Vindhya Telelinks Ltd Management Discussions.


The Company is primarily engaged in the business of manufacturing and sale of a variety of Telecommunication Cables including optical fibre cables conforming to various national and international specifications, Railway Signaling and Quad Cables, other types of Wires & Cables, Solar PV Cables, FRP Rods/ Glass Rovings, Connectorized Cable Products, etc. (classified as Cable Segment) and Engineering, Procurement & Construction business (classified as EPC Segment). Despite the severe second wave of Covid-19 Pandemic affecting the normal business operations during the beginning of the financial year under review coupled with post Covid-19 supply chain disruptions, the Company has managed to overcome the bottlenecks encountered due to pandemic and restored normalcy in its operations sooner than expected time frame. The Companys specialty cable business alongwith associated equipments and accessories executed during the first half of the fiscal year under review partially offset the depressed requirement of cables from the regular business customers in domestic and global markets. Covid-19 has fuelled an entire digital ecosystem where operating from anywhere has gained traction. The pandemic and other factors led to rise in demand for last-mile connectivity in order to provide higher speed and bandwidth capacity to the subscribers. The year 2021 and beyond thus marks a new era with accelerated transformation in almost every industry. Organizations have quickly adapted to new ways of operating remotely and in a hybrid model. Mainstream use of AI, IoT, AR and VR technologies in variety of sectors has brought about a need for high-speed high bandwidth internet, which 5G has potential to fulfil, creating a robust demand for it. While 4G has been instrumental in driving the data revolution, 5G has potential to transform every facet of digitization. Launch of 5G services may create new business opportunities for optical fibre cable industry as fibre based network has emerged as key infrastructure for fastest digital transmission. The various technology trends that goes in synchronization with 5G technology introduction will further increase the requirement of optical fibre cables. The impending 5G technology in mobile communication networks is going to be complemented by the aggressive expansion of FTTH networks by all the telecom operators. This Fibre-To-The-Home network expansion upto the subscriber premises is already witnessing the increased off-take of optical fibre cables which is expected to grow further thereby giving impetus to the cable industry. The fiber network for both 5G application and the fixed broadband reach through fibre will complement each other in delivering the high speed application and user cases in both wireless as well as wireline medium of reaching the end subscribers. The Government of India has therefore taken initiatives to support the roll-out of 5G as an important step towards self-reliance in critical and modern technology. 5G offers data usage capacity that is multiple times that of 4G. The system drives radio signals into narrow beams, each serving an individual customer, unlike 4G where a single radio beam serves all the customers located around a base station. The efficiency of each band of spectrum therefore, gets multiplied upto 50 times. This can remove at a stroke the niggling problem of Indian telecom architecture which is the limited reach of broadband data services. As such, going forward the rising broadband penetration, increasing FTTH connections to the demanding subscribers at competitive price levels, availability of low-cost smartphones, digitalization of cable TV and the expansion of 4G/5G networks roll-out shall contribute to the growth in the consumption of Optical Fibre Cables in India.

The upcoming 5G communication technology introduction in mobile networks will definitely have positive impact on demand of optical fibre cables. Consistent with the overall focus to create an enabling ecosystem for recovery and growth of the Indian economy, the telecom sector saw clear recognition from the government as the critical enabler of the digital vision of the country. Continuing with the momentum and positive sentiment created by the structural and policy reforms initiated by the government in the recent past, the Union Budget, 2022 focused on the following initiatives, which if implemented with agility, speed and pervasiveness will accelerate the demand for Companys products and services of Cable and EPC business segments going forward : (a) Commitment to conduct 5G auctions in the calendar year 2022 with launch of 5G mobile services in Financial Year 2022-23. (b) Allocation of 5% of the Universal Service Obligation Fund (USOF) towards enabling affordable broadband and mobile service proliferation in rural and isolated locations.

(c) Renewed focus on BharatNet project completion by 2025 through Public Private Partnership (PPP) models.

(d) Since BharatNet needs more coverage across the remaining villages and gram panchayats to be covered, the government will contract private and public players through a PPP mode for fibre deployment completion by 2025.

