Ladies and gentlemen, good day and welcome to Lloyds Metals and Energy Limited Q3 FY25 earnings conference call, hosted by DAM Capital. 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 conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Singh from DAM Capital. Thank you, and over to you, sir.
Thanks, Manav. Good evening, everybody, and thank you for joining us today. We at DAM Capital are pleased to host Lloyds Metals and Energy's third quarter and nine-month FY25 results conference call. We have with us today from the management, Mr. Rajesh Gupta, Managing Director, Mr. Riyaz Shaikh, CFO. Without further ado, now I would like to invite Mr. Rajesh Gupta to initiate the proceedings for the call. Thanks, and over to you, sir.
Good evening, everyone, and thanks, Pratik, for taking this call. Thank you all for taking the time to join our conference call here. Currently, with the investor community and sharing updates on our business is always a great pleasure. I will first give a brief update on our operations and the status of our ongoing projects. After that, Riyaz, our CFO, will take you through the financials. Let us begin with our nine-month FY25 performance overview, which has been quite and more than satisfactory, I would say. Our sponge iron division recorded highest-ever production during the nine-month period at both the plants, and are operating at optimum capacity utilization. In regard to our iron ore segment, the nine-month dispatches stood at 7.8 million tons, and for Q3, it was 2.4 million tons.
We are fully mobilized to mine and dispatch 25 million tons, with the expectation that the EC shall be received in time by the end of this current quarter. Now, let me give you some other project updates. Execution has been one of our biggest strengths, having demonstrated this with the pipeline which is completed, 85 km, awaiting the pellet plant, and the DRI plant completed last year in around 13-14 months after the EC. The current ongoing projects are the DRI at Ghugus and the 4-million-ton pellet plant. Both are nearing completion, and component-wise, commissioning and testing has started and should be commissioned latest by this quarter end or maybe very, very early next quarter. On our 1.2-million-ton steel plant, the designing at Chandrapur, the designing is complete. The layouts are ready, and the orders for the major equipment have been given.
The EC has been applied for, and the land has been acquired. For the BHQ beneficiation plant, the pellet plant has been ready for the last eight months and has consistently delivered Fe content of 66% and beyond, and a yield of 37 to 40%. This is beyond our original expectation. Primary engineering is complete, and the equipment procurement is currently in progress. The land and other legal formalities required to take it fully forward are underway. In summary, our project execution is progressing smoothly, and we remain confident of completing it well in time of our original schedules. I would like to mention specifically that we believe in Lloyds Metals being cost-competitive. This has come as an imperative in the current market scenario. We have implemented several measures to ensure that our cost of steel making remains under check and our profits stay sustainable in the long run.
Our investments in Thriveni, MDO business, is a strategic move in this direction that will significantly aid us over the years. Once fully consolidated, it is expected to result in meaningful earnings accretion on a consolidated basis. Now, I would like to hand over to Riyaz, who will explain the financials in more detail. Over to you, Riyaz.
Thank you, Raja ji. Good evening, everyone. It's a pleasure to be here today to share our financial and operational performance for nine months FY25 and quarter three FY25. Despite a dynamic and challenging market environment, we are pleased to report that we have delivered strong growth across key segments, driven by higher volumes in iron ore and sponge iron. Our ability to navigate market fluctuations, optimize resources, and maintain cost efficiency has helped us achieve a resilient performance this quarter. Let us delve into the financial performance for nine months FY25.
Our revenue grew by 11% year-on-year, supported by robust iron ore and sponge iron volume. What's particularly encouraging is that our iron ore segments saw higher sales and improved realization. Sponge iron volumes also remained on an upward trajectory, further strengthening our revenue base. On the EBITDA front, we witnessed a robust 31% year-on-year growth, mirroring our revenue performance.
