Q4 23/24

Apr 25, 2024

Summary

FY24 set records for revenue and profit as margins and debt metrics improved. Capacity investment and value-added products underpin FY25 growth and margin targets, while raw-material volatility and project execution remain key considerations.

Ladies and gentlemen, good day and welcome to the Jai Balaji Industries Limited Q4 FY 2024 earnings conference call hosted by GoIndia Advisors. 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 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 Ms. Sana Kapoor from GoIndia Advisors. Thank you, and over to you, ma'am. Thank you, Ray. Good afternoon, everybody, and welcome to Jai Balaji Industries Limited Q4 and FY 2024 earnings call. We have on the call Mr. Aditya Jajodia, Chairman and Managing Director, Mr. Raj Kumar Sharma, Chief Financial Officer, Mr. Vijay Kumar Bagri, President, Finance, and Mr. Ajay Kumar Tantia, Company Secretary. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request Mr. Aditya Jajodia to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir. Thank you, Sana. A very good afternoon to everyone. We are very pleased to welcome you all to our Q4 and FY 2024 earnings conference call. Our investor presentation and results have already been uploaded on the exchanges, and we hope that you have had the opportunity to review it. As you may be aware, Jai Balaji Industries is an integrated steel products company specializing in value-added products like ductile iron pipes and specialized ferroalloys. Our journey has witnessed a remarkable turnaround driven by resilience and hard work, leading to record-breaking performances. In Jai Balaji 2.0, our goal is to boost margins by focusing on revenue growth from ductile iron pipes and specialized ferroalloys, and implement cost-cutting strategies, improving operational efficiencies, and also achieving a net debt position between the next 15 months. FY 2024 has been a very eventful year for us. We have achieved record high financial performance, marking the highest ever in the history of our company. Before discussing the financial and operational performance, I would like to highlight the following. Strategic updates of FY 2024. Net debt free in the next 15 months. The company is making a significant focus in its net debt reduction strategy. In FY 2024, the net debt decreased to INR 398 crores from INR 871 crores, marking a reduction of 54%. It is worth noting that our current net debt to EBITDA ratio stands only at 0.4 as of March 31, 2024, thus performing better than our guidance of maintaining 0.6 net debt to EBITDA. This debt is associated with Tata Capital Limited, and we are optimistic that within the next 15 months, we will achieve our goal of becoming a net debt-free company. To update you all on the capacity expansion and the CapEx plan of the company, we had earlier announced a CapEx plan of around INR 1,000 crores. Out of this, around INR 497 crores has already been incurred, and the balance INR 503 crores is expected to be incurred in the next 15 months. All this CapEx is being done through internal accruals only. I am extremely delighted to share that we have made a significant improvement towards achieving our capacity expansion plans. Capacity of DI pipes has been expanded to 300,000 tonnes compared to 240,000 tonnes last year. Furthermore, 140,000 metric tonnes, that is the balance of phase one, and 220,000 metric tonnes, that is phase two, is expected to be commissioned in FY 2025 and FY 2026 respectively. The capacity of DI pipes will finally reach 660,000 tonnes in the immediate future. The ferroalloy capacity is also being increased from 140,000 tonnes to 166,000 tonnes. The balance capacity of 124,000 tonnes is expected to be commissioned by FY 2025. In the blast furnaces, one of the blast furnaces has already been recommissioned and hence the capacity has increased to 300,000 tonnes up from 500,000 tonnes of last year. The completion of the second blast furnace is anticipated by the next financial year. Additionally, the capacity of sinters has been raised by 300,000 metric tonnes to 900,000 metric tonnes, with the remaining 300,000 metric tonnes slated for commissioning in FY 2025. For more information, please refer to slide 13 of the investor presentation. I would want to highlight here that we are focusing on enhancing capacities for ductile iron pipes and ferroalloys because we believe that there is a very strong demand in these sectors. We expect that the DI pipes industry to grow at 13%-15% CAGR in the near future. The flagship mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for Infrastructure Development Plan, which has been promoted by the government, has led to increased demand of these pipes, and Jai Balaji is also contributing to the same. Currently, we have around 9%-10% of the ductile pipe market share of India, and our aim is to reach 18%-20% of the market share post our capacity expansion plan. We also manufacture special grade ferroalloys, which is grown at significantly higher premiums compared from ferroalloy prices. We are one of the largest producers of specialized ferroalloys in India and export to more than 40 countries in the world. Right, Satish? The company is also focusing on cost reduction measures through enhancing operational efficiencies. This includes owning three railway sidings and adding captive power facilities. Now, coming to financial performances. For FY 2024, the production of TMT bars, ferroalloys and DI pipes showed an increase of 18%, 12% and 14% to 2.5 lakh, 1.2 lakh and 2.4 lakh tons respectively. The sales volume