Ladies and gentlemen, good day and welcome to the Lloyds Metals and Energy Limited Q2 FY 2026 earnings conference call. As a reminder, all participants' lines will be in 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. Siddharth Gadekar. Thank you, and over to you, sir.
Good evening, everyone, and thank you for joining us today. We at Equirus are pleased to host Lloyds Metals and Energy's Q2 FY 2026 earnings call. We have with us today Mr. Rajesh Gupta, Managing Director; Mr. Riyaz Shaikh, CFO; and [audio distortion] Nalevi, Director of Finance of Thriveni. Now, I would like to invite Mr. Rajesh Gupta to initiate the proceedings for the result call.
Good afternoon, everyone. A warm welcome to all of you. I sincerely thank Siddharth and the Equirus team for hosting this call and for the continued support. Let me begin with the big picture headline before we go deeper. This has been a half-year where operational commissioning of the pellet plant has taken center stage. The DRI plant has started. The value-added products have further standardized profile, and our project pipeline has moved forward as predicted with the meticulous planning. Across the board, the business continues to demonstrate resilience and direction. Let's begin with the projects. The slurry pipeline of 85 km has been one of our biggest enablers this year, and I want to emphasize what the slurry pipeline means. Seamless and reliable ore evacuation, and we've already seen the advantages in this monsoon.
Structural cost reduction, lower carbon footprint, and most importantly, efficient movement that safeguards our margins even in volatile or crisis environments. This truly marks a turning point on how to operate and scale. The pellet plant has been ramped up, the first pellet plant of 4 million tons, which began commercial production just at the end of Q1. In the fourth month of full operation, in October, we have crossed 100% of capacity utilization with a production of 350,000 tons, a little bit more than that. The pellet business is already contributing robust EBITDA per metric ton, driven by captive oil, slurry pipeline efficiency, industry-leading conversion costing, and strong realizations due to the strong quality parameters. This value-added mix has now become a core driver of our profitability.
The next project that we have just commissioned is one of the DRI kilns, which has expanded our DRI operation this quarter, just towards the end of this quarter. This tells us the engineered pathway we are building from mines to pellets to DRI and eventually steel. With regard to other projects, we continue to move forward with all our other major projects with a very disciplined approach. Pellet plant number two is already in advanced stages, 1.2 million tons of wire rope plant. The groundwork is progressing extremely systematically. The BHQ beneficiary planning and procurement has started, and while land acquisition, final stage is still going on. Our overall CapEx plan remains well structured, and each project is aligned to long-term value creation, not short-term capacity addition. Let me touch base on Thriveni as well. This was the first quarter where the accounts have been consolidated.
The EC of our clients in iron ore products has gone up by 35%-40%. NTPC mines, the EC has gone up by around 20%. Surjagarh mine is also gearing up for full capacity from 10 million- 26 million tons. Operational and CapEx gearing up is done for these plants. Given our large scale mining footprint, rain-related interruptions do have an effect on quarterly numbers. However, I want to highlight that lost revenue will be made up in the coming months, and mining operations are now normalized post-monsoon. This confidence comes from the capability and depth our teams have built over years of operating in these challenging terrains. At Ravini, the underlying operations remain very strong and on track. There are multiple positives worth highlighting. The price are reading at all the key mines. Continuous conversion and induction of electric and LNG hybrid mining equipment.
All of this enforces our reason of acquisition of this integrated value proposition of the Lloyds Metals and Energy platform. Our policy and our philosophy for all these projects remains the same: plan meticulously, execute swiftly, execute efficiently, and build for the next 30 years, not for just three quarters. I want to appreciate all our teams at the mines, pellet plants, logistic units, and corporate offices who manage our large-scale operations with nearly 32,000 people now under our hat. We are able to maintain momentum, innovate on site, and push forward despite external challenges, one of our biggest strengths. As we look forward to edge two, the drivers are firmly in place. Full benefit of the slurry pipeline, higher and stabilized pellet output, DRI ramp-up, post-monsoon mining stabilization, and systematic execution of all these projects following motion.
