Ladies and gentlemen, good day and welcome to the APL Apollo Tubes Limited Q4 FY 2022 results conference call hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from Ambit Capital Private Limited. Thank you, and over to you, sir.
Thank you. Hello everyone. Welcome to APL Apollo's Q4 FY 2022 earnings call. From the management side today we have with us Mr. Sanjay Gupta, Chairman and Managing Director, Mr. Deepak Goyal, the Chief Financial Officer, Mr. Arun Agarwal, Chief Operating Officer, and Mr. Anubhav Gupta, the Chief Strategy Officer. Thank you, and over to you, sir, for your opening remarks.
Excuse me, sir, this is the operator. You can unmute your line.
Thanks. Hi Dhruv. Thank you so much for hosting us. Good afternoon, everyone. This is Anubhav Gupta. Thanks for dropping by. I welcome everyone on behalf of APL Apollo management to our FY 2022 earnings call. FY 2022 has been very eventful year. When we started the financial year, there was a second wave of corona which hit the nation badly. By the time we closed the year, there was a Russia and Ukraine war, which also kind of impacted the year in a big way.
I'm very glad to share that we have ended FY 2022 on a very high note, and we were able to make a perfect pyramid with sales volume growth of 7%, EBITDA rising by 39% and PAT rising by 55%. The volumes were soft in the first nine months, but we picked up very strongly in the Q4 with 27% YoY growth and closed FY 2022 with the highest ever volume of 1.75 million tons. Our EBITDA per ton improved to INR 5,400 from INR 4,200 per ton. This was driven by value addition, brand premium, and market pull, which we saw in the first half of FY 2022.
Now we are confident that our margins going forward should be in the range of INR 4,500-INR 5,500 per ton. Our value added sales mix improved to 63% from 57%. We saw very good growth in our coated tubes and heavy structural tubes. This has been our thesis for the last three, four years where we have invested a lot of energy, time and money on value addition, and now we are seeing the benefits with the margin improvement in the form of margin improvement and improving sales mix. Going forward, our focus to invest more into value-added products remain on a high note, and we'll talk about it as we talk about our outlook over the next two to three years.
The balance sheet got further strong with cash flow generation of INR 6.5 billion. This, our operating cash flow to EBITDA was 70%. This is quite good when we see that the steel prices increased by 45%. Our company absorbed this increase in steel prices easily without stretching our balance sheet and cash flows. This operating cash flow of INR 6.5 billion helped us to fund the CapEx in Raipur and some brownfield expansion, which made our full year CapEx of INR 6 billion. There was also investment of INR 750 million in one of our distributors.
The net working capital days remained seven, which is again best in the industry, and we could sustain the working capital days at single digit. Our inventory management, our debtor collection, everything remains good and on track the way we are guiding that our overall working capital cycle will remain in single digits. Our ROC improved to 34% from 26%. This shows the inherited strength of our business. The investment, the asset turnover, rising margin and the low working capital that has resulted in high ROC of 34%.
Our endeavor is to sustain this ROC and improve it further once the Raipur plant kicks in and starts contributing in a big way. At the same time, our ROE also touched 29%. As we sweat more assets, our ROE will also go beyond 20% going forward. These were the main highlights for FY 2022. Apart from that, there are some updates which we'd like to talk. One is the Shankara investment which we did into one of our largest distributors in month of March.
The rationale here was very simple, that we wanted to make our largest distributor to sell more of our products because we see there is a scope to increase APL sales volume onto its Shankara's network and channels. This will lead to certainty in sales volume going forward for APL Apollo. Given that South is our largest market, it made a lot of sense for us. It would provide a ready platform to launch our upcoming value-added products, which are mainly from Raipur. That also, jointly Shankara and APL Apollo will create the market for those new products and push through Shankara's existing network.
Third benefit is that we are getting is the better pricing policy in South market over other markets because our volumes are already secured by the largest distributor, so it is helping us to improve the pricing into that market. We will see the overall positive impact on our earnings as well on our EBITDA margins. As we are talking on Shankara, two things I'd like to make very clear is that we don't want to invest any more money in Shankara, right? This is all what we wanted to do below 10%. With that, we are achieving all the objectives which we had in our mind before getting into this deal.
Secondly, there is no plan of APL Apollo to run Shankara or run any retail business kind of setup. Our core business is manufacturing and distribution. This is what we are sticking to. We expect this investment of INR 1.8 billion out of which INR 750 million worth of shares have been bought from the promoters and rest INR 1.1 billion will be infused in Shankara over the next 18 months through warrant conversion. We expect this investment to be ROCE accretive and EBITDA and EPS accretive from year one itself. We are already seeing results. What we can tell you is that results are already visible after the deal was closed.
Now coming to the second update is our eleventh plant, Raipur which is in our 100% subsidiary Apollo Pipes Ltd. So that plant is also very important for the group, because it's the largest facility with 1.5 million tons. In Q4, we have already started the production with small 400 tons of dispatch. Week-on-week in fact dispatches are rising, and we are very confident that Q2 onwards we will see significant contribution from Raipur kicking in. It's a mega plant with almost INR 8 billion-INR 9 billion of investment.
We have spent 60% of it and 40% will be done, which is equivalent to INR 3 billion that will be spent during this financial year. The third update is on Tricoat merger. All the necessary processes have been completed there. We expect the NCLT, the final court to formalize the decision within this month. Hopefully, when we meet next time over the investor call, we would come with a single entity merger team. Fourth update is on Aalishaan app. I'm glad to share that, as our endeavor to reach near to the end consumer, we launched the Aalishaan app in month of February.
The idea is that we promote the end application of steel tubes closer to the end customer. So far we have got 45,000 downloads from end consumers, and we have enrolled 25,000 fabricators from 110 cities. Idea is to create a network of fabricators who are actual influencers in our products so that ultimately they become the promoters of APL Apollo brand in front of the customers. This will help us improve our brand equity and also help us get more premium as we move forward. Fifth is the update on Delhi hospital projects which were started last year.
You could see some of the photographs in the presentation that the work at all the six sites, which the contractor has got possession, it's on track. Within three to four months, this kind of super structures of up to 0.5 million sq ft of area has been erected. This is one of the fastest delivering projects in the country today. We have a very strong pipeline which is building in around 30-40 projects. There are a lot of inquiries. We are doing a lot of design changes for in various projects. Our PEB market for heavy structural tubes is also going well.
Once these projects are fully completed, this will help us create more markets for our heavy structural tubes. Apart from this, lastly, I'd like to touch base on our business strategy, which is revolving around four points. One is the continuous CapEx for value addition. Number two is the distribution enhancement through investment into Shankara for the southern market and starting of the secondary sales for some of the northern states where we have started a pilot project. Third is innovation where we continue to invest our resources into new innovative products into structural steel tubes which are launched in India.
