Q3 24/25

Jan 31, 2025

Summary

Q3 results were weighed down by the blast-furnace shutdown, while nine-month profit grew. Management expects demand recovery and targets FY26 sales of 8.5–9 lakh tons with 16%–18% EBITDA margins.

Ladies and gentlemen, good day and welcome to the Q3 and nine-month FY 2025 earnings conference call of Electrosteel Castings Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing * then zero on your touchtone phone. I now hand the conference over to Mr. Vikas Verma from EY LLP. Thank you, and over to you, sir. Thank you, Neil. Good evening, everyone. On behalf of Electrosteel Castings Limited, I welcome you all to the company's Quarter 3 and nine-month FY 2025 earnings call. To discuss the performance of the company and to answer the questions we have with us from the management team, Mr. Madhav Kejriwal, Whole-time Director, Mr. Sunil Katial, Whole-time Director and CEO, Mr. Ashutosh Agarwal, Whole-time Director and Chief Financial Officer, and Mr. Gaurav Somani, General Manager, Finance. Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain forward-looking statements that are subject to various risks, uncertainties, and other factors which will be beyond management control. We kindly request that you bear in mind there may be uncertainties when interpreting such statements. Please note that this conference is being recorded. We will now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session. I will now hand over the conference over to Mr. Madhav Kejriwal for his opening remarks. Thank you, and over to you, Mr. Madhav. Thank you, Mr. Verma. A very good evening to all and a warm welcome to Electrosteel Castings Q3 and nine-month FY 2025 earnings call. Let me share a glimpse of our financials and industry demand scenario. The company's total income stood at INR 1,816 crores during the third quarter of FY 2025. This was down 4% compared to Q3 of last financial year, which was mainly on account of the shutdown of the MBF at our south unit. The company's DI pipe sales volume stood at 1.77 lakh tons in Q3 FY 2025 and 5.45 lakh tons for the nine months. Export contributed to 14% of the aforesaid DI pipe volumes. On the ongoing brownfield expansion to reach capacities of 1 million tons of DI pipes out of our plant CapEx of INR 700 crores for phase two, we have already spent INR 480 crores till 31st of December. There is a minor delay of around 2-3 months on account of manpower shortage and delays in supply of equipment, and we are hopeful to reach the installed capacity of 9 lakh tons by the end of March 2025. We are also happy to inform you all that our long-term credit rating has been upgraded by CRISIL from double A minus to double A. Coming to the industry demand scenario, the demand for DI pipes and fittings continues to be robust on account of initiatives like River Linking, Viksit Bharat Vision, Jal Jeevan Mission, and AMRUT 2.0. Although there is a pause for some time from the government on spending, which has been seen across all sectors, we are optimistic the government will continue to push towards infrastructure spending from the upcoming Union Budget 2025/2026. I would now like to hand over the floor to my colleague, Mr. Ashutosh Agarwal, Whole-time Director and CFO, for taking you through the financial highlights. Thank you, Madhavji. Good evening and a warm welcome to all the investors present in Electrosteel Castings Q3 and 9 months 2025 earnings con call. First of all, I would like to brief you about the consolidated financial results of Q3 2025. Total income stood to INR 1,816 crores, partially impacted by, as informed by Madhavji, shutdown of blast furnace Srikalahasthi unit. EBITDA reported to INR 294 crores with EBITDA margin of 16.2%. Although margins were down year-on-year due to lower volume on account of shutdown, but saw an improvement from previous quarter. PAT reported to INR 150 crores with PAT margin of 8.8%. Highlights on consolidated 9-month results. Total income grew by 2.9% year-on-year to INR 5,701 crores. EBITDA increased by 2.7% year-on-year to INR 951 crores, and EBITDA margin stood to 16.9%. PAT grew by 5.5% year-on-year basis to INR 531 crores in 9 months. PAT margin stood to 9.5%. Now I'm talking about standalone results of Q3. Total income stood to INR 1,673 crores impacted by shutdown as implemented earlier. EBITDA stood to INR 280 crores with EBITDA margin of 16.7%. PAT stood to INR 157 crores with a PAT margin of 9.4%. Highlights of our standalone 9-month results. Total income was INR 5,236 crores- grew to INR 903 crores and EBITDA margin 17.2%. PAT was INR 521 crores. PAT margin is 2%-10%. About the ongoing CapEx plan, as intimated by Madhavji, total plan was for INR 700 crores for phase II, and we have spent around INR 480 crores till December 2024. We target to enhance our DI pipe manufacturing capacity to 1 million ton by March 2026. I will open the floor for question answers. