Ladies and gentlemen, good day, and welcome to Godawari Power & Ispat Limited Q4 and FY 2026 earnings conference call hosted by Monarch Networth Capital 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 Sahil Sanghvi from Monarch Networth Capital Limited. Thank you, and over to you, Sahil.
Thank you, Danish. Good afternoon, everyone. It's a pleasure to welcome you on behalf of Godawari Power & Ispat Limited. Please note that today's discussion may include certain forward-looking statements, therefore, this must be viewed in conjunction with the risks that the company faces. We are joined today by Mr. Abhishek Agrawal, Executive Director, Mr. Dinesh Gandhi, Executive Director, and Mr. Sanjay Bothra, Chief Financial Officer. May I now invite Mr. Sanjay Bothra to present the company's business outlook and performance. After which we'll open the floor for Q&A. Thank you, over to you, sir.
Thank you, Sahil. Good afternoon, everyone, and thank you for joining us on today's call. Our financial results and earning presentations have been uploaded to our website as well as the stock exchanges, and I trust you have had an opportunity to review them. I will now briefly walk you through the key highlights of the results, following which we will open the floor for a question and answer session. We are pleased to share that FY 2026 has been a year marked by several significant milestone and strategic achievements. Despite softer realization, GPIL delivered good set of numbers, with revenues remaining steady and EBITDA and PAT margin is strong at 23% and 15% respectively. On the operational front, GPIL delivered a strong performance in FY 2026, successfully achieving its production targets across key segments.
Sponge iron, Structural Rolled Products, and Ferroalloys surpassed their targets with production exceeding 100% of planned levels. Mining, pellets, and billets achieved 92%, 95%, and 96% of their targeted production level respectively. In FY 2026, healthy production ramp-up was seen across iron ore mining, pellet production, and structural rolled products. Q4 witnessed robust YoY growth in pellets, sponge iron, and structural rolled products, supported by capacity ramp-up and healthy demand. The sales volume in FY 2026 showed an increasing trend in pellets, sponge iron, galvanized fabricated products, and structural rolled products. In Q4, the growth momentum of sales volume remained strong, led by pellets and structural rolled products. Q4 witnessed sequential improvement in the realization, driven by better pricing momentum across the steel value chain, while FY 2026 realization remained softer across key products.
Coming to the consolidated financial performance, FY 2026 revenue remained stable, while Q4 FY 2026 revenue recorded a strong 41% quarter-on-quarter growth, supported by a healthy production ramp-up, higher sales volume, and improved realizations. FY 2026 EBITDA stood stable at INR 1,253 crore, whereas Q4 FY 2026 EBITDA increased by 38% YoY basis and 91% QoQ basis to INR 439 crore. FY 2026 PAT also remained stable at INR 802 crore, with Q4 FY 2026 PAT rising to INR 280 crore. Cash flow from operating activities improved by 29% to INR 1,157 crore, driven by a strong operational performance and efficient working capital management. GPIL continues to maintain a healthy balance sheet with a cash position of INR 837 crore.
The standalone performance during FY 2026 also remained stable and healthy. The standalone PAT growth of 19% represent dividend income from Ardent Steel and exceptional income on sale of stake in Ardent Steel. In the consolidated results, the stake held in Ardent Steel has been derecognized upon disinvestment of stake held in Ardent Steel. Dividend income and profit on sale of stake of Ardent Steel does not form part of consolidated results, and therefore consolidated PAT was lower as compared to the standalone PAT. Coming to the key achievements and strategic updates. I am pleased to share that GPIL received environment approval and consent to operate from the CPCB in February 2026 for the capacity enhancement of the Ari Dongri mines from 2.35 million- 6 million tons.
The ramping up of the capacities has already begun in a phased manner, with full scale operation targeted from FY 2028. The iron ore beneficiation plant capacity expansion at the Ari Dongri mines, increasing capacity tenfold to 6 million ton, is targeted for commissioning by Q3 FY 2027. GPIL has also received CTO from CPCB for capacity expansion of the sponge iron division from 0.59 million -0.65 million tons. HB wire from 0.1 million -0.115 million tons. For additional 7 MW waste heat recovery-based power plant, taking the total waste heat recovery power plant capacity to 49 MW. GPIL commissioned its 2 million ton iron ore pellet plant in December 2025, taking total pellet capacity from 2.7million-4.7 million tons.
The plant is India's first to use advanced natural gas-based grate-kiln technology, marking a shift from conventional carbon-intensive processes. GPIL is progressing on its 0.7 million ton CRM complex project with on-site construction expected to commission by July FY 2026. Orders for key equipment lines have been placed, and advance payments have been released for all major process lines. The project is targeted for commissioning by March FY 2027. GPIL is setting up a 20 GW BESS project for which soil testing has been completed and construction of the compound wall is currently underway. We have signed long-term agreements with EVE Power for Grade 1 628 AH LFP cells and with Shanghai Sermatec Energy Technologies for DC balance of system supply, securing the project supply chain. This project is expected to commission from March 2027.
The board has approved the setting up of a 1 million tons integrated steel plant for manufacturing structural steel and wire rods. Land acquisition and environmental approval are in place while consent to establish is awaited. Discussion with equipment suppliers and project engineering are underway, with construction expected to begin in October 2026. GPIL is also expanding its captive solar power capacity by over 3x , currently from 165 MW to 540 MW, to support captive consumption across iron ore mines, additional 2 million in pellet plant, CRM, and upcoming integrated steel plant operation. In addition to current 165 MW, the company has commissioned solar power capacity of 25 MW yesterday only, and additional 100 MW is expected to be commissioned by July 2026.
On the ESG front, the company has completed most initiatives under its energy efficiency and decarbonization project, reinforcing its commitment towards achieving net zero carbon emission by 2050. As part of its EV-led transition towards greener operation, GPL invested in 10 EV dumpers, 24 EV loaders, and 15 EV excavators during the year. The adoption of electric transportation has reduced operating costs by nearly 75% and lowered carbon emission by around 88% compared to conventional diesel vehicles. The company has plans to shift the existing transport fleet to EV fleet to reduce emission and cost saving. This shall be announced in due course. Coming to the market outlooks. Global iron ore prices remained relatively resilient during FY 2026, supported by steady demand from China, supply-side disruption, and healthy steel production in emerging economies such as India.
