HFCL Limited (NSE: HFCL) Q3 2025 Earnings Call dated Feb. 04, 2025
Corporate Participants:
Mahendra Nahata — Managing Director
Analysts:
Mohit Lohia — Analyst
Jinesh Shah — Analyst
Balasubramanian A — Analyst
Manoj Jethwa — Analyst
Tanuj Khiyani — Analyst
Rohan Vora — Analyst
Unidentified Participant
Hitesh K Patel — Analyst
Aakash Goel — Analyst
Saket Kapoor — Analyst
Abhi Mevawala — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to HFCL Q3 FY ’25 Earnings Conference Call hosted by ICICI Securities. Statements made during this call may be forward-looking in nature based on management’s current beliefs and expectations. They must be viewed in relation to the risks that HFCL’s business faces. That could cause this failure, future results, performance or achievements to differ significantly from what is expressed or implied by such forward-looking statements. Investors are therefore requested to check the information independently before making any investments or other decisions.
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 10 on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Mohit Lohir from ICICI Securities. Thank you, and over to you, Ms Lohia.
Mohit Lohia — Analyst
Yeah, hi. Thank you and you. Hi, good afternoon, everyone. Thank you for joining us today for Q3 FY ’25 earnings call of Limited. First of all, I would like to thank management for providing us the opportunity to host the call.
From the management side, we are Mr Nahata, Promoter and Managing Director; Mr Vijara Jain, Chief Financial Officer; Mr Manoj, Company Secretary; and Mr Amit Agarwa, Head of Investor Relations.
So without further delay, I would now hand over the call to Mr Nahata for opening remarks. Thank you, and over to you, sir.
Mahendra Nahata — Managing Director
Thank you. Thank you, Mr Loya. Good evening, ladies and gentlemen. I’m delighted to welcome all of you in HFCL’s earnings call for the 3rd-quarter for the financial year 2025. I trust you must-have had the opportunity to review our financial results, press release and earnings presentations, which are available on our website and also on the website of stock exchange.
Thanks, the telecommunization industry is undergoing a profound transformation driven by both technological innovations like artificial intelligence and upcoming growth in-demand for products required for hyper scaling of data centers and optical network. Our digital adoption accelerates. Countries like India are at the forefront of this global movement, spare reading initiatives that promised to shape the future of connectivity with strong emphasis on rural connectivity.
India now boasts over 1.19 billion telecom subscribers, making it the second-largest telecom market globally. This is a remarkable achievement considering that just a few decades ago, a telecom landscape in India was limited to major urban centers only. Data usage in India has grown exponentially in the last few years. The country has witnessed a ten-fold growth in data usage since 2018 and it is projected that India will reach 315 million 5G subscribers by financial year ’26.
Globally, the telecommunication market was valued at approximately US dollar 2.32 trillion in 2024 and is projected to expand at around US dollar 4.21 trillion by 2034, reflecting a CAGR of 6.15%. This growth will drive a surge in-demand for broadband equipment, telecom networking products and fiber-optic infrastructure as telecom networks operators work to meet the growing demand of data by the consumers. Hence, silicon networking products and fiber-optics will play a key role in telecom, particularly as 5G networks rolls out across the country.
The 5G revolution is well underway and we are seeing telecom operators invest heavily in fiber-based backhaul solutions to ensure that their networks are capable of handling the massive data loads that 5G delivers. Alongside these technological advancements, Cormance worldwide are implementing initiatives to enhance universal connectivity. Telecom operators are making significant strides in expanding broadband infrastructure in underserved areas, further boosting the demand.
Over the past few quarters, the global optical fiber cable market had experienced a slowdown. This slowdown could be attributed to a variety of factors, including geopolitical tensions, large inventory built with operators and delaying major government-funded programs. Despite these challenges, we remain optimistic about our future. We anticipate the demand for optical fiber and digital network solutions is gradually picking-up driven by several key catalysts including 5G acceleration, rural broadband initiatives such as Bharakat Phase-3, increasing adoption of artificial intelligence enabled services, hyperscaling of data centers and growing need for high-speed reliable internet connectivity across smart cities, industry 4.0 and remote education networks.
At HFCL, we have been preparing ourselves for this resurgence in-demand. Over the past few quarters, we have focused on enhancing our production capabilities, improving operational efficiencies and developing innovative products and solutions to cater to the evolving needs of the market. By optimizing our processes, we are better-positioned to deliver high-quality products on a scale and ensure timely deliveries to our customers. We are increasing our presence by appointing our own employees, distributors and dealers in key global markets. Our goal is to achieve a substantial rise in export revenue from our products. Additionally, we aim for a considerable share of telecom segment revenue also to be export-driven.
As we reflect on the past year, we would like to share some of the significant milestones that highlight HFC’s continued leadership in the telecom sector. As you are aware, Bhara Sunchyan Nigom Limited had 40 tenders for Bharat Phase-3 across 16 telecom circuits in which your company also participated. Has already announced the winners of six telecom circuits and I am pleased to inform you that your company has successfully secured an advanced work order worth INR2,501 crores for the design, supply, construction, installation, upgradation, operation and maintenance of the middle mile network of Phase-3 in the Punjab telecom circle.
In addition, the company has also secured advanced purchase order worth INR2,167 crores from Rail Vikas Limited for supply of optical fiber cables, telecom equipment and related along with maintenance of the telecom equipment for Phase-3 in Uttar Pradesh East Telecom Circle and Uttar Pradesh West Telecom Circuit. These wins indicate HFCL’s growing dominance in the market and its capabilities to meet ambitious goals of program.
In addition to securing these orders worth INR4,650 crores under Bharatnat Phase-3, there is a significant potential to the company to independently supply fiber, optical fiber cable and telecom to other vendors in the remaining 13 telecom circles, wherein either contracts have been awarded or are in the process of being awarded the Phase-3 is finally set to link 640,000 villages in India with high-street Internet. The company is dedicated for exhibiting this landmark project in-line with the government’s mission of a digital India aiming to build the digital gap, especially in rural and underserve regions.
