APL Apollo Tubes Limited — Q3 FY26

Apl Apollo Tubes Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=4n18TWPQkI4 Published: 3 months ago

0:01 1 second Hello. Hi. Good evening everyone. Um and welcome to APL Apollo's quarter 3 FI26 earnings call. I would like to take this 0:08 8 seconds opportunity to congratulate team Apollo for such a stupendous performance in a quarter which had multiple headwinds 0:15 15 seconds such as subdued macro construction ban in Delhi NCR and uh falling raw material prices. If you look at our performance, I would like to highlight a few points. 0:27 27 seconds Number one being that the 9 month sales volume increase 11% Y which is well in 0:34 34 seconds our guidance range of 10 to 15% growth which we had communicated in the quarter 1 FI26 earnings call and 9 month IITA 0:42 42 seconds per turn is above 5,000 rupees which has surprised our own guidance um which uh we had given in quarter 1 0:52 52 seconds earnings call. So our strategy of pricing pomization by leveraging AP colo brand has worked excellent exc 0:59 59 seconds excellently to expand our iita spreads and the launch of SG brand in the base 1:06 1 minute, 6 seconds category worked well to compete with the smaller players in the structural steel 1:12 1 minute, 12 seconds tube segment and the sponge iron pipe players. It's been 12 months uh since we increased the selling price for APA polo 1:21 1 minute, 21 seconds branded products. Uh which does suggest that uh the markets have successfully accepted 1:29 1 minute, 29 seconds our brand equity and the premium of 3 to 4,000 rupees per turn for APO brand is 1:36 1 minute, 36 seconds uh is uh is a new normal for the structural steel tube segment. Another highlight for the quarter 3 result is 1:44 1 minute, 44 seconds that we sold 375,000 tons of volume in December month which implies the annual 1:54 1 minute, 54 seconds figure of 4.4 million tons. So we have successfully tested our 5 million t capacity as almost 90% utilization we 2:03 2 minutes, 3 seconds could achieve in the December month of 2025. 2:07 2 minutes, 7 seconds So we are very confident of this uh momentum to continue. Hence we are upgrading our sales volume growth 2:14 2 minutes, 14 seconds guidance 20% for quarter 4 FI26 and FI27 2:20 2 minutes, 20 seconds uh with IITA guidance of almost uh almost 5500 rupees per ton. Um and um 2:28 2 minutes, 28 seconds and at the same time we are aggressively pursuing capacity expansion to 8 million ton from current 5 million tons in next 2:36 2 minutes, 36 seconds two years which is a mix of four green field projects. two being in East India, one in South India and one in West 2:44 2 minutes, 44 seconds India. one being the brownfield project in Rayur for uh for value added products 2:51 2 minutes, 51 seconds and um and very interestingly we identified the 1 million ton uh expansion uh through debottlenecking 2:58 2 minutes, 58 seconds wherein we identified existing mills which could be replaced with much faster modernized mills which 3:07 3 minutes, 7 seconds uh which will expand our ROC's um uh to next levels because the investment over there will be very very 3:14 3 minutes, 14 seconds minimal. So total investment to expand our capacity from 5 to 8 million ton is around 1,500 crores. Um and this will be 3:23 3 minutes, 23 seconds funded uh from internal cash flows over the next two years. 3:29 3 minutes, 29 seconds Um um now [clears throat] now one thing uh which uh which uh uh which uh 3:36 3 minutes, 36 seconds obviously we will be talking much more over our earnings call is the additional 2 million ton to uh to achieve our vision of 10 million t capacity by 2030. 3:47 3 minutes, 47 seconds This incremental 2 million t will be in the super uh super specialtity segment uh wherein we are uh identifying various 3:55 3 minutes, 55 seconds targets worldwide for JVS with Japanese, Korean and European and American 4:02 4 minutes, 2 seconds companies to uh to offer products in uh specialized segments like uh EV category, aerospace, petrochem, oil and 4:11 4 minutes, 11 seconds gas, heavy engineering. Uh we are already talking to a few uh targets. So um so over the next 12 months there will 4:20 4 minutes, 20 seconds be much more coming from our side. So so 8 million t of structural steel tube capacity by F28 and overall 10 million 4:27 4 minutes, 27 seconds tel tube capacity by 2030. This is what vision um every member in APO team is working on. 4:39 4 minutes, 39 seconds Um we are also working on a lot of u cost control measures which Sanjay G 4:46 4 minutes, 46 seconds will uh will elaborate um u later in the poll uh so that we are uh we are able to 4:56 4 minutes, 56 seconds achieve 5500 ton of uh of ITA target on perton basis uh because it's a it's a 5:03 5 minutes, 3 seconds big uh jump in our guidance which we gave from 4800 to 5,000 to 5,500 rupees per term. So a lot of working uh has uh 5:11 5 minutes, 11 seconds gone uh uh while we are giving or throwing up this number to our investors 5:19 5 minutes, 19 seconds on uh on cash flow generation. Uh uh you could see that our uh our balance sheet has a net cash flow of of of as has 5:28 5 minutes, 28 seconds balance sheet of surplus cash of 5.6 billion rupees. Um now um now now most 