Apl Apollo Tubes Ltd — Q4 FY26

Apl Apollo Tubes Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=h18oSqQdi_k Published: 9 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to APL Apollo tubes Q4 and FI26 earning conference call hosted by MK 0:10 10 seconds Global Financial Services Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, 0:18 18 seconds opinion and expectation of the company as on date of the score. These statement are not the guarantee of future performance and involve risk and 0:27 27 seconds uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to 0:35 35 seconds ask question after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then 0:43 43 seconds zero on your touchstone phone. I now hand the conference over to Mr. Akesh Kumar from MK Global Financial Service Limited. Thank you and over to you Mr. 0:52 52 seconds Kumar. 0:53 53 seconds Good morning everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Rahul Gupta director Deepa Bur 1:03 1 minute, 3 seconds director operations Anab Gupta chief strategy officer and Chetan Kandelwal chief financial officer. I shall now 1:11 1 minute, 11 seconds hand over the call to the management for their opening remarks. Over to you sir. 1:18 1 minute, 18 seconds Thanks for hosting us and we also have our chairman managing director Mr. Paul. 1:26 1 minute, 26 seconds So good morning everyone and uh thanks for uh joining in. Uh we hope you have reviewed the results and uh we'll now walk you through the key highlights for the quarter 4 FI26. 1:37 1 minute, 37 seconds It was such a um it was such an exciting quarter with the roller coaster ride. Uh things looked so good till 28th of 1:45 1 minute, 45 seconds February and then the Middle East crisis started which impacted our performance towards end of the uh financial year. 1:53 1 minute, 53 seconds But uh despite that uh we could pull off with very strong performance for the quarter 4 by 26. And if you look at the 2:01 2 minutes, 1 second fullear results as well, uh key highlights being number one 9% increase in our quarterly volume on Y basis beta 2:10 2 minutes, 10 seconds per ton um at upward of 5,500 rupees uh per ton for the quarter 4 37% ROC for 2:18 2 minutes, 18 seconds the full year closing FI26 negative working capital cycle uh for the full year operating cash flow generation of 2:26 2 minutes, 26 seconds rupees 20 billion uh and free cash flow generation of rupees uh 13 billion for 2:33 2 minutes, 33 seconds the full year and we close u uh the year with uh net cash balance of rupees 15 2:40 2 minutes, 40 seconds billion plus uh in the books in uh today's environment the way things are changing it's becoming very 2:47 2 minutes, 47 seconds difficult to predict sales volume on a month- on basis u um since the war 2:55 2 minutes, 55 seconds started uh there have been lot of u upsides and downsides sides um um for the global economy and the Indian 3:03 3 minutes, 3 seconds economy which is impacting u uh our business in lot of ways number number one being the shortage of raw material 3:12 3 minutes, 12 seconds steel uh from the Indian nails um um and also the global supply chain got disrupted um our Dubai operations um are 3:20 3 minutes, 20 seconds operating at 40% utilization right now because of the um ongoing crisis there uh then there is a fear of uh um uh 3:30 3 minutes, 30 seconds price correction in the ramp till prices because she ste prices have gone up so much in the last 3 four months. So there is a detocking u from our channel 3:38 3 minutes, 38 seconds partners as well. uh energy crisis in India did impact our volumes uh in the month of March and um things have got 3:46 3 minutes, 46 seconds stabilized but then there's always a swad uh which can come up and like which can again impact if at all shortage of 3:53 3 minutes, 53 seconds fuel etc in the country and of course um because of heat and elections there was 4:00 4 minutes labor shortage also for the time being which also impacted u our operations directly and indirectly as lot of 4:07 4 minutes, 7 seconds construction sites u um um um went for the whole. So 4:14 4 minutes, 14 seconds uh so um so so so our focus right now is to protect our uh profitability and um and and margins. uh when we know that 4:23 4 minutes, 23 seconds volume prediction becomes uh challenging in this environment because APL AFO is the market leader and uh because of of 4:31 4 minutes, 31 seconds our very strong brand positioning we are able to we able to improve our margins um significantly and this is what uh we 4:38 4 minutes, 38 seconds demonstrated in our March uh numbers as well. uh despite the April u um month being slow in terms of volume. Uh this 4:47 4 minutes, 47 seconds beginning of May is also uh kind of uh similar to what uh trend we saw in April. But in terms of profitability, in 4:55 4 minutes, 55 seconds terms of ITA per we are doing much better uh than what we have ever guided for. So we will try to protect our 5:04 5 minutes, 4 seconds fullear target numbers in terms of absolutely I beta which we had guided uh 5:10 5 minutes, 10 seconds in our uh previous call. Um and um and hopefully things will um things will u u 5:17 5 minutes, 17 seconds things will become better as we move forward. But uh given the current atmosphere, our focus is on profitability rather than just uh pushing volumes. 5:29 5 minutes, 29 seconds And our long-term plan of 8 million t capacity by FA28 remains totally uh on track. Our KFX commitments uh new land 5:37 5 minutes, 37 seconds acquisition uh new product development uh distribution announcement in East India um that everything remains on 5:44 5 minutes, 44 seconds track. uh so that whenever uh things u recover uh we are quickly able to um uh we are quickly able to recover our loss 5:53 5 minutes, 53 seconds volume and uh demonstrate uh good performance. That's all from our side. We like to take questions now. 6:03 6 minutes, 3 seconds Thank you so much ladies and gentlemen. 