Bhagyanagar India Limited — Q3 FY26

Bhagyanagar India Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=1JU4d_33HCE Published: 3 months ago

0:00 Good day everyone and welcome to the earnings call of Bhaginagar India Limited for the quarter ended 30th September 2025. 0:08 8 seconds Today's session is designed to provide an overview of the company's performance and address investor queries. Please note that this call is being recorded. 0:17 17 seconds Some of the statements made during this call may be forward-looking based on current expectations and are subject to risks and uncertaintities. Actual 0:25 25 seconds results may differ materially and the company does not undertake any obligation to update these statements except as required by law. We encourage 0:35 35 seconds all participants to exercise caution and refrain from placing undue reliance on these projections. Joining us today are 0:43 43 seconds Mr. Dendra Surana, managing director, Mr. Narendra Surana, founder, hello. 0:49 49 seconds Mr. Advet Surana, business development manager, Mr. Surendra Vtoria, Chief Financial Officer and Mr. Rahul Surana, Finance Manager. 1:00 1 minute We will now invite the management to present a brief overview of the company's performance. Thank you and over to you. 1:08 1 minute, 8 seconds Thank you very much. Uh since the first time I'm making this uh earnings call, I would like to start with a brief introduction and a background of the 1:15 1 minute, 15 seconds company. Uh so this company was started way back in 1982 by my brother and my father um who are the founders of this 1:24 1 minute, 24 seconds company and we have had u um continuous run of over 40 years of uninterrupted 1:32 1 minute, 32 seconds profits. So for the last 40 years we have never had uh any quarter where we have shown losses. 1:40 1 minute, 40 seconds We also very proud of our legacy that in the last 40 years there has never been any default or delay of payments to any 1:47 1 minute, 47 seconds institution, customer, bank or anybody else from our organization. We are very proud to keep that legacy started um in 1:58 1 minute, 58 seconds the early 80s as a manufacturer of just copper rods as a plain commodity uh player. We moved slowly over the last so 2:07 2 minutes, 7 seconds many years first from copper rods to making value added products as required by our customers and um which were 2:15 2 minutes, 15 seconds basically into auto components, bus bars, switch gear components and solar water heaters. Over the last 7 years, we 2:22 2 minutes, 22 seconds have changed our focus and got into backward integration with scrap recycling and uh import of scrap from 2:29 2 minutes, 29 seconds all parts of the world. As of today, we have 500 customers mostly in the OEM sector. Um, though our focus is mainly 2:38 2 minutes, 38 seconds in uh India, we have started uh made baby steps of exports of some of these products across the world. 2:47 2 minutes, 47 seconds Uh I would uh uh over the last few years we have been adding more and more value added products. I would request Adat who 2:56 2 minutes, 56 seconds is the business development manager to talk about the three new products which we have introduced in the last one one and a half years. 3:04 3 minutes, 4 seconds Hello. Hello everyone. I'm Adwat the business development manager. So uh in the last few years due to the requirements of our customers they were 3:12 3 minutes, 12 seconds pushing us to develop a few more products. One of these products are enamel wires uh enamel strips and 3:19 3 minutes, 19 seconds transpose conductors. They are used in the application of motor windings and transformer windings. Another product 3:26 3 minutes, 26 seconds that we have developed is uh copper in solar applications. As the solar industry is booming, this was something 3:33 3 minutes, 33 seconds that we have gotten into recently. Uh these products have huge potential due to the electrical requirements of the 3:40 3 minutes, 40 seconds country growing day by day and uh these products also have very high export potential. So we are working on this currently. 3:49 3 minutes, 49 seconds Thank you Adit. Uh as has al also been mentioned um because of the legacy 3:56 3 minutes, 56 seconds issues this company has uh a lot of um plants and uh real estate all over the 4:03 4 minutes, 3 seconds uh city. So uh we are going through a process also. We also have some windmills which are over 20 years old. 4:10 4 minutes, 10 seconds So we are currently under a process of restructuring where the entire copper assets will be hived off into a 4:17 4 minutes, 17 seconds separately listed entity which should happen in the next uh 12 months or so. 4:23 4 minutes, 23 seconds So that restructuring process is also underway where we will make one company which will be focused totally on copper 4:30 4 minutes, 30 seconds and another company which will have windmills uh real estate and other assets of the company. So that is also 4:37 4 minutes, 37 seconds underway. As regards the future, um we are personally very bullish on the 4:43 4 minutes, 43 seconds growth of copper. Copper in the last few years has been growing by leaps and bounds. In a country like India, 4:52 4 minutes, 52 seconds typically the growth of copper is twice the rate of GDP. So if the GDP is at 7%, copper growth is between 14 and 15% every year. 5:01 5 minutes, 1 second Um the main drivers for the growth of copper are uh three buzzwords today in the industry. Number one is green 5:09 5 minutes, 9 seconds energy. Green energy both solar and wind require about three and a half times more copper compared to traditional 5:17 5 minutes, 17 seconds forms of uh power generation because it is decentralized generation of power. there 5:24 5 minutes, 24 seconds is much more requirement of copper parts in both transformers uh cables and other places. This is leading into a great uh boom for copper. 