Baheti Recycling Industries Ltd — Q4 FY26

Baheti Recycling Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=C_I7O0Xt-8I Published: 8 days ago

0:03 3 seconds Good morning everyone. Welcome you all to the uh Bahi Recycling Industries Limited H2 and FYI26 earning cornal. On 0:11 11 seconds behalf of Aiden Capital Limited, I would like to thank the management of Bahiti Recycling for giving us the opportunity to host host this call. I would like to 0:20 20 seconds hand over the call to Aayush. Thank you so much. 0:23 23 seconds Thank you Anasha. Thank you Arian Capital. Good morning participants. 0:26 26 seconds Today on the call we have Mr. Yasha who is the joint managing director of the company along with Mr. Mano Sha chief financial officer of the company as a 0:35 35 seconds part of safe harbor I would like to inform you that this call may contain certain forward-looking statements and should view in conjunction with the risks and the uncertainties of the 0:44 44 seconds company's matter also as a part of compliance please note this call is now being recorded I now request Mr. Yasha to start with the opening remarks of the 0:52 52 seconds call followed by Mr. Marucha to provide the financial highlights over to you Mr. 0:56 56 seconds Yes, good morning everyone. A very warm welcome to all of you and a special thank you to Aran Capital for hosting 1:03 1 minute, 3 seconds today's call. We truly appreciate your continued support in connecting us with the investor community. For those of you 1:11 1 minute, 11 seconds who are newer to our story, we are a 7-Ele aluminum recycling business headquarter based in Gujarat and we are on a journey that I believe is only 1:19 1 minute, 19 seconds getting more exciting with every passing year. Before we get into the numbers, I want to set the context. The recycling industry environment is favorable right 1:27 1 minute, 27 seconds now. Global primary aluminum supply has been disrupted particularly from the geopolitical tension going on in the Middle East and that is pushing customer 1:36 1 minute, 36 seconds everywhere towards reliable secondary sources. This let us the customer to start taking trial and bigger orders 1:44 1 minute, 44 seconds from us after they are satisfied with the consistency and grade of order provided by us. We have been in the 1:52 1 minute, 52 seconds process of upgrading and modernizing our furnace infrastructure. As part of this, we are now ready to commence five new electrical furnaces in FI27. 2:01 2 minutes, 1 second These are meaningfully better machines as they give us higher output and a greener machine, more fuel efficiency 2:09 2 minutes, 9 seconds with com and that will be combined with our solar uh plant which is on track and which will be commenced by the end of May 2026. 2:20 2 minutes, 20 seconds With this addition, our total install capacity will stand to 38,000 tons annually. Our current current 2:27 2 minutes, 27 seconds utilization is 60%. It is because of the fact that we have been uh rapidly scaling ourselves yearly. Our plan is to 2:36 2 minutes, 36 seconds ramp up utilization full capacity utilization by FI28. 2:41 2 minutes, 41 seconds Beyond our core alloy and deioxidant uh line, we are now entering into aluminum wire rod product which is a higher 2:48 2 minutes, 48 seconds margin product segment. We are investing somewhere around 25 odd crores to build this out in two phases. 2:57 2 minutes, 57 seconds Our on our existing freehold land in DAM we are targeting in phase one around 12,500 metric t peranom with a annual revenue potential of 250 odd crores. 3:10 3 minutes, 10 seconds In phase two, it will increase to 25,000 tons. That uh that means the revenue will also increase by another 250 odd 3:18 3 minutes, 18 seconds crores. So, total revenue uh from this plant will be somewhere around 500 odd crores. 3:25 3 minutes, 25 seconds The government is also pushing uh significantly EPR norms are uh will be mandatory from 28 3:35 3 minutes, 35 seconds uh 5% and uh in 29 it will be 10%. 3:41 3 minutes, 41 seconds initiatives like JN RDCC that is Javanal Naru aluminum research development cost center. It is being uh raising industry 3:51 3 minutes, 51 seconds standards and the government focus on sustainability. 3:56 3 minutes, 56 seconds We are preparing for this uh infrastructure and cleaner and greener aluminum going forward. 4:03 4 minutes, 3 seconds We have also added many automotive clients in the month of March in H2 directly to the OEMs like Bajage Auto, 4:13 4 minutes, 13 seconds PVS motor, Royal Enfield. We are bullish on the sector and on our position in it. 4:20 4 minutes, 20 seconds The demand is that the government policy tailwinds are there. The global industry dynamics are in favor of secondary recycling aluminum. We are heading into 4:29 4 minutes, 29 seconds FI27 with a order book of minimum 200 crores with us and there are lot of excitement development. This is 4:38 4 minutes, 38 seconds excluding order book or the plant of aluminum wire rod. Lastly, we are also working actively on avenues to make our 4:47 4 minutes, 47 seconds working capital more efficient which is which will be happen as we are now directly uh connected with the OEMs with 4:56 4 minutes, 56 seconds better uh margins and better payment terms. So we we look forward to sharing that progress with you as it unfolds. 5:05 5 minutes, 5 seconds With that I'll hand over to Mr. Mano Sha company's CFO to take over to the numbers. 5:12 5 minutes, 12 seconds Good morning to all. Good morning to Arian Capital and good morning to IG. 5:18 5 minutes, 18 seconds I am CFO of the company working with the company from last 14 years. I am pleased to share an update regarding the 5:25 5 minutes, 25 seconds financials performance for the year 2526. 