5:36 5 minutes, 36 seconds of the capeex is uh behind us right and the company is throwing such large cash flows plus the uh plus the sales run 5:45 5 minutes, 45 seconds rate what we are achieving. So we are seeing lot of opportunities to rationalize the inventory day which right now is 30 plus it will uh it will 5:54 5 minutes, 54 seconds uh it will uh it will be in 20 days range and and with the strong Q4 our 6:02 6 minutes, 2 seconds surplus cash on balance sheet could be 1,500 cr rupees which was always our uh 6:10 6 minutes, 10 seconds target that we will uh we will have as much cash on our books to match our current liabilities so that we can be a 6:18 6 minutes, 18 seconds liability free company, debtfree company we became 2 years ago. Now we are on the verge of becoming liability free company 6:26 6 minutes, 26 seconds um and um and um and uh with such high inventory churn and uh better spreads uh 6:35 6 minutes, 35 seconds and volume growth our ROC which right now stands at 33% it would also further expand to uh to sub 40 levels. 6:45 6 minutes, 45 seconds Um so uh so so things uh look very very promising. Um thank you everyone for joining the poll. Uh we are happy to take questions now. 6:56 6 minutes, 56 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 7:03 7 minutes, 3 seconds star and one on the touchstone telephone. If you wish to remove yourself from the question queue you may 7:10 7 minutes, 10 seconds press star and two. Participants, you are requested to use hands up while asking a question. Ladies and gentlemen, 7:18 7 minutes, 18 seconds we will wait for a moment while the question assembles. 7:28 7 minutes, 28 seconds The first question is from the line of Niha Talija from Noama. Please go ahead. 7:34 7 minutes, 34 seconds Uh hi, good evening team and many congratulations and great set of numbers. Just couple of questions from my end. uh did we hear it correctly that 7:41 7 minutes, 41 seconds you said 20% volume growth in Q4 as well as FI27 I'm more concerned of FI27 while 7:48 7 minutes, 48 seconds quarter 4 is understood and secondly what's changed between in the last I would say 3 to four months or 6 months 7:56 7 minutes, 56 seconds where your ebitter per guidance has suddenly moved up significantly like you said from 48 100 to 5,000 to now 5500 8:05 8 minutes, 5 seconds what are the measures you are taking or what are the developments which are happening in the mix which is leading to this kind of a increase in guidance. 8:17 8 minutes, 17 seconds Thank thank you Sha. 8:20 8 minutes, 20 seconds Our mainly volume growth is coming from our strategy. 8:24 8 minutes, 24 seconds we have decided could go with the other brand also right now you can say we are in the our 8:33 8 minutes, 33 seconds segment in the market and also we are elible in our market. 8:45 8 minutes, 45 seconds This trial is totally successful. We started in month of November, November, December and till now in January also we 8:53 8 minutes, 53 seconds are going very good with our targets. So I think 9:05 9 minutes, 5 seconds you can say 30 3.55 million 9:11 9 minutes, 11 seconds Q4 we are targeting 10 to 11 target you can say 10.25 925 or 10.5 we can 9:19 9 minutes, 19 seconds easily achieve fixed cost 9:28 9 minutes, 28 seconds 2.6 Six per month 3.7 9:48 9 minutes, 48 seconds Otherwise, 10:01 10 minutes, 1 second we are well in as a brand. 10:18 10 minutes, 18 seconds Abnormal grow 10:41 10 minutes, 41 seconds we are doing so so like we are done in October 2.5 lakh done normal we have done almost three plus three lakh ton 10:49 10 minutes, 49 seconds and December we have done 370 January also we are looking for 370 or 380 11:08 11 minutes, 8 seconds local. 11:10 11 minutes, 10 seconds We have reduced our freight cost also by 100 200 11:29 11 minutes, 29 seconds 902 92 unit. 11:53 11 minutes, 53 seconds Thank you. 11:57 11 minutes, 57 seconds Thanks. Thanks a lot. So, thank you so much and all the very best team. 12:01 12 minutes, 1 second Thank you. Thank you. S just to uh reiterate that we are seeing 20% volume growth for Q4 FI26 and for the full year FI27 over FI26. 12:15 12 minutes, 15 seconds Thank you. The next question is from the line of Bat Sisha from Barat Sisha. Please go ahead. 12:25 12 minutes, 25 seconds Namaste San G. Thank you brother. Namaste. Namaste. 12:36 12 minutes, 36 seconds Before I ask a question, 12:45 12 minutes, 45 seconds headwinds and challenges quarterly presentation. 12:53 12 minutes, 53 seconds Headwinds and challenges. 13:07 13 minutes, 7 seconds I think we should stop writing this. 13:15 13 minutes, 15 seconds You're absolutely right. First of all, very thankful to you. 13:31 13 minutes, 31 seconds So I just wanted to with that as the first point or fail. 13:43 13 minutes, 43 seconds [laughter] 13:44 13 minutes, 44 seconds Okay. So basically uh I I I think fundamentally the most important change 13:52 13 minutes, 52 seconds in strategical strategic focus that we have now steered and which I think is providing 14:00 14 minutes uh superior outcomes is to focus on overall 14:07 14 minutes, 7 seconds growth of the profit pool. uh whether it comes through uh volumes, it comes from 14:14 14 minutes, 14 seconds the uh lead rate due to volumes or whether it comes through the mix but I 14:20 14 minutes, 20 seconds think we use those as levers but uh objective clearly is to grow the profit 14:27 14 minutes, 27 seconds pools and I think that strategy of focusing on the profit pool perhaps is 14:33 14 minutes, 33 seconds uh the most important strategic change that we have initiated in last few quarters and in my personal opinion uh 14:43 14 minutes, 43 seconds and absolutely the right area to focus on. So want to want to uh uh get your perspective on the matter. 