export markets also. We are already working in various Asian and European markets and also in the Oceania or you can say Australian market.

21:54 So we should start getting results within the next one, two years. We are confident of our progress in these markets. Okay, got it. Also my second question was on the working capital. Days were around one hundred and eight days despite a strong growth. So what will be our future cash conversion cycle? You see the working capital days, our medium term working capital target remains at ninety to one hundred days as we have previously guided. The current 100 basically reflect a conscious decision from our side to accelerate supplier payment. This was basically because we had done an equity raise and the funds were lying unutilized to quite an extent with us. So our receivable days have actually, in fact improved substantially from seventy nine days at the end of FY 2026 to sixty six days at the end of H1 twenty twenty seven. So inventory discipline also remains intact.

22:58 We expect to return ninety to one hundred days as I said. And this was only a temporary phenomenon where we had an excess liquidity and we utilized it to reduce the craters. Operating cash flow generation, we are confident that shall be improving and with the addition of the internal as well as the company expects to have a positive cash flow as well as the working capital is concerned. Okay. Got it. Thank you. You. The next question is from the line of Pratamesh Sawan from Abacus. Congratulations on a good set of numbers. Best of greetings to you and the team. Sir, yeah, on the exports front, sir, as we are saying that, you know, we expect to get back to our earlier margins of, you know, FY twenty five numbers. Just wanted to understand what will be the glide path because, you know, we had some discussions that the clawbacks on the additional tariffs that were there. So that was supposed to have a certain impact on margins and also what is the current situation on the export front, on the tariffs and duties front. So just trying to understand what will be the glide part to export margins?

24:22 All right. So let's look at the overall margin that will be that will give us an indication of how the export margins and the domestic margins have moved. We will hit the practically the lowest point of our operating margin in Q2 of FY twenty twenty six, then we touched 1.3% operating margin. Now since then, if you look at the glide path, have done 3.3 in Q3 and 5.2% in Q4. Now both these quarters were still badly affected by The U. S. Tariffs. It's only towards the end of February twenty seven February 26 that the U. S. Supreme Court shut down the tariffs, the high part tariffs imposed by the U. S. Government. But so we were able to do this basically on the strength of our domestic markets, because we were still incurring losses on The U. S.

25:23 Market. Now you come to Q1 twenty twenty seven, the operating margin was 6.6% and in Q2 it went up to 7.3%. We are well on target to exceed the FY twenty twenty five operating margins. And in fact, we are quite confident that this glide path shall remain on this upward trajectory on a continuous basis, especially because now that the U. S. Market has stabilized, the margins in U. S. Also we expect to improve. But at the same time, with our focus normally to keep the U. S. Exposure to up to 30% of our revenues mostly, I think the domestic margins are going to matter more and these are also coming up reasonably strong for us.

26:15 Right. So sir, on the domestic front, like we said, like, PARAC was mentioning that we have a 200 EHV order. So what kind of margins can we expect from that? And when the numbers will actually start coming for those? You see, HTLS order book currently as of date, not as of end quarter, but as of date is roughly INR200 crores already. And this is a product which is far better margins. And we expect this to help our margins to improve this year also. I think as said that by the fourth quarter, we should be exceeding the FY twenty twenty five margins and maybe we'll exceed it more comfortably with help from the STLS margins and the other No. Mean, sir, but can we expect... Sir, can we expect a double digit margin from this STLS segment? Because, you know, industry peers are getting that kind of margins from this segment.

27:21 You see, STLS by itself could give us double digit margins, but then HTLS would be still order book is roughly INR 200 crores as of now. Right. But just wanted to understand directionally because this is just the beginning. Eventually, as the book grows, we can have a STLES look grows as a percentage of our revenue, it should really help us to improve our operating margins. That's definitely there. No doubt about that. Okay. Okay. Best of luck, sir. Thank you. Thank you so much. Thank you. The next question is from the line of Yashti Sai from Sanjay Doshi Financial Services. Please Hello. Go First of all good day.

