Q2 24/25

Oct 30, 2024

Summary

Q2 earnings were affected by the extended furnace shutdown, while H1 income, EBITDA and PAT grew YoY. Management lowered FY25 volume expectations toward the lower end of its range but anticipates improving stability and continued infrastructure-led demand.

I now hand the conference over to Mr. Vikash Verma from EY LLP. Thank you, and over to you. Thank you, Mike. Good evening, everyone. On behalf of Electrosteel Castings Limited, I welcome you all to the company's quarter 2 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, Madhav. Thank you, Mr. Vikash. A very good afternoon and a warm welcome to all. I would like to start by wishing everybody a very happy Diwali. Let me run through the company's financial results for Q2 and H1 FY 2025. The company's total income stood at INR 1,849 crores during the second quarter of FY 2025, down 4.6% compared to Q2 of the last financial year. This was mainly on account of the shutdown taken of the MBF at the Srikalahasthi unit. Our H1 total income stood at INR 3,885 crores, which is up 6.5% compared to the previous H1. Our production is now stabilizing, and we expect improvement in volumes and overall profitability going ahead. Highlighting our balance sheet strengths, our net debt equity has further improved to 0.27 times as on 30th September 2024. We are very pleased to inform you that all our long-term credit rating has been upgraded by India Ratings from double A minus to double A during the quarter. The company's DI pipes sales volume stood at 1.76 lakh tonnes in Q2 FY 2025 and 3.68 lakh tonnes in H1 FY 2025. Export contributed to 13% of the total DI volumes for the first half. We at Electrosteel are amongst the few companies in the globe with a pure play focus on ductile iron pipes and fittings, and we are the pioneers of ductile iron pipe products in India and have maintained our leadership stance in the industry by building capacity at regular intervals to drive growth. The company's ongoing CapEx is progressing and is on track. We aim to enhance production capacity to 1 million tonnes by the end of FY 2026. The Government of India's Viksit Bharat vision, which includes Jal Jeevan Mission and AMRUT 2, provide robust demand visibility for DI pipes and fittings. Additionally, the governments across the globe are looking forward to modernizing their water infrastructure. We are one of the most preferred suppliers of ductile iron pipes, thanks to our strong brand recall. ECL is well-placed to ride on growing water infrastructure globally, spending our team across functions offer customized solutions to our esteemed customers, resulting in customer satisfaction. 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 afternoon to everybody, and wish you a very, very happy Diwali to all of you. Today, we are in discussion with the earnings calls for Q2 and H1 of 2024-2025. First of all, we would like to discuss about consolidated results of Q2 2024-2025. Total income stood to INR 1,849 crores, impacted by plant shutdown as narrated by Mr. Madhav Kejriwal of our blast furnace in Srikalahasthi unit during this quarter. EBITDA at INR 289 crores. EBITDA margin declined by 82 bps year-on-year basis to 15.6%, impacted by lower volumes as stated by us. PAT reported at INR 155 crores. PAT margin was 8.4%. Now on the consolidated H1 results. Total income grew by 6.5% year-on-year basis to INR 3,885 crores. EBITDA surged by 3.8% year-on-year basis to INR 666 crore. EBITDA margin expanded by 329 bps year-on-year basis to 17.2%. PAT grew by 52.8% year-on-year basis to INR 381 crores in H1. PAT margin expanded by 297 bps year-on-year basis to 9.8%. Now we are talking about standalone results of Q2 2024-2025. Total income stood to INR 1,712 crores impacted by plant shutdown as stated by us. EBITDA stood to INR 270 crores. EBITDA margin was 15.7%. PAT stood to INR 152 crores. PAT margin stood to 8.9%. Now I'm talking about standalone results of H1 for the year 2024-2025. Total income grew to 4.3% year-on-year to INR 3,564 crores. EBITDA surged by 21% year-on-year to INR 623 crores. EBITDA margin expanded by 242 bps year-on-year to 17.5%. PAT grew by 37.2% year-on-year to INR 364 crores. PAT margin expanded by 245 bps year-on-year to 10.2%. Now I'm talking about CapEx plan. We have spent nearly INR 440 crores till September 2024, and the progress of the balance portion is as per the schedule. We target to enhance our DI pipes manufacturing capacity to 1 million tonne, maybe by 2026. Now I open the floor for question answer session. Thank you very much. Thank you. We will now begin the question answer session. Anyone who wishes to ask a question may press star and one on your touchtone 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 a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question on the line of Vikash Singh from PhillipCapital. Please go ahead. Good evening, sir, and thank you for the opportunity. My first question pertains to our gross margin, which though improved on sequential basis, the improvement is slightly lower than what we would have anticipated. What kind of coking coal and iron