Apar Industries Limited (NSE: APARINDS) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Kushal Desai — Chairman and Managing Director
Chaitanya Desai — Managing Director
Ramesh Iyer — Chief Financial Officer
Analysts:
Ambesh Tiwari — Analyst
Mohit Kumar — Analyst
Mohit Motwani — Analyst
Amit Anwani — Analyst
Nitin Arora — Analyst
Sagar Dhawan — Analyst
Maulik Patel — Analyst
Unidentified Participant
Avnish Tiwari — Analyst
Mayank Bhandari — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Abar Industries Limited 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone.
Please note that pleased that this conference is being recorded. I now hand the conference over to Mr Ambesh Tiwari from Essential Technologies. Thank you, and over to you, sir.
Ambesh Tiwari — Analyst
Thank you. Good evening, everyone. This is Amesh Tiwari from Essential Technologies. I welcome you all for the Q4 FY ’25 earnings call for Appar Industries to discuss the business performance and outlook, we have from the management side, Mr Kushal Desai, Chairman and Managing Director; Mr Chetanya Desai, Managing Director; and the CFO, Mr Amish. I will now pass it on to Mr Kushal Desai for the opening remarks.
Kushal Desai — Chairman and Managing Director
Thank you, and over to you, sir. Yeah. Thank you, Ambesh. Good evening, everyone, and welcome to the Industries Q4 and the full year’s earnings call. Let me start by actually giving a quick overview of the overall performance of the company. I will follow that up with a short update on the industry and the spending and trends.
And then I would like to get into more details on the segmental performance of the three major businesses. Post all that, we can open up the floor to questions. So apart concluded the financial year with both revenue and volume growth across all the three business verticals. It’s an all-time high quarter for us and the first time in our history, our quarterly revenues crossed INR5,000 crores.
So for Q4 FY ’25, the consolidated revenue came in at INR5,210 crores, which is up 16.9% year-on-year. The domestic business continued to demonstrate a strong growth and the domestic side is up 31.4% versus the same-period previous year. Our export mix is at 31.3% for the quarter.
The US business has improved in this quarter. It is 195.6% higher than what it was — was over the last year’s Q4 and is 48.1% more than Q3 FY ’25. So there has been a increase in the execution of orders and the receipt of orders from the US thus far. In terms of EBITDA, the — our EBITDA is at 5.7% and it’s INR483 crores — sorry, our EBITDA is up by 5.7% to INR483 crores.
It is at 9.3% EBITDA margin. The profit-after-tax came in at INR250 crores, which is about 5.9% higher than the previous year. The profit-after-tax margin is at 4.8%. If you look at the 12-month consolidated revenues, we stand at INR18,581 crores, which is 15% higher than a year-ago. Exports has contributed to 32.8% of revenues in FY ’25 as opposed to 45.2% in FY ’24. Coming to a few key industry Highlights, according to the National Electricity Plan, India’s peak power demand is expected to hit 388 gigawatts by 203132, for which the country would require a power generation capacity of 997 gigawatts. This will necessiate expanding the transmission and distribution network from source to grid and then through the last mile to the consumer. The Union government is planning to connect all upcoming green energy units to a green national Grid at an estimated investment of INR4.9 lakh crore between 2027 and 2032. So the NEP has also projected that during the same-period 2027 to 2032, India’s battery energy storage capacity will reach 47 gigawatts and the current capacity is just about 300 megawatts. On the renewable energy front, the Ministry of New and Renewable Energy achieved a historic milestone in the renewable energy sector for the financial year FY ’25 as the country has recorded its highest-ever renewable energy capacity addition in a single year, adding 25 gigawatts, which is nearly a 35% increase over the previous year’s addition of 18.6 gigawatts. India’s solar power sector led this growth with the capacity addition rising from 15 gigawatt in FY ’24 to nearly 21 gigawatt in FY ’25, marking an increase of nearly 38%. The country also achieved a significant milestone of surpassing 100 gigawatts of installed solar capacity this year. Additionally, India’s solar module manufacturing capacity has nearly doubled from 38 gigawatts to about 74 gigawatts in March ’25, while the solar PV cell manufacturing capacity has tripled from 9 gigawatt to 25 gigawatt. So all these are indicators that show that solar addition should continue to take place at an accelerating pace. Coming to the transmission line and substation addition, in FY ’25, India’s transformation capacity has grown by 7% year-on-year. The installed capacity by approximately 5% and the transmission line network by approximately 2%. There were many issues with respect to write-off rate constraints and land acquisition hurdles which impacted growth. Also with the national elections taking place in this financial year, the first few months were pretty much lost in terms of all the election-related activities with relatively less expansion taking place through that period. To address the rising demand and to facilitate integration of the renewable energy sources, the transformation capacity and installed capacity will need to grow by exactly two times and the transmission line network by approximately 1.3 times by 2023. This demand will be largely met through the tariff-based competitive bidding which is the TBCB 45 interstate transmission systems or what they call ISTS projects will be awarded under the TBCB through this period of FY ’25 onwards. The Central Transmission utility of India Limited has released a rolling plan which is running up to INR2930, projecting a capex of almost 4.3 lakh crore for upgrading the ISTS network. So coming back to the financial performance by each of the individual segments, we can look at the conductor segment first. In the 4th-quarter of FY ’25, our revenues grew by 24.5% year-on-year, driven by strong demand in the domestic market, we also had higher amount of realization and exports from the US. Volumes grew by about 5.9%. Exports contributed towards 24.5% of the overall revenue. The US revenue grew by 142.6% for the conductor division over Q4 FY ’24 and 229% over Q3 of FY ’25. If you look at the premium product mix, that has contributed to 45.9% in Q4 FY ’25. In terms of EBITDA, post open period forex, that came in at INR41,430 per metric ton as against INR48,438 per metric ton in the same-period last year. The product mix and growth in shipments to the US has led to the higher EBITDA per metric ton over what we saw in Q3 FY ’25, which had come in at a period low of INR18,860 per metric ton. So the order book stands today at INR7,163 crores. New orders received during the quarter came in at INR2,114 crores. On an annual basis, revenues have grown by 19.3%. Volume has grown by 7.8% versus last year. The export mix was 24.2%. So even though the volume growth is showing 7.8%, a lot of value-added products have been — the mix has moved towards that, which includes the substitution of the conventional ACSR conductors with the AL59 and also the overall copper business has grown, with the copper transport conductors going into the transformers being a major leading factor-in the growth. Coming to the oil business, the revenues from the operations grew 3.3%, but the volume has grown by 9.3% versus the Q4 FY ’24. Transformer oil volume growth came in at 7% higher. Automotive oil grew 6% higher, while the industrial lubricant side grew by 11.3% year-on-year. Export remains a healthy 41.7% of the mix. The EBITDA per KL came in at INR5,873 rupees per KL versus INR4,251 from a year-ago. If you look at the full-year period of FY ’25, revenue has grown by 5.2% to reach INR5,087 crores. The volume growth has been at 7.8%. Transformer oil volumes have grown by 14%, driven by stronger demand both domestically as well as overseas. And our automotive sales growth led by higher volumes to OEMs has grown by 17.6%. Export for the year contributed 44% of the overall revenue. EBITDA per KL for the year came in at INR6,145 per KL as opposed to INR5,746 per kL in the previous year. Now coming to the metrics of our cable business, our cable business revenue for Q4 FY ’25, it posted a strong revenue growth of 29.9%, 30% to reach INR1,410 crores on the back of both strong domestic demand as well as increased shipments to the to the US. Continued infrastructure CapEx has led to the domestic business growth. This includes shipments to various data centers that are being set-up in the country and is covering not only Amazon, but also Google, Microsoft and Adani. Export mix came in at 28.4% in Q4 FY ’25 versus 24.7% in Q4 FY ’24. The US revenues grew by 268% over Q4 of FY ’24. Coming to the EBITDA, post ForEx Forex that has recorded a year-on-year growth of 21.5% to reach INR150 crores. The EBITDA margin is slightly down by 0.7% versus what we had in Q4 FY ’24, but it is up 1% versus what we had in Q3 FY ’25. So this has contributed from a better