Q2 24/25

Nov 8, 2024

Quarterly report

Summary

Q2 profits exceeded expectations, with EBITDA of INR 176 crore and a 25.8% margin. Near-term margins are expected to hold, while major furnace, mining, ethanol and renewable-power investments underpin expansion plans.

Ladies and gentlemen, good day and welcome to the analyst conference call of Indian Metals and Ferro Alloys Limited, arranged by Veritas Reputation. At this moment, all participant lines are in the listen only mode. Later, we will conduct a question and answer session. At that time, if you have a question, please press star and one on your touchtone keypad. Please note that this conference call is being recorded. I now hand the conference over to Mr. Aryan Rana from Veritas Reputation. Thank you, and over to you, sir. Thank you. Good evening, and thank you for joining this conference call with Indian Metals and Ferro Alloys Limited to review our financial results for the second quarter of fiscal year 2025, ending September 30, 2024. In fact, what has been a remarkable year with about 80% increase in market valuation the past one year and over 700% the last five years, we recently got a AA-/A1+ affirmation of our credit ratings by ICRA. Our long-term stability rating remains at AA- with a stable outlook, while our short-term rating continues at A1+. This endorsement reflects IMFA's global financial performance with sustained profitability, strong cash flows and current debt coverage indicators projected to remain strong in the near term. The improved financial profile is largely a result of effective debt reduction since FY 2022, and the company is favorably placed for growth in the ferrochrome sector. As a fully integrated manufacturer of quality ferrochrome and a leader in the industry, IMFA benefits from a highly competitive cost structure driven by self-reliance in chrome ore and power production. We remain one of India's top ferrochrome exporters, with a diverse operational portfolio encompassing chrome ore mining, electricity production and ferroalloy smelting. Our financial results are available on our website in the stock exchange for further reference. Please note that today's discussion may contain forward-looking statements that are involved with uncertainties and other factors. These statements should be considered in light of our business risks, which could impact future performance or results. Joining us today are key members of our management team, Mr. Prem Khandelwal, Chief Financial Officer and Company Secretary, Mr. Bijayananda Mohapatra, Chief Operating Officer, Mr. Saunak Gupta, Deputy Chief Financial Officer, Mr. Binoy Agarwalla, Head, Power Business Unit, Mr. Sandeep B. Narade, Head, Mines Business Unit, Mr. Suresh Tomar, Head, Ferroalloys Business Unit, and Mr. N. Venkatesh, Head, Sales and Marketing, Ferroalloys Business Unit. We'll start with a brief overview of our Q2 FY 2025 results, after which we will open the floor for questions. With that, I will now hand over the call to Mr. Prem Khandelwal, our CFO. Over to you, sir. Thank you. Thank you, Aryan, and good afternoon, everyone. Thank you for joining us on today's earnings call for Q2 FY 2025. We are pleased to report results that exceeded our expectations for this quarter, reflecting the hard work and commitment of our team and our strategic focus on operational efficiency. Our profits came in stronger than anticipated, bolstered by solid performance across our key segments. This positive outcome reinforces our confidence in the strength and resilience of our business model, even as we navigate a dynamic market environment. Looking ahead, we expect the upcoming quarters to continue this trend. We anticipate stability in demand and pricing, which should allow us to maintain a steady performance. We remain committed to driving sustainable growth, supported by our investments in technology and efficiency improvements. We are grateful for the continued support of our stakeholders, and we are eager to build on this momentum. Thank you once again for your trust and partnership, and we look forward to your questions now. Thank you very much, sir. We will now begin with a question and answer session. Anyone who wishes to ask a question may enter star followed by 1 on your touchtone telephones. If you wish to remove yourself from the question queue, you may enter star and 2. Participants are requested to use only 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 Sid Mehta from HNI. Please go ahead. Yes. Can you hear me? Yes. Okay. I have a question, if you can clarify my understanding of the operations going forward. If I read it correctly based on the CNBC interview I saw today, it seems that in the future, in the year FY 2025/2026, probably the quantity of production will be more or less what we have going right now. But there may be an improvement