The strong momentum was primarily led by iron ore and sponge iron. While market conditions for sponge iron continue to be volatile, our operational efficiency and captive raw material source have provided a strong cushion against price fluctuations. Now, we'll get into the specifics with segment-wise highlights. Iron ore. The iron ore business continued to be a key driver of our overall growth. Realizations per ton improved by 8% year-on-year in quarter three FY25 to INR 5,894, and by 10% year-on-year for nine months FY25 to INR 5,718. Our EBITDA per ton for quarter three FY25 was INR 2,021, marking a 21% year-on-year increase, while for nine months FY25, it stood at INR 1,860, reflecting the same 21% growth. And to DRI and power. In the DRI segment, we recorded 78,000 tons in quarter three FY25 and 239,000 tons in nine months FY25.
While realizations were muted in quarter three FY25, our captive iron ore supplies played a crucial role in protecting margins, ensuring stable profitability even in the fluctuating market. In the power segment, volumes remained flat year-on-year, and muted power prices in quarter three FY25 had an impact on the EBITDA. However, we continued to optimize efficiencies in this phase to counter market challenges. On the CAPEX front, the company has spent INR 2,700 crores in the nine months FY25 and a total of INR 4,400 crores till date. Looking ahead, despite some volatility in pricing, our integrated operations and strategic planning have ensured a stable and resilient performance. As we move forward, we will continue to focus on cost efficiencies, value maximization, and strengthening our market positioning. Pratik, now we can open the floor for the question-and-answer session.
Thank you, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. I requested to use headsets only while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Parthiv Jhonsa from Anand Rathi. Please go ahead.
Hi. Thank you, sir. Thank you for the opportunity. So I have got actually a couple of questions. So the first question pertains to the mine EC. I believe there was a public hearing which was there yesterday on 28th. Is it possible to know the status and what is the progress on it, and by when can we expect the EC to come in? And once the EC comes in, how long it takes for the expansion to actually kick in? That's my first question, sir.
The public hearing was held yesterday in Gadchiroli under the aegis of the Government of Maharashtra, the collector, etc., and it went off well. The usual questions were asked. Some queries were there relating to environment and employment, etc., which were expected, and they have been addressed, and now we await the outcome from the district administration, which will go to the center. From there, there'll be a final EC committee, etc., and that will probably take the whole process, I would say, within 60-70 days. It is a normal process that should take place.
Within 60-70 days, you mean the EC should come in, or it is another couple of months after that?
Yeah, our worst-case expectation.
Okay. Thank you, sir. So my second question was that you have done, I think, about 7.8-7.9 million-ton kind of sales of iron ore in the first nine months, right? So can you give the guidance for the remaining part? It will be completely 10 million ton, so about 2.2 million ton in the fourth quarter. Is my reading correct?
Yeah, that's pretty correct.
Okay. And so, one place in the presentation, you had mentioned that once the MDO business, the entire structure is completed, there'll be almost about INR 400-INR 500 cost savings in the iron ore side of the business. So, can you throw some light on it that when can this come and when can this savings play out? What is the timeline for the sale?
See, the NCLT process is going on. The company has to first go through the NCLT for the demergers. So the business, as we have already mentioned, that the MDO business will be coming in from 1st of April. So all these specs will be coming in from 1st of April 2025, once the NCLT order is received. So the entire business that business comes into this company is from 1st April 2025. So it will be for the next financial year.
Oh, okay. So basically, my question was, will this benefit taken from the day one itself?
Yes, since it will be under the same umbrella, which is a consolidated figure. So it will be kicking in as from the immediate basis.
Okay. Okay. Thank you, sir.
With the increased EC limits. With the effective end being 1st of April 2025.
Yes. Thank you so much, sir.
Thank you. We have our next question from the line of Vikash Singh from PhillipCapital. Please go ahead.
Good evening, sir, and thank you for the opportunity. So I just wanted to understand, once the EC is in place, how long will it take to ramp it up to the previously desired guidance levels of that 15, 20, or even 25 million tons? So if you could give us some timeline over there.