5:35 5 minutes, 35 seconds The second growth engine for copper is EVs. Electrical vehicles also require roughly about four times more copper per 5:44 5 minutes, 44 seconds car compared to a regular IC engine including in the uh setting up of the infrastructure for charging and others. 5:52 5 minutes, 52 seconds The third buzz word today is AI and AI is going to really increase the demand of power and thereby increases the 6:01 6 minutes, 1 second demand of copper. There is a um there is a estimation that AI will consume more than 10% of the world's requirement of 6:10 6 minutes, 10 seconds power which will straight away translate into additional 10% requirement of copper for powering this AI growth. 6:19 6 minutes, 19 seconds Seeing this major growth in copper requirements across various industries, we are also gearing up to meet the 6:26 6 minutes, 26 seconds challenges and the opportunities which are going to be presented in the coming years as we move forward. The other 6:35 6 minutes, 35 seconds challenge which is going to happen is that there is not enough copper which is to be mined on the earth. So recycling is going to play a much more important 6:44 6 minutes, 44 seconds role for the fulfillment of the copper requirements of the country and we are well placed to u take advantage of this 6:52 6 minutes, 52 seconds as we have been doing this for a long time. We have the technology as well as the resources required uh for taking 7:00 7 minutes advantage of this boom coming boom in the recycling industry. 7:05 7 minutes, 5 seconds Further recycling is also being given a lot of weightage by all um customers in terms of the ESG requirement as well as 7:15 7 minutes, 15 seconds uh the government is coming up with a a proposal of APR which is extended producer responsibility which will ensure that more and more producers will use recycled products in the future. 7:27 7 minutes, 27 seconds Uh we are also looking at opportunities since we import all this scrap from all over the world. We are looking also at 7:35 7 minutes, 35 seconds pro opportunities of getting into recycling of plastic and lead in the near future. 7:42 7 minutes, 42 seconds Furthermore, um we have an aspirational target to reach 5,000 crores turnover in 7:47 7 minutes, 47 seconds the next 7 to 8 years um with this in this product line. Uh we already have a 7:55 7 minutes, 55 seconds 60 acre facility for copper which is more than enough to reach this turnover. 8:01 8 minutes, 1 second uh as far as the land requirements are there. So one of the major constraint is already of the block. Now coming to this 8:09 8 minutes, 9 seconds quarter um and this half year I'll just give a brief uh summary of the half year 8:16 8 minutes, 16 seconds results. Um from the uh last year's 777 crores we have reached,65 crores in the 8:26 8 minutes, 26 seconds first half year of this um year. We have our AITA has gone up from 1483 14 crores 8:34 8 minutes, 34 seconds 83 lakhs to 41 crores 39 lakhs which is a almost a doubling from 1.92% to 3.88%. 8:45 8 minutes, 45 seconds This has happened mainly due to our focus on more value added products rather than um u commodity sales. The 8:54 8 minutes, 54 seconds PAT in the meanwhile has also gone up from 7 crores to 25 crores. Thank you very much. Looking forward to some questions. The presentation has already 9:03 9 minutes, 3 seconds been uploaded. I'm sure most of you have seen it and we'll be happy to answer any questions which uh are there. 9:13 9 minutes, 13 seconds Thank you for the detailed and insightful briefing. I now request attendees who wish to ask a question to please raise their hands so we can take questions one by one. 9:30 9 minutes, 30 seconds The first question we'll take from Mr. Aia Dav. Hello. Am I audible? 9:40 9 minutes, 40 seconds Yeah. Yeah. 9:42 9 minutes, 42 seconds Thank you very much, sir. First of all, for holding the conf uh the call. Uh it's been very tough getting in touch with you. Um although I've not like 9:51 9 minutes, 51 seconds tried extremely hard but but still sir I appreciate an open conc call like this from every company. Congratulations on great performance sir. Uh sir I've been 10:00 10 minutes following this company for a very long time and if I just look at the data for the last 3 years your volumes that you report in your annual reports they have 10:07 10 minutes, 7 seconds been declining uh whereas your ABA margins have been increasing which I understand is the value addition part but can you go into further details uh 10:15 10 minutes, 15 seconds like even in this uh quarter the AIA percentage and the gross margins have jumped quite significantly. So was there 10:23 10 minutes, 23 seconds an element of inventory gains here? Uh because copper corrected last year and then has surged over the last two 2 3 10:30 10 minutes, 30 seconds months. Uh and then uh my question is on the sustainability of this. So if you 10:37 10 minutes, 37 seconds can break uh give some kind of um a break up between how much is coming from value addition, how much was inventory 