6:06 6 minutes, 6 seconds We will now begin with the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to 6:14 6 minutes, 14 seconds remove yourself from the question queue, you may press star and two. Participants are request to use handsets while asking a question. 6:22 6 minutes, 22 seconds Ladies and gentlemen, we'll wait for a moment while the question builds. 6:34 6 minutes, 34 seconds Our first question come from the line of Niha from Noama Wealth Management. Please go ahead. 6:40 6 minutes, 40 seconds Hi uh good afternoon team. Uh just I mean good morning team just couple of questions from my end. Uh firstly you said Dubai is operating at around 40% 6:47 6 minutes, 47 seconds utilization. Just wanted to take an update on uh galvanized tube because last time we were facing some gas shortages. How's the operating level at 6:54 6 minutes, 54 seconds this point of time in those colored as well as galvanized tubes. 7:04 7 minutes, 4 seconds So uh Smeha um see I mean the domestic operations uh they were majorly hit uh for few weeks in month of March then 7:13 7 minutes, 13 seconds obviously things became a bit easy in terms of gas availability and our plants also moved to alternate fuels. So things have improved significantly. 7:23 7 minutes, 23 seconds uh but yes like I said there is always a swad um hanging okay when the crisis can again hit the the the industries um so 7:33 7 minutes, 33 seconds so I would say like because of that fear factor we would be operating at 80 85% if uh we know that crisis is fully gone 7:42 7 minutes, 42 seconds then of course there could be 15 20% increase in the production from the current levels understood and another of you also said about it demand weakness or detocking. 7:53 7 minutes, 53 seconds Could you actually bifrostate that into whether it's the actual demand weakness on the ground and has government spending actually picked up in any way or is it the mere deto which is taking 8:02 8 minutes, 2 seconds place and you know we are short short you know looking at a rebound here in terms of demand so that's one any 8:10 8 minutes, 10 seconds changes in the guidance because of the current situation that you may want to give out good morning site 8:19 8 minutes, 19 seconds you know the this type atmosphere we can't say this is a dtoing 8:26 8 minutes, 26 seconds or this is the demand slowdown in a takes some time to analyze these things 8:33 8 minutes, 33 seconds but whatever we give the yearly guidance in terms of volume and the profility I think volume 8:41 8 minutes, 41 seconds due to the current scenario but we are trying to keep our margin intact 8:51 8 minutes, 51 seconds volume. We are not focusing on our volume. We are focusing our margin. 9:01 9 minutes, 1 second Then we are focusing on the volume 9:13 9 minutes, 13 seconds we are maybe understood that was pretty helpful. 9:25 9 minutes, 25 seconds Thanks. Thanks a lot and all the very best. Thank you. 9:29 9 minutes, 29 seconds Thank you. Our next question comes from the line of Angut Saluja from UBSC India. Please go ahead. 9:38 9 minutes, 38 seconds Yeah. Hi, thank you for taking my question. Uh sir, one question. I think obviously guidance is difficult to give in the current scenario but if you look 9:46 9 minutes, 46 seconds at realizations and obviously an abida per ton how are we looking at that you know given HRC prices have also gone up but you know the risk from patra also 9:55 9 minutes, 55 seconds remains uh you know to sort of take away some volumes so how are we you know managing the margin bit in this scenario 10:02 10 minutes, 2 seconds uh even though you know volumes are slightly volatile volatile right now 10:12 10 minutes, 12 seconds I'm also talking last call also 10:21 10 minutes, 21 seconds less than 30% 10:32 10 minutes, 32 seconds innovations we increase our margin due to shortage also. 10:49 10 minutes, 49 seconds volume but margins are better. 10:53 10 minutes, 53 seconds Okay, got it. And what is driving this margin? Mainly is a better realizations that is driving it. 11:03 11 minutes, 3 seconds mainly boss you can say market leadership uh product innovation and supported by the shortage of the steel also. Perfect. Perfect. 11:16 11 minutes, 16 seconds Okay. And say one last question. I think uh capeex absolute amount how much are we expecting to spend in FI2700 11:27 11 minutes, 27 seconds total numbering for 8 million around 14500 next two and a half year. 11:39 11 minutes, 39 seconds Got it. Okay. Thank you. Thank you. 11:47 11 minutes, 47 seconds Thank you. Our next question comes from the line of Vikas Singh from ICA securities. Please go ahead. 11:55 11 minutes, 55 seconds Good morning sir and thank you for the opportunity and congratulation on a decent set of number in a very challenging time. So I just wanted to 12:04 12 minutes, 4 seconds understand the sustainability of 5500 ton margin uh going forward considering that the patra and the primary gap is 12:13 12 minutes, 13 seconds higher and this quarter you would have benefited from the shortage of material uh in the galvanized segment. So what uh and plus Dubai is also not picking up. 12:26 12 minutes, 26 seconds So could you give us a little bit more insight into this? 12:34 12 minutes, 34 seconds If you say from 5,000 to 5,500 per ton,000 12:50 12 minutes, 50 seconds I can't say anything right now but 5,000 to 5500 13:00 13 minutes we are quite sure in the future we we continue this we continue this margin. 