Note that this conference is being recorded. I now hand the conference over to Mr. Anupam Gupta from IIFL Capital. Thank you, and over to you, Mr. Gupta.
Yeah, thanks, Sanju, and welcome everyone to the Results Conference call for Jindal Stainless. From the management, we have Mr. Abhyuday Jindal, the Managing Director, Mr. Tarun Khulbe, CEO and whole-time Director, Mr. Anurag Mantri, ED and Group CFO, Mr. Rajeev Garg, Head of Sales, and Shreya Sharma, Head of Investor Relations. To start off with, I'll hand it over to Shreya, and post that, post the introduction by Mr. Jindal. We can take over the Q&A. Over to you, Shreya.
Thank you, Anupam. Good afternoon, everyone, and a very warm welcome on the call. We have shared our Q3 FY25 earnings presentation with the stock exchanges, which is also available on the company's website, and today's call discussion will be on the same lines. Please note some of the information on this call may be forward-looking in nature and is covered by the disclaimer on slide two of the earnings presentation. Now, I would like to hand it over to our Managing Director, Mr. Abhyuday Jindal. Over to you, sir.
Thank you, Shreya, and good afternoon to everyone, and welcome to the Q3 FY25 earnings call. On behalf of the management team, let me wish you all a very happy and prosperous year ahead. I would like to first discuss the key business highlights of the quarter ending December 2024, followed by Anurag's review of our operational and financial performance.
The consumption of stainless steel in the country has been consistently rising, with an annual increase of around 11%, reaching 4.46 million tons in FY24, indicating a strong growth trajectory. This positive trend is further reflected in India's rising per capita consumption, which reached 3.1 kg in FY24, from 2.25 kg in the last five years, driven by demand from sectors such as infra, processing industries, and railways.
Despite a weaker export market and ongoing pressure from low-price imports, we achieved highest-ever sales in Q3 FY 2025, reflecting a 15% year-on-year growth, driven mainly by strong domestic demand, which rose by 20% during the period. Robust economic growth, supported by ambitious infrastructure projects, increased adoption of stainless steel in the process industry, and rising importance of life-cycle costs in public sectors with government.
All these factors point to continued demand for stainless steel in the country. On the export front, volumes have remained subdued due to the ongoing geopolitical disruption and decline in demand from Western countries, particularly Europe, where prices have hit their lowest point in the past 15 months, and shipping costs have significantly increased. These factors have impacted our export margins in Q3 FY 2025.
To offset this, we are trying to strengthen our presence through niche offerings to global customers, especially in lift and elevator, auto, white goods, and metro segments, and considering alternate modes of trade, including break bulk shipping. On the project front, I'm pleased to share that Chromeni operations have begun, boosting our cold rolling capacity and supporting overall sales. In Indonesia, our SMS plant is making good progress and is expected to begin operations in FY 2027.
NPI project is in its ramp-up phase, and it's currently operating at approximately 65% capacity utilization. With respect to our ESG initiatives, we remain dedicated to sustainability and environmentally responsible practices. I'm pleased to report that at our plant, the share of grid-sourced renewable energy has risen to approximately 17% in Q3 FY 2025, up from about 1% in FY 2024, resulting in a significant reduction in CO2 emissions.
This progress is further supported by the successful installation of a 3.7 megawatt solar rooftop capacity at Hisar. Given our continued commitment to sustainability, we've received adequate to strong ESG rating in Q3 from different rating agencies such as MSCI, CRISIL ESG Risk, among others. I'm also glad to share that JSL has been awarded the Distinguished Sword of Honour from the British Safety Council. This global accolade highlights the company's unwavering commitment to upholding the highest occupational health and safety standards. With this, I would like to hand over to Anurag to discuss our operational and financial performance. Thank you.
Thank you, Abhyuday. Good afternoon, everyone. Welcome to the call. I hope you all had a wonderful start to the new year. Let me discuss in detail the operational and financial performance during Q3 of FY 2025. We delivered incremental sales volume of 587,658 metric tons in Q3, increased by around 15% on year-on-year and 4% on QoQ basis.
The standalone Q3 revenue increased by around 3% on a QoQ basis to INR 10,066 crore. On the back of robust domestic demand, Q3 EBITDA stable at INR 1,003 crore, and PAT increased by 5% to INR 619 crore on QoQ basis. The nine-month sales volume increased by 8% on YoY basis, in spite of our export volume falling by 26% on YoY basis due to the adverse global macro factors, as highlighted by Abhyuday.