10:45 10 minutes, 45 seconds gains, how much was uh some other uh some other uh factor which led to such such improved margins and going forward 10:54 10 minutes, 54 seconds how do you see these panning out? What is the upper level up to which you can go? 11:01 11 minutes, 1 second Thank you Augusta for your interest in the company. Uh yes our um uh um EVITA 11:08 11 minutes, 8 seconds margin has gone up and it's primarily due to our focus on more value added products. However, um as you have rightly pointed out the copper prices go 11:17 11 minutes, 17 seconds up while uh inventory gains has defin not substantially is contributed to the gains but whatever what happens is 11:26 11 minutes, 26 seconds whenever there is an uptrend in the commodity prices the overall sector uh goes up and there is a much more 11:33 11 minutes, 33 seconds bullishness when the price comes down you know the customers tend to not buy and delay the purchases and as the prices keep going up there is a surge in 11:42 11 minutes, 42 seconds demand from in the end customers who want to buy and that's how the there is a slight um increase in the AITA margin 11:51 11 minutes, 51 seconds because of that but the majority of the um price gain has happened because of the our shift to um higher value added 11:59 11 minutes, 59 seconds products and a certain small amount of value gain also has come in because the customs duty on copper scrap has been 12:07 12 minutes, 7 seconds removed from January 31st of this year in the uh budget last year. So our imports have suffered a lower customs 12:16 12 minutes, 16 seconds duty. Part of that saving has been added into our AITA margin. 12:21 12 minutes, 21 seconds So will that sustain this saving in the customs duty? 12:26 12 minutes, 26 seconds The the customs duty is gone forever. So therefore that AITA margin can continue. 12:32 12 minutes, 32 seconds We are looking at sustaining our AITA margin at close to 4% over the next few years. Um uh in spite of the higher 12:40 12 minutes, 40 seconds prices and uh higher volume our target is to sustain our AITA margin close to 4% plus or minus4% over the next few years. 12:50 12 minutes, 50 seconds Okay. And sir in terms of volume growth you uh uh as far as I know sir you have a 30,000 return capacity and I believe 12:57 12 minutes, 57 seconds the last year's numbers please correct me if I'm wrong were 18,300 tons. 13:02 13 minutes, 2 seconds Uh so you have some room to grow. So what kind of volume growth did you see in first half and how do you expect the next two years to pan out? 13:11 13 minutes, 11 seconds So the volume growth in the f uh first half I'll just give you the volume growth in the first half. So what 13:18 13 minutes, 18 seconds happens is because of the various value added products while our overall capacity is 30,000 tons which includes both the commodity as well as the uh finished products. 13:30 13 minutes, 30 seconds So the volume in metric tons of the first half has been 12,400 metric tonses as against 8,955 metric tons in the previous year. 13:41 13 minutes, 41 seconds 8,000 8,955 in the previous half year. 13:46 13 minutes, 46 seconds Okay. Okay. Okay. So that's a substantial jump sir. Okay. 13:49 13 minutes, 49 seconds Yeah. there is a substantial jump in the volume and sometimes the volume growth doesn't fully reflect the correct 13:57 13 minutes, 57 seconds picture because whenever there is an arbitrage opportunity in the commodity sector we increase our commodity sales 14:05 14 minutes, 5 seconds not only to test our capacity but also to take advantage of the situation and whenever there is a situation and that happens especially when the prices are 14:13 14 minutes, 13 seconds going up like you said when the prices go up there is an arbitrage opportunity between India and China and the places where we buy the local scrap in India 14:21 14 minutes, 21 seconds and then export the ingot to China. So that is sometimes a seasonal game. The commodity volume will keep be a little 14:29 14 minutes, 29 seconds volatile whereas the OEM sales are very very constant. 14:34 14 minutes, 34 seconds Great sir. One last question before I go back in the queue sir. Uh in terms of next round of capex when do you see that happening? because you you were 14:42 14 minutes, 42 seconds mentioning that you targeting a much larger volumes but can you quantify that in terms of tonnage and uh the next 14:50 14 minutes, 50 seconds round of capex uh beyond this 30,000 t capacity what are you planning so immediately we are looking at only an 14:57 14 minutes, 57 seconds additional 5,000 tons in terms of the overall capacity our majority of the capex right now will be going into 15:05 15 minutes, 5 seconds adding more value added products and increasing the capacity of the value added products okay sir How much is the value added portion as of now in terms of capacity and production? 15:15 15 minutes, 15 seconds Roughly about 60% of our sales is in value added products and the capacity is almost fully utilized in terms of the 15:23 15 minutes, 23 seconds value added products. So we are increasing the capacity there so that we can reach up to 75% of the volume in 15:30 15 minutes, 30 seconds terms of value added products and our investment in the first phase is going in that and it's a continuous process. 