28:09 Congratulations on the good set of numbers. And I wanted to ask that, as you mentioned, the order book sits at somewhere around $7.31 crores. So I wanted to know what proportion is backed by firm customer commitments, and how do you assess its revenue visibility and the risk of potential for cancellation or deferment? You see order book what we call our order book is only from orders that we have in hand. It's very rare that we see cancellations happening from our customers. In the worst of times, even from The U. S. Markets, we did not face any major cancellations. So one can be resting assured on that, not to the question.

28:58 When can we see the revenue visibility? Revenue visibility on... I I think it's it's quite continuous. I think there is some disturbance continuously. Will somebody from the? Yes. It's from the... From Yash's line. Oh, okay. Okay. Yash, can we request you to mute while we answer your question, please? Okay. So I think you can repeat the answer for this. The question was that about the order book and is it from... See, number one point is that as far as order book is concerned, our order book is only reflective of the firm orders that we have.

29:46 Number two, it's very rare that we see cancellations in our order books. Number three, the visibility of our annual this year's revenue target is already there considering the run rate that we have. Our H1 sales are INR1090 crores and we are comfortably in sight of our target for the financial year FY twenty twenty seven. That's not a problem. Right. I think you asked for the execution of the order book, which is generally a three to four month period for the firm price orders. And if there are any variable orders, they might be longer. But overall, it's a three to four month period execution of the order book.

30:33 Okay. Thank you so much and all the best for the future. Thank you. Thank you so much. Thank you. The next question is from the line of Priti Tripathi from NBS Brokerage. Please go ahead. Hello, sir. Congratulations on a strong set of numbers. So my first question is that the strong growth in the power generation and transmission sector. So can we expect the INR 5,000 crore revenue target in next three years instead of five years? That is one. And sir, what kind of EBITDA margin target has been set for that kind of a revenue? Sir, the other question is that as you are, you know, highlighted that HDLS, semiconductor, GHV cables, and cables are the important future growth opportunities.

31:19 So are we planning to introduce any additional higher value for the products like this? And the last question is, do we have any ambition to increase our export contribution to 50% of the turnover? Thank you, sir. You see, we had touched export contribution to the level of 50% way back in FY 'twenty three. So after that, we have been rather more concerned about limiting the exposure and which has been shown to be a bit of a problem last year. This year onwards, we look at it as a very stable opportunity. So we are still not planning to go much beyond 30% of our revenues as exports. U. S, of course, U. S. Market, we can expect we can try and get larger numbers, but then it is always a better way to limit our exposure to that market. Turning to the target of reaching INR5000 crores, I think we want to be conservative in whatever we give as a guidance. This comes as a guidance when we say that we expect to do INR500000 crores by '31.

32:33 So that we will not revise, but we are rather hopeful that we should be able to much better this target as we progress on our plans. As regards to the products, the more profitable products that are coming into the NMR project are of course going to be extra high voltage cables up to two twenty kV. We are also looking at e beam cables and rubber cables. And STLS, the additional capacities that we need beyond what we are being producing in our existing plants will also be going to be there. So overall, we are expecting our revenues and in concert with that, our margins to be on an upward trend.

33:24 Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of Nishita from Sattaya Capital. Am I audible? Yes, Yes. Yes, So I just had a few questions. First is on our order book bid pipeline. So you mentioned that you only take four more orders and not longer than three to four months. So what is the order book visibility past these three, four months of order book? You see, this is a rolling situation. Every month we keep on getting orders and getting orders fortunately for Paramount is not that much of a concern.