5:29 5 minutes, 29 seconds During this period the company delivered strong growth with revenue rising to 725 crores almost and with the profit 5:36 5 minutes, 36 seconds reaching to 27 K. This is significant increase compared to the previous year revenue of 520 crores and profit of 18 5:45 5 minutes, 45 seconds crores. Especially our revenue grow by approximately 38 year on year while profit increasing by the 50%. The result 5:54 5 minutes, 54 seconds indicates improved operational efficiency and successful margin expansion. This performance reflects 6:01 6 minutes, 1 second management's commitment to delivering sustainable growth and enhancing value to all our stakeholders. Furthermore, 6:08 6 minutes, 8 seconds companies actively focused on reducing the debt and improving the cre financial ratios. We expect this initiative to strengthen our balance sheet and 6:17 6 minutes, 17 seconds position of the company per company to tier performance in the coming years. Thank you. Thank you. 6:26 6 minutes, 26 seconds Uh thank you Maloji. With this uh we will now open the floor for question and answers. Any participant who wishes to ask a question may use the raise hand 6:35 6 minutes, 35 seconds feature and uh queue up for the line. So we will take 1 minute uh for the line to queue up and start taking questions. 6:57 6 minutes, 57 seconds Any participant who wishes to ask questions 7:05 7 minutes, 5 seconds can uh raise their hand and form a queue for asking questions. Thank you. 7:24 7 minutes, 24 seconds We'll take the first question from uh Miss Disha. Disha, you can uh uh introduce your name and your firm's name and ask a question. Thank you. 7:34 7 minutes, 34 seconds Hello. Am I audible, sir? Yes. 7:39 7 minutes, 39 seconds Yeah. So, this is Disha from Safaya Capital. Firstly, thank you so much for this opportunity. So, just a couple of questions. Firstly, on this aluminium 7:47 7 minutes, 47 seconds wire rod division, this phase one, when do we expect this to commission? 7:52 7 minutes, 52 seconds Uh, by the end of October, you can say early November. 7:57 7 minutes, 57 seconds Okay. Okay. Early November, right? And what sort of utilization we see for the So, it'll be for one quarter or so. I think we'll have the plant operational. 8:05 8 minutes, 5 seconds So initially 2050 12 12,500 tons and practically we'll get 8:11 8 minutes, 11 seconds 3 4 months 3 4 months. So 300 400 into 4200 on maybe 10 15%age of the entire 8:19 8 minutes, 19 seconds 12,500 tons capacity utilization for 3 months. 8:25 8 minutes, 25 seconds Okay. And how are we planning to scale it up? Where do we see the utilization reaching in FI28? 8:30 8 minutes, 30 seconds FI28 will be reaching somewhere around 70 odd percentage. See I'm talking about 10%age only on the basis of 3 months. 8:37 8 minutes, 37 seconds Correct. Correct. Yeah. Yeah. Right. And what sort of margins do we see because this is a more higher value added product. What sort of epida margins can we see here? 8:46 8 minutes, 46 seconds The epida margin will be will improve by one or two percentage from the existing business. 8:54 8 minutes, 54 seconds So that major impact so the major margin increase we'll see in F28 because then then we'll have the entire plant operation at a steady state. Is that correct? Yes. Yes. 9:02 9 minutes, 2 seconds Yeah. And you mentioned sir this 1200 cr revenue milestone for FR28. So can we expect a 30 40% sort of kagger in this year and FRA as well? 9:12 9 minutes, 12 seconds 100% you'll be you'll you'll see that and I'm more than hopeful that we'll we'll reach somewhere around four digit 9:18 9 minutes, 18 seconds in this financial uh alone. I'm more than hopeful. Oh okay okay that's very good to hear. 9:26 9 minutes, 26 seconds So and where do we see a margins for the entire year? 9:28 9 minutes, 28 seconds It will be in the same range. it see the AITA margin in our industry is a sustainable AITA margin which we are working on uh on the margin which we are 9:37 9 minutes, 37 seconds working on it so anywhere between 7 to 10% is very it's quite sustainable AITA margin in our kind of industry 9:46 9 minutes, 46 seconds so so this year I think we did around 8% so we sort of expect that to continue and then with the new wire ro division coming up we can see that inch towards 9:53 9 minutes, 53 seconds 10% in FI28 yeah that is that a fair assumption yeah yeah FI28 you can see a improvement in the margin. 10:02 10 minutes, 2 seconds So closer to a 10 closer to a 10%. Yeah. Hopefully. Yes. 10:06 10 minutes, 6 seconds And so this 20 to 25 CR this capeex that we putting is this only for phase one what be the additional amount for phase two. 10:12 10 minutes, 12 seconds Phase two would be five crores maximum in putting up the fundness and all the apart from it the major cost consist that of infrastructure. So we are 10:20 10 minutes, 20 seconds developing infrastructure on the basis for the entire phases for the entire two phase. Yes. Absolutely. 10:26 10 minutes, 26 seconds And when do we so the moment so F28 I think this phase one will stabilize and then that at that time we'll begin with the phase two right? 10:33 10 minutes, 33 seconds Yes. Yes. Yes. Once we once we reach 75 80 odd percentage in phase in the 12,500 10:40 10 minutes, 40 seconds tons and we'll immediately uh order and in next 3 months we can set up phase. 10:47 10 minutes, 47 seconds Correct. Correct. Okay. Okay. That's it from my side. Thank you so much sir and all the best. Thank you. Thank you so much. 10:53 10 minutes, 53 seconds Thank you. We'll take the next question from Mr. introduction. 11:00 11 minutes [clears throat] 11:00 11 minutes Hi [snorts] sir. Uh good morning. Good set of result. Congratulations sir. I just wanted to ask what is the reason uh behind getting into wire rods division? 11:10 11 minutes, 10 seconds As far as I understand we don't have any backward integration backward integration in terms of what 11:18 11 minutes, 18 seconds see rod project will make from that will make vro also from scrap. 11:27 11 minutes, 27 seconds It's a forward integration instead of backward. Got it. Got it. 11:38 11 minutes, 38 seconds Dashan. Any other questions from your audience? No, no, not. Thank you. 11:45 11 minutes, 45 seconds Okay. Thank you, Dashan. Uh, next question is Mr. from Mr. Jagger. you can ask your question. 11:52 11 minutes, 52 seconds Yeah. Hi. Uh thanks for taking the question. Uh so couple uh first with data keeping could you uh give me what 12:00 12 minutes is the full year revenues for uh inwards and deox the split out of 725 in the splitting in what manner? 12:12 12 minutes, 12 seconds So out of revenue yeah I'm not getting your question properly. 