15:37 15 minutes, 37 seconds uh like Advat said our u demand for value added products is driven by our customers and whenever the customer wants any new form of value added 15:46 15 minutes, 46 seconds product in copper we do the required investment for them and get into that business so that's how a better margin for VA would be I mean 15:55 15 minutes, 55 seconds value addition would be what 6% 7% beyond that how much would that be sir so it depends on the product because uh 16:02 16 minutes, 2 seconds depending on the various inputs which go into the value added product could be anywhere between 6 to 12% depending on 16:09 16 minutes, 9 seconds various different types of uh products which come in and commodity is at 2%. 16:14 16 minutes, 14 seconds A commodity is typically at around 2% 2 and a half%. 16:18 16 minutes, 18 seconds Understood sir. Sir, thank you very much for answering all the questions. Thank you sir. All the best. Thank you very much. 16:24 16 minutes, 24 seconds Thank you. We'll now take the next question from Mr. Dili. 16:34 16 minutes, 34 seconds Hello. Hi. Uh good good evening team. 16:38 16 minutes, 38 seconds Thank you so much for taking my question. Hopefully I'm Hello. Yeah. Wait for your question. 16:46 16 minutes, 46 seconds Yeah. Yeah. Hi sir. Uh so sir uh I just wanted to know like uh you know we've g a very ambitious target of I think uh 16:55 16 minutes, 55 seconds reaching 5,000 KS you know over the next seven to eight years but uh in the short term you know what would be you know our 17:04 17 minutes, 4 seconds growth targets like because as we saying there are a lot of drivers to the industry right so 17:12 17 minutes, 12 seconds currently like how would you see it for the you know next maybe this year and next year how would we scale up? 17:22 17 minutes, 22 seconds Okay, if uh for the near term we are hoping to at least replicate the first half in the second half for this year 17:30 17 minutes, 30 seconds and going forward we are looking at roughly about 20% growth every year uh year on year uh compounded like I said 17:38 17 minutes, 38 seconds the demand of copper is roughly double the demand of uh double the growth in GDP so we expect the Indian demand of 17:47 17 minutes, 47 seconds copper to grow at roughly about 12 to 14% every year and we want to have a uh something more than that and we are 17:55 17 minutes, 55 seconds looking at roughly about 20% growth every year and we see a lot of traction from all our customers. So all the 18:03 18 minutes, 3 seconds customers whom we talk to are looking at um you know increasing capacity by 40 to 50% every year and majority of our uh 18:13 18 minutes, 13 seconds growth is uh driven by our u customers. 18:20 18 minutes, 20 seconds Uh correct correct sir. So sir just uh as the first time I'm seeing the companies of pardon me if my sub questions are basic. So the we supply to 18:29 18 minutes, 29 seconds people who are doing more capeex or is it the you know regular need that they have? So the reason I'm asking this question is so when some they are doing 18:38 18 minutes, 38 seconds some new plant or factory or some other cap that's when our products are needed more or do we supply them on regular basis like uh so uh most of our 18:47 18 minutes, 47 seconds customers are very very regular customers and um month on month we supply the same customers the material 18:54 18 minutes, 54 seconds especially um when you are looking at transformer companies when you're looking at auto companies and switch 19:02 19 minutes, 2 seconds gear companies so most of our Customers are manufacturing capital goods but the same customers take the material from us and then supply to the entire market. 19:14 19 minutes, 14 seconds The panel builders, transformers and automotive the customers are same. They are all repeat customers. We hardly ever get any new customers. 19:25 19 minutes, 25 seconds Okay. Okay. Fair enough sir. So sir is there like some kind of seasonality in our business like you know H1's better 19:32 19 minutes, 32 seconds or H2 is better because September we've you know done very well in terms both of our revenue and margins. So just wanted 19:39 19 minutes, 39 seconds to know like is this you know that the September quarter is the highest quarter or you know we can expect this quarterly 19:47 19 minutes, 47 seconds run rate to you know be the new base for us. So we are hoping to maintain this quarterly run rate through this year and 19:54 19 minutes, 54 seconds then start increasing more from the next year. Typically the first quarter is a little slow. The other three quarters are equally good. 20:03 20 minutes, 3 seconds Okay. Okay. Okay. That's that's nothing seasonal in terms of the season but sometimes you know the March end will play a little bit of demand extra in March but nothing major seasonal. 20:16 20 minutes, 16 seconds Oh okay. That's that's really helpful sir. Uh and sir we saw that you know your value added is nearly 60% right now 20:23 20 minutes, 23 seconds and we want to go into more products something related to solar and everything. So those margins will be 20:31 20 minutes, 31 seconds even better than the value added currently we're doing 6 7% or you know how would those be sir the margins of 20:38 20 minutes, 38 seconds the new product that you know we are trying to explore. 