Financial Performance Highlights

Q2 FY27 Consolidated Results (Year-over-Year Comparison):

  • Revenue: ₹2,541.79 crore (up 143.62% from Q2 FY26)
  • Profit Before Tax (PBT): ₹538.60 crore (up 406.49% from ₹106.34 crore in Q2 FY26)
  • Profit After Tax (PAT): ₹394.22 crore (up 448.14% from ₹71.92 crore in Q2 FY26)
  • EBITDA: ₹658.00 crore (up 223.55% YoY)
  • EBITDA Margin: 25.89% (improved 640 basis points YoY)
  • PAT Margin: 15.51% (improved 862 basis points YoY)

Half-Year FY27 Consolidated Results (Year-over-Year Comparison):

  • PBT: ₹870.12 crore (up 1311.62% from ₹61.64 crore in H1 FY26)
  • PAT: ₹639.86 crore (up 1401.31% from ₹42.62 crore in H1 FY26)

Quarterly Sequential Growth (Q2 vs Q1 FY27):

  • Revenue: Up 32.73% quarter-on-quarter
  • PBT: Up 62.46% quarter-on-quarter
  • PAT: Up 60.49% quarter-on-quarter
  • EBITDA: Up 47.78% quarter-on-quarter
  • EBITDA Margin: Improved 264 basis points quarter-on-quarter
  • PAT Margin: Improved 268 basis points quarter-on-quarter

Operational and Business Metrics

Order Book Position:

  • Total order book: ₹28,900 crore as of October 19, 2026
  • Provides multi-year revenue visibility
  • Strong pipeline of orders at advanced stages expected to convert to firm contracts

Export Performance:

  • Export revenue grew approximately 493% year-on-year

Business Segment Analysis:

  • Optical Fiber Cable (OFC) and Data Center Interconnect order book: ₹18,500 crore
  • Approximately 70% of export orders from hyperscalers
  • Revenue mix: 65-75% from data centers, 25-35% from telecom operators

Capacity Expansion Plans:

  • Planned investment of approximately ₹1,800 crore across optical fiber, cable and preform manufacturing
  • Fiber capacity expansion: From 28 million to 38 million to 43 million fiber kilometers
  • Cable capacity expansion: From 39 million to 56 million to 63 million fiber kilometers
  • Preform capacity: Doubling from 300 metric tons to 600 metric tons with commissioning expected by October 2028

Defense & Aerospace Business Update

Current Performance:

  • Targeting ₹500-600 crore revenue in FY27
  • H1 FY27 defense revenue: Approximately ₹80 crore

Growth Targets:

  • FY28 target: At least ₹2,000 crore revenue
  • 3-year aspiration: ₹5,000 crore revenue

Product Portfolio:

  • Thermal Weapon Sights (successfully delivered second batch for AK-203 to Indian Defence Forces)
  • Electronic Fuzes
  • Surveillance Radars (Foliage Penetration Radar, Drone Detection Radar, Ground Surveillance Radar)
  • Multi-Mode Hand Grenades

Strategic Initiatives:

  • Aerospace acquisition with unexecuted order book of approximately ₹1,600 crore (expected completion in Q3 FY27)
  • Ammunition manufacturing complex in Andhra Pradesh on 1,000 acres of land (construction to start soon)
  • Participation in tender for 800,000 multi-mode hand grenades

Product Development Status:

  • Foliage Penetration Radar: First trial successful, second trial expected in approximately 2 weeks
  • Several products in final trial phases with Indian Defence Forces

Guidance and Outlook

Revenue Guidance:

  • Initial FY27 guidance: ~20% growth over FY26
  • Revised after Q1: 40% growth
  • Current upgrade: At least 80% growth for FY27
  • Previous FY29 revenue target of ₹10,000 crore expected to be achieved earlier

Margin Outlook:

  • Management confident of maintaining and potentially improving current margin levels
  • Expected drivers: Higher capacity utilization, backward integration (preform manufacturing), increased share of connectivity solutions

Connectivity Solutions Business:

  • FY27 target: ₹800 crore revenue
  • FY28 target: ₹2,000 crore revenue
  • Q2 FY27 connectivity revenue: Approximately ₹300 crore
  • Q1 FY27 connectivity revenue: Nil

EPC Business Update

Current Performance:

  • Q2 FY27 loss: ₹121 crore
  • Expected loss for next two quarters: ₹75-100 crore combined
  • Expected profitability: Q1 FY28

Key Developments:

  • Army AMC contract in final approval stage (expected signing in 7-10 days)
  • BharatNet billing delays due to milestone verification processes (bills to be submitted in Q3)
  • Restructuring committee with external advice from EY expected to make recommendations in 7-10 days

Raw Material and Supply Chain

Preform Pricing:

  • Current market prices described as "insane" at approximately USD 300/kg (up 600%)
  • Company protected through long-term contracts with price reset clauses
  • Expectation of price normalization as capacity increases globally

Germanium Supply:

  • Required for preform manufacturing starting in approximately 2 years
  • Already engaging with potential suppliers
  • Germanium represents small percentage of overall cost

Market Demand Environment

Data Center Demand:

  • Strong demand acceleration across AI infrastructure, hyperscale data centers and telecom networks
  • No slowdown expected despite interest rate concerns
  • Growth expected to expand from North America to Europe and Asia
  • Telco demand showing signs of recovery after 2 years of limited purchasing

India Data Center Opportunity:

  • Current capacity: ~1.6 GW
  • Expected capacity by 2030: 6 GW (potential to reach 10 GW)
  • Major industrial houses investing (Reliance, Adani, Yotta, Mahindra, Tata)

Capital Structure and Debt

Debt Management:

  • Repaying old debt while taking new debt for capex
  • Expect substantial debt reduction in current year
  • March 2027 and March 2028 balance sheets expected to show significant debt reduction

Management Commentary Highlights

Growth Sustainability:

  • Management does not view Q2 as peak performance but as sustained growth phase
  • Confidence based on robust order book, strong pipeline and long-term customer programs
  • Customers include world's largest technology companies with long-term agreements

Capacity Utilization:

  • Fiber manufacturing: 100% capacity utilization
  • Cable manufacturing: Varies by product type but overall at 100% on revenue basis
  • Different machines required for different cable types (armored, unarmored, double jacketed, loose tubes, tight buffer, IBR, flat)

Pricing Trends:

  • Q2 saw significant price increases
  • Expectation of stabilization with potential for further increases
  • Data center products command premium pricing (USD 25-27/km for A2 180-micron fiber vs USD 15/km for telecom fiber)

Defense Business Confidence:

  • Viewed as second growth pillar for the company
  • Geopolitical situation driving defense strengthening globally
  • Indigenous technology development creating export opportunities