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Gargi Singh from Value Investments. Please go ahead. Your voice is not clear, madam. Gargi, if you are using a handset, request you to come closer to the mic. We cannot hear you. Hello. I am sorry, Ms. Singh. We cannot really hear you. Request you to call us back maybe from a different number. We will move to the next question. The next question is from Rajesh Agarwal from Moneyore. Please go ahead. Hello. Sir, how much days production was lost in this quarter, and can you quantify the revenue out of it? Second question is the outlook on the order, because other pipe companies were saying now the order is moved from central government to state government, and your outlook on the orders. We have lost approximately eight days of production. Okay. Which is around 18,000 tons. Okay. In regard to the total revenue, Gaurav, why don't you? Yeah. I think in terms of total revenue, it should be around INR 45 crores. INR 45 crores. Okay. See, what happened was there was a shutdown between December and January. Yes. Right. We made it in stock exchange. Okay. Around approximately six days in December and seven to eight days in January. Okay. When did it start? Total loss. Okay, understood. Up to 7 January or is it only for the quarter, December, 7 days? The total loss that was given by Madhavji was for the total 12 to 13 days. Okay. In December, what we have lost is around INR 45 crores of revenue. Yes, INR 45 crores. Sorry, I apologize. I said 8 days. It is actually 6. Okay, understood, sir. Now that the blast furnace has stabilized? Yes, please. Of course, there is a time lag between firing and stability at the required production level. Okay. After the restart, it has taken us around 20-25 days to ramp up to its capacity, but now we are seeing stability at the blast furnace. Has the efficiency improved, sir? Yes, definitely. It has improved. Okay. On the order book, sir. Outlook on the orders. We have around 8 and a half months of order book at the moment. Okay. It is around 6 lakh tons of DI pipes. Okay. Hello? Yes, please. The outlook? The order book is decreasing because we are expecting after the elections some orders will come. Your outlook on that? Well, there has been a momentary slowdown from the government side on the expenditure towards Jal Jeevan Mission. Okay which was tantamount to around 50% of our total order book and also the total demand in the market. For this particular quarter, post the budget which is scheduled for tomorrow, we are very optimistic that spending will restart. Starting April, I think things will be back to the way they were earlier in regard to the demand pull. Parallelly, new initiatives by the government on the front of River Linking irrigation at a state level and AMRUT are seeing good impetus. Okay. So our bidding pipeline is strong? We may expect some orders by April? Absolutely. We usually keep an order book of around 8-10 months. We are at the lower end of that range, but it's still within our general. Okay trend. Okay. And sir, the outlook on the export, Pankaj? Optimism is there towards growing upcoming economies like the Middle East. Okay. Unfortunately, we have seen a bit of a hit on our business in the U.S., but Europe continues to be stable. U.K. is improving, but of course, it's a smaller part of the entire equation. Okay. We've also started exploring more markets in Southeast Asia and Africa, but at the moment it's difficult to give you an exact number of the growth over there, but it seems like there's a lot of potential. The sort of pricing and the margins will hold on, or there will be improvement in the margins from here? I think historically, if you see, we've always hit a margin of 15%-18%. At the moment, we are at 16.7. I think these are pretty stable numbers which we should be able to carry on for the foreseeable future. Okay. This one, any much fluctuation in the raw material, no? I'm sorry, I couldn't quite get you there. Any fluctuation in the raw material quarter to quarter? No. Any fluctuation in the raw material? Actually, on the raw material front, on the coke front, I mean, coking coals and all that, there has been a downward trend. The price correction to the tune of some $35-$40 has come down. Okay. But at the same time, as far as iron ore is concerned, there has been an upward trend. Okay. Practically on raw material front, they have neutralized each other, more or less. Thank you, sir. I am through. Thank you. Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. Next question is from Gargi Singh from Value Investments. Please go ahead. Gargi, I am really sorry, but your voice is breaking, and it is very inaudible. Yes, I am trying again. Is it better? Now it is much better. My first question was that, sir, in the last quarter concall, you had alluded that the coking coal benefit will be seen in this quarter, but the numbers suggest that it is not visible. The coking coal pricing has fallen by 30% in the last one year. Yet in the last one year, the gross profit per metric ton is same at INR 52 per kg. This has not even increased by INR 1. What is limiting the expansion in gross profit, and why are we unable to see any gross margin expansion? Ma'am, I will answer your question in three parts. First, as mentioned by Mr. Katial, we have seen an increase on the iron ore prices, which has an equal bearing on the costing. The second part of it is that due to our shutdowns, there are some increases in costs that are there, and as mentioned, we were