The ambitious BharatNet Phase II project lays emphasis to connect all the villages with high speed broadband network with the applications ranging from e-Governance, boosting the Agriculture ecosystem, Revenue generation programs, Land records, affordable e-Healthcare, improving the e-Education, online banking and a host of other user services powered by high bandwidth optical fibre cables on a PAN-India basis. This government driven project is going to benefit the telecom cable industry with envisaged huge deployment of optical fibre cables in a quickest possible roll-out time frame on Public Private Partnership on turnkey Model(s). Your Company is also a large scale manufacturer of electron beam irradiated power cables meant for diversified user segments like Solar Energy, Railways, Ship Building, and other some of the high temperature applications which are gradually picking up in both domestic and export market places. The Company is growing in a sustainable manner with continuous innovations with increase in its market share.

As a leading player in the industry, your Company is improving further with its quality offerings of Signaling Cables and Quad Cables for Railway applications. The Company has increased its reach with its range of railway cables in both dedicated freight corridor railway networks and also the high speed railway networks. The Companys EPC (Engineering, Procurement & Construction) vertical has made relentless efforts to sustain the business despite pandemic situation by prudently deploying its resources in executing its various project, with its consistent performance output in the key infrastructure sectors e.g. Telecom networks, Power sub-transmission distribution, Rural Electrification, Lift Irrigation, City Gas supply networks, Sewerage Pipeline, Water and all other services, etc. verticals. Under the Companys IP -1 License for creating the complete optical fibre cable network, various telecom operators have been relying upon network created by the Company with gradual expansion to enlarge coverage in new geographies in India based on increased demand for shared passive infrastructure from the telecom operators and other service providers. The Company is also involved in providing the Operations & Maintenance (O & M) services in maintaining the telecom networks apart from System Integration (SI) as well. There is no other material change in the industry structure as was reported last year.


The Indian telecom industry is one of the most competitive but fastest growing markets globally. Growth in the telecom sector has helped drive economic growth and bridge the digital divide and a new knowledge-based economy is evolving in the country, with a special focus on data connectivity. This data connectivity will ride high on futuristic 5G technology and thus readying the current infrastructure for the new age technology will be key to future growth. In order to make 5G a success story in India, it is essential to invest in the digital infrastructure and network densification heavily, through provisioning of fibre network, small cells and mobile towers.

Despite being the second largest telecommunications market in the world, India is still optical fibre starved country and fibre kilometer per capita is very much lower than several other key telecom markets. The fibre Km per capita in China with a 1.3 billion population is 0.87. On the contrary, India with a 1.2 billion population, the figure stands at 0.09 only which is very low. Lack of fibre infrastructure in India has adversely impacted the last mile connectivity. Although initiatives such as National Optical Fibre Network and BharatNet were launched, the implementation uptil now was slow. Earlier, in August 2020, the Honble Prime Minister of India laid out his vision to connect every village in the country with Optical Fibre Cables in 1,000 days. To achieve this, cables would have to be laid at nearly 3.6 times the current speed, up from the existing average of 350 KMs a day to over 1,251 KMs a day but the overall progress remains slow to date. The gap will further aggravate with implementation of 5G in the current fiscal year, which requires a significant overhaul and densification of optical fibre network. Further, with small cells becoming an important part of the 5G roll-out, fiberized backhaul will be essential. For an effective 5G mobile communication technology to reach the large customer base in a country like India, requires last mile deliveries as well in terms of high density fiberisation fiberisation of cell sites. At present, the tower levels stands at 32 % only and for an efficient and true 5G broadband speed, the fiberisation levels of cell sites to be increased to atleast 85% levels and then only the user case experience characteristics can be fulfilled to the delight of the subscribers. With a steady power supply, a fiberized backhaul will support the booming edge data centres. The cable industry shall, therefore, play a significant role in realizing this vision as it possesses the requisite skill sets and experience to expedite Indias fibre growth story. In addition, Ministry of Road Transport and Highways (MoRTH) has laid out plan to enable key highway projects in the country with optical fibre cable network as a part of Indias National Broadband Mission. The optical fibre cable network will help in telecommunication connectivity along the highways. The OFC project by MoRTH is also significant since the government is working on Bharatmata Phase-I project which includes a network of multi-modal logistic parks and stations with significant junctions along these high speed corridors. These optical fibre networks will then be required to feed connectivity in the upcoming economic zones that will come up along the expressways.