There are two aspects to the physical execution. One is the physical mining and excavation, and one is the evacuation. As for the mining is concerned, we have machinery in place through Thriveni to do the mining. And at peak times, we have done 1.8 million tons also in a month. So 2.2 million tons here, roughly, we were the first in the first one and a half, two years, we would be not going in for any beneficiation. It will be a current process of Direct Shipping Ore. So that 2 million tons of excavation and loading onto trucks doesn't seem very difficult. Regarding the evacuation, like I mentioned earlier, our pipeline of 10 million tons is in place.
By the time the grinding plant and the pellet plant is ready, the 5 million tons will be transported through that, and pro rata 15-20 million tons will be dispatched through the normal route. So we would have, therefore, a big support of the pipeline in helping us in evacuation. And therefore, we feel that there will be no major worries in achieving the evacuation either. So the day the EC happens and the other legal formalities happen, we hope to be ready with the mining from, if not day one, within the first 30 days.
Understood. And sir, just one clarification. Until the beneficiation project comes in, we can actually go up to 25 million tons in the high-grade ore, or we will cap our high-grade ore at a certain capacity, and that 25 million tons, like you previously said, is a mix of 15 million tons of low-grade beneficiation and 10 million tons of high-grade. But then until that comes within 27.
Yeah. In that year 28, FY28, the mix will be 10 million tons of DSO and 15 million tons of beneficiated ore. Prior to that, step by step, we will be achieving 25 million tons total. So in the first year, it will be 25 million tons of DSO directly.
Understood. But then my second question comes that the DSO resource seems to be pretty limited. So once if we utilize that 15 and 25 million ton, if I'm not correct, we will be left with only 45-50 million ton of DSO, which is not sufficient more than four to five years of high-grade ore. So just wanted to understand about how we should look at the mine life of DSO versus the low-grade going forward.
The results of DSO are 157-160 million tons as per the Tata report, which has been certified by JORC. So I don't know where you have observed the figure of 70 million tons? It's 157 million tons of DSO and around 700 million tons of BHQ. So by the third year, we'll go down to 10 million tons of DSO to preserve the ratio for the next 35 years.
Understood, sir. And sir, just one last question, basically, on this Environmental Clearance. Once we get the clearance from state, we need only the Consent to Operate, right? There's not much formality on the state level left.
Yeah, I believe that's the only formality that we balance. There are other formalities, obviously. Like I mentioned, the public hearings under the aegis of the state, the state has always been very supportive and continues to be supportive, and so all those regular formalities will be completed well in time.
Understood. And sir, just sorry to squeeze in one more question. In terms of parity, how does we stand versus Karnataka or Odisha material and imported material-wise? How the prices are ranging in Maharashtra or rather if Karnataka because recently, there's an ordinance Karnataka Government is trying to pass a new mining bill. So in case if Karnataka mining goes a little bit low and we could supply there also since we are going to have a very large capacity, how does it sit, including the logistic cost? Is that opportunity also available with us?
Currently, some of our materials are already going to Karnataka to various customers and will continue doing so irrespective of the fact of the taxation announced by the Karnataka Government. That taxation is actually a cost, not related to the selling price. The cost might go up, but the selling price would be ruled by the market. Since we are already competitive in that market currently, we hope to be competitive later also. As such, today, we are supplying our materials in literally all four corners of the country, and we continue to hope to be doing so through various logistics means like rake, truck, and now pipeline as well.
So on the interstate parity, Karnataka versus Mumbai, the gap would be? If you could give me just that figure.
I could not understand your figure.
So basically, Karnataka material price versus Mumbai material price ex of logistics, what would be the gap?
So there are some price differentiation between various destinations from the mine. There would be some differentiation. And those are commercial information which I cannot easily pass on. But let me put it this way that that's why we are doing a door-to-door delivery, which you might have seen in our presentation. And many places, we are giving rail siding, 24-hour siding, where the customer takes care of the transport. And I mean, it's a logistic-oriented business, and that is part of the reason why we try to have an understanding of equity with Thriveni so that all that income also remains in-house. But having said that, parity is interesting. Parity changes from time to time, location to location, and product to product. Very difficult to define it as a precise figure.
Understood, sir. That's all from my side. Thank you and all the best for future.