12:21 12 minutes, 21 seconds Uh what is the revenue split between alloy ingots and deox? 12:25 12 minutes, 25 seconds Okay. Okay. In percentage term it's an year around 64 36 64 would be in god 36 12:34 12 minutes, 34 seconds for the okay okay uh okay and sir uh if I look at your 12:41 12 minutes, 41 seconds numbers more from a historical perspective uh we have seen a lot of increase in aluminium prices as of now 12:50 12 minutes, 50 seconds over the last couple of years 25 26 um and we have also seen a proportion ate increase in your uh margin profile 12:58 12 minutes, 58 seconds be it IITA or gross margin profile. Uh so just wanted to understand how much of this increase that you are seeing is 13:06 13 minutes, 6 seconds more product mixled and how much is it more pricing increases in the uh core aluminium product that has helped us 13:14 13 minutes, 14 seconds increase this margin. Uh and also how do we look at your business? Should we look at your business in a percentage terms a 13:23 13 minutes, 23 seconds bit margin or should we look at it from a a bita per turn uh kind of a business? How how do you actually price it across? 13:32 13 minutes, 32 seconds I'll tell you I'll tell you one thing. 13:33 13 minutes, 33 seconds I'll tell you one thing good question and uh you have to see business in terms of percentage basis. See uh the 13:41 13 minutes, 41 seconds percentage basis why it is more relevant as it is metal industry. So the prices is not in our hands. It's not in anybody's hand. 13:51 13 minutes, 51 seconds So maybe aluminum some somewhere aluminum would be 200, somewhere aluminum would be 400. So in terms of quantity, the volume growth should be 13:59 13 minutes, 59 seconds there and the percentage of AITA should be there. What we are committing in in terms of that you have to look in that direction. 14:10 14 minutes, 10 seconds So the pricing also is on the percentage basis right is what I understand. I mean when you uh price your product it is 14:18 14 minutes, 18 seconds based on your raw material plus certain percentage is what I'm trying to understand plus some delta plus some delta so delta 14:26 14 minutes, 26 seconds depend delta would be delta would be same our our our sales price is on the basis of lm into dollar factor and that 14:34 14 minutes, 34 seconds delta would be fixed in INR say for example 58,000 rupees a turn 75,000 rupees a turn that would be fixed so the 14:42 14 minutes, 42 seconds the first part of my formula that is LM into dollar it is it is changing so that delta would remain same so ultimately we 14:51 14 minutes, 51 seconds are we are hedging ourselves in terms of purchase and in terms of sales 14:59 14 minutes, 59 seconds okay and uh uh also in terms of um uh the 15:06 15 minutes, 6 seconds overall aluminium wire rod project who would be our customers and what would be the timeline for approval of these 15:14 15 minutes, 14 seconds products. Are there any approvals needed, testing needed uh from the customer and uh whom we will be selling 15:22 15 minutes, 22 seconds these products to? If you could just give us some insight into that. 15:25 15 minutes, 25 seconds See that there that would be two wire rods. One is alloy wire rod and one is aluminum primary wire rod. Aluminum 15:32 15 minutes, 32 seconds primary wire rod which is close to uh our secondary product. It will be sellable to our existing client like 15:40 15 minutes, 40 seconds sorry Arsal Tatastel Jindel Steel. So we are doing business with them since long. So we don't need 15:47 15 minutes, 47 seconds any approval. We just we just want to pass our product in in in uh in their company and they they we are a vendor 15:55 15 minutes, 55 seconds development partner with them. So immediately we can we can target that kind of Philip rod which is used in steel plant. We can immediately target 16:03 16 minutes, 3 seconds that kind of industry. Secondly, we we are in talks with uh many companies like 16:09 16 minutes, 9 seconds Upper, Polycap, RR Cable, KI to to once we established our plant and we just 16:16 16 minutes, 16 seconds want to pass our product consistently on a three-month basis with low quantity and after that consistency on a 16:23 16 minutes, 23 seconds three-month basis to this kind of companies, we can easily scale up our production. So second aluminum wire rod 16:31 16 minutes, 31 seconds that is aluminum alloy wire rod and a EC grade wire rod which will be sellable to uh conductor manufacturer cable 16:38 16 minutes, 38 seconds conductor manufacturer like polycap apar ker. 16:44 16 minutes, 44 seconds So but that these guys will require a testing phase uh that would be for months that is what I have told that would be for 3 months the testing phase. 16:54 16 minutes, 54 seconds Okay. Okay. And uh lastly because we are on this topic this EPR mandate of 5% and 17:01 17 minutes, 1 second then 10%. Uh just is it applicable on everybody using aluminium or specific industries? Uh 17:09 17 minutes, 9 seconds yeah uh you have I I'll clarify your doubt. See aluminum in in such kind of industry like uh automobile and all 17:18 17 minutes, 18 seconds there are there are there is maximum of secondary aluminum but industry like aerospace industry like yeah you can say 17:25 17 minutes, 25 seconds target this the primary w the cable conductor wrote which was not earlier they were using nalos and dalos aluminum primary wrote so in this kind of 17:34 17 minutes, 34 seconds industry where there are there is no uh compulsion of aluminum secondary wrote aluminum secondary market will will able to enter into that kind of market also. 17:47 17 minutes, 47 seconds Aerospace you can say uh this EPR nom is making mandatory for the cable conductor industry to take secondary aluminum wire also. 17:57 17 minutes, 57 seconds Okay, understood. And last just data giving question is how much of your raw material is imported in FI26? 18:06 18 minutes, 6 seconds Mano G near around 80%. 18:09 18 minutes, 9 seconds 80%. And any disruptions you are seeing because of this work uh or everything is fine in terms of sourcing? 18:18 18 minutes, 18 seconds Nothing. Nothing as such. Nothing is s. 18:20 18 minutes, 20 seconds Okay. Thank you so much. I'll come back in the Thank you. 18:23 18 minutes, 23 seconds Thank you Mr. We'll take the next question from Mr. Man. 18:29 18 minutes, 29 seconds Yes. Thank you for the opportunity. I'm from Walford Fund Management LLP. Sir, my first question was regarding our uh 18:37 18 minutes, 37 seconds cash flows. So we see that our revenues have increased which is great. Our aid has increased which is great and uh 18:46 18 minutes, 46 seconds because with that our debt has also increased substantially. So we are funding our operations using debt 18:54 18 minutes, 54 seconds because our cash flows are negative for the past four years. So can you explain something around that like how are we looking so that we won't be continuously 19:02 19 minutes, 2 seconds dependent on debt and that we would you know generate sustainable cash flows. 