Further, with a push for economic revival through infrastructure growth and financing, the Government of India has put in place plans for further spending on seven engines of growth i.e. roads, railways, airports, ports, mass transport, waterways and logistic infrastructure through PM Gati Shakti Programme. These engines of growth are supported by complimentary roles of energy transmission and distribution, IT, communication, bulk water, sewerage and other social infrastructure projects. These projects shall open up more opportunities, thereby generating more business for the Companys EPC business segment in utilizing its expertise in all the business verticals it operates to ultimately thrive and provide its value added services to global standards.

SEGMENT-WISE PERFORMANCE Sale of Products (Cables, etc.)

During the year under review, the Companys Revenue from Operations on account of sale of products comprising of Telecommunication cables, other wires and cables, FRP Rod/Glass Rovings and traded goods, etc. increased from 48192.89 lakhs in the previous year to 56024.74 lakhs. This reasonable increase in the revenue achieved despite the pandemic related disruptions in normal operations during the beginning of the financial year under review and also due to customer retention measures adopted by the Company and reaching out for new customer acquisition which paved the way for this improved performance even during the challenging period for the industry as a whole.

Sale of Services (EPC Contracting/Turnkey Services)

The Companys Revenue from EPC Contracting/Turnkey Services in the EPC business segment has decreased to 85940.76 lakhs as compared to 110347.86 lakhs in the previous year, mainly due to low order booking in first half of the Financial Year. The Companys EPC Division having at its disposal with its highly experienced team of professionals to offer high quality services to its esteemed customers with latest technology driven tools. Companys IP-1 performance during the year was muted due to temporary slowdown in capital expenditure by TSPs. Further, the Companys IP-1 business model has delivered tremendous value to all the telecom operators who are its esteemed customers, deriving greater benefits out of the network built by the Company thereby offering latest digital services to the subscribers with ultimate customer delight.


During the year under review, the Company has reported reasonable financial performance despite Covid-19 pandemic related disruption in overall business environment. The Company has been able to maintain its market share in domestic cables business and also able to maintain the mark of trust earned by the Company in EPC business segment, although the revenue reduced due to the pandemic situation prevailed all across the country as compared to the previous year.


? The revenue from operations decreased by 11.86 % to 132394.90 lakhs during the year 2021-22 as compared to 150205.52 lakhs in the previous year.

? The aggregate other income during the year 2021-22 increased to 3100.63 lakhs as against 2369.80 lakhs in the previous year, mainly due to increase in Interest and other non-operating income.

? The Company achieved profit before interest, depreciation/amortisation and tax of 18609.83 lakhs during the year 2021-22 as compared to 22498.61 lakhs in previous year. Profit before depreciation and tax during the year 2021-22 stood at 13420.18 lakhs as against 15583.36 lakhs in the previous year.

? The finance costs has decreased to 5685.96 lakhs (previous year 7803.47 lakhs) primarily due to repayment of borrowings.

? There was no change in the capital structure during the year. The Other Equity of the Company stood at 99739.04 Lakhs during the year under review as compared to 87446.84 Lakhs in the previous year.

? The additions to the fixed assets of 822.52 lakhs during the year mainly consist of supporting infrastructure in its facility at Rewa


? The inventories increased marginally to 76021.27 lakhs as on March 31, 2022 from 74752.22 lakhs as at the end of the previous year, due to increase in inventory of raw material.

? The decrease in trade receivables level at 70844.78 lakhs as on March 31, 2022 as compared to 115834.60 lakhs as on March 31, 2021 was due to increase in turnover in last quarter.

? Key Financial Information (Standalone & Consolidated):




(Rs in lakhs)

Particulars Standalone Consolidated
F.Y 2021-22 F.Y 2020-21 F.Y 2021-22 F.Y 2020-21
Revenue from Operations 132394.90 150205.52 132394.90 150205.52
Profit before Finance Costs, Depreciation/Amortisation and Tax 19106.14 23386.83 33735.81 45188.90
Net Profit after Tax 8460.59 10355.62 19327.97 27007.90
Fixed Assets 10377.19 13185.61 10377.19 13185.61
Investments 22259.35 16670.13 301394.95 264546.43

? For detailed information on the financial performance with respect to operational performance, a reference may please be made to the financial statements.