Benchmark 62% Fe iron ore prices largely traded in the range of $95-$110 per metric ton during recent months. On the domestic front, India witnessed a sharp rise in the iron ore imports and reached a seven-year high of 12 million tons + in FY 2026, driven by strong steel demand and shortage of high-grade ore required by domestic mills. Despite higher domestic production, imports increased significantly, highlighting robust consumption trend in the Indian steel sector. Looking ahead, the medium-term outlook for iron ore prices remains closely balanced, ensuing steel demand in China and expected ramp up of new low-cost supply from Simandou project in Guinea. Rising steel consumption in India and increasing preferences for high-grade iron ore are expected to provide structural support to demand going forward for pellets and high-grade iron ore.
On the pellets front, demand for the premium-grade pellets continues to strengthen globally and decarbonization initiatives and the gradual shift towards gas-based DRI steel making. Industry reports project the global iron ore pellets market to grow at a CAGR of around 5%-6% over the next decade, supported by increasing adoption of cleaner steelmaking technologies. Looking ahead, India's pellet demand outlook also remains positive, supported by ongoing steel capacity expansion and the industry's growth focus on low carbon and high-grade raw materials. In conclusion, backed by the competitive advantage of captive iron ore mines, a strong net cash position, ongoing capacity expansion, and a strict ESG focus, GPIL remains well-positioned to drive sustainable value creation through operational excellence, solar-led cost optimization, and the continued support of all stakeholders. I would now like to open the floor for questions and answers.
Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Next question come from the line of Manav Gogia from YES Securities Limited. Please go ahead.
Hi. A very good afternoon and thanks for the opportunity. First of all, a lot of congratulations on the good set of numbers for the quarter. My first question is on the iron ore mining guidance. I might have missed in the opening remarks, but for FY 2027, if we go to slide number 17, we have a guidance of 3.4 million tons for FY 2027. Now, I think last call we were guiding that we would be doing somewhere around 4.5 million-5 million tons. What's changed? Is there some delays in the ore production? Can you please just help me with that?
Couple of things. Firstly, the guidance we've given is the net usable iron ore, which will be sent to the pellet complex for using it because we will be beneficiating the iron ore in the mines itself once our 6 million beneficiation plant commissions. The actual mining will be close to about 4million-4.25 million tons this year. With, you know, because 1.5 million will be BMQ, where the recovery will be less than 50%. About 0.8million, 0.75 million tons of iron ore will be, you know, waste and tailings.
The actual iron ore mining production will be about 4 million- 4.25 million tons, but the guidance we have given is the net usable iron ore coming to the plant for making pellets, which is about 3.4 million tons. This year we'll be doing about 4 million- 4.25 million tons of iron ore production. End of Q3, early Q4, we should be able to hit the rated capacity target of 6 million tons. From FY 2028 we should be able to mine 6 million, and the actual output concentrate usable for pellet plant will be about 4.5 million tons. That's how you wanna see it.
Okay. Thank you for that. This 3.4 million tons also includes ore from Boria Tibu or is it purely Ari Dongri?
No. Boria Tibu, Boria Tibu, you know, last year mining was hardly about 0.3 million tons. This year we'll be doing about 0.5 million tons, again, Boria Tibu is a very low-grade ore. Currently we are bringing it to the plant and beneficating where the recovery is hardly about 40%. Even if we do about 0.5 million tons this year, the usable iron ore will be about 0.2, 0.25 million. Which is very not substantial. 3.4 million tons will be the net usable iron ore this financial year, which will be going to the pellet plant.
Okay. Understood. To get it in a nutshell, we'll be buying roughly 1.5 million tons of iron ore for our pellet requirement.
About, yeah, close to 1 million ton. That will drastically come down post Diwali, which is November, once we are able to achieve the rated capacity post-monsoon. As a year whole, we can see a total mining to be about 4.5 million tons, including Boria Tibu. Net usable iron ore about 3.4 milion-3.5 million tons for this financial year.
Oh, okay. Got it.
Yes.
That, you know, the new mine now, putting in the ore, from this year onwards, how do we see the landed cost of ore changing? Do we expect it in the INR 2,900-INR 3,000 per ton range or?
No. This year unfortunately, if you see now, because of the diesel escalation and the shortage all over because of the war, our transportation cost is already up by, you know, INR 250. But for the full year, we see the value to be at the same, similar levels of INR 3,000. Mr. Bothra just mentioned, we have started talking to the transporters. We want to complete the entire fleet to EV trucks to have a substantial saving on the diesel side. This year the guidance will be in the similar levels, which is about INR 3,000-INR 3,200 levels. Q3, Q4 onwards, we can see a substantial reduction in the pricing of mining.
Oh, sure, sir. Thank you.
Yeah.
The second, my second question is, you know, how do you see the pricing in Q1 as compared to Q4 across ?
See Q1, the pricing was pretty much at the same levels of Q4 for the first half of Q1. The second half of Q1, say end of April, early May, the prices have, you know, softened a bit almost by 10% across the supply chain. It might be a war effect, it might be, you know, the summer season or the heat, you know, heat wave which is across India right now. Q1, the prices have softened by almost 10% across the supply chain, post in end of April onwards.
Okay. That's helpful. Just one last question. I was looking at slide 25 where we have a vision for 2031 and, you know.
Right.
We have our revenue with the growing substantially from the current levels.
Yeah.
Get a sense of what all are you know, looking at from a company's long-term strategy point of view? Is it the current projects is what the estimate is or there are certain projects which haven't been announced or, I mean, you know, the company.
No, no, no. It's basically the top line coming from all the projects we have announced. If you see the BESS battery storage, which is about 20 GW. If you consider about 15 GW, from there we see a top line of about INR 15,000 crore. Our new steel plant, we see a top line of over INR 6,000 crore. The CRM, we see a top line of about INR 3,000-INR 4,000 crore. With the pellet capacity, you know, crossing 4 million this year. Put together, you know, the current complex and the projects we've already announced, we see our top line reaching close to about INR 30,000 crore in the next 4- 5 years.