having some instability in the blast furnace, which throws our efficiencies and productivity a little out of whack. These elements cause a minor disruption in the costing on the operation side. On the input material side, iron ore somewhat made up for it. The third point here is that we carry stock. You will see that the impact of the reduction in costs do not take place immediately. It takes a little time for that impact to come into place. Although we are looking at a much lower cost on our stock as opposed to the beginning of this financial year, it is not come down as much as it seems to have on an index. Sir, in response to that, actually, historically, if I see the raw material cost, then as compared to the iron ore, then the overall cost of production and the coking coal price will at least be 3x of the iron ore, considering the requirement and the prices, how it fares out. The benefit of coking coal should be significantly higher, and I have been waiting for this for quarter on quarter. But for the last five quarters, it is at different levels. Hence this doubt that why are not we seeing these numbers, sir? When do we expect to see, or do we expect to see this? Ma'am, on the 3x part, it might seem so on the absolute term, but it is also important to understand that the consumption of iron ore and coke are different. Although you are right, the impact of coking coal is higher on the cost than iron ore, but it is not 3x. No, the usage factors are totally different. Actually, the consumption of coke to iron ore is in the ratio of one is to three, Rafi. Three times the iron ore. Iron ore, we consume around 1.7 tons for making one ton of iron. And coke we consume around, say, 500 kgs. So less than one-third of that. Though on the price index, what you said is absolutely correct, that the impact of reduction in the coke pricing is much higher. But because the multiple of that as a usage factor is less, so that is how it is getting neutralized. Yes, and the difference in the delta of the cost of coking coal and iron ore is, unfortunately, we've lost out on that due to minor changes in our KPIs, which is our key performance indexes because of the disturbance in the blast furnace. Okay, sir. So how long this is expected to continue? Because usually the blast furnace shut down. Because in your previous call you had alluded that it will not get extended post November. But in the opening remarks you mentioned that also the previous participants, you mentioned that Yes, sir. Ma'am, the timeline for the shutdown was only to start in December. If I said that, I might have miscommunicated or there's some sort of A misunderstanding, I feel. No, actually, when October we discussed, madam, the point was that we are having problem in the blast furnace. We are in the process of procuring the material for that, and in all probability, in the last week of December or so, after 20th, we should be able to take the shutdown. Actually, some small gap has taken place and we will definitely look into that how. Yes. But that is what actually has been the plan. We just want to clarify that we took the shutdown in end of December, 6 days into December, and then 8 days into January. So after that, the blast furnace has come up. There were small teething issues and now blast furnace is nearly stabilized. It is working fine now. Mm-hmm. Okay, sir. Sir, second question was that, going forward, if we see the coking coal prices sustaining at $200, $220 per ton, then there will be a revision in DI prices according to this because of the lower coking coal prices. So a few of the competitors have indicated that there is a correction in DI prices according to the coking coal prices. So at the current level, we are doing INR 16 per kg EBITDA. When we reach 1 million ton volume, considering the correction in prices, if we do around INR 14 per kg in EBITDA, then from a base of FY 2025, the EBITDA growth CAGR is coming in single digits. So what is your take on this? Well, ma'am, at the moment to really be able to quantify what will be the INR value of EBITDA on our production is difficult because we are going to be reaching 1 million ton, say, end FY 2027. At that moment to clearly know what the raw material price movement will be, will be difficult. It has never been so that for 2-3 years there has been a stable pricing on raw material to have a ₹14 per ton EBITDA margin. Thus, we like to fall back on percentages. So I am very optimistic and I am very sure that we will be able to maintain an EBITDA margin of 16%-18%. And considering that, our growth will take place as our quantities increase. Understood. Sir, third question was on the- I am really sorry to interrupt, but may we request you to rejoin the queue as there are several participants waiting with questions. Yeah. Thank you. We take the next question from Deepak Lalwani from Unifi Capital. Please go ahead. Hello, sir. Thank you for the opportunity. Sir, first question is that given the weakness in water infrastructure spends, is there any order execution risk that we will probably see in Q4 and going ahead? No. All these projects that we have in our order book, majority of them are projects which have already broken ground. So