They are not for the first time being launched in India but also globally. Fourth, continuous efforts on the market creation because that's how we have grown at the CAGR of 19%-20% over the last 10 years. Given that we have a target of reaching 4 million tons of sales volume by FY 2025, we believe that these strategies will help us smoothen our journey and we will be able to outperform expectations as we could do in FY 2022. That's it from our side, group. We can start the Q&A. Thank you so much.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Participants who wish to ask a question may kindly press star one on your touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Sumit Jain from ASK Investment Managers. Kindly proceed.
Yeah. Sanjay ji and team, our compliments on a good set of numbers. I'm on slide 36. If you can elaborate a little more on the two new plants in Kolkata and Dubai, and as well as the galvanized lines to improve efficiency, where you mentioned it may reduce zinc consumption by INR 4 per you know steel tube ton. What kind of margin improvement that can bring in? Some bit on the Hyderabad, Hosur backward integration value addition that you plan to do.
Yes, Sumit. Thank you very much. Sumit, if you see the our number, I think they have described anywhere or not, plant-wide plant, our two, three plants are in the low margin category. Like one of the plant in Hyderabad and Hosur, and a little bit similar plants, their margins are lower and our other plants margins are high. We are just going for some way backward, not a CapEx announcement, some little bit investment for the value-added product, backward integration. Hyderabad almost 2 lakh ton capacity new plant in Dubai and Kolkata. We just want to create a infrastructure in the both of the place and first up our presence and future opportunity.
Right. Sure. Thank you.
Thank you.
Thank you. The next question is from the line of Rahul Agarwal from InCred Capital. Kindly proceed.
Yeah. Hi, good evening and, congratulations on the performance. Good to see increase in dividend payout, sir. Two questions from my side. Firstly, on the go-to-market for APL Raipur. Some volumes have gone through in fourth quarter, first half year of it.
Hello, mister. We have the question from Mr. Bharat Shah from ASK Investment Managers right now. Yes, sir. Kindly proceed.
Sanjay ji. Congratulations. Once again, pretty remarkable performance of the business. On the specialty plant, where you have three plants, all of, I mean three 500,000 million plant categories. Want to understand from you your sense of likely outcomes from that plant over a period of time in terms of product portfolio, in terms of likely specialty areas which are distinguishing, and in turn the impact on the realization as well as the margins over a period of time.
Hi, Anubhav here. If you see the Raipur plant, it has three main product categories, okay. One is the color-coated products. Second is the color-coated tubes, and third is the heavy structural tubes up to size of 500 and 500 square diameter. Coming to the product category one, which is color-coated products. That is an established market where lot of companies are selling this product, but they make margins of up to 15%-20%. APL Apollo is already supplying the tubes for adjacent products.
Color-coated products become our adjacent product, which we can sell in the same channel under the same brand. The end fabricator, the end user will be able to buy our products jointly. We will be able into a solution category with the color-coated products and tubes put together. For that, we need not spend much into distribution infrastructure because all the existing distributors of Apollo deal into this product. Given that the industry is working on high 15%-20% better margins, even for us also it is very much possible given the Apollo branding, that we will be able to achieve these kind of margins. Number two and number three products are highly innovative products like color-coated tubes.
We have shown a photograph in our presentation also. You can see that this square tube or the rectangular tube, these products have not been introduced globally. Globally, there are color-coated tubes, but those are mainly circular, okay? The application has been mainly like chemical transportation or gas transportation. We converted that into the square rectangular tube, which is having a load-bearing capability. Again, it's going to replace the conventional products like wood and aluminum, okay, in a big way. It can be used inside the homes for various decor applications.
At the same time it can be used in industrial sheds, under pre-engineered buildings, where the fabricators or contractors, they don't have the beautified products. Right now they're maybe using either plain steel or maybe galvanized steel. Right. Lot of thought process innovation have gone into this category to make this product possible. Now the efforts have already begun from our team to create the markets both at the trade level and at the OEM level. Again, these products can carry very high margin because of two reasons. One, it is a highly specialized value-added product, so by default they carry better margin.
Because these kind of products are not available anywhere globally, and if we are able to make them fit the market successfully, we can charge a very high premium for that. Third product is a heavy structural tube with size of 500 square diameter. This is extension of our existing portfolio into heavy structural tube category. Almost five years ago, we were the first one in India to put up 300 square diameter tube. At that point of time, the market was not existent. It took us two to three years to educate the construction industry that these kind of sections are available. Now our mills are running at high capacity utilization.
After we got the Delhi hospital projects, there has been a good demonstration that with help of structural steel tubes, one can finish the buildings quickly and at a lower cost. We are getting a lot of inquiries for high-rise buildings up to 15, 20, 30 floors, and even for larger span industrial sheds, warehouses. For those products, we have to get into heavy structural tube with size up to 500 square diameter. You can look at the margin, what we are making in 300 square diameter, which is given in our presentation in the range of INR 7,000 per ton. This 500 square diameter, globally only three, four companies produce that.
With introduction of these tubes, our margins should be more than what we are making on existing portfolio. Put together, all these three products have the potential of earning much, much more than what is being made today by Apollo, right? The whole objective is to create market and ramp up the production. Our team is working 24/7 to do both jobs. In terms of the overall return profile, if you see, I mean, we have been able to improve our ROC from 26% to 34%.
In that almost INR 500-INR 600 crore of INR 5 billion-INR 6 billion of CapEx has been done into Raipur, which has not yielded even one dollar in FY 2022. As the plant ramps up, we are very hopeful and confident that our return profile would improve significantly from what we could do in FY 2022.
Can you talk about color-coated products in greater detail, the kind of products and what kind of possibilities exist?
Color-coated products there are three main categories. Okay, one is color-coated tubes. Second is color-coated door frames. Okay, because for that you need some adjustment in the width of the sheets, what we have been able to achieve, unlike anyone else. Third is for roofing. Roofing can be used at both locations, at homes and industrials. Right? Idea is that right now the market for overall color-coated products is very small because normally they are being only used in roofing.
We have innovated sizes and products which will expand the market beyond roofing. Roofing is an existing market, but we want to. We have made products for markets like door frames, for roofing in industrial sheds, which is called the purlins, for solar, for bus bodies, for shutters, for ductings. We can send you some of our presentations, Bharat bhai, or you could go on our website also. You will see how these products will be able to create markets into different categories, not only in one, but in at least 20.
And, uh, uh, Sanjay ji, uh
Haan Bharat bhai.
Sanjay ji, you hear me Sanjay ji?
No, awaaz nahi aa rahi hai Bharat bhai.
Hello. That's why I was saying.
