Paramount Communications Ltd (PARACABLES) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Paramount Communications Limited Q2 and H1 FY '27 earnings conference call. As a reminder, all participants' 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 signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Vanessa Fernandez from Investor Relations team at Adfactors PR. Thank you, and over to you, ma'am.
Vanessa Fernandez (Adfactors PR): Thank you, Ikra. Good evening, everyone. On behalf of Paramount Communications Limited, I would like to welcome you all to the earnings conference call for Quarter 2 and H1 FY 2027. Today on the call, we have with us from the management, Mr. Sanjay Aggarwal, Chairman and CEO; Mr. Parth Aggarwal, President, Marketing; Mr. Shambhu Aggarwal, Chief Financial Officer; and Mr. Narendra K. Gupta, President, Accounts and Finance. We will begin the call with brief opening remarks from the management, followed by a Q&A session. Please note that certain statements made during this call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or projections to differ materially from those statements. Paramount Communications will hold no responsibility for any actions taken based on such statements and undertakes no obligation to publicly update these forward-looking statements. I will now hand over the call to Mr. Sanjay Aggarwal for his opening remarks. Over to you, sir.
Sanjay Aggarwal (Paramount Communications Ltd): Good afternoon, ladies and gentlemen. A very warm welcome to you all to Paramount Communications' earnings conference call for the second quarter and half year ended 30th September 2026. Thank you for joining us today and for your continued interest in Paramount. Our results, earning press release, and investor presentation have already been uploaded to the stock exchanges and to our company website. And I trust that you have had the opportunity to go through them. When we last spoke in August, I had said that we had started FY '27 on a strong note, and the two engines of our business, domestic and exports, were both
Sanjay Aggarwal (Paramount Communications Ltd): for us at the same time. I'm happy to report that the second quarter has carried that momentum forward. Let me begin, as I usually do, with a brief word on the environment we operate in because I think that is what sets the context for the quarter very well. The wires and cable industry continue to navigate two familiar challenges this quarter. Metal price volatility and a global trade environment that is still settling down. On metals, copper prices touched record highs during the quarter and moved quite sharply from week to week with the tariff decisions in the US and supply disruptions at some stage of the large mines adding to the volatility. For a company like ours, that is exactly why we follow the discipline which we have spoken about many times. The day we receive a firm price order, the next working day, we book the metal and mostly, we do not accept firm price orders beyond 3 to 4 months delivery. That discipline has served us well throughout this period. It is pertinent to note, however, that the major metal consumed by us is aluminum, which is more than 75% of the metal value consumption for the quarter. Aluminum has shown some price softening during this quarter. What has remained constant, however, is the underlying demand for our product range. Transmission and distribution investments, renewable capacity addition, railways and metro electrification, and the build-out of large data centers all remain supportive throughout the quarter. These are not one quarter trends. These are multiyear programs and we are seeing them reflected directly in our inquiries in our order flow. On the export side, the picture in the US has become clearer and importantly, more predictable. As you know, the IEEPA tariff was struck down by the US Supreme Court in February. Today, Indian cables are at par with the competing exporting countries in Asia and Europe. One expects that the tariff framework in the US now rests on a more stable footing than sudden changes that we lived through last year. Our customers and distributors are regaining confidence and so are we. Now, Parth Agarwal will take you through the business developments first and then I will come back to the numbers. Over to you Parth.
Parth Aggarwal (Paramount Communications Ltd): Thank you, Sanjayji, and a very good afternoon to all of you. Our domestic business continued to build on the momentum of the first quarter, led once again by power cables and our B2B institutional customers. The structural the structural drivers we have consistently spoken about, grid strengthening and transmission investment, renewables, railways and metro, construction and infrastructure all remained active throughout the quarter. Our Dharuhera and Khushkhera plants continue to operate at optimal utilization, which underlines why NMR is so central sorry, why Narmadapuram is so central to our next phase of growth. On the export side, the normalization of our US business that we spoke about last quarter has continued to progress. With India now at par countries, our competitive position has been restored. And our distributors are planning with more confidence. We continue to view the US as our single largest and most important export market given the scale of grid upgradation and data center investment being planned there. At the same time, we have stayed disciplined as we said we would. We are not chasing volume at the cost of margin and most of our customers now carry tariff changes to their account. Alongside the US, our customer engagement and approval work in the Middle East, Europe and Africa is progressing, where we see medium term demand building from data center buildouts and grid grid upgrade programs. Our approach remains the same, to have approvals and customer relationships in place so that when demand in these markets turns, Paramount is a natural participant. This quarter, I would like to spend a few a few minutes on two areas that we believe are increasingly important for us. The first is HTLS, that is high temperature low sag conductors. Very simply, an HTLS conductor can carry significantly more current than a conventional conductor at higher temperatures and with less sag. This means a utility can increase the capacity of an existing transmission line on its existing towers without having to acquire a new corridor. In a country where right of way is one of the biggest constraints in building transmission lines,
Parth Aggarwal (Paramount Communications Ltd): a very powerful proposition. The opportunity is large and visible. The National Electricity Electricity Plan projects an investment of around 5 lakh crores in the transmission for EHV and about and between 2027 and 2032. Sorry, I'll read that again. The National Electricity Plan projects an investment of around 5 lakh crores in the EHV transmission lines between 2027 and 2032. As per our internal assessment of the tenders announced by multiple utilities, state governments, and central government authorities, the management projects a market size for reconductoring projects of HTLS to be approximately 50,000 crores in the next 5 years. Paramount is well-positioned here. We are the first company in India to provide an indigenously designed, developed, and manufactured product that is that is authentically Indian from core to surface. We offer both carbon core and gap-type HTLS conductors, which allow us to address the full range of the tender specs, and we have the capability to manufacture conductors up to 765 kV. Most importantly, this is not future story. We have already secured an HTLS order book of 200 crore plus as on date, and the capacity augmentation for specialized conductors is planned at our new plant at Narmadapuram. The second area is data centers. India's data center capacity is expandingly expanding rapidly, and we are seeing strong demand for our power and specialized cables in these projects. We have established approvals with leading data center developers, and the customers where we are approved rep- represent a substantial share of the hyperscale and colocation capex being planned in the country. Approvals with other leading developers are also progressing well. Overall, we remain convinced that this is a multi-year expansion phase for the Indian wires and cables industry, and that organized qualified players with a diversified portfolio and estab- -ation ships will capture a disproportionate share of it. With that, I hand back to Sanjeev for our financial performance. Thank you.