HFCL has been an important player in the success of especially in Phase-2 where our technology and effective education led to transformative improvements in rural broadband connectivity in the states of Punjab and. In the union budget announced recently, the government emphasized the importance of digital connectivity by proposing high-speed Internet access for primary healthcare centers and government-run secondary schools across the country. This initiative will increase the demand for broadband equipment and optical fiber cables, further accelerating broadband infrastructure development across the country.
Since these products are manufactured by your company, it expects to get reasonable market-share in this increased demand. As you are aware that your company has support orders worth 623 crores for supply of 5G fixed wireless access customer equipment. We have already supplied over 2 lakh such units which are being successfully deployed across the country. The demand for our indigenously designed communication equipment continues to grow strongly, reflecting our product’s reliability and market acceptance.
We recently introduced two groundbreaking unlicensed and radios designed to address critical needs in modern telecom networks. HFCL some license reduced the significant benefits to telecom operators by addressing the challenges of high capital and operational costs. HFCL has already achieved a remarkable milestone with over 350,000 successful UBR deployments. We have also made decision progress in our defense sector initiatives, which are aligned with our strategy for diversification.
We recently inaugurated a state-of-the-art defense acting facility in. Our defense product program are now in the advanced-stage of trials and we are optimistic that this will soon translate into orders. Furthermore, we are proud to announce prestigious orders in defense space, including supplying strong fiber-optic cables and fiber-optic assemblies for critical naval applications received by our subsidiary HTL Limited. In addition, HTL has also secured orders for power distribution units for air different systems as well as multiple cable assemblies for missile systems and applications. In addition to this, HFCL today has been declared as the lowest leader for a contract for INR43 crores for supply of tactical optical fiber cables to the Indian Army.
I would further like to update all the stakeholders that the Board of Directors in this meeting held on 21st February 2024 and granted approval for a strategic expansion into Europe by way of setting up optical fiber cable manufacturing in Poland. Subsequently, the European Commission its landmart decision on June 14, 2024, informed that HFCL is the only Indian company that has not been engaged in dumping of OFC in European markets.
As a result, while provisional duty was imposed on all other Indian optical fiber curve manufacturers, remains the sole Indian optical fiber cable manufacturer to have been exempted from these duties. Furthermore, European Commission on December 16, 2024 announced the imposition of definitive anti-dumping duty on all other Indian optical fiber cable manufacturers, reaffirming HFCL’s exemption.
Given this significant regulatory development, the Board in its meeting had on February 3, 2025 decided to temporarily put on-hold a planned OFC manufacturing project in Poland. Instead, the company will leverage its competitive advantage and capacity to cater to European customers directly from its manufacturing facilities in India. This strategic approach will optimize resource allocation while reinforcing company’s presence in the European market. By utilizing existing capacities in India, the company can effectively meet European demand while saving INR175 crores in capital expenditure.
I’m pleased to inform you the company’s current order book stands at INR10,410 crores as compared to INR6,151 crores in last quarter, which is a very, very significant achievement. In terms of our financial performance, I would like to highlight the key metrics for quarter three of financial year ’25.
Revenue for quarter three FY ’25 stood at Indian INR1,011.95 crores as compared to INR1,032.31 crores in-quarter three of FY ’24 and INR1,093.61 crores in-quarter two of financial year ’25. EBITDA for the quarter stood at Indian INR171.89 crores as compared to INR171.82 crores in-quarter two of FY ’25 and INR163.45 crores in-quarter three of FY ’24. EBITDA margin stands at 16.99% for quarter three of FY ’25 as compared to 15.71% for quarter two of FY ’25 and it stood at 15.83% in-quarter three of FY ’24.
For quarter three of FY ’25, profit-after-tax stands at INR72.58 crores as compared to INR73.33 crores for quarter two of FY ’25 and INR82.43 crores in-quarter three of FY ’24. PET margin stands at 7.17% in-quarter three of FY ’25 as compared to 6.71% in-quarter two of FY ’25 and 7.99% in-quarter three of FY ’24. Segment revenue for telecom products during the quarter stood at 58% as compared to 52% in-quarter two FY ’25 and 35% in-quarter three of FY ’24. Thanks.
As we enter 2025, HFCL is focused on resilience, innovation and collaboration to achieve remarkable milestones. We are grateful for your unwavering support and trust in your region. With your continued backing, we are poised to achieve even greater height.
Thank you very much. Very much, gentlemen. Now only open for questions.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you.
The first question comes from the line of Chinese Shah with RSPN Ventures. Please go-ahead.
Jinesh Shah
Yeah, hi. Thanks for the opportunity. So my first question would be, I just wanted to confirm that we had — we got order from in January, right? And we had order book of 10,000 CR as of December. So that is excluding the orders. So like I include that it is much more than that, right, is that understanding correct?
Mahendra Nahata
Includes Bharatnite orders, definitely.
Jinesh Shah
It includes 10,000 Bharakat orders.
Mahendra Nahata
Yeah, all orders are included in this figure. Okay. All orders are which have been currently received are in ordered are included. And as I said, we out of 16 circles, you know I think balance been — yes, balanced had been — have been awarded or are being awarded. Rather three have been awarded, 10 are yet to be awarded. So we are working with those operators to get more orders for our equipment and fiber. So as and when we receive those orders, we will definitely let you know. But whatever has been received is already included in this INR10,000 crores.
Jinesh Shah
Okay, okay, understood. And just to add one more question to this. Can you share the percentage of HFL for the order that has been received in consum of 20%.
Mahendra Nahata
Mr Shah, you have to — I’m not able to understand your question very clearly, there is a lot of noise in your — while you’re squeezing, can you repeat your question?
Jinesh Shah
Yeah, sure. But we received an order of CR in consortium, right? So I just wanted to understand the share of HFCL in that.
Mahendra Nahata
So is it totally — totally HFCL, consortium order was INR13,000 crores. This INR2,400 some crores which I have seen, it is totally HFCL, 100%.
Jinesh Shah
Okay. Understood. That’s clear. And of course, my second question is, you can give us a bit of West Equipment in telecom product segment revenue top-line?
Mahendra Nahata
Say that again?
Jinesh Shah
I wanted a bit of equipments and in the telecom product segment.
Mahendra Nahata
MR. Shah, operator, can you please clear his voice because your voice,
Operator
There’s a static behind your voice. I’m a little closer to the mic and speak.
