Q4 24/25

May 14, 2025

Summary

FY2025 faced weaker government spending, lower realizations and Q4 inventory losses, while debt fell sharply. FY2026 targets include 25%–30% revenue growth, 16%–17% EBITDA margin and 4 lakh tons of DI pipe output.

Ladies and gentlemen, good day and welcome to Jai Balaji Industries Limited Q4 and FY 2025 earnings conference call hosted by Systematix Shares and Stocks. As a reminder, all participant lines will be in the listen only mode. If you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone, and you will get an opportunity to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Shweta Dikshit from Systematix Shares and Stocks. Thank you and over to you, ma'am. Good afternoon, everyone. On behalf of Systematix, we welcome you to the fourth quarter FY 2025 earnings conference call of Jai Balaji Industries Limited. We are joined today by Mr. Aditya Jajodia, Chairman and Managing Director, Mr. Raj Kumar Sharma, Joint CFO, Mr. Vijay Kumar Bagri, President, Finance, and Mr. Ajay Kumar Tantia, Company Secretary, to discuss the company's financial and operational performance for fourth quarter and FY 2025. I would like to thank the management for giving us an opportunity to host this call. Now I request Mr. Aditya Jajodia for his opening remarks. Over to you, sir. Thank you, Shweta. A very good afternoon to everybody. We are pleased to welcome you all to our Q4 and FY 2025 earnings con call. Our investor presentation and financial results have already been uploaded on the exchanges, and we hope that you had the opportunity to review it. Despite the industry-wide challenges, and particularly in an environment where there was a slowdown in the government orders in FY 2025, I am pleased to share that Jai Balaji delivered a resilient performance and continues to strengthen its core competencies. Our strategic emphasis on the value-added segments of DI pipes and specialized ferroalloys remains firm, and with steady progress being made to expand the capacities and capacity utilizations in these high-margin areas. Additionally, the board has approved a proposal to diversify our product offerings also into other pipe and tube segments also, an initiative which will leverage our existing portfolio and tap into new growth avenues. We are also making consistent headway in reducing our net term debt, further strengthening and enhancing the flexibility of our balance sheet. Before discussing the financial and operational performance, I would like to highlight the following. Strategic updates for Q4 and FY 2025. Firstly, the updates on the capacity expansion plans. We are actively delivering on our capacity expansion commitments. In Q4 FY 2025, our company successfully commissioned an additional 2.04 lakh tons of ductile iron pipe capacity, increasing the total capacity from 3 lakh to 5.04 lakh. A further 96,000 tons is slated to be commissioned by FY 2026. Also, in ferroalloys, the capacity is set to rise from the current 1.66 lakh tons to 1.9 lakh tons within the expansion schedule for completion in Q1 FY27. Capacity of TMT bars also has been increased from 2.6 lakh tons to 3 lakh tons due to debottlenecking CapEx. Additionally, one of the blast furnaces had already been revamped and commissioned, with the second expected to be completed by Q4 of FY2026, boosting the total hot metal capacity from 6.3 lakh tons to 7.5 lakh metric tons per annum. Also, the sinter capacity of approximately 9 lakh tons is expected to increase to 12 lakh tons by Q4 2026. For more information, you can please refer to slide number 13 of the investor presentation. Secondly, coming to the updates on the CapEx plan. We are nearing the completion of our INR 1,000 crore capital expenditure plan for the capacity expansion. Of this, approximately INR 822 crores has already been deployed, with the remaining expected to be made over the next 12 months. The entire CapEx is being funded through internal accruals, reflecting our strong financial discipline. For FY2026, we have provided a CapEx guidance of around INR 175 crores. The company continues to make significant progress in executing its net debt reduction strategy. We have successfully brought down our net term debt from INR 871 crores in FY2023 to INR 221 crores in FY2025. We are very pleased to share that our net debt to EBITDA ratio for FY2025 stands at 0.25x, substantially outperforming our earlier guidance of maintaining it around 0.6x as of March 31st, 2025. Coming to the operational performance. For FY2025, production of all the products showed an increasing trend except for TMT bars. The production for ferroalloys and DI pipes increased by 8% and 17% respectively, and sales for ferroalloys and DI pipes increased by 1% and 8%. On the realization front, realization for almost all the products showed a slight decreasing trend. On a quarterly basis, the production of DI pipes stood stable and ferroalloys dropped on year-on-year basis. Sales for both showed an increasing trend on quarter-on-quarter and year-on-year basis. Realizations showed a decreasing trend. Coming to the financial performance, on an annual basis, the revenue and EBITDA