15:16 15 minutes, 16 seconds 40,000 per Dubai planting. 15:41 15 minutes, 41 seconds We are targeting Apollo Dubai,000 15:51 15 minutes, 51 seconds at allofingal 16:04 16 minutes, 4 seconds close to 6,000 per turn in 370,000 t 16:09 16 minutes, 9 seconds 37,000 turn into 000 220 cr 16:22 16 minutes, 22 seconds This is 16:45 16 minutes, 45 seconds dry raw material. 17:13 17 minutes, 13 seconds Focus Trade cost 25 2600 per average local 1150 17:24 17 minutes, 24 seconds 1150 2600 Localize 18:11 18 minutes, 11 seconds I think we are a very comfort position. 18:24 18 minutes, 24 seconds Absolutely. 18:29 18 minutes, 29 seconds Basically volume 18:43 18 minutes, 43 seconds control overall that should culminate into 18:52 18 minutes, 52 seconds profits and focusing on profits And growing the profit pool is far more 19:00 19 minutes strategically simpler objective and uh in my opinion an efficient objective uh 19:07 19 minutes, 7 seconds rather than uh you know getting carried away by moving parts. 19:23 19 minutes, 23 seconds Of course in between we suffered from a particularly bad quarter since ISIS swam nobody can do anything. So uh that is something exempted. 19:49 19 minutes, 49 seconds Then a second question I wanted to uh when I'm looking at conversion of AITA 19:56 19 minutes, 56 seconds into operational cash flow in this particular period of 9 months it has suffered and clearly that has suffered 20:04 20 minutes, 4 seconds because some amount of working capital has come into the play. 20:08 20 minutes, 8 seconds Uh but our free cash has gone up because our capex is now uh behind us. So the 20:16 20 minutes, 16 seconds question that I wanted to raise was uh uh Anuho mentioned at the beginning from 20:23 20 minutes, 23 seconds a zero date company uh zero debt balance sheet to liability free balance sheet. 20:30 20 minutes, 30 seconds If I had to interpret that uh uh appropriately, it would mean uh that basically even current liability is 20:39 20 minutes, 39 seconds probably knockoff which means our management of inventory and account 20:46 20 minutes, 46 seconds receivable is so efficient that uh the reduction of working capital through current liability itself may be unled as 20:55 20 minutes, 55 seconds an objective. Is that a right understanding? 20:58 20 minutes, 58 seconds That's that's right. Uh so so the working capital which right now stand at three it it will go to negative. 21:08 21 minutes, 8 seconds Now that is the most worthy objective because liability is a way of funding assets. 21:26 21 minutes, 26 seconds working capitaly. 21:39 21 minutes, 39 seconds [clears throat] 21:40 21 minutes, 40 seconds Fantastic. Last question. 21:46 21 minutes, 46 seconds GL 22:08 22 minutes, 8 seconds study. 22:48 22 minutes, 48 seconds Well, call best performance. 23:00 23 minutes G. Now this is music to the ears. And one last question uh 23:08 23 minutes, 8 seconds uh given the fact that volume outlook also is now healthy. Mix in any case is 23:15 23 minutes, 15 seconds uh steadily improving. Uh Dubai operation is moving forward on a fast uh forward basis. 23:26 23 minutes, 26 seconds uh and our strategic focus is now on uh raising the margins and first time I 23:33 23 minutes, 33 seconds have heard right at the beginning Ano spilling out ITA but objective 23:40 23 minutes, 40 seconds otherwise we typically would jun it out shy at the end of some questions you know so that that clearly tells me where 23:48 23 minutes, 48 seconds things are. So will it be uh will it be possible to see uh 23:58 23 minutes, 58 seconds a bit of 3,000 cr plus in 27 or am I being greedy? 24:04 24 minutes, 4 seconds No you are right now you are greedy brother you frankly you ask me I'm 42 million 24:13 24 minutes, 13 seconds 4.2 2 million 5500 24:29 24 minutes, 29 seconds in the last 20 years. 24:39 24 minutes, 39 seconds It's very hard to meet 24:49 24 minutes, 49 seconds My mind also 4.2 million volume 5500. 25:02 25 minutes, 2 seconds No, no, that's a very very fair answer which means 28 3,000 cr in any case has 25:10 25 minutes, 10 seconds to be million 25:24 25 minutes, 24 seconds so delighted to hear all that I heard and between what you stated and you 25:31 25 minutes, 31 seconds didn't state I I think uh uh this is a remarkable one. But that statement about challenges 26:04 26 minutes, 4 seconds Fantastic. Congratulations. 26:14 26 minutes, 14 seconds Thank you. Thank you brother. 26:19 26 minutes, 19 seconds Thank you. A reminder to all the participants, you may press star and one to ask a question. 26:28 26 minutes, 28 seconds The next question is from the line of Adit Talikar from Access Securities. Please go ahead. 