Jinesh Shah
Yeah, yeah. Is it better now?
Operator
Yes.
Jinesh Shah
Yeah. So I just wanted to understand the split of telecom equipments and OFC in the telecom segment.
Mahendra Nahata
Okay, you are saying that the total — percentage of revenue in OFC and telecom, vis-a-vis the total revenue. That is the question?
Jinesh Shah
Yeah, that is question.
Mahendra Nahata
Question is that reply is that 58% of the revenue has come from telecom products and 42% of the revenue has come from projects in this quarter.
Jinesh Shah
No, no. Just wanted to understand the of OSC and equipment.
Mahendra Nahata
Okay. Okay, understood. Okay, understood. That is roughly about 50% each — roughly about 50% each.
Jinesh Shah
Okay, okay, got it. And just to just to follow-up on that. Can you just talk about the market of OFC at a macro-level because we talked about that we saw an uptick in-quarter two or quarter three and then we should be seeing a good movement in the OFC market as well. But we are still — that is not like a seen in revenue terms if we see. So can you just better talk about that how — like what we should expect in the coming quarters and like when should we be normalized and it should be reflected in our P&L?
Mahendra Nahata
I understand you are talking about OFC market. It has already started showing some signs of growth with the orders, few orders we have received internationally. In India, the growth is yet to come in a sense that orders have been received, but implementation of is yet to start. So growth in India is also there with. Internationally also market has started looking up with more number of inquiries being received and there are some orders also being received from foreign operators, particularly demand is significantly growing from data centers because internationally, unlike India, data center people are allowed to interconnect their data center across the cities where they require very-high capacity cables. There also the demand is increasing, you know. And we have started supplying to data center people also with high-capacity cables.
So it has started looking up, not to the extent where we would expect it to be. I believe this quarter would see some growth in-demand, definitely current quarter from the last quarter, some I would say roughly about 15% growth in-demand would be there. Q1 of the next financial year would see even a better improved demand, particularly coming from data center areas and rural connectivity areas. That includes India also because Phase-3 implementation would start. So definitely we can now see green shoots in the increase in the demand of optical fiber cable.
Operator
Thank you. MR. Shah, please rejoin the queue for more questions. Thank you. A reminder to all the participants, please restrict yourself to two questions.
Next question comes from the line of Pala Subramanian with Alliant Capital. Please go-ahead.
Balasubramanian A
Good evening, sir. Thank you so much for the opportunity. My first question, in the budget, recent budget, Union Finance Minister has announced connections for all government and secondary and primary schools, healthcare centers and rural areas. So like — so what your view on this budget and what kind of benefits we can expect in overall industry.
Mahendra Nahata
So you know, good question. Just well, this is a kind of extension of. Once is put to the Punchase, which is the current program that the will go up to the grand franchise in a wind topology. Earlier it was in a linear topology, which was not so reliable.
Now the next step is to connect the villages and within the grand franchise different you know public utility organizations like primary healthcare centers, schools or government institutions. So this additional program of connecting all the schools and primary health centers, which was not allowed — announced till now would definitely increase the demand of the connectivity equipment, which are mostly in my opinion, to start with going to be wireless like Wi-Fi or different other kind of equipment, which would be used UBR, those kind of equipment would be used for this point-to-point or point-to-multi point connectivity.
Fortunately, whichever equipment they use, whether they use Wi-Fi or UBR or even fiber-optics, we have all those equipment available with us designed indigenously. So definitely, it is going to have some increase in the demand of this equipment and also naturally since we have all this equipment available, we will be benefited.
Balasubramanian A
Yeah, got it. Sir. Sir, and the second question regarding recently drum organization US have imposed a lot of types to like Mexico, China and Canada. Like right now China have the higher capacity for OFC side like — so is there any impact on US tariff and what kind of benefits are expected to Indian companies, especially here and how much exports like exposure we have on the US side?
Mahendra Nahata
Look, you know China’s increase in tariff on China by US market doesn’t impact much as far as telecom is concerned, because US does not allow import or equipment from China in any case. They really don’t allow. So therefore, this tariff increase on the Chinese products of 10%, which has pretty recently been announced would not impact the Indian manufacturers because as it is they are not allowing import of Chinese.
Balasubramanian A
Got it, sir. And sir, on that on the optical fiber and optical fiber cable realization side, like positive status in this quarter, sir. And price side.
Mahendra Nahata
You’re terminal to price?
Balasubramanian A
Yes, sir. Realization per fiber kilometer.
Mahendra Nahata
Yeah. In terms of realization fiber per kilometer of cable, I’m talking fiber culp per kilometer of cable has been about INR840 rupees as compared to INR893 rupees, which was there in the last quarter. And INR1,073 which was there in the — on 31st December 2023. So it has come down considerably, but similarly, price of fiber has also come down. Fiber is now INR266 per kilometer, which was INR291 on 30th September and on 31st December 2023, which a year-ago it was INR329 rupees. So as the price of cable has come down, price of fiber has also come down.
Operator
Thank you. MR. Balas, please rejoin the queue for more questions. Next question comes from the line of Manoj with and Securities Private Limited. Please go-ahead.
Manoj Jethwa
Good evening, sir. This is Manoj Jaya from KSI Securities and many congratulations for the good set of numbers in this challenging times. Sir, my question is regarding the defense sector, which we have come out with a new facility in Hosur. So could you please add some color on it, sir? And what could be the growth prospects as far as defense opportunity is concerned with HFCL?
Mahendra Nahata
And as far as color is concerned, color of army is green, Air Force is blue and is white as far as color is concerned. But anyway, you know, defense, as I’ve always been saying, approvals and all that take a lot of time and approval processes are pretty long and at the same point of time, you know a lot of impediments. You know, I would not tell you the numbers. We have a large order for electron — large alloy, of intent for supplying of electronic fuses from one of the networ countries. Now that network country wanted a certificate for testing from Indian government agency, which is DRDO. We applied for testing. We got the firing range sanction by DRDO. We needed ammunition for testing and would you believe we have been given a delivery date of nine months for supply of ammunition because which are produced by government factories only.