showed a drop due to sluggishness in the market. Despite the challenges, I am happy to share that our gross profit annually stood at around 14%. The margins, it was 26%. No, sorry. I just mixed up my numbers. The gross profit was 36%, the EBITDA was 14%, margins were 33%, and the return on equity was around 26%. On a quarterly basis, the revenues increased on quarter-on-quarter basis. However, EBITDA and PAT decreased. In conclusion, as we look ahead into FY2026, we are optimistic about the potential rebound in the government ordering activity. With this encouraging outlook, we are targeting revenue growth of around 25%-30%, EBITDA margins in the range of 16%-17%, and DI pipe production surpassing 4 lakh tons. We remain fully committed to leveraging our core strengths to drive sustainable growth and respond effectively to the evolving needs of both domestic and international markets. Backed by our enhanced capacities and strong financial foundation and an experienced leadership team, Jai Balaji is very well-positioned to create long-term value for all its stakeholders. We can now open the floor for question and answers. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shlok Bhartia from Swan Investments. Please go ahead. Hello. Good evening, sir. Thank you for the opportunity. Sir, I just had three questions. Sir, you gave the guidance for FY 2024 11 revenue. Hello? Hello. Am I audible? Now you are. Sir, what is the guidance for FY 2026 revenue and EBITDA? We have given a guidance of 25% increase in next year and EBITDA margin of 16%-17%. What we have achieved in last year, the previous financial year, was 14%. Sir, the DI pipes production volume was less in the FY 2025. Can you please explain the major reason for this? Are you confident about achieving the target on FY 2026? I do not understand what is the question because the voice is not coming clear. Hello. Can you repeat your question? Maybe a little louder. Sir, in FY 2025, you missed the DI pipe production volume. So what is your target for FY 2026, and will you be able to achieve it? We achieved 282,000 in FY 2025, and as per the internal assessment, we should be able to produce 400,000 tons of pipe in the next financial year, the current financial year. Okay. Thank you so much, sir. Thank you. Participants may press star and 1 at this time to ask a question. The next question is from the line of Manav Gogia from Yes Securities Limited. Please go ahead. Yes. Very good afternoon and thank you for the opportunity, sir. Sir, the first question is, on the ferroalloys division, we are currently taking a capacity expansion. If I recall, we were scheduled for this capacity expansion to get completed in early FY 2026, and now the presentation mentions it as Q1 FY 2027. Could you just highlight the reasons behind the same? Yeah. Actually, this project was a little bit delayed because of some very critical equipment, which was to be coming from China. So there were some issues at the Chinese supplier end. So some issues happened over there because what we were trying to develop here was slightly innovative, and it was one of a pathbreaking technology. So some changes were required from our end also and at their end also. So this has been delayed a little bit. Okay. Sure, sir. Sir, just following up on the ferroalloy segment, one thing I wanted to know is that our utilization rates are lower than what the current capacity is. We still continue to take some expansion plans for the segment. Can you just give me what sort of sustainable capacity utilizations are we targeting for the ferroalloy segment? Since we are making specialized ferroalloys, capacity utilization, we expect to be within the same range. It can also go down by a few percentage points as we increase the specialty grades of our products. Okay. The value goes up, but the actual production figures might go down a bit also, depending on the valuation. Okay. Sure, sir. And sir, just another follow-up question. It was much more on your opening remarks where you mentioned that FY 2025 saw that there was a temporary slowdown in the government orders. Could you give some details on the same, and what do you expect how it's shaping up for FY 2026? See, what had happened, in the last year, prior to the elections, the government was in a very, I will say, easy spending mode. Post-elections, though the same government was in place, but a lot of spending actually on the ground got a little bit constrained, and also because of the many social schemes which were floated by many of the state governments, a lot of money, as you all know, was diverted to these funds. Because of this, in some sectors, the spending actually slowed down. Now what we're expecting is that with the financial year over and with the new budget being announced, now accordingly, the government will be able to take a course of path correction to rectify these things, and the order book should be robust from here onwards. Got it, sir. Thank you so much. I will join back the queue for more. Thank you. Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Pujan Shah from Molecule Ventures. Please go ahead. Hello. Am I audible? Hello. Sir, you are a little out of place. Yeah, sure. Is it okay now? Yeah. Yeah. I think my first question will be on the industry side, also considering the JJM. We have seen that there was a slowdown, as you mentioned, Prithish, in your early remarks. You are not audible. Yeah. But recently, the government has also increased the allocation for JJM, roughly around INR 270 thousand crore. Do you feel any green shoots been happening on the grounds right now in Q1 FY 2026 onwards, and that could help us to get a good order book from your side? You are not audible. Sorry. Sorry to interrupt, sir, but your voice is breaking. Could you please move to a better reception area, Mr. Shah? Yeah. Is it audible now? Yes, sir. Please go ahead. Yeah. My first question would be on the JJM side. We know there was a slowdown in the JJM for the last few months, and recently the government also increased the budget and the CapEx for the JJM side. Is that the green shoots been visible or the more on the idea is to understand that the current budget which the government has allocated is sufficient to get the revamp in the JJM? Yeah, absolutely. Because with this budget, and if the money is actually spent on the ground, then this is enough money to cover the necessary demand and supply. Do- Actually, what has happened last year also, towards the second half of last year, over the last six months, the spending slowed down a little bit. But now the signals which we have from the market is that from here on, things will be better. Okay. Got it. Sir, recently we have seen that we are foraying into OPVC pipes. Just wanted to understand, as we understand that this is the replacement for the DI pipes. Just wanted to understand on a broader aspect. Few quarters back when we had a concall, the OPVC pipes segment was not been encouraged so much. What's the dynamic have been changed right now, and is that the adoption being very strong, or how's the situation right now? I'll explain. See, the stand which we have taken is that OPVC pipes, like in India, we have a lot of pipe materials. We have LDPE, we have PVC, we have OPVC, we have LSAW, we have SSAW, we have steel pipes, we have cement pipes, Hume pipes, we have DI pipes also. Every pipe has a different application and a different life cycle. In DI pipes, we will continue to expand and we will continue to do it via our main business. This OPVC pipe, this is a new alternate material which has been developed. In all probability, this demand for this is now been tested, and this is not going to eat into the requirement of ductile pipes. If at all it is going to have some market share, it will take something from the steel pipes, mostly from the plastic pipes or the HDPE pipes. Because the pressure resistance of the OPVC pipes, it is very low. For very high pressure applications and for high life cycle applications, it will still not be suitable. But the urge to go into this was that most of the buyers of these ductile iron pipes are the government bodies, and also the buyers for the other pipe materials also, like OPVC or plastic or steel, et cetera, it is also the government. The company saw that it may be an opportune time to enter another segment of pipe also, so as to ultimately enter more aggressive products to the customer. Right. Sir, I just wanted to understand more on this part. As you know that there is a constraint in the supply of equipment right now because one of our key supplier, which is a Spain technology, Spain player, they have a supply crunch. When are you planning to expand this space and what CapEx we will spend in this area in terms of lines, in terms of MTPA? To be very honest, our current capacity for OPVC is very small. We are starting with initial CapEx of less than USD 2 million, and our total CapEx will not be over INR 100 crores across a few years. So that's a very small module, and the expansion in OPVC is not very large. The basic idea was that we have some marketing synergies, and we have loyal customers who want DI as well as some OPVC pipe for the projects. So we're having a basket of products to cater to the customer needs. Right, sir. The technology what we have procured is a domestic, right? Technology, we will not be comfortable discussing now. Once our production is online and once we hit the market, we'll be able to inform you better about that. Okay. Got it, sir. I will join back in the queue. Thank you so much. Thank you. Participants who wish to ask a question may press star and one now. The next question is from the line of Rudraksh Raheja from iThought PMS. Please go ahead. Thanks for the opportunity, sir. I wanted to ask about which sizes is this OPVC competing with DI pipes, and what percentage of DI pipes market share can be taken by OPVC. Hello. Yeah, so the OPVC pipe facility we are putting, it is just one line that too for small dia. As mentioned earlier, we do not expect OPVC to largely eat into the market share of DI. We expect this to first enter the market as a replacement for the HTP pipes. Obviously, saying that there might be a very small portion of DI replacement, but that is not something which