the risk of losing out on business is negligible. There might be a bit of a stretch in the delivery because of the slower expenditure by the government, which also I feel is momentary. Fair enough. Understood. Secondly, a related question. You said that the outlook is strong, but given that the Jal Jeevan is almost 80% over, the AMRUT scheme is fairly small compared to Jal Jeevan. So what gives you the confidence for the demand growth for DI pipes? Secondly, the demand supply scenario, how should it pan out for the industry? Thirdly, have you witnessed any pricing moderation for our product? On the pricing moderation front, it is minor and it is related to the correction on the raw material front. Answering the question regarding AMRUT being a smaller CapEx than Jal Jeevan, Jal Jeevan today is around 79%-80% on the website. But if you see the actual impact on the ground, there are many places where the tap connections are there, but there is a dearth in drinking water available. That is because those taps are not really connected to a perennial source. So there is a lot of work left. The initial outlay for Jal Jeevan was actually twice as what was decided to be spent by the government. So they will need to spend more money to make this mission successful. In regard to other demand sources, India is very strongly and aggressively moving towards piped irrigation as against canal. There are many advantages that have been proven in that process. There is increased spend on the front of the states on that. Another very ambitious project which seems to have finally picked up pace is River Linking. It was something that was probably started in the early 2000s, but now there is actual work on the ground that is happening. That is again going to be a good source of demand for us. Going to these three, four reasons, I find that the medium-term situation on the demand front is quite robust. Okay. And the supply addition that you guys are doing and also the other industry peers, will it disturb the demand-supply gap? Should there be any risk of pricing relating to the supply being more than demand, in your opinion? I am not really concerned about demand-supply mismatch where the supply is more, at least for the next three years. There might be temporary blips like we have seen in the last quarter, but that is very momentary. Of course. Okay. kind of live orders in the market. Once the fund flow start, we go back to a situation where demand is surpassing supply. Okay, that is good to hear. I wanted to clarify one number. So what is the order inflow in terms of tonnage in this quarter versus Q2? Can I get back to you on that separately, please? Because I do not have that number ready at this point. Okay. The last question was on the margin outlook, sir. On a tonnage basis, per ton basis, what should we be budgeting in for the next quarter, which is Q4, and the whole year of 2026? Sir, I think it will be difficult for me to give you an exact number in terms of INR per ton, but as a percentage, I think we will be able to hold on to the performance we have had so far. Thank you, sir. Those are my questions. Thanks. Thank you. Thank you. The next question is from Ankur, who is an individual investor. Please go ahead. Yeah. Good evening to everyone. Very good evening. Sir, in the opening remarks, Shri Kejriwal said that the expanded capacity will start in the month of March 2025. On the other hand, GM finances, if I am not wrong, he said that the capacity will start in March 2026, sir. I would like to please correct the statement, sir, if I am not wrong. I am sorry. I will just bring clarity to that. Mr. Agarwal, who is the CFO, was mentioning the final capacity, which is around 1 million tons. I was highlighting the number of 9 lakh tons, which is our first step towards that. When it will get start, sir? in 2025 or in- FY 2025, we will have an installed capacity of approximately 9 lakh tons. Okay. 8.5 to 9 lakh tons. Then during the course of the financial year, we will put in more capital to take our capacity up to between 9.5 to 1 million tons. Okay. My second question is, sir, your forthcoming Odisha plants, sir, what is the position as of now, sir? When it will get start? Sir, there is very good progress on the overall due diligence of this project, and I am hoping that we will have cemented plans to present to the public soon enough. Sir, can we expect that it will get started in FY 2027? The project itself? Yes, sir. 0.5 million ton, sir. Sir, I think somewhere between 27-28 is a bit more realistic. Okay. Sir. Thank you so much, sir. Thank you. Thank you. Before we take the next question, a reminder to participants that you may press Star and 1 to join the question queue. Next question is from Saket Kapoor from Kapoor Companies. Please go ahead. Namaskar, sir, and thank you for the opportunity. You were answering to the earlier participant about the Odisha project. Sir, have we outlined the capacity we were mentioning about 0.5 lakh ton? Yes, please. Sir, the earlier participant was mentioning about 5 lakh ton. Have we outlined the capacity we will be coming up for the Odisha project? Sir, that is a somewhat approximate figure. Like I mentioned that you have to kind