As a result of that, we have not been able to test our switches as per the requirement of that particular country and we have not been able to start supplying. You know, this is a traversity that you have a large three-figure order reaching near to four figures. Not order LOI, of intent subject to this testing and all that. And I have not been able to do so till now because of delay and supply of munition by government companies.
So these are some of the difficulties, never be less, never be less. We have now started working on after successful testing of our radars, thermal weapon sites, we have started working on receiving orders. Recently our people had gone to some of the foreign countries and they have received a good inquiries for this product and we expect to start building order book from coming quarters. We start — we expect that some small orders may start from this quarter and start building a better order book on the next quarter itself.
Manoj Jethwa
So in the overall, say, around 1.5 — 1.5 year, how do you see the defense business to pan-out in the total revenue-wise, EBITDA-wise Q4 projects.
Mahendra Nahata
One electronics uses this testing and whatever has not happened, we are trying our best to make it happen by April and May. So once that happens and test results, which I am sure would be positive, would give rise to possible orders for those electronic fuses. Radars we are expecting a reasonably good demand to come for radars thermal weapon site again small, small orders are being received and some of the tenders also we have participated which are under evaluation then BMP 2 as I have been informing five companies have been shortlisted for a project which is multi-thousand crore project and HFCL is one of them. Others are of course, one of the government companies and LNT, Alpha design and all these kind of companies, startup projects at Tata which have been shortlisted.
So we again have high hopes that they are also you know we are very, very hopeful that we should be able to be a key player in that segment also. So 1.5 year, I think we expect to receive reasonable size of orders, reasonable size of orders from all this. So the revenue should also start flowing in from the next financial year. Revenue should also start flowing in. Apart from receiving orders, revenue flowing should also start. I would not like to give you a number how much it can be. But we are very hopeful that revenue will start flowing in from different in the next financial year.
Operator
Thank you. MR., please rejoin the queue for more questions. Next question comes from the line of Tanuj Kiyani with Venture. Please go-ahead.
Tanuj Khiyani
Hello, sir. Sir, you have decided for a depending what it didn’t come.
Operator
MR., sorry to interrupt, your voice is breaking. Can you just come a little closer.
Tanuj Khiyani
And is it clear now?
Operator
Yeah, go-ahead.
Tanuj Khiyani
Sir, you are the color which did come through
Operator
Once again, sorry to interrupt, your voice is breaking.
Tanuj Khiyani
Hello? Yeah. So you guys have defense order
Operator
Mr Kerry, I would request you to dial us back once again because your voice is breaking. Thank you.
We’ll take the next in-line and that is Rohan Vora from Envision Capital. Please go-ahead.
Rohan Vora
Hello. Thank you for the opportunity. Sir, sir, the first question was that as I understand around the order inflow for this quarter was around INR5,300 crores, of which around INR4,600 crores was pertaining to Bharat. So just wanted to understand what was the balance order from? What kind of products and what kind of projects are we seeing?
Mahendra Nahata
These were balanced also various equipment, it is a fiber-optic cable, unlicensed radios, Wi-Fi equipment, a mixture of mixture of different equipment and cable from very number of customers. This could be indigenous, this could be export also.
Rohan Vora
Got it. And sir, sir, the order book that we have today has around INR2,500 crores of product. So what is the breakup of equipment in this?
Mahendra Nahata
In the order of INR2,000 — which orders are talking about.
Rohan Vora
So our current order book as it stands is around INR10,400 crores.
Mahendra Nahata
So I can tell. Yeah. You know it in order would be roughly about INR2,525 crores for equipment and that would be about INR4,197 would be roughly about 10 key projects, which includes of INR1,400 crores, of course.
Operator
Thank you. MR. Vora, please rejoin the queue for more questions. Next question comes from the line of with. Please go-ahead.
Unidentified Participant
Hello, sir. A very good evening. Sir, my question was on the telecom product side. So you know during the year, we had told that we’ll be doing around a INR2,000 crore revenue. So currently, if I say, we’ve done around INR1,000 crore. So do we expect another INR1,000 crore by the last quarter or there has been some issue with it and it will come going ahead. I just wanted a little understanding of the —
Mahendra Nahata
Good question. We definitely had expected about INR2,000 crores or so. And till now this has been about INR1,000 crore or so. In the current quarter, we expect roughly about reaching to INR350 crores to INR400 crores in the particular quarter, something around that. I’m not 100% sure, but INR350 crores INR400 crores kind of reach. Now reason of this shortfall is that some of the equipment which we were to supply earlier, that delivery got delayed because of customers readiness and customer trials and they are approving the product because a lot of banks, they wanted lot of software changes to be done to their requirement, which was not expected earlier. So that delayed the supply of roughly about INR250 crores or so.
Then demand for some of the export market which we expected to happen that also got delayed. So all that delays contributed this INR500 crores to INR600 crores shortfall in this particular financial year. One is customer wanted some changes. Second, there was less of demand from export markets because we had expected the rural networks to come up more quickly like and all that when we started the year. So — and we should have increased the supply of equipment to Bharatnak project also because there is a significant demand in Bharatnak. But also got delayed by six to nine months. So that part of supply also could not happen.
So all these factors put together really led to a unexpected slowdown in the telecom networking segment, which we believe this year would come up again. It has come up. So increased demand would be there from. We are significantly good products for programs, routers and all that. In fact, we are one of the major recipients of the order for routers, which is one of the critical equipment of requirement. And moreover, we expect more orders to come in from the — as I said in the balance 13 circles, which are — three of which have been awarded and 10 more are to be awarded and eight more circuits where tenders are to be by state governments. We expect more orders to come in. So this year should show better performance in terms of order booking.
In terms of delivery, again, Bhara said particularly will depend upon how the people who receive orders, they are able to implement the network. From export side also, we expect to have better demand this year because low connectivity emphasis is being put on by different governments and we are manufacturing those well connectivity equipment. So this year should see a better prospect for telecom market as well as fiber-optic cable because fiber-optic cable had also considerably slowed down, as I said in opening remarks, worldwide, every fiber of the cable company had a low revenue now compared to what they had done two years ago and we were not the only company affected by that. And as a result, fiber-optic cable also had slowed down considerably in the current financial year.