26:35 26 minutes, 35 seconds Yeah, thank you. Uh congrats for the great set of numbers. Uh so my question is to Anuba. Uh just a few bookkeeping 26:43 26 minutes, 43 seconds questions uh on the capacity expansion front. So in the last quarter's presentation we have existing capacity of 4.5 million tons. So now we have 5 26:52 26 minutes, 52 seconds million tons. So the increment has come from Dubai. And what else uh apart from Dubai? 27:08 27 minutes, 8 seconds So so this 4 and a half to five capacity one is super heavy we had added. So that got added plus um some capacity we added 27:16 27 minutes, 16 seconds through deep bottlenecking only. Um so the team is working very very 27:23 27 minutes, 23 seconds aggressively right to uh to identify that within the existing capacity how we can increase capacity is by doing small 27:32 27 minutes, 32 seconds small improvements um like the mill has multiple components. So replacing uh old 27:39 27 minutes, 39 seconds components with new components uh the the efficiency improves. So 4 and a half to five uh new capacity got added by 100 27:46 27 minutes, 46 seconds 200,000 ton and rest to 300,000 t is through the bottlenecking only. 27:52 27 minutes, 52 seconds Okay. And this speciality tools which we were projecting earlier.5 million tons it will remain the same the quantum and 28:01 28 minutes, 1 second now we are now we are targeting 2 million tons. Um beyond 8 million t to reach 10 million t 2 million t will be specialtity tubes. Earlier it was 1 28:10 28 minutes, 10 seconds million t. uh now we have increased it to 2 million t because as we have started work as we started working so we 28:18 28 minutes, 18 seconds are identifying lot of areas where uh our company can work upon. 28:24 28 minutes, 24 seconds Yeah. So what gives us I mean if you can throw some uh use cases or uh demand 28:31 28 minutes, 31 seconds pointers that mean we are now projecting higher uh capacity additions. So anything on that front? 28:39 28 minutes, 39 seconds So from 5 to 8 journey right 2 million ton consists of 28:46 28 minutes, 46 seconds four green field plants one in Gorakpur another one in siliguri third one in new 28:54 28 minutes, 54 seconds new Malur which is in south India and fourth in Bhj. So these are the four green field plants and um and one 29:03 29 minutes, 3 seconds brownfield expansion in Raipur for value added products. So this put together will add 2 million ton over 5 million 29:10 29 minutes, 10 seconds ton and 1 million ton again through the bottlenecking we are going to increase um two 29:18 29 minutes, 18 seconds and and the green field plus brownfield expansion will require 1,300 crores and bottlenecking expansion will require 200 crores. 29:30 29 minutes, 30 seconds Yeah, my question was on demand drivers mean we are expanding the capacity. So from uh demand perspective do you see 29:38 29 minutes, 38 seconds that uh means uh from an overall perspective because last few we have seen there was some subdive demand. 29:45 29 minutes, 45 seconds Yes. No no demand is not substitute. We are selling the material in one segment. 29:50 29 minutes, 50 seconds Now we are straight ourself. Now what I last starting now we are in the market. 29:58 29 minutes, 58 seconds We are el in the market. We are not going to spread anything. We are very clear. 30:07 30 minutes, 7 seconds So, so what Sanjay is saying is that ATL Apollo brand is the highest selling price point. SG brand is at the lowest 30:13 30 minutes, 13 seconds selling price point. Correct? So, that way we have captured the market um heavily. Second, see all these 30:22 30 minutes, 22 seconds expansions which are coming. No so east India we are not uh selling our products in East India because because we don't 30:30 30 minutes, 30 seconds have any plant as yet so gorakur and siliguri will cater to all the new virgin market for apollo 30:38 30 minutes, 38 seconds then bhj bhj is for export market again the 30:45 30 minutes, 45 seconds again the segment where we have been lagging behind uh new Bangalore Malur project right they capacity for the 30:54 30 minutes, 54 seconds existing products is already fully utilized. So we are adding new capacities. So whatever new capacity is coming either it is for 31:03 31 minutes, 3 seconds new areas or the products which are fully utilized as on date and third the the roofing the value added products in 31:11 31 minutes, 11 seconds Raipur uh even Raipur plant today the capacity utilization has reached 70%. 31:17 31 minutes, 17 seconds Okay in uh in quarter 3. So uh so one year down the line we also need to reinvest again in ripur to expand the capacities because the demand for some 31:26 31 minutes, 26 seconds of the products is very very strong. Um so so so we're just gearing uh for that. 31:32 31 minutes, 32 seconds So this 2 million ton of incremental capacity it's not going to cannibalize existing sales. 31:41 31 minutes, 41 seconds It's it's it's from three point. Yeah, it's on three point fundamentals. New market, new uh product um 31:48 31 minutes, 48 seconds when we enter the motoring area coming this is this is overlap. This will be overlap. 31:54 31 minutes, 54 seconds Yes. But then uh the market will increase assuming India construction growth is 7 8% year on year. So that's much market will increase. 