HFCL Limited (NSE: HFCL) Q4 2025 Earnings Call dated May. 23, 2025
Corporate Participants:
Mahendra Nahata — Managing Director
Analysts:
Mohit Lohia — Analyst
Balasubramanian A — Analyst
Vaidik Bafna — Analyst
Rishubh Vasa — Analyst
Kriti Tripathi — Analyst
Giriraj Daga — Analyst
Deepesh Sancheti — Analyst
Hardik Vyas — Analyst
Lakshmi Narayanan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the HFCL Q4 FY ’25 Earnings Conference Call hosted by ICICI Securities Limited. Before we begin, I would also like to read the disclaimer statement. 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 its 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 investment 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 this conference call, please single an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Mohit Lohia from ICICI Securities Limited. Thank you, and over to you, sir.
Mohit Lohia — Analyst
Yeah, hi. Thank you, Navya, and good afternoon, everyone. Thank you for joining us today for the concluding call of HFC Limited for financial year ’25. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Mr Nahata, Promoter and Managing Director; Mr Vijayra Jain, Chief Financial Officer; Mr Manoj, Company Secretary; and Mr Amit Agarwal, Head of Investor Relations. 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 very much, Mohit, and good evening, ladies and gentlemen. I welcome all of you to HFC’s earnings call for the 4th-quarter and financial year ended 31st March 2025. I trust you have had the opportunity to review our financial results, press release and earnings presentation, which are available on your — on our website and also on the website of stock exchanges. The global trade landscape is undergoing a dynamic transformation, driven by resurgence of protection risk policies.
The recent announcement and subsequent temporary pause on reciprocal terror
Operator
Ladies and gentlemen, we seem to have lost the management’s line. Please stay connected while we rejoin them sorry
Mahendra Nahata — Managing Director
I think there was some disconnection and I would read the — I think where we got disconnected. So India is responding proactively to this evolving environment by strengthening its industrial base and accelerating this transition towards an innovative-led economy. This also includes sectors like telecommunication, semiconductors to artificial intelligence, machine-learning and quantum technologies, wherein India is positioning itself as a global leader.
We believe HFCL is well-positioned to thrive in this evolving environment by being both future-ready and deeply rooted in innovation. Globally, telecom sector is growing significantly. Mobile subscription will exceed 8.7 billion by 2025 with over 1.8 billion 5G users. Growth is driven by high-speed networks, data center exploration expansion, cloud and artificial intelligence. In India, by December 2024, the sector served 1.19 billion users with wireless users at 1.06 million fluid digital inclusion.
India’s telecom sector, backed by investments and policy support, is set to drive a dollar one through year in digital economy by 202930. ARPU is projected to grow by 10% to 12% in FY ’26, led by rising usage of 5G and rural data, ESH. These trends are generating sustained demand for fiber, telecom gear and next-gen connectivity solutions where HFCL is strongly poised to lead. Beyond telecom, the defense sector is fast emerging as a transformative and strategic growth engine for HFCL, offering potential for high-value, long-term value and long-term value-creation.
India’s renewed emphasis on indigenizing critical defense technologies, supported by the government’s earmarking 75% of the defense capital procurement budget for domestic players has opened up unprecedented opportunities for homegrown defense manufacturing costs.
HFCL has made decisive early investments in-building a robust portfolio of advanced defense technologies, including ground surveillance and coastal surveillance at us to protect the strategic locations, nitrogen devices for enhanced operational effectiveness in low visibility combat, electronic fuses that enhance safety and precision in modern munition, high-capacity radio relay systems for real-time high-branded mission-critical communication and tactical optical fiber cables designed for rapid deployment and ruggized use in battlefin and disaster recovery scenarios.
These products are engineered for both Indian and international defense markets and we are already witnessing interest from India’s armed forces and foreign countries. Our drone detection radar currently under development is expected to enter the production within the current financial year. We recently also inaugurated its third-of-the-art defense manufacturing facility in Hosur, Tamiladu. The new facility is dedicated to producing cutting-edge defense products, including HSCL’s indigenously developed thermal weapon sites, electronic features, high-capacity radio list systems and tailored to meet the evolving needs of armed forces.
I further wish to inform you that to further bolster our strategic positioning, we have signed two technology licensing agreements with DRDO for compact trans-horizon communication system for ensuring high data rate, low-latency, terrestrial communication system that enables connectivity in remote locations and for multimode — and also the second technologies for multimode and granite. These agreements reinforces our commitment of delivering battlefield rate innovations that are modular, effective and built for modern market.
As DRDO continues to lead India’s defense R&D ecosystem, we foresee more such collaborations that will allow us to manufacture indigenous next-generation defense products at-scale. We have also developed tactical cables, which are used by army and battlefield environment. These are integral part of HFC’s high-performance connectivity solutions designed to deliver robust, secure and reliable communication even in the most demanding and mission-critical environments.
We have already received a contract for INR44 crores from Indian Army for supply of tactical cable. Results form similar large tenders where we have already participated is expected soon. Our subsidiary STL Limited has ventured into wire harness business for different sectors, which is high-potential, low capex segment with good profitability prospects. We are already executing initial orders for critical applications in various fighter jet upgrades and T72 tanks, underscoring our role in India’s defense modernization.