Operator
Thank you. MS., please rejoin the queue for more questions. Thank you. Next question comes from the line of Rohan Vora with Envision Capital. Please go-ahead.
Rohan Vora
Hello, sir, thank you for the opportunity. So sir, my question actually was that as I understand INR2,500 crore is our order book for products. I wanted the breakup of equipment and cables between this.
Mahendra Nahata
2,500 crores 1,100 crores would be for fiber-optic cable and about INR1,400 crores would be for different equipment, which includes routers for about INR800 crores, INR500 crores of our 5G products and ask products. So is that division answering your question, INR1,100 crores and INR1,400 crores.
Rohan Vora
Understood, sir. Sir. And one more on this line was that over a longer period of time, we have said that we want INR3,000 crores of revenue to come in from equipments alone. So just a broader idea on what?
Mahendra Nahata
I never said to come from equipment alone. When did they say that?
Rohan Vora
So, sir, on an older call, what we said was that when we reach INR10,000 crores of revenue, we want 30,000.
Mahendra Nahata
At that point of time. Yes.
Rohan Vora
What we have said there is INR3,000 would come from equipments. So just wanted to understand what kind of equipments will drive our growth going-forward.
Mahendra Nahata
One is the 5G related equipment where we already have a INR600 crore order, which is under-supply. Routers, routers is again — which I have informed is we already have orders worth about INR800 crores for outer and we expect to receive a much more orders for outers from the balanced telecom circles and also the international market than Wi-Fi and UBR radio because that’s one of key products which we are manufacturing and we have already supplied about, supplied and installed about 350,000 more than that other radios all over. So that is another area we will receive a reasonably good orders. And moreover, within next one or two years, we are designing few more equipment, which includes in UPR right now we are point-to-point.
Now we are trying to go for point-to-multipoint because point two, multipoint would be now when government completes this Phase-3, which is connecting 250,000 gram franchise, next step would be to connect the villages where either over at fiber-optic cable would be used or they can use point to multi-point unlicensed and radio also. There are rural areas you know interference-free spectrum is very easily available and where the government does not have to pay the license fee for a spectrum even to itself. So that would receive ice to demand for point to multi-point radios significantly.
If I look at the world market, 80% of the demand is for point-to-multipoint radios, which we are not manufacturing at this point of time. We are doing on the point-to-point radios. So that is another area where we expect to good demand to come up. So access points, switches, routers, unlicensed and radios, 5G equipment, these are all put together — we expect that we should be able to — we are aspiring to reach to a INR3,000 crore kind of revenue from national and international market when we reach to a INR10,000 crore revenue in total.
Operator
Thank. MR. Vora, please rejoin the queue for more questions. Next question comes from the line of Tanuj Kiyani with Venturea. Please go-ahead.
Tanuj Khiyani
Hello, sir. Am I audible?
Operator
Yeah, yeah. Go-ahead, please.
Tanuj Khiyani
Sir, you had guided for INR800 crore defense order, which didn’t come through. Any guidance on that? And regarding our 25% to 30% growth, are we on-track to achieve for the
Mahendra Nahata
As I said, we have received the NOI for INR800 crores for the order. But unfortunately not they wanted test results from you know we have to summit test results from facility and as I just now explained how it got delayed and now we are thinking to — we are trying to complete it by April, May, then you have to submit the test results to the potential buyer and let us see what happens at that point of time. It was there. But because of ammunition supply getting delayed by governance actually in India, we had to have no-option but to quite a way for ammunition to come and when ammunition comes we test it and supply it supply the certificate to the foreign buyer and then you know order could be confirmed. But unfortunately that hasn’t happened till now.
Tanuj Khiyani
Okay, sir. And regarding the growth guidance, are we on-track to achieve the 25% 30% mark that you have guided?
Mahendra Nahata
Please say that again?
Tanuj Khiyani
Regarding the growth guidance, you had guided for 25% to 30% year-on-year growth. So how are we kind of going ahead with that?
Mahendra Nahata
Not really guidance, what I had said that we aspire to have a 25% to 30% growth. Definitely we aspire that. But sometimes what happens in the market like fiber opticable market knows that worldwide, which was out of our control and therefore, we could not reach to the required revenue. So we still aspire that, yes, this kind of a growth should be there in the company, 20% 25% growth has to happen. But sometimes despite of the best of the efforts, this what we aspire may not come true, particularly market situation, geopolitical situation and those kind of things happen which you which results in their aspiration not reaching to the level we wanted it to be. So that’s the situation.
But yes, we definitely aspire at that kind of a growth. And right now, looking at the current market situation and the growth in rural connectivity, BharatNet and those kind of things. I’m sure that we will be able to overcome those hurdles which we have faced in the current first 3/4.
Operator
Thank. MR. Kiyani, please rejoin the queue for more questions. Next question comes from the line of Hitesh K Patel KK Patel and Company. Please go-ahead.
Hitesh K Patel
Thanks for giving the opportunity to ask the question, sir. My question was regarding that how much of the PLI amount claim would be there from the government and when can the amount will be received? The production leave incentive.
Mahendra Nahata
PLI amount, we have still not been able to claim because as we discussed little while ago that the amount of revenue we thought would come from telecom equipment, which will make us a PLI available to us would not be fulfilled in the current financial year. So we expect to start claiming PLI from the next year.
Hitesh K Patel
And what will be the tentative amount, sir.
Mahendra Nahata
Tentative amount I can’t say at this point of time, but if at all we are able to claim we should be around INR40 crore to INR50 crore.
Hitesh K Patel
For the entire year, sir, next?
Mahendra Nahata
Yeah, for the entire year, right?
Hitesh K Patel
Okay. And my other question was, sir, for you already told that in all 16 circles, Bharat tender was there and only six have been opened yet. So when can the next 10 will be opened or will be available who has got the tender and all other information.
Mahendra Nahata
All have been opened or there are two-parts I will tell you. 16 have been centrally done by. On the instruction of DOT, funding has to come from DOT. So funding is not an issue. The other eight states, the tenders are yet to be announced — one of one has been announced, others are yet to announce which are to be implemented by state government-funded by central government. The funding again is not a problem. Of the 16 which have been done centrally, all have been opened, all have been opened. But only six have been awarded. Out of six have been awarded, two are in consortium with HFCL, wherein, as I said, HFCL received orders worth about INR2,500 some crores from Rail Vikas Limited, we were the prime bidders.
