APAR Industries Limited Q2 FY27 Earnings Conference Call Summary

Financial Performance Highlights

Q2 FY27 Consolidated Performance:

  • Revenue: ₹6,931 crores, up 21.3% YoY and 5.2% QoQ
  • Domestic revenue growth: 34.3% YoY
  • Export revenue: declined 3.3% YoY
  • EBITDA: ₹787 crores, up 57.8% YoY
  • EBITDA margin: 11.4% (270 bps improvement from 8.7% in Q2 FY26)
  • PAT: ₹447 crores, up 77.8% YoY
  • PAT margin: 6.5% (200 bps improvement)

H1 FY27 Consolidated Performance:

  • Revenue: ₹13,522 crores, up 25% YoY
  • Domestic revenue growth: 35.5% YoY
  • Export growth: 3.7% YoY (excluding ₹800 crores in-transit inventory)
  • Export proportion: 27.6% of total revenue
  • EBITDA: ₹1,602 crores, up 60.2% YoY
  • EBITDA margin: 11.8% (vs 9.2% in H1 FY26)
  • PAT: ₹915 crores, up 77.7% YoY
  • PAT margin: 200 bps improvement

Segment-wise Performance

Conductor Division (Q2 FY27):

  • Revenue: ₹3,753 crores, up 21.1% YoY
  • Volume: declined 9.2% YoY
  • Domestic revenue: up 22% YoY and 8% QoQ
  • Export revenue: up 18.3% YoY and 29.5% QoQ
  • Export mix: 23.6% of division revenue
  • U.S. conductor revenue: grew 12.2%
  • Premium mix: 39.4% (vs 45.3% in Q2 FY26)
  • EBITDA: ₹276 crores, up 11.3% YoY
  • EBITDA per metric ton: ₹48,241 (vs ₹39,363 YoY)

Conductor Division (H1 FY27):

  • Revenue: ₹7,092 crores, up 20.5% YoY
  • Volume: declined 8% YoY
  • Domestic revenue: up 20.7% YoY
  • Export revenue: up 20% YoY
  • U.S. revenue: down 8.4% YoY
  • EBITDA per metric ton: ₹50,739 (vs ₹41,421 YoY)

Oil Division (Q2 FY27):

  • Revenue: ₹1,819 crores, up 35.6% YoY and 6.7% QoQ
  • Volume: 128,590 KL, down 20% YoY
  • Export proportion: 37% (vs 43% YoY)
  • EBITDA: ₹299 crores, up 185% YoY
  • EBITDA per KL: ₹23,262 (vs ₹6,570 YoY)

Oil Division (H1 FY27):

  • Revenue: ₹3,525 crores, up 35.3% YoY
  • Volume: declined 16.9% YoY
  • Export growth: 23.5% YoY
  • Export mix: 36.7%

Cable Division (Q2 FY27):

  • Revenue: ₹1,875 crores, up 22.1% YoY
  • Copper mix: 30% of revenue (vs 20% YoY)
  • U.S. sales: declined 50% YoY
  • Domestic revenue: up 71.4% YoY and 14.1% QoQ
  • Export revenue: down 29.8% QoQ
  • Export mix: 19% (vs 42.3% YoY)
  • EBITDA margin: 11% (80 bps improvement)
  • In-transit cables: ₹440 crores (DDP basis, to be recognized in Q3)

Cable Division (H1 FY27):

  • Revenue: up 25.7% YoY
  • Domestic revenue: up 65.8% YoY
  • Export revenue: down 30.2% YoY
  • EBITDA: ₹401 crores, up 34.2% YoY
  • EBITDA margin: 10.8% (70 bps improvement)

Order Book Position

Conductor Order Book: ₹12,025 crores (all-time high as of September 30, 2026)

  • Q2 order intake: ₹4,725 crores (up 82% YoY)
  • Includes prestigious orders from UK and US utilities: ₹3,000 crores
  • Includes first Z-shaped conductor order from Scandinavia for offshore wind farm evacuation
  • Includes HTLS orders from Africa, South America, and Europe
  • Includes single largest OPGW order (48 fiber) from KPCL: ₹960 crores
  • Includes first 144 fiber OPGW order from Central America
  • 25% to be executed over 2-3 months, remainder within 18 months

Cable Order Book: ₹3,000 crores (vs ₹1,653 crores previously)