We have increased our domestic sales volume by 14% on YoY basis on the back of the healthy domestic demand, resulting in domestic sales reaching to 90% of our overall sales. Further, with continuous focus on maintaining a strong balance sheet, as on 31st December 2024, our external net debt on a standalone basis stood at INR 3,344 crore.
Also, we are able to maintain a healthy leverage ratio with the standalone net debt to equity maintained at 0.2x, and the net debt to EBITDA stood at 0.9x, despite CapEx and acquisition of around INR 3,800 crore during the nine months of FY 2025. I would also like to inform that the Board of Directors have approved an interim dividend payment of INR 1 for FY25, with a face value of INR 2 each, with an aggregate payout of nearly INR 82 crore, INR 82.37 crore.
The record date for the purpose of the payment has been set as February 8, 2025. On the subsidiary fund in Q3 FY 2025, all our subsidiaries performed steadily, reaching an overall EBITDA of INR 205 crore and PAT of INR 35 crore. With this, I would like to end my discussion and would request the moderator to open the floor for the Q&A session.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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'll wait for a moment while the question queue assembles. The first question comes from the line of Amit Dixit with ICICI Securities. Please go ahead.
Yeah, hi. Good afternoon, everyone, and thanks for the opportunity. First of all, congratulations for a good set of numbers in a very difficult quarter. I have two questions. The first one is, pertaining to the ongoing safeguard duty investigations. Now, in the document, stainless steel products are kept out of the investigation despite the stainless steel industry suffering maximum on account of unfairly priced imports. So just wanted to understand the general outlook of regulatory authority regarding,
Oh, Amit. Yeah. So, Amit, so basically, steel and stainless steel have been filed separately. So what you might be aware of is that, steel industry you might be looking at. So, and steel is, maybe, I would say, two weeks ahead of stainless steel. So they filed at the beginning of January, and we filed our safeguard application around mid towards the end of January.
So that's why maybe all the data are not available for stainless steel side, but we are absolutely on track, and we are keeping a close watch and discussion with all the concerned authorities in the ministry. So we're quite positive some, yeah, it's two different applications, and we're quite positive that both sides should see some positive results.
Okay. So is it safe to assume that, you know, a similar notification can be issued for, stainless steel considering the, injury that, we have suffered as an industry?
Yes, absolutely. So, like I said, steel is moving a bit faster than us. We are maybe two or three weeks behind them, but similar, same result.
Okay. Sure. Now, a little bit different question. I have been observing in the press release that we have actually initiated product development in very niche applications, for instance, in defense. Particularly, we have supplied to HAL the low-alloy products. Now, in India, we have, of course, a long, you know, I would say, a good runway for nuclear power plants, and that they are expected to use stainless steel in a good measure. So can you please highlight some of the product developments in these niche areas that we are doing, apart from the regular ones that we are aware of, like infra processing, railways, etc.?
So absolutely, right, rightly, correctly you've said. This has always been a key focus for the company to further add more value-added products. And in every sector that we see good growth coming in domestically, we are going to be part of it. So on nuclear, absolutely, we anyway have been supplying globally to a lot of prestigious nuclear projects. So this has been a regular phenomenon, and further development is on.
Defense, aerospace is another interesting area where every time more and more product ranges are getting added. So we've been supplying to BrahMos regularly. We've been supplying to a lot of missile applications and all satellite programs we are part of. So every launch that goes out from ISRO and also private companies now, some material of ours will be there. And apart from that, hydrogen economy is another focus area of ours, ethanol blending plant.
These are the nation's plants. A lot of efforts are being made to further develop products for this and also working on substituting other metals into stainless steel. So wherever corrosion is a problem, wherever wear and tear is a big problem, a lot of R&D development, business development activities are on to convert them into stainless steel.
Okay. Great. Thank you so much, and all the best.
Thank you. Next question comes from the line of Ritesh Shah with Investec. Please go ahead.
Hi. Thanks for the opportunity. Couple of questions. First is, would you like to revisit the guidance that we have given for volume growth for the year and EBITDA margin, specifically on standalone basis? And when we say standalone, just wanted a clarification. Does it include any of Chromeni, Rathi, or RUVL, or are those volumes over and above the stated volume guidance?
Standalone, when we talk, we talk standalone, Ritesh Shah, and we're continuing with the guidance for this year in terms of EBITDA per ton. We should do around INR 17,000 for this fiscal year, and our volume guidance is around 10%.
This would exclude Chromeni?