With increasing domestic demand and export potential, wire harness business represents a good growth potential. Rapid evolution of artificial intelligence is set to drive an unprecedented surge in global data consumption. This is fueling massive investments in hyperscale and edge data centers worldwide. As the backbone of this infrastructure, the demand for high-capacity optical fiber is — cable is growing exponentially. HFCL with its future-ready portfolio of high-capacity data center-grid Cables is well-positioned to capitalize on this growth and demand. With the market momentum building rapidly, we expect a strong pipeline of orders. After experiencing subdued demand for optical fiber cable over past six to seven quarters, leading to lower capacity utilization during this period, we are pleased to share that our optical fiber manufacturing has now began operating at full capacity starting from quarter one of FY ’26 as against 45% capacity utilization during FY ’25. Our optical fiber cable manufacturing capacity utilization was also 40% during last financial year. This will also start operating at full capacity by July 2025. With market conditions showing clear signs of recovery and new growth drivers such as 5G rollouts, data center expansion, BharatNet Phase-3 execution and rising export demand, our revenue from optical fiber cable during FY ’26 is expected to improve significantly. Our passive connectivity solutions business for optical fiber network in HTL Limited and our subsidiary company is undergoing a strategic transformation with a sharp focus on expanding into global markets. Until now, this business was largely domestic, but starting FY ’26, we expect our revenue to increase from exports. We have achieved a major milestone during financial year ’24-’25 by successfully developing indigenous MPLS routers designed to support 5G backhaul, fiber broadband and enterprise networks. These routers are engineered to perform reliably even under stringent working environment, making them suitable for both civil and defense applications. We have already secured orders worth INR800 crores for this innovative product. HFCL achieved another significant milestone in FY ’24-’25 by becoming the first Indian company to develop or as the only Indian community now to develop and commercially launch 5G fixed wireless access customer premises equipment, a critical enabler of last mile wireless connectivity in 5G era. In its very first year of launch itself, we have successfully dispatched over 4 lakh units of this equipment, demonstrating strong market acceptance with growing demand from telecom operators and Internet service providers. We expect to have continuous demand for such this product. I’m happy to inform that during last week itself, we have received another order worth INR174 crores for this product. As we continue to grow, we remain firmly committed to sustainable business practices. We are proud to share that HFCL has received an ESG score of 70.9 from SES ESG Research, a strong — which is a strong investment of our efforts to integrate environmental, social and governance principles into every aspect of our operation. Our strategic investments in R&D, capacity expansion, strategic focus on defense, data centers and global market are now converging to create a robust platform for long-term profitable growth. I’m pleased to report that our order book on 31st March 2025 stands at INR9,967 crore compared to INR7,685 crores as at 31st March 2024. Before I walk you through our financial performance for quarter-four and full-year of financial year ’25, let me make a moment — let me take a moment to set the context. Financial year ’25 was a year of both strategic advancement and transitional changes. While our financial performance are impacted by the downturn in optical fiber cable demand, margin pressure from newly-launched telecom products and slower customer offtake in our EPC business. We remain focused on strengthening the foundation for long-term growth. Let me now, friends highlight — highlight our financial performance for financial year ’25 and quarter-four of financial year ’25. For about 12 months ended 31st March 2025, the company reported consolidated revenue of INR4,064 crores as against INR4,465 crores in FY ’24. We reported EBITDA of INR507 crores as against INR680 crores — INR82 crores in 2024. Profit before-tax was INR217 crores as against INR454 crores in FY ’24 and profit-after-tax of INR173 crores as against INR338 crores in FY ’24. Revenue for quarter-four in FY ’25 stood at INR800.72 crores as compared to INR1,011.95 crores in-quarter three FY ’25 and INR1,326.06 crores in-quarter four FY ’24. EBITDA for quarter-four of FY ’25 stood at negative INR22.33 crores as compared to INR171.89 crores in-quarter three of FY ’25 and INR209 crores — 0.29 crores in-quarter four FY ’24. EBITDA margin of quarter-four FY ’25 stood at negative 2.79% as compared to 16.99% in-quarter three of FY ’25 and 15.78% at quarter-four FY ’24. Profit-after-tax in-quarter four FY ’25 stood at negative INR83.30 crores as compared to INR72.58 crores in-quarter three of FY ’25 and INR109.36 crores in FY ’24 of quarter-four. PET margin in-quarter four of FY ’25 stood at minus 10.40% as compared to 7.17% in-quarter three FY ’25 and 8.25% in-quarter four of FY ’24. Segment revenue from telecom products stood at 76% of total revenue in-quarter four of FY ’25 as compared to 58% in-quarter three of FY ’25 and 27% in-quarter four of FY ’24. With the strong order book, trends with strong order book, demand pickup and full capacity utilization now, the company expects growth of 25% to 30% in revenue of the current — from the current — from the last financial year to the current financial year. On overall basis, this major growth is starting from Q2. Looking at our current robust order book, capacity utilization pertaining to full-scale, strategic investments bearing fruit and multiple global and domestic growth engines gaining momentum, especially in optical fiber cable, defense, telecom and data center connectivity solutions. We are confident of delivering a strong rebound in FY ’26. Our focus remains steadfast on innovation, global expansion and suitable value-creation for all stakeholders. Thank you very much for your continued support. Now we are open to questions from any of you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone phone. 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.
The first question is from the line of from Arihant Capital. Please go-ahead.
Balasubramanian A
Good afternoon. Good afternoon, sir. Thank you so much for taking my question. My first question related to exports. Exports revenue, it’s around 12% of the sales and sir, what are the strategies are in the place to regain global market-share, especially in Europe and Southeast Asia? And what is the impact of a reciprocal tariff imposed by US and how do we see exports aside in coming years?
