Apar Industries Limited

Chaitanya Desai

MANAGING DIRECTOR, APAR INDUSTRIES LIMITED

Ramesh Iyer

CHIEF FINANCIAL OFFICER, APAR INDUSTRIES

rs,

I'd like to mention about is the conductor division, where we are making the conventional conductors, we are making the high temperature, low SAG or the high-performance conductors. We are making th

Rs. 12,000

preciation, tax and amortization. And that figure, we have been talking about is in the tune of Rs. 12,000 to Rs. 14,000 and is gradually increasing because what we have been trying to do is reduce our emp

Rs. 14,000

x and amortization. And that figure, we have been talking about is in the tune of Rs. 12,000 to Rs. 14,000 and is gradually increasing because what we have been trying to do is reduce our emphasis on the

Rs. 5,000

mers putting resistance due to an increase in oil prices. So, overall, to give a guidance about Rs. 5,000 to Rs. 6,000 per kiloliter for oil margins that we believe should be from a 12-month perspective

Rs. 6,000

g resistance due to an increase in oil prices. So, overall, to give a guidance about Rs. 5,000 to Rs. 6,000 per kiloliter for oil margins that we believe should be from a 12-month perspective. Of course,

50%

n the market. One is that it has a much higher current carrying capacity. It can actually carry 50% more current than the existing players. And secondly, the insulation is such that it's highly sho

150 crore

rstand that in the last con call, Kushal bhai has mentioned about that current run rate is around 150 crore, I mean for the FY '22, right? This year, you're targeting is close to Rs. 250 crore or around

Rs. 250 crore

n rate is around 150 crore, I mean for the FY '22, right? This year, you're targeting is close to Rs. 250 crore or around Rs. 300 crore and the next year, it's around Rs. 500 crore target for this product. A

Rs. 300 crore

, I mean for the FY '22, right? This year, you're targeting is close to Rs. 250 crore or around Rs. 300 crore and the next year, it's around Rs. 500 crore target for this product. Are you on track on that nu

Rs. 500 crore

you're targeting is close to Rs. 250 crore or around Rs. 300 crore and the next year, it's around Rs. 500 crore target for this product. Are you on track on that number? Ramesh Iyer: So, we are targeting a

11%

xt year. Okay. And in terms of the cable business, the highest margin at an EBITDA level, I think 11% margin we achieved in FY '19 and '20, and then there a dip in over the last 2 years because of

10%

is it like because we're investing significantly in a brand right now. It will be still around 10% to 11% kind of in the range? Ramesh Iyer: So, our aspiration is to get into this

“So, just an extension to that, should we see the normalized numbers will be higher than what they were historically, given the fact that share of premium products is going up?”

“So, overall, to give a guidance about Rs.”

“But on a 12-month period, we expect about Rs.”

“300 crore and the next year, it's around Rs.”

“It will be still around 10% to 11% kind of in the range?”

“We expect that this year, we will be close to about 8 to 8.5 percentage based on what we see coming for the year.”

“There were the years that we grew 30%, probably next year, it was down 20%.”

“This year, probably the guidance which you gave that in the previous con call was around between 1.3 to 1.4 lakh.”

“So, definitely, we see a sustained demand going forward.”

“Hopefully, there should not be any such pandemic going forward or any such disruption.”

Ramesh Iyer

17

Participant

16

Mihir Manohar

8

Siddharth

5

Chaitanya Desai

4

Manoj Bahety

4

Moderator

1

Hitesh Joshi

1

Levin

1

Chaitanya Desai

Thank you. I'd like to first thank all the participants for joining. And if I may start with a quick overview of the company products. First division I'd like to mention about is the conductor division, where we are making the conventional conductors, we are making the high temperature, low SAG or the high-performance conductors. We are making the optical fiber ground wire, and then copper railway conductors and the conductors used in the transformers called the CTC and some of these products we are taking on our turnkey solution basis. Over the years, we have been concentrating on more value-added products and made significant investments in this division. We also have a factory next to the Hindalco for the molten aluminum supply. And over the years, we have also moved into the Services segment, particularly for the high-performance conductors and the OPGW. In the last 2 years, there has been the railway electrification work. So, we have entered into the copper railway business. And n

Participant

Yes. Thanks, Chaitanya. If anyone have any questions, we can go ahead. Please raise your hand for the questions. Yes, Mihir, you can go ahead.

Mihir Manohar

Thanks for giving the opportunity and thanks for the presentation, sir. Sir, I largely wanted to understand on the profitability side, I mean, how is the profitability different in the high-value segment in the conductors versus the normal products that you are having? And also a related question to that was, I mean, how to understand the profitability, the EBITDA per metric ton for the conductors and in the oil and lubricant division from here on? I mean, how does the pricing mechanism work? Or what kind of number should we have confidence on? Is it more related to commodity prices and something like that, sir? So, largely in that context. Chaitanya Desai: Yes. So, in the conductor business, almost all the business is going on the basis of the London Metal Exchange pricing. And then on top of that, we are charging the premium or the conversion cost plus profit. So, that is the model which we use for our various pricing. Of course, in a lot of the businesses, we just have to declare a

Ramesh Iyer

Correct. So the EBDTA metrics, we are planning to start from Q2 onwards as we feel that interest for our type of business is like any other factors of production. And the way we look at raw materials and labor costs and power costs in the same way we look at interest cost, therefore, we try start to look at the EBTDA as a measure, hopefully from Q2 onwards. So, coming back to your question, it's difficult to get to an exact differential between the conventional and the premium conductors because we are into order business, and these are all design specific orders that we get from customers. So, it's not a fixed thumb rule that you can apply for arriving at a difference between the conventional and the premium conductors. Also, what is happening is that over a period of time, our export in conventional conductors is also increasing. So, that also gives us a better margin than the domestic conventional businesses. So, there's a combination of many factors that gets into the EBTDA. And a

Mihir Manohar

So, just an extension to that, should we see the normalized numbers will be higher than what they were historically, given the fact that share of premium products is going up?

Ramesh Iyer

Yes. As you see this trend going up, you will see the margins going up. At some point of time, once the trend stabilizes, then the margin also will get into a more stability mode. Chaitanya Desai: We are in a state of flux in that sense because we have invested a lot in various products, new products. And while there are some parts of the factory which is fungible, so our concentration is how to load our plant with more value-added products and reduce out the proportion of the less valuable product. So, accordingly, the rupees per ton figures will increase, but the overall absolute term figures also should increase. And our concentration is not so much in terms of the volume as much as the profit margin part.