Got it. That is helpful. Thank you. All the best. I'll join back with you for more.
Thank you so much.
Thank you. Ladies and gentlemen, you may press star and 1 in order to ask a question. Our next question comes from the line of Sunil Jain from Nirmal Bang Securities Private Limited. Please go ahead.
Thanks for taking my question, sir. My question relate to more of EBITDA growth, what we had seen quarter-on-quarter. If you see, the prices has remained more or less same for pellets, though we had seen increase in other commodities. The delta seems quite high in the EBITDA growth as compared to what we had seen in the prices increase of the pellet.
Yeah, yeah. There are two reasons.
There are two reasons. One is there was a carryover inventory of iron ore pellets of about 89,300 tons in Q3, which got sold in Q4. The additional EBITDA has come from there. Our new pellet plant started production end of Q3, which is December, and we were able to reach to a 70% capacity. The additional volume of pellets came in from there. Lastly was our mining production, which was about 2.4 million, 2.35 million tons till last year. We got the EC approval, you know, at third week of February. March, we could do the extra mining of almost about INR 2.5 lakh tons. Majorly these three factors contributed to the additional EBITDA compared to Q3.
Okay. Sir, second question related to gas. 20 million, 20 GW you're overall you will be doing. Can you give the timeline how it will be starting? Means, first you will be starting 5 GW and thereafter how you will scale it?
Sure, sure. See, with the current development, we should be able to commission the first line by end of Q4, which is March 2027. First year, FY 2028, we expect to do a, you know, 5 GW-6 GW of output, which is hardly at about, you know, 30%-40%. Second year, we want to scale it to about 70%, which is at about, you know, 12 GW-13 GW, 14 GW. From third year onwards, we expect to do, you know, about 17 GW-18 GW. Next 2-3 years we should be able to reach to a 90% capacity. That's how we have planned it for the phase one of 20 GW line.
If you can talk about the margin in this base business.
See, when we started the project, when we conceived, you know, we were expecting a margin of about, roughly about, you know, 7%-8%. Today, if you see, today the price of one container is close to about INR 80 lakh per megawatt hour , which is about INR 4 crore per container. When we conceived this project it was supposed to be about 7%- 8%, about INK 3.5 lakh , INR 4 lakh margin. With current demand coming from Indian sector, you know, with the grid stability and all those things, the margins have gone up almost to 12%, 13% at the moment.
Still, if you consider a very conservative figure of 7%-8%, on a, you know, INR 80 lakh per megawatt , we do about a INR 4 lakh of, you know, net margin. This is that you can multiply to a 16 GW-18 GW line. That's how we have conceived the project. At a INR 4, INR 4.5 lakh per megawatt hour into a 16 GW line. Comes to about INR 7 crore-INR 8 crore if everything goes well.
Yeah, yeah. Great. Sir, something related to this only, like, how we are, means related to anything increase in lithium prices or lithium cell prices. If that happens then, how we are safeguarded?
As Mr. Bothra announced, we have begun a long-term tie-up with a tier one Chinese company called EVE. The way we have, you know, priced the entire supply of the cells, it is index based, where we have captured few important components which contributes to the manufacturing of lithium cells. If the market goes up, the supplier will pass on the price to us. If the market goes down, it will be vice versa. For example, if you see, you know, six months back the prices of lithium cells were about $37-$38 per watt, which is now at about $55 per watt.
In the same way, if you see, six months back the price quoting in India was about INR 70 lakh per megawatt hour. Today price quoted for the same container is about INR 85 lakh per megawatt hour. Eventually any increase, substantial increase in the sale price will be eventually passed on to the buyers in the Indian market to maintain the margins. The pricing we've done with the supplier is on index base so that, you know, it is fair to both the parties.
Okay. Great, sir. Thank you very much.
Thank you.
Thank you. Our next question comes from the line of Aman Kothari from Aequitas Investments. Please go ahead.
Yeah. thank you for the opportunity for asking questions and congratulations sir on the wonderful set of results. Sir, I wanted to get a current understanding on the iron ore environment that we're seeing. recently we have seen that it has been hovering around $105, $110, currently around $107. Do you think these prices will be stable for the next of the year? With them being at these prices, our spread will eventually increase?
See, if you see about 15 days back the prices also touched about $110, $112, 10 levels as well.
Yeah.
With this war situation and you know, the currency fluctuation, the prices have softened a bit. As you see the international reports, I feel this year the prices should remain above $100 levels for the entire year. That's what the international report says. There is demand from China. Import into India is also happening because of, you know, availability of iron ore in India is not up to the mark. I feel.
Yeah.
The $100+ should be the target for the entire year on iron ore side.
Got it. Sorry. For the pellet plant, I think you mentioned sir it is a gas-based pellet plant that we have set up.
Yeah. earlier we were using coal gas.
Yeah.
Before we get into gasification. Now from coal gas, we have shifted to natural gas. We have done a seven years MOU with GAIL, for supply of natural gas. Our new plant, it's running 100%. The fuel is natural gas.
Sir, with that, I think you had clearly explained in the last call the difference between a coal-based DRI pellet and a gas-based DRI pellet. You've clearly stated you not want to look into a, let's say, a DRI that's gas-based. With this, are we looking at that kind of an export market?
We are. Definitely with CBAM coming into picture, with demand from, you know, export market and with the capacity of pellet being added to India, the whole idea was we want to be export ready. Whenever we see the domestic demand, for example, today the domestic demand is on the weak side, you might hear where Godawari starts exporting pellet from, you know, from the next quarter. We want to be future ready, and that was the whole idea. Plus, we also saved about close to about INR 100 crores of CapEx.
Yeah.
On, you know, on the coal gasification side to, you know, to generate the same kind of fuel. INR 100 crore CapEx was saved on the CapEx side. We are future ready whenever export opportunity is there. That was the whole idea.
