R
R R Kabel Ltd
NSE:RRKABEL
R R Kabel Ltd
NSE:RRKABEL
Price:
1 626.6
INR
1.09%
Market Closed
Market Cap:
₹184B
Add Note
Add Target
Capture your thoughts and set a target
Decide at what price you'd be comfortable buying and we'll help you stay ready.
Based on
Margin of Safety
0%
10%
20%
30%
40%
50%
Your Price Target
Linked to
current price
· In Buy Zone
Loading
Note attached
Choose the stock you wish to monitor with a price target
Popular Picks
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
Bank of America Corp
NYSE:BAC
|
US |
|
Mastercard Inc
NYSE:MA
|
US |
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
Pfizer Inc
NYSE:PFE
|
US |
|
Nike Inc
NYSE:NKE
|
US |
|
Visa Inc
NYSE:V
|
US |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
Coca-Cola Co
NYSE:KO
|
US |
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
Chevron Corp
NYSE:CVX
|
US |
|
Walt Disney Co
NYSE:DIS
|
US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
Earnings Call Transcript
Transcript
Other Earnings Calls
Ladies and gentlemen, good day, and welcome to the Q3 FY '25 Earnings Conference Call of R R Kabel Limited.
[Operator Instructions]
I now hand the conference over to Mr. [indiscernible] from Orin Capital Investor Relations. Thank you, and over to you.
Thank you, Steve. Good afternoon, everyone. On behalf of R R Kabel Limited, I extend a very warm welcome to all participants on Q3 FY '25 earnings conference cost call of R R Kabel Limited. Today on this call, Mr. Shreegopal Kabra, Managing Director; and Mr. Rajesh Jain, Chief Financial Officer.
Before we begin this call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements, which are completely based upon our belief, opinions and expectations as of today. These statements are not guarantees for our future performance. and involve unforeseen risks and uncertainties.
With this, I hand over the call to Shreegopal Kabra. Over to you, sir. Thank you.
Good afternoon. On behalf of R R Kabel Limited, I extend a warm welcome to all participant on our Q3 FY '25 conference call. I am joined today by our CFO; Mr. Rajesh Jain. Despite maybe getting through a challenging macro environment, economic development, elicited by slowdown in the economic, political transition and volatile commodity fares we are pleased to announce our highest ever revenue for the 9-month period FY '25. This achievement is a testament to the strength of our business model and global ability to adapt to dynamic market concerns. Our paper and wire segment demonstrated more debt volume growth of -- on a 9-month FY '25 basis, supported by city demand and members, especially in cable business. Additionally, our FMEG segment pursued its impressive trajectory, delivering a robust revenue growth of approximately 25% during this period. This growth was driven by strong volume performance and improve products and leadership in key categories, such as hence reinforcing our potion as 1 of the fastest-growing players in this space. We remain committed to achieving breakeven in FMEG business by turning FY '26. Despite later in the external environment, the demand for cables and wire remains regent to kept on this demand. We continue to undertake several strategic initiatives, including capacity expansion, the production of high margin products, new launches and the ongoing expenses of our distribution network. These initiatives are progressing at an aligned our long-term stability to announce growth and profitability.
Looking ahead, we are focused on achieving double-digit EBITDA margins in the coming years. Our efforts and center on strengthening our operational efficiencies enhancing our product portfolio and delivering sustainable value to all stakeholders.
With that, I would like to hand over the call to our CFO, Mr. Rajesh Jain, to take this discussion forward. Rajesh, over to you.
Good afternoon, everyone. Thank you for joining us on this earnings call. As you reflect on Q3 FY '25, I would like to share some insights into the factors influencing our performance and our outlook for the remaining of the fiscal year. India's GDP growth moderated in Q2 FY '25 compared to Q1. And this big reaction had varying impact across sectors. Moreover, the sector faced added pressure from copper price volatility, a key determinant of material costs.
