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Finolex Cables Ltd
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Yes. Hi. Thank you so much, and welcome, everyone. I would like to welcome the management of Finolex Cables on the call. From the management, we have Mr. Deepak Chhabria, who is the Executive Chairman; and Mr. Mahesh Viswanathan, who is the Chief Financial Officer. I would request, sir, to give us some opening remarks, and then we'll open the floor for a Q&A. Over to you, sir.
Good afternoon. This is Mahesh from Finolex Cables. Welcome to this earnings call today. So I think you must have all seen the results. You must have seen our press note as well as the results which were published in the newspaper as well as in the BSE website. So very quickly, what I can say is quarter 4 was impacted by COVID. We had a 21% drop in revenues when compared year-on-year. And for the full year, again, the impact of quarter 4 persisted on the full year numbers as well. We had a 7% lower revenue this year as compared to the previous year. On the volumes, while quarter 4 had substantial impact; on the full year level on wires, which is our major product, we were marginally higher than the previous year. We were about 1% higher. In communication, again, due to the issues that we have seen this year on optic fiber line, especially with both the government sector as well as the private sector, the issues that were there in that particular sector, we have seen a drop in that area. There are -- besides optic fiber, there are multiple product lines there. And of them, the LAN product line was the best performer. It -- we -- sorry, and all the others had a decline. Broadly, this was on the traditional areas. On the nontraditional areas, the recent introductions in terms of [indiscernible] each of those product lines had a significant growth in the year between 25% to 60% in volume terms. Of course, the value numbers are still below INR 100 crores at this point in time. But for COVID, we would have crossed, I think, about INR 115 crores or so. Fourth quarter, like I mentioned, was impacted by COVID. And our estimate is that we lost approximately INR 200 crores of sales in the last 1 month and, of course, the consequent profit and so on. Profit for the quarter was about INR 135 crores as against INR 140 crores last year. There is a decline of about 3%. But comparing -- I mean, considering the fact that volumes were down, this is considerably a decent performance. In post tax, of course, the adoption of the lower tax rates helped us, and we posted a post-tax profit of about INR 402 crores versus INR 344 crores last year. So with these brief remarks, I open the floor for questions. And so we'll be happy to take any questions that you have.
[Operator Instructions] We have a question from Sonali Salgaonkar from Jefferies. I'm sorry, we have a question from Viraj Mehta from Equirus Securities.
Yes. Sir, you mentioned that we lost approximately INR 200 crores of orders in -- because of the lockdown and the COVID impact. Was it -- is it that a part of that chunk is coming in this quarter or that sales which is lost is lost?
I don't think it's possible to correlate that 1:1. Some part of it might have come subsequently, but I really cannot say that. It's very difficult to correlate it 1:1 because there's been a gap of 3 months before we could start again.
Right. And sir, today, as we have just started, currently, what will be the utilization at which our plants should be running?
Slightly more than 1/3, I think. Maybe 40%.
40% of capacity or 40% of last year?
No, no, no. Your -- the question that you asked previously, at the March end, normally, you have a high sale because there are many targets given to distributors, and they have schemes running. And so normally, there's a pile-up of stock at their end. So now when COVID happened and there was a lockdown, that sale was lost, and it doesn't get covered later on, to answer what you were asking earlier to Mahesh. As we have opened after lockdown, at different times, we have opened up different plants in May. And earlier, it was a lower capacity that was being used. But slowly, people have been coming back, and it's been rising. So there are 2 kinds of labor. We have a permanent workforce and contractual labor. Permanent workforce has mostly come back now by now, but the contractual labor is difficult to find with all the migration of the labor, and there is a shortfall. So depending on the product line, it is your capacity available for production is anywhere from 50% to 80% depending on the product line.
This is very helpful, and best of luck. And sir, just last one question on our dealer rollout that we have been very vocal about over last few quarters. If you can just give a little update on that.
Okay. So when we started the last year program that we will do a distribution network, we had targets of software system for distribution management. So you have to have a target of 500 distributors, [ around 1 lakh ] retailers to reach out to for which we had done a survey all over India. We managed about I think...