Hello, Bharat bhai. Are you hearing me?
Excuse me. This is the operator. We are moving on to the next question from the line of Mr. Rahul Agarwal from InCred Capital.
Yeah. Hi, good evening, and thanks for the opportunity. Congratulations on the performance, and good to see the increase in dividend payouts. Sir, first question was on the market creation. Manubhai mentioned it in the, you know, previous answer. Just wanted to understand more color, if you could help me understand the go-to market for the APL Raipur products. You explained the products, but, you know, what is really happening, to, you know, get this 5 lakh ton volume, go through, this year? Could you help me understand that, please? That's the first question.
I would say, for the benefit of everyone, this year our target from Raipur is up to 300,000-400,000 tons of production and sales, right? This will be mainly into the color-coated tubes. This segment has around a capacity of 500,000 tons. Okay, this is what we have started in month of March. You could see some dispatch also. Color-coated tubes will be used at three main areas, okay? This will be bulk of it. Apart from that, we will be working on lot of other applications in other markets. Number one is the purlins which are used in the pre-engineered building structures. Okay?
Today, if you see any warehouse or any industrial shed which has come up in the country, they use non-color-coated products. They use either galvanized or non-galvanized products. Okay? This product lacks the beauty of the shed from inside. Okay? Our products, our color-coated tubes can be used in place of purlins and they can replace the existing products. How it will help the customer is by increasing the life. Because our color-coated tubes first they are galvanized, then they have aluminum coating, and then they have the color coating. The life of the product will increase by at least 15 years, right?
At a cost of what may be 10% or may be 15%. This becomes very strong value proposition for any fabricator or for any end consumer to switch to color-coated products, okay, instead of simple galvanized products or plain products. Second volume uptick will come from the heavy structural tubes. As you can see the ramp up, the sales growth in our heavy structural tubes in last four, five quarters. Okay. It is a function of our aggressive marketing and aggressive market creation strategy to increase the volume in this category.
We are today sitting on a very solid pipeline of projects where this heavy structural tube section need to be used. Right? We are waiting for this line to start in July, August. Once it is there, I mean, we have ready demand from our distributors and from the construction companies who will be happy to use these products on immediate basis. The third category is like what I said was color-coated products in the roofing segment. Where the market is already there, it is dominated by few players in the country.
With the launch of product from Apollo House, we can get some market immediately because the same distribution channel will sell these products, right? Selling 300,000-400,000 tons shouldn't be much of a challenge if things remain as it is right from Raipur. When the plant will be fully functional from Q3, Q4 onwards next year, FY 2024, the volume will ramp up to 700,000 tons-1 million tons and then 1.5 million tons in March 2025. We don't see much of a challenge to achieve these numbers from Raipur project.
Because the work on marketing and creation of the market has already begun. We are already seeing the results which are visible, Rahul. I mean, I'm sure when we meet again during Q1 earnings call, we'll be able to share much more information with you. The signs, the trends are already visible.
Got it, Anubhav. Thanks for the detailed answer. Just one question with Sanjay ji. Sanjay, this Shankara transaction, just wanted to know your thoughts that could have we signed the same agreement with Shankara without getting into equity stake, you know, kind of deal with the company? Because I think it's been a long-standing relationship with Shankara. How will, you know, things really change after this transaction purely because you've invested money into the company? Any thoughts, sir?
Boss, Shankara is a very good system for and the distribution center for the south market. He have, I think, already 100+ stores in the retail sector. My south market is almost in my business plan this year for Apollo Business Plan is like almost 20 lakh tons. Out of 20 lakh tons is my plan for south is 7 lakh tons. 7 lakh tons like last year 5.8 or 5.9 odd lakh tons came, out of that Shankara is 1 lakh ton. This year we are targeting Shankara to put all products. Tube is almost 2 lakh tons and 50,000 tons from new products. We are targeting 2.5 lakh tons from Shankara. Our visibility. Now we are in the controlling stage, and we are controlling the market as well as the distributors.
Like a simple example. I think this is good for the company.
Got it, sir. Thank you so much for the answers. Best wishes for fiscal 2023. I'll come back in the queue.
Thank you, Rahul. Thank you.
Thank you. Participants are requested to kindly restrict your questions to two per participant. The next question is from the line of Pallav Agarwal from Antique Stock Broking. Kindly proceed.
Yeah, good evening, sir. First question was on, you know, the, I think, our volume guidance. I guess you mentioned, you know, something like 2 lakh or 2 million tons for FY 2023. Is that something, you know, we will be again looking to maintain our 20% growth in volumes, which is our longer term target for FY 2023?
Pallav, first of all, thank you for a very good question. Right now, on the volume side, given market steel prices volatility $200 market prices $200. So we are only waiting for the right time. February, March demand is very good. 20-30 days steel prices come down to INR 60,000-INR 65,000. Lot of reports and lot of news are come and international market is also down. Guidance business plan very easily we can achieve. First half 10-11 lakh tons of volume. Second half 12-13 lakh tons of volume. Put together, we are taking a target of 2.4 million tons for this year. Market raw material shortage raw material market.
This year we are lined up with our quantity also because steel plants, as per the 2.4 million tons.
The month of April and May, there's no doubt too much pressure is there because the market is totally into the destocking mode. Maybe ek aadha quarter upar niche volume ho sakta hai, but we jaise jaise steel prices niche aayenge jo demand rukhi padi hai jo market mein secondary mein primary mein demand bahot zyada create hogi. Woh sab hamare liye bahot achhe signals aa rahe hai. Right now we are in not good position, but signals are very, very good for the long-term vision. We are very happy ki jo ek baar volatility khatam ho jaati hai aur ye steel prices are crashed down, ek reasonable level paa lete hai jahan par steel plants ko bhi dikkat nahi ho, consumer ko bhi dikkat nahi ho, and distributor ko bhi dikkat nahi ho.
This is very good for the business. Aur jo mereko lag raha hai ki we are very nearby. Hum uske bahot nazdik hai. Today is a painful time, but we are very hopeful ki the future is very bright. If you are taking our internal guidelines, agar aap market ke hisab se puchoge, hamara guideline I think 20% EBITDA growth ka hai, INR 1,200 crore ka. But internally we are taking a target of 10 se zyada lakh tons first half mein with a margin of INR 500-600 crore of EBITDA. Second half mein 12 se 13 lakh tons with a margin of INR 700-800 crore. If the time is good, maybe we cross INR 1,400.
If the time is not good or not in our favor, maybe this is close to 1,200.
Sure, sir. I think that is a very comprehensive answer. Just also, you mentioned that, you know, with prices coming down, you are more competitive now with the secondary, say, scrap-based players.
Yeah.