On the export front, the environment remained challenging during 9 months FY '25, weak economic conditions, shipment delays and logistical disruption accepted by geopolitical sectors like the red sea prices adversely affected export demand during the period. Despite this, the export revenue saw an increase of 11% Y-o-Y. Additionally, we have been actively working on securing new certifications to stand on our position in global markets and ensure readiness for future opportunities. Domestically, despite a slowdown in the economy, we have seen 6% growth Y-o-Y in Q3.
Looking ahead, we anticipate a significant boost in infrastructure and housing activity driven by higher government spending positioning us for a robust recovery in coming quarters.
Now talking on the financial and operating highlights of Q3 FY '25. In Q3 FY '25, revenue reached to INR 1,782 crores, reflecting a 9.1% year-on-year growth. This performance was supported by growth in both wires and cables and Media segment. On a 9-month FY '25 basis, revenue grew by 12%, achieving our highest ever revenue of INR 5,400 crores compared to the same period last year. Operating EBITDA for the quarter stood at INR 111 crores, while profit after tax amounted to INR 68.6 crores. The marginal reduction in EBITDA and paid was slimy due to impact of volatile price commodity prices in the first half of FY '25. However, this was a temporary phenomena, and sequential growth in margins indicated of a stabilizing trend. Segment price performance in the Wire & Cable business recorded a revenue of INR 1,543 crores in Q3 FY '25, up from INR 1,433 crores in Q3 FY '24, making a Y-o-Y growth of approximately 8%. On the 9-month FY '25 basis, the segment achieved a revenue of INR 4,732 crores, a growth of approx 10% compared to INR 436 crores in 9 month FY '24. The venue growth was driven by improved realization along with the strong growth in capital business. The segment profit stood at 7%, although the same is lower Y-o-Y due to volatile metal prices, margins improved sequentially, reflecting our focus on cost management and operational efficiency.
In the export market, which contributed around 27% of our total revenue in Q3 FY '25, resales were evident despite some headwinds, efforts to enhance our global presence have positioned us well to capitalize on future opportunities. Domestically, strong demand, especially in cable and ongoing strategic initiatives continue to support growth, and we remain confident in achieving sustained progress as we move forward.
Guidance, if you see about wire & cable, given the high volatility in copper prices during the first half of FY '25 and the subsequent softening observed in recent months we are casually getting back on track. The improved visibility in commodity prices have provided some relief and we are optimistic about future margin improvements. We continue to anticipate a volume growth of approach 15% in the last quarter, which should help us to achieve an overall volume growth in the range of 10% to 12% for FY '25. In Q3, FY '25, our segment fit in the wire and cable saw sequential improvement, and we remain confident in achieving the margin in the range of approx 8% in the last quarter. For the 9 month FY '25 period, our margin stood at approximately 6.4% in reflecting the challenges earlier in the year.
On the export front, looking to improvement in business scenario, we expect that our export growth will be on normal track back with additional fertigation. Further, with several changes in the product mix and additional capacity building, we are confident of growth and margin improvement. In the SME business segment, we achieved a robust revenue of approx to INR 240 crores in Q3 FY '25, continuing to deliver consistent growth in the range of 20% to 25% on a quarterly basis. For the 9 months FY '25 period, we recorded revenue growth of approximate 25% compared to 9 months FY '24. This impressive performance was primarily driven by strong volume growth in fence, which remained the largest contributor of our segment revenue followed by growth in advances and features.
On segment margin, saw a remarkable improvement depicting reduction in losses significantly, both year-on-year and sequentially, supported by operational cost saving and a slight increase in contribution from an optimized product mix and volume growth. These companies have solidified our standing as a key growth leader in the SME segment, and we remain dedicated to maintaining this momentum in the future. Additionally, we have successfully maintained our working capital days broadly in the range of 60 to 65 days as of December 31, 2024, further underscoring our commitment to sound financial management and operational efficiency. The current CapEx cycle continues to remain on track. Further, the company plans to incur approx INR 1,200 crores CapEx over the period of next 3 years, this will help the company to boost its top line by another INR 4,000 to 4,500 crores annually.