of get into the optimization of CapEx to capacity installed. With the kind of sizes that we have to reach a good level of production and efficiency, somewhere between 4 to 5 lakh tons should be the minimum that the company should be looking at. That is the genesis of this number. Okay, sir. Sir, if you could just provide me firstly with the tonnages for Q3 and last year comparable, and also for nine months and nine months comparable. Yes, sure. For Q3, our production this year has been 1.77 lakh tons. Q3 2024 was 1.84 lakh tons. Our nine-month has been 5.5 lakh tons for 2025. For 2024 it was approximately the same, give or take 2,000-3,000. It was 5.47 lakh tons. Sales. Sales. This year we've had a sales of 1.77 lakh tons. It's matching our production. Last quarter, we had more sales than production. It was at 1.95 lakh tons. Nine months sales is 5,45,000 tons for 2025, and for 2024 it was 5,50,000. So we are somewhat matching our production to sales. For nine months it is 5,25,000 vis-à-vis 550. 545, please. 545. Sorry. Yeah. Sir, taking into account still the shutdown which was in the month of January, and now the revamping of the MBF, what should be an ideal number to end the year? Sir, we are hoping that we will end at somewhere north of 7.5 lakh tons, both on production and on sales. 7.5? Yes, a little north of that. Okay. Last year, what was our sales? Just short of that. It was 7.47. Okay. A small request, sir, if the volume data can also be provided in your presentation or in the press release, which was earlier a norm, so that would suffice and it will save a lot of time also. Yes, sir, we will look into that. Noted. Thank you. Yes, sir. Sir, now coming to the impact of this shutdown. I think so, if in absolute number you could give us some idea how much have we lost. We lost about revenue of INR 45 crore and for the balance seven, eight days it should be closer to INR 60 crore, I think so, in that proportion. But in terms of the expenses that we have incurred which does not commensurate with the revenue, impact, Ashutosh Agarwal. The total expense for the shutdown is around INR 7.5 crores. Okay. This is for all the 15 days total. 14 days. Yes, please. Okay. Sir, what explains this other expense line item growing disproportionately, if we take the year-on-year comparison also and also for the quarter-on-quarter at the controlled level? Saket Ji, one factor is ocean freight, which had gone up compared to last year. That led to increase in other expenses. Also, since the production was low, the fixed cost absorption took a hit. That was the second reason which led to a fall in the margins and higher other expenses. Okay. And sir, for other income, there is also a significant increase if we take the controlled number at INR 39 crore, versus INR 21 or INR 22 for previous two quarters. What has attributed and what should be a sustainable number for the other income? Sir, this is on account of an anti-subsidy refund that we have got from the European Commission. There is an anti-subsidy duty that they have availed on us, but we keep applying for refunds, and we have managed to get a refund of INR 23 crore in this quarter. Going forward, I think in this quarter as well, we will be expecting some sort of refund. This is an exercise that is ongoing, sir. We do it every year. Some years we are able to get a substantial refund, some years it is lesser. It is difficult to give you an exact stable number for this. Okay, sir. Two more points. Sir, Madhavji, you mentioned about U.S. business getting a hit. Can you explain the reasons what has led to this and what steps are we taking? Exactly what has happened for the U.S. business? There is an overall slowdown in the U.S. market for our product as a whole. Secondly, because of the impending possibilities of tariffs that have to come and Made in America programs that are there, customers are a little apprehensive in buying non-American products right now. They are afraid that those products won't sell into the market. Unfortunately, sir, this is an issue which the solution to which is to go local manufacturing there. But for that, we have no immediate solution. We are looking at increasing our market shares in other geographies so that we don't lose out on our overall export percentages. Okay. Sir, for U.S.A., what percentage attributes to our total export? How much do we last year business? Sir, Saket, it's very small amount. Maybe 1% of the total export that we do. Now. Okay. Yes. Now it's come down to 1%. It was probably at sub 5% levels earlier. Okay, sir. Lastly, sir, on the coal block part, sir, already we have seen in precedent that whenever the party who has acquired the block and starts mining operations and all there are payments in packages that are released. I think JSW name which was mentioned in your notes to account speaks about the mine being handed over to them. Exactly, sir, where are we in terms of whether the right figure has not been determined or if you could just give some more color to the same. Sir, classification of the assets into the right categories and then its valuation is an exercise that has been ongoing for a little longer than we had expected it to go on for as well. Of