of TMT bars and DI pipes showed an increasing trend of 22% and 14% year-over-year to 2.5 lakh tons and 2.4 lakh tons respectively. We also saw an increase in exports of special grade ferroalloys to over 40-plus countries, with more than 50% of these being exported to three European, American countries and Japan. The realization of both ferroalloys and DI pipes increased significantly to INR 178,000 tons for ferroalloys and INR 77,000 per ton for ductile iron pipes, which is an increase of 28% and 12% year-over-year. The production of ferroalloys and DI pipes increased 19% and 6% year-over-year to 33 KT and 16 KT. Sales volume for them was similar to the volumes in Q4 2023. Realization of ferro alloys and ductile iron pipes showed an increasing trend of 23% year-over-year to 188,000 tons and to 83,000 tons for pipes. We are also thrilled to share that Jai Balaji has achieved its highest ever revenue, highest ever EBITDA, and highest ever PBT at PAT for this financial year. Revenue for this year increased by 5% year-over-year to INR 6,414 crores and INR 75 crores, up 71% year-over-year. EBITDA margin also increased to 15% compared to 9% last year. PAT also showed a very significant increase of 1,422% to INR 880 crores compared to only INR 58 crores earned last year. Similarly, PAT margin showed a jump from 1% in FY 2023-2024 to 14% in FY 2024. Revenue for this quarter increased to INR 1,846 crores, up 7% year-over-year. The adjusted EBITDA showed a slight drop of 3% to INR 257 crores year-over-year because of certain provisions taken in the books in this quarter only. The PAT increased significantly to INR 273 crores up from losses reported in Q4 2023. The PAT margin also grew to 15% from -1% in Q4 2023. Overall, the performance in FY 2024 has been outstanding and we at Jai Balaji are ready for the next financial year. For FY 2025, anticipate revenue growth in the region of 25%-30%, EBITDA margins of around 17%-18%, and the net debt to be reduced to a range of around INR 225-INR 250 crores. The capital expenditure is also expected to be in the range of INR 200-INR 250 crores, and we expect our ductile iron pipe production to exceed 4 lakh tons. With a focus on increasing the contribution of value-add products for margin expansion, we expect DI pipes to contribute 45%-50% and ferro alloys to contribute around 35% of our total volumes by FY 2025-2026. In conclusion, I am very confident that Jai Balaji Industries will continue to grow as a resilient organization with a very strong growth trajectory. We can now open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch-tone telephone. If you wish to remove your phone from the question queue, then press star and two. Participants are requested to use hands-up while asking questions. Ladies and gentlemen, we will wait for a moment while the questions assemble. To ask questions, please press star and one. The first question is from Japinder Manya from Svan Investments. Please go ahead. Good afternoon. Thank you, sir, for the opportunity, and congrats on a good set of numbers. Sir, for FY on your two segments, DI and ferroalloy, we are expanding capacity and we are confident that industry is likely to grow a healthy double digit growth. Can you throw some light in terms of what was the EBITDA per ton in both these segments in Q4 vis-a-vis Q3, and how did we enter into financial year FY 2024? Hello? Can you please repeat the question? You are not audible. Sir, now audible now? Now you are audible. Yeah. We just wanted to understand the EBITDA performance, the EBITDA per ton for the ductile iron and the ferro alloys in Q4 vis-a-vis Q3. Given the strong growth that we are seeing in ductile iron, where our major competitors are also increasing their capacity, how do we see your profitability panning out in FY 2025, 2026 once your capacity comes on stream? Answering your second question first. The competitors are expanding capacity because the demand for this over here in India for the next five to 10 years is extremely robust. There is a huge capacity of this pipe in the country because of the huge infrastructure road that we have there. Keeping this in view, many of the competitors also would be expanding capacities. Naturally, as we have mentioned that we are having our current market share of around 9% to 10% only right now, and we want to increase it to around 18%, 20%. Keeping this objective in view, we are expanding our capacities. One thing I will add over here is that when we compare ourselves to the cost. In terms of cost, our facilities is one of the most integrated in the ductile pipes among the country. We have everything there. We have all the facilities located in a single location, and our cost structure is very conducive. In the first quartile, we are one of the lowest producers in the first quartile. Even in the realizations, our realizations are slightly higher than our peers, I would say, because of faster deliveries, because of better quality, and because of very personalized services by our marketing teams. In terms of margin you ask, which in percentages, in ductile pipes we have a margin of around 22%, and in ferro alloys, specialized ferro alloys, we have a margin of around 25%. Is this margin is expected to sustain? Yes, margins absolutely are expected to sustain. Because as I also mentioned, other than expanding the capacity, what we are also doing is that we are also undertaking many cost-cutting measures in our Ferrous pipe factory, you will see that. So in these cost-cutting measures, the capacity of the blast furnace has been expanded. The capacity within the