Beyond CapEx, our strategic priorities continue to progress well in Q3 of FY '25. Additionally, we are on track to increase our revenue contribution from the cable segment from 30% to 35%. This initiative positions us for sustained growth and enhanced market presence in the coming quarters. Our SME segment is progressing well with continuous initiatives, including new product launches, [indiscernible] and expanding geographical reach. These measures are designed to bring us closer to breakeven in the near future. While we are navigating through some short-term challenges, we remain confident that this strategic excellence will foster long-term growth and profitability.
With this overview, I would now like to open the floor for question. Thank you for your attention and continued support.
[Operator Instructions] The first question is from the line of Praveen Sahay from PL Capital.
The first question is related to the guidance you had given 15% of our volume growth for Q4 and so as for a year 10 to 12. So how is the volume growth in the 9 months? Is it in the single digit? So 10% to 12% for the entire year is achievable with a 15% growth in the fourth quarter?
Yes. So if you see on a 9-month basis, our volume growth is around 6%. So an achieved this volume growth of 15% in Q4 in that range.
Okay. And in this related to that 15% of volume growth, are you seeing any kind of a traction, especially in your majority segments, which is a wire.
Yes. So off let at the end of Q3 and even at the beginning of Q4, we have seen good demand in wire. So here in Q3, like general was also not taking so much stock, so was very light air time. And now inventories will up and we are getting good demand in Q4 also. So we see other than cable where already we have very good demand that even why our segment will also see good growth in Q4.
Okay. And can you give the CapEx number for 9 months and the 25 and 26 expected?
And so if you see overall CapEx plan, which was planned until FY '25, which was INR 500 crores spread in the last 2 years. So it is on track, like some of the capacity were added in Q3 also, especially in power cable. And now also the majority of the CapEx will be get completed by March 25 and few like capacity will be added out of this CapEx by September 20 also.
So our contribution of cable has increased because of this capacity expansion?
Meaning that only part of this year on is get capacity was available for partly in this year only. But if you see on a quarterly basis, of course, our contribution from cable is increasing and as you have already seen that our cable growth is like almost 20%.
20% for this quarter or 9-month, how is that?
On 9-month basis, our like volume growth is almost 20% in cable.
Okay. And on the export, as you had a maintenance shipment delay and rate crisis all led to the impact in the export, how you are seeing in the export business right now? Is that it started picking up and these prices as somewhere subside?
Yes. So already now, like prices have come down is also and 1 from demand point of view, like now at the end of Q3, we have seen good demand in experts. So now it top take sequentially in Q4 and onwards. How in the Q3 for export since our major part exports go to Europe and normally due to the summer less in Europe. So there was less shipment. And traditionally, also, it is always less shipment in the November -- October and November. So now exports has picked up in the month of December onwards.
The next question is from the line of Rahul Agarwal from Ikigai Asset Management.
Congratulations for recovery in margins. Sir, 1 question was I just wanted to hear your thoughts on what's really happening on wire, both in India ports. So you explained a bit in the earlier question, but just wanted to be more specific, what should we expect in terms of revenue run rate for exports and in India for wires over the next 3 to 6 months? Could you just help us understand that, please?
Thanks, Rahul. So you have seen that though there were challenges institution all different, but our growth in terms of revenue and volume were almost similar in both the markets, export and domestic age. Now going forward, is expanding now like our channel is also picking up the demand and looking to the positive mountain corporate also, we have seen good growth test the end of Q3 and at the beginning of Q4 as well. So it since now like whatever there was degrowth in the first half of the year or even in export also due to the [indiscernible]. Now it will be on the trade, and we will work like planning we have made about 15% volume growth is achievable by focusing our highing growth from what that segment, the domestic or export.
And exports specifically, could you help us understand more as apart from where of what are we doing? What should be the quarterly [indiscernible]?