Thank you. We have our next question from the line of Rahul Agarwal from Avendus Capital. Please go ahead.
Hello.
Yes, sir. Please go ahead with the question.
Yeah. Thanks for the opportunity. So I just had a couple of questions. So I wanted to firstly understand, we acquired the MDO business of Thriveni at Mumbai, but they also dabble in the pellet trading business, which Lloyds is also going to continue doing forward. So I just wanted to understand if there's any plans to acquire the pellet trading side of it as well, or are we just going to stick to the MDO business?
Thriveni has what we have taken over is the MDO business. The other businesses like they have equity in BRPL and in MRPPL. And so that is BRPL does not come to us at all. And we are supplying raw material, and we have an understanding with Mandovi for supplying pellets to them. I don't know about them taking some pellets from them.
Okay, sir. So that partnership is going to continue.
We are starting off with our own pellet plant. So the question of trading did not allow that.
So sir, the partnership with Mandovi is then going to end once that pellet plant starts?
No, it's a 10-year agreement.
Oh, okay, sir. Thank you. And then, sir, I just wanted to ask, so Thriveni Earthmovers Private Limited, the new entity that is being formed, is projected to have around INR 5,500 crores of revenue in FY25. Could you just tell us, could you just aggregate that in terms of what Lloyds will be contributing and what will be coming from all the other mining projects that you will be able to acquire, which has, I think, and other companies whose mines are also controlled by Thriveni?
Currently, they're doing around 71 million tons of capacity. They're operating 71 million tons, which should increase to 125 million tons with our increase, the Lloyds Metals EC increase. The revenue is from 55. It's around INR 5,500 crores. It should increase to around INR 8,000 crores in the next financial year with the increase in the EC, that is. So from Lloyds Metals, it should be around INR 2,500 crores increase.
All right, sir. And finally, just one more thing. So sir, we were actually trying to look for the financials of Thriveni for the financial year 2024, but we were unable to find that. If you could just give me any guidance on how we could go about doing that.
You're available with the ROC sites, and if you need it, you can get in touch with us. We will be able to provide it to you.
All right, sir. Anybody I can contact in particular?
Mr. Chintan Mehta in our financial.
Sure, sir. Thanks a lot and all the best.
Thank you.
Thank you. We have our next question. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Divya Agarwal from Beacon Family Office. Please go ahead.
Yeah, hi, sir. Thanks for taking my question. And it's Beacon Family Office. So sir, my first question is on the so one of our customers recently signed an MOU with the Maharashtra government of investing around INR 3 lakh crores in the Gadchiroli district. So I wanted to understand, will there be an impact on Lloyds Metals on this investment?
You're talking about the JSW MOU?
Yes, sir.
So we are not fully privy to what the MOU is about. We know that in the past, they have signed a composite mining license with the Indian government for one of the mines in Surjagarh. The exact details of what MOU they have signed, we are not aware. Not only one, I think other MOUs have also been signed. One more has been signed, and one more has been signed, I think. So three or four MOUs are there now. And we saw three or four statements in Gadchiroli. Like the Prime Minister and the CM have said that it is the next steel city, and we are proud to have laid the foundation to that city.
With the iron ore reserve being very huge, I'm sure that a lot of steel companies will come, and the infrastructure overall would be developed in a better way once more companies come in, more taxes and royalties are retained by the government, so they will invest more money in the district. We feel positive about all this.
Just a follow-up on that, do we have better cost structure in those mines?
I'm sorry?
Just a follow-up on that. Do we have better cost structure as compared to those mines which these guys are having?
We would not be aware of their physical cost structure. But as far as I'm aware, that the six mines have been auctioned at a premium of around 110% of the revenue. So that of the average sales price of the state. So if I'm setting it around INR 4,000 average, their cost would be around INR 4,000 into 1.1 extra over and above mine, which I do not have to pay.
Right, right. Fair enough. Got it, sir. And secondly, on the gross margins, sir, overall sales volume we've seen quarter three FY25 is slightly higher. And the raw material percentage of sales was 21% in Q3 FY24 versus it is 8% in Q3 FY25. So can you throw some light on that? Why is it so low in Q3 FY25?