13:08 13 minutes, 8 seconds So any portion of the inventory gains would have been involved in this because the prices rise so sharply. 13:36 13 minutes, 36 seconds If you see our balance sheet, we are almost 25 days inventory and exporting. 13:48 13 minutes, 48 seconds I can say noted sir and so in the past we have 14:00 14 minutes seen when the prices rise so quickly we usually had a problem securing the raw material so anything that sort of 14:09 14 minutes, 9 seconds problem we are facing right now also considering that some of the capacities would have been cartel like archel 14:16 14 minutes, 16 seconds yeah I think of 14:42 14 minutes, 42 seconds we are also trying to push our volume. 14:46 14 minutes, 46 seconds Let us see early. 14:56 14 minutes, 56 seconds Notice last capital allocation policy question generation is far exceed requirements. 15:22 15 minutes, 22 seconds Q12. 15:30 15 minutes, 30 seconds So we can expect good dividend going forward for this year. I can say yes. 15:40 15 minutes, 40 seconds Thank you. That's all for my side and all the best for you. Thank you. 15:45 15 minutes, 45 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question anyone on their test telephone. 15:54 15 minutes, 54 seconds Our next question come from the line of Bharesa from BCS Capital Ideas Limited. Please go ahead. 16:00 16 minutes Uh namaskar namaskar by namaskar. Namaskar. Uh 16:14 16 minutes, 14 seconds uh Sanj first of all most delighted at this quarter results uh more than the quantum of the growth. 16:24 16 minutes, 24 seconds It is the outstanding quality of the growth which is uh really really 16:30 16 minutes, 30 seconds impressive I must say. uh I think the focus on the profit goal, focus on 16:38 16 minutes, 38 seconds maintaining the hygiene and strength of the sales uh which has been there for 16:44 16 minutes, 44 seconds last several quarters is finally showing up in a remarkable way in our 16:50 16 minutes, 50 seconds operating results. But what really impressed me was end of December quarter 16:58 16 minutes, 58 seconds our net cash on the balance sheet was 550 cr and end of March 26 17:06 17 minutes, 6 seconds it is 1,500510 cr or whatever which means 1,000 cr 17:14 17 minutes, 14 seconds almost cash has been added in a single quarter while profits have been net profit of 350 cr 17:24 17 minutes, 24 seconds in the quarter but net cash added on the balance sheet has been almost 1,000 cr I 17:29 17 minutes, 29 seconds think this is truly remarkable any 17:37 17 minutes, 37 seconds would you like to throw a light on that sure so there are two three factors one 17:46 17 minutes, 46 seconds is that during our quarter three call we had said that we are taking some steps to further rationalize our inventory churn. Okay. So some of the SKS we 17:55 17 minutes, 55 seconds wanted to start manufacturing at a single plant rather than being spread out. So which leads to um inventory hold 18:02 18 minutes, 2 seconds up raw material inventory hold up at multiple plants. So that u that strategy actually worked pretty well where we 18:10 18 minutes, 10 seconds could um almost reduce our absolute uh inventory um in terms of tonnage by 40 18:17 18 minutes, 17 seconds 30 40,000 tons. Okay. Um I mean if you look at uh if you look at the inventory 18:24 18 minutes, 24 seconds levels as at 31st December and 31st March in absolute value there is a 250 cr reduction despite the fact that steel 18:32 18 minutes, 32 seconds prices went up. So you can imagine that in terms of absolute volume um the deduction is much more. So that strategy of uh inventory rationalization actually 18:41 18 minutes, 41 seconds worked and um and uh and yes there were uh because uh there were some u um 18:48 18 minutes, 48 seconds better uh payment terms from the creditors that also helped uh our our cash flow generation um and then yes 18:57 18 minutes, 57 seconds like you said 350 K of cash flow generation for the quarter 4 which helped um in kind of piling piling up of the cash. 19:07 19 minutes, 7 seconds No truly remarkable I must say this uh and the whole team deserves congratulations 19:14 19 minutes, 14 seconds because single quarter cash edition of 1,000 cr is a really really remarkable 19:21 19 minutes, 21 seconds number uh uh given also lot has happened in a quarter I mean these days lot 19:29 19 minutes, 29 seconds happens every day so in a quarter so many things have happened and the business has delivered this is really 19:36 19 minutes, 36 seconds remarkable people the uh the target after the residual 19:44 19 minutes, 44 seconds 500 cr liability once they are retired uh maybe in the first quarter also in the current quarter uh I think the 19:53 19 minutes, 53 seconds target to reach negative working capital remains intact right that's right 20:01 20 minutes, 1 second okay and uh finally centered the year in entirety the targets remain 20:10 20 minutes, 10 seconds intact. uh so uh just to refresh my memory on that are we saying about 20% 20:18 20 minutes, 18 seconds volume growth which if I'm not mistaken we were I tell the last I tell the last 20:26 20 minutes, 26 seconds quote to 15 to 20% growth and 20 to 25 to 20% growth and 20 to 25% 20:34 20 minutes, 34 seconds growth and 25 to 30% pack growth okay fantastic okay so that is the guidance that we are talking which 20:42 20 minutes, 42 seconds remain yeah targeting 15% but margin point of view 20:53 20 minutes, 53 seconds we are very confident still we we can achieve but absolutely absolutely I think that focus 21:03 21 minutes, 3 seconds on maintaining and enhancing actually the quality of the performance rather than just the fun of Yeah, this is our main this is our main focus area. 21:14 21 minutes, 14 seconds Yeah, it is really remarkable and uh 40% plus ROC which I think will go even higher in the 21:23 21 minutes, 23 seconds uh fiscal 27 net cash balance and yet having global size addition to the 21:30 21 minutes, 30 seconds capacity and through the challenging time achieving all that truly remarkable congratulations. 