So in exports, the good part is that we have gained some of very good orders in the Cable segment and in the future also like our focus is more on exports of cable that we have competitively higher margins. And whatever like developments we have made in this first 9 months or so and now also we are in the process of getting few [indiscernible] from Europe as well as U.S. also, which will give this additional growth.
The next question is from the line of Achal Lohade from Nuvama Institutional Equities.
Sir, if you could just give specific a sense about the volume growth for the 9 months in terms of domestic cable growth and domestic is growth, please?
Volume growth. Sure. So our -- like on 9 months versus 9 months, our total growth is around 5%, where cable is 20% and wire is negative in [indiscernible]. But when we see in terms of export and domestic, then like wire in domestic and export, both were impacted by almost negative 9%, while cable growth grown in domestic, it is 18% and an export [indiscernible].
Sorry, in wire, the export is minus 9%. Is that, sir, Y-o-Y for volume?
Yes.
Okay. And domestic, how much did you say, sir? I didn't follow that.
Minus 1.9%.
Minus 19%. Yes, yes. And domestic also a similar number, domestic would be more.
It is almost 10%.
Minus 10%. Is that sir? Okay. So is that the industry trend according to you? Or is there any specific reason for us to have a lower domestic wires volume growth?
No. So as I explained earlier, in domestic, of course, when we are comparing on 9-month post months, the major impact was in the first half of this year on day.
Right. No, fair point. So you think basically, the industry would be flattish, would have also seen a decline or [indiscernible] in some growth? I'm just trying to figure that out in your estimate?
Sorry, can you come back again?
For the industry, for the wires industry, the volumes will be flat. We would have seen some growth or would have seen also a decline for 9 months?
For 9 months, like it seems the industry is also pressure in the wire growth and cable was being good, though we do not have expect from PS also publicly if figures are not available, but still what we understand based on our important channel rates, that it seems key wire was like almost having less growth in compared to [indiscernible].
Understood. As I understand in terms of the cables capacity, where are we in terms of addition, you said there will be some practices which will come by March and some will come by September. So what is the potential revenue of cables out of these 2 and existing capacities put together?
So what happened like this CapEx, what we have done like have potential to have a further growth of around INR 2,500 crores. But since like sequential growth will be there. So -- this will -- this CapEx will help us to meet the additional growth demand of FY '26 and '27.
Understood. And the next round of CapEx was bit confused, you said INR 1,200 crores over the next 3 years. Is that so?
Yes.
Which these 3 years sir, it is '26, '27, '28 or '25 '26, '27?
'26, '27, 28, because what CapEx already we have done, it will get completed by March what CapEx I'm noting 1,200 is for next 3 years it's starting from up '25 annual.
Understood. And can you be a little bit more specific on this INR 1,200 crores, where is it going to spend in terms of location and in terms of which category?
So this will be like fill project in the existing facility at Vagadia, which is near [indiscernible], and majority of this export will be in at only because still our share in cable is very less and we have a high potential growth area also. So -- and it will be like balanced with while growth in wire as well to have a sequential growth over year-on-year. So majority of the CapEx will be focused on cable only.
So is it fair to say like 70%, 80% of this...
Almost 80% will go in the [indiscernible].
So almost INR 1,000 crores, and that would give what incremental INR 5,000 crores of revenue?
No, no. On consolidated investors, it will be in the range of INR 4,000 crores to INR 4,500 crores because majority of the table we as per tumble, you can expect a tier cycle of 3 to 3.5 3 to 5.
Understood.
Just I would like to clarify on volumes because I mentioned the figures on a Y-o-Y basis. So like if -- just to clarify the volume growth, on 9 months versus 9-month basis, my domestic wire was almost flat, while cable grew by 21%. And export wire was like negative by 5.6%, while cable was 1.5%.
Understood. Sir, last question, if I may, with respect to the exports. Can you help us understand in terms of particularly to U.S., how large is for us U.S. market out of the total export. And in terms of the SKUs, whatever U.S. imports do we have all the capability, certifications, or what percentage of their imports we are entitled for our eligible for?