? Details of significant changes in Key Financial Ratios:

Ratio 2021-22 2020-21 Variation Reasons for Change
Debt Equity Ratio (in Times) 0.60 0.84 (28.02%) Debt Equity ratio further improved due to repayment in borrowings.
Return on Net Worth (in %) 9.38 12.65 (25.82%) Due to decrease in profitability as compared to previous year.


? The emerging opportunities for optical fibre cables infrastructure from government sponsored projects/private operators capex including the impending introduction of 5G technology in the mobile communication networks should auger well for your Companys both Cable and EPC business segments.

? Government driven BhartNet project envisages deployment of optical fibre cables in large quantity across the country which may lead to optimum capacity utilization in Cables manufacturing set-up besides bringing enormous opportunity for the EPC division with large scale cable deployment opportunities.

? FTTH and Tower fiberisation projects are also expected to add to the huge opportunity pipeline for the Company.

? Constant product innovation coupled with world class and competitive solutions may generate good demand for Companys products in solutions in global market thereby derisking its business model by reducing reliance on domestic market.

? Government proposed capital outlay and Companys initiative in Water and Irrigation projects will ensure strong growth for EPC business segments in the foreseeable future.

? Sluggish economy inhibits the robust growth of telecom network as the investments shrink during downturn which remains as a threat to the industry, but it remains in the short term only and development in telecom network is bound to happen with latest technology innovations.

? Governments Policy initiatives always play a major role in shaping up the Telecom industry and also in the domain of Infrastructure creation in terms of its ups and downs.

? Right of Way (RoW) permissions and its guidelines from various Government Authorities traditionally played a role in the telecom network creation and hopefully, the various policy impetus is resolving the perils of the industry.

? The economy and its business activities get derailed in the extraordinary circumstances emanating from pandemic, geo-political tensions and rising inflation, etc. which in turn affect the business and operations of the industries and ensuing impact on profitability. The Company is not a stranger to these challenges and has taken appropriate measures by building agility and ability to pivot quickly.

? Rising Human Resource challenges like workforce planning, retention, succession planning and skill gaps and increasing wage/ social security benefits trend will play crucial role for the sustained viability and continuing success of the Companys businesses and can be categorized as Human Capital Risk to be dealt with as an important matter for future growth of both Cables and EPC business segments.

? In an increasingly uncertain and volatile world that is throwing up new challenges for businesses, ESG provides a framework for staying resilient by holistically safeguarding people, planet and profits. The Company has taken effective steps for gradual integration of environmental, local and governance aspects in all spectrum of its businesses thereby decreasing the risks arising from domestic and global factors.


The risks that may affect the functioning of the Company include, but are not limited to:

? Financial and liquidity conditions in the economy in general and of the key customers of the Company in particular and Companys ability to retain these customers amid stiff competition;

? Dependence on concentrated customer base in cable business segment;

? Increasing cost of raw materials and logistics;

? Volatility in forex market and exposure of the Company to foreign currency movements;

? Technology challenges/information technology risks;

? Competitive market conditions;

? Inverted duty structure;

? Compliance and regulatory pressures including changes in tax laws;

? Delay in execution of turnkey projects leading to financial penalties and cost overrun;

? Retention of skilled manpower in the relevant areas of Cable and EPC business segments;

? Environment and safety risks;

? Digital transformation of manufacturing facilities to remain competitive and attain world-class status under Industry 4.0 concept;

? Structural risks represented by globalization, trade wars and macroeconomic interventions by the Government(s);

? Business disruptions during national disasters, pandemics, epidemics and other catastrophic events, supply chain disruptions and suppliers risk due to regulatory and policy changes by the Government(s); and

? Geopolitical events as well as other events outside the Companys control that could cause a disruption to the manufacturing and service operations.

Risk management is an increasingly important business driver and is embedded in the activities of the Company through an enterprise-wide approach. Your Company has a defined risk management strategy with senior management identifying potential risk, evolving mitigation responses and monitoring the occurrence of risk. The Company is also in the process of implementing a forward looking and predictive risk identification and management program that will help businesses limit risk exposure, save costs and enhance value for stakeholders. The definition of risk management is also being enlarged to incorporate an array of operational, legal and financial objectives besides ensuring safety and well-being of employees in the times of natural disasters and pandemic. The risks are identified on a regular basis, across functions and business segments and the Company strives to link each risk with mitigation step to ensure business continuity. Concerted efforts are being made to improve risk management programs so that both business and regulatory demands can be met, greater business value can be created and corporate reputation can be protected. Risk mapping updates are made available to Audit Committee and senior management team.