21:38 21 minutes, 38 seconds Thank you brother. Thank you sir. 21:48 21 minutes, 48 seconds Our next question come from the line of Ashe from AK investment. Please go ahead. 21:55 21 minutes, 55 seconds Hi sir. Uh thank you for taking my question and first of all congratulations for the great set of member. Uh sir my question is currently 22:02 22 minutes, 2 seconds for the application wise our segment uh housing is contributing the maximum is 22:08 22 minutes, 8 seconds as 54% and the second number is the commercial buildings and the third number is infrastructure 13%. So over 22:16 22 minutes, 16 seconds the next two three years do we expect that infrastructures and commercial buildings will be uh fair will be higher 22:25 22 minutes, 25 seconds uh due to the government effects and all these things. 22:29 22 minutes, 29 seconds So definitely there should be some improvement in uh infrastructure and commercial. Commercial has been doing pretty well for last two three years. So that mix continues to improve. 22:38 22 minutes, 38 seconds Infrastructure from the government side has been on slowdown for two years. 22:42 22 minutes, 42 seconds That's why the residential uh sales mix improved in the overall pie. Yes, we do expect government to start spending 22:50 22 minutes, 50 seconds heavily and if it does so there could be 2 3% improvement uh in mix from infra side otherwise the housing will uh keep on taking the lead. 23:00 23 minutes Okay sir. All right and rest other questions answered. Thank you so much and all the best. 23:08 23 minutes, 8 seconds Thanks. Thank you ladies and gentlemen. 23:11 23 minutes, 11 seconds Anyone who wishes to ask a question may press start and one. 23:19 23 minutes, 19 seconds Our next question come from the line of Dan Ma from Dal Capital. Please go ahead. 23:26 23 minutes, 26 seconds Yeah. Thanks for giving me the opportunity. Uh so my first question was can you provide us the share of SG premium to overall volumes in Q4? 23:40 23 minutes, 40 seconds So it's between 8 to 10. It's between 8 to 9%. 8 to 9% of total volumes, right? 23:48 23 minutes, 48 seconds The total volume. Yes. 23:50 23 minutes, 50 seconds Okay. Okay. Not general product total volume. Yeah. And uh I uh so also our other expenses I think have grown uh 13% 23:58 23 minutes, 58 seconds Q. So just wanted to know uh is there any specific reason for this or is uh this is in line with normal operating activity. 24:08 24 minutes, 8 seconds So there are two three things here. One is uh the freight cost the outward freight cost was a bit higher in the quarterfall okay on Q2 basis because 24:17 24 minutes, 17 seconds there was shutdown of our operations in few plants right because of gas shortage so we had to feed the market from the 24:25 24 minutes, 25 seconds other plants that's why uh the outgo was a bit higher um and secondly uh we did u some branding expenses in the quarter 4 24:34 24 minutes, 34 seconds so that was higher on Q basis these are the two main factors Okay. Okay. And just wanted to 24:42 24 minutes, 42 seconds understand let's say uh um let's say if the war had not broken but still uh let's say we would have seen uh seen the 24:50 24 minutes, 50 seconds same increase in steel prices uh the sporadic rise that we have seen in steel prices between Q3 to now. So in that 24:59 24 minutes, 59 seconds scenario could we uh could we have made a beta per turn in excess of 5,500 25:05 25 minutes, 5 seconds because what why I'm coming on this question is uh let's uh uh you would have lost some volumes but uh so that 25:15 25 minutes, 15 seconds means that operating leverage would not have really kicked in in your numbers but still you were able to make 5,500 so 25:22 25 minutes, 22 seconds just wanted to understand is this purely because of lower HRC price uh that would that you would have uh uh seen in your 25:31 25 minutes, 31 seconds inventory that has actually kicked in a bit by 10 or is there anything else? 25:40 25 minutes, 40 seconds Hello. 25:42 25 minutes, 42 seconds So Dashan see I mean during our quarter three call we had guided for around near about 1 million turn of sales volume in 25:50 25 minutes, 50 seconds quarter 4 with 5300 5500 first time ITA okay for the full quarter till 28th Feb 25:57 25 minutes, 57 seconds we were pretty much on track to achieve these numbers and when the crisis started then this whole disruption um 26:06 26 minutes, 6 seconds started to um hurt the operations in Middle East in India because of gas shortage and then in steam shortage and 26:12 26 minutes, 12 seconds uh steel price high. So so so yes I mean if war had not started we would have met 26:19 26 minutes, 19 seconds our guidance which we had given in the quarter three understood irrespective of the rise in 26:27 26 minutes, 27 seconds steel price that we had changed so I'm not talking about Q4 let's say even in Q1 assuming steel prices are where they 26:34 26 minutes, 34 seconds are currently and do we do we think that in terms of it is tough to Russian Russian economy but it is tough to it is tough to say no 26:44 26 minutes, 44 seconds Steel prices increased pretty much after war also. There was some increase during Jan Mar Jan and Feb but after war the 26:52 26 minutes, 52 seconds acceleration in steam prices uh was pretty high. Understood. Understood. Understood. 