product mix and larger shipments to the US. Scale economics has also added to improve the EBITDA margin over Q3 of FY ’25. The pending order in the cable business is at about INR1,500 crores. So if you look at the revenues for the 12 month FY ’25 for the full-year, that has grown by 28.1%. Domestic business grew by 43%, the export mix stands at 31% and the The EBITDA post ForEx grew 13.4% to reach INR498 crores for the year. So the US business has shown a recovery in this quarter, which along with continued domestic business growth has resulted in an all-time high revenue for the company as well as for the conductor division, oil division and the cable division individually. This was in-spite of the general election and some of the supply-chain disruptions that happened and a poor US demand, which happened in the first part of the year. We have also seen increased Chinese competition, which has posed challenge in terms of export to countries where the Chinese products are well-accepted, which includes some parts of Africa, Latin-America and Europe. We believe that the fundamentals of the business remain intact and we are optimistic that we will continue to be able to deliver a sustainable and healthy business in the coming periods. The US tariff situation continues to have a bit of an overhang until there is a BPA in-place with the US. Hopefully, this is at an advanced-stage and we hope that the outcome will be favorable for India relative to what tariff is being charged to other countries. I would just like to reiterate the fact that over 40% of the wires and cables and conductors are imported into the United States, which is over $20 billion US dollars from a total market, which is about $55 million US dollars. And with this whole energy transition moving towards more electricity-based demand and with the growth of hyperscaler data centers where the largest number of data centers being added are in the United States, we would continue to see the US as being an important and a strategic market. The gap remains so high that the only way that the electrification can continue is with import of product. And within hopefully a short-time, the overhang should actually settle down in terms of where exactly this stands. The company is actually stepping up substantially its capex plan. We completed capex of about INR500 crores in FY ’25. We have a plan of adding INR1,300 crores of capex through FY ’26 and running into the first-quarter of FY ’27. So the capex should go in the next 12 to 15 months. And considering commissioning, in about 18 months, we should have most of this equipment up and running. This includes about INR800 crores on the — on the cable side with building of a brand-new site. Post this expansion, we would expect a turnover to be able to be generated from that complex, which would take the business up to about INR10,000 crores of capacity that we would have. From what we’ve executed this year, which is close to INR5,000 crores. So it’s essentially being able to double the capacity of the of the business. We are looking at adding about INR300 crores of capex to the conductor business and that includes some of the rods which need to be produced for our cable business as well. We are also expecting to spend about INR200 crores in the oil business, where we are building a brand-new storage terminal in the JNPT port, so that we can cut-down the supply-chain costs of bringing product into the country, better distributed across the manufacturing facilities we have. And this is also going to allow us to be able to do bulk exports from the terminal of transformer oil, white oils and pharmaceutical oils, which is something that has not had so-far. We’ve had to resort to doing export only through flexi bags and containers. So in conclusion, I would say that looking at the situation today that I’ve explained, we are fairly bullish in terms of how the business will develop over the next few years. We are loading upfront the capex that we plan so that we have the capacities in-place as the demand in the business continues to grow. We also have a very detailed corporate presentation in the Investors section of our website. I would encourage you to please go through that to get a more detailed perspective on the company’s activities and strategy. So with that, I come to the end of my opening remarks and we’ll be very happy to open up the floor to questions. Thank you very much.
Questions and Answers:
Operator
We will now begin the question-and-answer session. Anyone who wishes to ask a question may press RN1 on the test on telephone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities. Please go-ahead.
Mohit Kumar
Good evening, sir. Absolutely fantastic job on the profitability. My first question is from the looks of it. It looks like you are selling a lot of non-premium conductors in the domestic market. Still you have been able to maintain the EBITDA per ton. What explains the strong profit despite your exports? Is it AL59?
Kushal Desai
Yes. So as you see in this particular quarter-four, we have about 45% of the products coming from the premium products that we have. And this is actually excluding, AL59, we are still categorizing it as a standard non-premium product. So 45% of the products are premium giving a higher-margin.
Plus you have AL-59 as a non-premium product, but still the margins are higher as compared to the conventional business. Secondly, if you see in this particular quarter, we have rebound in terms of the US business. The turnover from the US business has increased where the margins are higher and that has also resulted in high-margin, especially in this particular quarter.
So broadly, these two are the reasons that have helped. And also if you see that the copper business is also scaling up the margin and the products and the mix of copper is going up, that is also helping us to increase the margins of the overall conduct reduction.
Mohit Kumar
And my second question is on the US. The US looks to be lot more uncertain compared to last quarter, right? But does it — is it impacting our order book? Is it impacting our sales in Q1?, is it a fair assumption that Q1 will be weak till the time we will get the client as we go-forward and the USS will pick — pick once we have the FTA in-place.
Kushal Desai
So Mohit, the Q1 actually, we are still continuing on the cable side, we are still — we’ve got a green signal for a lot of the materials, which had been planned to be produced in the month of April, May and June. As you know, the tariff pause has happened up to the 9th of July. So a lot of the order book which was there, we’ve got to take to continue to execute that.
Some of the customers who are already at advanced stages of executing on their projects have even agreed to pay whatever is the differential tariff that comes in post the 9th of July as well because the cables are required to complete their projects. So you won’t see that dip actually taking place substantially in Q1.
Also keep in mind that a lot of product is already in the DDP stage, meaning so DDP as in-transit. So all that revenue will be booked in the first-quarter of FY ’26. Similarly, even on the conductor side, there is a product which is in and being delivered. We’ve got clearances to dispatch product for — produce and dispatch product for this quarter.
I think beyond this quarter, many customers are just waiting to see what is going to happen, both from the US side as well as from the Indian side, there have been various announcements and of trade delegations going back-and-forth very-high level, right, from Vice-President of the United States, Commerce Minister of India, etc.
And the sense is that whatever be the final situation that settles, India should hopefully not be at the countries. If you see the major places from where cables were being imported into the US, looking at the US import statistics, countries were basically Vietnam, Cambodia, Indonesia, India, Mexico from where the kind of product range that we are exporting, the competition is coming from. Both Cambodia and Vietnam are seen as a proxy for China.
Their duty rates are much higher than whatever were the tariffs that were originally declared. India being at 26%, these two countries were at 44% and 46% respectively and Mexico at 25%. So that was what was announced, then the pause came in, so everybody is at 10% currently. And the — we’ll have to wait-and-watch. That’s why I said in my opening remarks if there is a bit of an overhang, but I think the market requires a very, very substantial amount of import. It’s exceeding $20 billion US dollars and the kind of demand that’s coming from data centers and these things, one is continuing to scale-up. One of the highlights, which I did not mention in the opening remarks is that we’ve got after supplying Microsoft quite satisfactory in India, we have gone onto the global vendor list for supply to data centers in the United States. And so that I think is another area and we are looking-forward to be now able to participate in various RFQs that come up through our FY ’26 onwards. Does that answer your question?
Mohit Kumar
Yes. Thank you and all the best, sir.
Kushal Desai
Thank you.