ore benefits we have got in Q2, and what it is going to be in Q3? Hi, Vikash. Gaurav here. Hi, sir. Vikash, in Q2, our gross margins, what we reported, was around 50.7% compared to last year it was 49.4%. We have done around 130 basis points improvement. On the gross margin side, there is improvement you see year-on-year or maybe quarter-on-quarter. The coking coal prices have come down during the quarter. As we speak, it is further down. Obviously the benefit of the coking coal price will be there. Iron ore prices have been kind of stable. It was little volatile in Q1 to Q2. Between Q1 to Q2, it was on the upper side. Now it is more or less stable. We expect the commodity prices to support going forward. Just wanted the quantification, what kind of benefits we can get in Q2. Have we got the majority of the benefits already in Q2, or majority will come in Q2? If you just could clarify on that point. Vikash, we have booked good amount of coking coal, and we have inventory. In Q3 going forward, we feel that there will be some more benefit coming from coking coal side. Understood. Sir, second question pertains to the shutdown thing. How much on the EBITDA per ton basis is impacted are the EBITDA per ton? Going forward, what should we take as a steady state EBITDA per ton for the second half? Well, I think in terms of EBITDA per ton, maybe you can say half a percent to a percentage of impact has come from the shutdown. Going forward, stability on the EBITDA for the short to mid-term is envisaged. Understood. Sir, second question pertains to the general market. Couple of the people in the same space have commented that of late the order inflow had been a little bit slow from the Government side. Just wanted to know your comment on how we should look the order book for yourself as well as if the inflow is really slowing down or are you seeing the market being buoyant as usual? The reason for the slowdown is essentially that now that the new term has started, they are kind of collating and recalibrating the progress made so far and what the way forward is. I am not very concerned about this on a long-term perspective, and I am very hopeful that the outlook for demand remains the same. It is a temporary pause. Understood. Sir, what is your current order book in terms of month or tonnage, whatever you can give us? Also, the next 1 to 2 years, the order market of the DI pipes, total tonnage which is pending to be awarded, if you would have that number. So the total, today we stand at around a 9-month order book. Going forward, I think at the moment, around 6.5 million tons worth of order book is pending to be finalized, and I don't think that this will change anytime soon. Whatever order booking will be done will be constantly refilled with new demand. So maybe 6 to 6.5 million tons of requirement will constantly be there in the pipeline. From our 18 to 24 months perspective, right? Yes, please. Yeah. Just one last question. One for- Sir, can I ask you to kindly come into the queue for follow-up questions. Sure. Thank you. We have the next question on the line of Raja from B&K Securities. Please go ahead. Hi, sir. Thank you for the opportunity. Just continuing with the question that the previous participant has asked. You mentioned that we will see the benefit of coking coal prices in the coming quarters, Q3 or Q4 this year. The EBITDA per ton of second half seems to be, it could look much higher than the first half. On a blended basis, if we take INR 19 or INR 20 per kg for FY 2025, assuming we are targeted to do 8.5 lakh tons of volume in FY 2025, our DI EBITDA comes to INR 160 crores. But when this benefit of coking coal subsides, maybe after two to three quarters, when the price is stabilized. Next year we are targeting to achieve around 9.3 lakh tons of volume. 10%-11% volume growth. But on the other hand, the EBITDA per ton could come down because of the stability in coking coal prices. The 10% volume growth may not be enough to offset the stabilization in coking coal prices. Just wanted to know that, is it a fair assumption that the FY 2025 EBITDA on DI, because of these dynamics, will remain stable in FY 2026 and on an overall DI EBITDA, there may not be a growth in FY 2026? I think, I agree with you on the fact that the stability of EBITDA going forward will be there. Growth beyond this point will not be. I do not know. If luck favors, then yes, of course. But barring that, from what we can envisage, further growth from here is not something that we are looking at. In terms of percentages, not in terms of absolute numbers, of course. Madam, but one thing. When the volume will go up, there will be a decisive advantage also on the variable cost and major on the fixed cost. So that also should take care of a part of the negative impact of what you thought about coking coal and all that. Sir, assuming that in FY 2025, if we close the year with INR 19 per kg EBITDA on DI. Assuming all those benefits come through, do you expect the EBITDA per kg to be slightly lower than FY 2025 and FY 2026? It will be very difficult to give you an answer in absolute numbers, ma'am. Again, as