We remain committed to creating a business that is structurally low cost, fully integrated, environmentally responsible, and built to deliver sustainable shareholder value. With that, let me hand it over to both my colleagues, Riyaz and Nalevi , who will take you through the financials and detailed numbers of both the companies. Thank you once again to everyone for joining, and a special thank you to Siddharth again. Thank you.
Thank you, Rajesh , for the strategic overview. Good evening, everyone. Let me take you through our consolidated financial and operational performance for the second quarter and first half of FY 2026, followed by updates on key projects and strategic developments. This quarter has been another strong step forward for Lloyds Metals. We continue to build momentum across all business, translating operational execution into record financial performance. Starting with the standalone numbers, to reiterate, the company has reported its highest-ever quarter and half-year revenue. Our total income for quarter two FY 2026 stood at INR 25,754 million, up 75% year-on-year, driven by higher iron ore dispatches, the commencement of pellet sales, and improved logistics through the slurry pipeline. For H1 FY 2026, total income came in at INR 49,838 million, higher by 28% year-on-year.
EBITDA for the quarter was INR 8,693 million, up 95% year-on-year, with margins at 33.75%, expanding by 348 basis points. For the half-year, EBITDA stood at INR 1,678 million, with margins at 33.66%, reflecting an improvement of 363 basis points. Profit after tax came in at INR 6,056 million for the quarter and INR 12,402 million for the half-year, both up 22% year-on-year. These results highlight the growing strength of our integrated operations and the benefit of higher value-added contribution from pellets. As mentioned by Rajesh , we are getting more and more close towards creating a resilient business, which has minimum to least impact on account of steel cycle volatility. Our margins improvement is both year-on-year and quarter-on-quarter is a validation of our approach. Having said that, now moving to the segment performance.
In iron production, for quarter two FY 2026, stood at 3.42 million tons, while sales were 2.5 million tons, up 77% and 10% year-on-year. Realization averaged INR 5,571 per ton, stable sequentially. EBITDA per ton improved to INR 1,781, up 7% year-on-year. These numbers have to be viewed in perspective that despite quarter two being the traditionally challenging quarter for mining due to monsoon, we were able to report such robust growth in production and dispatches. The newly commissioned pellet plant at Konsari has been ramping up well and has achieved full utilization within four months of commencement. This is quite a significant milestone for us. In quarter two FY 2026, pellet production stood at 0.78 million tons, with realization at INR 9,916 per ton and EBITDA per ton at INR 5,039. The slurry pipeline and captive ore supply has ensured cost efficiency and strong margins right from the start.
In the DRI and power segment, DRI volumes stood at 88,200 tons, up 4% year-on-year. Though realizations were muted due to market softness, power volumes were stable and lower. Lower fuel cost helped maintain operating profitability. On CapEx, our focus remains on disciplined execution. We have commissioned a DRI expansion in Ghugus in this quarter, and the plant is ramping up well as we speak. We have spent INR 24,117 million during the first half of FY 2026, with work progressing simultaneously across all active projects. Let me also touch upon Thriveni as well. Thriveni is a subsidiary which is engaged in MDO and its related services. On a consolidated basis, Thriveni Engineering and Industries Limited and Infra Private Limited delivered a steady performance. Quarter two of the financial year is always a challenging quarter given the monsoon period. This year, monsoon was extended across India, which affected volume to a large extent.
However, the team has been quite upbeat for the remainder of the year. To sum up, quarter two FY 2026 has been a milestone quarter. Record revenues, margin expansion, new capacities coming online, and successful strategic integration. Each part of the business is now contributing meaningfully to our consolidated strength. With continued execution discipline, the benefit of new capacities, and operational synergy from Thriveni and the pellet plant ramp-up, we are confident of sustaining this momentum through the rest of FY 2026. Thank you very much, and we can now open the floor for questions.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone 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. The first question is from the line of Vikas Singh from ICICI Securities. Please go ahead.