Operator
Thank you. The next question is from the line of Mohit Mutwani from Tara Capital. Please go-ahead.
Mohit Motwani
Hi, am I audible?
Kushal Desai
Yes. Please go-ahead.
Mohit Motwani
Yeah, hi, sir. Thank you for the opportunity. First question is on the conductor exports. Now we saw very strong growth in the US exports on a quarter-on-quarter basis. Can you talk about the outside US markets? What we have seen there? Because I think in the last quarter, US was soft and other economic — other geographies were helping to give the growth. But I think in this quarter seems there’s some moderation in the outside US market. So if you can speak about that?
Chaitanya Desai
Yeah. I think last quarter we had actually explained in one of the questions that outside the US and India, the rest of the markets are weak for us because the Chinese competition was very aggressive. So this is the situation for the quarter, which has just got over as well. And even for the future also, the immediate future, we see the situation continuing. It’s the domestic market, which is doing well in India.
Kushal Desai
So on. On the US side, also in the last six months, what we’ve been doing is that we have been actually working in improving our on-the-ground presence in the US so Apar today has four employees, one very senior advisor and three employees on-the-ground in the US on the cable side, there is one person who is being seconded there on the conductor side full-time.
And we’ve been signing-up distribution and reps, manufacturing reps, which is what they had called in the US, which is today covering now the people who we signed-up is covering about 75% of the US market. So we’ve been systematically working with them to increase our approvals in the public utilities, in the independent-owned utilities as well as in the commercial, industrial space including real-estate.
So on-the-ground, the thing is, the US market may be made quite a lot of advances in terms of on-the-ground presence, on-the-ground approvals. I also mentioned about Microsoft approval just a couple of minutes ago. So as Chetany has mentioned, other markets may you are you finding a lot of Chinese competition, there is a subsidy, which is in the region of about 8% to 12% coming in from China.
Our selected premium products, we’ve signed-up some business in Latin-America for HTLS and few other premium products. But otherwise, the domestic market continues to remain very strong and the prospects in the US are looking better. If this tariff overhang was in there, I think we would have been looking at a very, very substantial runway and growth there, but we are optimistic that this thing will also get — get resolved. Keep in mind that basic import duty for aluminum is at 25% even today in the US.
So as a consequence, you know, even the local manufacturers are facing a increase taking place. And that is not based on any reciprocal tariff et-cetera, there is a separate notification out, which is under the section to 232 under which this higher tariff has been applied for aluminum steel and a few other products.
So even though we see that non-US exports are not looking very attractive because of the pricing. The Indian market itself is very strong and the US market, it will settle down and we are quite optimistic that the business there is going to grow. So we are basically gearing ourselves up to be able to make sure that we meet all that demand coming in.
Mohit Motwani
Sure. Thank you for the detailed color. So just one more question on your employee expenses. Any reason for the sharp drop quarter-on-quarter?
Kushal Desai
Is there any reason for that, there is no specific reason for this with some of the estimates based — based on quarterly numbers, we revise the employee benefit expenses. There is no specific reason for the drop-in the numbers.
Mohit Motwani
Okay, sure. And one more question on your cables, you mentioned the capex front-end capex of INR800 crores. So in the previous calls, we have guided for 25% revenue growth for cables. So this incremental capex, does it increase our guidance for CapEx or is this already factored in the higher capex? The 25% was factored in the higher CapEx?
Kushal Desai
Yeah. So we are still guiding a 25% growth for the simple reason that if you see, this whole thing is executed and in-place, it is really going to be available for revenues that kick-in from FY ’27 onwards. This green — most of the money is going into the greenfield site, where almost 48 acres of property is being completely built-up and all the civil infrastructure will be in-place.
And so it’s — we are making an investment essentially a year ahead, you know, so that we have a clear runway to get to INR10,000 crores on the business. In the business.
Mohit Motwani
Got it. Thanks for the answers. I’ll jump back-in the queue.
Kushal Desai
Thank you.
Operator
Thank you so much. The next question is from the line of Amit Anwani from PL Capital. Please go-ahead.
Amit Anwani
Hi, sir. Thank you for taking my question. And first of all, congratulations for the strong numbers. First question in continuation to cables again, sir. You said we’ll be investing INR800 crores and revenue is going to double in next three, four years. I wanted to understand this incremental INR5,000 crore revenue as we have been also discussing in the past, the specialty cables like electronic, and low-duty cables also.
So where the focus will be in this capacity expansion? And will it be margin-accretive? Any guidance of directional margins which we are targeting to achieve.
Kushal Desai
So in terms of where the capacity expansion is happening, there is — the all varieties of cables are expanding. So we are looking — if you take the XLP side, which is a power cable size, our medium voltage capability, which is your 11 KV — 33 KV and then in this expansion, we will also have the ability to manufacture 132 and up to 220 KV. So all the testing equipment, manufacturing equipment, everything is going-in.
So our total capacity to produce medium voltage cables and up to 220 KV cables, if you aggregate that, it will go up by 4x from what it is as of today. So there is new line — two new lines coming in, two existing lines getting transferred to the new plant and getting completely rebuilt. So that there will be not only this capacity expansion, but our utility cost and conversion costs will also substantially fall.
Then if you come to the low-tension cable side, because we do a whole lot of specialty LT cables you will approved for the US market, which go into the residential, commercial, industrial, utility, etc. So that portion of the business also the capacity will double from what it is today also. We are also looking at doubling the capacity that we have for the medium voltage cables that go into windmills.
So we are seeing a big resurgence on the windmill side. And our sense is that there will be modernization schemes that will come up. If you look at the windmill landscape, if you see once upon a time, the wind power was much more than solar power. If you redial — if you dial back about 10 years. And those windmills which have gone in are all very low capacity.
The windmills are 250 kilowatts, etc. Today, the minimum standard is 3.3.5 megawatt. So a lot of new windmills are being added to form the hybrid combination of wind and solar. In addition to that, we expect that over the next few years, a very good policy will come in, which will upgrade the old windmills to be modernized for new windmills because that real-estate is already occupied by windmills Which are actually of very low capacity. You know the best tracts of land where the wind is at very-high velocity. So the wind side is also going to increase. We are substantially increasing. We’ve already increased our electron beam capability. There is one more machine coming in. So the amount of solar cables which we can produce, we’ve doubled the solar cable production between FY ’24 and FY ’25, and we will have the capability to double that from FY ’25 as we go into FY ’27. So all-round, you will see the all categories where we will have ability to expand. We are also bringing in some new equipment on the cable side to be able to make much higher-volume of cables that go into the Indian defense, where you need very specialized type of equipment to make those cables. We expect that over the next few years, defense spending is not only increasing, but the indigenization content is also increasing. That includes the cables which we are going to supply. So all-around we see on the cable side the growth and we don’t want to miss on these opportunities. So we are expanding our capacity at least one year ahead of time because it’s very difficult in a growth phase like this to time exactly when the growth will happen. So all of cable, we have got expansion in-place. The only area where we are not expanding is in optical fiber, the optical fiber side, because there we see that the OFC cable demand is actually quite poor at this stage. So our concentration is on everything other than OFC.
Amit Anwani
Right. Right, sir. My second question, sir, again, on the US business, though there is a very good comeback and resurgence in US business, which has happened for us this quarter. And you highlighted that there has been some overhang. So wanted to understand what is still bothering us?
Will it be landed cost which because of tariff might impact our competitiveness because you highlighted that the business in US is pretty strong, data centers plus the macro demand there. And you highlighted that massive imports are still happening in US for cable semiconductors. So what is so.