is our target goal. Our goal is to again, cater to our customers who want both DIs and OPVCs. Got it, sir. Got it. And sir, compared to DI pipes, does installation of OPVC cost more or less? And if you could highlight a number for us. See, that numbers we are not aware of. But the entire lifecycle assessment cost, which the government had said, was that the steel DI pipes is the cheapest pipe material in India for that pressure application. Okay. Does that answer your question? Yes, sir. Compared to this, if you could highlight how much would be the cost difference? There is no such comparison because OPVC is of the pressure rating of less than 15 kgs, whereas a DI pipe pressure rating are more than 50 kgs. You can't have a cost comparison directly. Generally, a plastic pipe always will be cheaper to the steel pipe, but you can't have a cost comparison. Understood. Sir, regarding demand of DI pipes in the current market, has government funds started to release? After the budget, now the funds will be released in a couple of months, and the demand has already started coming up, and now the dispatch is also start happening. Good to hear that, sir. Good to hear that. Sir, what is the profitability EBITDA per ton in DI pipes today? Where do you see this settling once demand revised? Just a minute. Well, for the last year, FY 2025, the ductile iron pipe, we had EBITDA per ton of INR 19,000. It has come down slightly, but what we assume over here and we budget also, that this is probably the lowest level and things should improve from here. Where would you go this number? Any upside that you see potential that we could attain here? Upside, if the market is good and say the demand comes back and whatever committed expenditure that the government has announced, if that is spent, it should be somewhere in the region back up to 23,000, 24,000, which we had already achieved in first two quarters of this previous financial year. Understood, sir. What is our capacity utilization in DI pipes at this point of time? Just give me a second. I will come back. Hello? Yes. Last year's utilization on a weekly average basis was over 90% because the plant was commissioned in the second half. The current year, we are producing approximately 80%. 80%. Got it, sir. Got it. Sir, are we planning to export DI pipes as well like we do with ferroalloys? Yes, of course. We are also exporting DI pipes, and we will be expanding further on the export market as we are doing for ferroalloys. Understood. Sir, could you throw some light on your raw material prices? You could let us know average iron ore and coal costs for FY 2025 and how is it trending in this Q1 FY 2026. Our major raw material, as we know, are coking coal and iron ore. Yes, sir. Our prices are more or less flat. They might be different from maybe 200 INR per ton, plus or minus on a Q1 comparison, but on average, more or less flat. Coking coal prices, we are projecting to fall by $10 compared to the previous year. Got it, sir. Got it. Thank you. Thank you. Before we take the next question, participants who wish to ask a question may press star and one. The next question is from the line of Radha from B&K Securities. Please go ahead. Hi, sir. Thank you for the opportunity. My question was, you mentioned to the previous participant that government is the key customer, and the customers now want both DI and OPVC. Just wanted to understand which states are demanding OPVC currently, and in OPVC, how much capacity are you targeting in the next three years, and how long will it take for you to set up the capacity? On these marketing questions, we can answer later, but currently only a couple of states have already introduced OPVC. This is also a replacement for plastics. In the near future, on the capacity, once we start, we will be ramping up slowly as we told you earlier. Once we can count maybe the next con call we will take you the capacities what we are planning ahead. Okay. Secondly, apart from OPVC, are there any other pipes that we are looking into? If yes, how much are we planning to invest there? Our major focus will be DI pipes only. As we have told earlier that from current production levels, we are further expanding in FY 2026 by 1 lakh ton. So our installed capacity from 5 lakh tons will be 6 lakh tons in FY 2026. Our main focus will be ductile iron pipes only. Okay, sir. Thank you, and all the best. Thank you. Thank you. Participants may press star and one to ask a question. The next question is from the line of Kaustubh Shah from Wolfwood PMS. Please go ahead. Hi, sir. Thanks for the opportunity. I had one question on the margin front. Basically, our Q4 margins have come down. Obviously, the realizations are down and the raw material cost is up. We are guiding for a 16% EBITDA, whereas 8% EBITDA is what we are dropping Q4. What will change in the ensuing year, which gives us confidence that this will turn around, both from the realization front and the cost front? That was my first question. If you look at four quarters of the last financial year, you will see the answer will be in front of you only. The prices have come down by INR 5,000-INR 