19:12 19 minutes, 12 seconds See the regarding the operating cash flow you are talking about we are also addressing that kind of concern but 19:19 19 minutes, 19 seconds ultimately our business is like that we we are keeping an excess inventory of 30 40 odd days only because of to cater to 19:28 19 minutes, 28 seconds the OEMs I'll tell you one example which has occurred with us uh in March when people were facing many kind of issue 19:35 19 minutes, 35 seconds regarding the raw material We have we have been given an opportunity by the OEMs like Bajach, TBS and Royal Enfield. We were in talks with them because of the IATS certificate. 19:46 19 minutes, 46 seconds But it the the six month process of uh this evaluation from the OEMs and all it 19:53 19 minutes, 53 seconds has been toned down and it has been come down to one month because of this war kind of situation and we were having inventory higher inventory in 20:00 20 minutes anticipation of getting orders from OEMs or the tier one diecasters. So we were c we were able to cater to them and now we 20:08 20 minutes, 8 seconds are we are we are having we are having a vendor code with them uh the directly with the OEMs. So number one once it 20:15 20 minutes, 15 seconds will get stabilized now we are now we we know that these three OEMs will have a consistently so and so much of quantity 20:23 20 minutes, 23 seconds with them so we'll we'll keep will not keep excess quantity for them as of now. 20:29 20 minutes, 29 seconds So you will be able to see during this during upcoming two years we'll try to maintain this kind of inventory levels as we are getting many approvals from 20:37 20 minutes, 37 seconds the OEMs. We are in talks with five seven different OEMs. So once we get the clarity uh in uh within these OEMs 20:46 20 minutes, 46 seconds you'll able to see a substantial change in in coming two years FI27 and FI28 regarding the inventory once we control 20:53 20 minutes, 53 seconds that 3040 inventory level 30 40 days extra inventory level once we control that automatically every problem will 21:00 21 minutes get solved in terms of cash flow because datas we cannot control datas as in as our as our sales as our revenue will 21:09 21 minutes, 9 seconds increase datas will by default will get increased and in terms of creditors we we are we are paying up frontont to them 21:16 21 minutes, 16 seconds to our creditors. So in terms of creditors also we don't have any control on in terms of creditors we are improving that cycle by 21:26 21 minutes, 26 seconds uh utilizing in terms of operating cash flow will we are uh uh we are taking uh 21:32 21 minutes, 32 seconds facilities like build to ship to concept at a concessional interest rate at a marginally higher interest rate as compared to working capital. We are 21:40 21 minutes, 40 seconds using that uh product on build to ship to in in terms of what the we will will able to get a credit of 90 days from the 21:48 21 minutes, 48 seconds financing uh services like uh that will not increase that that will increase our creditors. So it will also impact our positive cash flow. 22:01 22 minutes, 1 second Okay. So that was helpful to understand. 22:03 22 minutes, 3 seconds So what my follow up on the same thing is that you are talking about the OEMs decreasing their approval time from 6 months to 1 month. Correct? 22:12 22 minutes, 12 seconds No, that that is only because it was the the war was a blessing in disguise for people like that was only for time being. See OEMs 22:21 22 minutes, 21 seconds don't have any uh to cater to OM it is also a very difficult task. We were not able to 22:29 22 minutes, 29 seconds cater to OEM since since last June. We are able to cater to OEMs or the tier one diecasters but it is not like that 22:37 22 minutes, 37 seconds that it has come down from 6 months to 1 month. 22:41 22 minutes, 41 seconds Correct. Correct. I understand that. Uh that is that is a blessing for us. Yet sir what I wanted to understand was that 22:49 22 minutes, 49 seconds we have been facing this negative cash flow thing for the past four years. So this one month thing we can understand but for the past four years we are 22:56 22 minutes, 56 seconds facing which is why I was trying to understand this because then this would then continue for the business for a very long time. No then sir because then 23:05 23 minutes, 5 seconds we'll have to continually raising debt in order to fund our operations. 23:10 23 minutes, 10 seconds I'll tell you one thing in last four years we are we were into uh an aggressive space because of aluminum 23:17 23 minutes, 17 seconds alloy. We are we were earlier the proportionate was different. Aluminum alloy was hardly 15 20% and aluminum 23:24 23 minutes, 24 seconds deoxxidant was 80 90%. So we are increasing ourselves into aluminum aggressively into aluminum alloy. Uh we 23:32 23 minutes, 32 seconds have catered to minda corporation. We have catered to Sigma electrical. We have catered to minda industries. So in last four five years we are in a 23:41 23 minutes, 41 seconds continuously we are in a um um you can say uh developing stage. Now the the 23:48 23 minutes, 48 seconds ultimate ultimate goal is to reach to the OEMs. So now we have reached to the OEMs. So now there is no point of 23:56 23 minutes, 56 seconds keeping that extra inventory with us in in in two years. See you'll you'll able to see in this year also a bit we'll not 24:04 24 minutes, 4 seconds be able will not increase our inventory but we'll we'll maintain we'll sustain our inventory to such extent that uh 24:13 24 minutes, 13 seconds we'll target fourdigit sales with the same current level of inventories because we are we are getting clearcut picture from the majority of the three 24:22 24 minutes, 22 seconds three OEMs which we are targeting the other OEMs are Marauti Suzuki India Limited uh Hero