Thank you for the opportunity and congratulations on a good set of numbers. I just wanted to understand our iron ore selling strategy going forward. Given that the iron ore prices in the domestic market are slightly under pressure, we are going to have almost 14 million-15 million tons extra volume. Would we push more volumes or is pricing something which we keep in mind because that extra volume would further degrade our pricing scenario? I just wanted to understand overall scenario, how do you see this and the balancing between volumes and realization?
Can I? Iron ore strategy, we would like to fill our full EC capacity, which this year stands to around 22 million tons. Given the last few months of extra rain, we may have reached between 20 million-22 million tons. In terms of pricing, pricing is a little down this last two months, but prior to that, it has been a little better than the previous quarter year-on-year. It is not that it is entirely down. It is softer in a softer regime. That is the cyclicality of the business which we are addressing. We have well-executed marketing strategy, including pelletization, including using internally DRI, as well as captive or nearly captive consumers. We are quite comfortable in our marketing strategy.
Noted. Since we are selling more on the West Coast and international prices are on a declining trend, just wanted to understand your views. Do you see further downside to the pricing, or what is the discount domestic prices are trading at versus the international imported landed prices?
International price versus domestic price, I think we are trading at a premium of around 35%-45% roughly. Yeah, not at a discount to the international price. International price currently, say, January is around $100 for a 61% grade. We are selling at a higher price ex people's factories. So there is a premium.
So there.
Sorry, there's a discount which is—I'm sorry, there's a discount which is slightly lesser. It's a steady thing, and I think India is quite delineated from the international pricing in that way. I don't think that the further reduction has had any effect on the Indian pricing. The pellets prices have come up and come down more because of the steel market, steel cycle being a little weak.
Noted. You don't foresee much of the risk going ahead?
I don't foresee anything more than 2%-3% market up or down in the next six months to nine months.
Noted. Regarding Thriveni, if I remember when we were doing the merger, our guidance for FY 2026 was somewhere around INR 8,000 crore with almost INR 2,800 crore of EBITDA. First half seems to be on a lopsided road. Do we want to change the guidance on Thriveni?
We will.
What caused this basically lower than expected achievement?
The guidance at the time of this merger, when we had bought in this guidance numbers, this was based on 26 million tons of EC of Lloyds Metals itself, which we were expecting it to have, getting it in the last quarter of the previous year. Now, that has which we received only in the month of June this year, almost at the end of the first quarter. Accordingly, we have already changed this guidance. We've been talking on to everybody. It won't be those same numbers. Our EBITDA should be anything around INR 2,000 crore-I NR 2,200 crore for this year.
Noted. And so just last.
We will see all this additional EC and the ramp-up in Surjagarh mines as well as the other mines will all happen in the second half of this year. We are very confident to reaching those numbers.
Noted. Just lastly on our upcoming integrated 3 million tons steel plant. Sir, since you are talking about starting the project as soon as first quarter 2027, could you give us the product mix which we are thinking of producing there?
The 3 million tons steel plant, we are not talking of starting the project. It is a half, 50-50 product mix. HR would be 50. We will start the work in mid to end 2027, not the plant. We are restarting the configuration a little bit, and the land is under acquisition right now. We are given the detailed project study to be made to a big Chinese consultant to understand the full technology upheaval that has happened in the last three, four years and take advantage of that. The product goals will ultimately be a mix between flat products, value-added flat products, value-added structural steel, and color-coated in terms of value-added HR coils and flat products. It will be a mix between both.
Prior to that, in the next year, we should be able to commission our steel plant at Chandrapur, which will be 1.2 million tons of wire rod plant.
No, actually, what I was coming from your slide number 23, where it has denoted that the construction work itself would start from Q1 FY 2027.
Yes.