The Companys system of financial, operational and compliance control and risk management is embedded in the business process by which the Company pursues its objectives. The Company is also required to comply with the provisions of the Companies Act, 2013 as regards to maintaining adequate internal financial controls over financial reporting. The management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides assurance on the efficacy of the Companys operations and safety/security of its assets besides orderly and legitimate conduct of Companys business in the circumstances, which may reasonably be foreseen. The Company has a defined organization structure, authority levels, delegated powers, internal procedures/SOPs, rules and guidelines, code of conduct, etc. for conducting business transactions, ensuring reliability of financial controls and compliance with applicable laws and regulations. To manage the risks profile of the Company, proper organization structures, EHS/other compliances, whistle blower mechanism, compliance management, performance reviews are conducted at regular intervals.

Further, to augment the internal controls, the Company has engaged a firm of Chartered Accountants for internal auditing, who besides conducting periodic audits, independently reviews and recommend measures to further strengthen the control mechanism. The Internal Audit programs cover the entire operations of both the business segments of the Company. The Internal Auditors regularly brief the Management and the Audit Committee on their significant audit observations/findings, steps to be taken with regard to deviations, if any, and the remedial measures as required are implemented by changing processes and/or setting up additional internal controls. The Audit Committee also reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, if any.


The Company successfully continued with the implementation of occupational health and safety, quality and environmental protection measures and these are ongoing processes at the Companys plant and facilities. Various proactive measures have also been adopted and implemented which, inter alia, include adoption of cleaner technologies wherever feasible, conservation of resources through waste reduction and training of employees with a focus on sustainable development by improving standards on occupational health & safety and environment protection. As a recognition of these objectives, the entire range of products of the Company continue to remain certified to the requirement of international standard ISO 14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health and Safety Management System) by the DNV GL Business Assurance India Pvt. Ltd.


The Company sees its relationship with its employees as critical to the future and its employee relations agenda focuses on ensuring that employees feel valued, on managing change constructively, and on creating an environment and culture within which every employee can maximize his contribution. The Company follows the core values of "be thorough on safety first and compliance" and takes great pride in being compliant to all laws and regulations governing labour and employees and continues to exercise strong governance over all established procedures and practices.

Your Company believes that the competence and commitment of the people are the principle drivers of competitive advantage which enhances competitive strength by differentiating it from competitors. The focus is therefore increasingly going to be retaining talent and try to develop human resources capable of opening up the next generation by identification of key people, knowing their aspirations, designing their growth paths and realigning responsibilities, etc. The industrial relation climate of your Company continues to remain harmonious with focus on improving productivity, quality and safety. Efforts are being made to strengthen organisational culture in order to attract and retain the best talent in the industry by redefining HR policies and processes in line with contemporary market practices. Training needs are identified in systematic manner, virtual as well as physical training programs were organized enabling the employees to grow their abilities for making the Company an enduring organisation, both economically successful and having impact on their operating environment. While the long-term consequences of the pandemic are still uncertain, the Company is gradually gearing up for new work realities to stay relevant and creating a work environment that fosters trust and empathy. The Board records its appreciation of the dedicated and exemplary services rendered by employees at all levels for safe and reliable operations throughout the year. The Company management stands stoically with all employees and their families, committed to their safety, security and well-being during dreadful pandemic and post pandemic period. The Company employed 1511 numbers of employees on its roll as on March 31, 2022.


The Management Discussion and Analysis Report may contain certain statements that might be considered "forward looking statements". These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed or implied in the Statement as important factors could influence the Companys operations such as demand supply conditions, Government policies, local, political and economic development, industrial relations, risks inherent to the Companys growth and such other factors. The Company does not undertake any obligation to publicly update, inform or revise such statements, whether as a result of developments, events or actual materialization. Market data and product analysis contained in this report has been taken from internal company reports, industry & research publications, but their accuracy and completeness are not guaranteed and their reliability cannot be assured.