So as of now, almost 10% of my revenue is coming from U.S. And in this quarter, like we have in the process almost we have received the certification of 1 and 2 product. But to get the testing line, I think by next quarter, we will start another new products in U.S. market. So there -- in this quarter, we may have not seen increased growth in U.S. exports, but from next year onwards, you can see good improvement in our exports.
Understood. Just to drill on this. Who do we compete here, which country? And what advantage or disadvantage we are against the other exporters in terms of percentage of the value.
No. So every market has different competition like in Europe, we have competition from Turkey, while in the U.S., still China is the largest supplier of cable to of the tax and import duties are not favorable to them also. But right now, it seems the India, we still have a lot of export potential and we are a very small contributor in overall exports at the international level. So we have good scope to improve, particularly in U.S. and Europe.
Got it. And just to clarify, 10% of export revenue is from U.S. or 10% of total revenues to U.S.?
Total export only.
Okay. Europe is the largest. Got it.
Europe is like more than 50%.
The next question is from the line of Natasha Jain from PhillipCapital.
So my first question is on the export mix. So out of the 20% -- 27% of your exports, how much is wires and how much is cables currently?
It's like a 70-30 ratio of 27%. So what happens like at the overall basis also, our in cable ratio is now which is moving towards like improvement in cable, which is by 1% or 2% every quarter. And in export also, we are almost maintaining the same ratio.
And the -- so when you say 1% or 2% every quarter next year -- next financial year when your cable capacity has come up, can we expect this shift to move to at least 60-40 in terms of exports?
Maybe 35 or 65.
All right. So your 35% of your cable exports.
Yes. And similar, we are expecting domestic together. So I'm saying even at company level, we try to improve our cable sales ratio and it may now by next year, and it may in the range of 65, 55.
Got it. Sir, and a question on wires again. So wires, what I sit least at an Indian industry level, there is overcapacity for wires. Now I want to understand, is this market a very brand-conscious market because otherwise, scaling up of capacity is very easy for wire. So having said that, do you see any near-term risk for wires as a product category?
So good part about Indian wire market that this is like now it is directly B2C category product where we would care about brand quality and it is like B2C category. And like day by day, the original organized sector is getting more market share. Of course, our competition will always be there, and that it is more about how you beyond how you generate or get full factor in market. So it is all about marketing effort as well as focus on our quality. And when we see like off-net, we have seen that after the GST or demonetization, we have seen that they wake organize shares increasing. So it's about the exams for all top tiers, they hope they achieve or how they improve their market share.
Got it, sir. Sir, you mentioned in your opening comments about the governmental CapEx slowdown, which is obviously there. So I want to understand, can that pose a near-term risk for us or in fact for the industry because a lot of cables capacity will come live in calendar '25. So any slowdown in governmental CapEx and then a slowdown in power distribution, then a slowdown in cables. Do you see that as a risk in, say, the next 1 year time frame?
What I consider that decrease in government spending waste because if India has to focus on growth or if we have to build infrastructure, the government has to focus on spending and the to increase spending. We may wait for some time a whole permit declaring budget also. But fundamentally, I believe that there will always be a good scope of improvement in infrastructure investment and therefore, why and cable demand will always be there. And even whatever additional capacity we see it is in the building. Still there will be more demand in terms of export market as well as India is spending on infrastructure building.
So it's safe to say that the capacities that are coming live will still be short in terms of what the demand for cables is?
At least for next 3, 4 years, it seems like there will be sort of supply only.
Got it. And sir, last question, if I may. You mentioned about the Reds crisis, which affected your exports. So has that kind of eased down now? And what about the freight charges, has that also softened.
So freight charge, of course, they have softened and reducing like reduction in freight to Europe as well as U.S. also. Yes. [indiscernible] prices also, to some extent, it has leased up and there are some delays, but now it is not extraordinary delays and people have also just said they either in their shipping requirements.