At what steel price level or HRC, you know, is it like right now let's say we're at INR 72,000. Do you think at, say, INR 65,000-INR 70,000 level, then the price is going to-
Right now the HR coil pricing is standard pricing close to INR 75,000, sir, in the month of April. Now this month is INR 75,000.
Okay.
Hello?
Yeah. Please go ahead.
Sir, month of April month pricing is, raw material pricing is almost close to 75,000 INR plus minus depending on the customer. Yeah, this month, I think there is an indication of the decrease of 3-4 INR/kg. Price go to 70 or 71 INR/kg. Next month, I'm also seeing a decrease of 4-5 INR/kg. I think the price should be, today the international market is close to $800 FOB. The price is close down to less than 65 or 65 ke base per price aayega. Wahan pe I think steel plant ka bhi coal prices have come down. Unka bhi cost June ke baad kam ho jana chahiye. This is a very good situation for the steel plants or also with the consumers also.
Hum pre-corona stage ko nahi dekh sakte. Dobara 40-45 wala stage dobara aa sakta hai. I think the when the price stabilize in between the range of 60 or 65, there will be a very good position for both the sides.
Okay, sir. Yeah, thank you so much, sir.
Thank you. The next question is from the line of Abhijit Mitra from ICICI Securities. Kindly proceed.
Yeah, thanks for taking my question and congrats on a good set of numbers. The question is on the CapEx. Clearly you have upfronted the Raipur CapEx, contributed almost completed 60% plus of the same, and that's probably leading to better than expected timeline as well as volumes from the project also are concerned. Now given the incremental INR 300 crores that has been announced, where does that incremental CapEx go into in terms of adding your capacity or adding your ROC or maintaining your ROC or, I mean, how to look at it essentially? Does that sort of support your EBITDA per ton? Does that increase your EBITDA per ton? Does that help maintain the ROC?
You know, where in the overall, you know, equation does this kind of CapEx fit in and will you see more scope for, you know, such CapEx going forward? Thanks.
Thank you, sir. Yeah, this other than the Raipur CapEx, almost about INR 300 crore of CapEx. This is I think a 0.5 increase our capacity by 0.5 million tons. With a capacity of almost 300,000 tons to Dubai and 200,000 tons to Kolkata. Other than this CapEx is only for the value additions, like, there is some value addition activity going on in Hosur, some value addition activity going in Hyderabad plant. Some activities going in our Bhusawal plant. This little bit activity in Secunderabad and Murbad also. All together the this CapEx part is INR 150 crore and cost improvement also. These are my the in this investment my one of my major investment is in the controlling of cost.
If you see my presentation, there is clearly mentioned innovative galvanizing line to improve efficiency by INR 100 crore to help reduce zinc consumption by 4 kg per ton. This means ki abhi hum log whatever we are coating the products hai, wahan pe hamara zinc jo per ton lag raha hai almost close to 11 kg-12 kg lag raha hai. Again, because this plant and this technology is very old, almost 13-14 years before I innovate this technology with a very less cost. Now, jo us time hamara portion bahot zyada rehta tha, humko itna fark nahi padta tha. Now my portion is too big. Toh 4 kg agar main isme zinc costing ko apna kam karta hoon plant ko improvement karke.
Agar hum 7 lakh ton per annum hum is zinc coating karte hai, 7 lakh ton per 4 kg se almost 3,000 ton hota hai jo its cost costs to INR 80 crore or INR 90 crore odd rupees. Toh ismein aap kah sakte ho hamara valuation ke upar bhi kharcha hai. Iske upar kuch capacity enhancement ke upar bhi kharcha, kuch cost controlling ke liye bhi kharcha hai.
Abhishek that's very comprehensive. That answers my question. Thanks.
Thank you. The next question is from the line of Shaleen Kumar from UBS. Kindly proceed.
Yeah. Hello Sanjay ji and Akhil and congratulations on a very good set of numbers sir. Sir ek question ka uttar aapne diya which I wanted to ask ki volatility hai market mein to April aur May mein soft rahega. To I think aapne hint kiya hai ki thoda soft hai April aur May. Doosra cost mein Sanjay ji energy prices have also rallied to usse apna EBITDA pe kaafi fark padega sir abhi in the current quarter.
नहीं नहीं नहीं Shailen, हमको point basis पर 0.2, 0.1 basis point का फर्क पड़ता है क्योंकि energy cost जो हमारा है वो almost ₹400, ₹500 per ton का है तो ₹500 का ₹550 हो जाएगा, ₹600 हो जाएगा, ₹450 हो जाएगा। वो हमारे लिए उतना बड़ा matter नहीं करता है।
Okay तो उस तरफ रखने का है। ठीक है। Sanjay ji अपना home improvement में volume pickup अगर मैं year-on-year compare करता हूं तो ज्यादा नहीं है। For the full year 2022 देखूं versus 2021 देखूं या quarter देखूं। यहां पे क्या हो रहा है? Like demand is not there या क्योंकि prices steel price बढ़ गया है। What is stopping us? Because FY 2021 से 2022, sorry 2021 में हमने बहुत sharp growth देखा था।
Shaleen, industrial question है। आपको इसका जवाब समझने के लिए आपको पहले industry को समझना पड़ेगा। Economy को समझना पड़ेगा। थोड़ा सा इसका जवाब लंबा है। मैं आपको थोड़ा सा detail में समझाता हूं। Today Indian market is almost 110 million ton.
Okay.
इसमें out of 110 million tons, 7 million tons is almost structural tubes. 6% के आसपास मैं मान के चलता हूं कि India में कोई बहुत accurate number नहीं है, but ये number बहुत आसपास है। 7 million tons का India में structural tube का market है, जिसमें इस समय 3 million tons के आसपास market है primary steel पे और 4 million tons के आसपास market है secondary steel पे।
जी, जी, okay.
Today primary steel का rate है INR 75/kg, जो हमारा HR coil है.
जी।
जो secondary steel से raw material बनता है, उनका rate है INR 60,000 ton.
अच्छा।
Almost 15,000 का gap है। ये gap जब तक INR 500 kg रहता है तो we are in a very comfortable position. 500 से नीचे जाता है तो we are in the working mode.
अगर ये gap ₹15,000 तक जाता है तो हमारा एक बहुत बड़ा part business का सो जाता है। एक तो gap सो गया। दूसरा हम लोग थोड़ा ज्यादा margin करके माल बेचते हैं। वो लोग बहुत low margin पे काम करते हैं तो gap बढ़ के कुछ places के prices extra हो जाते हैं हमारे। तो total gap all inclusive ₹20,000 per ton का हो जाता है और steel price जितना ऊपर है उसमें consumer बोलता है कि यार ठीक है, अभी तो इतना cost बढ़ गई तो थोड़ा सस्ता वाला माल लेकर चले जाओ। जैसे-जैसे Hindustan में capacities HR coil की build up हो रही है, like अभी last तीन महीने पहले SAIL का Rourkela steel plant चालू हो गया। इससे पहले SAIL हमको कभी भी 50,000 ton material से ऊपर देने को agree नहीं करता था। Now they are approaching a spot to take two lakh ton for this year.