Got it. Sir, for the coal, I think you had mentioned last time that South African coal prices had increased because of the supply cut. Can you just give us an idea on how the prices are hovering for this quarter?
This quarter we are very well covered within the limits. Our average pricing should be somewhere about, you know, twelve and a half, INR 13,000. Q2 onwards, because of the war impact, the sea freight has gone up substantially from $ 15-$ 16 is almost, you know, crossed $ 22. Dollar is up from 93-94 level to 97 levels.
Yeah.
There is a substantial impact on the imported coal price from Q2 onwards, at least by 15, 20%.
20%? Okay.
Yeah, yeah, yeah.
Domestically.
Yeah, at the moment it is.
Domestically, we wouldn't have a problem for the 40% mix that we have.
No. See, domestically, at the moment we are close to over 100% using imported coal. We have been using imported coal to maximize our production levels in the DRI. Any given point of time, we can always switch to domestic coal and the availability of domestic coal is abundant. There is no supply or cut in supply of domestic coal sourcing. We can switch whenever we want to. We are carefully monitoring this war situation, and if we feel the situation is not dying down, going forward, we might shift to some part of domestic coal for DRI.
Got it. Perfect. Just a last question before I join back in line. I think we have established some really good tie-ups in terms of our BESS setup, how we are progressing with EVE, with Roche Energy and other players. Sir, do you, can you just give us a sense on how do you think this market is going to play out in India? We've seen a lot of players announcing the CapEx or announcing the expansion into BESS projects that they would do. Can you just give us a bit light on how our talks with potential customers or early pipeline talks are progressing?
See, at the moment we haven't gone to the market yet. We want to get into the market once we know, we can deliver, you know, after a certain time period. We intend to go into the market, you know, end of Q2, which is say about September, August. See, it's an open market. People do feel the initial CapEx in the lower side, but it's actually not.
The challenge will be, you know, a continuous supply from tier one components across the globe. That is the reason we feel the market is going to be competitive, but eventually, what quality components and how you know, make the container eventually will play out. Once you deliver in the market, then only probably, you know, you can see who is able to deliver and unable to deliver.
Yeah. Okay, sir. I think in terms of capabilities, sir, we've seen China is the number one player in battery energy storage, and since they're sourcing components from most of those tie-ups, I think we should be in a very good capability.
Yeah. Recently just to, you know, inform all the stakeholders, we recently also have tied up with FEMA, which is a Thailand-based company.
They have a plant in India for PCS. We have tied up with a Gujarat-based developer for EMS, which is compulsory as a part of battery storage by the Indian government. We are continuously doing long-term tie-ups with key component suppliers so that we have a, you know, continuous supply for all the components on a regular basis.
Got it. Thank you so much, sir. I'll just join back in line.
Yeah. Thank you.
Thank you. Ladies and gentlemen, if anyone wishes to ask a question may press star then one. Our next question comes from the line of Vinit Thakur from Plus 91 AMC. Please go ahead.
Hi, sir. Thank you for the opportunity. Congratulations on generating numbers. I would like you to throw some light on the EBITDA margin and what would be your conversion ratios. How do the conversion ratios work right now from mining to pellets to ferromanganese? That would be great, sir.
See, the conversion from mining to pellet is about close to about INR 2,000, and from pellet to DRI, including thermal coal, of course. The conversion cost, operating cost is about INR 15 from pellet to DRI, and remaining is your coal and iron ore cost. Pellet, iron ore is about 40%, coal is about 35%, and remaining is your operating cost. Today, if you see a breakup of, say, my production cost is INR 20,000. Out of that, pellet will be about INR 10, coal will be about INR 8.5, and remaining INR 15 will be my operating cost. That is the breakup for the DRI.
Okay. Could you please shed some light on those structural products? Because there's been a, quite a incremental QoQ and YoY growth on those products.
Yes. Couple of things. One, we took the R.R. Ispat for the rolling mill which we had designed. There was some modification required to, you know, improve the quality and upgrade the production. That modification was over in end of Q3. That's why you are seeing a substantial increase in the rolled product production from Q4 onwards. Now you can see this production happening on a continuous basis quarter-on-quarter because the mills is now, you know, quite stable and there is activity of the product in the market. We have a healthy order book of almost six months on R.R Ispat. Now you can see these volumes on quarter-on-quarter basis.
Sir, what would be our capacity and what would be utilization for this year we are expecting for FY 2027?
See, total rolled product including Godawari, we should do about somewhere about INR 3.75 lakh tons for the entire year.
Okay. Thank you, sir. I'll hand over the question, to again for asking another question.
Thank you.
Thank you. Our next question comes from the line of Stuti Agarwal from Chhatisgarh Investment Limited. Please go ahead.
Thank you for the opportunity. Sir, regarding the exceptional line item in P&L, you had mentioned in your opening remarks that the difference between a positive, like from a + INR 36.69 crores at standalone level to a - INR 18.29 crores at consolidated level is due to the non-inclusion of profit on sale of Ardent Steel. Could you please give us a bifurcation between this profit and I guess the write-off of pre-operative cost of thermal power plant?
Yes. See, in other income there is a INR 91 crore item of dividend from Ardent Steel Limited, associate company. There is around INR 73 crore profit on sale of the stake of Ardent Steel, which is appearing in the exceptional item in standalone results.
Okay. I didn't see that item.
This method is on cost to cost basis. When the consolidation comes, so on equity method, the profit recognized in standalone on cost basis is eliminated and only INR 17 crore profit is there on the entire transaction of this Ardent Steel stake sale. INR 17 crore gain as exceptional items and around INR 37 crore or INR 36 crore write-off of the erstwhile Godawari Energy pre-operative cost. Net to net there is INR 17 crore loss in consolidated balance sheet as exceptional loss.
Okay, sir. That's all from my side. Thank you.
Thank you. Our next question comes from the line of Yogansh Jeswani from Mittal Analytics. Please go ahead. Yogansh, you may please proceed ahead with the question. Yogansh, if you are on mute, please unmute yourself and proceed ahead with the question. As there is no response, we'll move forward to the next participant. Our next question comes from the line of Synclair Dsouza from Lalkar Securities. Please go ahead.