We're not changing that guidance, which we revised during the half, middle of this year.
Okay, and when we say volume guidance, this excludes Chromeni, right?
This excludes Chromeni for this fiscal year. Absolutely.
Okay. And for the next fiscal, any volume guidance that we are looking at?
Ritesh Shah, it's inclusive of all the Chromeni volumes, sir.
Is it for this year, or when we say, like, my next question was?
Chromeni volumes are very low this year. We've just started to start stabilizing this year. I think we are targeting how much?
Oh, INR 34,000. Max, max 30,000 tons this year, so it'll be hardly.
Any.
Much different from that perspective. So that's why, we're not really changing our guidance.
Perfect. And, sir, I think on the call, on the TV, I think you indicated double-digit volume growth for next year. So I would presume this number would include Chromeni. Would that assumption be right?
Correct. That is correct. Absolutely.
Sir, double-digit is a very large band. Is it possible if we could narrow it further into a low double-digit or high double-digit? It would help us in modeling stuff.
I think Ritesh Shah, it's a little early for us to give, you know, that figure because now there are a few things that we are waiting and watching as compared to what Mr. Trump does for the budget, which is also coming up next couple of days. So I think that will give us a much better picture to give you our volume guidance for next fiscal.
Sure. That's helpful. My second question was again on volumes. Now, when we give standalone volume numbers, is it possible for us to dissect between HR and CR? The reason to ask this question is, there is 0.6 million ton Chromeni, which comes in, which gives us additional flexibility on CR, and hence CR as a percentage of total smelt will actually increase.
So wanted to understand, what is the sort of impact or bearing it has on profitability and our ability to put that volume in the marketplace? Is the demand for CR locally more than HR? So how does it stack up versus what the offering that we have in the marketplace right now post Chromeni?
So I can first answer at an overall level in terms of definitely the demand of CR in stainless steel is more than HR. And as a company, we were always around 45% of our melt was CR, and our target was to take it to 75%. So Chromeni was an acquisition in line with that. And anything, Rajeev, you can add?
Yeah. So, yeah, hi. This is Rajeev Garg. I head the steel consumer service. So globally, if you see, the CR to HR ratio is typically 80/20. 80% is for consumer in the market cold rolled, whereas 20% is hot rolled. So that's such as sheets, coils, plates. But in a developing economy, this ratio is slightly more skewed towards hot rolled, which is like it's more like 70/30, because the process industry requires a lot of hot rolled material.
So again, in terms of your second question that is there a market for cold rolled and all? Yeah. Actually, as you also mentioned that there is, we were as a company, we're always short of cold rolled, and we are very confident that the Chromeni's with Chromeni volume we'll be able to kind of serve many segments in which we were strategically keeping low market share because of you know production issues.
Sure. I just said this a little bit. Sorry, sir. I think it's important, sir. Basically, when we are saying that we do more of CR, it essentially means there will be HR to CR conversion. Would it essentially mean that it poses upside risk to the EBITDA guidance that we are looking at? And again, I think monthly we indicated that we will factor Chromeni numbers in next fiscal numbers. So wouldn't that be double counting?
So overall volume guidance, Ritesh Shah, is we will not be giving separate guidance for the Chromeni as well because, as Rajeev was mentioning, that CR is the one which is more saleable in terms of. So our volume guidance and EBITDA per rate guidance will always be combined in terms of including of Chromeni.
Okay. And what is the trajectory that it can move by, given we have more CR versus HR right now, given we have 0.6 million decommissioned? For those incremental volumes?
As Anurag mentioned, let's wait for some time to give us the specific numbers on the guidance range, because it depends on how the export markets pan out and how the Indian markets actually the growth pan out, especially all these Chinese dumping and certain trends which we pan out. That's why we are saying that we are targeting double-digit growth, but I think let's wait for some time to be very specific on the range.
Sure. This is helpful. I'll join back the queue. Thank you so much. Thank you.
Thank you. Next question comes from the line of Parthiv Jhonsa with Anand Rathi . Please go ahead.
Thank you for the opportunity. So my first question is very straightforward. What would be the volume breakup between 200, 300, and 400 sheets, if you can guide us?
Sorry, Parthiv, you're asking for a volume breakup?
Yes, for yeah, volume or the share, whatever is possible.
Yeah, so 200 series share was around 38%, and 300, 46%, 400 was 16%. This, I'm talking about quarter three FY25.
Nine months.
For nine months, it was 200, 36%, 300 was 46%, and 400 was 17%.