Hero Motors Honda Motors 24:30 24 minutes, 30 seconds and yama these are the four big OEMs which which is which we are targeting so once it is once it will get settled down 24:39 24 minutes, 39 seconds then you'll able to see drastically improve that 30 40 odd days of inventory it will drastically reduce by 30 40 odd days so if you if the inventory is 24:48 24 minutes, 48 seconds reduced by 30 40 odd days you'll able to see operating positive cash flow okay so just a clarification so what you 24:57 24 minutes, 57 seconds are saying sir this can happen in 20 9 correct like 28 29 FI27 FI28 you'll see some pro see with 25:06 25 minutes, 6 seconds same level of inventories with same level of in inventory if I'm if I'm targeting somewhere around thousand odd crores of business you'll automatically 25:14 25 minutes, 14 seconds see the proportionality of it of it correct okay understood thank you so much sir thank you thank you yeah thank 25:22 25 minutes, 22 seconds you madam we'll take the next question is from miss babik Hello. 25:32 25 minutes, 32 seconds Hello. Am I audible? Yes. 25:36 25 minutes, 36 seconds Yeah. So, basically I have the question regarding your capacity. So as per the last call um the management guided that 25:44 25 minutes, 44 seconds uh the cipex will be live by 2027 and now we uh we can see that it's already 25:52 25 minutes, 52 seconds uh 60% utilization in 2026 that 38,000 metric tons. So are we planning for further 26:00 26 minutes capex in um the same facility um going forward or not? 26:07 26 minutes, 7 seconds Yeah. Yeah. we will we'll will target another uh 5 7,000 tons in the same capa in the same premises and 12,500 tons for 26:14 26 minutes, 14 seconds aluminum wire rod. So our our current target is somewhere around 80%age utilization 75 to 80%age of utilization of 38,000 tons in FI27. 26:27 26 minutes, 27 seconds Okay. And what will be the timeline of this uh capex you are planning? It will be in the H2 of FI27 not immediately 26:36 26 minutes, 36 seconds because we have recently uh completed our expansion in the ongoing premises and we our major focus is on the aluminum wire rod project expansion. 26:47 26 minutes, 47 seconds Got it. And also want to understand as we are the recycling of aluminium uh do 26:54 26 minutes, 54 seconds we have the impact of the prices of uh the aluminium which goes globally like 27:01 27 minutes, 1 second do we see the impact or our prices get regulated by the aluminium prices. See 27:07 27 minutes, 7 seconds you can see impacted for a uh as it as we are a month lag or a quarter lag. You can see that but not consistent on a 27:16 27 minutes, 16 seconds consistent basis as we are hedge oursel from the import as well as from the sales side of uh business. In import are we are doing somewhere around percentage 27:24 27 minutes, 24 seconds of LME depending upon the scrap quality and in sales also it is average LME into average dollar plus that delta which I 27:32 27 minutes, 32 seconds was talking about earlier and that delta would be fixed. So average LM into average dollar will change but and delta would be fixed. So somewhere we are 27:40 27 minutes, 40 seconds cover we have covered ourself in such a way that we maintain our AITA market in terms of uh in in in in terms of any volatility in the market. 27:53 27 minutes, 53 seconds Thank you. Thank you so much. 27:55 27 minutes, 55 seconds Thank you so much. We'll take the next question from Mr. Shya. Um [clears throat] hi Yash. Hi Manoji. 28:03 28 minutes, 3 seconds Christopher congratulations on a fantastic set of numbers. Um I just want to understand our current market positioning. What is the competition? 28:12 28 minutes, 12 seconds What is our current market share in our current segment which is our alloys and ingots and what are we expecting in our new segment in the aluminium wire rods? 28:21 28 minutes, 21 seconds Do we see strong demand and like less supply or like what is the rational behind expanding into aluminium wire 28:29 28 minutes, 29 seconds rods? And just a bit on the competition and market share what you expect. See the market share in terms of aluminum would be really difficult to tell you 28:37 28 minutes, 37 seconds but in terms of aluminum alloy we are well placed uh we'll be in the you can 28:46 28 minutes, 46 seconds say top 10 uh aluminum alloy manufacturers in India across India and 28:53 28 minutes, 53 seconds now as we are approaching towards OEMs so in next one year or two FI28 we can 29:00 29 minutes we can target ourself into top Three top four aluminum alloy manufacturer number one. Number two, aluminum deoxxidant. We 29:08 29 minutes, 8 seconds are we are the pioneers and we are the still the leader in aluminum deoxxidant across India. Aluminum wire rod. If I 29:16 29 minutes, 16 seconds talk about aluminum wire rod, aluminum wire rod is a is a good industry is is it is a upbringing industry and uh we 29:26 29 minutes, 26 seconds the the demand is huge in aluminum wrote. So hopefully I'll I'll I'll able to tell you more about aluminum wrote in 29:34 29 minutes, 34 seconds next con call the next half year con call we'll able to tell you more about aluminum wrote 29:42 29 minutes, 42 seconds oh fair enough fair enough and when you say top 10 do you include the primary manufacturers as well like the non no 29:49 29 minutes, 49 seconds it's all together different industry I'm talking only about aluminum secondary industry aluminum secondary industry has 29:55 29 minutes, 55 seconds also its wide range like aluminum deoxxidant, aluminum uh alloy, aluminum 30:03 30 minutes, 3 seconds wire rod, aluminum utensil, aluminum extrusion, aluminum billets, aluminum foils. So there there is huge variety of 30:12 30 minutes, 12 seconds industries coming under aluminum secondary industry. 30:17 30 minutes, 17 seconds Got it. Got it. Got it. So in our product, we've kind of found a huge I have told you about our product which we are into it. 30:25 30 minutes, 25 seconds Fair enough. Fair enough. And secondly, just to follow up on one of the previous questions asked, um, we are 80 we're importing about 80% and where are we 30:33 30 minutes, 33 seconds seeing these imports from? Like which geography? 