380
380 distributors and some 42,000 retail outlets, which got registered and started buying from. We did not -- I mean, do what we set out to do in the full year, but we are continuing with the same reach. I'm trying to reach the same target of 1 lakh 50 this year. It is difficult with people wanting to travel out and meet new customers and try to bring them online. But even since it opened, we have been adding retailers. So we hope that we can achieve that target this year.
We have a question from Sonali Salgaonkar from Jefferies.
So my first question is again on the resumption activity. As we have started resuming in May and June, what are our current sales if you compare that to previous year same period?
I'm sorry, your question again, your voice was garbled a little bit.
Sorry. Sir, am I audible now?
Yes.
Right. Sir, so on the resumption activity, what are our current sales, say, in May 2020 and June 2020 compared to May and June 2019?
Obviously, it is going to be lower than last year numbers because of the logistics involved, because of transportation availability and because of the demand situation. I -- at this point in time, I don't think it's fair to talk numbers because the results have to be announced anyway in a short time from now. So while I wouldn't go into the numbers, obviously, the quarter-wise numbers would be lower than last year first quarter.
I understand. Sir, and on capacity utilization, please correct me if I'm wrong, but did you mention that the average capacity utilization was 40%?
Yes. Okay. So what Mr. Chhabria said is depending on the product line, the output could be anywhere between 40% to 80%, depending on these products we are talking about because we have several products that are running. And so in some lines, we need more people on the line and the proportion of permanent workers to the contract workers differs from product line to product line. So depending on where that requirement is higher for contract laborers, then the capacity available would be lower. But where it is entirely managed by our own force, then yes, availability is close to 80%. That doesn't mean that we are producing 80%. So it will go by what is the demand there.
I understand. Sir, and approximately, what percentage of our sales is emanating from rural versus urban?
That is difficult to answer because the flow of material happens all over the place. So while the customer might be located in a large urban center, we might be distributing or selling through the wholesale market into rural areas as well. And with the introduction of the distributor framework, we were hoping to ensure that -- we were hoping to get better idea on the secondary market and how things move, but there, our program is still partly over. So at this point, [indiscernible] to say exactly what percentage goes into rural and what percentage was consumed in the urban area. But if you look at construction, primarily, then as a larger portion of consumption happens in the urban and semi-urban areas, so it would follow that trend anyway.
I understand. Sir, could you help us with FY '20 volumes for electrical cables and communication cables?
Okay. Electrical wire, as I said, was up by 1% compared to last year, overall.
Okay. And communication volumes?
Communication cables, the largest contributor from communication cables is optic fiber, optic fiber cables and that was down by 35%.
Okay. Got it. Sir, any indication of CapEx for FY '21?
Our program still remains the same. The only issue is in terms of when we would be able to complete it would depend again on availability of part of manpower for construction. Because typically, if you see most of the construction manpower is migrant labor and that is one. Secondly, we've lost the first 3 months of the year when generally, construction activity is at peak level. Now with rains coming, in any case, that activity would have come down a little bit. So when we are able to restart those projects will depend on 2 things: one, the availability of manpower there with the contractors; and number two, the onset of the monsoon. So as we explained last year, we had multiple projects going. One was here at Goa, which is to manufacture conduit pipes. There, the construction has been completed. Equipment has been installed, but the proving of the equipment has to happen with technicians from overseas. With travel ban in most places, so that part is still -- we are awaiting those people to come in through the machinery.In Pune, we had 2, 3 projects going on. One was on the e-beam, where again, the construction has gotten stalled at this point in time. And subsequently, the construction will also be moved to 2 lines where we would be micro-integrating with copper clad steel and filling lines for solar wires. Again, both those -- the construction first will have to start and the issue is what I had mentioned before. But overall, our spend level plan is still the same that over the next 18 months, the INR 200 crores we had spent is in the plan. Nothing has changed there.
Right. Sir, and the orders lost that you mentioned of INR 200 crores because of this COVID lockdown, were there -- were they mostly from electrical cables or communication cables?