Hello, can you hear me?
Yes, please.
Yes.
Yeah. Thank you for giving me the opportunity. I wanted to ask what is the revenue guidance for FY 2027 and the EBITDA margin guidance for FY 2027.
See revenues, the revenue we should top line should be INR 6,000 plus with our new pellet plant operating at close to 80%-90% capacity. There will be the additional volume and the additional revenue coming from there as other volumes remains almost constant. FY 2027 guidance, see at current market level, we should be able to do somewhere about 24%-25% of, you know, at EBITDA levels, at current market levels. It's a very, you know, difficult to comment as actually, you know, such a early stage of the financial year. Looking at the current market scenario, 25% we should be able to maintain the EBITDA levels and top line should cross INR 6,000 crores with the additional volume of pellet coming in.
Got it. Thank you, sir.
Thank you.
Thank you. Our next question comes from the line of Sahil Sanghvi, from Monarch Capital. Please go ahead.
Hi. Congratulations again for very good results. My first question is on the pellet. If we have to see the quarter-on-quarter realizations, it's not moved at all versus the market pricing. What's happening over here, if you can help us understand the reasons and how can pellet prices look for FY 2027?
See, thanks, Sahil. On the Q4, we see the pellet pricing hasn't moved much as compared to market because, you know, there was a phase where we were not able to do mining at the full capacity because of the EC sanction. As EC got delayed, you know, right from October, November, finally it came in end of February. We were not able to produce the same volumes of high-grade pellets where we, you know, draw a premium of more than INR 1,000. We had to make the, you know, 63 commercial pellet. That is why you're not able to, you know, see a difference in the pellet pricing compared to the market scenario. That was a major reason.
No other reason beyond that. On the FY 2027 guidance, see, as the mining production goes up from Q3 onwards, once monsoons are over, the product mix of high grade will start going up drastically and that will definitely show a difference between the pellet pricing for Godawari and the others in the market. That will happen from Q3 onwards as the mining production starts going up post monsoons.
Got it. Got it. Perfect. Thank you.
Yeah.
That's all from my side. Thank you.
Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Yogansh Jeswani from Mittal Analytics. Please go ahead.
Hi, am I audible?
Yes, you are. Please proceed.
Thank you for the opportunity. Congratulations to you and the entire team on a good set of numbers. Just wanted to understand on the new mining and the pellet plant scale-up that you were explaining before. Earlier we used to mine INR 27 lakh-INR 28 lakh tons of ore and simultaneously convert that into pellet. While this time, because of the beneficiation plant, you are saying that the mining would be of higher, 4million-4.5 million and pellet-ready ore would be 3.5 million. Why is there a change in that? If you could help me understand, sir.
No. There is a slight correction. Earlier we used to mine about 2.4 million tons. If you see our last year's mining production, it was about 2.35-million-2.4 million tons. This year we have done about 2.7 million-2.8million tons because we were able to get the EC in February and there was additional production in March. There was an additional increment. Till last year, Boria Tibu was not in operation. We started Boria Tibu operations last year only, where we did a mining of hardly 200,000 tons. If you compare basis that, against the 2.4 million, we'll be doing about 3.4 million tons. Straightaway a jump of almost 1 million tons for this financial year.
If you compare basis that, 3.4 million is usable and actual mining will be 4 million+ . From next year onwards at full capacity, the actual mining will be 6 million ton and usable will be about 4.5 million tons after beneficiation.
Okay.
Because earlier there was no beneficiation plant in the mines. The 0.6 million plant started last year, so there was a little bit of beneficiation. Further we go up once we commission the new plant of 6 million tons.
Got it. Just, if you could broadly explain how does the economics and margin change once we do beneficiation, because then ideally, we are extracting more ore and converting to lesser pellet, if that number works out that way. Then how does the margin or the economics work in case of a beneficiation plant?
I'll tell you. Just to give you a very brief explanation. We beneficiate, average grade in the mines is about 59-60 Fe. We want to beneficiate that, upgrade that to a 67 concentrate. Basis which we will be making a high-grade 65 pellets. Once you do that, about 15% of iron ore is wasted in the form of tailings. If you do a 100 tons of mining, about 85 tons of concentrate you will be getting to feed to the pellet plant. This is 1 scenario. The second scenario is, we will also be mining a BMQ, which is a low-grade magnetite, where a 35-38 Fe will be upgraded to again 65-67. In that, the recovery will be close to about only 40%.
When you put together whole, the recovery basis of 6 million will be close to about 70%-80%. About 20%-25% of the entire iron ore will be wasted as a tailing. On a 6 million, if you subtract 25%, you get about 4.5 million tons of iron ore, usable iron ore of a 65+ concentrate. That is how it works.
Got it, sir.
If I don't beneficiate, if I may use a 60 Fe iron ore, I will get more value, but my Fe in the pellet will be below 59, which is not sellable in the market. I will have to beneficiate to upgrade the Fe content. That is the whole idea.
Got it. Sir, I think couple of calls ago you had mentioned that, by beneficiating at the mine you will be saving some logistic cost as well.
Exactly. Exactly.
Because spending more on the on the plant. What was the number if you could share or if there's any change in that number?
Currently the freight is about INR 1,000. If you're able to, you know, remove 10%, 15% of wastage inside the mine, straightaway an INR 150 of saving you'll be doing on the freight side. Earlier we were doing beneficiation inside the pellet plant, the, in the Raipur complex. We were losing on the freight. Now from Q3 onwards we'll be beneficiating inside the mine. Straightaway there'll be a saving of about INR 150 per ton on the final concentrate being sent to the Godawari plant for usage.
Got it, sir. That's very helpful. Thank you. I'll get back into you.
Yeah. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1. Our next question comes from the line of Vedant Sharda from Nirmal Bang Securities Private Limited. Please go ahead.
Hello? Hello?
Yes. You may proceed with your question.
I just wanted to know any of our plans to increase our mining capacity or soaring into new mining like new, any rare earths or anything, or increasing our iron ore mining capacity?