32:03 32 minutes, 3 seconds That's very good to hear. Uh thanks and all the best. 32:10 32 minutes, 10 seconds Thank you. The next question is from the line of Onar Gural from Shri Investment. Please go ahead. 32:18 32 minutes, 18 seconds [clears throat] Uh Congress, good set of numbers. Uh I just wanted to know this speciality tubes which you're talking about from FI28 to FI30 what kind of 32:28 32 minutes, 28 seconds like aida per ton is there? You can give a range that would be fine. 32:35 32 minutes, 35 seconds So uh so if you look at the specialtity tubes some of the Indian companies are present and some of the global companies 32:41 32 minutes, 41 seconds which we are studying um the IVA spreads are in the range of 10,000 to 15,000 rupees per turn. It will depend like 32:50 32 minutes, 50 seconds what kind of product segment we get into. It's a bit early uh to to comment in next two three quarters we'll have 32:57 32 minutes, 57 seconds much more clarity that which global partner which segment we are tying up with and uh but yesh whatever 33:07 33 minutes, 7 seconds we do it should be above 10,000 rupees per tonita and here you are talking about JVS right in international markets 33:14 33 minutes, 14 seconds yeah that's right because super uh super speciality products um now if we if we uh if we build this capacity um in house 33:23 33 minutes, 23 seconds uh in India it will take time so partnership with a global player always uh put things on fast track and we can 33:30 33 minutes, 30 seconds capture uh pretty quickly okay thanks the second one is on the capacity you mentioned I guess you'll be 33:38 33 minutes, 38 seconds doing around 3.6 uh million t this year and then 42 43 million t 4.2 to 4.3 million t in FY27. 33:49 33 minutes, 49 seconds So is the understanding correct? 33:53 33 minutes, 53 seconds Yes, very correct. Minimum 4.2 million minimum. 33:58 33 minutes, 58 seconds Okay. And you're talking about 5,500 of a per ton, right? Yes, minimum. 34:06 34 minutes, 6 seconds Okay. This is minimum you are talking about. And then with all the efforts you are doing and with the free cash we'll be generating, what kind of ROC's you are targeting? 34:16 34 minutes, 16 seconds It it it can it could hit 40%. How in 27 right? 34:24 34 minutes, 24 seconds Um um so optically right on 34:33 34 minutes, 33 seconds 5,000 5,000 shares are 34:49 34 minutes, 49 seconds so depreciation for 50% uh 34:57 34 minutes, 57 seconds 3200 3200 40% 40 so 40% is what you can 35:03 35 minutes, 3 seconds see um within FI27 okay and like the free cash flow which 35:13 35 minutes, 13 seconds you'll be generating you are like you will be using that to reduce the working capital days or like you will be giving 35:21 35 minutes, 21 seconds out some extra dividends like increasing your dividend payout as well. 35:26 35 minutes, 26 seconds We going to some increase of some dividend payout surely no doubt like right now we are we achieved our targets 35:35 35 minutes, 35 seconds what we are thinking so right now we are going with minimum 20% of dividend payout policy we increase to 25% minimum 35:45 35 minutes, 45 seconds okay all right thank you thank you next question is from the line 35:54 35 minutes, 54 seconds of Abishek from DS ASP mutual fund please go ahead. 36:03 36 minutes, 3 seconds Hello am I audible? 36:05 36 minutes, 5 seconds Yes please proceed. Yeah, congratulations for great set of numbers 36:20 36 minutes, 20 seconds as far as steel are concerned is that already 36:32 36 minutes, 32 seconds not looking backward. have to take the more material. 36:44 36 minutes, 44 seconds Okay. Okay. Because Okay. 36:50 36 minutes, 50 seconds Okay. And 37:00 37 minutes even 37:14 37 minutes, 14 seconds if there's a market tailwind, there can be upset to this number. Yes. 37:20 37 minutes, 20 seconds Okay sir, thank you so much and wish you Thank you. The next question is from the line of Dashin Maha from Access Capital. 37:30 37 minutes, 30 seconds Please go ahead. 37:32 37 minutes, 32 seconds Yes sir. Uh thank you for taking my question. My question was also on your similar line when we uh target for 5,500 37:42 37 minutes, 42 seconds per 10 AITA. So what uh uh what HRC price are we working with for this uh uh unit 3 AITA? 37:53 37 minutes, 53 seconds No Dashan. So HRC is passed through for us, right? So there is no assumption on the HR coil pricing whatever price is up or down uh it will it will be fully passed on to our customers. 38:05 38 minutes, 5 seconds So we are able to fully pass it like there is no absorption that we we have to take in our books. we are able to fully pass over to the to the end. 38:14 38 minutes, 14 seconds That's right. That's right, Josh. 38:16 38 minutes, 16 seconds Okay. Okay. And so uh just one so one more thing when uh in terms of uh recon uh consolation of the capacity. So in 38:24 38 minutes, 24 seconds the presentation it is given that uh two of for this 2 million t green capacity uh rur would be uh close to 6 million t. 38:33 38 minutes, 33 seconds However, my understanding is this rifle plant is for debuting, right? It doesn't fit into the 38:39 38 minutes, 39 seconds uh green field capacity. So, plant no within Riper, same land, same 38:47 38 minutes, 47 seconds land parcel, there will be new uh sheds coming up, new machinery coming up for six lakh tons. 38:56 38 minutes, 56 seconds Okay. Okay. So, so this uh Raipur 6 million t is purely green print and 39:03 39 minutes, 3 seconds then for can you give the break up of this deep bottle making capacity of this 1 million 10 that will be across the plants dashan that will be across the plants. 