Now in Punjab, we are the sole bidders and we have received orders worth about something like INR2,100 crores or so. No, the INR2,500 crores or so order we have received and opinion has been about INR2,200 crores. Now that takes three out of six balance three which have been awarded, we are already in talks with them to supply our fiber-optic cable and equipment like routers and unlicensed radio, etc. And that discussion negotiation is going on. They have — some of them have come and seen a few things that testing and all that of our routers and all that fiber opticable, they know that will take some years.
So that discussion with three of them is going on. Rest 10 have still not been awarded for two particular reasons. One, there are some high prices by some three or four of them, which are still being negotiated by BSL with the L1 bidders, which are maybe out-of-the budget range of BSL and some three, four, five are stuck in some technical issues. Some technical issues are there, which exactly we are not aware of. But I expect that these issues to get resolved for the tenders which have already been opened, which are 10, but not awarded in February or by-15 March or so in my opinion, and that would be awarded one-by-one as the issues get resolved, particularly the pricing issues which are under negotiation may get over quickly, quicker than you know, those technical issues where they are stuck-up because of some of the technical issues.
So by 15th March or so, I expected government it may happen early, it may happen little late. But yes, ultimately, it would happen. Of the remaining eight states which are to be done by states themselves like which includes Maharashtra, Tamil Nadu, Gujarat, Urissa, and, only Gujarat has announced a tender are in-process. Maybe another couple of months, they would also come up and announce their portion of Phase-3. Gujarat has already announced it just few days ago. So that is the situation. And we expect that these three circles which have been awarded, 10 which have to be avoided, eight where the tenders are to come from different states to receive significant amount of orders because fiber-optic able and equipment we produce most economically, most competitively, quite competitively, I would not say most but quite competitively.
So we should be able to receive reasonably good size of orders from those 10 plus 18 sectors. Right now it has been no, not 18 21 circle right now ordering for all the three have happened as far as we are concer lot more to go, you know. It is only three out of 24.
Operator
Thank you. MR. Patel, please rejoin the queue for more questions. Next question comes from the line of Akash with Tata Capital Partners. Please go-ahead.
Aakash Goel
Hello.
Operator
Scoel, please go-ahead.
Aakash Goel
Hello. Yeah. Hi, sir. Are you audible?
Operator
Yeah, yeah, yeah.
Aakash Goel
Yeah. Hi. Congratulations on a good set of results. Sir, just a few questions. I wanted to have some clarifications on the strategy. Sorry, I’ve not been following the company for a long-time. But so I think strategically, we have been talking about increasing our product-based revenue mix and reducing the service-based revenue. Is that correct?
Mahendra Nahata
Yeah, that is right. In the current quarter, if you see, the mix — mix has been quite reasonable current quarter, it has been 58% products and 42% of turnkey, which used to be reversed earlier, you know. The current quarter we have significant progress with 58% being the product. And I think trend should continue with more orders being received in for products now?
Aakash Goel
Okay. So sir, do we have a target mix in mind here regarding the services and the product mix that we want to achieve over a period of time?
Mahendra Nahata
Target is 70 30, 74 products, 34 EPC. That is the target again, but let me qualify it a little bit. You know, if I receive a profitable project, I’m not going to deny it. At that point of time, you may find this percentage may change a bit, but that would be on account of, you know, depending upon, if you receive a good profitable project, you are not going to refuse it.
Operator
Thank you. MR., please rejoin the queue for more questions. Next question comes from the line of Rishabh with. Please go-ahead.
Unidentified Participant
Yeah, hi, sir. Hello. Hello. Yeah, am I audible?
Operator
Yes, yes. Yes, sir.
Unidentified Participant
Sir, I wanted to understand basically the opportunities what we are seeing for our product division in the international scenario, that kind of means what are the coming — upcoming opportunities where we are targeting for the products? And currently what kind of challenges we are seeing in securing these things? Also, I would like to understand, key, now the OFC prices are in a declining trend. So where it will stabilize and what kind of an outlook do you foresee going ahead for the OFC, cables, fibers, et-cetera? And the third question will be regarding the market-share. How are we doing on the market-share in terms of the own domestic market as well as the international space.
Mahendra Nahata
Yeah. Look, fiber of the cable and products, I will mix-up those two questions together. Yeah. For the pricing, fiber of the cable and fiber prices have been coming down pretty recently and that has been because of the lower demand, as I have been saying for fiber-optic cables. That lower demand, that lower demand has been the result of worldwide kind of a trend where more stock was there with the operators and less consumption was there because of delay in government-funded programs and there was overcapacity built-up in expectation of these things to happen, but did not happen. So there was consequent decline in the prices. The price today, average price for good-quality fiber. I’m not talking of very third-grade kind of fiber so the price could even be lower. But December 31 December 2024, average price for the quarter for fiber has been roughly about INR266 per fiber kilometer, which was INR291 a quarter back and INR329 a year back.
So this trend 266 or so, which has come up, I think this should be almost — almost at the low-end, almost. There may be some more variation coming up. But with the increase in-demand, which we can see now, I think may not go down further except few rupees here there. So that is number-one. Cable prices have consequently come down as the raw-material price go down, the price also go down. So it is INR840 per fiber kilometer for cable on an average, which was 893 three months back, 1,073 a year back. And again, with the fiber price, if they come down a bit, this will also come down a bit. But again, I don’t expect to be a major decline happening any further now, not a major decline. Some decline will still be there, not a major decline, but the decline would be raw-material and cable both.
Another point I can give you. You know preform, which is the raw-material for fiber itself, we used to buy roughly about $82 to $85 a KG. Now that has come down to $58 a KG. So preform prices come down, there is a raw-material for fiber. Fiber prices come down, which is a raw-material for cable. Consumerly cable prices also come down. So — but I don’t expect now that trend to continue to a very larger extent. It should stabilize now with some possible changes which may happen. That is one. As far as the international demand for product and telecom are concerned, including fiber-optic cable is concerned, our iron fiber-optic cable market has already started looking up. We already see better orders coming in, better orders coming in, better inquiries coming in.