Based on that, basically, I was just thinking our product profile, basically how much of the HRC, how much of the TMT, or if we are putting CRC, all these would have been already worked out. That is how I was actually questioning the mix.
The current project is based on around 3 million tons of HR coil with further downstream of 2 million tons of cold rolling and HR pickled, and further downstream of around 500,000 tons of color-coated and galvanized. That was originally envisioned, and we are under the process of restarting that mix and overall size of the plant, which will come back shortly. We have not started anything other than land procurement at the present point of time.
Noted, sir. That's all from my side. I'll come back to the Q5 further questions. Thank you and all the best.
Thank you. The next question is from the line of Divya Agarwal from Ficom Family Office. Please go ahead.
Yeah, hi sir. Thanks for taking my question. A couple of questions from my side, sir. Firstly, on the gross margin front, the gross margin has reduced around 79% in the current quarter versus an average of around 87%-88% historically. I just wanted to know what led to this deduction and will it continue in the coming quarters?
No, there is no such deduction in the gross margin in this quarter. If you're looking at the consol numbers or the.
Standalone basis, sir.
Okay. Sure. It should improve further in the next quarter.
Sure, sir. Secondly, sir, on the Thriveni part, in the last quarter, it was mentioned that the EBITDA margins should be around 33%, while the numbers reported were around 16%. I just wanted to know what is the reason for this divergence?
I'll request Mr. Nalevi to address this question.
Yeah, normally, good afternoon. Normally, our standard EBITDA margin in our business is around in between 35%-40%, and we had projected 33%. Last time, it did not reach 33%. It reached only 16.5% in the last first half. The reason being due to lower production, as you are aware, that all our costs are almost fixed. Our equipment costs, labor costs, these costs are almost fixed. Only the variable cost is about the fuel cost. Since there was a lower production, almost 8-10 million due to what we had planned initially, what was in our forecast, due to that, our production, our EBITDA margins have gone down, and ultimately, it has impacted on our profitability margin percentage also.
Next half, as well as both the quarters and next half, since the volumes are going to be high, ultimately, overall, we'll be able to maintain. As everybody is aware, since we had to scale up the production to gear up the equipment and all those things, mobilization and all these things, we need to keep on deploying our manpower and equipment at the various sites for Lloyds Metals and Energy Limited as well as in Odisha, other places. All these things have incurred cost, and due to that, our EBITDA margin in terms of percentage or in terms of absolute numbers have gone down in this first half.
From next quarter, would it be back to around 30%-33%?
Yes, absolutely.
Right. Lastly, on the DRI part, the realization has been low since the last two, three quarters. What is the realization right now, and are you seeing any signs of improvement there?
DRI and the secondary steel market both are suffering quite a lot right now. The only rainbow that we are seeing is a little reduction in coal prices, which has reached its bottom, international coal. I think over the next two-three months, the pricing will come back, especially I think the next quarter. This quarter, I'm still seeing a very subdued market.
Sure, sure, sir. Thanks a lot, that's all from my end. I'll end the next.
Thank you. The next question is from the line of Hardik Doshi from Abans PMS. Please go ahead.
Thank you for the opportunity, and congratulations on a great set of numbers. Could you share the EBITDA per ton number for DRI in this quarter?
Yeah. The EBITDA per ton for DRI in this quarter, H1, has been INR 3,879.
Okay. What is the number for Q2?
INR 3,150.
Got it. Got it. Got it. What was the IPS benefit in Q2 FY 2026?
IPS recorded around INR 94 crore as a benefit in Q2.
All right. All right, sir. Lastly, sir, if you could share the realized slurry benefit in this quarter.
Slurry pipeline?
Yeah, slurry benefit per ton basis.
As we've been stating, we saved around INR 600 per ton on the slurry pipeline. Hello? Hello?
Yes, yes. I can hear you.
Yeah. You could hear me?
Yeah.
Around INR 600 has been the saving due to the slurry pipeline.