Mahendra Nahata
Look, you know, definitely export is a cornerstone of our strategy to increase revenue. If you would just look at one particular thing. You know, minus China, if you exclude China, India would be probably 5% to 7% of the world market in telecommunication. 95% market lies outside. So if you have to grow, you have to go in exports. Like for example, fiber-optic cable, we started exports. Last year Was — and the year before that was subdued because global demand has gone down. But we have been performing very well in exports. This year, again, we have started receiving good amount of orders from exports. The market has shown a big uptrend tiding on the wave of hyperscale data centers where you need high fiber count cable. For example, telcos need fiber count of 296 fiber mostly and hyperscalers start from 864 fiber cable. So you can imagine what kind of difference it is. So with the increase in the demand — demand outside India, particularly in North-America and to Europe also, mostly because of the data centers and fiber-to-home. We are concentrating quite heavily on export in fiber of the cable and we have started receiving orders which are to some extent, I would say we did not expect in the beginning of the year, it is much more than that. Even to the extent that what we believe our expanded capacity of optical fiber, which we are expanding, which is almost completed expansion by 100% will also fall short of our requirement and we’ll have to still buy fiber from outside. Simultaneously, we are now focusing on export of telecom equipment also, which again had taken some downturn, but now we are again or created a separate organization for this telecom increment export. And this year, we expect that we should have a reasonable performance in the telecom increment export also starting major items which will probably get exported would be WiFi access points where we are now going-in for Wi-Fi 7-based access points, our switches and also at the same point of time, fixed wireless access equipment, which I discussed, followed by routers. So fiber-optic cable and these are the equipment, which we are concentrating on export. As far as fiber-optic cable and passive connectivity solution attached with that are concerned, I think I’m quite sure this year our export will cost four figures. We will even four figures, not cost four figures, sorry, will be in four figures. And your second question was what impact the reciprocal tariffs has. Now right now, the reciprocal tariff is at 10%. So 10% has not meant much of difference for us. It has been — most of the case has been equally shared between us and the customers. But I can say, as demand from export has increased, margins have been also quite reasonable. So this 5% decrease in the prices in some cases is not impacting much. It’s not impacting much. We always still watch for future, you know. Nobody is sure it will remain 10% or it will go away or — but we have recommended to government from our side for optical fiber cable at least that you can have a zero tariff for import because nobody is going to import fiber-optic able for US. But they are not doing that way. They are doing it as a basket for every product. So if it remains around 10%, maybe it goes up to 15%, I don’t think we will have any significant impact on our exports.
Balasubramanian A
Got it, sir. Sir, my second question related to data center. So the difference between requirement from data center and DSP and what kind of market on the global level and where we can focus in those data center areas. Sir, why I’m asking this question because earlier the demand is mostly related to telco capex, but data center can be the alternative for this cable requirement center. If you have also mentioned the higher hyperscale requirement for data center.
One of our competitor also mentioned about 25% of revenue from data center itself. I just want to understand on your point-of-view on the data center side to share your inputs.
Mahendra Nahata
Look, data center demand has really fueled a very good growth in the demand of fiber-optic cable. Data centers are mushrooming, hyperscale data centers are or in all advanced countries. In India also, it has started happening, but not to that scale as it is happening in US and US and some other countries.
And this is definitely an alternate opportunity for cable manufacturers to supply fiber-optic cable, not only fiber-optic cable, we are at the same time doing the connectivity solutions which are required within the data center, the — the passive connectivity solutions as they are required in telcos, they are required in data centers also.
So — and but the quality and the type is completely different. So we are working on that also so that not only the export cable, but also connectivity solution. So definitely, no doubt that data center is a — has emerged at a good demand opportunity for fiber-optic cable of higher count, higher count means higher, much higher prices also. And I expect this is to continue for at least next five years, then it will stabilize.
And the reason is simple, so much of use of artificial intelligence, everyone is using artificial intelligence these days. All this data, more data means more storage, more cloud, more requirement, more capacity required. So all hyperscale data centers are coming up, which one could not have imagined a few months back till the time AI came. So this is a great alternate market opportunity which has opened up.
Operator
Thank you. We take the next question from the line of Vedik from Monarch Networth Capital Limited. Please go-ahead.
Vaidik Bafna
So sir, I have two questions. Firstly, on the telecom side, I just wanted to know your views about the demand of FWA in India and in the international markets as well. And are we manufacturing FW a for India or for India only or for other countries as well.
Mahendra Nahata
Okay, good. Our fixed wireless access equipment is being in India and many other countries quite extensively. We are manufacturing for India and now the new designs which are doing is for international market also. And I will tell you the difference. For India, of course, fixed wire access would have a continuedly good demand because this provides a optical fiber kind of a broadband connectivity over wireless. Taking fiber-to-home takes time, but on wireless, you can provide it on an immediate basis.
So the difference is consumed spectrum, which is costly. But in case of fiber, the land down cost is very-high. So operator has to choose which one to use. And all Indian operators are using fixed wireless access equipment very heavily. And we have supplied, as I mentioned, almost by now — by now, almost 0.5 million of that or maybe up more than 0.5 million of that and received a new order of INR200,000 also, about INR173 crores.
And we expect to receive more switch orders in the current financial year. Now for the export market, again, you know the difference is the particular spectrum you use for providing fixed wireless access. Different countries use different spectrum, different type of style as equipment. India, we are using outdoor equipment, but in five countries, the advanced countries, mostly they use indoor equipment and a different spectrum also.
So now the next-generation of equipment which we are designing and the pilot production is already on rather. And some of the cases, samples also have been submitted to the customers for testing in their network where the frequency bend is again the same which is being used in those countries and it is indoor version, not outdoor.