I mentioned, percentages is a better way of looking at it because of course, if there is an eventual impact on selling price of the reduction in the raw material prices, it does not reflect immediately. But if both coking coal and iron ore prices reduce, from a midterm perspective, we will see an impact on the per ton selling price. So we would like to stick to the percentages, and I am highly confident that we will be able to maintain these percentage points. All right, sir. The second question is on the bidding front. Just wanted to understand that when we started the year in FY 2025, so what were the realizations that we were getting while bidding for the projects on a per ton basis? And considering that there is correction in raw material prices. So just wanted to understand that for the current biddings that we are doing currently, so how has the realization spread out now compared to what it was six months back? There is a very minor downward correction, ma'am. How do you see it going forward, sir, considering that coking coal price, raw material prices are coming down? Raw material prices are coming down. Demand is still robust, so I do not feel that there will be any major correction in the selling price as of now. Maybe a slight dip, and then a slight increase from quarter to quarter, depending on the demand pool. As we were discussing earlier in the call, because there was a minor slowdown due to the rains, plus the Government kind of wanting to recalibrate what the ground situation is like. There is a couple of percentage points drop maybe in the selling price. Similarly, come Q4, when usually demand picks up again, we might see the opposite side of this happening. It is going to be a minor correction upward and downward with the raw material prices as compared to the raw material prices. Yeah. Thanks, sir. Sir, continuing with this bid book question, I just wanted to know what is the bid book size currently for AMRUT and other irrigation projects? Ma'am, I will have to get back to you on the exact number for our current order book on that front, on how much is coming out of AMRUT and how much is from irrigation. But on the demand front, overall for the industry, we can say that the AMRUT demand is around 20%-25%, and the same for irrigation. Okay, sir. Thanks, and have a good day. Thank you. Thank you. We have the next question on the line of Prathamesh Dewar from Tiger Assets. Please go ahead. Yeah. Am I audible? Yeah. Just wanted to know on the industry front, like you said earlier, currently the orders are muted from Jal Jeevan. From when we are seeing the pickup in the order inflow by the government. Sorry to interrupt, Prathamesh. Your audio is not extremely clear. There is some background. Sorry. If you would switch to the handset mode. Yeah, sure. Am I audible now? Yeah. Just a much- I was able to get your question, though. Right. I think by the end of this quarter, beginning of next quarter, we should start seeing the JJM order book pick up again. Okay. From Q3. What are the average order sizes of these projects? That varies by such a huge margin, it would be incorrect for me to give you a particular answer on that. Okay. Thank you, sir. Thank you so much, and Happy Diwali. You too. Thank you very much. Thank you. Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next person on the line of Rakesh Roy from Omkara Capital. Please go ahead. Yeah. Hi, sir. My first question regarding, sir, your volume number, if you compare it to last year or- Rakesh, could you kindly come closer to the microphone? Hello. Yes. Request you to kindly switch to handset mode or come closer to the microphone. Yeah. Hi, sir. My first question is related to volume number. If you compare your volume number from a sequential basis or year-on-year basis, it is coming down. You say it is due to plants shutdown. But when it comes to realization improved, sir. Any reason for realization improve, or you have taken any price increase in Q2 or Q1 for FASA? There is no price increase per se. The pricing is stable, sir. Hello? Hello. Yeah. Am I audible to you, sir? Yes, sir. There is no real major improvement in the realization per ton. It is similar. Okay. Sequential basis similar. If you take the same portion like this, like now, iron ore prices is down to H1, if you say. So next bidding realization will be same or will come down? Like I mentioned, sir, recently there has been a very minor reduction in the realizations on the order book front. That is also reflecting a temporarily slowdown from Jal Jeevan Mission. Okay. As I mentioned that these kind of things, they move a few percentage points up and down depending on the time of the quarter. Maybe come Q4, once JJM picks up again, we will go back to better realizations. But again, that is a slight difference. This I am talking about in the range of maybe 2, 3%, 4%, like that. Okay, got it. Same thing as in your Jal Jeevan Mission. As I know, we are one form, or we are saying there is less projects in Jal Jeevan Mission. But many projects come from state government. Are you supplying to state government also, sir, the state project? Yes, sir. Absolutely. We are supplying to state-funded projects. We are supplying to foreign-funded projects. Okay. How much is percentage of total if you say to, how much is a Jal Jeevan Mission and how much is a state project today? Sir, Jal Jeevan Mission is a part of state funded. It is not that Jal Jeevan Mission is completely central funded. Independently state-funded projects, most of the irrigation projects are independently state funded, and you have a few other foreign-funded projects which are direct loans to the state. I would say around 30%-35% are independent of any central schemes. Okay. 38. 