in the price as well as there is currently a reduction in the cost of coking coal. And both aspects together should be expected to increase our profitability going forward. Is this one correct outlook that I'm having? No, for the next quarter, I don't think MD has indicated that. For the next 15, 18 months. No. I don't think he has indicated that because in our business, predicting more than two quarters is very difficult. Okay. What he has mentioned in the interview, that next two quarters looks like we are going to maintain these kind of margins. Okay. Beyond that, it is very difficult to predict anything, so we need to see where the markets are at that point of time, and demand and supply situation will determine the price. Okay. All right. In FY 2025/2026, we will be setting up the expansion facilities. After FY 2025/2026, a year after that, pretty much we would start seeing some result of the expansion. Right? The quantity of production would increase only at that time. Today, we are producing everything we can, and we are selling everything we can. Yeah, that is correct. Our any improvement in the next year, next FY, would come mainly from price increases, if any, if they take place. Right? Mm-hmm. Correct. And maybe foreign exchange improvements also. Maybe some cost reduction. It all depends on where the market is at that point of time. Okay. All right. Once we pass over this scenario, if I am understanding it correctly, we will get an expansion of roughly 40%. So if our capacity would go from, say, about 2. some lakh tons to- another probably 1 lakh tons added into that. Yeah. And say, two, three years after that, we would look to probably expand another 2 lakh tons, if I am understanding correctly. Another 1 lakh ton. Another 1 lakh ton only. Okay. The second expansion also would be if it's underground mining and all that? That would also be only 1 lakh tons? Yeah. That will start somewhere in FY 2028 or 2029. That will be 28 and 29. I see. Yeah. I see. Okay. Would you like to add anything to this outlook as I am seeing it? No, I think pretty much you are on this thing. As you said, next year we cannot predict anything. Yes. But next 2 quarters, yes, that we can predict that it is more or less likely to be like this. Okay. Now, in terms of the global situation, our position today is such that we can sell everything that we are making. We are one of the lowest cost producers. If Africa, maybe if the situation improves or if the world goes slightly into recession a little bit here and there, I do not see that it should affect us, right, very much? Because right now at $0.95, we are already among the sort of pretty low price at the moment. Mm-hmm. You see, we are at such a level as far as cost curve is concerned. Yeah that if prices come down at certain unsustainable level, Yeah then most of the facility would be shut down. Closed down. worldwide. Right. Yeah. Almost 70%-80% capacity will shut down, but even at that level, we will be making some money. Yes. Right now you don't foresee any such a bad scenario. Such a bad scenario seems unlikely that people will drive the price down so low that level. Yeah, very unlikely. If it happens, then we would see the kind of jump back we have seen earlier also. Yes. Correct. Very good point. Yes. Yeah. One last question. What is your view on what are the options available to us to disperse the money that will come to us? No. The money, as you may be knowing that a lot of expenses have been lined up. Yes. We have to spend almost INR 2,000 crore in next six, seven years. I see. Okay. Okay. So apart from the dividend, I don't see any further disbursement. No further windfall disbursements or anything. No. As of now, we are not anticipating any such kind of thing. We will be needing money for expansion, a lot of expansion. Absolutely. No, it's a correct thing also. Yeah. Okay. Thank you so much. Thank you. Thank you. Ladies and gentlemen, if you have any questions at this time, you may enter star followed by one on your touchtone telephones. The next question is from the line of Dhriti from Molecule Ventures. Please go ahead. Hi, sir. Yeah, Dhriti. Hello. Yeah. Yeah. Congratulations with set of numbers, sir. Thank you. I had a question that given the new capacities will be on stream in two years, and we already have our mining capacity approval. Do we plan to expand to any inorganic route like acquisition of some smelting capacity just to achieve the volume growth in FY 2025/2026? We are open to that, Dhriti, and we are in fact looking for those kind of opportunity in the market also, but nothing lucrative is available at the moment. If something comes up, definitely we will look for that. Okay. Yeah. And sir, if you could help me with the cost of production Q2 FY 2025. Q2 FY 2025. Just a moment, let me see. The cost of production was INR 