In this interview with ET Markets, Jain also talks about the Q3 numbers and company outlook. Edited excerpts

Your revenue in Q3 went up 10.4% YoY but PAT fell 0.7% YoY as EBITDA margin fell below the 7% mark. What dragged margins and what is the outlook for FY25?

While we achieved a commendable 10.4% year-over-year increase in revenue, the company experienced a slight decline in Profit After Tax (PAT) and a dip in our EBITDA margin below the 7% mark. The main factor impacting our margins in Q3 FY24 was the volatility in raw material prices, which exerted pressure on our gross margins. Despite proactive measures to mitigate this challenge, including strategic procurement practices and operational efficiencies, we faced a temporary setback in maintaining margins at the desired level. However, our 9M margins have significantly improved, rising from 5.4% in 9M FY23 to 7.2% in 9M FY24, reflecting our commitment to enhancing operational efficiency and optimizing cost structures over the long term. Looking ahead to FY25, we remain optimistic about our prospects. Our robust sales growth, surpassing industry standards, underscores the strength of our business fundamentals and market positioning. With a substantial presence in the construction and real estate sectors, we are well-aligned with the ongoing industry upswing, particularly in the wire and cable segment. We are confident in our ability to navigate challenges effectively, capitalize on growth opportunities, and deliver sustainable value to our stakeholders in FY25 and beyond.

Take us through the kind of volume growth that you are witnessing in wires and cables segment. As private capex is expected to pick up in FY25, what would be the strategy going ahead?

Currently, we’re experiencing a steady volume growth trend, with a year-on-year growth of 10% for the December quarter and an impressive 20% growth for the 9M FY24 over 9M FY23. These figures underscore the resilience and strength of our product offerings in the market. Looking ahead to FY25, with the anticipation of private capital expenditure picking up, particularly in housing, infrastructure, and renewable energy sectors, our strategy will focus on two key aspects. Firstly, we aim to capitalize on this expected growth by intensifying our efforts to increase sales and market share in these sectors where we already have a foothold. Secondly, we endeavour to prioritize innovation and product development to cater to the evolving needs of our customers in these high-growth areas. By offering advanced solutions tailored to specific requirements, we aim to strengthen our position as a preferred partner in the market.

FMEG segment is also undergoing a sharp shift towards organised players. How do you plan to make the most of this opportunity?

Our focus on enhancing the value proposition of our product portfolio spanning across various price points, from economy to premium, positions us favourably to attract customers among both organized and unorganized players. Our portfolio’s clear value proposition, supported by consumer-centric product features developed through rigorous consumer insight gathering, sets us apart from the competition. Additionally, our synchronized-channel play ensures comprehensive coverage of retail touchpoints, with approximately 65,000 outlets targeted, particularly in semi-urban and rural markets. This well-penetrated distribution network, coupled with initiatives such as the ‘star dealer’ program targeting top industry outlets, strengthens our presence and competitiveness in the market. In essence, we aim to leverage our strong product portfolio, distribution network, and consumer-centric approach to capitalize on the shift towards organized players in the FMEG segment, thereby maximizing our market share and driving sustained growth.

What is the kind of impact you are facing as a result of Red Sea disruptions?

In light of the recent disruptions in the Red Sea region, we have been closely monitoring the situation to assess its potential impact on our operations. As a company with major exports to US and Europe markets, we are mindful of the possibility of encountering challenges in delivery timelines due to the global event affecting the supply channels. However, it’s important to note that while there may be some disturbances in the supply chain, we have taken proactive measures to mitigate any adverse effects. One key aspect to highlight is that our freight costs are entirely passed on to our customers. Therefore, any fluctuations in transportation logistics or related costs are absorbed by our clients, ensuring minimal impact on our company’s financial standing. Moreover, we are continuously working to optimize our supply chain management and logistics operations to maintain efficiency and minimize disruptions. By staying agile and responsive to evolving circumstances, we aim to navigate through these challenges while upholding our commitment to delivering quality products and services to our customers.

Other than the capex and real estate boom, the wires and cables industry is also expected to benefit from the shift towards solar energy. What is the long-term outlook when it comes to capitalising from this trend?

The government’s focus on solar energy presents a lucrative opportunity for the wires and cables industry. With our latest, compatible products, we’re well-positioned to tap into this market. The long-term outlook is promising, given the increasing adoption of solar energy in residential and commercial sectors. We anticipate sustained growth as demand for specialized wiring solutions rises. By aligning with this trend and maintaining our commitment to innovation and quality, we’re poised for success in terms of capitalizing on the shift towards renewable energy.

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