Apar Industries , a leading player in the power transmission and distribution sector, has announced a significant development for its wholly-owned subsidiary, APAR Transmission & Distribution Project Private Limited (ATDPPL). The company has been selected by Karnataka Power Transmission Corporation Limited (KPTCL) to operate, maintain, and monetize their existing 6,100 km OPGW (Optical Ground Wire) fiber network for a period of 15 years.

Key Contract Details

• Network Scope: ATDPPL will be responsible for the operation, maintenance, and monetization of KPTCL's 6,100 km OPGW fiber network.
• Contract Duration: The agreement spans 15 years.
• Financial Arrangement:
  • ATDPPL will pay an annual network rental of Rs. 5.00 crore to KPTCL.
  • Revenue sharing model: 60% for ATDPPL and 40% for KPTCL.

Strategic Implications

This contract marks Apar Industries' entry into the dark fiber monetization business, allowing the company to market network capacity to telecom service providers. The move is seen as a strategic step for Apar Industries to diversify its operations and create a new, recurring revenue stream in the passive communication infrastructure segment.

Industry Context

OPGW fiber networks are highly valued in the telecom industry due to their reliability and high network uptime. The demand for such networks is particularly strong among telecom service providers, leading to higher utilization rates for OPGW fiber networks.

Company's Perspective

Chaitanya N. Desai, Managing Director of Apar Industries, stated in the company's regulatory filing, "This opportunity will allow APAR to become a data connectivity solution provider to its Telecom customers in the state of Karnataka." He further added that this diversification marks a strategic step forward for Apar Industries to enter the niche segment of brownfield OPGW infrastructure in India.

Financial Implications

While the company has not provided specific revenue projections, it expects that the benefits from this contract will exceed the minimum costs over the agreement period. The project does not require any capital expenditure from ATDPPL for the term of the agreement, making it an asset-light expansion into a new business segment.

Market Response

The announcement of this contract win could potentially be viewed positively by investors, as it represents a new growth avenue for Apar Industries. The company's ability to leverage its existing relationships with telecom and data center companies across India may provide a competitive advantage in this new business segment.

Conclusion

Apar Industries' expansion into the dark fiber monetization business through its subsidiary ATDPPL represents a significant step in the company's growth strategy. By leveraging its expertise in the T&D segment and its relationships with telecom customers, Apar Industries is positioning itself to capture opportunities in the evolving digital infrastructure landscape of India.

Apar Industries , a leading player in the power transmission and distribution sector, has reported a robust performance for the second quarter of fiscal year 2026 (Q2FY26), with significant growth across its business segments. However, the company faces short-term challenges due to recent global market dynamics.

Financial Highlights

Apar Industries achieved consolidated revenue of Rs 5,715.00 crores in Q2FY26, marking a 23.1% year-on-year growth. The company's performance was driven by volume growth across all three divisions - conductors, cables, and specialty oils.

Key financial metrics for Q2FY26:

Exports played a significant role in the company's growth, surging 43% year-on-year and contributing 34.7% to the consolidated revenue, up from 29.8% in the previous year.

Half-Yearly Performance

For the first half of FY26, Apar Industries crossed a significant milestone:

• Consolidated revenue reached Rs 10,820.00 crores, up 25% year-on-year
• EBITDA stood at Rs 1,000.00 crores, a 25.5% increase from H1FY25
• EBITDA margin maintained at 9.2%

Segment-wise Performance

Conductor Division

• Revenue growth: 34.9% year-on-year
• Volume growth: 16.2%
• Exports grew by 74.6%, contributing 24.2% to the division's revenue
• Premium product mix contribution increased to 45.4% from 42.2% in Q2FY25

Cable Division

• Revenue growth: 25.1% year-on-year, reaching Rs 1,535.00 crores
• EBITDA growth: 32% year-on-year, reaching Rs 157.00 crores
• EBITDA margin improved to 10.2%, up 50 basis points

Oil Division

• Revenue remained flat due to lower crude prices
• Volume growth: 8.2%
• Domestic transformer oil business posted 13.6% revenue growth

Market Dynamics and Challenges

Despite the strong performance, Apar Industries faces some near-term challenges:

1. Metal Price Volatility: Recent spikes in aluminum (reaching $2,900.00 per ton) and copper (exceeding $11,200.00 per metric ton) prices have led to order delays from customers.

2. US Tariff Situation: The company is navigating through recent changes in US tariffs, including the Section 232 duty on aluminum, copper, and steel products.

3. Q3 Outlook: Management expects pressure on Q3 performance due to these factors but remains optimistic about Q4 recovery.

Strategic Initiatives and Outlook

Apar Industries is taking proactive steps to address these challenges:

1. Capacity Expansion: The company is proceeding with its planned capex, including a Rs 800.00 crore investment in the cable division, reflecting confidence in long-term demand.

2. Market Diversification: Efforts are underway to expand into new geographic markets, particularly for premium products.

3. Focus on Renewable Energy: The company is well-positioned to benefit from the growing renewable energy sector, particularly in solar and wind energy projects.

Kushal Desai, Chairman and Managing Director of Apar Industries, commented on the results, stating, "While we face some short-term headwinds, particularly in Q3, our fundamental growth drivers remain strong. We are optimistic about our long-term prospects, especially given the continued investments in renewable energy and grid modernization globally."

As Apar Industries navigates through these short-term challenges, its strong order book of Rs 7,168.00 crores in the conductor division and Rs 1,836.00 crores in the cable division provides a solid foundation for future growth. The company's strategic focus on premium products and expanding its global footprint is expected to drive sustainable growth in the coming quarters.