69,600. Okay. EBITDA quarter? EBITDA was INR 176 crore, which is around 25.8%. Mm. Sir, quarter, also if you could help me with the coal cost and coke cost. Power cost, variable cost was INR 3.85 paisa. The coke cost was INR 16,545. Okay. That's all from my side, sir. Thank you. Thank you. Thank you, Ruchi. Thank you. Participants with questions may enter star and one on their handsets. The next question is from the line of Joe Shah from Seven Seas. Please go ahead. Good evening, everyone. Thank you very much for the very good numbers. Thank you very much. After a long time today, shareholders of IMFA had a broad smile. Thank you very much. Prem, regarding this mineral tax, we know that the Supreme Court has rejected a review petition filed by Union of India. All the legal doors are closed now, and now this pending mineral tax is a big tension for us. We are also not able to utilize the compensation which we have received from UCL. Now, I think the only option left is some parliamentary action. This is not a small job. But I remember our vice chairman during Manmohan Singh's time, he was coordinating with all the central India states for minerals matters. He is a brilliant person, we know, and he is an elected member of Parliament from Odisha and very active in Parliament. So I think this matter should be taken up by him. Not just for the benefit of IMFA, but for the benefit of the entire mining industry. And because it is very important that this matter is sorted out amicably in the interest of the industry, which the Government of India also believes that this is a very unjust ruling by Supreme Court. So now, Operator request has been initiated. If you would like to cancel this request, please press star zero again. But I believe this matter has been taken up by all the mining companies with the government. And in fact, CMEA has also given their representation that this levy should not be allowed. Right. So beyond that, I have no idea. And our MD has also taken up the matter with the ministry. Right. All the companies are jointly taking the action. Right. Hopefully, there should be some amicable solution to this. Beyond that, I won't be able to comment anything on this. Sure. Okay. Thank you. Thank you. Thank you very much. Thank you. The next question is from the line of Sanjiv Goswami from Fractal Capital Investments. Please go ahead. Yes, thank you. Thanks for the opportunity. I was seeing that the Hello. One, the ferrochrome production has actually increased by more than 10%. Is it that we buy chrome ore from outside also from other places like Odisha Mining Corporation, or did we have enough inventory of chrome ore? Sanjiv, you got cut off in between. Can you repeat your question again? Hello. Yeah. Yeah. Can you hear me now? Yes. I was saying your production of chrome ore actually declined by almost 50%, while ferrochrome production has gone up by more than 10%. Do we really buy chrome ore from other mining companies like Odisha Mining Corporation, or we had enough inventory of chrome ore initially? Mr. Sandeep B. Narade, would you answer that? Yes, we are having the inventory. If you compare with the last year, it sounds to be dropped. This year, the monsoon was quite long, and there was rainfall almost all the days. That was the main reason. Last year, the monsoon was delayed, so we could make up the production in H1. You can see the difference is of almost 1 lakh tons. There is no direct impact of rains. We are in line, and in Q1 it was 100%, in Q2 about 18% less. Yes, we have the stock. We are having the inventory of ore. So no need to buy from others. Okay. Generally, we do not buy chrome ore from outside. Is that That means we do not buy. Okay. The reason I am asking is because if you look from FY 2021 to FY 2024, your ferrochrome production per chrome ore has come down from 0.5 to 0.39 in FY 2024. Is it because the quality of the chrome ore coming out is better, or what exactly explains that? No, Sanjiv, we did not get your question. You are talking about chrome ore consumption in terms of ferrochrome? Yes, exactly. No, I do not know from where you got the figure, but chrome ore in terms of ferrochrome, the chrome ore consumption is almost 2.3. 