6,000, and that is only because of the demand being low. Once the demand is back, the prices are going to go back to the same level. As we are talking about only quarter four, the margin has come down to 8%-9%. It also includes the inventory losses. When the prices come down, there are inventory losses which also have to be booked in the quarter itself. It is a cumulative impact of the prices coming down and some of the inventory losses that we had to book. Okay. Got it, sir. This was helpful. Secondly, on the working capital front, we have seen the working capital increasing in the Q4. My question is whether it will be at this level only, or we see working capital again, coming up. Was this more of a Q4 phenomenon? I just wanted to understand. No. Once the demand is slightly low and we have continued the production probably at 90% of the same level, the inventory pileup is there. We have orders. Orders have been placed. They have to pick up the quantity. We have to raise the LCs and BGs. We are waiting for that. Once that is completed, the orders will pick up. The inventory buildup is there, it is inspected, and it is waiting for delivery. Okay, great. Yeah. And the last question from my side, you mentioned to some previous participant regarding the ferroalloy CapEx being delayed because of the machinery or non-critical machinery not coming from China. But now because that problem has been sorted and everything is on track for the CapEx now? The problem has been sorted, but the supply chain will take some time to deliver. I'm expecting to start the plant by Q1 of next year. Okay. Thanks. Thanks for answering my question. That's it from my side. All the best. Thank you. Thank you. Before we take the next question, ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Divesh from Finrest Capital. Please go ahead. Hello. Hello, sir. Am I audible? Yes. Congratulations on a good set of numbers, sir. My first question is related to the EBITDA margin that you have said about 16%-17%. So what is the strategy for this? How will you clock this kind of margin, sir? This 16%-17% margin, and currently for the last year it is 15%, and on the higher side it was 19%, 20% also for some of the quarters. So 16% is not a number which is not achievable. Okay. This is the estimation that the management has taken. It will be achieved in the current financial year as we think. One quarter here and there. Okay. Okay, sir. My second question is regarding the receivables and payables. It has been increased and it is affecting our working capital. The working capital has been increased almost by 2x, sir. To be very frank, what has happened is, some players who are some of our buyers, their payment from the government is also delayed. Okay. Some of the government payments are also delayed, and it always happens before the budget and gets resolved once the new budget is in place and the disbursement starts to happen. This should come down by the end of this quarter. Okay. Okay, sir. Sir, if you can provide a segmental EBITDA per ton for your segments, sir. I have the yearly numbers in front of me. Okay. Sponge iron per ton. Pig iron was INR 4,000. Ferroalloy on a blended basis was INR 20,000. Pellets, MS ingot was INR 2,000. TMT bar was INR 4,000. And ductile iron pipe was INR 19,000. Okay, sir. And sir, my last question is regarding depreciation, as our plants are getting commissioned. So what could be the depreciation going forward, sir? Our current depreciation, for the last financial it was INR 63 crore. INR 94 crore. Ninety-four. It will be INR 64 crore in FY 2023-2024. Once all the plants are commissioned, it can go up to INR 105 crore-INR 110 crore. An increase of INR 10 crore-INR 15 crore. Okay. Okay, sir. Thank you. Thank you. That's it from my side. Thank you, sir. Thank you. Participants may press star and one at this time to ask a question. The next question is from the line of Shweta from Systematix Shares and Stocks. Please go ahead. Hi. Good afternoon. Thank you. Sir, a couple of questions. First, relating to the DI pipe expansion, could you just verify, we're expanding DI pipe to 660,000 tons or 600,000 tons by the end of FY 2026? It is six hundred thousand. 600,000. Sir, it was earlier planned to be 660,000 tons. We have reduced two of the spinning machines, which are the higher dia side, and we have finalized that only. Over to you. Understood. Sir, second question is on your capital allocation policy going forward. Because we are yet concluding our existing CapEx and our target, we have been on track in terms of debt reduction. But there is still residual CapEx to be done for this DI pipe expansion as well as ferroalloys also stands extended to Q1 FY 2027. Could you just highlight why as of this point, planning into OPVC, why the existing CapEx is already going on? When are we expecting to break ground in terms of the OPVC expansion? Also, what can be our annual CapEx for the next two years, and how are we looking to fund it, and what are our debt targets for the next two years? Madam, this was like too many missiles and too many drones at the same time. It was like a swarm drone attack. Okay. If