JSW हमको कभी भी नौ लाख ton से ऊपर माल देने को, उनका Dolvi चालू हो गया है। हमको नौ-दस लाख ton से ऊपर माल देने को agree नहीं करता था। This year they sign a MOU with us for 15 lakh ton. Tata से हमारा MOU same quantity पर हमने renew किया है। तो अब आगे एक साल के अंदर में JSPL में भी HR coil का plant आ रहा है। ये Bellary में भी steel पे ये HR coil का plant आ रहा है। तो मेरे अपने vision से दो साल में Hindustan की market जो steel की है, ये HR coil की double capacity होने जा रही है in the next two to three years. और इनका जो basic cost है, cost of production है, जो ये secondary का, primary का cost of production in primary cost of production is less.
Due to investment उनका depreciation और interest के कारण उनका selling price बढ़ जाता है। जैसे-जैसे competition बढ़ेगा तो मेरे को लगता है कि ये secondary को hit करेंगे और जैसे-जैसे secondary को hit करेंगे तो four million ton का सारा market वापस coil पे आएगा। और इधर से India का total steel consumption अगले तीन साल में 200 million ton होने की बातें हो रही है। अगर 200 million ton होता है और steel ये tube का usage भी सबसे बढ़ रहा है। अगर ये market बढ़ के आठ million, 8% भी हो जाती है तो 16 million ton India को tube चाहिए होगा।
जी।
और India में अभी total capacity seven million ton की है। हमारी एक million ton की extra capacity मान लो, अपने एक million ton की total capacity है। और एक million ton की capacity जो होगी, India की nine million ton की capacity है। आज अगर ये 16 million ton की demand create होती है तो Hindustan में Apollo के अलावा कोई दूसरा brand नहीं है जो इतनी capacity को fulfill कर सके। मैं तो सिर्फ एक इसी vision पर काम कर रहा हूं, जिसका आपने झलक पिछले दो महीने में February और March की आप देखोगे तो हमने सिर्फ 50 दिन काम किया February और March में। After 20th of March, we closed our plants to taking the physical stock on the zero level.
10-10 साल, 15-15 सालों से मैंने plant को zero stock तो कभी नहीं देखा। तो हर plant में जाके मैं तो counting कर नहीं सकता। तो मैं तो अपना देसी आदमी है। मैंने कहा यार plant खाली करो, zero stock कर ले कर आप हमारा inventory देखो plant की। तो आप अगर ये plant की inventory भाई देखोगे 31 March की तो बहुत flat है। मैं Hosur जैसे हमारा जो 40,000 ton का plant है, वहां पर सिर्फ तीन-तीन thousand ton material था।
जी।
हमने वो stock 50 days में हमने almost 3.7 lakh ton माल हमने बेचा था।
Right, right.
मैं waiting कर रहा हूँ जो ये bill मिले जो कहते हैं ना कि I want to swim with the waves. मैं उस time में तैयार कर रहा हूँ। मेरी capacity उस time के लिए लगाई है। ये तो मैं अपनी उस एक time pass कर रहा हूँ value addition करके, ये सब करके। This is it. ये होगा कि material दो, then Apollo is in the front side और ये time आएगा। हम उस time के लिए बस अपने आप को बचा कर रखना चाहते हैं कि हम कहीं पर clash नहीं करें, हम कहीं पर कोई गलती नहीं करें, हम कोई पर death trap में नहीं फंसे। We just want to walk very safely. नंबर के बाद एक quarter, एक साल मेरी ऊपर-नीचे हो जाए, I am not worried.
My vision is to 2025 कि मेरे को किसी भी हालत में four, five million ton के बीच में पहुंचना है। 2025 तक कोता पूरा करना है। और वहां तक में time जरूर लगेगा। I am very, very hopeful. Data कह रहे हैं, situations कह रही है like अब देखो अगर ये steel prices अभी एक आध महीने में crack होता है तो no doubt हमारे sales down है। मतलब बहुत, बहुत तेजी से cover up करेगा। I have no worry.
Right. Thank you, Sanjay ji. आपकी energy, frankness वो देख के हमें बहुत encouragement मिल जाता है. We hope आप definitely possible हो सकते हो.
जो मैं देख रहा हूँ ना वही बात करता हूँ। अब इसमें गलत है अच्छा है मेरे को नहीं मालूम। क्योंकि मैं जो देख रहा हूँ वो बात करता हूँ।
There is a good fan following of you, Sanjay. Thank you so much. That's a very, very good answer, sir.
Thank you.
Theek hai, sir. I'll join the queue.
Thank you. The next question is from the line of Ankush Agrawal from Surge Capital. Kindly proceed.
Hi team. Sanjay ji, abhi apna inventory days kitna hai?
Inventory है हमारे less than 30 days ऊपर। अब कितना है?
24 days.
24 days hai.
Sir, next two, three years में अपन जो ये सब optimization कर रहे हैं value addition में और additional plant डाल के तो अपना inventory days में कुछ substantial difference आएगा कि stable रहेगा 2024, 2025 के आगे।
20 days से नीचे लाना impossible है.
30 days.
Maximum 30 days, minimum 20 days. 30 days ऊपर मतलब हम trap हो गए। 20 days से नीचे जाता तो फिर मतलब हम market को खराब कर रहे हैं। क्योंकि इतने सारे हमारे warehouses हैं, हमारे इतने सारे ये, इतने सारे हमारे excuse हैं, so not possible.
Right. Sir, ye 20 se 30.
In FY 2017, we used to have 44 days of inventory. We have already rationalized and worked hard to bring this down to 23-24 days level.
Sir, ये 20 से 30 दिन का जो range है, इसमें अपने को कोई बड़ा inventory loss होने का possibility कम है, right?
तो हमारे पास total अगर आप देखोगे, 1 लाख 10 हजार ton का हमारे पास stock था total। उसमें 20, 30, 40 हजार ton माल हमारा बिका हुआ भी होता है। 50, 70 हजार ton माल है, उसमें रुपए दो चार तो ऊपर से घट गया, बढ़ गया, हम नहीं देखते। हम अपने ना gain देखते हैं, ना loss देखते हैं। हम इस trap से तो बाहर आ गए। हमको हाँ, इससे जरूर फर्क पड़ता है कि जब अभी steel prices ऊपर है, तो हमारे margins pressure में आ जाते हैं थोड़े से।
Right. Got it. Secondly sir, ये हमने presentation में mention किया है about some secondary sales on pilot basis in eight states. ये थोड़ा clarify कर सकते हैं?