Second quarter, we had some. There were two or three factors because of which the cost structure was on a higher side because there was more related to our sponge iron plant. That was, as it is, this quarter; it has been lower. The production has been lower. There was a physical verification of these stocks, so there was some mismatch in that. So we had to provide for that. As well as there was a change in the consumption norms of coal, what we have done in this year to reduce the imported coal consumption. So all these things have resulted in this mismatch in the numbers.
Okay. So can we expect the similar range going forward?
Yes. Yes, so what Chintan and I mentioned earlier, we are always cognizant of the market. Once the market of the sponge iron and the steel industry has been a bit softer, we have instead of focusing on volume alone in the DRI sector, we have focused on cost, and by using local coal, costs went down. A little production has come down because of that, and that's the advantage that we have seen.
Right. I got it. And the next question on the DRI segment. So if you see, the sales is very little in this quarter as compared to the last quarter. While the volume is fallen by 8%, but the sales, if you see in absolute terms, it's down by like 48% quarter on quarter. So what is the reason for that?
Okay. Sales in terms of quantity?
No. The volume is down by 8%, but if you see the total DRI sales, it's down by 48%, and you shared in the investor presentation, the realization is like last.
In the last quarter, we have the idea. In the last quarter, there was an Industrial Promotion Subsidy what we received. So because of that, if you see that the difference in the volume is coming in and out. Around INR 70 crore is what we received in the form of IPS last quarter.
Sorry.
So there was an advantage.
Yeah. Got it. Now, on the IPS, did we receive anything in this quarter?
That will continue now. Sorry. This was a one-time. The IPS was the one-time for the prior period. Now, we will start once the pellet plant starts, we will apply and get for the.
For the new project.
For the new project that is both the DRI and the new pellet plant, we will start getting after some time. That income is not recognized in this quarter.
Sure, sir, and just last question. In the last phone call, you said we'll be selling around three million tons of BHQ, but are we planning to sell it in this financial year, or will it be in the next financial year?
No, we won't sell three million tons of BHQ. Sorry. Sorry. That is the message you got. The maximum BHQ we will be doing is 15 million tons of output. And that will be in a step-up manner. We start with DSO, and then we keep on reducing the DSO as well as when the BHQ capacities get added.
Yeah.
BHQ is not a tradable product.
Right. I got it. Got it, sir. Thank you and all the best.
Thank you.
Thank you. Before we move on to the next question, a reminder to all participants, you may press star and one to ask questions. The next question is from the line of Prince Choudhary from Finkwale. Please go ahead.
Hello?
Yes.
Yeah. Hi, sir. Can you provide me the timeline for our beneficiation plant, like when the phase one will be operational, then phase two, and phase three?
The beneficiation plant, before we come into the physical phases, we have the technical phases and the approval phases. The technical phase of clearing the process route is final, and our pellet plant is.
Pilot plant.
Sorry. Our pilot plant is up and running, and we are now in the phase of testing that output, number one. Number two, the permissions required, including getting the land, etc., are already in place. I mean, are already applied for and in place. And physically, we feel 27 would be the first phase complete. In the next 12 months.
So by 2027, only first phase will be operational, right?
We're doing it in three modules. It will be 15 million tons per module. So the first module of 15 million tons will be done in that.
Okay. And other two phases?
Other two would be in the next every financial year after that.
Okay. And what will be the royalty for that BHQ one?
The royalty currently is less than 55, is not recognized as iron ore by the country. The royalty for that is around INR 65 for Maharashtra and for iron, therefore for this product, which is what we, worst-case scenario, will be paying.
Okay. Like INR 65 per ton, right?
65 per ton of BHQ.
Okay. And if we sell it for other third party, if I'm doing the investigation of the iron ore and selling it to third party, is there any other charges on that, or is it only the royalty which we have to pay?
What is the cost?
No.