I hear you correctly, one by one, but I think in enough detail. The most important thing is that, madam, OPVC, it has been giving lot of interest today, I think in today's conference. OPVC, the investment which we are making it is very negligible. As we just mentioned, it is around INR 25 crore, INR 20 crore only. It is a very small investment just to see that what is the potential of this material to replace the plastic. If at all we can open up a new segment in the near future or not. If succeed, then probably we will be looking at something next year, if not, then we see the viability, otherwise, we may drop it entirely. As of now, we can consider it to be a very trial product for Jai Balaji. Let us not attach a lot of importance to OPVC at this moment of time. Number one. Number two, regarding the CapEx plans. The CapEx plans, out of the balance CapEx plans, it is only INR 170 crore-INR 180 crore it is now pending. As we have already declared earlier also, this entire CapEx, it has been funded by internal accruals fully. You must have seen in our cash flow statement, that whatever cash flow we generated last year. Out of that, after repayment of the term loans, whatever remained, 50% of it went into enhancement of working capital, 50% of it went to new expansion, into the CapEx. This year, the CapEx figure it is so low is that the majority of the money will be going firstly towards, the waterfall will be the repayments of the debts. The second will be complete the CapEx. Also wherever it is required, we will be enhancing the working capital also to improve the profitability. I think I answered your question. Is there anything else to be answered on this? Out of the INR 170 crore-INR 180 crore CapEx, this majority of it is likely to come this year itself. That is, in financial year 2026? Yes, the majority will come this year only. Okay. What is your target net debt number now? The remaining receivable debt is only INR 221 crore. The CapEx is INR 135 crore. That adds up to INR 350 crore, INR 375 crore. That we will phase it as per the cash flow availability. Second, what has also happened, the working capital, the inventory, and the debtors has absorbed a lot of surplus requirement was there, and we have absorbed some of the cash. Once that is released, it will be available. Understood, sir. Thank you so much for the detailed answers. You must see the historical numbers. Last year, we did a cash flow EBITDA income of INR 800 odd crore. Out of that, INR 350 has been spent in debt repayment, plus minus INR 5 crore. INR 350 has been spent in CapEx. Balance INR 100 crore is for working capital increase. The same thing is going to happen. We have a budget of INR 221 crore. Out of that, approximately INR 175 will be paid in the current financial year, and the balance in next financial year. As far as CapEx is concerned, it will be INR 175, even if we have to do the entire CapEx. Both adds up to INR 350 crore. Last year and previous to that year, we have done a cash flow EBITDA of approximately INR 850 crore of average. I think that answers your questions. Yes, sir. Thank you so much. Thank you. Participants may press star and one to ask a question. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Hello. Yes, Saketji. Namaskar, Adityaji. Thank you, sir. Thank you to the team, Sharmaji, for providing the opportunity. Sir, firstly, as you alluded to the fact that lot of time has been spent on OPVC. Sir, if you could just give firstly on the DIP landscape currently, sir. Currently, India capacity here, currently, taking the entire geography, north, south, east, west, and utilization levels for the industry and the new capacity that we are anticipating for the current two financial years. If you could give us a thought process firstly on that. Currently, the India capacities in the last 2 years have been the same, output has been the same. Some additions were there, but due to the funds scarcity, they couldn't materialize in terms of output. Seeing the current numbers and the current requirement of funds and everything, I doubt any further expansion is going to happen in the near future. So only the existing players which are there will be doing the work. No new players are expected soon. One more point to add. As we mentioned in the last phone call to you only, Mr. Saket, you had asked, as I remember. To put up a new capacity of DI plant would mean a very huge CapEx. Entire steel plant has to be set up from behind, it takes a lot of time. It is a very time-consuming process of 2 years, at least for 3 to 5 years, and also it requires a huge CapEx. It is not that somebody would imagine that additional has to be done and it will be done in 6 months or a year. So existing players who are able to do brownfield, those who have plants are able to do it. Apart from that, no one has a special plan and it is not going to come immediately. Okay. Translation is okay. I'll just change the language. What is happening is that in the immediate future, we are not foreseeing any new players entering into the market, and the existing players also, whatever they have announced, whatever is in the way of being