27:01 27 minutes, 1 second Fine. Thank you. 27:06 27 minutes, 6 seconds Question come from the line of Amit Mura from Access Capital. Please go ahead. 27:12 27 minutes, 12 seconds Uh yeah. Hi, good morning. So, just wanted to understand like uh your market share movements. So, I believe these 27:20 27 minutes, 20 seconds kind of disruptions that we are seeing let's say the uh issue around fuel availability around metal availability. 27:26 27 minutes, 26 seconds Um is it fair to say that the this is structurally positive for you wherein you gain market share from the unorganized players? 27:36 27 minutes, 36 seconds Swamit which we did definitely. Okay. um like uh we have demonstrated this similar uh trends during covid time. 27:43 27 minutes, 43 seconds Okay. The industry leaders uh the strong uh players they always benefit from the um like disruption which uh impact the 27:51 27 minutes, 51 seconds overall industry. So yes um um I mean it u and that's the resilience of our business model that we can maneuver our 28:00 28 minutes strategy based on the um conditions which keep on coming and going but yes I 28:06 28 minutes, 6 seconds mean um at the same time we wish that things become back to normal so that uh so that um whatever guidance we have 28:16 28 minutes, 16 seconds given for the full year we are um smoothly able to achieve that. 28:22 28 minutes, 22 seconds I I wanted to understand more the market behavior honestly. Yeah. So like we have seen in other industries also generally high high inflation sometimes also lead 28:30 28 minutes, 30 seconds to uh downtrading and actually some gains to unorganized players. So in that context I wanted to understand like is 28:36 28 minutes, 36 seconds this current situation that is positive for you on a on a structural basis or would you see or fear some down trading to happen because of inflation? 28:47 28 minutes, 47 seconds See I mean uh Amit see this disruption is not going to stay for more than like 6 months. Okay I mean um any expert you 28:56 28 minutes, 56 seconds talk about people keep on saying that u it's been it was it was earlier it was earlier two weeks honestly so it's been stretching quite a bit. So yeah we don't know. Yeah we don't know. 29:05 29 minutes, 5 seconds Yeah that's what yes. So if it's if it is for say four months put together two months have been passed then another 2 29:11 29 minutes, 11 seconds months then um whatever benefit uh we could get we have already um achieved that right in terms of market share 29:19 29 minutes, 19 seconds gains in terms of pricing power in terms of margin improvement okay so but yes if it is if it goes beyond like 4 months 29:27 29 minutes, 27 seconds right so then obviously the the the uh the weaker players right um they may not be able to run their plants um um 29:36 29 minutes, 36 seconds because of gas shortage obviously larger players have access to um uh to to resources. Uh we have seen that in other 29:43 29 minutes, 43 seconds industries similarly in building materials. Okay. U so so yes I mean uh uh whenever disruption uh takes place uh 29:51 29 minutes, 51 seconds stronger companies, larger companies organized players they will definitely benefit at the cost of weaker players. 29:57 29 minutes, 57 seconds So, so, so yes, I mean to answer your question, uh, I mean, if things uh get wrong like more than what anyone is expecting, then obviously the benefits 30:06 30 minutes, 6 seconds will keep on accuring more and more for stronger players. Got it. Got it. That's all from me. 30:12 30 minutes, 12 seconds Thank you. Thank you. 30:18 30 minutes, 18 seconds Next question come from the line of Rajes from SGFC Securities. Please go ahead. 30:26 30 minutes, 26 seconds Hi, good morning. Am I audible? 30:28 30 minutes, 28 seconds [clears throat] 30:29 30 minutes, 29 seconds Yes, sure you are. 30:30 30 minutes, 30 seconds Yeah, congratulations to the team for a good set of numbers. My first question pertains to you know the inventory which has come down significantly multi-year 30:38 30 minutes, 38 seconds low and I think this was as per guidance. So just wanted to understand the sustainability of the current levels uh or is it like uh this was also an 30:48 30 minutes, 48 seconds impact of Sanji stock the turmoil. 30:54 30 minutes, 54 seconds So Rajesh Sanj's mission is to bring it further down. Okay. Uh that's what he has given mandate to the relevant team 31:02 31 minutes, 2 seconds to uh keep on bringing inventory levels down and down and down. Um so yes u I mean whatever we have achieved as at March 2026 it is highly sustainable. 31:14 31 minutes, 14 seconds Great. It's really nice to hear and on the VITA front uh San has mentioned around 20 22% uh ina growth and in which 31:23 31 minutes, 23 seconds you are facing close to 15% for the volume growth and margin expanding loss around at close to 5500 is this 31:32 31 minutes, 32 seconds understanding correct for 27 for 27 31:41 31 minutes, 41 seconds our volume growth is very clearly we we are targeting 15 to 20%. Correct. Growth is 20 to 25%. 31:50 31 minutes, 50 seconds And growth is 25 to 30%. 