| Q3 FY26 Earnings Conference Call
Summary : APAR Industries reported strong Q3 FY26 results driven by robust domestic growth and a favorable product mix, despite U.S. tariff headwinds, with management optimistic about future demand and strategic investments.
Management Perspective positive : "We continue to remain optimistic in terms of delivering whatever guidance that we had for this year.""APAR is clearly the leader in carrying current in all different – between conductors, cables, transformer oil, et cetera.""We are generally positive that the demand in India will continue to be good.""Our expectation is that it would generally be favourable for both our Cable and Conductor business.""The top line as well as the bottom line are both all-time highs for a 9-month period."
Concall Report Analysis & Insights
Business Overview
- Consolidated revenue grew 16.2% year-on-year to INR5,480 crores in Q3 FY26.
- Domestic revenues increased by 30% in Q3 FY26, and 26.9% for the 9-month period.
- Exports declined 11.2% in Q3, contributing 25.6% to overall revenue due to U.S. tariffs.
- EBITDA rose 20.4% year-on-year to INR483 crores, with an 8.8% margin.
- Profit after tax increased 19.4% to INR209 crores, achieving a 3.8% margin.
Future Growth Prospects
- India achieved its highest annual renewable energy capacity addition in 2025.
- Conductor division expects double-digit volume growth in FY27 due to resolving legacy issues.
- Secured INR153 crores Kavach project for railway safety and signaling, an initial foray.
- Capex plan of INR1,400 crores is on track, with facilities operational by mid-FY27.
- EU trade deal is expected to be generally favorable for Cable and Conductor businesses.
Management Insights
- Domestic business performance was resilient, helping offset deficits from exports.
- Favorable product mix across all verticals contributed to higher EBITDA margins.
- Strategic decision to maintain U.S. market access despite slightly lower margins.
- Business model is pass-through for commodity price fluctuations, minimizing risk.
- Bullish on India's demand, investing in capex 1-2 years ahead of projected sales.
Signs of Skepticism
- Management maintains previous EBITDA guidance despite ongoing U.S. tariff challenges and commodity volatility.
- Uncertainty regarding the exact impact and benefits of the new EU trade deal's fine print.
- Reliance on customers eventually taking deliveries despite commodity price-induced delays.
Risk Factors
- U.S. Section 232 tariffs negatively impacted export business, especially copper-based products.
- Commodity price volatility may cause project delays by customers postponing deliveries.
- Transformer deliveries are delayed due to a lack of bushing supply.
- Transmission line work is stalled by right-of-way issues.
- Increased Chinese competition is impacting non-U.S. export geographies.
Good To Know
- Recognized INR25 crores exceptional loss due to new labor code gratuity provision.
- India's total installed renewable energy capacity reached 258 gigawatts by December 2025.
- Power sector achieved a historic milestone with 242 gigawatts maximum demand in 2025.
- 60,260 megawatts of new substation capacity added, 75% of planned additions.
- Mr. Chandrashekhar Shrotri joined as the new CEO for the Cable business in December.
Key Drivers
- Strong domestic demand growth.
- Renewable energy expansion.
- Railway infrastructure projects.
- Favorable EU trade deal.
Key Analyst Discussions
Competitive Environment
- Impact of U.S. tariffs on conductor and cable exports.
- Customer conversations regarding commodity volatility and tariffs in the U.S.
- Details on the recent India-EU FTA and its potential impact on tariffs.
- Chinese competition in non-U.S. export markets.
Market Trends & Consumer Behavior
- Demand drivers for domestic cables (renewable, railways, data centers, defense).
- Impact of renewable energy PPAs and silver prices on new projects.
- Growth trends in specific cable types (high voltage vs. low voltage).
- Demand mix from various sectors for cables.
Financial Highlights
- Clarification on strong EBITDA per ton despite U.S. challenges.
- Volume growth expectations for conductors in Q4 and the medium term.
- Cable business top-line growth CAGR and EBITDA margin trajectory.
- Impact of U.S. orders on the Q3 cable division order book dip.
Product Composition
- Premium product mix contribution to conductor EBITDA per ton.
- Potential for conductor premiumization to cross 50% of revenues.
- Categorization of AL-59 conductors as premium or conventional.
- Key growth drivers in cable business sub-segments.
Strategic Considerations
- Scope and opportunity of the new Kavach railway project.
- Status and timeline of the INR1,400 crores capex plan.
- Plans for setting up manufacturing in the U.S.
- Impact of Microsoft global approval for data center cables on U.S. market.