2.3 I am seeing all the year. Yeah. 2.3-2.4. It is not coming down. Okay. If you look at FY 2021 to FY 2024, the chrome ore production increased from 5.21 lakh to 6.70 lakh. That is an increase of almost 1.50 lakh. Yeah. While the production of ferro increased only by 5,000. Yes, but that is not a comparison, because then we are holding inventory. Basically, in FY 2024 we had the large inventory. Yeah. But consumption is same. It is around 2.4 tons per ton of ferrochrome. Of course, absolutely. Yeah. Okay, perfect. Thank you. Thank you a lot, sir. Thank you. Thank you. The next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Namaskar, sir. Thank you for the opportunity. Sir, we have spent around INR 41 crore for the first half under the purchase of property, plant, and equipment. How much of this is to be our new furnace project, and when are we going to start spending in a major way the CapEx for the new project? Suresh? Yes, hello. We have started our boundary work from the last month, and the boundary work will be completed by the end of this December. We are expecting to start the furnace by July 2026. We have placed the order for the equipment. Major packages we have ordered, like power plant and other electro systems of the furnace, and relevant packages we have already made an LOI and ordered. Some of them were ordered. Okay. When will we draw money? When will you be paying them for that, which quarter we will be drawing cash for the same? The payment will begin from the Q2 beginning up to next year. Some of them in the Q1, major will be coming at Q2 of 2025. Okay. How much have been entrusted with? What will be spending on this in terms of the plant equipment? Plant equipment for furnace packages, it will be around INR 181 crore, power plant is around INR 95 crore. Other, we have paid till date around INR 63 crore. Okay. Sir, what is our cash balance? Mr. Kapoor, can we ask you to return to the question queue? Only one question I have, ma'am. Cash balance, sir, if you could give me in terms of our investment in liquid funds and what is the cash on books? Total cash and bank balance as on date is INR 869 crore. Okay. And our working capital requirement is? Working capital is INR 240 crore. Okay. That minus INR 600 crore net cash we are carrying as of now. Yeah. Okay. Thank you, sir, and all the best to the team, sir, in the future. Thank you. Thank you. The next question is from the line of Sid Mehta from HNI. Please go ahead. Yes. My question relates to our expansion going into ethanol production. I am just curious, not a criticism or anything, about what is the reason that while we are making chrome ore, we decided to get into a different field altogether. And right now, from my understanding, the sales on that would be around INR 300 crore, which is a fairly small amount for us as a company. So doing some different business, getting into a whole different area, but getting a small amount of revenue. So I am just curious, what was the reason? I am not criticizing or anything. I am just curious about this. And will this INR 300 crore one day become INR 3,000 crore also, or it will remain INR 300 crore, INR 400 crore like that? Binoy, would you answer that? Yeah. Actually, we have diverted this new project as a diversification, and we have land at Therubali. Utilizing that one, this one. Initially, we are going for 120 KLD. Afterwards, we will go on increasing the capacity, seeing the plant performance. If we go for maximum capacity in the future, given our land, roughly what would we expect the sales, say, in today's prices to be? Theoretically, what would be the maximum sale? Maximum sale, 120 KLD means around INR 300 crore. As you add on another 120, we will increase by another INR 300 crore. Like that will increase. Phase-wise we will expand. Not at a time. Total, how much KLD we can put? Maximum. That will be difficult to say anything at the moment, because it depends. We are just experimenting now with 120 KLD, and if it is successful, and if we get extra land there, then we will expand further. Okay. It can go to 1,000. Nothing has been worked out. Okay. In the future, we can go for 300, 500, 1,000 like that. Yeah. Because you see, the ferrochrome production, that area, logistically, there is a disadvantage, around INR 600 per ton. So it does not make any sense in expanding ferrochrome in that area. I see. Okay. So we have enough infrastructure available there. A lot of land is available, railway siding is available. That is a full agriculture belt. So maize, rice, everything is available in plenty there. I see. That was the reason for expanding in ethanol. Yeah. We are seeing lucrative business, and if it is successful, then we expand further. Yeah. It is likely to be successful because are there any other people doing the same business? They are taking ethanol out of maize in that area and selling it? No, that area, I think nobody else is there, so that is why we have started. We are pioneers there. All right. Let's hope it all works out. I am glad that some new initiative is there. Yeah. By God's grace, let's say, one day it can go from 120 to maybe 1,200 also. Let's hope so. Yeah. Thank you. All right. Thank you. Thank you. Thank you. The next question is from the line of Kaushal Kedia, an individual investor. Please go ahead. Hi, sir. Congratulations on a good set of numbers. Sir, I want to ask you, in one of the annual reports, you mentioned that your proven capacity in the reserves are 21 million