  • Includes orders from Google data center in US and Amazon's largest data center in India: ~₹1,000 crores
  • Bulk expected to be executed before year-end

Industry Updates & Developments

Transmission Sector Developments:

  • India added 8,775 circuit km transmission lines in H1 FY27 (up 153% YoY)
  • Transformation capacity added: 671,815 MVA (up 52% YoY)
  • Center approved intrastate transmission systems for 135 GW renewable energy evacuation by FY33
  • Investment expected: ₹1.86 trillion for 51,126 circuit km lines and 228,903 MVA transformation capacity
  • CEA mandated 10-15% thermal margin limit for transmission lines and N-1 reliability architecture

US Department of Energy PAT Program:

  • Announced in September 2026 with $1.9 billion federal funding
  • 31 projects across 26 states
  • Expected to unlock 23 GW transmission capacity
  • Includes reconductoring/rebuilding of 1,500 miles transmission lines
  • Grid enhancing technology for 21,000 miles

Capital Raising & Financial Position

QIP Completion:

  • Raised ₹2,500 crores through QIP
  • Proceeds to be deployed for working capital and strengthening balance sheet
  • Credit rating improved from AA negative to AA
  • Enhanced financial flexibility and borrowing cost rationalization

Capex Plans:

  • Planned capex: ₹1,500 crores over 12-15 months
  • H1 FY27 capex: ₹500 crores already spent
  • Future annual capex expected: ₹300-400 crores
  • Overseas expansion under consideration

PSPL Investment:

  • Enabling resolution for up to $100 million investment in Singapore subsidiary
  • For overseas expansion initiatives

Operational Challenges & Strategies

Commodity Price Volatility:

  • Significant inflation in copper (up 50%), aluminum (up 35%), and base oils (up 100%)
  • Steel prices increased sharply for tower manufacturing
  • Aluminum premium (MGP) at 4-year high
  • Freight rates increased sharply in Q2, particularly to Europe and LatAm

Volume Impact:

  • Conductor volume decline due to delayed manufacturing clearances and TBCB order awards
  • Oil volume decline due to strategic focus on quality customers and risk management
  • Cable US sales impacted by shipping delays and container availability

Inventory in Transit:

  • Conductors: ₹800 crores in transit (DDP basis, primarily for US market)
  • Cables: ₹440 crores in transit (DDP basis)
  • Expected to be recognized in Q3 FY27

Management Outlook & Guidance

Volume Recovery Expected:

  • Conductor volumes expected to improve in H2 FY27
  • Strong order execution anticipated in Q3 and Q4
  • TBCB projects have strict 36-month execution timelines with severe penalties

Margin Outlook:

  • Conductor: Targeting ₹35,000-36,000 EBITDA per ton plus tailwinds
  • Cable: Targeting 11-12% EBITDA margins
  • Oil: Focus on margin and ROCE over volume

Growth Guidance:

  • Conductor: Medium-term industry growth expected at 10% (excluding metal price effects)
  • Cable: 25% value growth guidance maintained
  • Oil: 5-7% volume growth guidance (though currently prioritizing quality over volume)

Capacity Utilization:

  • Cable: >90% utilization,某些 sections at 100-105%
  • Conductor: ~80% utilization
  • Oil: No capacity constraints

Technology & Innovation

New Product Developments:

  • Z-shaped conductor for high wind conditions (Scandinavian offshore wind farm)
  • 48 fiber OPGW with IP MPLS technology (tie-up with Nokia)
  • 144 fiber OPGW capability
  • CTC conductor expansion for export markets
  • Elastomeric cable growth for data centers
  • Power cable capability expansion to 132kV and eventually 220kV

Conference Call Participants

Management:

  • Mr. Kushal Desai - Chairman and Managing Director
  • Mr. Chaitanya Desai - Managing Director
  • Mr. Ramesh Iyer - Chief Financial Officer

Moderator: Mr. Ambesh Tiwari - S-Ancial Technologies

Analysts Participating:

  • Nitin Arora - Axis Mutual Fund
  • Mohit Kumar - ICICI Securities
  • Umesh Raut - Nomura
  • Vidit Trivedi - Asian Market Securities
  • Achal Lohade - Nuvama Institutional Equities
  • Amit Anwani - PL Capital
  • Natasha Jain - PhillipCapital
  • Sanjeev Zarbade - Antique Institutional Equity
  • Mahesh Patil - ICICI Securities