Like I said, mentioned earlier, there's no buyer for BHQ, and we have no plan to sell any BHQ. There is no other cost except the mining cost, obviously, and the royalty.
Okay. And the mining cost would be more than what we do for the DSO iron ore if I'm not wrong then. Or it would be the same?
It would be lesser per ton of BHQ, but when we beneficiate it, we have to use two and a half times the material to three times the material. So from that angle, the ratio would be a little higher.
Yeah. From that concept only, I have to mine, for example, two point nine or three tons is required for one ton of DSO. So for that, in percentage terms, the cost would be more, right? If I'm correct.
Prince Chintan, you asked me a question of if I sell BHQ. So for BHQ, the mining cost is lower. After I beneficiate the BHQ, the iron ore mining, the finished iron ore cost would be around two and a half times of the BHQ mining, which is much lower than iron ore mining, and two and a half times of the royalties. So if that answers your question.
Yes, sir. Yes, sir. Understood.
Sometimes the revenue is around 40% each.
Okay, sir. Yeah. Thank you. Thank you.
Thank you. We have our next question from the line of Parthiv Jhonsa from Anand Rathi. Please go ahead.
Yeah. Hi. Thank you for the opportunity, Aaron. Sir, no. I think the number you mentioned, the CapEx amount actually mentioned at. Is it possible to repeat the same for Q3 and nine month?
I didn't get you. Can you just repeat?
Yeah. The CAPEX for Q3 and 9 months, sir. Is it possible to get the number?
Yes.
Because you have said in the opening remark.
Crores close to our in the nine months. It is INR 2,700 crores, and we've done totally around INR 4,400 crores till now in nine months.
Okay. Sir, also just one question to harp on the ex-mine cost incurred compared to, say, someone who is a merchant miner, right? Considering we have our own mine, and what would be the cost differential there? For example, if someone is mining, considering the MDO cost and everything, what would be the cost differential with us compared to a merchant miner or not?
I'm not privy to other miners in Gadchiroli. There are no mining going on right now. I'm not privy to their physical costs. On the premium cost, I already mentioned that I think it's in the range of 110%. So that is around INR 4,400 higher, approximately.
No. I believe, sir, there are no other merchant miners near our mine. I just wanted to understand with miners, say, from Karnataka or Odisha, if they are doing on MDO, what would be the cost differential just to get a comparison?
I think I don't track my competitors so closely. I think the easiest way to track it would be NMDC is a pure mining play or maybe Tata Steel. I'll have to have a look at that. We believe we are quite competitive in the overall mining cost. And with the advent of Thriveni coming into our fold, it will be much lower because the profit of the MDO would be consolidated in our books as well.
Okay, sir. Sir, and just on the BHQ.
One more point is that being newly established in Gadchiroli, only two years compared to NMDC being 20 years or 30 years and Tata Steel being 100 years plus, their cost may be different. I would have to ask, and I'll ask my IR people to work out the costing and give me a better understanding as well. Thank you for the question.
No problem, sir. No problem, sir. I'll get in touch with Chintan on this. Absolutely. It's fine. Sir, the last question is, is it possible to, because the pilot has given some very good yield on BHQ, possible to give a handshake on what would be the per ton kind of a conversion cost there, or it's too preliminary right now?
We have the cost with us. We believe that the overall cost per mine or per beneficiation plant would not be very different from the current DSO cost given the lower royalty at INR 65. We are trying to understand the clause a little bit more of whether INR 65 can be reduced or not. And so it would be in the same range, maybe a little bit plus minus, but the grade is better. The silica alumina is much, much lesser. So for the end user, there's a much, much bigger benefit whether we make pellets or we make steel or my consumers make steel. It will be a much better benefit. Pellets out of that product are around $45-$50 premium for that grade.
Okay. Okay. Thank you so much, sir. Thank you.
Thank you. We have our next question from the line of Siddharth Gadekar from Equirus. Please go ahead.
Oh, hi, sir. Good evening. So first, just on the EC approval, broadly, that we are expected to get the EC approval in the next 60-90 days, FY26 should be a year where we have the full EC, and we should be mining 25 million tons?
