Summary
APAR Industries Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026 2:00 PM
Event Participants
Executives 3 Chaitanya Desai (Managing Director), Kushal Desai (Chairman and Managing Director), Ramesh Iyer (Chief Financial Officer)
Analysts 6 Amit Anwani (PL Capital), Garvit Goyal (Serene Alpha), Mahesh Patil (ICICI Securities), Nikhil (Kizuna Wealth), Nikhil Abhyankar (UTI Mutual Fund), Sanjeev (Antique Stock Broking), Swastik Ghadge (Ekvity Wealth Management), Umesh Raut (Nomura), Vidit Trivedi (Asian Market Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹5,480 crores | +16.2% YoY; driven by 30% domestic growth, partially offset by 11.2% dip in exports due to U.S. tariffs. |
| EBITDA | ₹483 crores | +20.4% YoY; EBITDA margin at 8.8% vs 8.5% YoY, supported by favorable product mix. |
| Profit After Tax (PAT) | ₹209 crores | +19.4% YoY; margin at 3.8%. Includes ₹25 crore exceptional loss for gratuity provision under new labor code. |
| 9M FY26 Revenue | ₹16,299 crores | +22% YoY; all-time high for a 9-month period. |
| Conductor EBITDA/MT | ₹44,195 | +49.3% YoY; significant jump from ₹29,593 driven by premium products (44.2% of mix) and commodity tailwinds. |
| Conductor Volume | 56,794 MT | -5.9% YoY; impacted by ROW issues & delayed transformer deliveries due to bushing shortages. |
| Transformer Oil Volume | 1,32,000 KL | +10.6% YoY; overall oil volume grew 21% led by industrial and automotive lubricants. |
| Cable EBITDA Margin | 9.7% | +100 bps YoY; domestic cable revenue grew 34.6%, offsetting a 65% drop in U.S. revenues. |
Geographic & Segment Commentary
- Domestic Market: Achieved 30% YoY revenue growth in Q3 and 26.9% for 9M FY26. Performance was bolstered by historic renewable energy additions in India (38GW solar, 6.3GW wind) and increased demand from railways and data centers.
- United States: Revenues were significantly impacted by the expansion of Section 232 tariffs (54%) covering ~400 products. Cable exports to the U.S. dropped 65% in Q3, though new order inflows recovered to ₹500 crores during the quarter as the company adjusted pricing strategically.
- European Union: Currently contributes ~5% of revenue. Management expects positive impact from the recent India-EU trade deal, though specific benefits depend on final BTN classification and tariff reductions (currently 4%–7.5%).
Company-Specific & Strategic Commentary
- Premiumization Strategy: Conductor premium product mix reached 44.2% (vs 37.4% YoY). Management aims for this to exceed 50% as utilities shift from ACSR to AL-59 and HTLS conductors for re-conductoring.
- New Business - Kavach: Secured a ₹153 crore turnkey project from Indian Railways for safety/signaling systems. This marks a strategic entry into a projected ₹40,000–₹50,000 crore market for railway safety upgrades.
- U.S. Market Positioning: Despite 54% tariffs, APAR is maintaining U.S. market access by sacrificing margins on aluminum-based products to retain long-term approvals from data centers and utilities.
- Capacity Expansion: Progressing on a ₹1,400 crore capex plan with ₹500+ crores spent as of Q3. Full capacity for premium cables and conductors is expected to be online by mid-FY27.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth (Cables) | 20%+ CAGR | FY26 targets remain intact despite U.S. tariff headwinds; domestic strength to bridge gap. |
| Conductor Volume | Double-digit growth | Targeted for FY27 as transformer bushing shortages ease and renewable grid connections accelerate. |
| Cable EBITDA Margin | 9.5% – 10.0% | Management expects to maintain this range despite pricing pressure in the U.S. market. |
| Conductor EBITDA/MT | ₹30,000+ | Maintaining conservative long-term guidance despite current performance exceeding ₹42,000/MT. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical/Tariffs | Section 232 tariffs of 54% in the U.S. remain a significant hurdle for copper-based exports; requires strategic price discounting. |
| Supply Chain | A global shortage of transformer bushings has delayed substation completions, leading to deferred conductor and oil deliveries. |
| Commodity Volatility | While a pass-through model is used, sharp spikes in aluminum/copper prices lead some clients to delay project execution. |
Q&A Highlights
Conductor EBITDA Sustainability
- Question: What is driving the ₹44,000/MT EBITDA and is it sustainable? (Amit Anwani)
- Answer: Driven by premium mix increasing to 44% and shifts from ACSR to AL-59. Guidance remains at ₹30,000+ as tailwinds like commodity gains are unpredictable. (Ramesh Iyer)
U.S. Tariff Strategy
- Question: How are you handling the 54% tariff and the drop in U.S. revenue? (Amit Anwani/Kunal Sheth)
- Answer: The U.S. is strategic; APAR is lowering prices to keep order flow (₹500Cr new orders in Q3). Aluminum products are more resilient as 90% of U.S. aluminum is imported, while copper is more challenged. (Kushal Desai)
Bushing Shortages
- Question: What is the impact of transformer delays on conductors? (Umesh Raut)
- Answer: Shortage of bushings delayed transformer deliveries, stalling substation work. Govt is now allowing imports to alleviate this; situation expected to normalize in 6 months. (Kushal Desai)
Data Center Opportunity
- Question: What is the potential in data centers? (Nikhil Abhyankar/Nikhil)
- Answer: Supplying to major projects like Adani’s 1GW center in Navi Mumbai. While U.S. data centers use copper (tariff-heavy), domestic demand is strong across power and fiber cables. (Kushal Desai)
Key Takeaway
APAR Industries delivered a resilient Q3 FY26 with consolidated revenue growing 16.2% to ₹5,480 crores, supported by a 30% surge in domestic markets which offset severe tariff-led headwinds in the U.S. The Conductor segment achieved a record EBITDA of ₹44,195 per MT due to a superior premium product mix (44.2%), while the Cable segment maintained 10% 9M margins despite a 65% drop in U.S. sales. Strategically, the company is diversifying into railway safety (₹153Cr Kavach order) and expanding its ₹1,400 crore capex to capture rising demand from India’s renewable energy and data center sectors. While U.S. tariffs remain a margin constraint, management remains confident in achieving 20%+ revenue growth for the Cable business and expects volume recovery in Conductors as domestic supply chain bottlenecks (bushings) ease by early FY27.
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