course, it's a very voluminous procedure. At the moment, JSW has, yes, you're right, they have been handed over the mine. But within the mine, if you look at the orders, it says that under mine infrastructure, it says nil, which is the reason why they cannot start operating it at a commercial level. At this junction, we are still waiting for proper categorization and valuations of all the assets. They've managed to do some of it. There is some still left. Any timeline we are working. Mr. Kapoor, I'm not here. Sorry. Yeah. I am joining only. Madhavji has just communicated. I will just answer. Any timeline we can look forward, sir? Or it is a judicial process wherein Sir, I have been saying for two quarters that I went wrong on this timeline. So if I comment on this part, it will be wrong again. I would rather just say that we are optimistic because we know that it is in the right stages. Mm-hmm. Okay, sir. I will join the queue again. Thank you, sir. Thank you. Thank you. Next question is from Dipesh Agarwal from ICICI Asset Management. Please go ahead. Yeah. Hello, sir. Good evening. So a couple of questions. The first question was, so we are looking at increasing our capacity to almost 1 million tons by FY 2026. And you just mentioned that we are currently matching, like the current demand scenarios are matching our capacity. So do we have any tangible proof or any tangible material, like proof that by FY 2026, we will actually need that 1 million tons of capacity? Do we really have that demand prospect for the next couple years? Yes. Well, you see, the capital expenditure of the governments in both state and central that was being done up till, say, mid of this year or even maybe a little beginning of this year. Going to that expenditure, there was a demand-supply gap of almost 25%, where the demand was higher. So being optimistic on the fact that we will at least go back to that level of expenditure, it seems obvious that there is good space for growth. Beyond that, there are also new projects that are coming up. As I mentioned earlier, River Linking is a very big, robust project which is seeing light of day now. I think there are around eight or nine projects, of which three of them have really picked up pace, and there's good outlay against them. It will take five to seven years for them to be completed, but every year there will be a good allocation towards those projects. So keeping that in mind and when you kind of understand the growth trajectory of a developing economy to a developed economy, you try to replicate the growth story of demands for the product in China, in the States, and in other similar economies. You will realize that at this particular junction when you're in the transitionary phase, demand just keeps growing, and we need to maintain our market share, if not grow it. Right. Understood. Can you give me a geographic breakdown of our revenue? You mean in terms of country by country or Country by country, yes. Continents. Sir, this is something that fluctuates every quarter, every six months, because as you know, it is a project-based business. Today we are seeing Middle East take up a big chunk of our exports, whereas a year back it was not much. Say the year previous to that, America was a little bigger than what it is today. Europe also fluctuates. I think for me to give you a particular trend, because within six months that would change. I can give you a breakdown of export and domestic. It is approximately, for this quarter, it was 14%, but our general average is around 18%-20%. I think the reason I asked that question was not just India, the whole world is actually looking to build a clean water infrastructure. Not just India, there is a lot of opportunity that lies in this particular aspect. I just wanted to understand if the company currently has a good presence to capitalize on that, or are we making any such expansion plans to capitalize on the same? No. Of course, while we expand our capacities here in India, we will also be looking at increasing our market shares in different continents. We tend to keep a minimum baseline quantity in each major country that is there. Then based on where the projects come, we expand. We have been selling in the Middle East for many, many years, and there was a peak during the Qatar World Cup, and now there is a peak again due to Saudi. Similarly, in Europe, just post-COVID, there was a big peak because the government spent a lot of money to get the economy starting again. This is something that, as you rightfully said, every continent, every country is looking at expanding, but they do not spend money at the same time, fortunately. We are able to capitalize on different places based on what they are doing at that moment. Right. Last question. Are there any R&D expenditures that we are making that may help us maybe work better on our capacity utilization or help us in executing projects faster? Secondly, are there any new business verticals that we are looking to tap into? The management of the board believes there are much more better opportunities, maybe in other verticals that the company can explore. No, in fact, in the recent past only, we have added some capacities with newer products