30:36 30 minutes, 36 seconds UK, Europe. The predominant is UK, Europe, US. 30:40 30 minutes, 40 seconds Understood. So do you think we'll have good tailwinds from the FDA that we've signed? India, UK. 30:45 30 minutes, 45 seconds Yeah. But it is not applicable as of now. But 100%. See the basic custom duty is 2.5 plus 10% of educational sales 30:53 30 minutes, 53 seconds which is non-refundable. that is that comes to 2.75 percentage this FDA will help us in uh it will directly impact 31:00 31 minutes our pet or or you can say the cost of manufacturing will decrease by 2.75%. 31:05 31 minutes, 5 seconds and 2.75% it is it is huge significant right with our sort of a business absolutely and uh last question 31:14 31 minutes, 14 seconds I just want to understand you know in terms of primary and secondary as you mentioned you're also looking to penetrate the OEM segment right which is 31:21 31 minutes, 21 seconds primarily sourced through primary aluminium manufacturers like Hindalco etc so what could be the difference in the pricing and the quality as compared 31:30 31 minutes, 30 seconds to the primary manufacturers and the secondary manufacturers of aluminium See in terms of aluminum alloy the primary and secondary aluminum 31:38 31 minutes, 38 seconds difference ranges between 7 to 10% and secondary aluminum is cheaper as compared to primary aluminum. 31:46 31 minutes, 46 seconds Right. Right. And any quality difference or it's more or less the same thing? Nothing in terms of it is nothing. 31:52 31 minutes, 52 seconds Okay. Okay. Okay. Thank you so much again Yash. Thank you Manoji. Have a great day and congratulations once again. Thank you. 32:00 32 minutes Yes. Thank you. We'll take the next question from Minerva Research. Hello. Yes sir. Hello. 32:08 32 minutes, 8 seconds Yes. Yes. Good ma'am. Good sir. Good work. 32:11 32 minutes, 11 seconds Sir, actually I wanted to understand with respect to preferential issue. 32:18 32 minutes, 18 seconds Sir, first of all, the valuation uh report prescribes valuation close to 300 rupees which is almost 50% discount to 32:25 32 minutes, 25 seconds the CNP. Is is that why many investors backed up during the round valuation report 300? 32:33 32 minutes, 33 seconds No. No. Something is mistaken from your side. How it's 200 lower than the current market price. 32:46 32 minutes, 46 seconds Sir the valuation report which is there on the website of the company in that it is giving the value as 300 rupees and at 32:54 32 minutes, 54 seconds that time it was uh at 50% to the CMP so that is why investors backed out or what was the reason 33:02 33 minutes, 2 seconds and the market condition was the reason the one major uh are uh you can say the stakeholder who was investing somewhere 33:10 33 minutes, 10 seconds around 40 odd crores he has backed out because of the market condition and the CIOS of their company uh they were they 33:17 33 minutes, 17 seconds they were not allowing them to invest any new fund to infuse any new fund into any new company. So that is the reason we we we dropped that uh preferential 33:26 33 minutes, 26 seconds issue report 33:37 33 minutes, 37 seconds where you find the price of 300 rupees sorry In the EGM notices section there 33:46 33 minutes, 46 seconds is a valuation report given wherein they have written clearly that the the pair price is 300 and CMP is 600. So almost 33:54 33 minutes, 54 seconds it is 50% discount right uh Manuji I think after this call you could look into that and uh provide a 34:03 34 minutes, 3 seconds clarification over email. Correct. Sir, can you provide us the mail ID to our IR team? So, they'll they'll have they'll take your question and we'll provide you the clarifications. 34:13 34 minutes, 13 seconds Right after this sir, it's 16th December 2025 report. 14 pages report. 34:21 34 minutes, 21 seconds Yes sir. That is what I'm telling you. 34:23 34 minutes, 23 seconds Uh question we'll come back to you with your answer sir. Definitely. Okay. 34:33 34 minutes, 33 seconds G sir G 11 page number 300 a fair value. 34:43 34 minutes, 43 seconds Okay, noted. 34:46 34 minutes, 46 seconds Man, you you replied to them some time to be a check it out, but our preference was done at the price of 59850. 34:56 34 minutes, 56 seconds So whatever the report showing, I just need to be a check it out. 35:03 35 minutes, 3 seconds We we never issued any share on a discounted price. 35:06 35 minutes, 6 seconds Okay, sir. I'll email you all the details if you want. Please sir, please please we'll come back to you. Definitely we'll come back to you. 35:13 35 minutes, 13 seconds Yeah. Thank you. Mineralva research. 35:16 35 minutes, 16 seconds We'll take the next question. It's from Mr. Om. 35:21 35 minutes, 21 seconds Uh hi sir. Good afternoon. This side from 361 capital. Uh like you said about 35:28 35 minutes, 28 seconds the high margin from the aluminium wire rod business. Could you just uh tell me what are the target margins from that business? 35:36 35 minutes, 36 seconds I' I've told sir that it will be it will be somewhere around one or two percentage higher than what we are currently doing. Anywhere see if you are 35:45 35 minutes, 45 seconds anywhere in recycling industry 7 to 10 percentage AITA is is quite fantastic and is quite sustainable according to 35:52 35 minutes, 52 seconds us. So uh 7 to 10 percentage of AITA in aluminum wire also it is quite sustainable. If you are earning 7 7 and 36:01 36 minutes, 1 second a half percentage in it then 8 and a half to 9 9% close to 10%age also it is quite achievable in aluminum w 36:10 36 minutes, 10 seconds okay got it. Uh again uh who are top five traders overall and what is the 36:17 36 minutes, 17 seconds sales volume specific to the OEMs we are talking about. See OEMs we have we have we have just recently targeted OEMs in 36:26 36 minutes, 26 seconds month of March we have sold somewhere around 250 tons to Bajage auto and 150 tons to TVS motor and 100 tons to Royal 36:35 36 minutes, 35 seconds Enfield and same order has been repeated in the month of May. So, OEMs we have just recently started. It is it would be 36:42 36 minutes, 42 seconds better if you ask and if we provide you the data in by the end of H1 of this financial year we'll able to provide you 36:50 36 minutes, 50 seconds much better clarity and much better numbers only particularly only from the OEMs 36:58 36 minutes, 58 seconds then apart from this OEMs who are top five traders like top traders Mano G please provide the top 10 customers 37:06 37 minutes, 6 seconds customers Tata Steel Sigma Electronics Minda Corporation Seltal 37:15 37 minutes, 15 seconds and okay sir got it. Uh again considering 37:23 37 minutes, 23 seconds the recent uh effect of war do we have any fuel or coal price impact on our business? 