Okay. Thanks, yeah, for the update. So just to take a couple of analysts to we have already, you know, half done this question pertaining to the volume. Just to take it a bit forward, I believe somewhere in the print media today and even in the, you know, on the TV today, I think sir had mentioned that you are actually reducing your guidance to 9%, if I'm not mistaken. Right now, I think you just reiterated that it will be about 10%, which is a mild change. Am I reading it wrong, or is there any ambiguity out there? If you can just, you know, throw some light on it.
We were reviewing the range between 9%-10%. So we revised it during the middle of this year, which was around 9%-10%, and we're keeping that intact.
Oh, okay. So there is no further reduction from there, right?
There was no further revision or guidance revision.
Okay. And sir, if I may just squeeze a very quick, third one, so what would be the status on Rabirun and Rathi right now? And currently, what is the realization you're getting from Chromeni?
Basically, on Rabirun, we are running in Rabirun our polishing line, because that is what we have started, and we are finding there the market to be better. We are producing approximately at a rate of around 4,000 tons per month over there. In Chromeni now, as we just said that we have started, and we have started ramping it up. Now almost hitting a volume of around 15,000-20,000 tons per month already we are seeing it touching over there.
Sir, is it possible to give some guidance on the realization or the margins at these verticals?
Please, please come again. I could not hear it very clearly.
Possible to give some margin guidance for Rabirun and Chromeni going forward? Because in the past, we had already indicated for Rabirun and Rathi, but is it possible to give it once again considering the current scenario?
We don't give separate guidance. We give a blended guidance because both, Rabirun and Chromeni will guide it will get added to our overall sales. It's a process, midterm process, you can say, you know? So that's why we give overall guidance, generally encompasses both these units.
Okay. Thank you so much, sir.
Thank you. A reminder to all the participants that you must star and one to ask a question. Next question comes from the line of Anupam Gupta with IIFL Capital. Please go ahead.
Yeah, thanks for the opportunity, sir. So first question is basically, if you see your EBITDA per ton is relatively on the lower side given that exports have been very subdued for the last couple of quarters, and incrementally we have some possible pressures coming from the Trump administration coming in and possible duty actions. So how do you look at that section? And between that, in that 10% exports which you are doing at this point of time, what is it that is going to U.S. and can see an impact if there is an adverse duty which comes in in U.S.?
Okay. So first point, in the question today, U.S. is roughly around 20% of our export mix. So, you know, that's sometimes sorry, I couldn't catch your first question.
That's how the Trump administration is.
Yeah. How do you look at that in terms of possible duties there?
Yeah. So, see, India as a country, I mean, we all.
So I, Anupam, I'll take this. So basically, our focus for the last few quarters, few years has been domestic. We are seeing most of the green shoots coming in the domestic market, and that is where we've been very bullish. Export has always been a second priority for us, and export we would always use as a factor that our long-term customers we still want to service, which we will continue and to protect our margin. Since the export market has drastically dipped, we still feel for, we will still deliver good export volumes even next year despite all these challenges that we are facing.
The real growth, and the real story is all based on India again. That is our real focus. And like Rajeev was mentioning, U.S. is around 20% of our export. I would say despite any further, major change in Trump tariff, I think this will still continue. I don't see much dip happening, and the other positive side with U.S. is that they will also come with a lot of, CapEx expenditure, you know, from infra spending to other areas where we as a company can cater to them, quite efficiently, so definitely it's a kind of a wait-and-watch situation, with what's going to happen in the U.S., but despite that, we're still extremely bullish on the India story, and we'll still continue to export to our long-term customers.
Just, Anupam, just to add the better point, the U.S. tariff on Indian, on us is currently 25%, which is the Trump tariff which was put in earlier. That will still continue. Whatever we are doing in the U.S. market is with the range of that tariff. It's unlikely it could increase. We'll have to wait and watch, but it's unlikely to be increasing further, especially that.
Just to give you the perspective on U.S., the stainless steel industry, even at the current level, without even infra push, they are short of the capacities in terms of their demand. As Amit mentioned, if the demand push comes, then they will further be short of the capacities. At least, Mexico and Canada, they are very clear they will be putting their duty. So that will be clear. That should be able to give us some of the better opportunity in U.S. to participate in U.S. market.
Sure. Okay. That is helpful. Anupam, second question is basically on the greenfield CapEx which we were talking about earlier. Anything that you have finalized so far or any thoughts you can share?
No. Right now, there are no clear-cut plans for that at the moment. When we are ready, we'll definitely come back and announce.