And in case of indoor version, what additionally you have to do, integrate with Wi-Fi because in outdoor version, WiFi is inside the house. The outdoor WiFi will not work. So indoor WiFi has to be — WiFi has to be you know, included in the fixed wireless equipment itself. It has to be integrated within the fixed wireless equipment. So those versions are also ready. And I think this year would be here, we should be able to start exporting this FW equipment for different other countries also.
Vaidik Bafna
Yeah. Okay, sir. And sir, the next question is on the is on the defense side. So I just wanted to know what is our outlook on the demand for defense product in India and what role are we playing in the defense sector?
Mahendra Nahata
Look, the outlook, I don’t have to tell you Because this last month or this month beginning, what happened across our borders that itself tells you the kind of defense preparednet country needs to have to throw the design of any enemy whether from west or whether from north or any place. You know really government has in my personal opinion is awakened to the possibility that defense preparedness needs, which is good, but it needs to be a much higher-level and that’s why you read in newspaper, the emergency procurement funds are getting alloted and it is my opinion that our budget for the defense forces definitely will have to be increased if we want to increase our preparedness. Our forces are very brave, very brave and in fact, I will not be violating any confidentiality if I tell that even HFCL, 36 people from HFCL was present throughout the border from Udi to Patha, Udhampur working on the NFS network for the army, which is dedicated network we have created to do any sort of a replayer replacement if any portion of that network was hit by enemy forces. And I’m also happy to tell you we have received commendation letters from various army units for the kind of service our people have done, various communation letters and you will be very pleased to hear — know that the kind of language they have used praising our efforts, HFC’s efforts, there has been — really I am proud of that. So coming back, you know, the demand of defense equipment is going to be definitely very-high and we are concentrating in couple of areas. One, ground surveillance radars, which are going to be used for ground surveillance and also our coastal surveillance. And those have been tested by our team and they are ready for-sale now. And this year, we expect revenue to start flowing in for — from. Second is night vision devices, which are also again indigenously designed like and. And night vision devices, we participated in two tenders, one we won, one we could not, but what we won is roughly about INR45 crores. The supply of that for that would also start in Q2 and we have participated in couple of more tenders for the same equipment, the results are still awaited. So supply for this equipment would start from Q2. Then communication equipment, of course, which is our, we are working on those areas. Then electronics uses, which is one player product. Again, HF Steel is the only company which it has designed and which has its own IPR on that. Unfortunately, we could not be part of the last tender because there were some software issues noticed in our fews and they did not give us time to correct that, whereas we could have done it in few days, but anyway, that’s history three, four years back. Now they have to be retried, retested. And for that we need ammunition and ammunition is to be supplied by government directly to DRDO and they had given us a six months time even with advanced women to supply of that ammunition. So we paid about four or five months ago. Now they have promised that supply would be made during the beginning of the next month and then they will be tried by DRDO, which are — we allotted a range in and to try that. I’m sure this small defect has already been rectified, which is lab tested. And that would be one equipment — which is huge for artillery guns. And have a huge demand, not only in India, but worldwide. Worldwide is huge demand opportunity for that. We keep on receiving inquiries every now and then for these kind of futures. Every now and then we keep on receiving inquiries. So once they’re tested in the month of June, we should be able to start marketing those equipment also because unfortunate part is we cannot test it ourselves. It requires a range where you can fire these artillery guns. Range has to be some, 18 20 30 kilometers and we cannot fire artillery guns by. So it has to be tested by DRD or army itself. But with that defect, whatever the small defect was having rectified, this is one-product, which would be golden product, I can assure you. Then of course, we are designing that a drone detection radar, we should be in-production in the current financial year itself. Right now, it is undergoing the final phase of software integration and then the trial would start. That is another area we are working very closely. And also, of course, now we have taken — joined hands with DRDO, Defense research and development organization also and taken — transfer a couple of technology transfers from them where the ready technology is being transferred to us and we able to is manufacturing those equipment also. One is of course, battlefield radio equipment and other is multimode hand graded. So this would be the first time we were going-in ammunition area. So that technology has also been approved by DRDO to be transferred to us. And for hand, the trial production for approval, you have to produce 100 units and give it to them and they will try it out has already begin — begun on our facility where we, as I said in my presentation, we have created a facility to manufacture different. So pilot production or trial production, you can say, has already started. So these are the areas we are working in defense at the moment.
Vaidik Bafna
Got thank you. Got it, sir. Got it, sir. Thank you, sir. This is from my side.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. We take the next question from the line of Rishabh Vasa from Insect Securities. Please go-ahead.
Rishubh Vasa
Hi, am I audible?
Mahendra Nahata
Yeah.
Rishubh Vasa
Yeah. Hi, thank you so much for the opportunity. So my question was regarding the optical fiber cable market. So how long do we expect this trend to go upwards and what kind of revenue growth are we expecting in FY ’26?
Mahendra Nahata
Look, as I said earlier — in earlier question, I think next five years, the trend is built-in upwardly led by US because the data centers, the way they are mushrooming in US is incredible. And it would have followed everywhere in the world because artificial intelligence, IoT, machine-learning, all these are going to happen worldwide. You will see the progress on this computer and IT industry in next five years, which you would not have seen in last 25 years.
Next five years is going to show you more development, more progress in this industry than what you saw in last 25 years. A major contributor to that is artificial intelligence. You know when you work-in your — on your computer, using artificial intelligence, how easy it becomes to work and how fast it becomes to work, you can understand, you know yourself. And that all means more data, usage of more data because data is happening quickly.