39:15 39 minutes, 15 seconds Okay, that would be across the plants. 39:17 39 minutes, 17 seconds Okay. And uh uh one more question is on the uh so we uh saw increase in interest 39:25 39 minutes, 25 seconds calls this quarter. However, I think uh debt our total uh debt quarter on quarter which you grew in the 39:32 39 minutes, 32 seconds presentation has decreased. So just wanted to know why did we see this increase in overall interest cost. 39:43 39 minutes, 43 seconds So it is u so if you see like uh the uh the uh debt we have on the books right 39:50 39 minutes, 50 seconds the gross debt let's not talk about the net debt if we talk about the gross debt on uh March 25 uh it used to be around 39:59 39 minutes, 59 seconds 600 K rupees 615 crores okay March 25 and uh 9 months we closed at 548 crores 40:08 40 minutes, 8 seconds okay uh that's the gross that on the books so um so because There was interest rate movement during the year. 40:15 40 minutes, 15 seconds This is what it is and some bank charges because of uh because of bill discounting etc. we do so some increase 40:24 40 minutes, 24 seconds in uh interest cost because of that. So basically you are saying also overall debt has gone down basically there are 40:31 40 minutes, 31 seconds some bank charges as well as maybe increase in overall borrowing rate which has uh basically like 40:39 40 minutes, 39 seconds yeah so um so as we are going to have a lot of cash flow generation during quarter 4 I mean from quarter 1 FI27 40:46 40 minutes, 46 seconds onwards u this interest rate will reduce drastically down to almost zero levels. 40:54 40 minutes, 54 seconds Okay. And uh just uh one two more questions before I can squeeze. Uh so first first was on the consolidate tax 41:02 41 minutes, 2 seconds rate. Uh uh can we can we assume uh lower tax rate going ahead once this 41:09 41 minutes, 9 seconds Dubai facility comes into play already I think we are at now at 22 23%. Would 41:15 41 minutes, 15 seconds there be any uh more uh reduction in tax rate going forward once uh this Dubai 41:22 41 minutes, 22 seconds you know Dubai plant uh keeps running uh like once it is on stream? 41:29 41 minutes, 29 seconds So so Darian both Dubai and Rifle plants are at low tax rate um because Rifle we started uh in 2018 under that scheme 41:38 41 minutes, 38 seconds when the government uh gave tax benefits for the uh new ventures. Um so eventually we expect our tax rate to be around 20%. 41:49 41 minutes, 49 seconds Okay. 41:49 41 minutes, 49 seconds When the contribution from both Dubai and Raipur will be at its peak. 41:55 41 minutes, 55 seconds Okay. So can I say FI 28 would see more like 20% tax rate or kind of be 42:03 42 minutes, 3 seconds okay. Okay. and uh yeah I think uh done with my questions 42:11 42 minutes, 11 seconds and the congratulations on the numbers sir. Thank you. Thanks Asha. 42:19 42 minutes, 19 seconds Thank you. The next question is from the line of Sanjay Nandi from VT Capital. Please go ahead. 42:26 42 minutes, 26 seconds Hello. Yeah. Congress sir on a good set of numbers. Uh so just a broad vision picture kind of like as we are heading 42:32 42 minutes, 32 seconds for 10 million and by 2030 from five as we talk so which of the industries where we can expect the green shoots from. 42:43 42 minutes, 43 seconds So from 5 to 8 we are betting on our existing industry which is structural steel tubing which 42:50 42 minutes, 50 seconds is linked to the construction across the country for residential for commercial government infrastructure. Um 42:58 42 minutes, 58 seconds [clears throat] 42:58 42 minutes, 58 seconds uh real estate uh private u construction has been um um uh on a slow track for 43:06 43 minutes, 6 seconds last two two and a half years because of various reasons but next three four years look very promising um and the 43:13 43 minutes, 13 seconds government spending on infrastructure once it um kickstarts then um then also 43:20 43 minutes, 20 seconds there will be a lot of tailwinds coming in. So we are very bullish on the on the um construction and infrastructure uh spending over the next three four years. 43:30 43 minutes, 30 seconds Um so 5 to 8 million ton is the existing structural steel tubing and beyond 8 million t to reach 10 million t that is 43:37 43 minutes, 37 seconds for the special segments uh new emerging categories like uh uh EVs and aerospace 43:45 43 minutes, 45 seconds and highly mechanical engineering uh petrochem and oil and gas segments uh that we will uh that we are still 43:52 43 minutes, 52 seconds evaluating and studying. um um maybe in um 2 three quarters time we'll have a fine blueprint that how we going to 44:00 44 minutes cater to this um segment. So sir in the specialized segment also we are planning for the structural steel supplying the 44:08 44 minutes, 8 seconds structural steel right which one in the specialized field also we are planning to supply the structural steel 44:15 44 minutes, 15 seconds right in the respect of those segments no that won't be structural steel that that will be that will be nonstructural 44:23 44 minutes, 23 seconds like round pipes or or uh coated pipes or like titanium pipes um structure uh 44:31 44 minutes, 31 seconds structure structural steel tube don't require that kind of speciality. Yeah. 44:39 44 minutes, 39 seconds So that's it from my side. I wish you all sir. Thank you so much. 44:46 44 minutes, 46 seconds Thank you. The next question is from the line of Harwasa from SBI Capital Securities. Please go ahead. 