See, at current production levels, we already planned the expansion for Ari Dongri, and that will take care of the next, you know, till these are done. On Boria Tibu front, we have already announced earlier. We have plans to take the mining capacity from 0.7 million- 4 million tons, along with beneficiation inside the mine because again, Boria Tibu is a low-grade ore, about 35% Fe content, 40% content. That will take about another three years from now on. We've already started working on it. Boria Tibu should be online by, I think, FY 2030, including beneficiation. Once we're able to do that, Boria Tibu, the output, usable output will be close to about 1.5 million tons. These are the current mines which we've planned for.
In future, if there is any new mines coming up in auction, which we feel is attractive, we will or we are always gonna explore that. At the moment we don't see any good mines coming up in the area. If there is an opportunity going forward, we will definitely explore it.
Okay. Thank you.
Yes.
Thank you. Our next question comes from the line of Vandana Rathi from Korman Capital Investment Advisers LLP. Please go ahead.
Yeah, sir. Very good afternoon. Sir, one bookkeeping question. I wanted to understand how much was the inventory gain in Q4?
Can you come again, please? You're not audible.
How much was the inventory gain in Q4?
Inventory gain in Q4?
Yeah.
No, I think, Bothra Sanjay, you have the figure for that, inventory gain?
We have roughly gained INR 20 crore on account of unsold pellet stock carrying from last quarter and sold during the quarter. That's higher realization, INR 20 crore roughly on 90,000 tons.
Yes.
Okay. Sir, my next question is, I want to go into the results. I was seeing INR 150 crores of loan given to the education subsidiary company for some residential school project. Do you want to elaborate something on that?
We have taken an enabling resolution for the time being. The school will separately go for the loan from the other sources. In the meanwhile, for the time being arrangement, we have taken this enabling resolution.
Okay, sir. Thank you so much.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Divya Agarwal from Ficom Family Office. Please go ahead.
Yeah. Hi, sir. Thanks for taking my question. Sir, only one question regarding the 2031 guidance. Basically, in the guidance you have mentioned that you'll be achieving INR 3,000 crore PAT. That's like a 10% PAT margin. Just wanted a clarification. Is it because the margins are coming down is because of your BESS project?
BESS and the CRM. Both BESS and CRM will be on the lower margin side. The top volume will go up heavily, but the margins BESS is at about a 7%-8% margin business. The CRM is about a 7%-10% margin business. That is the reason the overall margins are coming down. The top line is going heavy. Exponentially there is top line growth.
Right. Got it. Secondly, sir, just wanted to know your outlook on the current pellet situation domestically. How is it and in terms of the capacity as well, are you seeing any overcapacity coming in? Just wanted to get a sense on that. Thanks.
See, at the moment, we don't see an overcapacity coming in. There will be a challenge to merchant pellet players who are solely dependent on market for purchase of iron ore. We can definitely see a squeeze in margins for them. For people like Lloyds, Godawari or other companies which have the captive resources, I don't see a pressure margin there and also on the demand supply. At the moment, it's there's no over demand supply. Plus export is always available. You see today, export market is very much viable if you want to really explore. I don't see at the moment going forward, all depends, you know, how the sea market goes.
Right. I got it. Thanks. Thanks a lot.
Thank you. Our next question comes from the line of Varun Mehta from WealthInc Investment. Please go ahead.
Good afternoon, everyone. Am I audible?
Good afternoon. Yes, please.
Yeah. I just want to know about the steel plant cost, which we are looking at INR 7,000 crore. I think three, four years back we spoke about 1 million ton to be a INR 4,000 crore cost. The cost has gone up on this project or we doing something else on this?
No. Yeah. We you know, I had personally you know, tendered an apology to all the stakeholders, because for us being in the first time in a blast primary route, we did a wrong calculation. There was a wrong estimation done by us on the CapEx side. Again, once again, sincere apologies. If you can please, you know, omit that entire story from your mind. We were wrong on the cost estimation. The current CapEx given us INR 7,000 crore is very much on the practical side. We have done a thorough study with the equipment suppliers, and based on that, we have shared the details with the stakeholders.
Okay. What are the returns on capital we are looking at for the steel?
There are a couple of changes, which there's an increase in CapEx. One is earlier we had said we had no intention of putting up a coke oven plant because there was ample of import of coke available from Indonesia and other countries. Last year, to support the local domestic coke industry, Government of India had imposed restrictions on import of cokes, because of which now we are investing heavily in the coke oven plant. One. Secondly is, the product we're gonna enter into is a value-added product. It's not a TMT or a regular wire rod product. The structure mill which we are proposing, it's a value-added steel, and it has a substantial cost compared to a similar volume of a TMT or a rebar mill.
On these two accounts, the CapEx is slightly higher compared to a standard 1 million steel plant. Apart from that, numbers are pretty much on the similar levels.
How much return we are looking at for this investment of steel plant? We would have calculated.
See, we expect a EBITDA of more than 20% once the plant is operating at full capacity because we are into value-added steel and currently there is not much competition from the Indian market. We should be able to do a EBITDA of more than 20% going forward once the plant is running at full capacity. Again, you know, it's a commodity market. It's steel. Anybody's open to, you know, invest in such kind of CapEx. It's just an estimation, basis which we have, you know, thought of going ahead.
Can you just share what is our cost of production for pellets basically at INR 5,000, INR 5,500? What is the basic cost for pellets?
If you consider annual INR 2,000, with beneficiation, everything, our current cost of pellets is at about INR 5,500-INR 5,800 after beneficiation.
Okay. This last question is, this guidance what we have provided for 2031 on the sales part, this includes the steel revenue also?
Yeah, it includes the steel revenue, includes the first phase of battery storage and the CRM revenue. All three.
Okay. Steel plant is not reckoning that.
No, no. 1 million steel plant, the battery storage and the CRM complex. All three.
Okay. Okay. Thank you so much.
Yeah. Thank you.
Thank you. Our next question come from the line of Aryan Bhatia from InvIT Research. InvIT Research, please go ahead.