or newer type of coatings and all that. Our major focus on R&D is on the fittings area, whereby we are continuously trying to develop new type of fittings. I mean, to suit different terrains and applications. Also, in regard to different verticals, we see ourselves as a water solutions provider. We are continuously exploring increasing our product portfolio to satisfy the customer's needs and move more towards a one-stop solution for our customers, both in India and overseas. That is a continuous exercise. We are improving. In fact, let me highlight the fittings numbers. We have already seen an increase of approximately 3,000 tons this financial year, nine months average, as opposed to last year. This is all owing to addition of new product lines. As such, we are looking at going up to 25,000 odd tons over there. That is all a result of R&D. On the pipe front, we continuously look at finding ways of giving the customer a solution depending on his requirements on soil pressure, quality of water. Electrosteel today offers one of the widest range of linings and coatings on a pipe that any ductile iron producer gives in the world, not just in India. In India, we are definitely the largest supplier of various combinations. But even in the world, Electrosteel is probably in the top one or two. All right, sir. That was very, very useful. Thank you so much. Thank you. Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. Next question is from Dheeraj Ram from Ashika Institutional Equities. Please go ahead. Hi, sir. Thank you for taking my question. My first question is, sir, what can we expect as a volume sales in FY 2026, and how can we see the margins going ahead in FY 2026? Sir, on the margin front, as I mentioned that depending on the overall scenario, it will be between 16%-18%. On the volume front, we are open to hit a figure of somewhere between 8.5 lakh tons to 9 lakh tons. Got it, sir. My second question is, sir, are we seeing a slowdown since we ordered the tender outflow in Jal Jeevan Mission as facing some headwinds, and even AMRUT 2.0 is facing some headwinds in terms of tender outflow. Do you see any slowdown, at least for the short term in this particular segment? Definitely, there was a bit of a slowdown in quarter three and even in quarter four. As of now, it is not at the same pace that it was at, say, last quarter three and quarter four. But as with all other infrastructure spending such as railway and highways, we are pretty sure that come the new financial year and even the last one or two months of this quarter, with the budget coming out tomorrow, there will be a good allocation towards water infrastructure because the stage we are at right now, it is kind of not here, not there. They have to spend to make all that infrastructure complete and successful. Got it, sir. Thank you. Thank you. Thank you. Next question is from Rajesh Bhandari from Nakoda Engineers. Please go ahead. Good evening, sir. Sir, I wanted to know what is our total present capacity of DI pipes. 7.5 lakh tons? Sir, 7.5 lakh tons is what we will achieve. Our installed capacity is close to 8 lakh tons. Okay. Sir, you said 9 lakh by March 2025 or March 2026? Our installed capacity will be close to 9 lakh tons around March 2025. Okay. And- Production? Sorry. Production. Production for the year, sir, because this is going to get installed and then it takes a little bit of time to start ramping up to that level. As I mentioned, our production will be somewhere between 8.5 and 9 lakh tons. Right. By March 2026, we will have 8.5-9 lakh tons. Yes, please. Similarly, we would have put up an installed capacity of approximately 1 million tons by March 2026 or March 2027. Our production will be somewhere in the range of 9.5-1 million. In March 2027, we will have that 9.5-1 million. Yes, please. Normally, sir, 1 lakh tonne means around approximately INR 800 crores? Sir, 1 lakh tonne. I am interested in knowing by March 2027 what will be our approximate turnover. Oh. Because Sir, considering that our raw material price trends remain the same. Yeah. It will be around INR 9,000 crores. Around INR 9,000 crores. Yes, because the business works a lot on margin percentages rather than absolute numbers. Yeah. Correct. Raw material prices become half. Yes. It will come down. Naturally, the turnover will come down. Yes, please. Sir, is there any other thing in which we are doing our expansion to increase the turnover? Sir, fittings production, we are looking at expanding substantially. We are also exploring, as I was mentioning just to the previous gentleman, that we are exploring adding to our kitty further product lines towards the water infrastructure space. But how much is expected in this, sir? Is it INR 1,000 or INR 2,000 crores or will it increase? Sir, around INR 300 to INR 500 crores. Okay. That means we can come by March 2027 to approximately INR 9,000-INR 10,000 crores. Somewhere between that. Yes. A little more towards, I would say between INR 9,000-INR 9,500 crores. INR 9-INR 9.5. Okay. Approximately it will be INR 1.5 by March 2027. Yes, please. Sir, this mining that you have given to JSW, what is the expected amount in it, sir? Sir, our claim is for INR 1,200 crores. The way it