We have been shortlisted by a couple of companies for supply. Though firm orders are yet to be received from them, but as LOI kind of our documents have already been received, then we are in-process of finalizing contracts with them. If they are able to finalize contracts for which LOIs have already been received, there would be significant amounts of contracts to come for multiple years. So market is certainly looking up — certainly looking up for fiber-optic cable as well as equipment. So we see that the fiber-optic cable we saw a major slowdown of revenue internationally, not only HFCL, but internationally, should show much better improvement in the next financial year. We expect that it should show a good improvement in the next financial year.
Unidentified Participant
Okay, sir. Yeah. And regarding the market-share, if you can give any color on that.
Mahendra Nahata
Well, the market-share for India, internationally, it would be pointless bit of market-share. But in-market share in India, for fiber-optic cable, I would say we have a highest market-share. Percentage I would not be able to tell you right now, it’s difficult to really percentage. As in India, HFCL should be having highest market-share in the country. In terms of equipment, different equipment would have different market-share. For FWA CP, fixed wireless or 5G CPE, we aren’t the only Indian producer. So as an Indian producer, we are the only 100%. But rest is coming from outside India, countries like Taiwan and all that. So if you mix-up all that, then our market-share could be 15% or so.
But as an Indian company, our market-share is 100% because there is nobody else producing that as an Indian company. UPR unlicensed man ready, which is another major product which has been designed by us. I would say as an Indian company, we should have 90% market-share in the country for point-to-point UVRs. We should have 90% share. All operators we have supplied point-to-point radios. To BSML, we are supplying are to Vodafone-Idea we are supplying. So point-to-point ratios, we have 90% market-share. We haven’t seen any other independent manufacturer — manufacturing that in India, those point-to-point UBS.
Operator
Thank you. MR. Rishabh, please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to one question. Next question comes from the line of Saket Kapoor with Kapoor Company. Please go-ahead.
Saket Kapoor
Thank you for the opportunity. Sir, just a question on — it is heartening to see that you guided for a higher mix of telecom product to the. But when we look at our margins, they are lower for the product segment. So what should be fastening in-going — going ahead? And also, sir, for the trunky part, are there one-off any receivables pending or one-off any payments that have been included in the profitability. I’m just referring to our nine months number rather than the quarter one and just to elaborate the same, sir, for the nine months, we find the telecom product at 1863 1,863 and Trunki project at INR1,400, whereas the profitability is 128 for telecom product and 300 for Trunki. So what explains and what should we be placed in-going ahead.
Mahendra Nahata
Look, without going into the numbers, you know, since the capacity utilization was low, profitability has been lower. As fiber-optic cable, for example, capacity utilization is roughly about 50% in the current year. So when the capacity utilization improves, definitely the profitability is also going to improve. There is no receivables included in the profitability in a sense. Receivable and profitability are two different numbers. So I don’t understand that part of the question.
But as far as profitability is concerned, when the capacity utilization improves, the profitability is definitely going to improve. And particularly fiber-optic cable segment, we already see green shoots happening in this quarter itself, we should do better than the last quarter in the current financial — current quarter, which is a quarter-four from the quarter three, we should do better in my opinion.
And then as the orders come in, quarter one even better and we have started receiving orders today itself, we have been L1 in Army tender for tactical cables, which we would be supplying in this quantity for the first time. Earlier we have supplied a small order for tactical cable, but now is the first time INR43 crores order has been received by us. And another major tender for the similar cable is coming up as we expect very soon. And as we have won this tender, our effort would be to win that next tender also. Internationally also we have started receiving Alvine where we have been at just lowest in the tenders, you know quoted by those telecom operators. And of course, once they test our cables and approve them, their supply would be starting for a multi-year contract.
But yes, LOI has been received. I don’t think there would be problem in the testing at all because cables we have been manufacturing since many, many years shouldn’t be a problem. So capacity — and then don’t forget,. Is a major part of consumption in India for next three years. And our expectation is to issue reasonable orders from that part also. So that should also help us improve our capacity utilization and consequently the profitability.
Operator
Thank you. MR. Kapoor, please rejourn the queue for more questions. Next question comes from the line of Hardik with ET. Please go-ahead.
Unidentified Participant
Sir, I had one question. For the telecom products, we have executed about 2 lakh numbers for FWA and 3.5 lakh for UBR. So do we have capacity to cater to the domestic market as well as export markets when the demand comes up for these telecom products? And what could be the demand look like in terms of numbers.
Mahendra Nahata
Look,, you know, let me tell you how we manufacture this telecom products. Telecom products are essentially we get manufactured on a contract basis. We don’t manufacture them ourselves. We do the integration of those products. The PCB assembly, PCB assembly, which is the starting point of manufacturing is the key point where the maximum amount of capex and all are required are manufactured on a contract basis, which is a trend worldwide. Worldwide everybody — all major companies get it manufactured on a contract basis by EMS houses, like you have selectronics, you have Dix and you have a and many, many, many, many such names you would have heard, including Apple and all that they get-in manufactured from such contract manufacturers. We also do that.
System integration is then done in our own and system integration capacity, you can increase very quickly with the increase of the test equipment. They give us me the test equipment and workers and increase your capability to do the system integration and final testing of equipment. So now if you have an EPC house which has less capacity, you can engage another EPC house, contract manufacturer to manufacture your equipment. There is system integration you can do at your — you can keep on doing at your own place. So capacity would not be a constraint in terms of this, whether it is UBR or whether it is going to be fixed access. It would not be constant. Constant can come in PCB assembly, but then you can go to under the contact manufacturer.
Operator
Thank you. MR. Vias, please rejoin the queue for more questions. Next question comes from the line of Rishita Karda with. Please go-ahead. Ahead.
Unidentified Participant
Hi, sir. Sir, my question was on the order book side. So on the product and the turnkey and the O&M. So what is the execution cycle for the same? I’m currently in O&M, what is the kind of revenue that we are doing.