Sanjay Aggarwal (Paramount Communications Ltd): Yes. Thank you, Parth. Let me now take you through the numbers for Q2 and H1 FY27. For Q2 FY27, the revenue from operations for the quarter stood at ₹560.4 crores, a growth of 31.1% year-on-year and 5.9% quarter-on-quarter. EBITDA, including other income, was ₹44.7 crores with an EBITDA margin of 7.9%. As I said last quarter, the metric that best reflects the underlying business is our operating profit. Operating profit for the quarter was ₹40.9 crores with an operating margin of 7.3% as against 6.6% in Q1 FY27 and 1.3% in Q2 FY26. PAT for the year for the quarter stood at ₹24.2 crores with a PAT margin of 4.3%, and earnings per share was ₹0.74 for the quarter. As regards H1 FY27, for the first half, the revenue from the operations was ₹1089.8 crores, up 24.1% year-on-year. EBITDA, including other income, was ₹82.5 crores and operating profit was ₹75.6 crores with an operating margin of 6.9%. PAT was ₹43.9 crores. On our I had said that our first milestone is to get back to the FY25 level of margins by the last quarter of this financial year after having suffered the shock of sudden shock of US tariffs last year. With the first half behind us, I can say that we remain firmly on track towards that milestone. Exports and domestic when we look at the breakup, on the export side, for the quarter the export for the quarter stood at ₹158.1 crores, contributing 28.2% of the revenue, and ₹313.1 crores for the half year. The decision we took last year to hold on to our US distributor relationships, even through the worst ha- even of the worst of tariff disruption, continues to pay off. We we expect US
Sanjay Aggarwal (Paramount Communications Ltd): to contribute 25 to 30% of our revenues for the full year full FY '27. And we will continue to grow US revenues in a measured way rather than pressing the accelerator too hard. Domestic revenues for the quarter was ₹402.3 crores, contributing 71.8% of revenue, led by power cables at 55.9% of that revenue. Within domestic, our B2B institutional business was ₹296.7 crores, B2C retail and distribution was ₹53.7 crores, and B2G government and PSUs was ₹51.9 crores. Coming to order book. Our order book as of 30th September '26 stood at ₹731 crores, comprising ₹632 crores of domestic orders and ₹99 crores of export orders. Power cable and specialized conductors orders stood at ₹575 crore. As I have explained before, you will rarely see a very large order book on Paramount's books. That is by design. We do not accept firm-price orders with long delivery periods beyond 3 to 4 months, because that is how we protect ourselves from metal volatility. Coming to work working capital and balance sheet figures, our net working capital stood at 108 days versus 101 days at the end of FY '26. This reflects basically the accelerated supplier payments post our equity raise. Our inventory and receivables discipline is intact. We expect to normalize in H2 within 90 to 100 days for FY '27. Our net worth stood at ₹920 crores as of 30th September '26, and our debt equity ratio remains comfortable at 0.14x. The equity that we raised in the first quarter continues to give us a healthy liquidity buffer for both growth and the Narmadapuram project. Now on the Narmadapuram project. Let me give you an update on this project, our greenfield project coming up in Madhya Pradesh, which will be our third manufacturing facility. I'm happy to report that the project is progressing as per plan. Foundation and civil works are well underway and moving in line with our planned schedule. As I had mentioned last time, we placed orders for the critical machinery well in advance, precisely because delivery lead times in our industry are long right now. Apart from the critical positions that have already been filled, hiring for operational and plant level roles has also begun with a phased ramp-up aligned to the commissioning time lines. We continue to expect partial commissioning in Q1 FY '28 as previously guided. Our expectations from the plant remain unchanged, revenue of approximately ₹500 crores in FY '28, scaling up to ₹1,200 crores in FY '29 as the plant ramps up. Narmadapuram is what allows us to to move up the value chain with EHV cables up to 220 kV, specialized conductors including HTLS and E-beam cables. These are exactly the products where we see the strongest demand from transmission and grid modernization cycle that Parth spoke about. Outlook. To sum up, ladies and gentlemen, the first half of FY '27 has been about consolidating the recovery that we began to see in the first quarter. The domestic business continues to grow, US business is steadily normalizing, and we are building our position in newer, higher value segments like HTLS and data centers while Narmadapuram progresses on schedule. We remain firmly focused on our 5-year vision of reaching revenues of ₹5,000 crores by FY '31 through capacity expansion at Narmadapuram, deeper domestic penetration and broader export presence. I believe the first half of this year is clear evidence that we are moving in the right direction. With with this now, ladies and gentlemen, I open the floor for questions. Thank you so much.
Moderator: Thank you very much. We will now begin with a question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone 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'll wait for a moment while the question queue assembles.
Moderator: The first question is from the line of Parth Mandavgane from ID IDBI Capital. Please go ahead.
Parth Mandavgane (IDBI Capital): Hi team. So, my question was on our utilization. So, I think our plants are operating at near full utilization. So, what will be the most effective opportunities to improve our throughput and our utilization before you know, the new facility, which is our the scale that we need.
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