So hyperscalers are coming up worldwide, it’s a machine growth. So this is going to lead to major creation of demand because of high-capacity cables required, 864 fiber, 1,728 fiber, whereas telcos have been using 96 fiber, 48, 24 fiber. So from data center application at least next five years, at least next five years.
But as the data center application increases, the demand for transmitting and transporting data from one city to another city, one continent to another continent, one country to another country are also going to happen rapidly because they are complementary to each other. So there will be increased demand from telcos also. And then when you want to use artificial intelligence kind of high requirement, more fiber-to-home connectivity would be required.
Either it is going to be fixed wireless access like what I thought little bit back or it would be fiber-optic connectivity. In any case, demand of fiber-optic cable would again be there either for home correction or data center applications or intercity or intercountry requirement. So at least for next five years, this demand is going to keep on increasing. And then of course, you have a requirement like rural connectivity where governments want to connect all the villages like in India program is happening, those demands will be in addition.
Rishubh Vasa
Got it, got it. And would it be possible to put a number on the growth for FY ’26?
Mahendra Nahata
Well, growth as far as our company is concerned, again, this is a pure estimation based on our current demand that you growth potential. Last year we Had a very dismal performance of fiber-optic cable because of the worldwide demand had gone down and that was the situation with every manufacturer in the world, not only HFCL, our competitors or friends in our country or if you take big companies like, and OFFS, any company you take, they had a huge downturn in the revenue from fiber-optic cable business. Now this year against the revenue of INR1,100 crores last year, with all humbleness, I can say with the kind of orders we are receiving from data centers, telcos, locally, exports. I am of the opinion that we will grow by at least 100% this year as compared to last year, 100%. And this is not a guidance. Please note, this is not a guidance. I’m giving purely this number from the — my present knowledge and the kind of order book we are creating. I am quite certain. I expect — I expect that this year our revenue from in this fiber opticable and associated business is going to grow by about 100%.
Rishubh Vasa
Got it, got it. Thank you so much.
Operator
Thank you. We take the next question from the line of Rapati from NBS Brokerage. Please go-ahead.
Kriti Tripathi
Hello, sir. Thank you for the opportunity. So my first question is on the margins. As you should have said that you expect a revenue growth of 25% to 30% in terms of revenue for FY ’26. So how should we think about the margin trends? And can we expect the EBITDA and PAT margins to remain in-line with the FY ’25, which was around 7% for PAT, I should say.
Mahendra Nahata
Yeah, yeah. Yeah, in terms of percentage, I think it will remain around stable around the percentage what we have in FY ’25. I don’t say that they would increase dramatically or significantly. I’m not giving any such guidance, but I think it will remain steady what we have in FY ’25 because this particular year, it had gone down drastically because of low revenue and for the reasons which I explained that why the revenue was low, but what was in FY ’25, I think we should be able to maintain that.
Kriti Tripathi
Okay. So not the FY ’24 figures of PAT margin, right in FY ’24, the consolidated PAT was around 7%. In FY ’25, it was around 4%. So that is what we expect in the current year side, sir.
Mahendra Nahata
No, no, what I’m saying is EBITDA margin of what was there, not in FY ’25. So I’m talking of FY ’24.
Kriti Tripathi
Okay, okay, okay. Understood.
Mahendra Nahata
Sorry, I missed out the year. So this was — this year was negative margins and all that. So for FY ’24, what margins we had, we would should remain stable around those markets?
Kriti Tripathi
Sure. And sir, the next question is on the capex side. So can you say like can you what would be capex outlook for the current year and what would be the areas of focus the same?
Mahendra Nahata
The capex outlook, we are — you know, why right now there is no major cost apart from — now apart from what we are already doing in optical fiber and optical fiber cable business, which has already been approved, planned and all done.
There are two kind of capex which is in offering in OF, optical fiber and optical fiber cable business, which is expansion of capacity, particularly for newer kind of cables, which are required in data center and those kind of applications, which is we have already placed orders for machinery import, we have opened SEs and all that and the total expenditure, which is going to be made is around INR138 crores, INR138 crores.
Now the way that we are receiving demands and getting orders, my team has come back and told me we need more expansion. So we have not planned for that right now. And to some of my customers I have told I would only do more expansion if you give me a three-year contract otherwise, why should I put my money right now on the basis of current demand only. If you give me three years requirement, then possibly I can do more.
But yes, INR138 crores is being spent on this expansion of fiber-optic cable manufacturing facility over and above what we already have. Now second area of capex, some capex could be the defense, where manufacturing facility we have already created, but certain amount of test equipment, testing, pilot production are always required. So some amount of capex will be required in defense securement business also. And that may be not much, that may be something around INR50 crores or so. It would not be much, maybe around INR50 crores.
Kriti Tripathi
Okay, sir. That’s it from my side. Thank you.
Operator
Thank you. Next question is from the line of from Arihant Capital. Please go-ahead.
Balasubramanian A
Thank you for your question. Sir, what is the current scenario on the inventory levels for global operator levels? And what’s the price ranges for optical fiber and optical fiber cables?
Mahendra Nahata
Look, inventory is one of the reasons, one of the reason why market was sluggish for two years because people had built-up huge inventories. So two years back, if you see fiber-optic cable market moving like anything. There were no delivery available in US delivery was 52 weeks. So people accumulated lot of stock with the expectation that you know, market would remain like that, but downturn in-demand of China and lower demand in rest of the world and that time data centers hyperscalers were not there as much.