static casing has been, the coke has been reduced, the fuel oil has been reduced. Also sinter plants have been added. Also we are adding a substantial capacity of green power to the works. And to the rail-based material we get it from. So the cost also will come down and with increasing volume, overhead also will come down, marketing expenses will come down. So although we are expanding this, the margins will be generally satisfactory for the group as well. When you said about the cost-cutting initiatives that you have taken, and probably you are starting up the railway siding and the captive power plant. So incrementally, how much cost saving that we can see into the overall company? What is the portion? Estimates what we are talking about is that on the metals produced, entirely, we are looking at a cost saving of approximately INR 3,000 to INR 4,000 per ton on these hot materials. Oh, wow. Okay. And sir, one more question on the ductile. When you indicated that the margin is around 24%, 25% for ductile iron. What was the same in the last quarter, Q3? Q3, the margins must have been in the region of around Around 3%-4%. Around 20%, 21%. Okay. We have seen almost 300-400 bps higher in this quarter. Sir, last question is on your employee cost for FY 2024. If you look at the overall costing, employee cost has increased by over 20%. What was the main reason behind that? What happened in the first three quarters, the projects which were being capitalized, the expenses of the employees were not transferred over there. The entire months and capitalization were done. Approximately INR 8,000 capitalization was taken out of the employee cost, and it was capitalized. Therefore, this quarter the employee cost is lower by INR 8,000. Okay. Will this run rate continue going ahead? No, it will be the same region. Annually, if you look at it will be in the same range. Sure, sir. Thank you, sir. If I have other questions, I will come back in the queue, and all the best. Thank you. Participants who wish to ask questions, please press Star and One. Next question is from Shweta Dixit from Systematix Group. Please go ahead. Hello. Thank you, sir, for the opportunity. Question is regarding the EBITDA per ton margins. Could you reiterate the margins for DI pipes and ferro alloys for the quarter in terms of EBITDA on a per ton basis? Also, post-expansion, how are we looking at the margins evolving? By FY 2026, 2027, what can be the EBITDA per ton expected out of these segments? I missed your guidance for FY 2025 and 2026 for the segments, volume guidance. Could you please repeat that? Thank you. Madam, as we said that the margins in the ductile iron pipe could be in the region of around 22%-25%. In the specialized ferro alloys about 7%. In terms of volume guidance, for ductile, we are looking to produce around 4 lakh tons in the forthcoming year. That is FY 2025. In FY 2026, we are looking to produce around 6 lakh tons. As far as ferro alloy is concerned, we are looking to produce around 1.5 lakh tons in the forthcoming year. With the capacity going up to 1.9 lakh tons, we are supposed to produce 1.9, 1.8 lakh tons in the FY 2026. Sir, what is the outlook on how the steel prices have remained range-bound, barring some uptick in the prices in this quarter. If the prices fall further, what is your view on it? Will we still be able to maintain margins or what could be the impact of that? Madam, one thing I would like to Hello. One thing you may like to emphasize is that we are making steel products now. We are now no more a commodity company by and large. As I mentioned earlier in the presentation also, that our sales of specialized products were only 25% two years ago, which has increased to 50% this year. Going forward, we are looking to achieve 75%-90%. Basically, what we are talking about is that we are making products out of steel. If you are assessing us. We are no more a commodity player. As such, if you are saying that as the prices of the commodities going up and down, it will not be impacting the margins. There will be a long-term adjustment in the final prices of the finished products, depending upon the cost of production of steel or the sale price of steel. The margins will remain intact. That is our point on this. Okay. Thank you, sir. Thank you. Participants who wish to ask questions, please press star and one on your telephone. The next question is from Siddharth Jain from YES Securities. Please go ahead. Hi, good afternoon, sir. Firstly, congratulations. A couple of questions from my side. You have already mentioned your guidance for FY 2025 in your presentation, but if you could just give us some more details on the same, that would be helpful. And if you could guide on your ferro alloy production numbers for FY 2025. I will answer you about the ferro alloy special grade. This year we have completed with a production of 34,316. That is the special grade, and the normal grade is 81,000. And what was your first question? Sir, and what would be your production number for FY 2025? Any guidance on that? In ferro alloys, we will be increasing capacity by around 30,000 this year, to roughly the same level of capacity utilization. Last year, we achieved around 76%. We will achieve the same level. All right. My second question is, can you give a breakup of your normal grade ferroalloys and your special grade ferroalloys will also remain the same going forward? We will try to increase the special grade ferroalloys. That all depends on market and the demand, which is currently being increased. It is showing an increasing trend. Got it. Any