Yes, Siddharth.
Okay. So secondly, on our BHQ, have we started ordering the equipment, or what is the status on that?
The engineering is all in full swing. Some of the very long lead items I think we have just ordered or are about to order. Our teams have gone to Australia and to China to inspect better technologies also. I think we'll be in the position to order those equipment in the next I mean, in the next 10 days or so, we'll be placing the biggest orders for the. We have got the big grinder in place, the tertiary crusher, which would be getting installed shortly.
So secondly, then broadly, we should be on our original timeline in terms of commissioning the first BHQ plant. Is that fair understanding?
We continue to maintain that would be maintained.
Okay, so secondly, on the second slurry pipeline, when do we expect that to commission?
So the schedule, the way we have done our scheduling, which I mentioned to you earlier, is I think we cash flow to take care of that. And so once the two pellet plants are ready and the first BHQ plant is ready, then we'll work on the second BHQ plant and this pipeline and the pellet plant.
Okay. Got it.
The pellet plant in Chandrapur.
So broadly, by FY28, we should have two beneficiation plants and at least eight million tons of pellets, which should be online, right?
Yes, and 1.2 million of steel at Chandrapur.
Yes. Okay. Okay, sir. Got it. Thank you.
Thank you. We have our next question from the line of Abhishek Mehra from DAM Capital Advisors. Please go ahead.
Hello, sir. Good evening. I just had one question. I just wanted to ask, what is the closing iron ore inventory volume figure as on Q3?
We'll just come back in a minute for that.
Okay.
Any other questions?
Okay. Thank you, sir.
Thank you.
The closing inventory is 0.4 million tons. Hello.
Hello?
It's a line going to.
I think the line got disconnected.
Yeah.
So.
The answer is 0.4 million tons.
Thank you, sir. We'll move on to the next question from the line of Dhananjay Bagrodia from ASK Investment Managers. Please go ahead.
Hi, sir. Congratulations. Good set of numbers. Just wanted to understand what CAPEX are we looking for this entity over the next three years or so, and how are we looking at this entity on a longer-term basis in terms of a business plan, or how are we seeing that?
Can you just repeat?
So just a question is, how are we looking at CAPEX over the next three years on a consolidated level across divisions, and how are we looking at this company over the next three to five years in terms of business plan, in terms of how we because we've now got the clearances, we are trying new opportunities. So how should one look at it?
Yeah. See, as we've informed you, we should be getting into this 25 million tons of EC, and so we should be doing that much of production in the next financial year. So going forward, it should be 25 million tons of iron ore. In the next two years, as I just mentioned, we should be done with 4 million tons of pellet plant. We should be around 7 lakh tons of DRI production and 1.2 million tons of wire rod plant. That is a steel plant and an equivalent of 125 megawatts of power along with it. In terms of CapEx, we should be doing around INR 5,000 crore by this year's end. That is, we're at around INR 4,400. So we should be reaching around INR 5,000 crore by this year's end. And going forward in the next two years, yes, we should be doing more than that.
That is around ₹6,000-₹6,500 crores every year of CapEx to achieve all these projects of ours.
Okay. And just to understand, is our vision to focus on which part of the chain going ahead? Obviously, the first leg, what you mentioned, but over longer term, this company wants to be known as a mining company, processing company. What about that? How are we looking at that?
So our long-term vision is to be a cyclical free steel industry. Yeah. At the same time, how we achieve that is a, by very, very low debt, if any, number one. Number two, we have a part of the iron ore that we mine will be sold as either iron ore or as pellets. Part will be sold as steel. Around 25 million tons out of 10 million will be sold, will be converted into steel and selling around 4.5 million tons of steel. And balance will be sold or semi-products. And around 15 million tons will be sold as pellets or iron, mostly pellets.
Okay.
Million tons of iron.
Okay. Okay. Fantastic. Congratulations, sir. And any other fundraise we're going to do after this, or is it just going to be now no more fundraise required?
All these plans that we mentioned.