The next question is from the line of Manoj Gori from Equirus Capital.
Sir, since over the last 1, 1.5 years, we have been targeting to scale up our presence into peaker or probably into newer geographies. And we believe like this should have resulted into better than industry growth rate, especially in the virus. While we do understand that there have been underlying demand challenges. But ideally, we should have outperformed the industry and probably the geographical strength that we were looking to build. That's not visible in the numbers. So can you throw some light like where are we lagging probably what's actually offsetting this growth? That's my first question.
Yes, I can understand. Of course, there is like we have grown better than industry pace also and there were challenges. It doesn't mean that we were not doing efforts towards that. But like the corporate price volatility has affected more in compared to other industry are in the first half of this year, and that's why we have seen lesser growth. But on the basis of fundamentals where we are working First, we are like best in quality in terms of like we are the only company in reaching averages compliance. Same way, even our loyalty managed program is the largest in the industry. So there are some short-term effects, but fundamentally still we are confident that we'll do better than industry ages.
Sir, I will ask it a bit differently. So probably in the last 1.5 years, can you throw some light, which are the new geographies that you have ventured into? And how things are progressing over there?
So if you see our current strength, like we are very strong in west and the north part of the country, but it's still like we have to weigh our part of growth in our market share in southern part of the country and is part of the country. So we -- now we have like a good network of dealer and issue, whatever, they still we are not able to get the quantum what we were looking for. And it can now since we have already made the bet, so now it is time how high it is that effort and how we get there of our investment, what we are doing previous year or even currently 9 months in this new geography, particularly like more from the southern and the eastern part of the country.
Okay. And sir, lastly, if I may, how do you read the overall underlying demand environment? We know it's challenging, but probably see, long-term macros obviously will continue to remain intact, but probably from a 6-month or to 9-month period, like overall, if you look at underlying demand for last couple of years for wire as a category has been under pressure. So if you can throw some light like how do you read the situation for the industry in respect of it.
So even when we see at GDP level, we have seen some like a downward trend in GDP than what the public level for first half of this year. So there was some pressure and still there are some such especially wire. But overall, if you see and if you see at macro level, there are a good demand at least in cable, and there are so many like first and the biggest is like wind and solar, so moving towards this nontraditional power generation. There are a lot of opportunities and infrastructure work is like low rates are slow in first half, but now it seems it will be on track. So fundamental, it seems even in short term or a little bit longer term also, while we may have some challenges, but cable, of course, has very good growth. And while also sequentially, it has to go.
The next question is from the line of Shrinidhi Karlekar from HSBC.
Congratulations on some good improvement in margin. Couple of questions, just 1 clarification on guidance. For Q4, are you saying Cable & Wire EBIT margin can grow to 8% from 7% in [indiscernible]?
Yes, yes. So what we have seen, like 8%, even last year, our overall like margins were in the range of 8.4% and looking to the trend of last quarter also and current and it seems we will be able to achieve 8% kind of EBIT margin for Q4.
Right. And sir, second question is in the quarter gone by, did you face capacity constraints in the cable business?
Cable always, we are getting that challenges particularly in [indiscernible] where we are a very limited capacity and still like though we have added some capacity in Q3 also. But I think more -- we can have some relax in terms of capacity on and later on next year onwards, we will have some capacity.
And sir, last one, when you say you aspire to we have a long-term vision of reaching double-digit EBITDA margins. Here are we specifically talking about the cable and wire business or we're talking about at the company level? And in what time frame you try to achieve there?
Like for both offers, we have to achieve this like company level also, we are trying to get double-digit margins. But first, we'll get in mind ever. And it is expected by FY '28. We can expect double-digit margins in both at company level also.
[Operator Instructions] The next question is from the line of Naushad Chaudhary from Aditya Birla Mutual Funds.
2 clarifications, sir. Firstly, I was just curious to understand in terms of what specific calculation you have and what is the mass you have that makes you believe that there will not be a supply, there will not be a capacity step up issue in the industry, especially in cable business, why there should be continued supply shortage for the next 2, 3 years. What is the calculation you have that makes you believe this?