31:53 31 minutes, 53 seconds Yes. Yes. Great. So just go to the question in this in the scenario you can 32:01 32 minutes, 1 second score the lower side 15 20 25. If the feel better you can take the the higher side. 32:08 32 minutes, 8 seconds Great. So I just wanted to understand this 5,500 rupees which works out to be at least on the Vita margin. So you know 32:15 32 minutes, 15 seconds what this is it the better product mix or what better product 32:23 32 minutes, 23 seconds better product mix because of the low volume but this is a better product mix. 32:33 32 minutes, 33 seconds Better product mix is what will drive up your margins. Okay. Yeah. Answer on the April you mentioned that the volume growth had been uh muted or volume has 32:42 32 minutes, 42 seconds been muted. What does this mean? This is low single digit low your indicating or flat how should be and may volume and 32:51 32 minutes, 51 seconds general in general what is the construction 32:59 32 minutes, 59 seconds very 33:13 33 minutes, 13 seconds And this last year 7.92 7.92 33:26 33 minutes, 26 seconds 2.5 875 Okay. 33:43 33 minutes, 43 seconds Understood. Understood. Okay. So, next two months you're looking at May and June. Uh better traction to happen. 33:50 33 minutes, 50 seconds Yeah. 33:59 33 minutes, 59 seconds So, we are now little bit aggressive in the market. 34:04 34 minutes, 4 seconds May we can do three lakh and June we back on track with 3.5 lakh 34:11 34 minutes, 11 seconds good and so this margin performance of March quarter you believe that this could be repeated in 34:17 34 minutes, 17 seconds yeah this is considerable so great great and lastly you said you just 34:24 34 minutes, 24 seconds wanted that you mentioned that the surplus cash beyond whatever you know certain liability you want to uh reduce 34:32 34 minutes, 32 seconds after that whatever surplus is there you use that to either increase dividend or do a buy. Yes. 34:41 34 minutes, 41 seconds Great. That's all from my side. All the best. Thank you. Thank you. 34:47 34 minutes, 47 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and one on the telephone. 34:58 34 minutes, 58 seconds Our next question come from the line of Onar Gangur from Sri Investment. Please go ahead. 35:05 35 minutes, 5 seconds Uh good morning sir. Uh my question is regarding whatever the commentary you have given it looks like there are more headwinds than the tailwinds currently. 35:14 35 minutes, 14 seconds Uh given whatever the situation on ground is uh that's the correct understanding. 35:24 35 minutes, 24 seconds Yes, of course. Um I mean um I mean whatever happening u globally and u in the domestic markets um yes um you have associate pretty right. 35:35 35 minutes, 35 seconds So I mean uh you must I mean I have to say then this is only and only because of the warlike situation right because 35:44 35 minutes, 44 seconds before the war broke out you are quite bullish I mean in fact you raised the guidance as well on in the quarter three 35:51 35 minutes, 51 seconds so whatever is yeah yeah so we are not uh reducing our guidance uh as of now right for the absolute 36:00 36 minutes okay so so yes I mean um uh like uh we were discussing on previous fall every disruption brings some opportunities uh 36:09 36 minutes, 9 seconds for the better companies and we try to grab uh that in our favor. 36:14 36 minutes, 14 seconds So yeah like my another question regarding this was like uh now you have a good amount of cash 36:22 36 minutes, 22 seconds with the financial strength you have on the balance sheet like how can you capture more and more market share from the competitors given the current 36:30 36 minutes, 30 seconds situation because they must be also suffering quite a lot if the biggest player is suffering I mean giving a flattish kind of growth or low singledit 36:38 36 minutes, 38 seconds kind of growth so their situation would be even worse. So how can you use the financial strength to gain even more market share from competitors? 36:48 36 minutes, 48 seconds This is what if you look at our market share in FI26 versus FI27 uh FI25 our market share has improved to 60% 65% 36:57 36 minutes, 57 seconds from 55%. Okay. Um and this can continue to improve if disruption continues to hurt our competition more than uh than 37:06 37 minutes, 6 seconds than the larger player like Apollo. So I mean what kind of steps you are taking to gain that kind of market shift given the strength you have financially. 37:16 37 minutes, 16 seconds So one is the capacity building. Okay. 37:19 37 minutes, 19 seconds Uh the capex is fully funded from internal cash flows. We are we were not present in East India much right. So putting up two plants in East India will 37:28 37 minutes, 28 seconds help us uh um u compete uh intensively with the local smaller players there and that results we will start seeing in 37:36 37 minutes, 36 seconds next one to two years as our both plants become operational. Second, we are building capacities for lighter 37:44 37 minutes, 44 seconds structures in South India uh where again uh we believe that uh we have uh been we can uh gain more market share okay if we 37:53 37 minutes, 53 seconds increase our capacities there. So our new Bangalore plant which we call it Malur 2 that u we are uh uh that we are 38:01 38 minutes, 1 second going to build up over the next two years. So that again is on the back of strong balance sheet where my large capex will be funded from operating cash 38:08 38 minutes, 8 seconds flows. So balance sheet can only balance sheet can only help fund capex right without trading 38:16 38 minutes, 16 seconds uh without leveraging brand. Um so this is what this is what uh we are building capacity building and second uh uh 38:25 38 minutes, 25 seconds branding also with better margins uh we will spend uh a bit extra on branding this year which will again help us u 38:33 38 minutes, 33 seconds gain uh market share. So this capacity building exercise you are saying is like more of a mid to long-term kind of thing 38:42 38 minutes, 42 seconds right but immediately