30%. You can say around 30%. Okay, sir. Regarding this, export is due to this 12% of total revenue, no sir? I am sorry, I couldn't quite get your question. Your voice is a bit Yeah. Hello. Yes, sir. I am saying, sir, our export is nearby 12%. 13%. 13%, sir. Is there any impact due to this one, let's say, Red Sea crisis or any increase in shipping costs? Yes, sir. There are two aspects as to why export is a little lesser than what it usually is. One is the impact of the ocean freight, and the other part is that because the demand in domestic is so robust, we are finding the domestic markets a little more interesting in terms of margins for some markets. So we are concentrating on the higher margin markets in total. A part of the reason is because the ocean freight, of course, if that gets a little better, we will be back to decent realizations again in the export markets. Okay. In the ones which we are not concentrating right now as well. Okay. Sir, hopefully for Q3, these numbers will stay the same for export market, 20%-30%. I think it might be a little better off, but it won't be substantial. It's difficult to comment on what will happen later because it really is very much dependent on the movement of the ocean freights. Unfortunately, the ocean freights are dependent on the geopolitical scenario of that region, and I don't think any of us are equipped to really answer that particular question. Agreed. Last question, sir. For your steel plant shutdown, sir, how many days it shut down, sir? How many days? Yes, sir. We had a shutdown of approximately seven days. Only seven days, sir? Yes. I think seven and a half days, something like that. Is this annual maintenance, or is this one or two, three years? This is a part of the annual maintenance shutdown. We had extended it a bit longer than we usually do because we want to try a few more things. Okay. This is the reason our volume is down. This is the major reason why our volumes are down. Stability post the shutdown did not come in as quickly as we thought it would. Now we are seeing better stability at the blast furnace. Okay. Thank you, sir. Thank you. We have the next question on the line of Dhiraj from Ashika. Please go ahead. Hi, sir. Thank you for taking up my question. The first question is on, could you share any update on the greenfield project for Odisha? Sir, as I mentioned at this point, I cannot share too much information because we are not at that stage yet. Things are going on as per plan, though. We are getting closer and closer to finalizing the end result and then disclosing it. Okay. No problem. How are we planning to fund this project? It will largely be through internal accrual, and if required, there might be a minor leveraging. We do not see our overall leverage going up as we will be repaying loans as well. Got it. Okay. One last question, sir. How do you see the opportunities from river interlink, as there are some 3 to 5 river interlinks were identified, and how do you see the orders coming in from this? From the orders coming in perspective, we are at a bit more of a nascent stage than that level of maturity of the river linking. Ken Betwa is one which is progressing with good speed. River linking is interestingly a part of irrigation. It is going to end up being a part of Jal Jeevan as well because that will give sustainable source of raw water supply. I am relatively excited about it, to tell you the truth, not only from the perspective of demand for our pipes, but also as a showcase of infrastructure progress of the country. Got it, sir. I am very hopeful that we implement exactly as we are planning. I am glad that the government has taken this initiative up this time with more aggression than it had last time as well. Got it, sir. Can we expect in FY 2026 more and more incremental order book to be generated from river interlink or anything new? Can we expect this? It seems so, yes. It seems so. Got it, sir. Thank you. Thank you. Thank you. We have the next question from the line of Rajesh Agarwal from Moneyworld. Please go ahead. Sir, my question is on the shutdown for. Is this the shutdown overall, we will take more shutdown in the next half second half? Well, sir, as I was mentioning, the stability of the SW blast furnace was not as quickly as we thought, and it is still not reached the exact level. Okay. We will do whatever is required to bring it to the point that we need to for it to be running optimally. It is difficult to say whether we will need another shutdown for that or we