20:42 20 minutes, 42 seconds So uh like I said the the uh margins in OEMs range between 6 and 12%. So we are 20:49 20 minutes, 49 seconds looking at all the entire range of uh value added products across the various uh sectors. So even if you look at 20:58 20 minutes, 58 seconds something like a transformer winding even in that there will be a variation between them between 6 and 10%. But roughly the range is between 6 and 12% 21:06 21 minutes, 6 seconds for the value added products because that's a very big range s because you know 6 to 12 if you know we 21:13 21 minutes, 13 seconds could narrow it down a bit on an average rate because uh we are right now doing 4% I don't expect us to reach 10% 21:20 21 minutes, 20 seconds overnight but we hope that that's the end but still just wanted to you know get your feel that you know in general what the value added products are doing 21:29 21 minutes, 29 seconds right now and what will it be during the future. So uh we are not targeting aggressively over 4% on a weight total value addition. 21:40 21 minutes, 40 seconds Um we are quite happy with maintaining 4% and maybe look at getting it slowly upwards in small decimal points to 4 and 21:48 21 minutes, 48 seconds a half or so. We are definitely not targeting more than 5% I mean 5% value added in the next 2 years or so. The 21:56 21 minutes, 56 seconds overall valuation will remain uh AITA margin will remain between four and four and a half. 22:01 22 minutes, 1 second Oh okay. Okay. Okay, just last question from my answer. Uh we are talking that you know we have some real estate assets. So what would be its current 22:10 22 minutes, 10 seconds market value? Do we have any idea sir about that? So we look at uh adding construction. 22:20 22 minutes, 20 seconds So uh the circle rate of that will be around 200 to 250 crores. We haven't taken out the exact figure but once we 22:29 22 minutes, 29 seconds do this uh restructuring we might be doing some development work and also adding value in that in a separate uh separately in the other company. 22:38 22 minutes, 38 seconds Okay. So we look to become kind of like a construction company out there like Yeah. Either we do a construction. 22:45 22 minutes, 45 seconds That's right. Maybe. 22:50 22 minutes, 50 seconds Okay. Okay. That's that. I have some more question but I'll just join back in. Yeah. Thank you. Thank you very much Dash. 22:58 22 minutes, 58 seconds Uh thank you. We'll take the next question from Mr. Mayor. 23:07 23 minutes, 7 seconds Hi. Hello everyone. Uh am I audible? Yeah. 23:12 23 minutes, 12 seconds All right. Uh thank you so much firstly for allowing me to speak over here and congratulations on the stellar results. 23:20 23 minutes, 20 seconds Uh I just had one concern or one question rather. Uh because everyone is now saying copper is going to be the new 23:28 23 minutes, 28 seconds silver in the market overall all across the world. How uh does the company uh 23:35 23 minutes, 35 seconds plan to handle all the market fluctuations that are happening month on month or quarter or quarter especially 23:43 23 minutes, 43 seconds what we have seen this year at least uh how how do you see the company handling all the market fluctuations? 23:50 23 minutes, 50 seconds So uh we hedge our positions on uh all the three exchanges comx, lme and mcx 23:57 23 minutes, 57 seconds and uh depending on whatever the uh situation uh we try to ensure that we are not very much exposed to the market 24:06 24 minutes, 6 seconds forces but given that we are um quoting in tenders giving to OEMs there is a little bit of overflow which we can come 24:15 24 minutes, 15 seconds to us but it is typically a second level ripple effect which affects the the first level effect is typically hedged on the exchanges. 24:26 24 minutes, 26 seconds Okay, understood. Thank you. 24:28 24 minutes, 28 seconds Also just uh since we are on this question would like to make it very clear that um uh in copper the purchase 24:36 24 minutes, 36 seconds prices and the sale prices are continuously um uh adjusted. So there is 24:44 24 minutes, 44 seconds uh the price of copper is always put LME plus so so and so. So whenever we 24:50 24 minutes, 50 seconds purchase and sell the automatic pass through mechanism is there both in our purchases as well as in our sales 24:58 24 minutes, 58 seconds and we really don't have long-term contracts of sales over 3 months or 6 months like that on a fixed price. 25:06 25 minutes, 6 seconds Okay. Okay sir. Understood. Thank you so much for answering that. Welcome. 25:12 25 minutes, 12 seconds Thank you. We have one question in the Q&A tab as well. I'm just reading out the question. How will you manage with increasing raw metal prices? 25:22 25 minutes, 22 seconds So the uh increasing raw material prices like I said is a straightaway pass through to the customer. However, it 25:29 25 minutes, 29 seconds does have a second uh level effect that in it increases our working capital requirements in the company as uh we 25:37 25 minutes, 37 seconds need to provide for the finances for the working capital. Other than that uh it is a direct pass through whatever the prices of raw material will go up are increased in our sales prices. 25:51 25 minutes, 51 seconds Thank you. Uh we'll take the next question from Mr. Pratik. 25:58 25 minutes, 58 seconds Yeah. Hello sir. Uh this is the first time I'm actually joining the call again. Thank you for conducting this uh if I'm right first ever phone call. So 26:07 26 minutes, 7 seconds please continue to do that with the investors. uh enough for the results. Uh so sir, I'm just learning a bit more about the company. So I do have a few 26:16 26 minutes, 16 seconds questions. Uh can you talk a bit about your customer segmentation, customer like are you supplying mostly to you 26:25 26 minutes, 25 seconds know private sector or is it mostly for like B2G government sector and then my question was more around the uh 26:32 26 minutes, 32 seconds receivables. Sir uh are we doing anything? I see our receivables uh pretty high. are we doing something to 26:39 26 minutes, 39 seconds improve the uh operating cash flow situation? 