Kushal Desai
Sorry, I’m cutting. There are three data points that I mentioned, which is the best information that we have as of today. One is that there is an over $20 billion annual import that is taking place and is likely to continue. Second thing is that the key importer — the key exporting countries into the US, India even at the moment is not at a disadvantage relative to Mexico, Vietnam, Cambodia and Indonesia.
So in that sense also, we are not so badly off. Hopefully, the tariffs will be down lower than what they are. The third thing is that the US is importing aluminum and that at the moment is under the special section 232, where a tariff is at 25% and the reason that Section 232 is based on products which need to be manufactured in the US in the long-run and is of strategic importance.
So if you look at these data points, it doesn’t point towards us having — I’m sure that we are very optimistic that things should settled up. So it may find a little disruption in the short-term, but hopefully it will iron itself out over-time.
Amit Anwani
Right. So finally, any guidance you would like to give for EBITDA per ton growth or maybe also for the oil business EBITDA per KL, any guidance you would like to give for FY ’26?
Kushal Desai
So in terms of oil division, the volume growth we are looking is about 6% to 8 percentage and EBITDA guidance is about INR5,000 to INR6,000 per k. In the conductor division, we are looking at a volume growth about 10 percentage and EBITDA per metric ton of 30,000 plus tailwinds on a 12-month basis. Because of cable business, it would be value growth of 25 percentage and an EBITDA range of 10% to 12 percentage on a 12-month basis.
Amit Anwani
Thank you, sir. Thank you so much for taking my question.
Operator
Thank you. The next question is from the line of Sunder from Axis Mutual Fund. Please go-ahead.
Nitin Arora
Hi, sir. This is Nitin here from Axis Mutual Fund. Sir, just one question on the non-US business. You articulated your context, I think over the last two, 3/4 that competition is really increasing from the Chinese players in the non-US market. But how are you thinking about it because it’s also a very decent piece, piece which is coming down quarter-by-quarter.
So is there something backward integration or localization or putting some assembly there helps you? And I just want to know-how as a promoter you’re thinking about it, will it structurally keep issue? It keeps coming down only now, now there is no chance of recovering back. How one should think about this business, if you can throw some light on the non-US part?
Chaitanya Desai
So the thing is the Chinese government policy is we have seen in the past also at times they have kind of subsidized the aluminum and steel in China. So that has given the advantage at that time. But these things go in cycles and cannot be predicted. So we don’t want to kind of do any backward integration or any such thing in China, because then again we may not be able to have that sustainable advantage.
It’s all dependent on how the Chinese government policy is from time-to-time. On the contrary, we are looking at — and we had mentioned this in one — in the previous earnings call as well, and we’ve gone ahead to appoint advisers to look at manufacturing in the United States.
And so that exercise is actually going on, because not only do you have a tariff and a potential tariff overhang, but there are certain projects which are being executed and there are certain public utilities in the US who want to buy only US manufactured products because of the way in which they get compensated, et-cetera, etc.
It’s a very complex sort of network in the US. But there is — and there are customers who pay a premium for immediate deliveries, very short shortage delivery. So that exercise is going on. So rather than looking at backward integrating and doing anything in China, we are looking more in terms of wanting to produce examine production, say, in the United States, given that market is such a large market and will continue to be a large market over the next decade or so.
Nitin Arora
So the capex which you have announced, does that entail a picture of putting something in US as well or that’ll be a fresh investment that should — we should look this year announcement should come or how are you thinking about it?
Kushal Desai
So this current investment is all the investment that’s going into our existing manufacturing plants in India as well as there is a piece of you know in the UAE for our oil business, where we are putting in some new package and stuff over there. So it’s all-in our existing manufacturing facilities plus this greenfield facility coming up in — in the cable side.
So the US will be something that will be over and above this. Yeah. And then the growth numbers would be also different than there will be additional growth to support that investment.
Nitin Arora
Okay. Now why I’m asking this, sir because — sorry for again you know, pressing on this well because there is a recent agreement that happened with China as well, the FTA between the US and the China. Can you throw some light because those — now the articles are not out yet, which product gets about 25% or a 30% duty versus us. Can you throw some light if when we send a conductor from here to US versus what China now will send to US is the duty arbitrage has become very narrowed down or still the arbitrage is.
Kushal Desai
Still what has happened is that the — everything has reverted back with a 10% delta to what was existing. So the — there is an additional duty of 10% which is put on every single-country, right. And in the case of China, that additional is 30% because previously the delta between others and China was 20%. Okay.
So what the Trump administration has done is we recalibrated back to whatever deltas were there with a 10% increase. So that is what is happening in this 90-day period. I guess the Chinese 90-day period is a little bit different than the rest of the world because we were from maybe 9th of April onwards to put this in-place.
But otherwise, the economics, I don’t — I don’t think that there’s anything more favorable going to come into China relative to India, that delta will probably remain that the signaling is that it’s going to remain at 20%.
Nitin Arora
So basically, I was asking this only that going-forward, the US itself will become very important for us and non-US will now will face a parental issue until unless you feel that you set-up a plant In US, which can cater to the other parts of the world at a less product.
Kushal Desai
So the plant in the US will look at catering to the US and especially those utilities which buy US product and which work on short delivery. What Sanya has mentioned is that even in the past, the Chinese have done this. In the last 15 years, this is the third time that they are subsidizing by this time a lot more by 8% to 12%, but that adds up in multiple billions of dollars.
The way they do that is they subsidize the price of the metal, for our industry. They have other ways of subsidizing for other industries. So that build becomes a massive bill over a period of time. So they have — after doing it for X number of months or up to a year or year and a half, then they pulled that off.
And then again, you have a period where the Chinese people then are not in a position to you know to compete as much. So we believe that these sort of cycles of subsidy are there to meet a certain objective and when the bill becomes too hefty, then it gets reduced. And we’ve seen that happen twice before in the last 15 years at least.
Ramesh Iyer
I’ll also add there that a lot of this is because the Chinese government has tried to help their manufacturers who earlier had a decent market in the US and then currently, they were out-of-the US market. So then to help them to penetrate the rest of the markets, this kind of subsidy is being given.
So if suppose things may at some point not be so difficult for the Chinese manufacturers in the US market, then it is possible that subsidy may also get reduced out. But we can’t say for sure what will happen exactly as of today. But this is one of the reasons we were given to understand from people that we have been talking to in China.
Nitin Arora
Got it. And sir, just last question on the guidance of EBITDA per ton. I mean, this has become the very difficult number for us to predict. But given the 30,000 per ton kind of a guidance next year-plus the tailwind what said, generally, you know your order book of conductors from the very first day, is that when — what gets executed becomes difficult, right, to assess in which quarter?
Yeah. And in the current order backlog, is it safe to assume that 40% to 45% is still premium? And that’s where at that premium level, this guidance of INR30,000 is given if on an annualized basis.
Ramesh Iyer
So the way we guidance has been given is based on an estimated number for 12 months and a lot of it we don’t have an order book as of now, but it’s more of a medium-term guidance that we have given because the pending order book that we have also have some delivery that may fall beyond FY ’27.
About 20% of the pending order books are those deliveries that can happen ’26 got it. Yeah, after FY ’26. So — and we — at the same time, we also get lot of orders during the quarter and that has to be executed in the quarter. So typically it’s very difficult to estimate an EBITDA for our line-of-business and we have always been saying that we need to look at this EBITDA on a 12-monthly basis rather than on a quarterly basis.
But based on the premiumization and the mix changes that we have worked out, we feel that anytime it could — it could be anywhere about INR30,000 30,000 plus tailwinds that depends on the kind of product mix and the geography mix that we do.