can manage operationally. If anything comes up as we did last time, we will be communicating to every. Sir, can you quantify how much production was lost or how much sales or what EBITDA was lost because of the shutdown? Approximately 12,000 tons. 12,000 tons. Okay. Sir, do you feel this Jal Jeevan Mission output little bit slow because of the elections or it will improve from here? It is because of the election. The new government just wants to kind of recalibrate what has happened so far. Okay. Since it was Appointed, it was an exercise which was supposed to end. The first phase of it was supposed to end with the term. Now they are just kind of collating everything, seeing what the progress is like. Okay. Then they will spend going forward, depending on the results of that. Even as per the dashboard, if you see, we are still at around 78%, 79%. 20% is required as per the dashboard. We feel that more will be required also since some work within the 78% is pending, plus new households are also getting added up. Are there possibilities because of the efficiency or scale and the margins improving further from here, apart from the realization? I think going by a stable margin at this level would be a better way to look at it. Okay. Thank you, sir. Thanks a lot. Thank you. Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question on line, Muskan from B&K Group. Please go ahead. Hi, sir. Thank you for the opportunity. My question is, you have guided 8.5 lakh tons for the full year, and in the first half you have done 3.69 ton of volume. In 3Q, we can produce maximum 2 lakh tons. Balance is 2.8 lakh tons entirely. Can we do it in 4Q only? Due to the slower pace of stabilization of the blast furnace, we are feeling that there might be a reduction in the total outlook. There's also been a minor setback in terms of the equipment supply coming in from China by a month, not longer. These two factors, I think, we were talking about a range of 8 to 8.5. We were hopeful to hit the upper end of that spectrum. I think we might be at the lower range of that number. Okay. Sir, in first quarter, you mentioned that the contribution in the fittings is currently 4%, and we aim to reach around 5%-10% in two years. For this, are we planning to do any capacity expansion for the fitting side? This is all a part of what will come in the greenfield project. Exact tonnages are not clear, but definitely it is something that is being considered. Okay, sir. Sir, one last question. Out of INR 700 crores, we have spent INR 450 crores for the CapEx, right? What would be the CapEx for this year and for the next year, sir? We are yet to spend around INR 260 crores for completing the running projects, and the project is on schedule. Okay. For the next year, sir? Come again. Next year. Sorry. So for next year, the balance will be for the next year? This 260 crores will be required for completing the entire balance projects. Okay. The second half would be somewhere around INR 150 crores-INR 160 crores. Balance INR 100 crores will be in subsequent financial years. All right, sir. Thank you so much, sir. Thank you. Thank you. We have the next question on line of Ankit Puri, an investor. Please go ahead. Hi, good evening. Congrats on the stable set of numbers. I have got two questions. Can you please share the company's vision with regards to the acquisition of Singardo International? What exactly does the company plan to achieve with this acquisition? The second question is, any updates on the case with regards to the coal block settlements? Thanks. Okay. So in regard to the Singardo acquisition, the thought behind that was that Singardo was a company which was the authorized distributor for Electrosteel pipes and fittings in the Southeast market. We wanted to further aggressively expand into that area. We look at markets like Vietnam, et cetera, as a good opportunity as we expand our total production. Also, in regard to using the other traded products of Singardo, we are hopeful we will be able to capitalize on that a little more as well. We are hopeful that we will be able to use the network of Singardo for other products which we do not manufacture to increase trade within the water industry. In regard to the dates for the coal block. What is the revised date that has come out now? It is sometime in November. I am very sorry, I do not remember the exact date, but it is in the Delhi High Court right now, the case, and unfortunately during the last hearing, the judge was not available, so the matter has been now pushed to a date in November. All right. I think we hope to get some updates hopefully in the next con call, I guess. With regards to the first question, again, basically when do we start to see addition from Singardo acquisition coming up in the numbers in subsequent quarters? What kind of numbers are we looking at? Any idea on that? Numbers in terms of the turnover and the Yeah and the margins over there? That is correct. Yeah. In terms of the turnover and margins being worked out from the traded products, we have not finalized on specific numbers yet. We do see a lot of opportunity over there. So