So Naushad, if you see the CapEx plan of all the talk of particularly cable manufacturer, and Indian cable growth is growing. So normally in like exchange to by looking to the plan of format or development in such share order development in wind, solar power generation or even the opportunity of sport market. So even if this industry, particularly in cable, is it grow by say, 20%, then the summer of this industry are not suffice to supply the all CapEx. Because now these days, even the CapEx cycle is almost 24 to 30 months to get whatever capacity we are building. And even in our case of CapEx started in FY '24, now it is getting completed. So in that way, it seems India has more growth opportunities than what capacity, which is getting business. And already, we have seen that even last year -- or in this year also, there was huge supply shortage attesting power travel.
Yes, sir. But historically, if we look at the industry CapEx average, if we look at the last 3 years, 5 years. So broadly, it has been in the range of between 700, 800 or max 1,000 than last year was a piece in terms of capacity addition from a CapEx point of view and next 2, 3 years I just it is going up substantially, and we have seen a peak of demand for '24. And on that base, we have to grow with this kind of capacity at least we should have some very strong visibility, at least in 1 or 2 piece of end user industry where we are confident that this should be able to help to observe all these capacity. Do you think the kind of run rate which used to be INR 1,000 crores has gone up to INR 4,000 crores annual gross block addition in the industry started from FY '24 should be a problem in '25,'26. For short, we understand the group point of view, but because this is B2B, everybody's capacity would come together, at least for a short-term period, everybody would fight to absorb this capacity short term may do you think you might have the -- has to compromise on the margin side. And long term, I believe that 5 years, this capacity would be absorbed, but short term, 1 has to compromise on the margin to filter capacities?
So first, regarding your demand [indiscernible] that you have to see -- even if you see the way government is planned, the growth in power generation, like what we have done until now time of more government is planning in next 4, 5 years. So even if something not in 4 years, but in 6, 7 years, you can assume the quantum of solar cable will require same way like the infrastructure, though, this year, we have seen some slow growth in the first 6 months. But I still see if India has to grow, then we have to invest in infrastructure growth. Thirdly, even in export open, we have seen a very good demand. yes, like there are hardly an export of wire and cable. And now we are seeing a good demand from Europe or U.S. So that is giving us the confidence that the loans done, there will be a good demand. Even at our development, we are very small parent table and our capacity limited we know there is huge potential of expansion and growth. And that is also without compromising on price. So we are confident to have a higher growth in cable segment in the coming years.
Okay. And second, on the margin side, can you share the specific levers which you have, which makes you believe that your 6% should go to double-digit what should drive it?
So 2 or 3 regions are there. We are working. First, this -- like last year, we were in the range of 7%. So though this year, we have seen growth, but even if we take the improvement of 40 bps year-on-year, then we can be -- by FY '28, we can be in the double digit. And this will get by my first change in product mix where we are improving our margins here having high-margin products like export of cables or solar ever officialized tables. So -- and plus we will get the benefit of SK also. So this will give improvement in our margins.
So your first lever is changing product in its export of power cable solar cable, would it come at the cost of the overall business economics in terms of do you have to compromise on the working capital or have to deploy some more money to get this 1% margin?
No, the working capital cycle is on the 60 days, which is like almost at the best of the industry is. So -- and export doesn't mean that I will need a higher inventory or higher working capital. So this is all factoring all the factors we are saying that our margins will improve scale will improve, so I get a cost benefit advantage also.
The next question is from the line of Rohan Vora from Envision Capital.
So sir, to 1 of the previous questions that you answered, you said that.
Sorry to interrupt. Mr. Rohan, your volume is coming very low.
Is it better now?
Yes.
So 1 of the previous answers, you mentioned that volatility in copper impacted us more than the other industry players. So just tell them a bit more color on how that was the case? And what we've done so that this is not repeated going forward because that resulted in us losing market share in wires. So this is question one.