Sorry, come again.
We have mentioned something about secondary sales on the presentation within 8 states that you have started on pilot basis. Can you clarify something on that?
Right. This is in the distribution strategy because this is right now one of the core pillars over the next three, four years. One is that we are strengthening our house market by joining hands with Shankara. Second is what we have observed in other B2C franchisee business models is that there has been a lot of focus on the secondary sales. Right. Reaching to the retailer of our distributors, the retail counter which our distributor is servicing. We have created a team who is going and promoting Apollo brand at the retailer counter level. From primary we have created this pilot project to work on the secondary model also. Right now we have launched it in seven states.
Once we see the benefits, then this can be replicated on pan-India basis.
Apollo will sell directly to the retailer and not to the distributor in this channel.
No, no. Apollo will promote its product. The sales will happen through the distributor.
Okay, okay. It's just a marketing effort that way sir.
Yeah, correct.
Correct. Lastly, sir, just a small one. You know, we have talked a lot about market formation. You know anything specifically, you know, if the HRC price is remaining quite high, will that affect market creation for our new products from the Raipur plant?
See, I mean, today when steel prices are at all-time high.
Right.
I mean, Raipur there are two products. One is heavy structural, second is color coated. Right. Let's talk about heavy structural first. At steel price peaking out at INR 75 per kilo, the cost differential versus RCC is INR 200-INR 250 per sq ft. Okay, at the construction level. So this is the focus of the overall budget cost, and then the TMT prices, which is called rebar. The cement prices have also risen. The delta used to be 250 and it is still at INR 250 per sq ft because all building material products are going up.
Okay. In fact, if prices come down, that delta will come down in favor of tubular consumption. Second, on steel, for color coated steel, there is no other alternative, right? For roofing, for cladding, for walls, for door frame, you have to buy steel only, right? That has no substitute. Steel is the only product in the color coated category which is used. For that the contractors have to use that. All they can do is they can delay their purchases by a few weeks in anticipation if prices are coming down. If prices won't come down, if they have to finish their project, they have to buy steel.
Right. Just a small clarity in terms of color coated products. You know, are we price competitive when, you know, when it comes to, you know, someone buying a non-colored product, coloring it and then fitting it versus, you know, supplying a color coated product directly since you are doing it in bulk? Is that competitive?
Boss, color concept. In India color plants, in worldwide color plants 1.4 thickness limited. Nobody is making above than 1.4 thickness color coating. Design 3 millimeter. We are color coating up to 3 millimeter. So 1.6 or two is the major market for the tube in the color. So pre-galvanized tube paint powder coating color supply. This is not possible like TV sets color sheets but purlin 2 mm thickness Z purlin. Nobody is able to take the Z purlin of color. GP. Now we are slowly replacing this product from our color. Purlin last month we are supplying almost in the month of April 1,000 tons color sheet and tube just start 50 tons last month. This month we are planning in purlin 2,000 tons, 1,000 tons in tube.
Our number third is door frame. Fabricator door frame open style. Powder coating 1.8, 2 mm, 2.2 million solution provide. I think in this segment, three segments capacity 1.25 lakh ton per annum. Within one or two months we are fulfilling line busy.
Right. Right. That is what I was asking. That was very helpful. Thank you. Thank you.
Thank you. The next question is from the line of Anupam Gupta from IIFL Capital. Kindly proceed.
Yeah. Good evening, sir. Congrats for the good set of numbers. Just two questions. Firstly, this Dubai CapEx of 3 lakh tons, what is the rationale behind it? And, is exports getting up, getting into as a target as well, apart from the India operations which you do?
Boss, sir, 300 sq ft line. This line today costing almost INR 75 crore-INR 80 crore. 500 sq commission line free. 500 sq capacity. Ideal Dubai Middle East market. Dubai line 1,000 ton material month. Line ideal Dubai market. Ready delivery service provide line. Number two. Last two, three, four months all prices are high. Middle East growth. CapEx 7,500 infrastructure machines CapEx. Dubai presence price. Presence success. This is just an initial stage. Okay.
Sir, as you have outlined for India that you are looking at a capacity of 5 million tons possibly. Dubai potentially, if you find it relevant, how much can it go up? What will be your explanation?
Up to like INR 0.5 million.
Okay. If the response is good, you are ready to expand that further also.
Boss, how much money we have in our pocket, what is the condition of the market, what are the margins. If the margins are good, we will increase the capacity if there is no problem, then we will increase it further.
Okay, okay. Understand. The second question is on the new product innovation and the market creation which you do. You alerted that you have a lot of patents which you have at this point of time, and these patents have been increasing all through the years. If you want to, can you give me a share of the volume which has come from these patents, let's say, in FY 2022 versus FY 2021 versus FY 2020 volume?
Base volumes of patented products are very less, but growth margin, growth margins are very good. Growth margin is almost 40%-50%. If you look at the total volume in tons, our total volume would be 8,000-9,000 tons.
Per month.
Per month.
100,000 tons.
100,000 tons per annum. Growth rate, you know, about 40%.
Okay, okay. Understood. That's all from my side, sir. Thank you.
Thank you. The next question is from the line of Bhavin Pande from Trust Family Office. Kindly proceed.
Yeah. Hi, good evening to you and congratulations on excellent set of numbers. I have just one question regarding general products. As you can see that, EBITDA per ton from this product is below INR 2,000, but the contribution still stands stronger in the overall scheme of things. I was just wondering as we plan to gradually transition towards value-added products, how do you plan to deal with this segment in particular? Thank you.
If you see the general category, it used to contribute 60% in FY2018, which is down to 37% by fiscal 2022. Okay. We have already decommoditized our portfolio in a big way and going forward with our Raipur plant starting contributing, first. Second, the value addition, what we're going to do in Hyderabad and Hosur plant, right. The other small value addition which we will do in other facility. Our heavy structural tube moving to Dubai, that again is a high margin product. Overall this mix will go down to 20%-25% in next two, three years from 33% today. Okay. Our strategy is to keep on decommoditizing our portfolio year-on-year, as you are seeing.
This volume will remain constant at around 1 million tons when we will be producing 4 million to 4.5-5 million tons of sales volume. The general categories volume will restrict to 1 million tons, right? That will remain because we have ready facilities, ready distribution. Our SKU range gets completed. Once this as a mix it goes below 20% then it won't impact our EBITDA per ton on a quarterly or yearly basis.
Okay. If this transpires assuming around 25% contribution from a commoditized product, how much EBITDA per ton are we looking in the long run?