Sure. That's okay, sir.
Anupam , thank you.
Thank you.
Thank you. Next question comes from the line of Tushar Chaudhari with Prabhudas Lilladher, please go ahead.
Yeah. Good afternoon, sir. Thanks a lot for the opportunity, and congratulations for the good set of numbers. I just wanted to get one data point. The imports which you have mentioned in the presentation, it's around 262 in this quarter. Can we get last year number or maybe full year number of this particular imports of SS?
Imports in.
Yeah. Tushar, I'll share this number, for imports.
Okay.
Of my mention.
As we were saying in earlier question.
30%. Import intensity is around 30%, but we'll get you the exact figure.
It's around a million ton. I mean, more details, Shreya will share, but it's around a million ton last year, FY 2023-2024.
Okay. Thanks a lot, sir, and U.S., you said, out of our export, let's say, already small, U.S. is 20. How much will be the other, proportion like Europe and MENA countries? Europe will be higher, right?
Yeah. Europe is higher, because in Europe, we have less quotas, so Europe will be around 60%-65%, somewhere between 62%-65%.
Okay. And how is the demand situation?
It's all a mix. It will be mixing South Korea, South America. It's all a mix.
Okay. And how is the demand situation now over there in Europe?
So Europe is in a very bad state. I think that everyone would be tracking and knowing that the economy, most of the economies have not recovered. One of our biggest countries, exporting countries was Germany, which is suffering tremendously right now. So Europe as a whole definitely is under severe pressure.
Okay.
From European economy, I'm talking, not our sales, but more European economy, which is impacting our sales.
Sir, we were trying for some other nations like Japan and all, South Korea, is it?
That is continuing, like I said, South Korea, Middle East, South America. Japan was more a first entry for us, and we're going to keep trying to keep increasing. But again, it's overall, if you understand the world, China is also pushing material as much in all those markets, you know? So we are competing always, with a lot of Chinese and other Asian players. So despite that, we're still maintaining our export volume guidance. But yes, nothing major, no major increase in any of the other geographies.
Okay. Thanks a lot, sir. We'll come back on the queue.
Thank you.
Thank you. Next question comes from the line of Vikash Singh with PhillipCapital. Please go ahead.
Thank you for the opportunity. Sir, I just wanted to understand, though we have managed to gain the volumes, despite lower exports, our EBITDA per ton has also been sequentially getting lower. So are we keeping volumes over the margins? And is that, is that the thing? Because we have promised 20% out of the volume growth. So how should we look at our product mix, and what determination or improvement from there on?
See, so we are always going with a blended approach. Our biggest factor and why we are here is to give better returns to our shareholders. That is the target that we always take. Any running plant or any steel company has to target complete utilization or complete, you know, utilization of all our resources. That is how you bring down your fixed costs. That is how you bring down all your other overheads.
So that's why we have to target every time going for a volume increase. We could have shown a further volume increase. We could have pushed more material in the domestic market, but to protect our margin also, we did not go as aggressive. So that opportunity and that kind of flexibility we keep in sight. So we have to go show a good volume growth also every time while protecting our margins. It's because export market for the last two to three years is completely being subdued and going market has been going down, which is why that pressure on domestic front you can see.
So if for my understanding purpose only, if I may ask, export margin versus the lower end of the product which you are selling, the margin differential at this point of time, just wanted to see if you need to pull back the lower end and, once the export market opens up, how the things would improve for you. So what is the gap between the export, which on an average term, we?
We're only mentioning on the call. I'm sorry. These things are. I cannot mention on the call, you know? These things are something sensitive.
Understood. Sir, one more question regarding basically. We have said that the yearly guidance on a consolidated basis would be around 20,000, but in the month, we are already at close to 21,000. So am I mistaking it, that the forecast would be a weaker quarter? Continue to be weaker in terms of EBITDA per ton or smooth?
No, sir. No, sir. If you see the consolidated number is around 20,837, you are right. So what we have said is that on this we will try to maintain. We'll be in this range itself because JUSL will continue to be the same level of EBITDA per ton. Volumes will increase. So that's why we are saying 20,000 plus of EBITDA per ton we'll be able to deliver on FY25 on a consolidated basis.
Understood. And sir, our debt peak-out targets and if you could like to share?