They will be across the product line. So that would be wires. That would be communication products. That could be -- that could have also been our fans and what -- fans and LANs and switches and switchgears as well. The entire market is -- was close, right? And the first 2 months, the new products actually were doing very well.
Right. Sir, FY '21 is, we understand, very choppy because of what we have seen in Q1, but any sense you would like to give on the margins because our electrical margins have always been very strong? So any sense or any target you have for the margin front?
I think we are looking at a period when there are too many uncertainties. We do not know which market, at which point in time is going to remain open. We do not know which market at which point in time is going to be in a containment area of lockdown or whatever. We thought that the market had opened up and suddenly, terminally closed Chennai. And now they've extended it again for another 12 days. We hear a similar move in Calcutta from 3 days ago. So how things are going to move will depend on how the virus is being contained and how that is being managed. And so it's very difficult to predict what volume of sales will happen. And margin is a follow-up from 2 things, what revenue we achieved, what volume we achieved, what growth we achieved. And so that is something I'm not wanting to predict at this point in time. Our focus right now is how do we contain costs, how do we make sure that people are safe, while at the same time, we don't let loose of any opportunity. So -- and make sure that avoidable costs are actually avoided, can we get better efficiencies in the way that we are working. So where automation is possible, we will do that. Where better efficiencies can be squeezed out of the equipment, we will try and do that. So those are all our margin protection mechanisms, if you want to call them. And in that connection, we've had extensive conversations within the company. We have -- we utilized the 2, 2.5 months' time period that we were all locked at home to work on those ideas. Some of them require investments. Some of them are things that you could do in any case. So those are activities which are going on where we are tracking them on a week-to-week, month-to-month basis. And to make sure that we really come out with a leaner and a meaner output. Beyond that, we have -- obviously, our attempt will be to protect the margins. But how much we succeed, are we able to better that? That only time will tell. I think, 1.5 months post lockdown is too early to say anything.
Understood, sir. And my last question, any cost rationalization initiative that we are running during this period of lower sales?
That's what I mentioned. And we -- that is exactly our focus at this point in time: how do we get better efficiencies from the organization, whether it is by improved automation, whether it is by getting more output on the machine or whether it is by we are going back to zero waste that we bring to question every expenditure, whether it is required, yes or no.
We have a question from Mr. Sumit Jain from ASK Investments.
Just wanted to know what kind of demand environment are we seeing on the optic fiber side, optic fiber cables?
Demand?
Yes. Are there orders on the BharatNet side or any other orders that we are witnessing on the optic fiber side?
Okay. We must have seen 2 days, 3 days ago, Tamil Nadu has been directed to change their terms and conditions. So while the demand is there, we could not yet converted into and not just for us, for anybody because that process of going through the tender, finalizing the tender awards, that is still in process. So in that sense, there is some work happening in Tamil Nadu by the local government. I think Karnataka is preparing a preliminary note basis, which they will formalize their tender. I think a similar job happening in Bengal as well. But beyond that, whatever orders were issued out last year, if some residual work is going on, that is what is currently being done. In fact, 2 days ago, there was a small tender from BSNL also. And there is one more coming next week.
Sir, what is the size of orders that have come up in Tamil Nadu, Karnataka, BSNL, I mean also together with the government?
Part of the opportunity size was somewhere around -- I think that tender of about INR 2,000 crores big. But of course, it's now been -- it's going to be a while before they play or they bring the tender out again. And I think Karnataka and Bengal also will be of similar numbers.
And this INR 2,000 crores would involve product and project execution, both? Or this would only be product supply?
No, no. This will be everything, all the way. Turnkey, it would be turnkey. This will be the company.
How much would be the product within this?
That would depend on actually the route length to be done. So depending on that, the EPC portion would come up. We've got -- I think that particular tender got canceled, even at the very early stage. As soon as they announced it, there were issues and it got canceled.
Sure. And in FY '20, within communication cable, what was the share of optic fiber sale of products?