What happened, the built-up inventory consumptions took a lot of time and that is why the — that fresh demand was very low. Now what has happened, that inventory is no longer there. It has been consumed in last almost two years and new demand opportunity has come up like hyperscale data centers and all that and fiber-to-home and all that. As a result of that, no, there is no such inventory left with the operators or data center providers, there is no such inventory left.
And that is why you see is a huge increase in the demand of fiber opticable. And as I said, I think it will continue for at least five years. And this year because of this kind of a demand, we expect to double our revenue from fiber optical business.
Balasubramanian A
Sir, secondly, on that optical fiber — optical.
Operator
Sorry to interrupt.
Mahendra Nahata
Let him continue this one.
Balasubramanian A
Okay. So optical fiber and optical fiber cables are pricing and pricing.
Mahendra Nahata
Pricing, I will tell you. Yeah, fiber-optic cable, you know the price which was coming to be around INR840 rupees per fiber kilometer for cable is now around INR905, INR905, fiber kilometers. The fiber price, which was around INR266 rupees in on 31st December 2024 is around INR259 rupees right now. So very marginal difference. While cable prices have gone up a bit per fiber kilometer, fiber price has gone down a bit. So again, these are very marginal changes. There are much of changes remains almost stable between December and March.
Operator
Thank you. Next question is from the line of Giriraj Dava from Visaria Family Trust. Please go-ahead.
Giriraj Daga
Yeah, hello team. So my first question is regarding our order book. So we have roughly mentioned about INR10,000 crores of order book. When I look at the presentation, we have given the breakup between network service O&M products are — and one segment was the government and the private. What I would like to look about sir, is that can we have the breakup between what you are mentioning between like what is the OFC optifiber and cable-related orders book? Second would be how much is a turnkey ton-Q?
Mahendra Nahata
I can give you the breakup. I can give you the breakup you are going further for that. The demand from your telecom products, I would say telecom products, which includes optical fiber cable, routers and everything see roughly about INR2,227 crores. Out of which 50% is optical fiber cable, 50% is other telecom equipment, you know, which includes, as I said little while ago, INR800 crores from routers, about INR200 crores from fixed wireless access customer premise equipment, optical transport network and Wi-Fi equipment.
This is about INR2,200 crores. Okay. Then roughly about INR4,000 crore would be from 10 g EPC solutions, EPC. EPC would be INR6,000 crores, which includes orders which you have received from BharatNet, of course , which includes orders from GEO, which includes orders from various other projects, different, different other projects, it is about INR4,000 crores. And we are — here we are very cautious in taking orders in EPC. Only those orders we take where we expect the payments to Be made in time and not based on milestones which are not under our control, which are not under our control because customer may delivered if milestone-based, I don’t get paid which happened in NFS in our case, which I’m very unhappy about, though Army is placing our network so much, but at the same point of time, we are not getting paid because of non-completion of milestones, which is not my fault, which is a fault to either BSNL or Army itself. Itself, okay. So we are taking orders only those orders which are under our control in milestone and where the payment is quick. You know, recently, I would not name the customer, I refused an order, which could have been more than INR2,000 crores for EPC, more than INR2,000 crores. I refused. I was not sure about payments when would they come and when would I be able to do that cable lane because things were under not my control. So we INR2,000 crore order I refused, INR2,400 crores rather. I just refused. I did not take.
Giriraj Daga
Understood. So that makes 4,000 tonne key and telecom is 2,200 crore 220.
Mahendra Nahata
And then O&M is roughly about it is INR3,675 crores. Defense is INR1,000 crores, is about INR1,600 crores and different other projects put together would be INR700 crores INR800 crores, which is good that such kind of order book for O&M is very good because as you start receiving yearly revenues, which are annuity kind of revenues and O&M profitability is bit better than normal profitability in your normal business in supply. So — because it’s more of a service business rather than supply. So this kind of order book for ONM is I think I’ve been pretty happy about.
Giriraj Daga
Okay. O&M is like what 10 years or 15 years kind of
Mahendra Nahata
Depends upon. It starts from seven years, goes up to 10 years.
Giriraj Daga
Okay, seven to 10 years. Okay. And any particular reason for this quarter very weak performance in a contract?
Mahendra Nahata
Look, it’s again customers depend in some cases, customers to change size and some cases they wanted to go a bit slow because of their own reasons. So it was mostly because of reasons from the customer side and some of the orders which we did not take because of payment situation we were not certain about. So it was — major vision was that only. Okay. But this year it will improve because where the payment conditions are good, we are going ahead.
And I think private telco should also increase their EPC orders, which last year was practically one-fourth of what it used to be earlier, one-fourth. This year, I think it should become better and should also give us reasonably good revenue which are not there at all last year. This year there should be some, you know middle three figure revenue coming up from that also. So this year it should become better. But again, as I said, we are very selective about EPC orders.
Giriraj Daga
Understood. In our segment reporting, we mentioned telecom products. So there is a — like where do we account for the defense — is it part of the telecom products only? Any revenue on defense products?
Mahendra Nahata
Defense, last year, you find that there was hardly any revenue from defense products. So it’s not anywhere. But when we report it, we will report it separately.
Giriraj Daga
Okay. So this year probably it’s likely that we will have a separate reclassification of.
Mahendra Nahata
Definitely. As I said just now that we will be starting delivering up one of the product from the Q1 — sorry, Q2, Q2, well, both products, two products will be starting delivering from Q2. So definitely it would be reported separately. In Q2, we will be starting a manufacture — sorry, supply of those equipment.