26:44 26 minutes, 44 seconds So uh we have hardly any presence in the government. Most of our uh sales are B2B 26:50 26 minutes, 50 seconds sales to OEMs and uh we have a slightly higher concentration towards South India 26:57 26 minutes, 57 seconds and these are all long-term OEMs for some of these customers we have been supplying for about 35 years. Every 27:05 27 minutes, 5 seconds month we are supply month and uh the receivables typically are from OEM 27:14 27 minutes, 14 seconds customers are from 15 days to 60 days whereas the commodity is typically 0 to 7 days and as our focus goes more 27:22 27 minutes, 22 seconds towards OEMs our receivable days will keep going up and over the last few years we've had a 27:32 27 minutes, 32 seconds very good track record in terms of you know um receivables and absolute almost uh zero write offs on an annual basis. 27:40 27 minutes, 40 seconds It's less than.1% every year. 27:44 27 minutes, 44 seconds So that's been our record in terms of the receivables and getting the money. 27:49 27 minutes, 49 seconds Got it. So sir, my second question then followup is on the capeex plan. Uh so you that the second half we are doing the capeex. 27:58 27 minutes, 58 seconds Uh so what would be how are we funding this? Is it through internal approvals? 28:03 28 minutes, 3 seconds uh are we going to raise through the market or is it through loans? Can you and and then can you talk a bit more about the capeex in terms of you know uh 28:13 28 minutes, 13 seconds when will it go live and how do you see the uh the operational uh you know efficiency going up. 28:22 28 minutes, 22 seconds So uh so far all our capex over the last few years in fact from 2014 we were at around 300 crores and now this year we 28:30 28 minutes, 30 seconds are targeting 2,000 crores. are uh through internal acruals. So far all our capex has been through internal acrals 28:38 28 minutes, 38 seconds and very minor amount of loans from the banks. Uh we are looking at some fundraising in the near future 28:46 28 minutes, 46 seconds especially uh we uh when we are looking at the new plans of uh plastic and lead recycling. So we'll be looking at some 28:55 28 minutes, 55 seconds uh raising of funds for that. 29:01 29 minutes, 1 second Got it. And can you talk a bit more about the uh the cycle for uh this like when is this going to come live? Can you 29:09 29 minutes, 9 seconds talk a bit more about the plan there and when how can the capacity utilization how do you sorry can you can you repeat those questions? I didn't get that. 29:20 29 minutes, 20 seconds Yeah. So my question again was on this new uh recycling uh plant which you are talking about sir. So um when when is 29:29 29 minutes, 29 seconds this coming live and uh how would the capacity utilization do you see uh initially and then when do you see it 29:37 29 minutes, 37 seconds can reach full capacity utilization and is this also margin accrative? Uh yeah uh so the we'll be doing it 29:45 29 minutes, 45 seconds probably in three phases. The continuous growth in our value added products continues on a literally on a month-on-month basis. It's a rolling 29:54 29 minutes, 54 seconds effort. As far as a plastic recycling is concerned, we are looking at getting it live in the first quarter of next year. 30:01 30 minutes, 1 second Uh the lead recycling is still on the um drawing boards. We are still making the uh total detailed working. We are not we 30:10 30 minutes, 10 seconds are expecting that to come only by end of uh FY27. 30:18 30 minutes, 18 seconds Got it. Got it. And this is this is going to be uh within this entity right within this copper entity not the this will going to be within the copper 30:26 30 minutes, 26 seconds entity and post de merger also it will remain in the copper entity it copper entity will become a much more 30:34 30 minutes, 34 seconds uh broad in a broader sense a recycling uh entity. 30:40 30 minutes, 40 seconds Okay. Okay. and any uh business reason behind that since we are seeing that the copper price are going uh up and you are 30:47 30 minutes, 47 seconds direct beneficiary for that. So now uh sort of uh getting into uh uh you know 30:54 30 minutes, 54 seconds uh uh a joining business of recycling for plastic and lead as well. So uh can you uh give a more can you throw more 31:03 31 minutes, 3 seconds light on the So when we import copper scrap we basically import it in the form of cables. 31:11 31 minutes, 11 seconds So already we handle roughly about 600 to 700 tons of plastics which comes as part of the copper scrap which we import 31:20 31 minutes, 20 seconds and uh we are already doing a small way plastic recycling in terms of molding and making granules but we want it to 31:28 31 minutes, 28 seconds become a much more full-fledged uh area so that the entire plastic which comes in the table scrap which we import is 31:35 31 minutes, 35 seconds converted into finished products. So that is the reason we are getting into plastic and that's why we are thinking uh we are doing this on the first basis. 