Out of the INR 408 crores or INR 409 crores, I think more than 50% was optic fiber.
And margins there would be?
If you see the communication cables sector, the margin last year had dropped from 14% to 6% or 7%. And primary reason for that was the drop in volumes from optic fiber because then you had to observe the entire fixed cost. So typical margins should be around 11%, 12%.
Okay. And optic fiber and nonoptic fiber, both the businesses would have kind of similar margins? Or would there be differences between the 2 in communication cable?
I think that there could be minor differences depending on who your customer is. If it is the market, then the margins are slightly better. If it is an OE, then you have a price risk.
Got it. And within electrical cable business, what is the revenue mix between industrial cables, domestic fibers, technical cables, so on and so forth?
About 60% is construction wire.
Okay. So construction wire would be diversified for. This would be really small in this...
Then you have 4 major categories, that would be industrial, agricultural, auto and power. And each one of them would between 12% and 15% each.
It still not add up then. If 65% is the highest, then it is only 35% and...
And I know the number doesn't -- I know the number crosses to beyond 100, but I'm giving you a range. That'll be within 10%, 12% range.
Okay. And within these 4, which one would be the largest one?
I'm sorry?
Within these 4 invests on the cable side, which one would be the largest?
Construction, I said.
No, 65% is construction. The balance for that you talked about. Within those 4, it can reach 10% to 12%, anyone -- anything which is the largest of the 4?
I think agri would be the larger of the 4.
We have a question from Tarang Bhanushali from Yes Securities.
Sir, one question on the other income. It was sharply lower on a Y-o-Y basis this quarter. So any particular reason in that?
Sharply lower?
So 30% on a Q-on-Q basis and 22% on a Y-o-Y basis, sir?
I'm sorry, I don't understand. The other income is what you're talking about, right?
Yes, sir.
So last year was INR 24 crores. And this year, INR 58 crores.
Sir, for the quarter.
Yes, for the quarter is what I'm saying.
Sir, INR 18 crores against INR 26 crores last year, Q3. So again, why is the sequential drop in -- so my question was on that front?
No, there is no drop. It is INR 58 crores, not INR 18 crores.
So on the consolidated level, sir?
At a consolidated level.
Yes, sir.
Because I have to eliminate the dividend, no. The dividend from -- if I -- I have to eliminate in the consolidation because that will move to share of income from associates in joint ventures.
Okay, sir. Sir, second question is on the J-Power JV. So what was the performance in FY '20? And what would be the order book currently with that?
Sales-wise, we moved from INR 47 crores to close to INR 72 crores or INR 73 crores. Losses were reduced from INR 38 crores to -- sorry, losses also came down from INR 40 crores to 26%. And we start the year with an order book of about INR 110 crores.
Sir, what do we expect in terms of FY '21, this subsidiary? Because we were seeing some green shoots in the EHV segment. So are there any orders in the near term? And what do you think -- how the subsidiary will perform this year?
As I said, we are starting the year with an order book of about INR 110 crores. That's number one. Number two, this is a business where revenue recognition is subject to completion of certain stages of the order. Supply alone doesn't allow you to claim the revenue, we also have delay. Now with the kind of restrictions that are there on public work, I'm not too sure how much of the laying can be completed. In fact, we have 4 projects going on in Chennai at this moment. While the supply for those 4 orders are ready and available at Chennai, we are unable to lay anything on the ground because of lack of permissions to do any laying. So that is the constraint. And that could be different in different cities depending on how critical the virus management is there at this point in time, at any point in time. So I think as we -- as the country opens up more, maybe I can give you a better answer. But at this point in time, I'm really not able to give you much in terms of specifics.
Sir, on the automobile side, we had added a new client, I think, in FY '20. So what is the progress? And have we added more clients on that front?