44:54 44 minutes, 54 seconds Uh yeah, first of all, congratulations on a great set of numbers to the entire EP Lako team and thank you for the opportunity. So my question was that 45:02 45 minutes, 2 seconds like currently we have a capacity of 5 million tons uh at the end of FI26. So by the time of FI27 uh so what would be 45:10 45 minutes, 10 seconds our like exit capacity at the end of FI27 and what would be our FI28 uh like volume growth like if you can titively 45:18 45 minutes, 18 seconds give like ballpark number from FI27 y growth. 45:24 45 minutes, 24 seconds So, [clears throat] so, so FI26 the exit capacity will be 6 million ton. FI28 target is 8 million uh 8 million tons. 45:35 45 minutes, 35 seconds Right? So, almost uh 3 million ton will come in 24 months from April 26 to uh 45:42 45 minutes, 42 seconds March 28. Okay. Now, now exact numbers you can assume like 45:50 45 minutes, 50 seconds um 6 6 and a half million ton could be 6 6.25 million ton could be as at FI27 and 45:57 45 minutes, 57 seconds 8 million ton by FI28 but majority of the capacity will come in FI28 because these are the green field plants we are 46:04 46 minutes, 4 seconds setting up. Um um so so bulk of that will start coming from Q1 of FI28 46:10 46 minutes, 10 seconds and um as far as uh the volume uh growth for FI28 so so the guidance is that we 46:19 46 minutes, 19 seconds should continue 20% we should maintain 20% growth rate for FI27 and FI28. 46:27 46 minutes, 27 seconds Okay. Okay. Thank you. 46:33 46 minutes, 33 seconds Thank you. The next question is from the line of Radha from BNK Securities. Please go ahead. 46:45 46 minutes, 45 seconds Radha, please proceed with your question. 46:51 46 minutes, 51 seconds Due to no response, we will take the next participant. The next question is from the line of Prashant Sharma from GM Financial. Please go ahead. 47:00 47 minutes Yeah. Uh so my question is regarding this new safeguard duty uh that have come into play in December. So what was the impact of that uh on the APL a polo? 47:13 47 minutes, 13 seconds No impact on Apollo except the fact that our raw material prices went up but that 47:20 47 minutes, 20 seconds is fully pass on. So um so no impact as such. Okay. Thank you. That's all from my end. 47:32 47 minutes, 32 seconds Thank you. The next question is from the line of Ajit Shetty from Elco Quantum Solutions. Please go ahead. 47:40 47 minutes, 40 seconds Yeah, thanks for the opportunity. As we will be doing L1 going forward, so do we expect any realization hits going forward? 47:50 47 minutes, 50 seconds This is going to be a very small part of the business. Uh you saw that contribution in Q2 and Q3 also. um um 47:58 47 minutes, 58 seconds and we still maintain the ITA spread of 5200 rupees uh per turn. So we uh so whatever projections guidance we are 48:06 48 minutes, 6 seconds giving in we have built in uh the volume from uh from uh from low category brand. 48:20 48 minutes, 20 seconds Thank you. The next question is from the line of Mud Bandari from Capital. Please go ahead. 48:29 48 minutes, 29 seconds Hi sir. Uh just one question. Uh in the SG premium I think you said 1,500 to 2,000 is the AIDA per turn. So what kind 48:37 48 minutes, 37 seconds of volumes did we make in 3Q FY26? Uh and is there any uh if we want to 48:44 48 minutes, 44 seconds increase those volumes would there be any additional assembly line or machinery uh different from what we are using would be required? 48:52 48 minutes, 52 seconds No machinery is almost same. We are doing doing almost 60 70,000 turn per turn in quarter Q3. I depend on the our 49:02 49 minutes, 2 seconds balanced product mix sales. If my sale is less in the other my premium products 49:09 49 minutes, 9 seconds maybe I go for one lakh in a quarter we have not no problem at all because Merci is same. 49:27 49 minutes, 27 seconds I hope this uh answers your question. Can we take next one please? 49:32 49 minutes, 32 seconds Thank you. The next question is from the line of Palab Agarwal from Antique Stock Broking. Please go ahead. 49:39 49 minutes, 39 seconds Yeah, good evening and congratulations on the record quarter. Um so a couple of questions. uh one is you know with the 49:47 49 minutes, 47 seconds safeguard duty and HRC prices going up are we seeing some restocking demand happening in the quarter so that can 49:53 49 minutes, 53 seconds lead to better volumes very minor because it's too early for 50:02 50 minutes, 2 seconds channel partners to act on this um once there is more uh more clarity on how 50:09 50 minutes, 9 seconds prices will behave then restocking uh should Okay. Uh the other question you know was 50:17 50 minutes, 17 seconds on the purchase of stock and trades. So uh in some quarters you know it is a pretty high number. So this quarter it's 50:23 50 minutes, 23 seconds about 329 crores. So is this 50:34 50 minutes, 34 seconds hello? Oh 50:38 50 minutes, 38 seconds [music] 50:42 50 minutes, 42 seconds due to no response we will take the next participant. 