Giriraj Daga
Okay. My last question is on capex, you mentioned about INR130 crore a place order? Was it part of FY ’25 payment or will it be part of it 26.138 crore for.
Mahendra Nahata
Yes, this would be this year because we have placed orders, machineries are yet to be delivered. Some advance has been placed on 5% or so. The advance has been paid-off this INR138 crores. But rest of them LC has been opened and when the shipment takes place, of course, that point of time, we’ll be paying for that. So — and those are very essential equipment in a sense that when I talk of 100% additional turnover revenue this year, those machines are part of it, because those machines are for specifically new types of fiber-optic cables which are required.
I hope any of you would like to visit our factories in Hyderabad where you can see these new machines and expansion and fiber and fiber-optic cable production. So those are the machines which are required where the payment would be once — apart from the advance which has given, which is 5% and that also we give always bank guarantee. But those are all companies, bank guarantee or no bank guarantee. So those payments should be made in the current year.
Operator
Thank you. We take the next question from the line of Dipesh Sanchati from Manya Finance. Please go-ahead.
Deepesh Sancheti
Hello, sir. Am I audible?
Mahendra Nahata
Yeah, you are audible. Manya, you’re audible.
Deepesh Sancheti
Yes, sir. Sir, I want to know about how much time would this transition period you said that we are going through a transition phase. How much time according to you would take and when will we see the parabolic growth, which now we all have been waiting for?
Mahendra Nahata
Yeah, this I think this transition phase we say you can say quarter one maximum this quarter and we start showing much better results improvement, quarter few even better for — should we even be better. This is all again I say, not a guidance based on my best of my opinion and expectation. This transition phase should last in-quarter one, that’s it. Because you know some of the — many of the orders which have received, we start delivering from quarter two. This higher fiber-optic cable, these new machines arrives and then we start dispatching those machines.
You know, current machines will give 100% output. Fiber is already giving 100% output. Rather, you know, fiber-optic cable now, they will also give 100% output. From July onwards, though it can happen from June, but I let us say July. In June, it may be 80% to 90%. But the further increase in revenue would happen once these new machines we can have been opened would arrive, there will be further increase in revenue with those machines.
So that’s why I see the transition period. But with all this capacity utilization, improving orders for new orders of supply of fixed wireless access equipment, implementation of project, starting supply of routers and all those kind of equipment, this all would mean that this transition period would end in this quarter?
Deepesh Sancheti
Great, great. And also when you mentioned about the order book, when — whether it is telecom products or EPC or O&M, we will maintain a similar margin profile. I mean, will we have a similar 15% margin on EBITDA margin on everything or will it be different?
Mahendra Nahata
No, look, it from different products from different times. I cannot again say that X product will always have XY margin because customer-to-customer quantity to quantity time-to-time. One customer on fiber-optic cable may give you 10% net margin, either can give you 20% net margin or the third one can give you only 5% net margin, somebody like Reliance, for example, they will not give you more than 5%. They know the cost of every raw-material and they add it together and add your 5% and give you the order, right? You know, you know-how they function.
So it goes from 5% to 20% from different people, different companies to different customers. But yes, some of the customers who low-margin, but they may payment quite fast. Like as an example, low-margin but good payment. So fine, you are not worried about low margins. Working capital more is much faster.
Deepesh Sancheti
Right. So very, very much. I mean you know very exciting to hear about drone detection and fuses. What is the progress on drone detection? And also the fuses, you mentioned that you already paid-for the artillery to the DRDO and you’re expecting results by around Q2. Is that the right timeline? And what about drone detection? I mean, especially if you can throw some light on the drone detection.
Mahendra Nahata
Let me talk on the drone detection that is in the final stage of software integration, software, hardware integration that is happening and lab trials are happening. I think in two to three months’ time, we will take it for field trial, field trial and once the field trial, you will find some bugs and And all that was already happened. So it would be hydration would be there. But in this year itself, we would start production of those drone detection. Another thing which we are doing, which I did not mention in my presentation though is talking to our possible partners to who are the soft kill option. Soft skill means you neutralize the drone either by jamming his GPS or blocking this frequency. That frequency is operating, so he loses a communication with his command center and it falls down. GPS and this both jamming can take place. That’s why it costs soft kill. It’s not a gun or a bullet or a laser. It’s a kill by jamming the spectrum of GPS. So we are talking to a possible partner when we integrate, integrate which will take some time. When we integrate our radar and the option, the demand would become even better. Right now, it is radar, but there is going to be huge demand opportunity for radar also for detecting incoming drones and this beginning of this month you have seen why do we need to detect the drones, you know, how they come, hundreds and hundreds as they come. So detection becomes absolutely critical. The radar we have designed, it can detect a single radar and detect 100 drones at one single-point of time and maybe one centimeter drone, 1 centimeter length drone which is a very micro drone, that also would be detected by this.
Deepesh Sancheti
Wow, that will be very exciting, sir. Thank you so much, sir. That was — this is all the questions I had. Thank you so much. And all the very best for thank you.
Operator
Next question is from the line of Harbik Vas from ET. Please go-ahead.
Hardik Vyas
Sir, I had a couple of questions. The first one being what is the status on the BLP upgrade that we were thinking about in the previous quarters?
Mahendra Nahata
Yeah. Look, you know this RFP is due on 1st July. 1st July, the RFP is due. You know it was due earlier in May, but they postponed it. Now it is due on 1st July and we will definitely be participating in that. It’s on 1st July. So we are waiting for to come and to participate.