We've added -- I see large -- there are 4 or 5 large harness manufacturers. And they have multiple sites making products for different automobile manufacturers in different places. So what I said is 4 customers over last year. What I meant was more sites from each of those customers because they are now going to get -- gets to go into more vehicles or more brands. So that is what brought about the increase in the first 3 quarters. So obviously, that will continue. There are more in the pipeline. But having said that, one has to also look at the entire auto industry to see what they are going to achieve this year. They have multiple troubles as you know. One is they're migrating to [ BS6 ], and that brings with it its own set of complications. And of course, now with COVID, what will be the demand situation is something that we'll have to see for a period of time. I think it is going to be impacted very heavily. Maybe the first one month or so when we opened up, they saw some activity, but I honestly suspect that they will see a growth. They will, I think, see every growth pressure.
Right. Sir, my question is, again, post the lockdown. So on the demand side, have you seen the rural demand picking up faster compared to what we have seen in metros? And to what levels would have been the rural demand coming back? So any color on that.
I'll give you my perspective what I think can happen. Instead of looking at urban, and like Mahesh were explaining, all over India, everyday situation changes. Some places are [indiscernible] containment areas and some utterly out of containment, and a lot of restrictions come and go. And the movement of products is also a problem. You don't even have proper transport facilities or getting drivers to move products in time. There are a lot of issues and supply chain is running a successful manufacturing operation, right? I believe that as we go forward through the pandemic, and I think we will be facing these problems for little time to come. There are going to be opportunities as well. There are going to be companies, which have issues in the market, people who are building -- who are probably giving credit to the customers and not getting paid back will see some sales go down. And as you are aware, our company sells all the products with advanced payment basis. So here -- where we don't have outstanding, except for some OE or government bodies. Majority of our business is on, and the market is on advanced payment basis. So we have that kind of an opportunity to sell and expand our business. So there is also going to be companies, which are from the unorganized sector who may close shop. And so such a market could let available for us as we go forward. So it's a mixed thing, and we are positive and we are trying our level best to actually gain market share.
Yes. Okay. Sir, in our FMEG segment, what would be our largest contributor in terms of product? And what would be the large segments, large products maybe?
Our fan and lights.
Fans and light. And that would be what? More than 2/3 of the overall revenue?
Fans and lights would have -- yes.
Yes.
Yes. Both of them, more than 2/3.
We have a question from Mr. Ashish Poddar from Anand Rathi.
Sir, just wanted to understand the difference of control and standard numbers. For this quarter, I see some large difference. If you can explain why it is for the quarter and even for the year, the number is quite significant.
So if you have the consolidated balance sheet in front of you and the consolidated income statement in front of you and this would be -- you put [indiscernible]. Basic difference you will see will be in the line item, other income.
So that is fine. That is visible. That is very -- that is similar for every second and fourth quarter. But there are other line items also which is making differences higher.
No, the other -- the only other line item where you will find a difference is other expenses.
No, sir. Even on the deferred tax item side or even on the other, there are a few other line items in other expenses, which is making differences high. This is what I wanted to understand.
Yes. So I'm coming line by line, no? So if you look at other expenses, you will find differences. That is because in the case of the stand-alone financials...
So last year, same quarter, it was minus INR 18 crore. This year, it is plus INR 7 crore.
I'm sorry, I -- where did you get minus INR 18 crores?
This is the difference for the last Q4 FY '19.
So which line item are you talking?
Other expenses.
Yes. Other expenses this year, the -- this year's quarter -- March quarter, it shows INR 73 crores in the consolidated, right? And last year was INR 42 crores. And for the full year, it's INR 261 crores versus INR 202 crores. So the major item of elimination there between that and the stand-alone financials is the impairment that we have taken in the stand-alone books for the investment in the JV. So that's the main difference. There's nothing else.
So I mean -- so the difference will -- in the coming year, you will not find this kind of difference, which we saw in FY '20.
No, no, no. The differences on account are a principal. The principal is what -- in your stand-alone books, you have the JV as an investment. So if you are impairing that item, so you take the charge in the books of the stand-alone in the stand-alone books. When you're consolidating it, why do you take the impairment? Because the JV has made a loss, right? So when you are consolidating it, then you have to eliminate the impairment. Because the last figure becomes enough as part of the -- when you consolidate the numbers.