Got it. Got it. That's all from my side.
Next.
Thank you. The next question is from the line of Ritesh Bhagwati from Alpha Plus Capital. Please go ahead.
Thanks for taking my question. My question pertains to our debt situation. From standalone to console, I see we have increased to roughly around INR 8,000 crore. That's like an addition of INR 6,000 crore. Is it project-related mostly, or is it primarily coming from Thriveni's consolidation? That's my question.
Yeah, it's coming from Thriveni's consolidation. So including the RPS, the redeemable preference shares issued to the promoters for taking over all this fund.
Okay. If you could share any comments on our negative cash conversion that we see on a console basis.
Could you repeat that question?
If it's possible, can you share any comments on our negative cash conversion, CFO, on our console basis versus the standalone?
Oh, versus the standalone. Part of it is because of the debt, I'm guessing. Working capital might be a reason for that. I think so. We'll get back to you. If you can just get in touch with us, Chintan or myself, later on, then we'll get back to you on that in detail. Because as such, we're not able to get any negative cash.
Sure, sir. I'll do that. Thanks. Okay. That's it from my end.
A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Vinit Thakur from Plus 91 Asset. Please go ahead.
Hello. Thank you for this opportunity. I just wanted to know, what is your estimated iron ore supply shortfall that you expect in current year 2026, and what would be your timeline for the third pellet plant?
The maximum that we can do in iron ore this year is around 22 million tons. We would do a minimum of 20 million-21 million tons of dispatches from the mine. Part of that would be used internally for the pellet and the DRI, and the balance would be sold. We would not be having any stock to a large extent. What was the second part of your question?
The third pellet plant.
The third pellet plant.
What would be your timeline for the?
What would be your timeline for the third pellet plant? Third pellet plant would be 2028, 2029, around the time that the third phase of the beneficiary plant is commissioned.
Okay, sir. Noted. Has the IPS benefit been recognized, and what is the total planned capacity of your pellet plants that you're expecting?
Total capacity for my pellet plants would be 12 million tons, including taking all three into the line. IPS, yes, we've already started. In this quarter, we've got around INR 94 crore that has been identified.
Okay, sir. That would be all. Thank you.
Thank you. The next question is from the line of Bhavik Shah from Invexa Capital. Please go ahead.
Yeah. Hello, sir. Am I audible?
Yes.
My question is related to the debt. At the time of Thriveni acquisition, we were told the enterprise value was around INR 5,000 crore, so around INR 4,950 crore of debt. Now, when we see the September balance sheet, our gross debt stands at around INR 7,980 crore versus INR 756 crore in March. There is an addition of almost, say, INR 7,000 odd crore. Is this like we have extra debt from Thriveni?
It's a console number. That INR 7,900 crore is a console number with Lloyds Metals also in it. As in Lloyds, as in Thriveni, the number was around INR 5,000 crore as when we had INR 5,600 crore, which is now around INR 6,000 crore, which is on account of the scaling up of the operations. This is continuous business. We have to go on for the equipment. Plus, we also have a cash balance of INR 400 crore. The net cash will be always INR 5,600 crore.
Okay. So we have taken around INR 6,000 crore from Thriveni as debt, right?
Yes, including the RPS again.
Understood, sir. Understood.
Regarding CapEx, we have done around INR 2,900 crore.
INR 2,400 crore in this half year.
Okay. What is the guidance for the remaining year?
We should be doing around INR 5,000 crore, both INR 500 crore- INR 5,000 crore in this year. The next two years also should be around INR 6,600 crore.
Understood, sir. Okay, sir. Thank you so much.
Thank you. The next question is from the line of Siddharth Gadekar from Equirus Securities. Please go ahead.
Hi, sir. My first question is on the Bharat Wire Ropes acquisition where we have acquired from CCPS. Can you just share the rationale behind that, and how do we see that conversion happening over the next two, three years?
