The conductor business of Apar Industries posted healthy performance in the first quarter (April to June) of FY22, judged by an investor presentation filed by the company on stock exchanges.
Apar’s conductor business saw order inflows of Rs.1,551 crore in Q1 of FY22, which was nearly five times that in the same quarter of FY21. There is of course a “low base” effect to this comparison as much of Q1 of FY21 was a period of nationwide lockdown. High-efficiency conductors (HEC) contributed a little over half of the order inflows in Q1 of FY22.
The outstanding order book of the conductor business, as of June 30, 2021, was Rs.2,119 crore, up 34.7 per cent, year-on-year. The latest order book was dominated by premium products like HEC, optical ground wire (OPGW), copper conductors and ACCC conductors. These premium products had a collective share of 50.6 per cent in the outstanding order book as of June 30, 2021.
Exports hit
The investor presentation noted two areas of concern in the company conductor business. First was the year-on-year decline in exports revenue, at 27.7 per cent. This was attributed to disruption in order execution, in turn due to abnormally high sea-freight charges and shortage of containers. The company said that it was trying to pass the risk of international freight market volatility to clients, and in the meanwhile, increasing its focus on the domestic markets and on value-added products.
Also read: Bolstered By June Performance, Transmission Upgrade Improves In Q1 Of FY22
Delisting of product
The second concern was the 25.6 per cent fall in revenue of the Railway-destined copper conductor business. The presentation noted that this fall was attributed to delisting of a particular product “107 sqmm contact wire” by the Railway Design & Standards Organisation (RDSO). However, towards the end of Q1 of FY22, a High Court granted a stay on the order, the presentation said.
Business mix
The conductors business accounted for 35 per cent of the company’s total revenues in Q1 of FY22. Apar Industries has other business operations that mainly include lubricants, specialty oils (including transformer oils), and cables.
Featured photograph shows a conductor manufacturing facility of Apar Industries Ltd