So Rohan, what I meant to say by like more impact on what quality in my margins because we are like having highest revenue coming from Vie, which is B2C product. And what happens always there will be like time lag between passing on the prices of like whatever the raw material prices has been changed. The only extraordinary things happen in first half of this year was that there was like a sudden rise in the copper prices. And by the time we could pass on the prices impact to our consumer, the corporate prices again came down very sharply. So if there is too much volatility within a very small span of time, then, of course, we may have some impact on our profitability. But overall, it will be like always passing on the effect of copper prices to consumers. So this was like a kind of onetime on the effect.
Okay. Understood. And sir, so second question was -- sorry, if it is a repetitive one. So the capacity that is coming in, in the coming quarter. So how much volume growth would that enable us to do? And what is the color on FY '26 volume growth that you're looking at?
So this overall CapEx is like have a probability or possibility of adding top line of INR 2,500 crores. but like looking to our historical growth and even our current expansion plan, like for this Q4, we are planning a volume growth and for coming years, we are making detailed plans and will these guidelines by end of Q4.
The next question is from the line of Praveen Sahay from PL Capital.
My question related to the FMEG business. there, you had mentioned that there is a very strong volume growth in the fan. So if you can give some color on this in the 9 months, the growth you had achieved. How much is from the bid segment and also volume value mix, if you can give how much is like 23% of the growth comes from the volume and how much is the value? And related to that, by when you are expecting to achieve a breakeven in this segment?
So in FMSG, we have seen a very good working sen,particularly in FEMA like earlier, our like almost 40% revenue was coming from [indiscernible] increased to 45%. In light also, we have seen a very good growth, but due to the price rationalization and negative pricing in '19, the growth is flat at value level. But at the same time, we have seen a very good growth in [indiscernible] also. So by top like broader product mix in my SME at 45% of revenue is coming from far, 32% is coming from light and us 23% is coming from upside [indiscernible] future. And when we talk about breakeven, like I mentioned earlier also, we are expecting that Q1 of next FY '26, that is like June 25 quarters, we're able to come into green at EBITDA.
Right. And the volume growth, can you give color on that out 23% of the growth, how much is from the volume?
So like approach, though I do not have exact backup of this, but 55% growth came in [indiscernible] segment. And like 20% of our sale in sand came from new products which we integrated in this year, and we are seeing almost 23% to 25% revenue in Fan from premium categories. So this is a very broad breakup of our sales.
Right, sir. And how much of the CapEx is planned in this segment? And at what level of utilization of your capacity currently in?
So in SME, we have not made any big CapEx plan. It will be very small, like in that end of 20, INR 25 crores only because it's still like a majority of our we are sourcing through third party only. So almost 2/3 of my revenue is coming from competing basis and only 1/3 is coming through manufacturing.
The next question is from the line of [indiscernible] from PA Financial.
Hello, am I audible?
Yes, please.
So I just wanted to know the capacity utilization over the segment.
Yes. So in -- particularly in wire, we are at 5% to 7%, while in cable, we are already at 92%, 95% capacitance. 90 to 95 cable, right?
And sir, what about the order book, the current order book and the targeted order book as well over the next couple of years?
Yes, since we are more into B2C category also. So like it is an ongoing project, and we do not have very long order where we have orders for 2 years or 3 years or 1 year to measure the sales B2C category. So it is a continuous process.
Okay. And any revenue guidance as a business as a whole, like where do we see ourselves in the next 4 years or some time by 2030 or something with the data centers and everything coming up?
So we are making our detailed statement and growth plan, which we'll live by next quarter.
Ladies and gentlemen, that was the last question for today's conference call. I now like to hand the conference over to the management for the closing comments.
Thank you, for joining this call. We appreciate your [indiscernible], if you have any question or query please feel free to reach out to or directly or [indiscernible], we will forward to [indiscernible] with you again next quarter. Thank you.
On behalf of R R Kabel Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.