It was purely a financial investment. There is no strategic direction attached to this transaction. Let's see if this company is positioned as an industry with long-term potential. For the risk-reward standpoint, the opportunity was compelling. We are looking at something around 18%-20%. Within 18 months is what's supposed to be converged. That is what we are looking at most.
Okay. The second question is on the Thriveni operations. When we had done the acquisition, we had given a roadmap where our mining expansion would go up to almost 123 million-124 million tons once LMEL also ramps up. Where do we stand on that? Over the last 12 months, have we acquired any new projects? Can you give some more color that how should we see 2027 and 2028 incrementally going ahead?
In the last year, this year, we are expecting some increase in our mining operations in Odisha. Two new projects we are proposing to start are Dalpark Mines and Lasardas Cherry. These are the two mines which we propose to increase in Odisha. On the coal side, we have got a contract from NTPC, it says INR 3 million ton. The coal has already been taken out, and it will start immediately in this financial year. The major impact would be the Surjagarh operations, where earlier the capacity was 10 million. Now we have got the capacity to increase to 26 million. These two, three things taken together are going to increase the production this year.
By FY 2028, any guidance you want to give in terms of volumes for Thriveni?
FY 2020?
Seven or twenty-eight?
FY 2027, we can just give you right now. We'll come back to you by the end of this conversation about 2027. We'll just total up all these figures, and we'll come back to you. In the meantime, let's continue the other questions.
FY 2028, we are having a guidance of around INR 7,800 crore-INR 8,000 crore of top line volume tons.
Tons and cubic meters, I'll just work out, and I'll just share two things during this.
Okay. Yeah. I'm done. Thank you.
Thank you. The next question is from the line of Tanmay Choudhury from Ventura Securities. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. My first question is on the can you just give me the ballpark number for the captive consumption, like for the entire FY 2026? If INR 22 million tons we are targeting, how much go for the captive consumption?
Can you repeat the question? Be a bit louder.
I audible right now?
Yeah. It's now better.
Yeah. Sir, I'm asking, can you give me the ballpark number for the captive consumption over the open market side for the pellet and DRI side for the full year?
For the next year, the total market, the self-consumption would be around 8 million tons for the pellet plant. It will take 500,000 tons. And out of that 8 million tons, 1 million tons or INR 800,000 tons will be used internally, and around INR 200,000 tons for the DRI. Around 1 million tons, 1.2 million tons will be used for DRI and 8 million tons for pellet.
For the open market, I don't know.
The rest will be for open iron ore, which is, say, around 18 million tons.
Okay. And sir, in the second half of the financial year, we're targeting for around 12 million-14 million tons of. So can you just throw some light of the relocation plan and the customer consultation profile for the supply of it?
The customer profile for the iron ore has motamotu remained the same. We are 100% serving our customers in the Chandrapur area. 100%, not 100%, but out of the non-captive consumption in Raipur, most of the iron ore pellet producers are using from us around 70%-75%. A lot of the quantity, around 35%-40%, is going to JSW and JSPL. 100% of our product is going, of their requirement is being fed by us to Evonith and to Sunflag, which is more or less the main constant for the last six-eight months. It is quite steady. On the pellet front, we are again, in our captive area of Chandrapur and Telangana, is more or less 100%. We are feeding to RINL. We are feeding to Belai, also export around 70,000 tons, 60,000 tons a month we are exporting. By and large, that is the route.
We are looking at other markets also. We have zero stock at the moment.
Understood, sir. Sir, what would be your framework for the evacuation? How much are we targeting per day of evacuation through transport and through rail and through pipeline?
By pipeline, next year will be around 25,000 tons-28,000 tons, and around 60,000 tons by truck to the siding and to the rest of the market.
Okay, sir. Understood. Thank you.
Thank you. The next question is from the line of [Dirash Khadelkar], an individual investor. Please go ahead.
Hello, sir. Am I audible?
Yeah.