31:43 31 minutes, 43 seconds Secondly all the sourcing for copper scrap is international and the same sources 31:52 31 minutes, 52 seconds we get all the other raw materials like lead and other things. So we are seeing a good opportunity in that area and we 32:00 32 minutes have a big infrastructure in terms of the land and the uh you know pollution norms and other things set up. So it makes a lot of sense to get into other 32:08 32 minutes, 8 seconds recycling like lead. We are thinking of lead in the first phase and maybe in three or four years getting into aluminum as Got it. And these businesses are margin accative. 32:18 32 minutes, 18 seconds These are margin accative. Copper being the highest value has the lowest margin in terms of percentages. 32:25 32 minutes, 25 seconds The lower value uh products will always have a higher AIA margin per se. Okay. 32:32 32 minutes, 32 seconds Thank you. Thank you very much sir. 32:37 32 minutes, 37 seconds Thank you. Uh we'll take the next question from uh Mr. August. 32:48 32 minutes, 48 seconds Uh thank you very much sir. I wanted to ask about the capex which you have answered except one thing uh how much will be the capex uh for this year? Can 32:57 32 minutes, 57 seconds you quantify the actual amount of capex that you'll be doing? 33:01 33 minutes, 1 second So for this financial year we'll be doing roughly about uh 15 crores of capex that is fi 26 and we are targeting 33:08 33 minutes, 8 seconds 30 crores for fi 30 27 and sir how much of this uh 45 crores goes into the 5,000 t expansion in the 33:17 33 minutes, 17 seconds copper uh and how much goes for plastic um 33:25 33 minutes, 25 seconds a rough number would do sir yeah the plastics will be roughly about 3 crores The capex growth will will also be 33:32 33 minutes, 32 seconds hardly about 7 or 8 crores. The majority of the capex is going in adding value added products. 33:41 33 minutes, 41 seconds Perfect sir. Uh sir uh the the question on the working capital side I would like to repeat that uh because uh I've seen 33:50 33 minutes, 50 seconds this um I don't know whether it should be called a problem for you or not but whenever copper actually picks up in prices your your working capital capital 33:58 33 minutes, 58 seconds historically has exploded. Uh so even even now if I do like just normal projections I see that that number 34:06 34 minutes, 6 seconds exploding. So what is the maximum level of debt do you think you you guys are comfortable with uh at the current 34:13 34 minutes, 13 seconds equity base and how much you mentioned about raising capital. So how much equity are you considering uh to raise? 34:22 34 minutes, 22 seconds So uh we are looking at the market and we are talking to investment bankers. So the uh ballpark figure is between 100 34:29 34 minutes, 29 seconds and 150 crores of equity raise and uh and what we are looking at is at the current 34:37 34 minutes, 37 seconds capital you rightly said our current debt is optimal anything more will require further uh equity raise. So internally what is the level you're 34:46 34 minutes, 46 seconds comfortable with 1 is to1 equity or you can go so because it is mainly working capital 34:54 34 minutes, 54 seconds we can go up to 1 is to2 because uh the uh uh long-term loans are hardly going to be a maximum of 20 crores which is 35:03 35 minutes, 3 seconds like.1.1 is to 1. 35:06 35 minutes, 6 seconds The long-term debt is always going to be very low. It is only working capital which is backed with um both uh stocks 35:14 35 minutes, 14 seconds and so we are comfortable with 2 is to1 and so what's the rate at which you get these loans the short-term loans typically less than 9%. 35:25 35 minutes, 25 seconds Okay. Okay. Still quite high sir because most of it is backed by copper right? 35:29 35 minutes, 29 seconds Yeah. Yeah. I'm saying less than 9%. If you see the marginal cost of debt is about 7.75%. 35:36 35 minutes, 36 seconds But if we add all the you know upfront payments and other things I'm saying it is less than 9. 35:44 35 minutes, 44 seconds Understood sir. Understood. Okay. 35:48 35 minutes, 48 seconds And sir you mentioned the the receivable days for value added products. So net net on an ROE basis is working is value 35:58 35 minutes, 58 seconds addition still beneficial for the company because the working capital limit working capital requirements are pretty high. 36:06 36 minutes, 6 seconds Yes. uh but um uh that is where the value is for the company where because we make this value added company uh products that is where the value 36:15 36 minutes, 15 seconds accretion happens for the company otherwise our AITA margin like until it was one and a half two years back EITA margin remains very low unless we get 36:23 36 minutes, 23 seconds into value added products one final question so any any further ch uh consideration you're giving for more 36:30 36 minutes, 30 seconds forward integration the backward integration you're pretty much like at what you can do right you can't go beyond that but uh on the forward 36:38 36 minutes, 38 seconds integration side what are the plans if any so uh we are looking at a few more products like we were saying we'll be 36:46 36 minutes, 46 seconds doing solar uh wires right right and we are talking to making more components for our existing comp 36:54 36 minutes, 54 seconds companies uh where we are making water heaters and other things. So we are looking at some more products like that but again we are not looking at any 37:02 37 minutes, 2 seconds