37:30 37 minutes, 30 seconds See the cost of production has increased no doubt about it because of the fuel prices the cost of production has 37:36 37 minutes, 36 seconds increased by 15%. But ultimately it has been uh diverted or it has been uh it 37:44 37 minutes, 44 seconds has been passed to our to our selling price. As simple as that. Okay. Thank you. 37:52 37 minutes, 52 seconds Thank you so much. 37:58 37 minutes, 58 seconds Thank you. Uh any other participant if they have any questions can raise their hand and ask their question. 38:04 38 minutes, 4 seconds We'll wait for a few seconds uh to see any follow-up questions. Yes, Jordan. 38:10 38 minutes, 10 seconds Um yeah, sorry. Uh I just want to understand one more thing like apart from the incremental growth that we're looking at from the aluminium wire rods, 38:18 38 minutes, 18 seconds what sort of growth uh strategy and what expectations do we have in our current segment? Could you please tell me a 38:26 38 minutes, 26 seconds little bit on that? Sir I as I have told you my target is fourdigit in terms of from the existing plant as aluminum wire 38:33 38 minutes, 33 seconds rod will come from Q4 and VR we are taking zero as of now. So our target is four digit from the existing uh plant. 38:43 38 minutes, 43 seconds Got it. Got it. And you expect this trajectory to go on for the next maybe you know 3 years four years what? 38:50 38 minutes, 50 seconds As of now we have we have catered only to the three OEMs and that to only the trial lots. We are not catered to we 38:58 38 minutes, 58 seconds have not catered a maximum chunk of their business. So we are more than hopeful and the journey is just started. 39:06 39 minutes, 6 seconds Oh okay. Okay. Okay. So you expect significant scale up with these OEMs itself. Right. Understood. Understood. Okay. Thank you. 39:14 39 minutes, 14 seconds Thank you. 39:18 39 minutes, 18 seconds Thank you. We'll take the next question from Bhavika. 39:25 39 minutes, 25 seconds Follow question. So basically I just want to know uh going forward what uh a bitter profile we can expect because I 39:33 39 minutes, 33 seconds think from the new cipex on the wire side um um uh we can like uh last time 39:40 39 minutes, 40 seconds management guided that 10% margin can be expected. So how the overall profile will be look like a beta profile 39:49 39 minutes, 49 seconds ma'am FI207 you I'll tell you very honestly FI207 you have to consider from aluminum wrote uh to be zero because it 39:58 39 minutes, 58 seconds will be it will start from Q4 December you can say December and Q4 so we are not considering any uh AITA or any any 40:07 40 minutes, 7 seconds any revenue or any margins from aluminum wrote as of now FI28 we can expect good margins and good sales from aluminum 40:15 40 minutes, 15 seconds wire rod and can I know the reason why there is a so much delay in the wire rod? I think the capacity is lying. 40:23 40 minutes, 23 seconds No, we are we are making newly new shade on our freehold land. So it is taking time uh than expected that is why nothing else. 40:34 40 minutes, 34 seconds Okay. And uh as uh do we have the customers? 40:38 40 minutes, 38 seconds Yeah, we have we have the customer as I've told on the earlier con call also we have the customer with us there one 40:46 40 minutes, 46 seconds is Philip rod Philip rod will will be able to sell philip rod to our existing client like Tata steel arsenal metal 40:54 40 minutes, 54 seconds gindel steel and aluminum alloy wire rod will be able will will be selling it to apar ki and all 41:02 41 minutes, 2 seconds and also just one more question that apart from us so who all are into the wire rod in the recycling side. 41:10 41 minutes, 10 seconds There are there are a lot of industries which is not listed. There are they have just recently started like you can say u 41:18 41 minutes, 18 seconds Sakar industries, RFIN India limited, RFIN India is listed company. They are into aluminum wrote 41:25 41 minutes, 25 seconds and uh frame conductor PG foils and all facility is the largest among the all the fragmented players. 41:35 41 minutes, 35 seconds Sorry. 41:36 41 minutes, 36 seconds Our capacity the upcoming capacity which we are coming up for the wire rod is the largest among all the fragmented pers. 41:44 41 minutes, 44 seconds I cannot say the largest but it will be a you can say a decent a good size of capacity of aluminum wire rod maybe you can say top five top 10 again. 41:57 41 minutes, 57 seconds Thank you so much. 42:02 42 minutes, 2 seconds Thank you. We'll take the next questions from Mr. Priyans. 42:11 42 minutes, 11 seconds Hello team. This is Priyansu from Invest. Couple of question from my side. 42:15 42 minutes, 15 seconds So apart from the natural hedge that uh we are doing uh how we are ensuring our margin from the aluminium LME uh 42:24 42 minutes, 24 seconds volatility uh whether we are taking any hedging contracts on the LME directly or uh what else we are doing to protect our 42:33 42 minutes, 33 seconds margin apart from the value added product mix. 42:36 42 minutes, 36 seconds We are not doing anything because our sales and all are naturally hedged. So we don't need to do any any extra effort 42:44 42 minutes, 44 seconds on hedging ourselves as our as our import is also hedged and linked to 42:51 42 minutes, 51 seconds import our sales are also hedged. So we don't need any extra efforts on the MCX or hedging platform. 43:00 43 minutes Okay. So is my understanding is correct that our margin will tendon in the uh range of LM aluminium prices changes. it 43:09 43 minutes, 9 seconds will not change. See uh I'll tell you it will a month lag you can see because our sales are on the basis of m minus one 43:17 43 minutes, 17 seconds formula month minus one. So average sales of average lm of April into average dollar of April plus that delta 43:24 43 minutes, 24 seconds would be applicable for uh May month May month average uh the selling will be of May month. So you you can see that 43:33 43 minutes, 33 seconds the dollar of April we are taking effect into we have we have taken average dollar impact into consideration in the 43:41 43 minutes, 41 seconds sales price of May and again in the average sales price average of May will taken into consideration of June. So 43:49 43 minutes, 49 seconds that that would be a lag of one month maximum one or two months. But uh uh the margins or anything that is why we we we 43:57 43 minutes, 57 seconds we are we we are proudly saying that the AITA margin which we are working will range from 7 to 10 percentage. 