Kushal Desai
So you see last year also there has been because of the election year and things a lot of HPLIs or upgrade projects were didn’t happen, they are also in the process of various tenders have come up, etc., etc. So if these premium things keep on happening, then if you saw we had said that if you take a five-year period or an average, we were talking about 25,000 to 27,000 to 26,000 and we upgraded it to 27,000 to 28,000.
Now is the mix of product and what we see we can further upgrade it to 30,000. So as more-and-more time passes by on the execution of these things and the visibility on these things, then I guess we would be in a position to then keep revising the guidance. But 30,000 is a guidance, which as Ramesh said, it’s a medium-term guidance that you will work on.
Nitin Arora
Got it. That’s very helpful team and all the very best.
Kushal Desai
Yeah. Thank you.
Operator
Thank you. The next question is from the line of Sagar from Valuquest. Please go-ahead.
Sagar Dhawan
Yeah. Thanks for the opportunity. Question on the domestic conductors business. So we’ve seen a strong growth in the domestic business, about 64% growth in FY ’25. Just wanted to understand going into FY ’26, what is the outlook and what could be the drivers for growth to be able to grow from from a very good growth we’ve seen in this year already in the domestic conductors business.
Chaitanya Desai
So we look at the growth thing more from a blended totality point-of-view, though the domestic business has grown 64 percentage, what we look at what gives a higher EBITDA per metric ton, whether it be domestic or exports. And based on this thing and also based on our factory utilization, we end-up executing the orders. So I would say that we’ll more be guided with a blended growth rather than looking at domestic and exports for the division.
Sagar Dhawan
Understood. Just a follow-up, just based on the demand environment that you see in the domestic market today, would it be fair to assume that next year as well, there could be a double-digit sort of a growth or any number on the — purely on the domestic growth outlook for the company?
Ramesh Iyer
Yeah. So the market outlook looks positive with the kind of transformation capacity and transition line that is needed and based on various document that is there for 2030 till 2030 onwards, the market outlook is positive. Our growth will largely — will depend on where the higher-margin per metric ton is there. And accordingly, we allocate capacity either the domestic or export business based on the profitability that we get-out of the orders.
Kushal Desai
So if I may just add to Ramesh is like we’ve grown by this percentage when you can — as you saw in the opening remarks that the transmission network has grown only by 2%, the transmission line network because of various write-over issues, this election period, there’s been a lot of manpower shortage also.
During that whole election period, the big manpower shortage, etc. So if these plans are executed and we can see that several very, very mega-solar projects are coming up, you know solar, wind hybrids are coming up. If the — if the pace of the transmission line additions start increasing, then you will see even further levels of growth. That’s one of the reasons why we’ve been quite aggressive in terms of wanting to add the capex in-place, so that we can proactively get after the demand rather than react to the demand?
Sagar Dhawan
Understood. Sir. Just in terms of the capex that you’re adding on the conductor side, you said INR300 crores, how much of capacity are we adding in terms of metric tons per year-by this capex?
Ramesh Iyer
It would be about 10 percentage will get added.
Kushal Desai
So about 25 — about 25,000 tonnes, but this 25,000 tons is capable of being made-for all premium type products as well. So you have HTLS, you have CPC, all of those high-end products can be made with this 45,000 ton expansion.
Sagar Dhawan
Got it. And one last question from my side. What would be our market-share in the domestic conventional conductors market and in the AL-59, if you have the numbers of hand.
Ramesh Iyer
It’s about 25% or so.
Sagar Dhawan
Understood. Thanks. Thanks for taking my question.
Kushal Desai
It will be much higher than the HPLS and those premium — premium side?
Sagar Dhawan
Yeah. Okay. Thank you. Understood. Thank you.
Operator
Thank you. The next question is from the line of Malek Patel from Equirus. Please go-ahead.
Maulik Patel
Thanks for the opportunity. Kushar, I’m seeing so much in the last past 15 years of tracking you. And given that you’re spending close to INR1,300 crores over the next 18 months, almost 50% higher than what your current cross block is that and you have summarized your optimism that various government schemes and the capex, which is driving that. Just one question on that.
How are you going to fund this capex of INR30 million because we are not — that’s — we have not done this kind of on a capex in such a short period of time over the last — in our history.
Kushal Desai
So you know, our — we just had discussions at the Board level itself on that. And the plan is to do through INR650 crores coming from our equity and INR650 crores coming from a long-term debt. Okay. So we’ll use a one-to-one equity debt combination to fund this.
Maulik Patel
Okay. Got it. Got it, got it. And the second question is that in terms of — see, look at that when you had hardly any margin in cable 10, 12 years back, now you are almost INR5,000 crore of top-line and 10%, 11% margin. Cable was Hardly contributing anything to the operating profit at that point of time and now almost 30% plus. In a way that — and the way your capex plan is that you want to bring cable to from INR5,000 crore to INR10,000 crore. Are we going to see a more-and-more of a cable company in the future than the other two? Obviously, today the conductor EBITDA is relatively on higher side and probably sustain for next one or two years. But eventually in the next three to four years, the mix will be much more towards total and less towards other two businesses. Is that what the way you think about the business?
Kushal Desai
So I think, Malik, our position is that we want to support all the three businesses to be agnostic to supporting one business more versus the other. I think we did that raise the equity raise in November of 2023, simply because we wanted a stronger balance sheet in-place to allow all the businesses to grow on their own merit.
So whereas we see that the cable business has the largest addressable market and as a consequence, as we are also growing from strength-to-strength in terms of all those specialty products, specialty applications, the conductor business itself being 50% of our revenue is also growing at a fairly rapid pace.
All over the world, transmission lines have to be added. So we are equally bullish on both of those businesses. Within the oil business, the transformer oil business is also growing at double-digit. It’s the other lubricant pieces which are growing relatively slower and we are quite happy with that. Let it be at whatever, we’re still growing more than the market is growing.
So I don’t think look as a management, I don’t think we are looking at supporting one business more than the other. We would like to support each of the businesses on its own merit and as long as it makes economic sense to invest in that and grow it, we are going ahead and doing it.
So you will see the cable forming a larger percentage of the total revenue because it is going to grow at a faster pace than conductors and the oil business will probably be at the slowest pace of the three. Already in FY ’26, you will find the cable business being larger than the specialty oil business in terms of revenues.
Maulik Patel
Now open profit is already much larger than the TSO segment. And just one question on the recurring the balance sheet. What is the acceptance on the books at the — at the end of FY ’25,
Ramesh Iyer
I mean, it’s about INR3,500 crores modeling.
Maulik Patel
We will remain same, right? I think compared to the last year, the number has been pretty much.
Ramesh Iyer
Yeah, because we have deployed a lot of cash into cash purchases, the available profit we have been deploying into cash purchases and that’s where as we know. And also the earlier statement that when we talked about the funding of that, half of it will be debt and half of it would actually be internal accruals just instead of equity.
Equity already in internal accruals or internal cash that we have on our books. So currently, all this cash has been used to pay more get purchases on cash basis. And therefore, as you rightly said, the acceptance level has been same. Once we deploy money of this cash into the capex, we will see a large higher acceptances going-forward.
Chaitanya Desai
We will see the higher number on the acceptance side next financial year.
Ramesh Iyer
Yeah, like as the money will get deployed into capex, that is where it will get funded from.
Kushal Desai
But you will also see in the actual working capital management that we have grown the business and reduced the number of days you know that we use the cash. It’s almost down by a week, seven to eight days. Overall. So net working capital is also down seven to eight days.