targets that you have? We have exporters out of India. Excuse me. As and when someone is saying, what is happening is that the special grade of ferroalloys, this is a very new product for India as a whole. What has happened is that we established the market. It has taken us more than 4-5 years. Currently, we are exporting to 40 countries, and with the passage of every month, every quarter, the confidence of our buyers is increasing multifold. Currently, in our mix, whatever mix we have given you, is that in this mix, the contribution and the share of specialized ferroalloys will be continuously increasing, because the customers have potential to buy more. But many customers are still not buying 100% of their requirements from us because we are a relatively new supplier to them, because we are the only exporter out of India for this product. The need to establish some more confidence, it will take us a couple of more quarters, 3 quarters more. It's not a one day match. It is a long haul. Here also, the share of the specialized ferroalloys will be increasing gradually. Got it, sir. Lastly, sir- One more thing I'd like to add over here is that the sales of the specialized ferroalloys has increased 80% over last year. Got it, sir. Okay. Lastly from my end, as you've mentioned that there's a INR 1,000 crore CapEx that you have planned for the next 15 months. Sir, anything post that, any other CapEx plans that you all have on the table, or any discussions that you can help us with post the 15 months, the INR 1,000 crore CapEx? See, what is happening is that the management is very focused to complete this particular CapEx plan. As of now, we will not like to give any guidance on further CapEx. Till the time these particular projects are completed and the company is able to reap the fruits and the benefits of this particular CapEx, we will not be in a position to do any further CapEx. As of now, there are no further plans. Immediate. Okay. That is helpful, sir. Wish you all the best. Thank you. Thank you. Thank you, sir. Before we take the next question, a reminder to participants that you may press star and one to ask questions. The next question is from Parmod from Equirus Securities. Please go ahead. Hi, sir, and thanks for the opportunity, and congratulations on the great set of numbers. I have only one question, that why the other income has gone so up, and can you please give the rest of break up of the same? If you see our large balance sheet, there was a lot of provisions which we had made, and those provisions have been reversed. Those were not required. The other expenses also has gone up. Certain provisions have been made into other expenses, and these provisions have been clubbed into other income as per accounting. Okay. Thank you. To ask a question, please press star and one. Next question is from Yogesh from Autumn. Please go ahead. Yes, sir. Am I audible? Yes. Yeah. Sir, just on, to understand the DI pipes basically. As we know that we are an integrated player in DI pipes. Just wanted to know, on an EBITDA per ton basis, what would be the difference between a non-integrated and integrated player in the DI pipe segment, in terms of EBITDA per ton? The difference could be as high as around 8%-10%. Okay, 8%-10%, between an integrated and a non-integrated. Absolutely. And we have about 9%-10% market share in the DI pipe segment. How much of the total industry of DI pipes in India would be non-integrated players? Can you repeat the question? We have a market share of about 9%-10% in the DI pipe segment in India. Out of the total industry of DI pipe in India, how much would be contributed by non-integrated players? See, integrated and non-integrated would also have different levels of integration and non-integration. What I would like to say is that, what we have mentioned about our company is that our facilities are fully integrated, and they are all integrated at the same location itself. That also gives a very big advantage. For example, there could be players who are integrated, but they have the integration at some other location where there would be a slight disadvantage. The different players will have different levels of integration. So different types of integration. But if you talk about total integration at a single location, ours would be one of the very few companies. Okay. What would be contribution of such players to the overall industry, where they are integrated at one location only? What would be their contribution out of the total industry? It will be around 50%. 50%. Okay. And sir, one more observation, like if I compare TMT with DI pipes. TMT, we see a fall in realization of about 16% year-over-year, and again, a 2% on QoQ basis, while DI pipes, there has been an increase of 23%. What is the different dynamics playing in both this TMT versus DI pipes? Let me explain. This is exactly what you have been trying to emphasize. TMT is a segment which is being made by hundreds of players in the country. It is a pure commodity segment. The steel prices, they have softened since last year. That is why the realization of TMT. Commodity prices have come down, TMT prices have also come down. But in the case of DI pipe, since it is not a pure commodity play, but a niche product play, value-to-product play, these prices have actually not come down. They have increased. Reverse happened. Sure, sir. What would be the EBITDA per ton in TMT segment? If I can get a range, in TMT segment, what would be the EBITDA per ton? EBITDA would be ranging in different quarters, ranging between around 7% to 10%. Okay. 7% to 10%. And