Hi, sir. Thank you for the opportunity. Yesterday, we got an update regarding the purchase of 290 acres of land from Balapur Industries. The query is, what will this land be used for? Is it for a wire rod mill or something else? Another query is regarding any update on coal mining block at Madhya Pradesh?
On the land, the land will be used, it's around 10 kilometers from our coal-cerry factory. It will be used for two, three purposes, including partly housing, which already exists on the land. We'll also be using it as a switchyard station for the MSCDCL support system. Regarding Madhya Pradesh mining, there is no update at the moment. It is still under study and things like that.
Okay. Thank you, sir. Thank you, sir.
Thank you. The next question is from the line of Siddharth Gadekar from Equirus Securities. Please go ahead.
Just a couple of more questions. First, on the 1.2 million ton BHQ that we have mined, have we already booked these costs in the quarter? Going ahead, will we see some more BHQ mining done before the BHQ plant comes online?
The costs have been booked.
Lightning stock, yes.
Lightning stock.
Over the next 12, 15 months before the BHQ plant comes online, will we see more production on the BHQ side also?
Yes. Yes. The mining plan indicates that. The exact figures, we would know as the mining progresses.
This would be over and above the 22 million ton guidance that we are talking about, right?
Yes. This is over and above the 22 million tons.
Okay. Secondly, on the BHQ plant, when do we expect the first plant to get commissioned? About the ramp-up also, how should we think about that?
Next year, last quarter, should be the first unit. Basically, there are three units of 15 million ton input. Each of these three units have three modules of 5 million ton. Basically, we have nine modules of 5 million tons each. Starting last quarter of next year, we would be doing one module every month for the first six modules. Based on that, along with the steel plant, we will be doing the last module.
Broadly, by FY 2028, we should have around 15 million tons coming from BHQ?
Output of 10 million tons, input of 30 million tons.
Okay. Got it. Secondly, on the pellets, incrementally with our second pellet plant coming in also next year, how should we think about the customer profile moving?
Customer profile is increasing. We are looking, like I said, at more markets towards the south of India. We are also looking at more exports with CBAM and all that. We are hoping to also export into Europe and things like that. We are looking at various options. We have done the overall working. At this moment, it is too early to divulge that in the public. We are very confident of the marketing strategy of that. Like I said earlier, our cost of conversion, our captive mining, etc., makes us the lowest cost producer. Our market strength in India is there, and we hope to capture that also in the international market. Right now, most of our exports are going to China, but we are looking at other areas in Far East, Middle East, as well as Europe.
Lastly, this quarter, did we have any trading volumes also from pellets or only our own production?
Can you repeat that question, please?
Did we have any trading volumes also from our associate companies on the pellet side?
This quarter, the trading was around 2 lakh tons of iron ore. Of pellets.
Of pellets.
Of pellets.
Of pellets.
Of pellets.
Sorry. Okay. Got it. Thank you so much.
Thank you. The next question is from the line of Vignesh [audio distortion] Wealth. Please go ahead.
Hi, sir. Am I audible?
Hello?
Yeah.
Yeah. So just want to touch upon the debt numbers. So considering the CapEx of INR 6,000 crore, how should we see the debt numbers going forward, sir? For FY 2027?
We have INR 5,000 crore of NCD issue. That is what we have planned. Going forward, that is something what we are planning to raise that debt over the next six months from now. Working capital is something what we have now. That we've got sanctioned around INR 800 crore of working capital in place.
For FY 2027, the debt number should be around INR 9,000 crore, like INR 7,500 crore+ the NCD?
It will be also repaying because the Thriveni loans are getting repaid also every quarter. Even we start repaying from this month, the loans what we have taken on a short-term basis will all start being repaid. It would be somewhere it should be around INR 6,000. No, with the NCD is a big amount, it should be around INR 8,000.
Okay. Any other plan for future? It should be around debt raising or mostly it's equity kind of thing which we are planning for?