34:16 We therefore do not try and feel comfortable with a longer order book or if we wish we can have a eight month order book. But we feel much more secure when we keep our order book limited to four months because of the metal price fluctuations. They can go up, they can go down, either which way there can be a problem. Our policy is, whenever we accept an order, the very next working day we book the metals. And at the same time, we cannot have unlimited booking of metals that puts financial strain on the company. And secondly, it exposes the company to a situation where if a metal crashes and the customer finds reasons not to accept the material, then the company would be in a problem. So the so called hedging is something that we do not consider to be hedging in case of customers walking out of their orders.

35:06 Right. And in case of variable price orders, we are comfortable taking larger delivery orders when and where they are available for. Variable price orders, many customers are nowadays changing their policy and giving variable orders. Those we are comfortable. So variable price orders, can accept on a longer delivery basis. I'll just add on to what Sanjeev said. One thing we always say, Paramount's footprint is much larger than its current market size. We are a 70 year old company with approvals and brand wins across the country, across the utilities and the industries. So it is not hard for us to sell, right? So the order book to using the visibility to get new orders every month, it is not a problem for us.

35:56 Okay, okay. Understood. And just wanted to understand, the INR 200 crore of HTLS order book, that also has the same execution time line of three to four months? HTLS, hopefully, yes. But since this is a new product, well, and this also involves installation. There's an EPC work also involved. So this might have some longer deliveries. But in any case, we are building up our capacities on that also. And there are further orders also in the pipeline. So all this is a work in progress and we are very confident that this is going to be a very strong contributor to our top line and bottom line. So like if you could quantify the pipeline for HDLS?

36:42 We mentioned that we as of date, we have got order book of around INR 200 crores for HDLS. And of course, are more orders in the pipeline. And this adds a substantial portion of this is the supply portion. Okay, okay. Understood. My next question would be on our new facility. So what kind of what will be the total capacity for this new facility in Manti Pradesh? Did you ask what will be the total capacity of the new plant? Is that what you asked? Yes, yes. We plan to double our existing capacity. Right now, we are doing approximately 30,000 metric tons. And with the of metal and with the new plant completely ramped up in the next by FY 'thirty, we expect to double this capacity.

37:40 So approximately the similar 30,000 metric tons in the new plant in the next three to four years. Okay, okay. Understood. So like by FY 2019, you've given a target of getting INR 1,200 crores of turnover from this new capacity. So by then, can we expect the capacity to be around like INR 20,000 a tonne? See, that will be as the situation goes. The production capacity could be in that range, yes. By FY 'twenty nine, yes, it could be on a run rate of that. Yes. Okay. Okay. Understood. Yeah. And my next question would be on approval. So you mentioned that you wanted to get the two twenty kV approvals and, like, that's the major part of our new facility as well. So when can we expect these approvals to come?

38:37 As I mentioned, it takes one to one and a half years usually, or it should take that much time for us to get the approvals. But as I said, the plant will not be lying unused and the same plant we'll be using to manufacture our eleven thirty three and sixty six kV cable. See, every I'll just explain a little more on this. On the same lines that we're doing, we're doing multiple lines of HD cable, right? Now some lines will do 33 kilobytes, some lines will do 132 kilobytes and two twenty kilobytes cables scan also sorry, machines can also make the 33 kV cable that we're currently making, 66. Right? Also each range has its own time requirement for approvals. 66 kV, we have a current range and to get the full range, we'll probably be able to get it within three to six months of the plant being operational.

39:34 132 kV probably within the twelve months of the plant being operational. And two twenty kV might be a little longer gestation period. So every benchmark will take its own time, but the plant will never remain idle. That's why we are confident of our numbers. Right. So this 500 crore and 1,200 crore revenue turnover target that we have from this new facility, ideally then won't be majorly from the two twenty kV cables, I'm assuming, because we won't get the approvals by then. Yes. Yes. Yes. They're going to majorly from two twenty kV in the first two years, of course. The product mix is going to be regularly improving, but it's going to be a part of our process. But the STLS cables, we will be able to start supplying quite in an initial period from initial dates.