sir, lastly, on the realization. DI pipes, the realization increased in one year about from INR 68,000 per ton to about INR 83,500. Do we expect sustaining around current levels, or it will try to revert to where it has started from? Because, see the order book which we have at hand as of now, and the demand conditions which we are seeing, what we are looking at is that we should be able to maintain this realization. There may be a correction of 2%, 3% in the price. Sure. And sir, lastly on that, also on that realization. So, from about like INR 54,000 per ton last year to about INR 45,000, it has continuously declined. So do we see a decline going forward in realization per ton? Of course, the decline or increase in prices, steel prices, this is a very macro subject. This is a very global subject. So what we are seeing is that globally, there are two trends emerging. One is that steel prices, they have softened globally. But in India, what we have seen on the contrary is that in the last two months, in spite of the global prices softening, the prices here have gone up. So it affects actually where the global prices as well as the local demand. So several months away, accordingly the prices will react. So to make a locked up position of the prices and the demand of steel is a very difficult job to do actually. Sure, sir. This is very helpful. Sometimes Tata Steel and JSW Steel will become better on this, I think. There are a lot of volatility there. Sure sir. This is very helpful. That is all from my side. Thanks. Thank you. Participants who wish to ask a question, please press star and one on your telephone. Next question is from Ankur Kumar from Alpha Capital. Please go ahead. Hello, sir. Thank you for taking my question. Sir, I wanted to inquire on this other income only. So you are saying that this is like provision reversal. So can you comment how much was it for the provision reversal? Hello. Hello. As far as the provisions, the other income provisions which was reversed, it was around INR 110-INR 115 reverse on a quarter. Okay. Sir, in terms of then if I remove this other income, then there is a margin reduction from 14% to 13%. Is this right, sir? Can you comment on that? Just one minute. The actual reversal was around INR 180 crore. Hello. Okay, sir. In that cases, was there a margin reduction compared to the last quarter? Margin reduction was not there. It was in the same region, 13%, 14%. Got it, sir. On the tax rate, what should be our assumption for FY 2025 tax rate? Tax rate, we have carry forward losses. So probably, for the next financial year, we have close to 1,000 crores of carry forward losses which will be used. This year, I think, tax rate was close to 9% or so, the one which came in income statement. So that should continue, 9%, 10% only? That was deferred taxation which was reversed, which we have in our balance sheet. This is a non-cash item. Okay. Got it, sir. Thank you, and all the best. Thank you. Ladies and gentlemen, to ask questions, please press star and one. The next question is from Majed, Analyst from Smarthink Investment Advisory Services. Please go ahead. Majed? Yes, sir. Yes. Good set of numbers, sir. My first question is, what is your current order book, and how much of the order book is from the government side? Just any glimpse you could just give us. See, the order book currently for the DI pipes, it is in the region of around 10-12 months of the current capacity. Out of this, around 35% would be government orders. The next is you are also looking to diversify into export markets. Yes, sir. Namo order book, sir? Yeah. General order book. Yes, sir. My next question is, what is your plan if you are going to the export markets? You are also looking at Africa and also current update on that. See the plan for the export market, we have a long-term plan. Currently what is happening is that the demand locally is very robust, and the government is very keen that they start such a project and complete it on time. Since there is a scarcity, our first responsibility is towards supplying the pipes in India. We have a very small export market also, which with the pipes coming on stream by next year. From there we will be moving differently to the export market. Immediately, in the near future, we are not looking at expanding very aggressively in the export market. Okay, sir. My last question, sir, is that, you were also saying that you are planning to reduce your power cost, maybe through green energy and so on. Can you expand on that? Are you planning to install something, any CapEx on that side to reduce your power cost going forward? No, Majed. Yes, sir. Namo Majed, sir. My question is, you also said you are also going to reduce power cost and making it more cost-optimized. Is there any CapEx made on that side, maybe installing some of the renewable energy on that side which you are saying about green energy? Is there any plans on that front? Mr. Aiman, if you are on a hands-free, I request you to use the handset. Yes, sir. My question is there any plans to reduce the cost on green energy you had said earlier, any CapEx on that front to reduce your energy cost? With regards to green power, we are putting up another BFG boiler. 