tonnes. And in some earlier interview, I think someone had mentioned that it can increase also, you've not done a proper survey of the area. I want to know what is the kind of reserves that you have in the mines. Sandeep, would you answer that? Can you please repeat the question? Because voice was not- What is the mining reserves that we have, proven reserves? Number as of now, I am not having with me right now. But yes, we are having enough reserves for our lease period from both the mines. So we are comfortable for the next 20-25 years? Yes. So it is upwards of, I am assuming, 21 million tonnes then. Yeah, roughly. Okay. Sir, and can you just repeat in terms of the EBITDA cost per tonne? EBITDA cost per tonne is around. Just a moment. INR 77,500. Okay. Sir, and this new furnace that we are setting up, where will we get the power from? Bijan? Yeah. Actually, we are setting up the power plant in the Kalinganagar. Whatever our thermal capacity is now, it is now catering the year. For future, we are getting tied up with the renewable energy. It is a hybrid. Solar plus wind. With that grid power, we will go for the furnace. This CapEx that we are doing, it includes setting up of how many megawatts of power plant? No. We are setting up a small power plant utilizing the furnace gas. It will be around 9 megawatt. Okay. That is beneficial to us, that is using the heat from the CO gas. Okay. There is no real thermal power plant. Okay, understood. The balance will be dependent on the grid only. Not in grid. We are getting tied up with a captive hybrid power plant. Renewable. What does that mean, captive hybrid power plant? That means somebody is setting up a solar plus wind energy. We are there as a stakeholder, as a partner, passive. We will be investing in that. Yeah. As equity shareholder. Yeah. Okay. So a third party is setting it up, and we will be investing in that? Yes. Okay. And what is, how much is that investment? INR 95 crore you said. Under INR 20 crore. INR 100 crore. So that is including in this CapEx, or you have included it in this CapEx, or that is a separate investment now? No, that is a separate CapEx. It is not included in the furnace. Furnace. Okay. And sir, to set up 1 lakh tons of furnace, what is the cost? Is it INR 500 crore or INR 1,000 crore? I am confused because when I read it in the last- No, it is around INR 650 crore, Kaushal. Okay. Furnace will be INR 650 crore, and for mining it is around INR 1,000 crore. This mining is to go up to 1.1 million tonnes. Yes, 1.2 million tonnes. 1.2 million. Okay, sir. Thank you, sir. Right. Thank you. Thank you. The next question is from the line of Joe Shah from Seven Seas. Please go ahead. Joe, regarding power investment maintained of about INR 85 crore in Kalinganagar, that is for the producing power from the gas, right? No. That is Oh, sorry. Yeah, please go ahead. This Kalinganagar power plant is around 9 megawatt. Yeah. That power generation will be done from the furnace of gas. Yes, I see. We will be producing 9 MW of power from this furnace gas. Yeah. Okay. Now, one more thing. Prem, this Sukinda underground mining, which we are going to start, when are we starting with that project, underground mining, because it is very challenging project, underground mining. What is the timeline and how much investment would be needed? Sandeep? Yes, the timeline is next five to six years to start the improved production, and investment will be about INR 1,000 crore. Okay. When will we be starting this underground project? We have already started some work. Right. Okay. Yeah. Okay. Thank you. Yeah. Thank you. Thank you. Ladies and gentlemen, if you have any questions at this time, you may enter star and one on your handsets. The next question is from the line of Akhilesh B, who is an individual investor. Please go ahead. Yeah, hello. Am I audible? Yeah, Akhilesh. Congratulations, sir, and your whole team. Thank you. For a great set of numbers. Good execution as usual. Sir, I have two questions. One is on this Supreme Court verdict which came a few months back, that state government can also levy royalty. Have you had any discussion with your state government in Odisha? Is there any idea you are getting about how it will proceed going ahead. The act has been struck down in Odisha High Court, and the state government has gone to Supreme Court against that. That is pending since so many years now. Unless the act is reenacted, nothing is payable as of now. You have no contingent liability on Adani? No. There is no demand, there is no contingent liability. That's how we are not showing anything in our books. Even Tata Steel also which had quantified earlier, this quarter, they have also withdrawn that note because there is no demand, there is no act as on date. As on date, royalty is still decided by the center? Yes. IBM. Not center, IBM. IBM, yes. Royalty