That is what I understand. What I wanted to understand is the PAT level. Before share of profit and JV, in FY '19, the difference was INR 37 crores. And this year, the difference is about INR 90 crore. So I just wanted to clarify on that number.
So when you were talking difference, I don't see it here. So you please explain to me where are you getting the difference, which minus hit is the INR 20 crore.
So as I said, apart from other income, there are other line items also where I find difference in the current quarter, in Q4, which was not there meaningfully in the earlier quarters.
So tell me, for example, which line item, no? So then I can understand.
I think I'll take it off-line. I think this may be distracting others further. I'll take it off-line for this time.
We have a question from Mr. Saurabh Patwa from HDFC Mutual Fund.
Are you able to hear me?
Yes. Can you be a little louder, please?
Yes, sir. Sir, is it better now?
Actually, if you can speak up a little more.
One second. Is it better now?
Absolutely.
Yes. So just my tide -- I just want -- though you have already put some light on the current scenario. Just wanted to -- your thoughts on 2 key focus areas. One is does a higher lockdown or a severe lockdown in major hubs like Mumbai, Chennai is impacting your company more? Because being more B2B company and these are large distribution domestic areas, and they being under severe lockdown, is this impacting more? That was one. And secondary -- second, what's your thought on this migrant labor, who are many electricians, et cetera, would have migrated back to their hometowns and in many metro cities all over the country? There may be demand, but since there is no labor to do small jobs or the renovations, the home renovation kind of jobs, did you -- have you -- just wanted your thoughts on these 2 areas, sir.
You want this one?
You see, our company has a strong following in the south. More than 50% of our sales comes from South India. We are reasonably strong in the west, and we are weaker in the north. So thinking of where the containment or issues happen, then, of course, it hurts us. For example, we are very strong in Tamil [indiscernible] has gone under lockdown, it certainly hurts our business. Mumbai is -- we do very good business, but Mumbai is not one of our strong hold points. And so if Mumbai is in the lockdown, we are not hurt that badly. So it depends on product and the market share we have in the particular territory.But overall, all these things are definitely affecting the business. It's not a smooth and straight sailing. And I think it will impact us in the year.When you -- your next part of the question was what is the impact...
On migrant labor, sir.
The impact. So if you look at it last year, the real estate sector has been facing a slowdown. Anyway, we are -- on the electrical wires, we are directly linked in where the new projects are being launched. If there is effect on sale of flats, apartments, commercial building, it affects our business. It affects more in the luxury segment. And if you see last year, the midsize is a small -- 50 lakh flats have been selling more than the bigger ones. So anyway, we were pretty stressed last year with the real estate sector. Now with the lockdown, it's the same story. We can forget the electricians. There is no labor due to any construction. Labor has just vanished. Even at our plan, what Mahesh was saying earlier for the electron beam, there were 100 labor stations there, and the contractor was paying them salaries and giving them an additional bonus to hang on there. They're taking care of all their needs. But the minute there are buses or some transport open, not a single person stayed back. Everybody vanished. So everywhere around you, you'll see construction is halted and not taking place. Obviously, that will have an impact because the wiring happens after the construction. So the labor has gone, it's going to affect our business. But as I was saying earlier, luckily, there are other opportunistic things for us, like people or smaller companies who have cash flow issues, unorganized sector not able to function in these kind of times. For our business gets an added boost from that side while we lose out in the other. So let's hope that in this, we are going to come out on top. I mean...
Just one more question, if I can chip in. It's more on realization. What is FY '20 average realization on a blended basis for cable, wires and cable?
What is affecting the realization for this year?
Yes, FY '20 realization.
So are you asking what the realization was?
Yes, sir.
Again, it's slightly difficult to give you our average number because then you are comparing dissimilar products and making an average out of them.
Broadly, sir. Are you able -- up or down broadly? Because it seems many of these products would be linked to the raw material. So where are you, sir, in volumes?
It would be slightly lower because the LME was depressed comparatively.