40:23 E beam cables as we get it set up, we'll be using it for renewable sector and that should be coming around much faster. So I think every product will have its different light path as you say. Okay. Okay. Understood. And my last question would be on if you could just like if you would just reiterate the guidance for second, it's 15% to $18 growth you're expecting on top line? And what are we expecting on margin front? Like guided earlier, our growth will be between 15% to 20% from the previous year sales. We are confident of achieving that. And I think our H1 run rate is pretty much indicative of that as well. So there's no issue in that.

41:16 In terms of margin, I think Chen Min has very clearly stated that we will be able to achieve the FY twenty twenty five operating margin levels by the last quarter. And that is what we will reiterate. Perfect. Okay. Yes. Thank you so much for answering my questions. Thank you. Thank you. The next question is from the line of Nikhil Kanodia from Suniti Securities. Congratulations on a great set of numbers. This is very encouraging to see that you are walking the talk, be it the growth on the top line or inching towards the stabilized EBITDA margin. So my first question is on that regardably, that same, we have seen a lot of sort of commodity price going up and down and then a lot of the status that hasn't played out and then there are some refunds that are there, then temporary cost benefits.

42:20 So given all these conditions, what could be our steady state margin profile in a normal course of demand? So like if you can throw some light on your stable, sustainable growth trajectory that could be we could see in the EBITDA margin level? You see, I would prefer to use the term operating margin because that is what probably seems to be the market norm. And when we look at operating margins, we have already achieved 7.3% operating margin for this quarter. The target of around 8% is not that far away. We are looking at two quarters away. And whatever is the clawback that comes from the net clawback that comes after reduction of the sharing that we do with our customers, I think we are looking at that amount to be separate from the normal operating margins that we hope to show.

43:27 This should be visible in our Q3 results. Okay. So is my understanding correct that you are saying that your 8% guidance that is ex of your clawbacks and any other price adjustments that might occur. So that would be ex of that thing you will achieve, you are confident of achieving 8%, right? Yes. Yes. Yes. Okay. By quarter four, yes. By quarter four, you're clearly. By throughput, you're saying that 8% will be the margin. Yeah. Yeah. Okay. We have achieved. We have not achieved. It's not happened, But we can say that we are hopeful, yes. Okay, sir. Okay, understood. And sir, on the next segment of our products and all of those things, so you have been guiding on a lot of stuff and your competitors as well. They have been saying a lot on data center cables, EVM, HTLS and all of those things. So just wanted to understand your idea behind, like for you, what would be the best product mix in your range and what would be your priority for the commercialization?

44:28 Like what will be the sequence, Like, the data center first or the or it is gonna be in a simultaneous way because, obviously, your new capacity is also coming up. So phase two might have all sort of cables and all of those things that will be there. So what could be the ideal product mix for you, which is margin accretive? And also what would be the sequence for the commercialization of the same? See, I think let us be clear, we ourselves when we discuss sometimes we also get confused between the market segment and the product segment. You see, product segments are what we produce and market segments are where we have to sell. Now whether it is data center for example, there are many product centers that will go product segments that will go into the data center market.

45:16 Similar would be the case of power T and D sector, where we could be supplying STLS, where we could be supplying ESP cables and where we could be supplying medium voltage cables also. So it's as far as we let us look at the product range then. Product range wise, there is a very stable product range that we have in our existing two plants, where except for the unfortunate tariff scenario that happened in the last financial year, which disturbed our working. Other than that, we have had a very steady margin profile on our domestic sales and we have been able to increase our domestic sales also as and when required at a very fast pace.

46:07 In fact, I would call my markets are being fully very substantially fungible between U. S. And India. The which we have shown by our track record, there's a slide also in our earnings presentation, which shows that. So I think we that way are looking at the product margins, we are able to switch from whichever product is giving us a better margin profile. As I said, these two existing two plants are more or less having a steady range. The new plant, the range as we have mentioned is going to be EHV cables, it is going to be E beam cables, it is going to be HTLS and some more margin accretive products.