40%-50% of work have already been completed, and we shall be completing the same in the next six months. This year, we will be able to produce more rings out of that. What is financial projection of this? Financial implication, like how much cost it can reduce? The BLB boiler cost was estimated around INR 30 crores only, and out of which around INR 15.3 crores was spent up till March 2024, and the balance will be spent in next six months. Okay, sir. Thank you for all the details. Thank you. Ladies and gentlemen, to ask a question, please press star and one. Next question is on the line of Gunit Singh from Counter Cyclical PMS. Please go ahead. Hi, sir. You mentioned that we have moved from a commodity business to more specialized business, and that is what the future outlook also is. Our margin used to be about 1%-5% around four or five years back, which we are seeing now to be around 14%. I just would like to understand what kind of steady state margins should the company expect going forward. I also want to understand, how would our margins react to changes in steel prices? For example, in future, say if in FY 2026 steel prices fall by 50%. How should that affect our margins directionally? That's what I would like to understand. Gunit, I didn't understand your question properly. Can you please repeat this question once again? So basically, I want to understand the steady state operating margins the company expects in future. In past, we saw that we had about 1%-5% operating margins about 3-5 years back, which are now at about 14%. You mentioned that the company has moved from more of commodity business to more specialized products. So, I would like to understand what kind of margins can be maintained, and how would our margins move in future with changes in steel prices. For example, say in future if steel prices fall by 50%, what kind of minimum operating margins can the company still expect to operate in? Yeah. See, the guidance given by us, so we've been repeating this continuously, is that we're looking at expanding our margins to 18%-20% by the time the entire CapEx plan is completed over the next 15-18 months. So this is the guidance for the future. This is the first part of your question. Coming to the second part of your question where you're asking what will happen to the margins if steel price has to come down. See, even if the prices have to come down, the margins will not come down. In fact, the margins may in fact go up if the prices of the steel is to come down. Because we are making the products where we are selling, I would say, where the prices are linked very much to the prices of the demand and supply, not so much as to the prices of steel. All right, sir. So, what kind of minimum steady state margins can we expect even in that adverse scenario going forward according to the management? That is what we discussed so far, is that as a guidance, on conservative basis, it is going to be 18%-20%. All right. This is not just for next year, but this is for coming, say 4-5 years. Yeah, obviously. All right, sir. That is all from my side. Thank you. Thank you. Participants who wish to ask questions, please press star and one. Next question is on the line of Saket Kapoor from Kapoor & Company. Please go ahead. Namaskar, sir, and thank you for the opportunity. Firstly, Sharmaji, if you could just explain the impact of the reversal in terms of the other income and also its impact on the other expenses. Just to keep it in a comparative number to Q3, what should be the likely number? Comparative number to Q3. Q3. Quarter-over-quarter, if we compare the numbers, if we net off your exceptional income and expenses, then what should be the net impact? Net impact to non-cash impact is INR 137 crores. I do not have the figure in front of me, but it was close to INR 137 crores. Okay. Sir, when I am referring to page number 18 of the investor presentation, we are looking at our EBITDA down 2%, even on a higher revenue QoQ. What explains this? Referring to page number 18. The sale prices of certain products have come down in Q3, Q4. Because of that, the margins come down. Okay. Sir, recently, now with the expansion kicking in for the DI pipes, what should be the quarterly run rate for the DI pipes for this financial year, FY 2024-2025? This year, in FY 2024, 2025, we will be achieving a production volume of close to 4 lakh tons, and we will be seeing incremental sales quarter to quarter. Okay. Now we are doing a production of 66,000, 67,000, and a sales of 66,000, 67,000. What should be the likely number in terms of it should be proportionate or in the second half there will be a bump up in the volume. That is what I want to understand. Q1 to rise every quarter, starting from quarter 2. Come again, sir. Q2 rise production every quarter, starting from quarter 2. Quarter 2. So quarter 1 is on similar line in terms of the capacity benefits will kick in from quarter 2. That is what we are understanding. One, we expect the increase by up to 4% to 5% compared to Q4 of last year. So our first plant has already been commissioned in the month of February. So we have seen some gains in quarter 4. Q1 also will see more gains, and our next phase will get commissioned in Q2. So every quarter you will see incremental gains. Okay. Sharmaji, what should we read into this high trade payable of INR 858 crore and also this other current liability of INR 264 crore? Why are these so high numbers when we look at our receivable part? Why are the numbers so unbalanced? Correct me there, sir. Well, I could verify there. The trade payable number will also be coming down since the company does not have any bank credit facilities. The company is going with the support of its creditors as well as the support of its buyers. So these numbers will be high right now, but on pure usage, it will be coming down in the next quarter itself. Okay. On the other current liabilities part, that has gone down from INR 400 crore to INR 265 