44:08 44 minutes, 8 seconds uh only and only uh during that case when the market falls down vertically 44:15 44 minutes, 15 seconds over 6 months or one year then during that 6 months you'll see uh a loss because in that in that case scenario no 44:24 44 minutes, 24 seconds one can predict the vertical fall or no one can judge that vertical fall only during that time but once you see the vertical fall you'll see the vertical 44:33 44 minutes, 33 seconds rise also so in next uh in going forward in 3 six months we can make up for at loss of 6 months. 44:40 44 minutes, 40 seconds Okay, that is a high situation I'm telling you. 44:43 44 minutes, 43 seconds Okay, that's uh clear. And the second thing is that due to the implementation of this EPR norms and uh government 44:51 44 minutes, 51 seconds tightening the uh regulations uh whether we are looking at any increase in the availability of domestic scrap and what 44:59 44 minutes, 59 seconds is the difference in terms of cost between domestic scrap versus imported scrap. Sir as on date domestic scrap is much expensive than imported scrap. 45:09 45 minutes, 9 seconds Number one. Number two in India until and unless the recycling concept will 45:16 45 minutes, 16 seconds not uh been done then we will not be able to get that much of scrap. Till date people are using 15 20 years old 45:25 45 minutes, 25 seconds vehicle. there is no government has introduced vele scrap policy but it has not been sincerely implemented uh down 45:35 45 minutes, 35 seconds the line. So it will take time in India to get scrap to generate scrap because if we don't 45:42 45 minutes, 42 seconds uh trash or if we don't uh you can say uh dispose the older thing the air 45:50 45 minutes, 50 seconds conditioner or you can say the computer or you can say any kind of thing the demolishing of the building 60 70 80 45:57 45 minutes, 57 seconds years old building are also there. uh people are uh now the concept of you can say redevelopment is going on across 46:05 46 minutes, 5 seconds India. So we'll be able to see more scrap once it is sincerely or strictly being implemented down the line. 46:14 46 minutes, 14 seconds Okay. And in terms of number we can say that uh domestic scrap is 10 to 15% 46:20 46 minutes, 20 seconds expensive than the imported scrap. Any number? 46:24 46 minutes, 24 seconds Not not that much. uh to be very honest we have not compared but you can say 7 8%age would be expensive we have never 46:33 46 minutes, 33 seconds compared uh domestic with uh import because domestic you you cannot get domestic material easily and that too 46:40 46 minutes, 40 seconds much of quantum and consistent quality homogeneity material okay that's clear and if I may squeeze 46:48 46 minutes, 48 seconds one more question uh yeah so what is the margin differential between the uh refined and aluminium and 46:57 46 minutes, 57 seconds aluminium wire rods or value added aluminium products or uh besides the aluminum rod 47:06 47 minutes, 6 seconds looking at any other product range which is which will be in the category of value added product mix. 47:13 47 minutes, 13 seconds So aluminum wire rod is a forward integration is a value added product mix which we are entering into and the margin product if you'll make anything 47:23 47 minutes, 23 seconds out of aluminum scrap the margin product will vary from 1 to 2% maximum apart from that in the the difference would 47:31 47 minutes, 31 seconds not be there much 47:42 47 minutes, 42 seconds Thank thank you. We'll take the next question from Krishna. 47:48 47 minutes, 48 seconds Yeah. Hi Hash. Good morning. Uh so [clears throat] you mentioned briefly that u you know uh your cost uh is 47:55 47 minutes, 55 seconds increased by 15% and you pass it on to the customers in the selling price. What is the lag for that? Is it is it passed on immediately or it comes with a lag? 48:03 48 minutes, 3 seconds So everything is everything is being passed immediately under force major situation in terms of war that the extra 48:11 48 minutes, 11 seconds freight cost because of the war kind of geopolitical tension extra freight cost extra processing cost everything is being passed on an immediate basis and 48:20 48 minutes, 20 seconds OEMs are also quite supportive and the our customer are also quite supportive and they also know the situation the need of the it is a need of an R that's 48:28 48 minutes, 28 seconds it okay thank you thanks a Thank you. Any participant who wishes to 48:38 48 minutes, 38 seconds ask any questions uh may raise their hands. We'll wait for a minute for the line to queue up. 48:53 48 minutes, 53 seconds Oh, okay. Mr. Yes. Uh since there are no further questions, we can head to our closing remarks. 48:59 48 minutes, 59 seconds So one thing I want to personally extend to every investor and analyst on this call. You are always welcome to visit 49:06 49 minutes, 6 seconds our manufacturing facility at Dagam Gujarat and seeing our plant firsthand. 49:12 49 minutes, 12 seconds The furnaces, the process, the efforts, the scale which we are building will give you a perspective 49:20 49 minutes, 20 seconds uh a perspective of what Recycling Industries Limited stands for. No presentation can fully replicate that 49:28 49 minutes, 28 seconds kind of uh experience. Please reach out to our IR team to coordinate a visit uh at your convenience. Once again, I 49:37 49 minutes, 37 seconds sincerely thank you Arian Capital for hosting today's call for us and thank you to each one of you for your time, 49:44 49 minutes, 44 seconds your trust and continuous support and interest showing in by Recycling Industries Limited. Thank you everyone. Thank you very much. 49:51 49 minutes, 51 seconds Thanks to all of you. Thank you. Thank you Aran Capital. Thank you. That concludes the call.