is going till now, we are optimistic that majority of this will be realized. Mm-hmm. So it will come all to Electrosteel only. Really sorry but Sir, only I have to complete my question, that is all. Yes, please. The answer to your question is yes, please. Thank you. Next question is from Kaushal Vengani from Jindal. Please go ahead. Thank you for taking my question. I have gone through your results and presentation. It is a good presentation. Only a couple of points. I think management may consider it favorably because a couple of other participants have also requested. We are always open to the inputs of our shareholders. Sir, I have noticed that on quarter-on-quarter basis, the EBITDA margin has increased and that has also increased. The operational impact is not clear in absence of tonnages because what has happened is despite production being lower by 10% on a quarter-on-quarter basis, EBITDA margins have still improved. That can only be visible if you provide the tonnage data because that impact is not evident to someone who does not participate in the call or does not go through the transcript and only goes through the presentation. So if in the next presentation, maybe management can consider including tonnage data. Sir, I can commit to you from now itself that this will be done. Because if we are good at something, I think other people should also know that we are good at it. Most definitely, sir. We've generally remained a slightly shy organization on that front, but I completely agree with you and this will be done. We will not need to re-discuss this. Okay. Thank you. In one of the earlier discussions, you have mentioned that you're getting good orders from the Middle East. Do you believe that more orders, specifically from Saudi Arabia, are expected in current quarter and in next quarter? Sir, for the current quarter, the dispatches against the orders that will happen are for orders that are already booked. But yes, we are seeing a steady growth in our order book from the Middle East, especially from Southeast, mostly Saudi Arabia right now when I say Middle East. Okay. Finally, I have noticed that the promoter holding has remained at 44%-46% levels for quite some time. Is there a view within the promoter group or with the promoter of increasing this stake going forward? Sir, I would say there is no real discussion on this front at this moment here. Okay. Maybe if there is an update on this, we would appreciate if that can be communicated going forward whenever there is an update. Absolutely, sir. Thank you. Thank you. Thank you. A follow-up question from Mr. Rajesh Bhandari from Nakoda Engineers. Please go ahead. Sir, I just wanted to know, what is the holding of BlackRock? Just a second, Rajeshji. Just a minute, please. Yeah, BlackRock holding, sir, in Electrosteel. 0.5%. 5%? 0.5%. Hello? 0.5%, Rajeshji. 0.5%. Okay. 0.5% is the holding. Yes, sir. And this JSW of INR 1,200 crores, it is all expected to come to Electrosteel Castings only? Yes, please. That will be added in our kind of reserves or whatever? Meaning it will be money for Electrosteel Castings? Yes. The money will be received by Electrosteel Castings only. Ji. It will not be credited to the reserve because there is a receivables. I did not get you, sir. There is a receivable outstanding in our balance sheet. Ji sir. It will be adjusted against that, but the cash flow will be available for Electrosteel Castings. It is not going to go to Electrosteel. No, it is not belonging to Electrosteel Castings. Okay, sir. Yeah. Right, sir. Thank you, sir. Thank you. Thank you. Thank you. Next question is from Vikas Jain from UrbanSteels. Please go ahead. Hello. Vikas Jain. Hello. Can you all hear me? Yes, Mr. Vikas, please go ahead. Yeah. Hi. I would just like to have a thought from you all. Your shares have been one of the worst performers in last 3-4 months. Mutual funds have also more or less exited from your company. What sort of a thing can we do to win their confidence back? Sir, I think consistent performance. We would like the consistent performance, sir. I think work and actions speak much louder than words. To be able to perform consistently to the commitments that we make and adequate transparency, in-time communication to our shareholders, that's the best way. Somehow this doesn't seem to be working with them. They seem to be exiting. Whatever the minuscule holdings they were having, they're still exiting that also, it seems. Well, sir, that is a question that you will have to ask them. It will be difficult for me to answer. But with due course of time, I will not be surprised if there is a re-entry of the same people. Okay. Let's hope so. Thank you. Thank you. Thank you very much. We will take that as the last question. I would now like to hand the conference back to the management team for closing comments. Yes. Thank you all for dedicating your valuable time and engaging with us during the con call. Should you have any questions, please feel free to reach out to ENY our investor relations consultants. Have a very good evening. Thank you. Thank you, everybody. Thank you. Thank you very much. On behalf of Electrosteel Castings Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.