Thank you. Thank you for the opportunity. My question is, what is generally the conversion ratio from our mining to pellet? From the usable 4.5 million tons mine, what will be the pellet conversion? What will be they've been buying from the market for our 4.7 million pellet plant.
Okay. You're not audible. Still I could got your question. as said earlier, we'll be doing about 0.8million- 1 million tons of procurement of iron ore this year to run at full capacity. That should basically come down from Q3 onwards once monsoons are over. The conversion from mining to pellet, as I mentioned, it's after beneficiation of all kinds of ore. if you mine 100 tons of iron ore, you'll get about 75 tons of usable concentrate of high grade to feed to the pellet plant. if you do a 4 million mining, you get about 3millon-3.2 million tons of usable iron ore for the pellet plant.
Got it. On the second, on the rolled products capacity. Can you provide the breakdown of our rolled products capacity? How much is the wire rod? How much is the MS rounds and how much is the galvanized products?
Okay. For this financial year, the wire rod will be close to about INR 2.2 lakh tons, further rolled to INR 1.1 lakh tons of HB wire. On the structure side, that will be about INR1.2 lakh, INR 1.3 lakh tons. Put together, we'll be doing about 3.7 million tons of total rolled products this year.
Okay. Thank you. Thank you very much.
Thank you.
Thank you. Our next question comes from the line of Ajit Sethi from Eiko Quantum Solutions. Please go ahead.
Yeah. Thank you for the opportunity. My question is on the CRM complex. In the previous con call we have guided for 50% utilization in CRM complex in FY 2028. Are we on track to achieve that guidance?
Yes. At the moment, with the current status, being, you know, shared with, all the stakeholders, little earlier by Bothra Sanjay. At the moment we are on track. We are hopeful to commission the first line by end of Q4, early, you know, Q1 next financial year. That's why we have taken a very conservative guidance of 50%, which is at about INR 3.5 lakh tons of CRM complex for FY 2028.
How can we expect the further ramp up of capacity going forward?
From FY 2029 we should be at about 90% capacity for sure.
Okay. Thank you.
Yeah.
Thank you. Our next question come from the line of Rohan Mehta from Star TC. Please go ahead.
Hi, sir. Thank you so much. Good afternoon. Just a couple of questions. Currently the Indian pellet prices seem to be around INR 10,000 and the global price is around INR 11,500. What I wanted to understand was, what is the delta because of the higher freight cost that we are looking to export?
Can you come again, please? You were not audible initially.
Sorry. Indian pellet prices seem to be around INR 10,000 and export market is around INR 11,500, if I'm not mistaken. Because of the higher freight cost, what is it that we are looking as delta to export?
See, currently if you talk about from my plant to, say, China for just a number, including the freight cost, it is somewhere about INR 3,000. If I'm selling at INR 10,000 ex-plant, my export price to be at the similar level has to be somewhere about INR 13,000 level, which is not the case. Today the Indian prices are about INR 9,500, and with the dollar inflation, today if we want to export, we can easily achieve more than INR 9,000 plant. The delta is now hardly less than $10 between domestic pricing and export pricing.
Probably sometime in the next quarter or this quarter end, we should start exporting. That is what, if I'm looking at correctly.
See, it all depends. If the Indian market continues to remain on the lull side, which is at the moment because of XYZ reasons, and the export market remains at this level, we might see some volumes going into export.
Those reasons currently in the Indian market is the Lloyd extra capacity or just monsoon coming up?
See, to be honest, Lloyd hasn't hit the Chhattisgarh market at the moment right now. 90% pellets are going into Chhattisgarh market. Lloyd hasn't touched the Chhattisgarh market at the moment. There is a overall, you know, there is a lull in the steel demand. There's no selling in the finished side. The prices corrected almost by 10% in last few weeks. The overall sentiment is weak. Based on that, we have started exploring the export market. No other thing.
Perfect. The second question is on the BESS front. Just like everything else, the 5 GWh, 6 GWh for the next year is a conservative guidance or that is what we are looking to achieve?
No, it's a very conservative guidance.
Perfect. In the 2031 explanation that we are assuming, we have not considered the phase 2 of the BESS thing. Is there a reason for that?
No. No, there's no reason. Just that, you know, we thought whatever we have announced, whatever the projects have started, you know, taking shape, we want to, you know, give our estimation based on that. Phase II, when it will come, how it will come, we don't know because battery storage itself it's huge. It's a new-tech industry.
Please.
Hello?
Sure, sir. Go ahead.
We haven't considered phase II. The only reason is because it's something which is very new for us. We want to establish the phase 1. We want to run the plant at full capacity. Based on that we want to decide whether how we want to, you know, go ahead in the phase II. Whether we want to get into expanding capacity in phase II, or whether we want to go into battery integration and enter into a cell manufacturing with a technical tie-up. It's a very nascent stage for us to decide for the phase II. That's why we only give an estimation based on the current projects taken up. No other thing.
Perfect. Thank you so much. That's it from my side.
Thank you. Thank you.
Thank you. Our next question come from the line of Manav Gogia from YES SECURITIES Limited. Please go ahead.
Yeah. Thanks so much for the opportunity again. Sir, we just wanted to know one clarification. The new steel plant of 1 million tons that we have, this is a blast furnace or this is through the DRI route?
No, this is a blast furnace route. See, we have no intention of getting into a coal-based DRI because it becomes very challenging to, you know, be cost effective in producing steel and compete with the big guys. It's a blast furnace route, which is a conventional route in India at the moment now. We did ponder over the gas-based DRI route, but looking at the current, you know, supply discussion and dependency on import of natural gas, you know, we thought it's better to go with the conventional blast furnace route, at least for the phase 1.
This will include the 1 million ton blast furnace, 0.7 million ton of coke oven as well, right?
No. The hot metal should be about 1.1.2 million tons. There's a 0.5 million coke oven, non-recovery coke oven. There'll be a 1 million sinter plant. Our idea is to 50% pellet and 50% sinter because we want to also hedge a pellet bet. We don't wanna keep, you know, keep selling pellets in the market. 50% pellet from the new plant will be going into the blast furnace and remaining steel complex, right from converter to the finished side.