crore. So what are the key constituents? As conveyed by Mr. Sharma that there have been certain provisions which have been made in the earlier year. It got reversed in this quarter. So we are expecting that the other current liabilities figures will be more or less in line with this quarter in the coming quarters. Right. Aditya, you have been alluding to the fact about the ferroalloy segment contributing to around 50% margin. Sir, who are its end users? Who are our main buyers and what is the client concentration for this product? You need to repeat that question, actually. It was not audible. I will repeat it, sir. As Mr. Aditya has mentioned that for ferro alloys, we are enjoying a margin of 50%. Correct me there. Who are our end users, and is there any client concentration or any concentration in the geographies where we are selling to? Margin was what? 50%? Correct. Yes. I said 500. Okay. Please correct it, sir. What is the margin? The margin will be above 50%. Okay. Sir, you said that we are making specialized ferroalloys for which we charge a higher premium. So who are the buyers, and if we look for peer comparison globally, who are we competing with? Look, there are two parts to the question. There are many buyers in the world. There are some big buyers. If we talk about India, there is JSW Steel, there is ArcelorMittal. These are the big buyers. If we look at the world, there are factories in Japan. There are foundries in Europe and America. So the large steel players are also there, and other than that, there are many small foundries which use people who have very big applications, and where these steel is meant for the acquisition in the aerospace industry, in different oil drilling, et cetera. So these are also the users. So the buyer's spread is very global, in these developed countries only. And in India, its demand is increasing. So if we talk about buyers, all the big steel producers are there in the world. Should I name ArcelorMittal? Understood. So it is all for the value-added product only, this ferroalloy is going through. The value-added steel. Only value-added steel. Okay. Sir, when we look at our Chhattisgarh unit, how is this getting integrated with our Bengal unit, and how will this serve the purpose of integration as you were explaining to us? The Chhattisgarh unit is an entirely different geographical region. It is very far from Bengal. It has no link to Bengal, and their vertical is different. Look, value-added products like DI pipe and ferroalloy are all made in Bengal. Apart from this, the company has other products as well, which include sponge iron and billet. Chhattisgarh produces billet from sponge. Sir, this sponge iron, billet, all this is raw commodities, and this can be called margin dilutive, sir, in comparison to the DI pipe and ferroalloy product, on which we are taking a little thrust. Absolutely. Sir, going ahead, this segment of ours, pipe and iron. Pipe and iron is still going into integration, but other than that, what is our roadmap going forward for the external space we are doing? Will we continue to sell in this geography, and what are the thought processes for it, sir? I am telling you clearly. Hello? We are saying that in the next 1.5 years, 80%-85% of the company's sales will be value-added products. Okay. Sharmaji, I will speak in English. Yes, sir. Please. Hello? Yes, sir. Please continue. Sir, going forward, the percentage of value-added products from the total product basket will be around 80%-85%. The 15%-20% of the non-value-added products will be products like sponge iron, et cetera, which we are selling off as it is also. We are not closing down these models now. Though they are, I will say, EBITDA dilutive in terms of the very highly valued products, but they are not EBITDA negative. They are still EBITDA positive and greatly positive. We will not be dilutive in those businesses. Right. Lastly, Mr. Sharma, on the capital work in progress, this entire INR 160 will be capitalized by the quarter 2 with the DI pipe expansion getting commissioned? It will take three quarters. Something will be capitalized in first quarter, second quarter, and probably next year first quarter our entire expansion will be completed. The current year close to INR 250 million CapEx will be completed. The last line I missed completely. Around INR 300 million of CapEx will be done in the current financial year. Okay. That will be the closing capital work in progress for FY 2025. Yes. Right. And last point on the deferred tax. I understood, sir. No issues. Thank you. Before we take the next question, a reminder to participants that you may press star and one to ask questions. Next question is from Shweta Dixit from Systematix Group. Please go ahead. Thank you, sir. My question is answered. No more questions from my side. Thank you. Participants who wish to ask questions may press star and one. The next question is from Saket Kapoor from Kapoor & Company. Yes, sir. I was just listening to the deferred tax asset and you mentioning about we are having a carryforward loss to the tune of INR 1,000 million. So there will be no tax incidence, cash outflow till the balance gets clear, or we will be paying tax on the profit that we will be making during this period. We are into new regime. Tax is not applicable over there. As far as carryforward losses is concerned, close to INR 1,000 million of carryforward losses remain in the company, which will be utilized in the current financial year probably. As far as deferred tax asset is concerned, if I remember it correctly, INR 250 million of deferred. INR 250 