Okay. Fine.
For large metals, we have yet to sit with management of Thriveni to understand their CapEx plans and their requirements and overall thing. There will be some fundraisers on the anvil for both the companies, yes.
Okay. Fine. Fantastic. Thank you, sir.
Thank you. We have our next question from the line of Karthik Khandelwal from Khandwala Securities. Please go ahead.
Yeah. Good evening, sir. Few quarters back in a con call, and so we desire to achieve a revenue of around INR 40,000 crores by FY28 to FY29. So the recent acquisition of MDO business we did and the revenue we will be earning from this, is it considered in that target, or will it be over and above our desired revenue target of INR 40,000 crores by FY28 or FY29?
I think your question got lost in the noise. The voice was a little echoing. Can you repeat the whole question?
Sir, a few quarters back, we showcased a desire to achieve a revenue of around 40,000 crores by FY28 or 29. So the recent acquisition of MDO business and the revenue we'll be earning from this, is it considered in the target itself, or will it be over and above the desired revenue of 40,000 crores?
It will be over and above this.
Over and above. Okay. Thank you, sir. That must be all.
Thank you. We have our next question from the line of Aman from Seven Rivers. Please go ahead.
Yeah. Hi, sir. So any price cuts that we have taken in December and January? And how do you see it moving in February? Price cut. We haven't taken any price cut. Most of our metal is sold for this year of 10 million tons. So we don't see any price cut on the annual.
Sir, the realization for DRI has come off. What would be the reason for that? Can you explain what's the linkage with, let's say, iron ore realization in terms of what's the flow-through linkage with iron ore realization?
The DRI realization has come down. You're talking about in January or in?
For the quarter, sir.
Our realization has come down for the quarter, not up. The DRI is more linked to the secondary steel market and the scrap market, lesser to the iron ore market. And also, as far as raw metal concerns, we've got two raw metals, iron ore and coal. So both of those are part of the equation that people have, and ultimately, supply and demand. And the steel sector has been a little soft on the, I won't say, soft on the demand side. I think oversupply is there. The demand is still 7%-9% growth. So.
Okay. Yeah.
Yeah.
Thank you. We have our next question from the line of Kishore Udasi, an individual investor. Please go ahead.
Hello.
Hi, sir.
I just wanted to ask how much will be the total iron ore mining for this financial year?
We are expecting the EC should be by the mining cost. Mining. Total mining is mining or mining cost?
No, no. Only mining. Iron ore mining. How much million tons?
10 million tons this year.
10 million. So it won't be above that, sir, if we get environmental clearance before March?
If we get it before March on a pro rata basis, we can. That looks difficult, but yes, we can try a little bit more than 10 million.
Okay, but right now, we are calculating only 10 for this financial year.
Yes.
Okay. Okay. Thank you, sir.
Thank you. We have our next question from the line of Gaurav from Labdhi Fintrade . Please go ahead.
Yes, sir. Thank you for the opportunity. So actually, I joined a little bit late. So if my question is already answered, then please ignore it. I will read the transcript. So my question is, what is the company's plan for achieving the 100 megawatt of renewable energies for captive consumption?
We have tied up with two companies, Hinduja and Amplus. We are about to sign the final contracts with them. We'll be buying power from them and also becoming an equity holder of 26% in those two special subsidiaries for that power.
Okay. And my second question is, could you provide a detailed projection on how this cost reduction will translate into the rising competitiveness in the market and enable a company to maintain its profitability?
The landed cost of this power is around INR 4.75 per unit, and the landed cost of MSEB detailed cost is around INR 8.5. Number one. Number two, and of course, this is green power, so that is also very important for us in our business strategy. With those two benefits, I think it's very easy to calculate the cost-benefit to the product.
Okay. Okay. Got it. Yeah. Thank you.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference to management for closing comments. Over to you, sir.
Thank you, sir. As usual, it has been a very informative and helpful discussion, and these questions always help us to think of our management strategy also going forward. Thank you, everybody, for the interest in our company.
Thank you. On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.
Thank you very much.