is 15%, and IBM declares the price on which we pay royalty. Right. That is the status quo. Nothing has changed since this order. Yes. Unlike Tata Steel, we did not even have any contingent liability or demand in the past. I doubt even Tata Steel had any demand. I do not know how they have shown it because the act was struck down, so obviously there is no demand. I get worried a lot of investors out there. Now they have modified their note. This quarter, yes, they have now modified the note. Okay. And sir, second question is, can you refresh us on this ethanol project? What is our total CapEx? When is the payback period or expected EBITDA, profit transfer? Can you refresh us on this? VNMs? Saunak Kantam. Hello, Saunak? Saunak, are you there? Yeah. Hi. So on the ethanol project, our CapEx is approximately INR 140 crore, and we expect to get this around in six years' time, the payback period. What can we be projected EBITDA at full utilization? At full utilization, we expect it should be somewhere around 14%-15%. EBITDA will be there in that. Okay. Okay, thank you. Okay. Thank you. The next question is from the line of Pawan Kavare from NMV Securities. Please go ahead. Hello. I am ready. Yeah, Pawan. Hello. Congratulations for your good numbers. My question is on CapEx. In Q4 of FY 2024, you have given a CapEx number of INR 1,500 crore. Is there improvement in that number? Improvement, you mean reduction? Increase, obviously. You have said 2,000 in today. No. 2,000 is because there are several CapEx items are there. Like we have furnace capacity, then mining, then ethanol, then RE power. Okay. All put together is around INR 2,000 crores. Okay. If you can give me a breakup of this INR 2,000 crore. Estimated around INR 650 crore for furnace, INR 1,000 crore for mining, INR 140 crore as Saunak said, INR 140 crore for ethanol, and roughly INR 100 crore-INR 120 crore for RE power. Okay. What is the expected CapEx for this year, this and next 2 years? Saunak, do you have that number? Yeah. This year we expect to be around, if I go by the order released, will be around INR 600 crore, will be the CapEx. Next two years, we are in the finalization stage, we will be actually framing it out. Okay. Out of the INR 600 crore for this year, what was the executed CapEx till now in half year? As of now, what Suresh mentioned, especially the Kalinganagar project. There we have around, if I say, executed is around INR 60 crore. And a portion with the ethanol has started. There we have some, and the rest of them would be the routine CapEx which we have spent around INR 50- Okay. Yeah, continue, sir. That is the thing as of now. So what we mentioned, basically, we mentioned this on the basis of order released. The overall order released is in that tune annually INR 600 crore, but as of now we have released in the tune of about INR 300 crore-INR 350 crore. Okay. So out of this INR 600 crore, is it include maintenance CapEx? Yeah. Routine CapEx is included. What is the routine CapEx, sir? It is around INR 70 crore-INR 80 crore. INR 70 crore-INR 80 crore yearly? Yeah. Okay. Thank you, sir. Thank you. Thank you. The next question is from the line of Mohit Motiwala from Envision Capital. Please go ahead. Hello, sir. Thank you for taking my question. I just wanted to understand that, has there been any reclassification of costs in the cost of material consumed line item? Yeah. From this quarter onwards, we are showing power and fuel separately. If you see our results, there is a line item of power and fuel expense of INR 101 crore. Right. This was earlier being shown as- Under the raw material consumption. Yeah. But the auditors have advised that, no, this is not part of raw material. This is a separate line item, so we have segregated this, and that's why the two items are appearing now. Okay, sir. Fair enough. I just wanted to confirm a few things in terms of the capacities that we have and all of that. On our ferrochrome production capacity, we are currently at 2.84 lakh tons, right? Yes. What would be the utilization for this quarter? I didn't get you. Utilization for this quarter means we are running at full capacity now. Oh, right. Okay. Yeah. On average, we are producing around 65,000 tons every quarter. Right. Got it. Okay. I also wanted to check on the ethanol plant, just in terms of when the revenues are expected. Just little bit on that as well. We are expecting it to be operational by end of December 2025. Okay. Last quarter of FY 2026, we should be seeing that. Sorry, last quarter of FY 2026. FY, December 2025, we are expecting it to be operational. Okay. Okay. January to March quarter 2026, we should be seeing the revenue out of that. Okay, sir. Understood. That is all from my side. Thank you. Thank you, Mohit. Thank you. Participants with questions may enter star followed by one on their