in the short term like what you are doing in this warl like situation to gain from the competitors given the strength you have 38:50 38 minutes, 50 seconds financially so mainly working on u sq management and branding these are the two things we are 38:57 38 minutes, 57 seconds doing okay I mean uh like more dealerships or something like that uh you are doing 39:06 39 minutes, 6 seconds anything with the dealers you are doing dealership in existing territories are fully um leveraged I mean there is no 39:14 39 minutes, 14 seconds scope to add new dealers in the existing territories new market where we are going there we are developing new network 39:22 39 minutes, 22 seconds okay all right thank you sir thank you ladies and gentlemen anyone 39:30 39 minutes, 30 seconds who wishes to ask a question Our next question come from the line of 39:37 39 minutes, 37 seconds Ranjit Saram from Mahindra Manual Life Mutual. Please go ahead. 39:45 39 minutes, 45 seconds Yeah. Uh hi sir just wanted to understand like what there any 39:52 39 minutes, 52 seconds shop or anything overall operation. Can you can you be a bit louder please? 39:59 39 minutes, 59 seconds Uh yeah. Am I audible now? Hello. Yeah, go ahead. 40:04 40 minutes, 4 seconds Yeah. Uh, was there any impact on this LPG shortage in our business and uh do you have any uh backup plan for that? 40:16 40 minutes, 16 seconds So definitely in month of March uh two of our product categories in India uh the rust proof pipes and ported products 40:23 40 minutes, 23 seconds they faced temporary shutdowns at few locations. Um so our plants moved to alternate fuel. Um uh there was 40:31 40 minutes, 31 seconds disruption of 10 to 15 days. Um yes. So there was definitely some disruption because of that. 40:38 40 minutes, 38 seconds Okay. And uh going ahead do you see any what is your backup plan like you have now kind of mitigated this thing? 40:49 40 minutes, 49 seconds Right. So alternate fuels have helped uh the um capacity ramp up at those locations. It's just that u I mean that 40:57 40 minutes, 57 seconds fear of uh energy crisis coming back is always there. Okay. So so things have become much better than uh what they 41:04 41 minutes, 4 seconds were for those two weeks and months of March. But still because of fear factor uh we would say that we are operating at 90% level not 100% levels. 41:15 41 minutes, 15 seconds Okay. So the 15 to 20% growth guidance which you are giving is factoring in this right? 41:23 41 minutes, 23 seconds Of course. Yes. I mean uh unless things become uh really worse from here if u if there is like shortage of fuel to run 41:30 41 minutes, 30 seconds vehicles, cars, automobiles um then it will be like extraordinary situation which will uh make us reconsider our business plan. 41:40 41 minutes, 40 seconds And like in the near demand industries where is supply will be also facing similarly such 41:48 41 minutes, 48 seconds issues in terms of shortage and do you feel the demand will be uh enough to 41:55 41 minutes, 55 seconds support this kind of a growth or market share gain 42:04 42 minutes, 4 seconds it'll be combination of both right um I mean um our material goes at the construction construction sites, right? 42:10 42 minutes, 10 seconds So, construction sites got halted uh for multiple reasons. Labor shortage, all raw material prices at construction 42:17 42 minutes, 17 seconds sites went up. Steel, tile, plumbing pipes, paints, right? So many construction materials. So, contractors they try to delay the purchases. Okay? 42:26 42 minutes, 26 seconds So, once things settle down, um uh contractors will renegotiate uh pricing with their customers, right? So, things will uh start uh coming back on track. 42:36 42 minutes, 36 seconds So then this pent-up demand will come back and we uh are hoping that we will be able to take uh share from that and 42:44 42 minutes, 44 seconds that's why we are giving that 15 to 20% volume guidance. Um yes of course if things become further worse from here 42:52 42 minutes, 52 seconds okay um then we'll see then we'll evaluate again but right now talking to um uh like whatever is happening um 43:01 43 minutes, 1 second around us it looks like uh things should get a little uh things should settle down quickly and we will be able to achieve our volume guidance. 43:11 43 minutes, 11 seconds Okay sir, thanks and all the best. Thank you. 43:20 43 minutes, 20 seconds Our next question come from the line of Deasi Jany from indiv and individual investor. Please go ahead. 43:26 43 minutes, 26 seconds Hello proceed. 43:31 43 minutes, 31 seconds Okay. Uh thank you for opportunity. Uh I just one thing about the validated system um related question. We have 43:38 43 minutes, 38 seconds reported the valued sales mix of 25% in Q4. Uh it's down uh down slightly from 43:45 43 minutes, 45 seconds 57 in Q3. Despite uh this VITA person rose to a record high uh it's like a double 525. Can you bridge with this 43:53 43 minutes, 53 seconds gap? uh was it driven by the inventory gap or better spread in the general category which saw uh jump to 3405 beta 44:02 44 minutes, 2 seconds python or a specific cost efficiency at a rural client saw. 44:09 44 minutes, 9 seconds So there were two reasons. Number one is the Apollo APL Apollo brand premium. 