Mahendra Nahata
O&M, I think this quarter the revenue was negligible. Just let me just check, give me one second. So you know the O&M revenue in the current year, not the quarter, it would be roughly about INR50 crores. But it will increase once the goes into a mode of operation after implementation or our NFS project, which we are implementing the warranty period for that end, which is under discussion when that warranty period would — and this is the discussion is going on at this point of time. So that is as far as the O&M is concerned. Is that the question or any other question from you.
Unidentified Participant
So can the Turkey order bookstore? What is the execution cycle for it? Like this INR4,000 crore in Turkey and 2,500 in products by when can we execute this?
Mahendra Nahata
Yeah, yeah, this be executable in three years of signing of the you know, agreement between us and, which is in-process. But our effort is to complete quicker than three years, because you know then we receive better revenue. But yes, contracted cycle would be three years.
Operator
Thank you. MS., please rejoin the queue for more questions. Next question comes from the line of Laksh Agarwal with Ventures LLP. Please go-ahead.
Unidentified Participant
So thank you for taking my question. So as you have mentioned that like in our optical fiber cable segment, we can see that in the current quarter and the following quarter also, we see some growth. So I wanted to understand that is there any specific optical fiber cable which is required to cater to the data center orders which are coming in? And, how much in terms of the contract value are these orders for?
Mahendra Nahata
It’s lot of money.
Unidentified Participant
No, no, it’s not from my end. I guess someone else is unmuted.
Operator
Agarwal your, it’s coming from your line.
Unidentified Participant
It is not coming from my end definitely.
Operator
Let me just check just hold-on. Just give me a moment.
Mahendra Nahata
Yeah, mister Agarwal, if I understand where your question was, are we making any specific cable for data center? Is that true?
Unidentified Participant
Yes, I just wanted to understand that is there any specific optical fiber cable which is required for it and in terms of the contract value which we get from these from data centers.
Mahendra Nahata
As I said, you know, we have started working on getting orders from data centers. Now different kind of data centers need different kind of give us. This all depends upon what particular customer wants. Some of the customers would need traditional loose tube kind of cables with a multiple fiber, you know, somebody would need about, let us say, somewhere near 400 fiber cables, some of them need 800, some of them need 1,700. Now as you keep on-going higher, the design changes. The recent trend is IDR kind of cable, intermittently bonded driven cable in a way lower-volume of, you know size, you are able to pack in more fibers, you know.
So it again depends upon what a particular customer wants. IBR cable is the most recent trend which has started a higher-volume of cables. We already manufacture IBR cables in Hyderabad and we are increasing our capacity for IBR cables now because as I said, data center people are asking for more-and-more cable now because they are connecting — they are interconnecting the data centers and their high-capacity cable are required. So we are increasing our capacity to manufacture IDR cables. We are almost more than doubling that capacity.
Operator
Thank you. MR. Agarwal, please rejoin the queue for more questions. Last question comes from the line of Abhi with Wise Capital. Please go-ahead. MR Maywalwala, please go-ahead with your question. MR., if you have muted, your line unmute yourself and please go-ahead with your question.
Abhi Mevawala
Hello. Am I audible?
Mahendra Nahata
Yes, yes.
Abhi Mevawala
Yes. So I have only one question. So optical business is currently in a down-cycle. So when earlier the business was in good — in good term two years, towards three years back. So compared to that time and recent time, what are the margin impacted in terms of percentage?
Mahendra Nahata
While margin impacted is quite significant. I think margins have gone down by almost 50%, almost 50%. One prices have gone down and also capacity utilization have gone down. Margin has gone down by roughly about 50%.
Operator
Okay. Thank you you. Thank you. Ladies and gentlemen, due to time constraints, we will not be taking any further questions. You can connect with us individually. I would now like to hand the conference over to you.
Mahendra Nahata
I have one more question. Operator, can I have one more question?
Operator
Sure, all right. So the next question comes from the line of Chinesh Shah with RSPN Ventures. Please go-ahead.
Jinesh Shah
Okay. Yeah, so thanks for the opportunity again. So I just had this question that we can see a significant improvement in the gross margins. So is it because of the product mix or like what is the reason behind it? I just wanted to understand that.
Mahendra Nahata
So internally better margins can happen content to content basis, you know. Sometimes when the contract is good and the supply portion is higher, you can have better margins. So it all depends upon which portion of the contract you are executing at which point of a time. Certain portion you have higher margins, certain portion you may not have. It really depends upon the contract to contract and phases of that contract.
Jinesh Shah
So can we expect that it should be around like 29% to 31% or 32% maybe
Mahendra Nahata
Not always, not always, not always. Yeah. Average should be sometimes something coming around 15% or so on an average.
Operator
Thank you. MR. Shah, please rejourn the queue for more questions. One last question comes from the line of Rohan Vora with Envision Capital. Please go-ahead.
Rohan Vora
Hello, sir. Thank you again. So sir, just a couple of questions. One was on the capacity expansion for fiber and cable. So when is that expected? And the second was on RAN products. So what is your view on the market size because it appears that the market is pretty large for that? And how do we expect to get orders on the RAN side of the telecom equipment? Thank you.
Mahendra Nahata
That capacity expansion of fiber will be completed by — more or less by 31st March. It is already happening in Hyderabad, so it should be completed by 31st March. So as far as RAM products, RAM products is a very broad thing, you know, RAM could be 5G RAN, RAM could be UBR, RAM could be Wi-Fi, radio access network is a very wide terminology. Any specific area you are asking?
Rohan Vora
Our competitor delivered a large project — a large project for BSNL recently. So the similar product —
Mahendra Nahata
And is for 4G RAN, that is for 4G. 4G, I don’t expect any major demand to happen in fuel check because 5G has come. 4G, I don’t foresee major demand to come up. As you are talking about BSML project of 4G, I think worldwide 4G is more or less finished I don’t expect major orders for 4G to come any longer.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we will not be taking any further questions. You can connect with us individually. I would now like to hand the conference over to the management for closing comments.
Mahendra Nahata
Thank you. Thank you very much, ladies and gentlemen, for being with us for this call for the quarter three of financial year ’25. And we look-forward for your continuous support. And we definitely aspire for a better growth in the coming quarter and the coming year and we’ll stay connected. Thank you very much.
Operator
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.