Got it. Secondly, what sort of land parcel? I mean, we have roughly 452 acres, right?
Yeah. We have 450 acres, that is more than sufficient for the entire complex.
No. Well, yes. My question was here, what would be the scalability in the future if we had to go for a brownfield expansion? Would we have enough infrastructure from if we plan to move on going ahead post 2030?
See, we have left a certain space for a brownfield expansion. We have also identified nearby land which is adjoining to the current land. If we think we want to, you know, go for a brownfield expansion, we can always use that same parcel and buy a little bit of adjoining parcel to expand. To be honest, at the moment we are not thinking of phase II. We are just concentrating on phase I at the moment right now.
Got it. We continue to maintain that our focus will be long products because I think we also have a CRM complex. We still have had a full-fledged, you know, flat product.
The problem is, for a CRM complex, right? For a HR mill, the minimum capacity, which is, you know, technically and commercially viable is a 2 million ton mill because the width has to be, you know, 15 +. For a 2 feed a 2 million mill, we didn't have the hot metal. The entire CapEx would have crossed maybe INR 1,200 crores-INR 1,300 crores. We didn't wanna go that high. Secondly, even with the steel capacity announced by the big players, we already feel today India's market is oversupplied by HR coil plus import is always open, right?
Yes.
We thought instead of doing a CRM, you know, HR complex, let's just focus on to CRM, which is a value-added steel, and enter into a long product where we, you know, enter into the structures and, you know, other segments. That is the whole idea behind not going to a HR mill complex here.
Understandable. Thank you. Second question is could you please highlight how the next couple of years would look in terms of CapEx? What sort of debt numbers do we see coming up? With INR 7,000 crores, I think 1 is to 1 would be the debt equity, right?
Yeah. Yeah.
For debt from the other side.
The CRM, the battery storage, you know, we have already invested more than almost 40%, 50% in both the projects. This year, the CapEx on the steel side hardly will be about 10%, which will mainly go into account of ordering of equipments and in advance. The major CapEx which is gonna incur in steel will happen from FY 2028. FY 2028, FY 2029 will be the major money inflow into the steel plant. Apart from that, we are self-funded, you know, from everything from internal accrual. Whatever debt we have to take on will be happening from FY 2028 only on account of steel CapEx.
Got it. In a nutshell, if I have to assume for FY 2027, we can take INR 1,800 crore-INR 2,000 crore CapEx number, right? Would that be the correct way to think of it?
Yes. Including the balance of CRM, balance of your battery storage and little bit of solar, you can consider the CapEx of close to about INR 1,500 crores-INR 2,000 crores for FY 2027.
2028 onwards, it can probably go towards INR 2,500 and INR 3,000.
About INR 3,000 crores. About INR 3,000 crores FY 2028 and INR 3,000 crores FY 2029. Very correct.
Okay. Got it. That is helpful. Just one request I had. I think in our earlier presentations, we had a, you know, split of project-wide CapEx and the timelines and whatever CapEx we had incurred. If you could just bring back that from our next presentation, would be really helpful.
Sure. Well, very well noted. We will take care of that.
Thank you so much, sir. All the best.
Thank you. Thank you so much. Thank you.
Thank you. Next question come from the line of Kothari from Aequitas Investments. Please go ahead.
Hi, sir. Sir, I think in the last con call, we had guided that pellet capacity would be running at over 90% utilization, and we would be targeting around 4.1 million-4.2 million tons. I think what you guided that we would be looking at around 3-3.2 million tons. Any reason why we've looking at 3 million-3.2 million tons pellet quantity for this year?
No, no. There's a confusion. Pellet guidance for this year is 4 million tons. The iron ore volume, net usable iron ore for the pellet will be at 3.4 million tons.
Okay. That will be the captive one you were stating earlier. Okay.
Exactly, exactly. The pellet guidance is at 4 million tons this year. Iron ore guidance, net usable is at 3.4 million tons.
Got it. It would be the same mixer, three and one, sales and captive?
Yeah. See, captive remains the same. Captive capacity is about 0.9-1 million tons. There'll be no increment in captive capacity. The pellet merchant will be about 3 million tons.
Got it. As you had earlier rightly pointed out the increase in diesel cost that we've seen particularly. Can you just give an idea on the incremental cost it would accrue us in terms of mining cost?
See, diesel, the good thing is, see, of course, we have also invested in heavily into EVs in the mining as well, you know.
Yeah.
Loaders and excavators. Currently our major concern is on the transportation side because our entire iron ore comes by road. The diesel pricing on the rising side and looks to be, you know, at the similar levels for, you know, quite some time. We have started working on the EV, and we want to replace that with EV trucks ASAP. Currently the transportation is about INR 900. We foresee it can go up to INR 1,INR 150, INR 1,200 if the diesel prices continue to rise in the near future.
INR 1,150-INR 1,200. Okay.
Yes, yes.
And.
For short term. For short term definitely, yes.
Short term. Got it, got it. Sir, as you rightly pointed out that we're looking to transition to an EV fleet. Is there an estimate on what would be the fleet size that we'll be targeting and the amount that we will be committing to the same?
See, the amount of iron ore we need to move, at the full capacity, we need to deploy more than about 300 trucks or about 350 trucks.
INR 300. Okay.
At the full capacity. Yeah, 350 trucks. At a full site, CapEx should be more than about INR 350 crores.
Okay, INR 350 crores. Got it, sir.
Yes, yes. With the charging infra and other things, it should be about INR 350 crores at full scale.
Thank you. Participant has left the queue. Ladies and gentlemen, that was the last question for today. I would like to hand the conference over to the management for the closing remarks. Thank you, and over to you, team.
We would like to express our sincere appreciation for joining us on this conference call. We are confident that we have adequately addressed all your queries. Should you have any further questions or need additional information, please feel free to reach out our IR team at Go India Advisors. Once again, we sincerely thank you all for your active participation and unwavering support. Thank you.
Thank you so much, sir. Ladies and gentlemen, on behalf of Godawari Power & Ispat Limited, also Monarch Networth Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect.
Thank you.
Thank you.