touchtone telephones. To ask a question, you can enter star and one on your handsets. The next question is from the line of Joe Shah from Seven Seas. Please go ahead, sir. Prem, this is a rather futuristic statement. Or suggestion. There is a lot of interest and discussion about ethanol. There is a very interesting product which is called sustainable aviation fuel, SAF, which is produced using ethanol as a feedstock to process like alcohol to jet, ATJ. India is taking expertise from U.S., Europe about this SAF blend. And SAF blend is getting mandated for aviation. So we should consider this SAF also in future, once we are established in ethanol. So ethanol is used mainly for the vehicles on the roads. This is for the aviation fuel. And India is supposed to become the global hub of this SAF because of our location. This is number one. Number two is, this is interesting point. CBAM is a Carbon Border Adjustment Mechanism tax. It is coming into effect in Europe in 2026 because everyone is becoming aware of carbon tax, carbon emission, and they want to control it. So Europe is going to maybe tax on this, all the carbon emission, and that will make freight very expensive. Freight of chrome ore from South Africa to China will become more expensive. And China, U.S., Japan, Korea, they are also considering this kind of carbon tax. That will put us in benefit in a way because already we are, as far as power generation is concerned, we are using renewable energy. Yeah. Our underground mining is also producing less of pollution. These are our benefits. Maybe a time will come when foreign importers would find import from us more beneficial than doing all the processing and getting from other places. This is another. CBAM is a very interesting point we should keep in mind. Yeah. Yeah. Thank you. Yeah, that's it. Thank you. Thank you. Participants with questions may enter star and one. The next question is from the line of Pawan Kavare from NMV Securities. Please go ahead. Hello. Yeah, Pawan. My question was on our CapEx plans. It is on our mining and chrome capacity expansion. What is the expected time when we can see the full capacity expansion in mining and co-production both? Mining will be Mr. Sandeep, could you give the date? Yes. We are expanding this Sukinda mine for the production capacity of, in the first phase, 6 lakh tons per annum. Right now, we are producing 3 lakh tons. From that we will move to 6 lakh tons. That will come in FY 2031. Pawan, you got it? Yeah. This is about the mining. What about this 1.2 lakh tons increase, expansions? No, that is the mining Sandeep is talking about, Pawan. 1.2 million tons. Ultimately- That will be 1.2 million tons. From both the mines together, it will be 1.2 million tons. This will be expected in FY 2031? Yeah. Okay. What about the ferrochrome capacity increasing by 1 lakh ton? That will come in second quarter of FY 2026. Okay. So it will be counted in financial year 2027. Yeah. Okay. So our current capacity of mining is 6.51 lakh. 6.51. Yeah, 6.51 lakh. So will it be possible to produce this much ton from ferrochrome? Because for this 3.84 lakh, we will be requiring nearly 8.8 lakh. Just a minute. This is our production. Our capacity is now 9 lakh tons. Mahagiri underground is 6 lakhs and Sukinda open cast 3 lakhs. So as on date, our capacity is 9 lakhs. Okay. Capacity is 9 lakhs. Yeah. Okay, sir. Okay. Sir, are you done with your questions? Yes. No question. Participants with questions may enter star and one now. As there are no further questions, I would now like to hand the conference over to Mr. Abhishek Savant for closing comments. Thank you, Prem. Our Q2 performance has been solid, driven by consistent growth, higher revenue and improved margin, thanks to our fully integrated model and debt-free balance sheet. While the global stainless steel demand is under pressure due to economic slowdown, China's recent economic indicators show promise, with their October PMI marking the first growth in 6 months, along with stability in the real estate prices. This is encouraging for the ferrochrome market, especially as many global regions face uncertainties. Rising power costs in South Africa may also drive China to seek alternative ferrochrome sources, potentially benefiting our industry. As we move forward, we are focused on our expansion plans, which are progressing on schedule. Thank you all for joining, and we look forward to a continued positive momentum. On behalf of the Board of Directors and Management, we thank you all for your participation in this call today, and have a good day ahead. Thank you very much, everyone. On behalf of Indian Metals and Ferro Alloys Limited and Veritas Reputation, that concludes this conference call. Thank you all for joining us, and you may now disconnect your lines. Thank you. Thank you. Thank you. Thank you. Thank you.