We have a question from Mr. Siddarth Mohta from Principal Asset Management.
Sir, regarding the J-Power loss, can you please repeat the same? Your voice was not that clear. You said that losses has reduced from INR 40 crores to INR 26 crores? Is that the correct number?
Yes. Last year, it was close to INR 40 crores, I think. And this year, it was INR 26.5 crores or INR 26.6 crores.
Okay. And sir, this is at the PBT level? Or is it a...
At the PBT level.
PBT level.
Okay. Okay. And sir, as you -- yes, sorry.
And revenue recognized was up from INR 46 crores or INR 47 crores to INR 70 crores to INR 73 crores.
Okay. And this is for 100% J-Power? Or this is our share?
No, this is at the company level.
At the company level. So out of that we have...
Our sales of the losses would be 49%.
Correct. And sir, at what -- I do understand you have explained that not only supply but laying is a bit of a challenge. So just removing this couple of quarters, so at what revenue level we can be -- we can make profit at J-Power? And whether all our product -- or most of our product, it has been approved by different discoms?
The second part of the question I'll answer first. That is a dynamic situation. So as you keep getting qualified in utilities, you know how things happen in our country. Somebody goes and manipulates a different qualifying requirement in another place. So there you, again, have to go and fight. So that's going to be a never-ending process. It's going to continue until we become a really established player. So that part, I think I've answered. Your first part of the question is what?
Sir, regarding the breakeven point for J-Power, at what revenue will be?
I think at INR 200 crores, we should grow at breakeven.
INR 200 crores. Okay. And sir, one more question is on this CapEx part. You said that you are still on with INR 200 crores of CapEx. This to be spent in 18 to 20 months. So some of them will be backward integrated, and some of them will be the capacity expansion of existing products. So on that INR 200 crore of revenue of CapEx, how much revenues we can generate? And just to add to this question, whether it will enhance our product SKU or also many new segment that you will be targeting?
I think the revenue growth will be, let's say, 2x the expenditures in a full year when fully operational. And sorry, the second part, again? I'm lost, I'm sorry.
Yes, sir. So any new product line or any new segment that we will be targeting within this INR 200 crore CapEx? e-beam, I think, is a one new segment that you will be targeting or one new product. So apart from that, within OFS, even OFC, you are increasing your capacity. So any new product or any new segment, which was not there with Finolex Cable, now you will be targeting?
There could be newer designs of products.
In a backward integration, when we are adding this building and we are installing plants to make tin copper, we are looking at instrumentation cable as a new line of business, which has growing potential. In the e-beam, we are looking at solar cable, and we are looking at other high-temperature, specialized wires for various applications and due to the new product line itself as it stands. But even other than this project, on an ongoing basis, we always go on increasing our range within the standard product lines, like now we've developed fiber-to-the-home products, where we are seeing a huge requirement coming up right now suddenly after lockdown. Everybody wants to have fiber-to-the-home because of their -- everything going digital and being locked at home. The requirements just suddenly jumped up and we have designed such products and given it for trial, and now we are certainly seeing a large increase of order. So standard products on -- in the range anyway keep getting developed in the company from the year.
And sir, this fiber-to-the-home segment that you said, it has been designed and approved at most of the places. So that can be a major growth driver in the sense whether it can be like 10% to 15% of our electrical cable or might be communication cable delivery fall -- might be in 2 years, that is FY '21 or '22 thing?
So fiber-to-the-home has a very small fiber count, but it's a specialized product, which with high strength would come bringing the fiber in the home. But the fiber count is very low. So if you want the business volume to really go up, then there are different types of products and we make them range up to 96 fiber or even higher. Those will drive the real values up in the business. So the telecom network has to become more profitable, which means the private network operators will become more profitable, then they will expand into cable. [indiscernible] in the question.
Okay. And sir, last question from my side. This BSNL, they were talking about the 4G and the other opportunities. So in the foreseeable future, do you think that, again, the OFC demand, it will come back might be from BSNL or might be from some other players?