million. So it will get reversed. Balance sheet, it is around INR 100 million is still left, which will be reversed and shown in the year, charged in the year this year. Right. Aditya, you mentioned about a strong growth in the DI pipe segment, and we are expecting 13%-15% growth for the coming 2-3 years. Currently, if you could give us some understanding, how is the bid pipeline looking? What is the current installed capacity for the country? Including you and other players, what are the new capacities that will hit the market for FY 2025 and FY 2026? Any ballpark number you would like to share? The current capacity, operating capacity is around 35 lakh tons, approximately. Different manufacturers are adding different capacities in different timelines. We are expecting over the next 2 years, this capacity to grow to approximately around 4.5 lakh tons in the current year. What year? Around 45 lakh tons. From 35 lakh tons to 45 lakh tons will be the expanded capacity in 2 years. Actually, you have to remember one thing. Adding the pipe capacity is not very easy because the pipe capacity for an integrated pipe capacity, it is only the finishing line. But in between you need blast furnace, you need the sinter, you need the precipitator. It is a complete integrated steel capacity, but pipe is only the part. Adding the capacity is not an overnight job. Right. If you could give some more color on the bid pipeline. What is the demand outlook in terms of the government bid pipeline with pertaining to the AMRUT scheme, the Jal Jeevan scheme and all? What is the traction you are seeing in the bid pipeline look like? This capacity should get absorbed easily or not? That is only my question. This capacity will very easily absorb because there is huge work pending and still pending. Actually, water is a very important resource for any nation. In India, what we are right now talking about in the Swachh Bharat Mission and the AMRUT scheme, it is only the first leg of the implementation where the water can be provided to each and every household. Still those schemes to be fully implemented, it is around 2 to 3 years away. After that, there is also incremental demand coming from irrigation, there may be incremental demand coming from housing colonies, incremental demand coming from industries. The demand will be there. The demand perspective is very positive. Okay. That will also involve the river linking project also. That is also in the bid pipeline as we are referring to. That is the DPR that will not be released. Okay. But that is also a big demand driver going ahead. Absolutely. Big demand driver. Right. So bid pipeline, can you tell me, sir, what should be the bid pipeline? What should be the? Bid pipeline. If on a nameplate capacity of 3.5 million, what should be the bid pipeline for this year and the coming years should likely be? The bid pipeline is very large. The bid pipeline will be at least 50%, 60% more than the demand because the candidates have to get clearance also. Already we are talking about only this week's 600 tonnes we have. Already for this particular year, we will sacrifice a little more for the plant. The tender quantity, however, we have covered that also now. Great. If the time permits, my last concluding remark on the export part. With 6 lakh tonnes of our capacity coming up, we will look to export DI pipes also going there, or we will be completely concentrating to the domestic market? Our focus for the next three years, it is going to be highly, I will say, focusing on the domestic industry. Because the demand in India is very large, and we also have a social responsibility to first cater to our own country's demand, number one. Number two, in the export market, we have a very small market share. In the export market, we will be venturing out maybe after 18 to 24 months once our entire capacity program is complete. Right. On the raw material mix of coking coal and iron ore, I missed the price trends for the same. How has the price behaved QoQ basis for the coking coal and iron ore? You want to clear this? Sir, I was looking for the raw material basket prices of coking coal and iron ore. How have they fared for the fourth quarter? See, for the fourth quarter, the raw material prices followed a very big global trend. Iron ore prices, they had stopped. Again, they have gone up very recently. Coking coal prices, they also corrected in Q4. But now again, the trend is slightly up. Iron ore, coking coal, thermal coal, these are raw materials which will keep on fluctuating QoQ. Fourth quarter, we got a little advantage. Currently again, they have shifted a little up. This will come also during the season. If the price of a raw material is-- these prices are also predicted, but then these will be up and down in the market always. Khaas variation nahi hai. That is what we can conclude. Sir, yeah. Okay. Thank you, Aditya-ji and Sharmaji for elaborating and answering our questions, and all the best to the team. Dhanyavad and namaskar sir. Thank you very much. That was the last question. I would now like to hand the conference back to the management team for closing comments. Thank you everyone for joining the call today. We trust that we have addressed all your queries to your satisfaction. If you have any other remaining unanswered questions, please do not hesitate to contact our investor relationship agency, GoIndia Advisors. They will be more than happy to assist you further. Thank you so much once again. Thank you. Thank you very much. On behalf of GoIndia Advisors, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.