46:55 Now as and when we try and get the approvals and entry into various customers for each product segment, we are going to be improving our margins. I think very well put, I'll just add on to it. You asked that what will be that priority selling area, which is data center or transmission. See, we are it's we have to fire on all engines, right? Our teams are working on all segments. We are progressing very well on our data center approvals. We have a very good team working there and we have had many factory visits and plant approvals, etcetera, from very good big data center projects. So let's see, we will get good business from them. We will get good business from various T and D customer segments like the state and central utilities like power grid, etcetera.

47:47 Very, very good opportunities coming in there. And then obviously the industrial investment that is going on across the country is generating good demand. Now yes, we will go into all three, not particularly data center itself, but all three. So we will sell into both. Wherever we can sell, we will sell all our products. Even export, we are trying. That the approval that we are going to take for the new plant, we will work on export markets as well for those products, even for HK, even for AHV cases. Okay. So, Pat, all these newer product segments that we're talking, which are margin accretive, largely of it will be catered from the newer capacity, right? Yes, largely. Largely, yes, but from the existing plans also, as we get into more, let us say, accretive customer segments, that should also improve the margin profile there also. That's helpful. Okay. Okay. Okay. And sir, if I may squeeze in one last question that I had is that we have seen that there is a new entrant in the industry and the larger players have been impacted.

48:52 Obviously, right now, there is not much of an overlap between our product segment and the competitors product segment. So say, for example, just in case if you were to enter into their segment or they were to enter in your segment, how are... How well are we prepared to face that competition? Because, obviously, that will lead to some price wars and all of those things. Right? So like right now we are looking We do at not have any ambitions to jump into that extra competitive high advertising cost and high distribution cost segment, we have a very limited exposure to B2C business and that is quite steady. We just do around INR100 crores out of B2C business out of our INR2000 crores revenue roughly.

49:39 So that is not an area of concern for us. As far as the B2B business is concerned, that is a different ballgame altogether. We have a strength, which as part of just a few minutes ago mentioned, it is our footprint is much larger than our size actually of revenues or operations. Right now, we why we are so comfortable with the three, four, four, five month order book, because orders keep rolling in on a very regular basis. It's not a problem for us. And whatever larger player enters into the field and they try to increase their presence in the markets that we are dealing, I think we sit quite comfortably because even now we don't have any difficulty in getting the business that we need. So it's not an issue. Okay. Okay. So basically, you are going to stay in your area of expertise and no experimenting here and there, and we were confident about the trajectory going ahead. Correct?

50:43 Sure. As we are going with the newer production, there are going to be less competition, right? That's why we are saying that there is only margin accretive. So we are confident of that. Okay. Okay. So those were my questions. All the best. And look forward to your trajectory that you have been guiding and, like, for future conversations in your future earnings call. Thank you, and all the best. Thank you. Thank you so much. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Adip Sethi from Eco Content Solution. Please go ahead. Yeah. Thank you for the opportunity.

51:29 So my question is on Reconducting. I want to understand the Reconducting opportunity in India in terms of circuit kilometers. And out of this total opportunity, what market share does company target to capture? You see, we cannot share or rather be very confident of some exact numbers on the reconditioning kilometer age as you mentioned. But from our estimate, the size of the market is at least INR 50,000 crores in the next five years for the Reconducting business, which will mainly include STLS but other items also. Okay. Sir And this is something that this is something that we have derived from our observation experience in the overall market scenario.

52:22 There was a second part to your question. Can you repeat that please? Yes. And out of this total opportunity, what market share does the company target to capture? See, we have just introduced this product, right? And we are well positioned to capture good portion of this business. Right now, we will be in the top five companies for this product in the country right now. And as the market matures and as the product segment matures, we will be one of the leaders for this product. We are very confident of that. Okay. And sir, I want to understand of the total circuit kilometer, which is expected to be reconditioned, how much is likely to be involved replacing the existing ACSR conductor, and how do you see the adoption of HTLS evolving compared with conventional AL 59 conductors over the next few years?