added, that will be added. As far as we look at it, what you asked in the next 2 years, probably another capacity addition of say around 12 lakh to 15 lakh tons will be added at most over the next 2 to 3 years. Okay. And sir, as you also mentioned that there was some slackening of response from the government side in terms of order tendering and release of funds. Post the budget and the new financial year, have you received any further new orders in any of the schemes? How are the realizations currently shaping up in terms of the raw material prices being softened? How have the price trends been for the DI pipes since realization? See, in terms of new orders, most of the orders are in the pipeline, and all the parties are ready to place the orders. They are also realizing that it is a very good time to place the order. What has happened is that for the last 3, 4 months, the fund flow to these particular projects and to the infrastructure contractors, it has been actually very slow. You might have seen that even in Maharashtra. You must have read in the papers only. Just for an example, is that the Maharashtra government is withholding contractors' payments, whether be it in pipe projects or whether be it in water projects or whether be road, whatever. There has been a slowdown of spending little bit. But now after the budget, now we are expecting that in the month of May and June, things will be normalized from here onwards. With that, the order flow should be more than normal, because the last 3, 4 months, order booking has been slack. From here, it should be picking up. In terms of realization, because of the slow inflow of orders, naturally, the realizations at this moment of time prices have come down to a slightly lower level, which we feel is that we are very close to the bottom. As soon as the funds are released and the demand gets released, prices should come up. But the advantage which we have is that we are a very low-cost producer, so the drop in prices by 3%, 4%, 5% does not bother us much. This is something which we always factor when we are considering the average margin. We have not taken a very aggressive margin projection. Okay. So for the new orders, where we are tendering now, we are seeing 4%-5% lower bid than what the average had been earlier. This is what the understanding should be? By and large. Somewhere 4%, 5%, somewhere 6%, that's it. Okay. Correct, sir. Sir, now coming to some of the questions for the financial part. Firstly, sir, on the tax front, we are only paying closer to INR 4 crore in terms of the direct taxes as the cash flow speaks. If you could just explain to us the current advantage we have and when we will be paying the max taxes and some clarity on the same. As far as cash flow of the tax is concerned, we started the last financial year with 1,000 crore carry forward tax losses. Out of that, 750-800 crore has been consumed, and still we have started this current financial year with a carry forward tax loss of 250 crore. After the profitability of 250, it will be normal taxation. Right, sir. Lastly, on the capacity addition. For this financial year, sir, we are expecting tonnage closer to 4 lakh tons for the DI pipes on a capacity of 5 lakh. This is what you have guided. There also what we are trying to say is we have announced a conservative number. We will see how the market moves in next two quarters, three quarters. We will be meeting every quarter. If there is any adjustment to be made to that number, we will definitely make it. Okay. Sir, and last point, one of the players in the industry in the earlier call was also alluding to the fact of coming up with HAM type of projects where equity would be there for the companies who will be participating in the DI pipes procurement part. Have we heard anything in the new tendering process wherein the center share is going down and the HAM type of story, which is there in the road and all, are also to be replicated in the DI pipe model also, sir? Any color you want to give on the same? This is something new to us, but the HAM is a very long story, and it has been discussed in our past many years with many departments and tendering bodies. But till now in India, this HAM is not a successful model yet, and I doubt that any of the competitors, any producers would be liking to go ahead with the HAM scheme. Lastly, sir, so much has been spoken about the government finances strain and diversion of funds towards other non-productive activities, quote-unquote, if I may use so. Sir, do you think that the best of the time for this Jal Shakti, Jal Jeevan scheme or the interlinking, which is not even the sectors we have not touched. The best time is back for us or, sir, this scheme's benefit to get to this place is forward. Is the best of time for the DI pipes in terms of margins, in terms of the availability of orders is behind or now things may look better from here. Also on the interlinking of river part of the story, if you could just share your thoughts in terms of the Ken Betwa project and the others, which we can see in the website of the government of India. Where are things in these two aspects, sir? If