44:15 44 minutes, 15 seconds Okay, which led to better pricing in general category. Okay, if you uh remember that we have uh we had 44:22 44 minutes, 22 seconds increased the pricing for Apollo general segment in January of 2025. Okay, by 44:28 44 minutes, 28 seconds almost 1,500 rupees per ton. So that increase that price cycle is straight away coming to our IITA. Okay, for the 44:37 44 minutes, 37 seconds general product that's why from 2,000 rupees per ton beta level we are at 3500 uh per ton plus level in general. So this is the main um driver of the 44:46 44 minutes, 46 seconds profitability um okay and um and the second yes of course first u uh rationalization uh 44:54 44 minutes, 54 seconds steps we keep on taking um um 24x7 so some u some uh some measures uh keep on um delivering results. 45:05 45 minutes, 5 seconds Okay. So my next question is related to ESGN decarbonization. So now that you have achieved the SBTI validation, what 45:13 45 minutes, 13 seconds is the incremental capex required in to meet 25% emission reduction target at uh 2030? Uh will it uh impact the 45:22 45 minutes, 22 seconds manufacturing cost per turn significantly? 45:26 45 minutes, 26 seconds No. In fact, whatever uh I mean um whatever steps we take uh for better ESG 45:33 45 minutes, 33 seconds compliance, it actually u results in lower costs. For example, you you um you invest into renewable energy, right? 45:42 45 minutes, 42 seconds That brings down your overall uh cost per ton, power cost per ton, right? So, so in fact we are experiencing opposite 45:50 45 minutes, 50 seconds that you invest into ESG compliance it actually um end up uh yielding better results for you in terms of cost optimization. 46:01 46 minutes, 1 second Okay, thank you so much sir for answering sir. Rest of the question already answer and thank you uh thank you for opportunity and best of luck for next. 46:09 46 minutes, 9 seconds Thank you. 46:11 46 minutes, 11 seconds Thank you. Our next question comes from the line of Rajes Shi from HDFC securities. Please go ahead. 46:18 46 minutes, 18 seconds Just a followup question. Uh given the current state you know how would be the realization 46:25 46 minutes, 25 seconds number looking sequentially Q1 versus Q4 based current prices 46:33 46 minutes, 33 seconds now Rajes you'll have to come Raj can you please repeat? Yeah. Yeah. 46:42 46 minutes, 42 seconds Sure. I'm saying uh based the current steel prices which are significantly higher and have been rising even in April and uh you know in this scenario 46:52 46 minutes, 52 seconds uh I'm sure not everything would have been captured in Q4 numbers in realization. So what sort of price 46:59 46 minutes, 59 seconds increase on an average uh you know is uh your sales versus Q4 average. 47:08 47 minutes, 8 seconds So prices like u okay so if you look at the uh HR coil prices okay in the in the 47:15 47 minutes, 15 seconds in the market they are uh up by around uh from March to May okay or I would say 47:22 47 minutes, 22 seconds from April to May they are uh up by around uh uh 3,000 rupees per turn. 47:31 47 minutes, 31 seconds Mhm. 47:33 47 minutes, 33 seconds Yeah. So that much price tag we took Rajes. 47:37 47 minutes, 37 seconds Okay. So that is what would be reflected anyway in your realization in terms cost me cost cost. Yes. 47:43 47 minutes, 43 seconds Okay. Okay. And uh you know I just last responded to uh research on this uh 47:50 47 minutes, 50 seconds inventory gain. I believe somewhere during the call you mentioned we have 10 to 15 days of finished good inventory you know obviously which is quite clean 47:59 47 minutes, 59 seconds and uh because of finished good inventory Rajes uh raw material raw material inventory is 15 raw material okay so ah HR rather uh so 48:08 48 minutes, 8 seconds you know HR prices which is going up would you have to mark up your inventory and would have that led to some 48:15 48 minutes, 15 seconds inventory gain in Q4 so Rajes what happens is that since our overall All inventory churn is less than 48:23 48 minutes, 23 seconds 30 days and in India field prices are revised uh once in a month. Okay. So by the time next cycle comes up we are already out of our previous cycle. 48:34 48 minutes, 34 seconds Okay. 48:34 48 minutes, 34 seconds Correct. So so that's why the uh mark to market is not significant. It's like very very minuscule. If my net inventory 48:42 48 minutes, 42 seconds days are higher than 30 days then there will be mark to market uh in my balance. 48:47 48 minutes, 47 seconds Unusual. Understood. So basically none of your numbers would have any pad up of inventory. So in case if shield prices 48:54 48 minutes, 54 seconds were to again come back you won't have any issues over this. 48:58 48 minutes, 58 seconds That's right. Uh that's right. Uh it it only happens when there is a significant drop in field prices. U sometimes like 49:05 49 minutes, 5 seconds what we have seen um like uh there will be like a time when field price are 49:13 49 minutes, 13 seconds revised twice in a month. Okay. Which which which happens once in a decade. 49:18 49 minutes, 18 seconds Okay. then there could be like you know some gains or losses okay which would be significant otherwise 11 out of 12 49:25 49 minutes, 25 seconds months field prices are revived once in a month so so that doesn't hurt us agree yeah great that's all from my end thank 49:33 49 minutes, 33 seconds you and all the best thanks thank you ladies and gentlemen that was the last 49:42 49 minutes, 42 seconds question for today I'll now hand the conference over the management for the closing remarks thank you and over to 49:49 49 minutes, 49 seconds Thank you everyone for joining us and thanks u NK team for hosting us. Look forward to see you in the next quarter. 49:57 49 minutes, 57 seconds Have a good day. 49:59 49 minutes, 59 seconds Thank you so much sir. Ladies and gentlemen on behalf of MK Global Financial Services Limited that concludes this conference. Thank you for joining us and you may not disconnect your lines.