53:24 You see, STLS is going to be replacing the traditional ACSR conductors. AL 59, I think, should not be a priority right now to be reconnected because there'll be so much of... You know, the low hanging fruit would be ACSR conductors, which should be reconnected first. And thereafter, of course, STLS will be much more efficient solution to the requirements. So that will also happen. And also new lines, it's not just reconducting, but also new lines of private companies, which are setting up their own captive use solar parks or renewable parks are setting up transmission lines with HTLS. So that is also an opportunity. Great. And sir, within the HTLS conductor segment, which technology is seeing the higher adoption in Reconducting?

54:14 Is it ATC or AEC? And what are the key reason behind this preference? We will not talk too much in detail about... Are basically brands, not technologies. And these are, I think, probably areas where we would not like to discuss on a public forum. Right. And I said like you know, we said it's a developing market. Things are progressing very quickly, right. So we will wait for the market to mature and comment on that. But like we said, we are currently we cover the two largest technologies, which has been procured for HDLS, which is the carbon co conductor and gap conductor.

55:01 And suppose commissioning of the Greenfield plant, what will be our capacity for HDFS? It will be an increasing investment into it and output into it. But we believe about we want we will give you a number by the time our plant becomes operational for what portion tonnage wise we are going to be doing price scales. Thank you, sir. That was very much appreciated. Thank you. Thank you very much. Thank you. Thank you. The next question is from the line of Pat Sheth from Smith and Thompson Capital Advisory. Please go ahead.

55:48 So hi, sir. Congrats for the good set of numbers. I had a couple of questions. First, like, are we on track for just 700 to 800 CR in U. S. Exports during this year? Roughly, yes, because we are looking at some 30% revenues, as I said. So INR700 crores should be more like it, but these things are slightly variable depending on what sort of market scenario prevails. Right. I think, Suraj clearly guided that we will try to maintain our U. S. Exports between 25% to 30% of our turnover for the year, should be around that number, right?

56:38 Some tweaks here and there are always there as per the situation, but it should be around that number. And second question I would like to ask is how will the company fund the expanse and like while maintaining debt to equity of 0.3? Sir, can you please repeat your question once again? Yes. Yes. Like how will the company fund the expansion of the Narmurapura? Like as like while maintaining debt to equity of 0.3 times. See, at present, our debt equity is point three. That is certainly very low. It is below point three. At present, I think it is point one four or one Yeah. Yeah. It is. Is.

57:25 Certainly, we are going to target some long term loan in the coming times to meet the project. And in any case, we don't expect more than INR 0.6 or 0.78. Sorry, sir. We just clarify. The INR 300 crore CapEx that we are envisioning, it is going to be a mix of debt equity and the cash accruals that we are doing, right? The cash accruals are there, the equity has already been raised and long term debt is being tied up, right? Currently, we didn't need it, but now in the coming quarters, the long term loans will be tied up. So for the once the plant becomes operational, we are confident that our debt equity ratio shall not cross 0.3.

58:16 Okay. Around that range. Let's not we'll be around that. Okay. Ladies and gentlemen, we'll take this as the last question for today. I would now like to hand the conference over to Ms. Vanessa Fernandez for closing comments. Over to you, ma'am. I would like to thank the management of Paramount Communications for their time today and for taking us through what has been a strong quarter for the company with growth in both revenue and profitability. Thank you to all the participants for joining us and for your thoughtful questions today. If any of your queries remain unanswered, please feel free to reach out to us at AdFactors PR.

59:03 We look forward to connecting with you again next quarter. Thank you, and have a good evening ahead. Thank you very much. Thank you very much. Thank you. On behalf of Paramount Communications Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.