it will be a little difficult for me to answer that question. We are seeing that our total tonnages in the Southeast Asian market might improve by 5%-7%. All right. Thanks much for that. Have a good evening. Thank you. Thank you. We have the next question on the line of Sanket Kapoor from Kapoor & Company. Please go ahead. Yeah. Namaskar, sir, and thank you for this opportunity. So just continuing the discussion on our Singardo acquisition, sir, if you could provide us some more details on the financials of the company for the last 3 years. What was the average turnover and the profitability, and how did we value it at, say, these INR 49 crore when we came to the price? If you could elaborate a bit more on the same. Sanketji, revenue of Singardo, it has been around SGD 13 million for 2023-2024, and same around for 2022-2023 as well. And EBITDA margins has been around between 10%-13%. As far as our cost of acquisition is about, it's based on the book value of Singardo. Okay. Sir, when you were mentioning about stable EBITDA margin, we had, I think, closer to 18% for quarter 1 and lower of 16% for quarter 2. So what should be the EBITDA margin range for H2 now? I think as you correctly mentioned, sir, it will be the 16%-18% range is what we're looking at. In fact, I will be looking at that range for a midterm perspective. Okay. For the tonnage part, sir, you outlined that we will be doing closer to 8 lakh, and we did 3.69 for the first half. Something around 4 to 4.3 is what can be envisaged for H2. Yes, please. Okay. Sir, as we have gone through these shutdowns, have we incurred any one-off expenses for this quarter? Sir, what was the period for which the shutdown happened, in which month? Shutdown happened sometime in the month of August, and we have incurred around ₹13 crore-₹14 crore, and that is for the long-term benefit. The shutdown was seven days plus a few hours. And sir, as Mr. Madhav Kejriwal was mentioning that, until now we have not been able to do a proper blast. We will be spending more for this quarter also on top of the INR 12-13 crore that has been spent? Yeah. Actually, we are going to decide in maybe another 10 to 15 days' time what to do to bring it to an optimal production level. So it may also involve another shutdown. There is a possibility. But nevertheless, it will not be very cost-intensive. Last point, sir, it will not be very cost-intensive. It will not be very cost-intensive. Correct. It will not be very capital intense, please. Yes, sir. Sir, and our capacity for year ending FY 2024-2025 would be 9 lakh or 8 lakh, sir? In the presentation, it was mentioned 9 lakh for the next year. We are still hopeful for that, so that number still holds for FY 2026, you said, right? 2025. FY 2025, sir. It is 9 lakh and 1 million. Yeah. No. Post the CapEx that we will have for the expansion that was planned in the mid of this quarter, which has been shifted to the end of this quarter, our installed capacity will become 9 lakh tonnes, which you will see us manufacturing for FY 2026. Our rated capacity will become such. Correct. Right, sir. I will join with you. It was mentioned that the long-term borrowing, we have repaid all our long-term borrowing. I have missed the commentary on that here, sir. As on September 30, it is around ₹450 crores of long-term borrowing in our books, and we are sitting that much of cash in our system. Okay. Do we have any current maturity? What should we end this year, sir, in terms of the net debt level, sir? Absolute number. Net debt level, including working capital? Yes, sir. It will be around INR 1,300 crores, including working capital. Okay. With these ratings getting up, we have been upgraded. What will be our blended cost of funds now? Including term loan and working capital, both? You tell me separately, sir, or if you can tell me blended. Term loan is around 8% and working capital is 7.5% approximately. It is very fluctuating nowadays. Right, sir. Okay, sir. Thank you, and all the best to the team and Shubh Deepawali to everybody. Thank you. Thank you very much. Very same to you. Yes. Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question from the line of Radha from B&K Securities. Please go ahead. Sir, thank you for the opportunity again. Sir, just wanted to know this shutdown expense of INR 14 crores you mentioned, that has already been accounted for in this quarter? Yeah. Sir, second question was on the Ken Betwa project that you spoke about, and you said that now the government thrust on the river interlink project has increased. So I think the project cost is around INR 64,000 crores. So, in this, there would be other requirement of pipes as well. So how much of this INR 64,000 crores could create a DI demand? Ma'am, it's a little too early to be able to answer that question. They have not finalized on their DPRs and other aspects which are required to be able for me to answer that question. Sir, normally, if you can Please. Yes, sir. Please go ahead. If we take per kilometer, what would be the metric ton of DI pipe requirement? Ma'am, as you would know that in a pipeline, it is not only ductile iron that