As you know, five companies are shortlisted, Tata, L&T, our government’s AVLN ourselves and one of the company, I forget the name where Adani also has got equity, I’m forgetting the name. So they are the five companies shortly stage. And in the UTTR, the user trial, which had happened with readiness trial where our BNP modified BNP function the best. Now, of course, the RFP would be tender would be there, where we have to participate and who becomes L1 depending upon that order would be placed. But the — right now, the current date of submission of tender is for July
Hardik Vyas
Okay. And sir, what would be the size of possible size of order if we get?
Mahendra Nahata
Sir, if I tell you the size, then I’m diverging my tender details, the price down.
Hardik Vyas
Okay. Okay, not the problem. And sir, the second question is about the NATO order that we were likely to get from some orders.
Mahendra Nahata
And the problem that happened is the delay in DRDO trial, which is, I paid money six months back and the 70 or 80 shelves of ammunition of Munition India Limited, not DRD. This is Munition India Limited government company has not supplied till today. I don’t want to say negative about government companies, but you can imagine what I’m trying to say.
Hardik Vyas
Okay. Okay. So is it likely in the near-future or will it take a little June,
Mahendra Nahata
They are now promising June, June.
Hardik Vyas
Okay. And sir, my last question is for the drone detection radar and other defense products that we are developing and probably from the second-quarter will have contribution in the revenues. What is the opportunity on the export front for the same products that we are going to sell?
Mahendra Nahata
There is a reasonably good opportunity. For fuels, for example, I am receiving inquiries every now and then from different countries. I receive early inquiry just three days ago for 20,000 futures, just three days ago. So we are receiving inquiries from number of countries. There is a huge opportunity for export of for, particularly 155 MM proximity fuels. Everybody wants that. But unfortunate part is, you know, as I mentioned, our own fault — default in our country that you are not able to get 70 pieces of ammunition to fire, whereas military must be fired in during this war 700 pieces every minute.
Hardik Vyas
Yes, okay. Okay, sir. And the last question is, sir, for our EPC business that we did in FY ’24, not FY ’25, so we would be replicating back those numbers for this financial year
Mahendra Nahata
Because FY ’25 was a workout year not giving any guidance, not giving any guidance and to the best of my knowledge and order book which we have, it would be somewhere between INR1,200 crores to INR1,500 crores.
Hardik Vyas
Okay. Thank you so much, sir. All the best. That’s all from my side.
Operator
Thank you. Participants in the conference are requested to limit themselves to one question at a time. I repeat, participants in the conference, please limit your question to one per participant. We take the next question from the line of Narayan from K Summa Wealth Private Limited. Please go-ahead.
Lakshmi Narayanan
Hi, sir, are you able to hear me?
Mahendra Nahata
Yeah, we can hear you listen sir,
Lakshmi Narayanan
You have said you are guiding for 100% revenue growth. Could you just say from which segment would be the driver and also can you put a number on the, sir?
Mahendra Nahata
So, let me be very clear. I said 100% growth in fiber-optic cable and associated business, not on an overall basis. Okay. So it’s just limited to fiber of the cable and associated like passive connectivity solutions and all that. And this is on different variety of customers, indigenous export, data center, you know, drop cable, normal cable and those kind of things.
Lakshmi Narayanan
So telecom product a whole, what would be your expectation? When is it positive to put a number?
Mahendra Nahata
Telecom equivalent business.
Lakshmi Narayanan
Yeah, telecom products is more.
Mahendra Nahata
Again, you know the guidance this is more guidance. This is just based on my current orders and expectations of orders which we have. I would again say something like INR120 crore to INR1,500 crores. Sure thank you. That’s all from my side. I’m not giving any guidance,. Don’t take any of the number I have given as a guidance. These are my estimation based on my current order book and expect it off.
Lakshmi Narayanan
Sure, sir. Thank you. Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments.
Mahendra Nahata
Thank you,. I thank you all of you who have come and attended this call. And I can again assure you that though the last quarter of the last year was not the same as you desired, as it was a period where you know, fiber-optic cable demand was very low, same one of time, EPC operators and the customers decided to shift sized or remain quiet for some time and also macroeconomic situation around the globe.
This transition period, as I also said, should into the best of my estimation and in the current — during the current — after the current quarter. And in Q2, we should start picking-up revenue from defense equipment business significantly. And at the same point of time would also start getting revenue from new products like routers, you know, the new product, but still we have got an order of INR800 crores.
So with this increase in revenue from defense, fiber-optic cable major — major increase in fiber-optic cable, start out revenue from defense segment, then EPC revenue coming up, including from our Bharat program. And I also expect Bharat, whatever has happened till now is not an end. State-led model for seven or eight states is still to come up. Once that comes up, I believe the company should get reasonably good orders from that segment also.
Till now what orders we have got from is roughly about INR4,800 crores. But those — those are the 13 sectors and we expect more from these 13 centers, of course. But from upcoming tenders of different states, which have not yet come, again, we expect good size of orders to come to the company . So there would be real good rebound in FY ’26 and fiber-optic cable, as I said, should see 100% progress. And as also I mentioned for other areas also. So I look-forward with good optimism for financial year ’26. And this — you know, every sector company has this kind of a transitional period because of demand situations in the sector and the worldwide demand and quite dependent on exports, that kind of a situation, but it improves rapidly also, which has happened in our case because of machinery of data centers and renewed demand from telecom operators. So thank you very much. Look-forward an excellent ’26. Thank you very much. Thanks to all of you.
Operator
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. Thank you