you could just clarify. As you have rightly said that there is a lot of scope coming up. The last work has started in the entire country. On a pan-India basis, people know that the government rule of the JJM is not going to end soon. This is the reason JJM has been extended till 2028. If the state funds are released from the center, the equivalent funds will be released from the states as well. There are a few major states where above 40% of tap connections are still pending. Apart from JJM, as you have said, interlinking projects, Ken Betwa projects have already started procuring pipes and orders have been placed with the contractors. Further procurement of pipes will happen soon. Apart from the interlinking of rivers, there is also AMRUT 2.0, where there will be further funds coming up in this budget. INR 10,000 crores have already been allotted in the AMRUT scheme. Irrigation is one major part where you will be seeing demand coming for DI pipes. We are also working ahead to work on the power and the industrial belt, where you will see that DI pipes will be further used in the power industry and in the industrial part as well. There is a lot of scope left which can be explored. Yes, sir. Thank you, sir. I will join the queue for two more questions. Thank you. Thanks. Thank you. The next question is from the line of Pujan Shah from Molecule Ventures. Please go ahead. Hello. Thanks for the follow-up, sir. If we wanted to break the DI industry into two parts, let's suppose if the industry is under 400 MM versus above 400. Can you give us the actual size and the segment or market is growing between both the things? This is a detailed question. As per the tender mix which has happened in the past year, it is going to happen the same way. There are different areas, sir, where you have the rivers coming to the main segment, there's bigger pipes or smaller pipes. The ratio remains the same. It is on the projects and different sites where the demand will be coming up. We can give you a detailed answer once you mail us your particular query. We can give a detailed answer later. Because there are tonnage, there are meters. It cannot be given across the call. You can give me a detailed question, we'll answer your query. Sure, sir. Done. Sir, just wanted to understand a broader aspect. Is that ratio would remain at a 50/50% considering the last year's tendering? It cannot be commented. Okay. It's a very typical marketing question. Our business development team will associate with you and give you the actual answer. Sure, done, sir. We'll connect offline. Thank you, sir. Thanks. Thank you. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Yes, sir. Sir, if you could give us some color on the order book, currently, sir, pending order book for DIP, and our expected tonnage for the ensuing quarter, sir. In the current order book in hand, we already have 1.45 lakh tons order in hand. As I have given you an annual target of 4 lakh tons, we are reaching that. As soon as the funds are released from the government, the capacity and the output will be increased on a month-to-month basis. Okay. You also have confirmed that for the first 45 days of this current financial year, we haven't bagged any fresh orders in DIP, the order booking. Yes. We have done order booking for the first 35 days also. Okay. In that case, the pricing is 5%-6% lower than the previous quarters. That is what you are factoring in. Or if you could give us some color how the pricing has been for this current financial year. Just wait for the quarter. 35 days orders have come. We cannot disclose the exact pricing at which we have taken the order, but on a quarter-to-quarter basis, the 5%-6%, there is a reduction of prices. Do not worry, whatever projections we have done, they are conservative figure on a year-on-year basis. So the prices are already at a bottom level. This will improve as the funds come up and further production are increased. Got it, sir. Sir, on a Q-on-Q basis, when we look at our financials, we find the other expenses have moved up from INR 298 crore to INR 331 crore. Line item, other expenses. Can you explain the reason? When we compare Q-on-Q, any one of items we have, sir, that we need to factor? That we have to go in details. I will not be able to give you the answer right now because I do not have the exact breakup in front of me. Okay. Then I will take offline and speak to the team. Tomorrow morning, I will be happy to answer. I will take forward, sir. Thank you once again, sir, for elaborate discussion. We hope, sir, that things do start trending towards better for industry going ahead, sir. Thank you. Thank you, sir, and all the best. Namaskar, sir. Thank you. Thank you very much. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you everyone for joining the call today. We trust that we have addressed all your inquiries to your satisfaction. In case you have any remaining unanswered questions, please don't hesitate to contact our investor relations advisory. They will be more than happy to assist you further. Thank you. On behalf of Jai Balaji Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.