is used. We use steel, ductile iron and plastics. It really depends. The entire project is across two states and will have multiple distributaries. Now, depending on the requirement and the functioning of each distributary, the demand outlay for ductile iron separately and plastic and steel will come out. It is a bit nascent for me to be commenting on what the exact demand outlay from this project will be. Sir, historically, there has been quite some delays in these projects. Is it a fair understanding that across not only in Ken Betwa but across other projects also that have been announced, there would be, or we can expect some higher thrust in these projects, maybe in the ensuing quarters or from FY 2026? I am relatively certain that at least river linking projects which are interstate or intrastate between two states which have the same government, that will see good thrust. All right, sir. Thanks a lot. Happy Diwali to you. Thank you. Same to you. Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Sir, on the depreciation part, we find depreciation line item being at INR 36 crore, which is also up around 20% year-on-year. What have we capitalized in terms of value and also in terms of assets for the first half, for this quarter in particular, and for the first half? Also, sir, we were doing some minor CapEx in terms of fittings and some gaskets, I am forgetting the right term, which we used to outsource earlier. What is the update on the same? The depreciation changes due to capitalization of some projects in Srikalahasthi, with the projects on the pipeline. Some of the projects completed, and we have capitalized and we are getting the benefit out of that. Second question about the gasket. We are setting up a plant in Punganur near Srikalahasthi only, maybe around 125 kilometers away from Srikalahasthi. We will be using mostly the output enough for our captive purpose. Anything surplus will be sold in the market. Okay. On the fittings front, sir, any kind of CapEx or debottlenecking exercise we are doing? Not exactly now at the moment. Okay. Sir, historically, correct me, Ashutosh ji, whenever we have done this maintenance work for the southern unit, we have faced challenges. If I correctly remember, in 2018-2019 also, we faced similar type of issues with the blast furnace. Where is this disconnect that our technical teams or people in the southern unit or because of what are the key reasons why we do face these issues? Correct me if my memory is not serving me. No, you are absolutely right. Earlier also, we had an issue. First of all, the problem in south plant has been the raw material quality is varying very extensively. Particularly the impurities in the iron ore, namely the silica and alumina. These components are going very high, which are creating a change in the behavior of the iron blast furnace flows. We did talk to the designers, we did talk to the suppliers, and we also got some experts. With all that, we could get that it has lot of linkage with the raw material. Now we are trying to actually improve our charge mixes accordingly and do some small corrections in the blast furnace so that these type of problems can be checked for long. Right. In fact, as there is some carbon footprint issue also with this type of our manufacturing unit. Our investment in the renewable segment and any other that we have outlined going ahead, that may reduce also our carbon footprint. In fact, in our greenfield project, we are taking it in a big way. In our existing operations also, we are taking up projects of taking up green power. Plus, we are now interacting to have a green power tie-up. Yes, sir. I was coming to that. These are the three, four directions in which we are working on. Last point I missed, sir. You mentioned we are looking for a tie-up? Yeah. Okay. We will be buying the open access scheme that the Government of India has envisaged. Yeah. Okay. And lastly, sir, when we look the cash flow part, there are this direct taxes paid line item. So that is inclusive of the TDS also that has been paid on our accounts. How to get this number correct of INR 130 crore has been paid as direct taxes for the first half? Yeah. This is inclusive of TDS deducted by us. Okay, sir. Right. Yes, sir. Thank you for all the answers and all the best again, sir, to the team. Thank you. Hope for improved set of numbers, sir, for H1. Thank you. Thank you for your good wishes. Thank you. That was the last question. I now hand the conference over to the management for closing comments. Thank you everybody for taking out your valuable time and for listening to us patiently. I would like to reinstate that the company continues to grow along with maintaining its balance sheet strength and further is well-positioned to benefit from the growing water infrastructure spending globally. I would also like to wish everybody a very, very happy Diwali once again. In case of any query, please feel free to connect with EY, our IR consultants. Thank you. Thank you. On behalf of Electrosteel Castings Limited, that concludes this conference. Thank you for joining us and you may now disconnect your line.