50:46 50 minutes, 46 seconds The next question is from the line of Onar Gare from Shri Investment. Please go ahead. Yeah, I just wanted to know uh 50:54 50 minutes, 54 seconds with the recent upside in the all the commodities I mean will there be any 51:01 51 minutes, 1 second impact on the guidance which you have given I mean you cannot comment on the revenue front but what would be your 51:09 51 minutes, 9 seconds prediction on that sorry say it again prediction on what uh prediction on overall uh guidance 51:16 51 minutes, 16 seconds which you have given of 20% volume growth I mean uh where do you see the trajectory of uh commodity prices and 51:25 51 minutes, 25 seconds how much it can impact your overall revenue. 51:30 51 minutes, 30 seconds So we don't factor in how steel prices will uh behave uh because there is no measure uh where we can have clarity 51:39 51 minutes, 39 seconds while uh while working on our business plan for next two years. We work on a simple u fundamental that whatever 51:46 51 minutes, 46 seconds increase or decrease in uh raw metal prices we get we immediately pass it on to our customers and uh and this we have 51:54 51 minutes, 54 seconds been doing for many years now and our channel partners our network of 800 distributors uh has also kind of got 52:03 52 minutes, 3 seconds used to this model and not only us but our competitors also work on the uh same 52:10 52 minutes, 10 seconds uh fundamental. So industry has adopted this that u that um the increase or decrease in ramp till prices should be easily passed on to the customers. 52:21 52 minutes, 21 seconds So generally how much is the lag in that? 5 to 8 days. Oh just 5 to 8 days. 52:28 52 minutes, 28 seconds That's right. 52:29 52 minutes, 29 seconds So practically speaking there should be no impact because of the commodity steel prices or the commodity price increase if it sustains like this. 52:38 52 minutes, 38 seconds Yeah. Yeah. Unless there is a drop or increase of like 10% or more in a single quarter 52:46 52 minutes, 46 seconds right um which happens like once in 10 years. 52:51 52 minutes, 51 seconds So so last year we had uh this impact but uh we don't expect this to come again such a sharp increase or decrease um again during this decade at least. 53:01 53 minutes, 1 second Okay. Uh less than that is easily passed on right as you said within the same quarter or maybe in seven eight days. Yeah. Yeah. Sorry. 53:09 53 minutes, 9 seconds Okay. All right. No problem. Thank you very much. 53:15 53 minutes, 15 seconds Thank you. The next question is from the line of Kumar Somia from Abid Capital. Please go ahead. Hi Anab, just one question from my side. 53:23 53 minutes, 23 seconds I just trying to understand a math here. 53:25 53 minutes, 25 seconds Uh the market is roughly 10 to 12 million ton. Assuming 55% is your HRC coil based that implies 5 and a half to 53:33 53 minutes, 33 seconds 6 and a half million t. Now based on 20% guidance you would be touching 4 and a half million t next year and as if I 53:40 53 minutes, 40 seconds remove 200,000 tons for SG premium and 300,000 tons of Dubai you're left with four million tons for domestic market. 53:47 53 minutes, 47 seconds So that impress 65% market share and your competition is also planning for capacity addition. So how comfortable are you with this uh volume? 53:56 53 minutes, 56 seconds So Kumar 65% market share we've been maintaining for almost four years now after co before covid we were at 40%. 54:03 54 minutes, 3 seconds Now after COVID from 2021 straight into 25 as we enter in 26 we are above 60%. 54:09 54 minutes, 9 seconds Um Sanji you want to add to this? Yeah. 54:12 54 minutes, 12 seconds Number two I think number two like we are talking per month 2000. 54:32 54 minutes, 32 seconds Okay. And number two 54:41 54 minutes, 41 seconds whatever the price maybe price is less than HR coil or maybe price is less than maybe the price is less than anything 54:50 54 minutes, 50 seconds so in this guidance of 4 to 4.5 what is the estimate that SG premium will 54:57 54 minutes, 57 seconds command in terms of volume share three to four Under 10% under 10%. 55:05 55 minutes, 5 seconds Okay. Okay. Thank you, sir. That will be all from my s. Thank you. Thank you. 55:11 55 minutes, 11 seconds Thank you very much. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments. 55:22 55 minutes, 22 seconds Um thanks uh Kumar and Embit for hosting a polo for its quarter three um earnings call and thanks to all the participants 55:30 55 minutes, 30 seconds who dropped by. Look forward to see you again uh during Q4 FI 26 earnings call for. Thank you so much. 55:39 55 minutes, 39 seconds Thank you very much on behalf of Ambbit Capital Limited. That concludes this conference. Thank you for joining with us today.