Maulik Patel
Got it. Got it. And just last question, if you allow me to. How is this — we heard earlier that some of this EPC player like AMC and even the — which has gone into and set-up the conductor plant, right, old captive consumption. And I think was looking to and they acquire the Diamond Power and they are also adding it.
Right also this new conductor capacity is coming up in the domestic market and do you think that will have any kind of bearing on a longer-term conductor margin? Because we have — I would — I assume that you keep adding your value-added products, you keep investing in R&D and keep coming out with a new product, which has been your age over the last seven, eight years.
And that has reduced volatility in the conductor margin at a large extent. But this upcoming capacities, are there more for the traditional conductor or anything for the specialist in premium conductor?
Kushal Desai
So the thing is,, that the kind of investment which is being made, for example, KEC and conductors, they will produce the conventional type of conductors, ACSR AL-59. So I think we not only produce that and have produce it quite efficiently because we are fully-integrated, including doing our own alloying, etc.
So we have — how developed the alloying technology for AL59, but we have developed an alloying technology, not only for AL59, but we do gap conductors, ACSS, A3C, we do a whole range of copper products. Products next year, our copper business will be over INR3,000 crores, which is the — which is the — which will be — if you just look at the cable companies will be in the top-10 cable companies on copper, you know, not even 10, maybe the fifth or six largest.
If you just look at the copper has been produced on the conductor side. So the business has evolved quite a lot. We do a lot of specialized EPC as well, which supports these premium products. So I think for us, we are playing an infinite game. We are interested in increasing our own product mix, figuring out what are the products which — so you’ve got people like you know, the large developers who are also bidding on PVCB lines to evacuate power from some of the generation sources that they have.
We are in dialogue with them saying that why are you looking at all the you know, conventional conductors? We can offer you a full range of other products, which can reduce your losses, your cost of ownership, etc. So the game that we are playing is now completely moved away from just producing a conventional conductor.
The same thing is there on the cable side. On the cable side, if you want to get into renewable energy. So on the renewable energy, there is a certain Indian standard, but there is a much higher standard that exists in Australia and in Europe. There is also a higher US standard that exists in the United States. So we are making products of all those standards.
We are now pitching those products and we supplied thousands of kilometers to these countries. Why don’t you look at upgrading in India to those standards because they’re all meant for being able to weather the weather, temperature fluctuations, you know, the hostility in terms of wind, sunshine, all those things.
Water, you see there’s a lot of stuff going into deserts and into the — probably into the runoff and those areas. So that’s all salty terrain, all it’s you know desert terrain. So there are different types of products which can come up to better manage the applications because these panels are supposed to last for 35, 40 years.
We’ve just launched a new — we were the first to do in the country, the eBeam housewire. Now today, you have RR cable has come in, Phenolex has come in, polycab has come in, has come in, everybody is trying to follow, we’ve come up with an upgraded product that instead of carrying 50% more current carries, 100% more current, instead of having 50-year life has a 70-year life.
And this is zero halogen product, so it’s less toxic in case you know an accident does take place. So I think we are constantly in a position to keep upgrading and that’s the game that we want to play. So whether enters this or whether you have Adani entering the wires business, I think there’s enough and more business available for players like us to continue to innovate and sell-in different segments and different geographies.
Maulik Patel
So what kind of growth you delivered in FY ’25 on the side.
Ramesh Iyer
But 37% for the growth.
Maulik Patel
Makes close to around INR350 crores kind of the top-line on that.
Ramesh Iyer
INR375 crores.
Maulik Patel
Yeah. Got it. Thanks. Thanks, and from taking my questions.
Kushal Desai
Thank you.
Operator
Thank you. The next question is from the line of Nikhil from KC Wealth. Please go-ahead.
Unidentified Participant
Yeah, hi, sir. Congratulations on a good set of numbers and thank you for giving me the opportunity. Sir, my first question is like in our quarter-four, like there were a lot of companies that were front running due to the US service. So have you seen such a scenario in our clients? And second, sir, now with this so much tariff force in the Q1 too, so are we expecting that company will pie up the inventory and then we will see increase of inventory inventorization phase again?
Ramesh Iyer
Sorry, your first question we didn’t understand, can you repeat?
Unidentified Participant
So like in the Q1 — Q4, we have seen a lot of companies front-running the tires, like a lot of companies started building up their inventory. So have you seen the same phenomenon? And the secondary now with the tariff force. So our company is still building the inventory and
Unidentified Participant
And now are we seeing inventories being built-up and then you will see a phase of de-inventorization in Q2 or Q3?
Kushal Desai
So it’s a good question. I don’t think, Nikhil, that’s not what we are seeing at our end. We have a significant amount of our shipments which are going-in directly to EPC players and project sites. So those are against the — against specific requirements which are there. So we are not really seeing a big inventory buildup.
Also, the many distributor — import distributors wanted to place much larger orders on us, but we had already booked out our capacity. So we were not in a position to take on, you know, we didn’t have any spare capacity. Everything was already allocated and orders were booked. So those are getting executed.
And the kind of client mix which we are looking at because now we’ve got a bunch of — we’ve got a sales team on-the-ground and working with manufacturing reps, we are no longer looking at being overly dependent on an import distributor. They are the ones who actually stock up, they also sell a lot of cables in their own brand-name through multi-listing in the US, whereas the uppar focus is to sell also a lot of Apart branded products with approvals from end-customers.
So I think for us, the overhang is just basically in terms of the tariff and clarity on that, so that people can price their product you know, correctly and our sense is that hopefully it will get resolved within the period of these 90 days. And then as the business — the new orders start coming in, they’ll come in from a much larger set of customers.
So we are not worried about any front-loading or front running, et-cetera or an inventory overhang in that. At least as of now, that doesn’t seem to be.
Unidentified Participant
So that’s great to hear. That’s absolutely great to hear. Sir, my second question is like how were the inquiries in the month of April and May? And now as you said that China is forwarding 8% to 12% subsidiary. So are we expecting a price in the US market too?
Kushal Desai
The serious buyers have actually been quite wary of wanting to sign things up. The US-China relationship, as you can see has been extremely volatile. And you know the 90-day truce as I mentioned just a few minutes earlier, which is there is keeping the same on existing before. So we don’t see anything like substantially changing as such.
In fact, the Chinese competition is hurting us in non-US markets. We are not so worried about China in the US market. We have to compete with them in other non-US markets.
Unidentified Participant
Okay. That’s great to hear, sir. And sir, now as we have upgraded our guidance from 20,500 EBITDA per ton to 30,000 EBITDA per ton, so are we assuming that EBITDA per ton has bottomed-out? Now there’s only upward trajectory going-forward.
Ramesh Iyer
So we have been saying this earlier also. We need to look at it on a 12-month basis and that’s how we have given this guidance. So there would be some quarters where EBITDA is low, some quarters EBITDA is high because of the nature of the business is such that it’s all made-to-order business and therefore, we need to look at a long-term 12 months or even beyond that to get a good feel of the numbers.
Kushal Desai
But as things are — as you have premiumization being paid, as you move from conventional ACSR to AL59, all that. So fundamentally the product mix should drive it upward.
Unidentified Participant
Okay, that’s great to hear, sir. And sir, my last question is on the new administration is not the plan of renewable energy. They are more into coating. So have we seen any kind of clients having lower confidence in the renewable energy — renewable energy capex or something like that?
Kushal Desai
So the point-of-view that we have been able to gather through various customers and whoever we are in touch with, including developers in the United States is that solar and solar, including the energy storage, the ESS system is the cheapest form of energy available to add-in the shortest period of time.