So if you recall, last quarter we gave a guidance of closing FY 2025 debt of around INR 5,500 crore, which on the back of the 55 or similar sort of number of the CapEx what we announced. We know that some of the EBITDA per ton has come down a bit, but more or less we should be able to maintain the same. We'll maintain the same guidance, and probably we should be able to do a bit better depending on the inventory levels. But otherwise, CapEx-wise, we are on track to within that range. So we should be able to maintain our closing debt guidance of around close to INR 5,500. We'll try to improve further on that.
Understood. And sir, just one last thing. JUSL EBITDA per ton seems to be on a slightly lower side than what it used to be last year. So since it's a conversion business, are we getting the outside order less or what has changed? Or we are charging less to the JSL? So what has changed exactly?
So, as per their formula, because it's a job work model, and as per their formula, when the volumes, because it largely does the JSL volume, increase, the per ton job charges come down. So basically, that's why, as you rightly pointed out, it should be looked at JSL and JUSL combined, and which in the nine months was around 20,837, because since the volumes of the job work are increasing, so therefore the conversion charges for them have been moved into a different range.
Understood. Understood. Understood. Thank you, sir. That's all from my side and all the rest.
It also has upstreaming the cash, JUSL cash tax efficiently, so you can see that JUSL has been turning almost close to INR 300 crore plus of cash.
Noted, sir. Thank you. Thank you.
Thank you. Next question comes from the line of Pallav Agarwal with Antique Stock Broking. Please go ahead.
Yeah. Good afternoon, sir. So I just want to check, you know, what is the impact of this, CBAM, in Europe? So does it apply to stainless steel as well? And if it does.
So absolutely it applies to stainless steel as well, but there is a lot of new information coming out where whole CBAM is under question. But despite that, we as a company are keeping our plans intact. We started the journey to invest into renewable capacity which we are carrying on, and we are continuing with that. So if CBAM comes or doesn't come, we're going to be ready with all our sustainability targets and carbon emission reduction so that in case there is some positivity from that side, we are not going to get impacted.
Okay, and the renewable energy cost would be lower than our current power cost. Is that also a benefit that can happen?
You're saying is renewable energy cost lower than our current power rate?
Yeah. Power rate.
No, thermal is definitely the cheapest still, globally also in India also. But renewables, we have some, good I mean, we got some good tariff rates actually. So it won't be cheaper, but not a very high amount.
Sure. And also, you know, if you could just, you know, I mean, in carbon steel, we've had China exporting one of the highest, you know, levels in the past many years. So if you could just, you know, give some information on, in stainless steel, what's the level of are we seeing any production cutdowns in China or, you know, and what are the level of exports that are coming out of this?
See, India import into India is clearly there's a 30% import intensity into stainless steel products, and maximum of that is coming from China. That continues, and that has been continuing for almost, I would say, more than three-to-four years.
Three-to-four years.
You know, so that continues. We don't see any dip happening from China export front at the moment.
Okay, so you're not seeing any reduction in the domestic production in China happening in the case of stainless steel, so?
At least not till now. Maybe some of the small, small ones are closed, but not in the least. The imports coming into India, we've not seen any despite there.
Sure, sir. And lastly, sir, you know, we've seen that, you know, some of the other non-ferrous commodities have, you know, bounced back pretty well. But nickel is still, you know, pretty subdued. So any view on, you know, what's keeping the prices?
So it is basically the demand. It is basically demand from both the stainless steel and from the EV market side. That is keeping the pressure down. So it's, and China is a big factor because of that.
You're not seeing any major disruption in supply happening, like maybe, because, you know, even in the case of some other commodities, demand is subdued, but probably because of supply, you know, balancing it out, you're still seeing pretty healthy pricing. So in this case, we're not really seeing any supply disruption with it?
No. In nickel as of now, we're not seeing because Indonesian economy is solely based on nickel, so they are really pursuing it.
Okay. Yeah.
What I would like to add here is that Indonesia is definitely pushing it, but outside Indonesia, the impact is coming, and some of the nickel plants have either closed down or running at a lesser capacity utilization.
Okay. But we won't have any information on the cost curve for nickel, right? So, how what percentage of probably, you know, manufacturers would be underwater at this price level?
What we can say is that Indonesia is the lowest-cost producer.
Okay. Fantastic. Thank you so much.
Thank you. Next question comes from the line of Pritam Roy with B&K Securities. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. I have a couple of questions. Firstly, sir, this quarter, to maintain the volume number and we have, getting to the loss of niche products this time, so if you can quantify how much value-added product is contributing on the overall volume for this quarter or what is the, target contribution we are expecting in the near term from value-added product side? That is my first question for you.