We are planning to do mostly it should be the lease debt. More of internal approval as such, which will be continuously flowing in. We are planning, aiming for a debt to EBITDA of 1. That's what our aim is, though it would be higher sometimes and it will be always the trailing the next year EBITDA. We are working on those lines.
Yeah. Okay, sir. That was helpful. Just on the Thriveni EBITDA, any guidance for the next year, sir? Revenue, I guess it's around INR 8,000 crore you have guided for. How about the EBITDA number, sir?
You mentioned INR 8,000 crore and around 30%-35% OpEx.
30%.
OpEx, EBITDA, so I think INR 2,000 crore is the right figure that we can look at given the vagaries in this year.
Okay. Okay. Just regarding the IPS benefit from Navon, annually, how much should we expect, sir, as a total amount? How much should we be receiving it?
IPS, Navon?
IPS will be around INR 1,000 a ton for the pellet and around INR 1,200 for the DRI additional capacity. So around.
INR 350.
INR 350, INR 400.
Okay.
Annually, approximately INR 400.
Okay. Okay. Thank you. That's it from me.
This is on increasing as we add on the new products.
Okay. Got it, sir. Yeah. Thank you. That's it from me, sir.
Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Yeah. Good evening and thank you for the chance. Sir, my first question is on the pellet. Our margin is at around INR 5,000 per ton, which is much higher than the industry standard. If you can explain what are the economics here and assuming today's price, do we expect similar margins to continue on expanded volumes also in coming years?
The level of margin is, like I mentioned earlier, amongst the highest in the country, three, four reasons. Number one is captive mine. Number two, captive transport by the slurry pipeline, saving of INR 600 for us and INR 1,000 for many other players. Number three is an operating cost, which is around INR 300-INR 400 lesser. Number four, destination to destination selling price is around INR 200-INR 300 higher than anybody else. Given the factor of all of this, like I have kept saying, our company, we are building a cyclical proof industry. The pellet industry, which is not having a very nice time with the rest of the players, because of all these reasons, we are quite happy. We can be happier, but we are quite happy with the progress. The plant has performed very well as per textbook operations. Our fuel cost is 9.5.
We are going to further reduce our conversion cost by going green in the fuel by LNG this month, maybe early next month. 25%-35% of our power would be green in the next six months. All put together, we would save another INR 100-INR 150 per ton from these two factors alone. All focused on being cyclical proof. That is our mantra, and we stand by it.
Understood. So say INR 4,000-INR 5,000 range is sustainable. That is what we can assume?
Given today's market and at least next two to three months, I would say a little better or the same. Yeah.
Understood. Understood.
I do not see it going below INR 4,000 because even at my export level, it is INR 4,000.
Okay. Got it. Sir, one last question on the BHQ plant. Now, given the mining has started, what are the reasons for the delay in the beneficiary plant? Or is it some sort of inventory, and are we looking at, and then only we would commission the?
We are talking of a first-time industry in the country in one of the very difficult terrains. One of the reasons is that we are waiting for the final clearance for the land. Number two reason is that we have identified all the technology and doing the engineering in full depth so that when we go there, we can go full blast. By that time, our pellet plant construction would also be over so that the team can fully focus on that side. With all of that, I think it's more or more from the original schedule, we are ±6 months. It is within the thought process that we had originally.
Understood. The margins would be similar? Lower royalty will offset the higher mining cost, etc. Is that the right understanding?
Yeah.
Understood. Okay. Thank you and all the best to the team. Thank you.
Thank you, sir.
Thank you. As there are no further questions, I would now like to hand the conference over to management for closing remarks.
Thank you, everybody. Thank you for all the support. We hope to perform well with your blessing and the blessing of the market. The steel industry is going through a tough cycle at the moment, and we hope to cross this by the time our steel plant starts so that when we are on the other side of the steel cycle, we are in full swing on the steel schedule as well. Thank you again.
Thank you. On behalf of Equirus Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.