So the solar side of the business is going to continue. You have more-and-more US manufacturing also being set-up. Vari, for example, has set-up a US manufacturing. I think other manufacturers from India also exporting panels to the US. So the solar side looks very much intact. The wind is a mixed bag.
There are certain corridors in the US which are extremely windy and can carry a high plant road factor. So those corridors you can continue to develop. What is likely to stop is the subsidy that is going on the wind side. Sure. And the offshore wind, which was being built only with subsidiaries pretty much for making it viable that is to be forgotten as far as the US is concerned.
So we don’t see the renewable story completely ending, we see the subsidiary story ending. So the renewable that’s actually able to stand and expand based on its own economics will continue to expand. And see, today the permitting in the US is very, very tedious. So in whatever direct information we have, it takes 10 to 12 years to get permitting to build a transmission line in the US versus three years in India.
So the similar issues are there for building power plants and power sources as well. So you will see solar addition happening because that is the fastest way of being able to actually get — get power. If you add it along with battery storage capacity when you are able to deliver power at.
Unidentified Participant
That’s great to you, sir. That’s it from my side.
Kushal Desai
Thank you.
Operator
Thank you. The next question is from the line of Shah from Goyal lucky Fintech Private Limited. Please go-ahead.
Unidentified Participant
Thank you for the opportunity and congrats for the good set of numbers. So most of the questions you are answered. I was just one follow-up question. Sir, like in the last con-call, you had mentioned that the company is supplying the cables to the major data centers like you were mentioning today as well like Microsoft, right? So it — so you were the liquid solution right and but making a test site. So has there been any progress on this development?
Kushal Desai
So we — at the moment, I’m not — we’ve developed a product here. We are still looking at how to test market it, et-cetera, because the liquid electric, first of all, most of the data centers today do not use liquids. There are a few companies overseas that have been supplied as a system.
So we’ve not really made any progress on that front. We are still working knocking on dolls and trying to figure out how we can get a trial for that to happen. In the meantime, the cables which are being supplied are being supplied on — from the basically in the substation and substation to connecting to the data center equipment, you know, that side of the business is what we are covering today.
Unidentified Participant
Got it. Yeah. Thank you.
Operator
Thank you. The next question is from the line of Tiwari from Varia. Please go-ahead.
Avnish Tiwari
Hi, am I audible?
Kushal Desai
Yes, yes.
Avnish Tiwari
My first question is, what is the tariff on the US exports you’re doing for the cables? Say in May you are paying compared to what were you paying in February or March and the delta which you are experiencing now, how is it being shared between you and your end-customer, whether it is importer or whether it’s actual customer in US?
Kushal Desai
So the basic duty remains intact. The basic duty that we were paying on cables is 4.9%. So for argument’s sake, you can take it as 5%. Now whatever has been put here is a reciprocal tariff. So that applies over and above. So the 10% or 26% or 46% or whatever it is over and above the basic tariff which is in-place. So currently, it is at 5% plus 10%.
Avnish Tiwari
And with additional 10%, how are you sharing this between importer and?
Ramesh Iyer
So there are different contracts with the customers, some contracts are on FOB, some contracts are on DDP, some are delivered — deliveries below before July 9, some are deliveries after July 9. In some cases, we are talking to some of the customers who are agreeing to share a part of the duty. So those all mix and combinations are actually happening at the moment.
Kushal Desai
So all the efforts this is no problem. The DDP GDPs, we’ve had to sit and negotiate with customers. So there’s been some portions where there’s been a combination, we picked-up part of it, customers have picked-up part of it. Some of the contracts have allowed us to pass the whole thing on. On. So overall we won’t see some major impact at least for This 10% tariff phase.
Avnish Tiwari
Okay, that’s good to hear. So basically dominating part is FOB or where most of the pain is held by the only take part of it, a small part of it.
Kushal Desai
Yeah. So bulk of the business which you’re executing right now is in that — is in that bracket.
Avnish Tiwari
Right. The second question is that what is the dominating types of cables you export in the US? Are these less than 1,000 volts or higher for more than 1,000 volts? And what is the key raw-material in the, aluminum or copper?
Kushal Desai
So the bulk of what we export is all aluminum alloy. So there is a special alloy which is used in the United States, which is an 8,000 CVs aluminum alloy. So we produce and alloy ourselves, the rods that is from our rolling mills in the conductor division. Then they are aged and then made it to conductors and then finally insulated to make cables.
So there’s a whole set on our website if you go and see, you will see a set of approved products. So those are the products which are being manufactured and shipped to the US. There are a few copper products as well, which is a relatively very small volume, the bulk of the volume is aluminum-based. Aluminum alloy waste.
Avnish Tiwari
And these copper products would be cables of, let’s 11,000 or more than 1,000 volts.
Kushal Desai
The copper products which are being exported right now are basically medium voltage cables which are with copper and so we are not — lower-end copper because the US has zero duty on import of copper, even twice, whereas 25% duty on import of aluminum. So aluminum has been in a strategic to manufacture in the US, whereas copper is something that even today the government believes that it should be imported in the US without — without al.
So our whole strategy has been focused more around products that are aluminum-based where has always had a strength.
Avnish Tiwari
I think less than 1,000 volt are they typically using copper or aluminum, if you want to do in future.
Kushal Desai
So the US is largely aluminum market. Aluminum.
Avnish Tiwari
No, no, I’m is normal cable.
Kushal Desai
Of,000 less than 1,000, above 1,000, only special applications you use copper over there, although it’s predominantly in aluminum. Got it, mostly it’s the aluminum market.
Avnish Tiwari
Okay. The last question I have is that you talked about Mexico also having the duties. But my understanding was most of the cables are in the US MCA in Mexico. Is that like you’re talking about mostly alloy, which is not part of the or you think cables are also not part of SECA and they are trying to teach its right now. Right now.
Kushal Desai
So our understanding is that, that unless and until Mexico comes up with anything different, we are also facing the same tariff situation as India. The minimum tariff is 10%, whatever you want to bring into the US unless there is a very specific FDA in-place which is like the first one that they signed is with the UK, nobody else that they signed anything specifically with as of now. So we are in the same boat as Mexico as of today.
Avnish Tiwari
Okay, so you you’re understanding that these cables or you are exporting are not part of MC, USMC, USMC in Mexico.
Kushal Desai
Yeah. Yeah. I mean from what we hear from our customers is — there is nothing advantages currently in Mexico other than the short delivery cycle as there.
Avnish Tiwari
So great. Thank you very much. And then just last question if I can switch in. How much extra either margins at the contribution level or EBITDA level you make or better working capital terms you get the same cable or you are selling to US export versus in India.
Kushal Desai
The US is very tricky to just put a number because it is a combination of FOB and DDP. So it’s not — it’s not a number that I would like to hazard any guess, it keeps changing depending on who wants to buy FOB versus on a DDP basis. So EPC players normally want it on a DDP basis, but actual users are very happy to buy it on an FOB basis. So they have the full transparency of freight.
Avnish Tiwari
Right. But you make higher-margin in US exports versus India sales, is that fair to understand?
Ramesh Iyer
So it depends on different product and mixes. So on an apple-to-apple basis, we cannot actually compare this because different products go for the US market and different products are there for Indian market. And we don’t actually give out a geography-wise margins on a further revision.
Avnish Tiwari
Thank you for. Great. Thank you very much.
Operator
Thank you. The next question is from the line of Amit from PL Capital. Please go-ahead.
Amit Anwani
And just a follow-up, is it possible to share the annual US contribution overall and as well as within conductors and cables this year, FY ’25.
Ramesh Iyer
Okay. So the margins we don’t share.
Kushal Desai
Are you talking about the revenue that we’ve done?