See, I mean, today if you see, this year we closed at INR 5,200-INR 5,300 per ton, right? From the existing capacity, our focus is to sustain this number around INR 5,000 per ton. The incremental revenue which will come from Raipur, that will bring EBITDA of like INR 6,000-INR 7,000 per ton. Blended basis, we should be inching towards INR 5,500-INR 6,000 per ton, slowly and gradually.
Okay. That was helpful. Thank you on the Board.
Thank you.
Thank you.
The next question is from the line of Rajiv Mehra from Sanctum. Kindly proceed.
Yeah. Good evening, sir. Congratulations on a great set of numbers. Most of my questions have been answered. Just wanted to clarify a couple of things. You said that FY 2025 you are looking at touching volumes of around 4 million tons, and I think you've already given the breakup of market. Just wanted to say the structural tube market currently stands at 7 million, which should grow to 16 million in the next three years. Did I hear that correct, sir?
Yes. Maybe possibly the industry concerned go to 110 million to 200 million tons.
110 million-200 million tons. Okay. Okay.
110 million-200 million ton what the industry and the governments are saying.
Got it. As your these capacities are coming online and as your value-added products are increasing, currently from a 55% market share overall, what market share would you be inching towards? Would it be around close to 60%-65%? As your EBITDA per ton moves up, which ideally you are trying to reach in the blended region of INR 5,500-6,000, if we compare it with your peer group, the blended EBITDA margins, which right now stand at around 7%, but globally a few peer group companies are in the higher range. Can we reach closer to say a 9%-9.5% EBITDA margin over the next couple of years, sir?
Coming to point number one, which is regarding the 55% market share. See, I mean, we don't look at market share based on, like, what we sold and what the market size.
Mm-hmm.
This is a function of two things. One is in the segment which is highly competitive, what is our market share and in the category which is monopolistic, which is bulk of our business, right? Whenever we launch a new product, whenever we innovate, we begin with 100% market share.
Okay.
That market share remains with us for next two, three years before competition start putting up or copying our capacity. Right. Then again after three years, we have another product which will come and we will have 100% market share to begin with.
Mm-hmm.
Our sales growth is not confined with our market share today, which is at 55%. How we want to grow is that we create totally new market, totally new segment. We create demand there and we take 100% market share for at least three years, right?
Mm-hmm.
If my monopolistic innovative products keep on going, my market share could be 60%, 70%, and I can still grow if I'm able to increase the market with my innovative products. Right. Given that, in three, four, five years, the competition increases in any product category, so we can sustain between 50%-60% easily and still achieve the high growth which we are targeting.
Got it.
Secondly, on margins, like, we responded to the earlier caller, that, I mean, we are at INR 5,500 per ton range, in terms of EBITDA. With the commencement of Raipur plant, which is definitely high margin product, on overall basis, we would like to gradually increase to INR 6,000-INR 6,500 kind of levels in next two, three years. And see how, what these innovative products or what value addition we are able to do in next two, three years, where we can grow, where we can take our EBITDA to. The immediate target is to reach to INR 6,000-INR 7,000 in the next three, four years.
Got that. Just one last question. Just wanted to, I mean, you already touched upon this point, but just wanted to reaffirm what you're saying that in case if the steel prices move up, say by another 10%-15%, how much sensitivity will be impacting your margins or your volumes going ahead? And how would that play out even in the same case if it goes down by, say, 15%?
See, in last two years, steel prices have moved from INR 35 per kg to INR 75 per kg.
Right.
In the last two years, you can see our profitability in terms of EBITDA, net profit, debt reduction, cash flow generation, working capital reduction. We have been able to. Why only two years, right? You look at our 10-year history. Steel prices have moved from, like, any level to any level, right? Steel has been very, very volatile commodity. If you look at our consistency in terms of volume growth, which has been 18%-19% CAGR, you look at our EBITDA growth, which has been 25% CAGR. You look at our PAT growth, which has been 26%-27% CAGR. You look at our constant, consistent ROC improvement, right? You look at our ROE improvement. You look at our cash flow generation. You look at our working capital enhancement.
I guess, I mean, as a group, we have demonstrated our capabilities to grow profitability in any cycle, whether upcycle or downcycle in steel, right? I mean, we are not, I mean, there could be impact of few weeks or few months. On annualized basis, on consistent basis, you will see, you will keep on seeing the consistency in our numbers.
Got it. Thank you for answering my questions and all the best for the future.
Thank you.
Thank you. Ladies and gentlemen, the management will be taking one last question. It is from the line of Mr. Bharat Shah from ASK Investment Managers. Can we proceed?
Moderator, we can continue with the call. After Bharat Shah question, we can take more questions.
Sure, sir.
Please continue.
Yeah. Sanjay ji, I was just trying to raise a question and maybe line got shifted. Apart from the numbers and, you know, improving profitability, introducing specialty products and the size of opportunity with the growing steel capacity and you're doing favorably poised there and improving percentage of structural steel tube as a percentage of steel. If you have to lay down your vision as to how you see this unfolding scenario, APL Apollo, and what is it that you are most passionate about? What is it that excites you the most when you look at next five years or 10 years in this journey? What are some of the things that really drives you as an entrepreneur?
Bharat bhai, kya hai ki today market segment is changing very fast. Like, February month mein humko yeh lag raha hai ki hamari kitni bhi capacity lagayi hui hai, woh itni kam kyu lagayi thi. Raw material arrangement humne itna kam kyu kiya hua tha. April month mein aisa lag raha hai ki humne itni capacity kyu lagayi. Hamari itna volume arrangement kyu kiya hai. Toh market mein kya hai ki last 2, agar aap 2 saal se dekhoge toh volatility bahut jyada badha hua hai. Isse 5 saal, 10 saal ka agar main comment pass on karu toh it's not good. Mere ko jo lagta hai ki India is a growing market. Aur in spite of, respect to Mr., Indian Government, Mr. Modi ji and his team, poore country mein bahut achha kaam hua hai. Aur yeh kaafi reconstruction hui hai poore country mein.
Like jis hisab se hamare pass inquiries aa rahi hai metros ki, airports ki. Toh usko dekhte lagta hai ki isme kisi bhi level par demand ja sakti hai. Unfortunately kya hua hai ki pichhle 2 saal mein steel prices is increased from INR 35/kg to INR 75/kg. Usme jitne bhi logo ne projects le rakhe the, kuch bhi kaam kar rakha tha, woh log ya toh koi ab yeh, dusra products dhundne lag gaye usko substitute karne ke liye, kyunki unki cost se yeh bahar ho gaya tha, aur project ko slow down karke baith gaye hai. If all the things come into the picture. Toh jaisa agar aap dekhoge worldwide choti-choti country hai jahan par 10, 20 crore ki populations hai, wahan par millions sub type of tube banane wali companiyan hai.
