Apar Industries Limited — Q3 FY26 earnings call

In terms of the EBITDA per ton, it is largely because of increase in the premium mix as compared to the total sales of the conductor. As we have discussed earlier also, U.S. is always one of the reasons for the higher EBITDA. But as we have been premiumizing our portfolio over last several years, this has made a big impact in terms of increasing the EBITDA margin on a per metric ton basis.

Clarified the strong EBITDA per ton was due to a higher premium product mix (44.2% in Q3) and shift to AL-59, indicating successful premiumization strategy.

Asked by Amit Anwani

So right now, we have seen a little bit of that affecting us in this Q3 and it is possible in Q4 also, there could be some. Although as of now as things stand, we feel that Q4 will be as per our original expectation. But again if the commodity prices go up the way they have been going up since the last couple of months, then there is a possibility that some customer may face some difficulty and postpone some of the deliveries.

Management acknowledged that commodity price volatility can lead to customer-initiated project delays, impacting execution in Q3 and potentially Q4.

Asked by Amit Anwani

So the current tariff situation remains the same at 54%. So whatever order inflow we have got in Q3, which is approximately INR500 crores for the cable business, where we have had to adjust the prices down to some extent to keep the order flow going. So mind you, there's also been some increase that has happened across the board because other countries also have had some increase in tariffs.

Confirmed ongoing 54% US tariffs and the strategic decision to adjust prices and accept lower margins to maintain market access and customer relationships, especially for cable business.

Asked by Amit Anwani

No, no, no. What I was saying is that in the last year, the U.S. business in the first 6 months, as you rightly said, was equal to approximately what we did in the previous year. So with the gap that we've had in Q3, as we get into Q4, you'll get back into this. INR500 crores order book which we have, a significant portion of that will get executed in Q4.

Clarified that despite a Q3 dip, significant Q4 execution of new orders will lead to a stronger H2 US revenue, potentially matching or exceeding the previous year's total.

Asked by Amit Anwani

Our sense is so you have to actually look at each BTN number to see whether the specific product that we manufacture and are exporting to the EU are covered under a O tariff or a lower tariff situation. The European market otherwise is very large, but the access to the market has been very restricted because the utilities there tend to prefer to buy EU manufactured product locally.

Management indicated that while the FTA is positive, the specific impact is still being assessed due to product-specific tariff details and historical preference for local EU manufacturers.

Asked by Umesh Raut

So currently, there is a backlog which is there because of, as I mentioned in my opening remarks that there is a problem of transformer deliveries because of the lack of bushing and the bushing capacity that's available. So the government is actually making a concession for import of bushings, which will kick in very shortly within the next week or so.

Identified transformer bushing shortages and right-of-way issues as current bottlenecks, with government intervention expected to resolve them, leading to accelerated execution and double-digit volume growth in FY27.

Asked by Umesh Raut

So actually it's really an extension of what we're trying to do in the Cable Solutions space around telecommunication and the telecom products. So really, we won 1 package in the Kavach project, which is basically increasing the security and safety in the railway lines. So that package is about INR153 crores. It will take approximately, we just formally received the order today. We received an LOI earlier.

Provided details on the new ₹153 crores Kavach project order, highlighting it as a complete turnkey solution for railway signalling and safety, extending their telecom product offerings.

Asked by Kunal Sheth

It's a variety of cables and from a variety of customers. So depending on what the local competition is, we've had to make some adjustments in prices. So it's varying across the product categories. But clearly there is -- I don't want to specifically talk about how much is the margin hit, but there is clearly a compromise to be made on margins, but we've seen that as that compromise is made, the order inflow is taking place.

Management confirmed that new US cable orders involve a 'compromise' on margins due to local competition and tariffs, but did not quantify the exact impact, indicating potential pressure on cable segment profitability.

Asked by Amit Anwani