Amit Anwani
Yes, yes, revenue contribution.
Ramesh Iyer
So overall, US would be slightly on a higher single-digit compared to the total consolidated turnover.
Kushal Desai
And INR1,000 crores in cables, about INR1,000 crores in cables or 600 crores INR600 odd on conductor about INR1,600 odd crores approximately overall. So that’s why.
Amit Anwani
Was this last year, 1,600 crore on what this FY ’24?
Ramesh Iyer
Yes. We have given that in our corporate presentation, it was slightly degrown still as compared to last year-on an annual basis. But sequentially things have improved. Every quarter has been better than the earlier quarter when it comes to the US sales.
Amit Anwani
Yeah, sure. Thank you so much.
Operator
Thank you. The next question is from the line of Raj from RJF Partners. Please go-ahead.
Unidentified Participant
Hello, am I audible?
Kushal Desai
Yes, yes. Please go-ahead.
Unidentified Participant
Can I a part on the outlook part? For FY ’26, you are intending to grow and I wouldn’t hear that. So can you please.
Operator
Sorry, your line is breaking up. We’re not able to hear you.
Unidentified Participant
Am I audible now? Am I audible now?
Kushal Desai
Yes, sir.
Unidentified Participant
For FY ’26 outlook, I just skipped your comments. So can you repeat it again?
Ramesh Iyer
Yes. So on the oil division, we are giving a top-line volume growth of 6% to 8 percentage. EBITDA level margins 5,000 to 6,000 per kil. Our cable division top-line value growth 25 percentage. EBITDA percentage 10% to 12 percentage and conductor division volume growth 10 percentage and EBITDA per metric ton 30,000 plus. 30,000 plus.
Unidentified Participant
All right, all right. And also can you repeat on the capex part, how much is in what division?
Ramesh Iyer
About INR1,300 crores of capex, what INR200 crores coming from oil division, INR300 crore in the conductor division and 800 in cable division.
Unidentified Participant
Okay and how much time will it take for all these three to come on-stream.
Ramesh Iyer
15 to 18 months.
Unidentified Participant
Sorry 15 to.
Ramesh Iyer
18 months.
Unidentified Participant
15 to 18 months alright and how much will be your expanded percentage sum?
Ramesh Iyer
So it will grow for the conductor division, it may grow by about 10 percentage in terms of capacity. For the cable, as you already mentioned, once the entire plant is commissioned, then it will have capacity to generate revenue of about INR10,000 crores once it is fully commissioned.
Unidentified Participant
All right and for the oil part?
Kushal Desai
So the oil we don’t really capacity constraint other than on the auto industrial side where today we run two ships and we can just add a 3rd shift in-place this. So this investment is going-in largely in terms of building a storage facility in the port, in JNPP and expanding our storage capability in as well in the UAE plants.
So right now, almost 24,000 24 million liters of storage space we have on a rental basis from third-party in Mumbai. So that is going to get collapsed into about 30 million 35 million liter storage which we are building out in JMPA and that also has a big productivity boost on the supply-chain side because the ship will be — will directly be able to unload from a ship into those tank.
Unidentified Participant
Alright, understood, sir. Okay, sir. Thanks. All the best.
Kushal Desai
Okay. Thank you.
Operator
The next question is from the line of Mayank Bandari from ACI Market Securities. Please go-ahead.
Mayank Bhandari
Thanks for the opportunity. Sir, just wanted few data points if you could provide in the cables revenue, how much would be the B2C revenue, how much would be the defense, telecom cable revenue, EHV revenue And of course, railways revenue.
Ramesh Iyer
We don’t give out so detailed revenue breakup for the division, but I can tell you about this B2C is about INR375 crores that I have mentioned earlier. Apart from that, then of revenue coming from each sales that something we don’t give out.
Mayank Bhandari
So have we started applying to telecom no you need defense telecom or tele there.
Kushal Desai
For us there are two separate verticals. One is defense and the other one is telecom.
Mayank Bhandari
So supplying to the difference.
Kushal Desai
Yeah. So that’s something that’s ongoing. We would see — we would see that in the future as more-and-more localization is taking place, the volume should start increasing. As I mentioned in my earlier comments that we are bringing in additional equipment as well, which can help produce larger quantities of some of the sophisticated cables and new ends for the Indian Navy, particularly.
Mayank Bhandari
What about EHP, sir.
Kushal Desai
So as we complete our expansion in the cable side, currently we are able to produce up to 66 KV, so this will go up to 220 KV that we will be able to produce.
Mayank Bhandari
No, are we — does this contribute any revenue in FY ’25 PHV?
Kushal Desai
No. Because by the time the capacity goes in-place and gets implemented, then post that we will start hunting — we will start working on getting approvals. So you will see that revenue not coming in FY ’26 at all. You may start seeing small portion coming in FY ’27, but a larger portion of them coming in FY ’28. In the meantime, the same equipment is capable of producing up to — up to 220, so you will produce the other voltage level until those approvals come.
Mayank Bhandari
What about the wind cables?
Kushal Desai
Wind is on 20 different equipment where we are also looking at doubling our capacity. Those are elastomeric cables or rubber cable. So that production is also going to be doubled in the same timeframe. That’s part of the INR800?
Mayank Bhandari
No, I’m just checking if we would give the contribution of the renewables cable revenue in the total of cable revenue right now.
Kushal Desai
So we are not giving these detailed breakups as such per ton of both. Go-ahead.
Mayank Bhandari
Yeah. Last, I mean what is the interest on the interest-bearing acceptances in FY ’25 interest number.
Ramesh Iyer
Is about 6.5% to range from 6.5% to 7.5 percentage over a period of time.
Mayank Bhandari
6.5% to 7%. No, I’m asking the absolute number of the — out-of-the total interest expense.
Ramesh Iyer
Out-of-the total interest we see about 90 percentage would be on the acceptances only because we have very less debt on the balance sheet. Most of it would be out-of-the acceptance only.
Mayank Bhandari
So last year FY ’24, this number was around INR240 crore.
Ramesh Iyer
Yeah, large part, almost everything would be out of — we have just done ECB loan on the balance sheet. Apart from that, everything else is actually the interest on the acceptances loan. And that disclosure is there in the balance sheet, the interest part of the ECB low.
Mayank Bhandari
Okay. Any guidance on FY ’26 on a interest expense?
Ramesh Iyer
So it will go in-line with the volume of the business as all of this is relating the acceptances as the volume of the business grows, the interest cost will go up. Also, interest cost depends on the price of aluminum and copper, which was on the value of that purchases. So depending on the price of the metal, this fluctuates.
Mayank Bhandari
Yes, thank you. Thank you.
Operator
As there are no further questions from the participants, I now hand the conference over to Mr Kushal Desai for closing comments.
Kushal Desai
Yeah. I’d like to take you the opportunity to thank everyone for participating in our Q4 and financial year FY ’25 earnings call. Just to summarize, we do have a few overhangs like the US tariff situation, which will hopefully get clarity and sorted-out in the next few weeks. But overall, as a management, we continue to remain very bullish on our business.
We are putting in INR1,300 crores of capex, which will go in over the next 12 to 15 months and then get commissioned thereafter. This is in addition to INR500 crores, which we put in FY ’25. All the three businesses are poised to be able to grow. The product ranges also as well as the premiumization of product and customers is something that we are working on.
And whereas it’s always difficult in our business to predict quarter-by-quarter, but if you take a medium-term view, we continue to remain very bullish on the growth of the business. So once again, thank you so much for attending our call and goodbye.
Operator
Thank you. On behalf of Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.