Eventually, the country needs a lot of fiber. So now whether the private or whether BSNL installs them, India will need a lot of fiber. The whole question comes up [indiscernible] power. To delay the [indiscernible] know the balance sheets of the various companies and the problems being faced we read in the newspaper. So they need to become more healthy for them to be making their investments. And BSNL is also in the same position. Their balance sheet is also now very, very healthy. So while their tenders coming out, we have to wait and see and hope that they buy.
We take our last question from Mr. Ajay Sharma from Cycas Investment Advisors.
I'd appreciate it if you could just give us your view of the industry over the next 1, 2 years. What do you think might happen from a competitive point of view, the consolidation, what your strategy is? Would the company ever think about extending credit to your dealers? Just your broad thoughts, please.
Okay. Long term, I think, the prospects of the company basis to product lines that we are in, it is all related in some form or the other to infrastructure, whether it is building infrastructure or whether it is power infrastructure or whether it is communication infrastructure. And the country needs each of those items. So in that sense, the potential for demand is very high. The need for the product is still high. And I think we should be able to grow profitably. That being said, from time to time, the issue has been the ability of the various participants to spend the kind of money that are required to be spent or decisions to be taken in the speed in which the decisions needed to be bigger. So if you are, let's say, for instance, we are talking about power infrastructure, there still needs to be quite -- while we have reached probably everybody, at least that's the government's claim today, the quality of power that we will get is still not something that is always reliable. So you do need to enhance the carrying capacity. You need to modify lines in different places. You need to reduce line losses. You need to reduce its debt. And all will require changing their existing network models into something different. And that requires a lot of investment. And there, tenders do come out, but decisions on tenders take ages to happen. So our ability to therefore predict something with reliability that you are happy with, that is consequently less. So that's one issue that we face.Or if you look at the telecom sector, it's a no-brainer that you need much, much more investment in there. But on the other side, the willingness to pay for that is not really there because people have got used to living on 3G. So that has to change. And so therefore, when telco operators say, "We want 4G," it may be technically on 4G, but you don't get the experience of 4G. So -- which means there are capacities that need to be upgraded. There are lines that need to be added and so on. And those investments, again, are dependent on their ability to fund that money. And over the last few years, there had been a lot of confusion over the licenses, in our last year over the ADR-related payments. So I think we are going through a period of some volatility. And when that will subside, when that will change, I really do not know. But the long term still mix -- looks promising.
So if we were to assume that this COVID situation would last for the next 1 or 2 years in the worst-case scenario, how long do you think until the industry and the companies would be on a sustainable growth track? Let's say it lasts for 2 years, that we have this overhang for 2 years.
Well, so I think a lot depends -- let's say, there is no vaccine coming, and so it's going to last for a long time. But I think people, as a whole, will start going back to normal lives and goes on. They will take precautions or protection, but people will start consuming products and go back to a normal life. So a lot depends on the demand scenario of the nation. And based on that, we will be having [ a big growth ]. And I think all the products we make are required for a normal life. It is not for a luxurious life. It's like people may not go to a mall, may not see a movie and so that can get affected more. People may not travel on a holiday. But you will get -- you will have to build a home. You would want a light bulb, a fan, a switch, a wire inside the home. You want connection to the TV with high-speed Internet. All these products which we make are for everyday life. So I don't think they are going to be hit in the long run.
Okay. And do you think that the competitive position of the company would only get better?
The competitive position, you say. Is that what you said?
Yes. The competitive positioning of the company within the industry.
No, at times -- I mean, see, we as a company had taken a direction to have our products available through a wide distribution network into small, small retail outlet. So I personally believe that if we are able to achieve this objective, we will keep seeing growth in our company because the product, which was not reaching the interiors and availability was restricted to some large good shops is now going to get available everywhere, and that will help our sales.
I would now like to hand over the call to the management team of Finolex Cables for closing comments. Please go ahead, sir.
Thank you all for participating. I think somebody from I think it was Anand Rathi, who had a question that was to be answered off-line, please contact me some time tomorrow, and I'll try and sort it out.