product which really go directly to the customer because we find that B2B is where our strength lies. 37:10 37 minutes, 10 seconds But can you go get into some subasssemblies like the bindings that you can go like probably do subasssembly for the transformer guys. Is that is 37:18 37 minutes, 18 seconds that a possibility sir? Does it make sense? So we do such things for auto companies where we make the windings for the auto companies and uh depending on 37:27 37 minutes, 27 seconds where the customer uh requirements are and where his pain points are we always move towards that we make some 37:34 37 minutes, 34 seconds components for switch gear companies where we can do bus bar you know after making the bus bar we add value and give it in a form of a component those are the things which we are also looking at. 37:45 37 minutes, 45 seconds Great sir, sir. Thank you very much for the opportunity and I really appreciate the con, sir. Uh, thank you very much, sir. Thank you. All the best. 37:54 37 minutes, 54 seconds Thank you. 37:56 37 minutes, 56 seconds Thank you. Now, we'll take the next question from Mr. Daril. 38:12 38 minutes, 12 seconds Yeah, Dash. We can Uh, Mr. Daril, are you there? 38:19 38 minutes, 19 seconds I think he must have walked. Okay. 38:31 38 minutes, 31 seconds Uh, we'll take the next question from Mr. Arjun. 38:38 38 minutes, 38 seconds Hello. Good afternoon, sir. Thank you for this opportunity. So my first question is with respect to the capacity 38:46 38 minutes, 46 seconds example. So you know we were around at somewhere 25,000 in 2017 and it took us more than five years to reach us at the 38:55 38 minutes, 55 seconds 30,000 level and now we are adding adding capacity by another 5,000. So I want to understand from the demand perspective like what has driven this 39:03 39 minutes, 3 seconds demand is it because of the product shift that we are now focusing more on value added products. 39:10 39 minutes, 10 seconds So the demand is mainly because of the growth in the economy. So things like our bus bars and other things there is much more growth in the economy and 39:19 39 minutes, 19 seconds there's much more demand which is coming from the market around us. That is what is driving our growth in uh production. 39:26 39 minutes, 26 seconds The value addition is what we are adding to ensure that we get a higher part of the pie. But the demand is basically one 39:34 39 minutes, 34 seconds as a country we are becoming more competitive so we are able to export. 39:38 39 minutes, 38 seconds Number two, each and every customer of ours is expanding. That is what is growing um making the demand. 39:47 39 minutes, 47 seconds Got it. And out of this additional 5,000 capacity, what capacity will be for value added products? 39:55 39 minutes, 55 seconds So, uh we have a lot of flexibility. You know, when we want to make value added products, first we have to make the commodity and then convert it into value 40:02 40 minutes, 2 seconds added products. So when I'm saying 30,000 to 35,000 tons that is increase in the capacity for the value added 40:09 40 minutes, 9 seconds products uh for the commodity whereas the value added products we do incrementally on um literally quarter by 40:17 40 minutes, 17 seconds quarter depending on where we see the growth coming which sector whether it is automotive uh switch gear uh 40:25 40 minutes, 25 seconds transformers solar wherever the growth is coming we keep adding capacities to increase our value added products to cater to those sectors. 40:35 40 minutes, 35 seconds Okay. And right now what like what sector is you can see demand for value 40:42 40 minutes, 42 seconds added products from which end user industry. 40:46 40 minutes, 46 seconds So mainly from the electrical sector the transformer sector is the biggest growth and the second is the uh green energy. 40:54 40 minutes, 54 seconds Okay. and what percentage of value added products versus commodity in the revenue mix we can see two three years down the 41:03 41 minutes, 3 seconds line. So right now we are at 60%. We are hoping to reach 70% uh in the next 3 years. 41:11 41 minutes, 11 seconds Okay. Okay. That's it from my side. Thank you so much. Thank you. 41:21 41 minutes, 21 seconds Uh thank you. Do we have any other question from any other attendee? You may please raise their raise your hand now. 41:33 41 minutes, 33 seconds Uh thank you everyone for such an engaging session. I now request the management to share their closing remarks. 41:40 41 minutes, 40 seconds You have to say thank you once again. I thank all the uh participants who have come and taken 41:49 41 minutes, 49 seconds interest in our company. um and hope hopefully we'll keep this uh tradition going forward with uh every quarter. I 41:57 41 minutes, 57 seconds would like to thank final also for organizing this uh meeting for us and getting uh the interest into the 42:05 42 minutes, 5 seconds company. Um we are also looking forward to a lot of growth in the next few years especially with the restructuring 42:12 42 minutes, 12 seconds company uh coming up ahead and when we'll focus totally on the copper segment of our company. We um hope to 42:20 42 minutes, 20 seconds keep in touch with all of you for uh in our journey forward. Thank you very much. 42:27 42 minutes, 27 seconds Thank you sir. On behalf of Paginagar India Limited, I would I would now like to thank all participants for joining today. Have a great day ahead. You may now disconnect.