So around 35%-40% is what our, value-added, segment delivers. And, so right now, nickel price is again subdued as the earlier participants mentioned.
In the Indonesian project, IRR and how much cost benefit that we can expect from that project in the near term that if you come into the picture and if you come into the full phase, so what kind of benefit you can expect from that?
Mr. Khulbe, you would like to take this up?
Yeah. So, the Indonesia project, the NPI project, we have started. It is now under the ramp-up stage. So I will say it is gradually ramping up and stabilizing. The point is that the advantage with that project is that it is based out of Indonesia, which is the least cost producer globally that is established. And we see that in the future, we believe that the nickel demand will definitely pick up, and then this supply-demand ratio will definitely improve. At the same time, we, as a stainless steel producer, for us having raw material security that is nickel security is very, very essential. And for us, from that angle, this project is very, very important, and that's how we see it that we are getting raw material security.
Okay. Thank you. Thank you, sir. I'm just a doctor for the next quarter.
Thank you. Next question comes from the line of Ritesh Shah with Investec. Please go ahead.
Sir, hi sir. Thank you for the opportunity. So just a broader industry-level question. What is the import intensity right now on an annualized basis? Is it like 25%-30%?
30% .
Okay. 30%. Sir, if we had to break this number of 30%, say hypothetically, I don't know, 30% of, say, three and a half million tons, into HR and CR, would it be possible? We tried to do it, but it's not possible given separate HSN codes are not available, at least we are not aware of it. Again, I'm just trying to understand that with Chromeni coming in.
Can you give me the ballpark figure between HR, CR, import?
Yeah. Yeah. So 85% of imports is CR.
85% is CR.
80%-85% is CR, currently.
Okay. So does it necessarily mean that even after Chromeni coming through, there will be some pressure on pricing given bulk of the imports is CR?
Definitely. If exports are not available to us, there would be a little pressure underpricing, but we will again target other areas where our margins are better, and not where China is really dumping.
Okay. That's fine. My second question was on corporate restructuring. Are there any updates on JCL and Indonesia CR Mill? I think we had indicated on JCL some length of overall spending and Indonesia CR Mill. The timeline was given by March. Any updates over here and kind of proceeds that we expect from both these events?
Okay. So, the JCL that transaction will be completed now within probably the next four to six weeks. We have got all the approvals, and it's now we are just completing the more formalities and process steps. So that will be there. On Indonesia CR Mill, the sale of assets has been, is in progress, and approximately we are likely to fetch around $20 million from that asset. So, and then after that, we'll look for the land sales separately, or later we'll see that how to monetize the land or what, what are the next steps. Right now, plant has been actually in a dismantling stage.
On JCL, how should we look at the valuations? Any color?
JCL, if you recall, Ritesh, the one transaction was anyway done, so more or less it will be in line with the same valuations what we did earlier transaction.
Okay. Would it be possible for you to help the net debt and nine-month EBITDA number for JCL?
That we can do separately because JCL is not part of this one, so maybe I'll ask Shreya to get you that.
No worries. Perfect. And lastly, Mantri, anything on the tax rates given Chromeni has started? I would presume that Rathi, RUVL, Chromeni, they had some sort of historical accumulated losses might be there. So is there any benefit that we expect at JSL level, say FY 2026, FY 2027? How should we look at it?
Yeah. So, Chromeni, ah so you're right. All the CRs are accumulated losses. Chromeni, we will, so but that can only be claimed actually, as a thing once we merge the entity with that. So that we are in the process of evaluating. Rathi, we may not merge the entity. Chromeni, we are just evaluating. We will look for the merging of that entity because that's more part of the core operation, in that.
But depending on that, how we actually envisage the plan for the future. So probably once we do that, I think then there would be a tax shelter available. And then so I would say not immediately next year, but 2027 we should see some of the tax shelter appearing into that because or maybe 2026 end, we can see some of the things coming up.
Sure. This was very helpful. Thank you so much. Thank you. All the very best. Thank you.
Thank you. Next question comes from the line of Ritwik Sheth with OneUp Financial Consultants Private Limited. Please go ahead.
Yeah. Hi. Good afternoon, sir. So just one question from my end. So on the NPI, Nickel Indonesia JV, have we already started generating EBITDA? Hello?
So we have just started it, as we said that the plant has started and we are stabilizing it. So we are not right now. I mean, we are evaluating it. So the numbers and all will come, will provide you in the future once we stabilize it fully.