If you look at Italy, there is a company called Marcegaglia. It is doing almost 2.4 million tons. If you look at U.S., there is a company called Zekelman Industries. It has a capacity of almost 2.5 million tons. तो छोटी छोटी countries में जहां पर development है वहां पर 2-2.5 million ton की company है। अगर China को देखोगे तो China's world number one company capacity of 13 million ton capacity company called Youfa.
Anything is possible but problem यह है कि आज मैं आपको नहीं बोल सकता। मैं 10 million ton करूंगा। 15 million ton करूंगा। अगर आज मैं India का ये 110 million ton steel conversion में 4 million ton plant लगाने की सोच सकता हूं तो कल को मैं India की conversion 820 million ton पहुंचू भी तो I can think about 8 million ton or 10 million ton plant. I am ready. मैं मेरा system कोई debt पर नहीं है। मैं cash flow generate कर रहा है। हमको कोई cash burn business नहीं create करना होता है। हम हर schedule से ready है। मैं call नहीं ले सकता इतनी बड़ी। मैं इतना बड़ा statement नहीं दे सकता हूं। It's too early to give any this type of statement.
अगर market चलेगी, we have a हमारा system का जो strength है. We are the world lowest cost production.
हम tube को सबसे low cost पर बनाते हैं। Every day we are working on the cost कि हम अपनी cost को कैसे कम करें। जैसे अभी अपने call में मैंने simple example दिया कि मैं zinc coating पर काम कर रहा हूं। जिससे मैं चार kg zinc coating कम कर दूंगा। जिससे मेरे को almost ₹80 to ₹90 per ton का saving आ जाएगा मेरा। मैं इसी तरह trade factor को बहुत कम कर रहा हूं। मैंने trade factor को अपना काफी reduce किया है। इसी तरह से मैं power पे, अपने rejections पे, mill to mill — हमारा इस समय total 47 lines working है। अब सब line में हमारा average tube rejection जो है 2.6% के आसपास है। उसमें किसी line में 1.6% भी है, किसी line में 3.5% भी है। तो हम जो हमारे benchmark से ऊपर के rejections के tube mills हैं, उस पर बहुत काम कर रहे हैं कि उसके rejections को कैसे कम करें। हमारी cutting cost almost ₹60 per ton की आती है। अब किसी line का हमारी cutting cost ₹15 per ton है। किसी line का हमारी cost ₹150 per ton से ऊपर है। तो उस पर बहुत काम कर रहे हैं कि जहां पर ₹150 per ton की cutting है, जो bigger size में आती है, उसको कैसे plasma cut पर या laser cut पर लेकर जाएं कि हमारी cost ₹10-15 per ton आ जाए। तो इस तरह छोटे-छोटे cost पर मैं बहुत काम कर रहा हूं। Innovations पर बहुत काम कर रहा हूं। Organization buildup पर बहुत काम कर रहा हूं कि हमारा system बहुत strong रहे। अगर आप हमारे जो इस साल का सबसे बड़ा vision है, अगर आप मेरे business को दो part में बांट के देखोगे कि हमने total 17 लाख ton का काम किया है। 17 लाख ton में से पांच-छह लाख ton का काम हमने किया है — Lakshmi, Apollo Metalex और Apollo Tricoat मिलाकर तीनों companies जो हमारी subsidiary हैं — और 10 से 11 लाख ton का काम किया हमने APL Apollo में और हमारा जो EBITDA margin है, दोनों में almost equal है, बराबर है। ₹500-₹500 करोड़ का दोनों में margin है। तो मेरे इस समय पूरा focus है कि जो 11 लाख ton पर मैंने ₹500 करोड़ कमाया है और वहां 5 लाख ton पर ₹500 करोड़ तक कमाया है, तो इसको 11 लाख ton के margins को मैं कैसे increase करूं। Last दो साल से मेरा दिमाग पूरा margins पर काम कर रहा है कि how to increase my margins.
तो जैसे ही को margins पर मेरे को लगेगा कि अब यहां पर ज्यादा कुछ करने को नहीं रह गया है तो फिर हम volume पर ध्यान लाएंगे। Like अभी हमारे बहुत सारे tube में segments जो हमसे छूटे हुए हैं। Like अभी आप देखो API में कहीं हमारी presence नहीं है। Auto tube में हमारी कहीं भी presence नहीं है। Water line में हमारी कहीं भी ज्यादा presence नहीं है। Water line में presence तो है, but बहुत nominal है। तो उसका कल को future में सब पर thinking करेगी है। But अभी मेरा single point focus है कि पहले एक बार मैं Raipur पूरा कर दूं। Four million ton का हमारा capacity create हो जाएगा। पांच million में almost हम carrying करने में लगे हुए हैं। इसमें से 3.5 four million ton achieve कर लूं अगले एक दो साल में कि मैं आगे फिर आठ और दस million ton की बात करने लायक हो जाऊं। तो I am a tube person.
मेरे tube के बाहर कोई focus नहीं है। मैं अपने आप को उधर उधर defocus करना चाहता हूं। मैं एक ही business को concentrate कर रहा हूं और एक ही पर अपने आप को strong करना चाहता हूं कि कहते हैं don't touch me। इतने अपने आप को business पर मैं strong बनाना चाहता हूं कि untouchable हूं मैं। उस पर काम कर रहा। बाकी देखो थोड़ा हमको external environment का भी साथ चाहिए। थोड़ा हमको internal भी काम करना पड़ेगा। सारा external का साथ आ जाए तो भी हम नहीं कर सकते। सारा internal का हमारा साथ है तो हम नहीं कर सकते। I am hopeful कि हम next vision, एक बार हम जैसे 3-3.5 million ton तक पहुंचेंगे तो we can throw our next vision.
Sanjay ji, mehnat sahi hai, intention sahi hai aur opportunity badi hai toh poori kaaynaat hamare saath aake shayad wo mission ko pehle hi poora karegi. All the very best.
मेहनत अच्छी कर रहे हैं। नीयत हमारी बहुत अच्छी है। कायनात भी साथ में आ गई। आप जैसे बड़े भाई लोग हमारे साथ हैं तो कायनात भी साथ में आएगी।
Thank you, Sanjay ji.
Thank you, Pradesh bhai.
Thank you. As there are no further questions. I would now like to hand the conference over to the management for closing comments.
Thanks, Ambit team, for hosting us today for our earnings call and like to thank everyone who was present on this call on behalf of APL Apollo team for dropping by, and if there are any further questions, you could reach out to the investor relation team. Thank you so much.
Thank you. On behalf of Ambit Capital Private Limited. That concludes this conference. Thank you for joining us. You may now disconnect your lines.