Okay, but safe to say that it will be 100% completely ramped up in FY26?
Yeah. That's correct.
Okay. Thanks. Sir, just an update on the CapEx that we announced last year in May. If you could just give an update on the brownfield downstream CapEx at Jajpur, the infra upgradation, and the Indonesia SMS.
So, if you see, out of 5,500 for CapEx, if you recall that, the CapEx number for the year was 5,500. Out of that, almost 2,700 we have spent on the various acquisitions. So which has already gone, which include the Chromeni, the NPI, the last tranche of NPI and some of the working capital, and also the SMS facility. So that's this year.
And then besides this, other CapEx around INR 1,100 crore has been spent on the other CapEx so far. So it's progressing well. Some of the brownfield CapEx may get deferred to next year, but depending on the progress because with that. But more or less, a large part of the CapEx announced CapEx was actually the acquisition-related CapEx or our investment in the JV-related CapEx.
Correct. And the Indonesia SMS was scheduled to get commissioned in 24 months. Is that on track?
Yes. That is on track.
Okay. Okay. Great, sir. Thank you, and wish you a great 2025.
Thank you. Same to you.
Thank you. Next question comes from the line of Rohan Vora with Envision Capital. Please go ahead.
Hello. Thank you for the opportunity. So the first question was, I was just reading about in Indonesia, basically, they have put quota on nickel, and what would be the impact of this? You know, overall, what is your stance, you know, view on this? So that was the first question.
So that is the reason why, you know, we went and made investments into Indonesia because we already got those deals, that government would be going further more restrictive on ore export and then NPI export. So which is why we have further gone with these investments in Indonesia. So we should not be impacted really by any kind of quota system, and further, it will help increase the price of nickel also.
Right. So, basically, we will be able to, you know, get out the amount of bars that we were expecting earlier. So, that should not impact our plans.
Correct. Correct.
Got it. Got it. And the second question was on the JV, the Indonesia JV. So we had earlier said that, you know, because of the lower nickel prices, our ROC on that will be lower. So what is the view on that? Earlier we had a plan to get 25% ROC out of it, but what would be the revised number?
I don't know. You want to answer, reply, response to this?
Okay. So, I mean, like, as I said before that, on this, the return and this, I think we should wait for some more time, and then we come back with these numbers.
Okay. Okay. Got it. And anything that will flow to the, you know, the line item in the P&L when we show the profits from JV? So anything that will flow this year?
Sorry, I haven't got it. It's rightly. So you are saying JUSL?
No. The JV in Indonesia that we have.
That will come as an associate consolidation item.
Right. So, any guidance on what amount of, you know, PAT that will flow from?
So as Tarun just mentioned, I think just wait for some time because to get that exactly the profitability numbers on the current scenario for that JV.
No problem. No problem. Thank you so much.
Thank you. Next question comes from the line of Prasanth Gopal with Spark Asia Impact Managers. Please go ahead.
Sir, where is the current stainless steel price versus third-quarter average? And, can you give your outlook on that?
Sorry, Prasanth, your question is stainless steel price outlook?
Yeah. If you have any views on that near term?
See, stainless steel, if you see, it's the prices of average realization if you see in our line is depending on the two things. One is that our product mix and also the underlying raw material prices because it's quite a lot of raw material prices are in the pass-through, which is when the raw material prices goes up, the average realization goes down.
So it's not exactly like a carbon steel where the prices go up, the profitability increases because ultimately there is a pass-through impact on that. And second is also on the product mix because the prices between the 200 series and 400, sorry, 300 series, there is a vast difference between the two. I mean, the 400 is in between.
Okay. Hello?
Mr. Gopal, are you done with the questions?
Yes, sir, so what does if you take stainless steel 304 grade, where are we currently now, the prices versus the third-quarter average, if you can give that data?
Individual grade-wise prices, we don't give. Average realization overall for us, we can give you that average realization what comes to the blended. So this quarter average realization was INR 171,283 per ton.
Yeah. That, we got it. Yeah.
Okay. Thank you. Thank you. Yeah. Thanks.
Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Thank you. And let me also thank everyone for attending this call. In closing, I would like to reaffirm our confidence in the growth of the domestic market. Despite ongoing pressures of low-priced imports, we continue to demonstrate our leadership given the wide distribution network, technological prowess, and product supremacy. I hope that we have been able to answer all your questions satisfactorily. Should you need any further clarification or would you like to know more about the company, please feel free to contact our investor relations team. Thank you once again and speak to all of you soon.
Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Thank you.