BMW Ventures Limited — Q3 FY26

BMW Industries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=KWWn3BrgC_E Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to BMW Industries Limited Q3 and 9 months FI26 earnings call hosted by 0:08 8 seconds Ahant Capital Markets Limited. As a reminder, all participant lines will be in the listenonly mode and there will be 0:15 15 seconds an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an 0:24 24 seconds operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now 0:31 31 seconds hand the conference over to Mr. Ronak Oatwal from Aryant Capital Markets Limited. Thank you and over to you sir. 0:39 39 seconds Thank you. Hello and good afternoon to everyone. On behalf of Aryant Capital Market Limited, I thank you all for 0:46 46 seconds joining into quarter 3 FI26 earnings conference call of BMW Industries Limited. Today from the management we 0:54 54 seconds have Mr. Hersh Bansson the managing director. Mr. Vikram Kapoor the CFO and Mr. Sanjivil Sanchetti investor relation 1:02 1 minute, 2 seconds of Puritas advisor. So without any further delay I will hand over call to Mr. Sanjiv sir for their opening remarks. Over to you sir. 1:12 1 minute, 12 seconds Uh thank you. Good afternoon to all the participants. 1:16 1 minute, 16 seconds Before I hand over the call to Mr. Hush Manil for the opening remarks I would like to draw your attention to the safe harbor statement in the earnings 1:24 1 minute, 24 seconds presentation. I request each one of you to kindly go through the presentation now before the Q&A starts so that you are well aware of the same. 1:34 1 minute, 34 seconds Request you to go through the safe harbor statement very carefully. Over to you Mr. 1:40 1 minute, 40 seconds Thank you sir. Uh good afternoon everyone and thank you for joining us for BMW Industry Limited's quarter 3 1:47 1 minute, 47 seconds FI26 earnings call. This quarter marks an important step forward for the company with tangible progress across 1:56 1 minute, 56 seconds our strategic initiatives and operating performance. We are pleased to [clears throat] share that a green field downstream steel complex at Bukaro is 2:03 2 minutes, 3 seconds progressing well and during the quarter achieved financial closure by tying up 500 crores of long-term debt financing 2:11 2 minutes, 11 seconds from a consortium led by the State Bank of India along with HDFC and Yes Bank reflecting strong lender confidence and 2:19 2 minutes, 19 seconds a key inflection point as we transition from a largely conversionbased model to an integrated downstream steel 2:28 2 minutes, 28 seconds processing business. Thank you. Turning to financial performance, operating income for quarter 3 FI26 stood at 2:35 2 minutes, 35 seconds 162.16 crores, growing 9.9% year-onear and 11.9% quarteron quarter. Operating AITA 2:45 2 minutes, 45 seconds for Q3 FI26 was 3855 lakhs, up 6.8% Y on Y with an operating AITA margin of 23.8%. 2:57 2 minutes, 57 seconds Profit after tax for the quarter stood at 1761 lakhs reflecting a 16.3% 3:04 3 minutes, 4 seconds quarteron-quarter improvement on a year-to-ate basis. Operating income for 9 months FI26 3:12 3 minutes, 12 seconds stood at 45573 lakhs with operating AITA of 10690 lakhs and a margin of 23.5%. 3:24 3 minutes, 24 seconds Our balance sheet remains strong and well positioned to support the ongoing capex cycle. Net debt stood at 23231 3:32 3 minutes, 32 seconds lakhs with net debt to operating AITA at a comfortable 1.63x 3:40 3 minutes, 40 seconds and net debt to equity at 0.3x providing adequate financial headroom. 3:46 3 minutes, 46 seconds As on 31st December 2025, ROCE stood at 10.1% and ROE at 8.5% 3:54 3 minutes, 54 seconds reflecting the ongoing capital deployment for the Bukaro Greenfield project and the transition phase ahead of commissioning. 4:02 4 minutes, 2 seconds Operationally, our CRM segment witnessed a strong rebound with dispatches increasing 18.1% sequentially supported 4:10 4 minutes, 10 seconds by improved offtake, firm pricing, and better demand conditions. In parallel, we continue to build out our proprietary 4:18 4 minutes, 18 seconds downstream business and establish early stage sales network, positioning us well for a smooth integration with the 4:26 4 minutes, 26 seconds commencement of first phase sales from Bokaro by early FY27. 4:33 4 minutes, 33 seconds We reaffirm our mediumterm growth guidance over the next three fiscals. We anticipate consolidated revenue to grow 4:42 4 minutes, 42 seconds at a caggr of approximately 75% driven by the phased commissioning of Bokaro green field project as well as 4:51 4 minutes, 51 seconds the organic growth in our existing business verticals. 4:56 4 minutes, 56 seconds Operating AITA is expected to grow at a caggr of 45% over the same period with operating aida margin stabilizing at around 11% by FY28. 5:08 5 minutes, 8 seconds As we progressively integrate our uh new and existing business lines, 5:15 5 minutes, 15 seconds it is important to contextualize our margin outlook within the evolution of our revenue model. 5:23 5 minutes, 23 seconds Historically, our conversion based business has delivered operating aida margins in the mid20s largely due to minimal raw material 5:32 5 minutes, 32 seconds exposure. As we transition to an integrated downstream processing model, our cost structure will naturally evolve. Steel inputs will now form a 5:42 5 minutes, 42 seconds part of our cost base with raw material cost comprising approximately 80% of revenue. Consequently, consolidating 5:50 5 minutes, 50 seconds operating a bit margins will moderate as the legacy business blends with a more input inensive model. However, this 5:58 5 minutes, 58 seconds should not be viewed as a deterioration in performance, but rather reflects a conscious pivot towards scaling volumes, 6:06 6 minutes, 6 seconds deepening value chain integration, getting closer to customers, and enhancing stakeholder value. 6:12 6 minutes, 12 seconds We encourage investors to assess margin trends alongside absolute value creation. 6:18 6 minutes, 18 seconds While margins may normalize, the top line is expend uh expected to expand materially and profit after tax is 6:27 6 minutes, 27 seconds projected to grow in the range of 35 to 40% CAGR over the next three fiscals with PAT margins stabilizing at 6:35 6 minutes, 35 seconds approximately 5% by FY28 resulting in a return on capital employed of 15% or more. With the green 6:44 6 minutes, 44 seconds field expansion progressing as planned, we remain confident in our ability to enhance operating resilience, diversified our revenue base, and 6:53 6 minutes, 53 seconds deliver sustainable long-term value to our stakeholders. 6:57 6 minutes, 57 seconds With that, I will now open for questions. Thank you. 7:03 7 minutes, 3 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 7:11 7 minutes, 11 seconds star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 7:20 7 minutes, 20 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 7:38 7 minutes, 38 seconds Our first question is from the line of Bhavesh, an individual investor. Please go ahead. 7:45 7 minutes, 45 seconds Uh good afternoon Mr. Bansil. Uh my first question is on the revenues. Uh did the current quarter include any uh 7:52 7 minutes, 52 seconds trading revenue and if yes so could you quantify the trading component and its margin profile versus the core manufacturing revenues? 8:00 8 minutes Uh hi Bavesh welcome back. This is going to be a very short answer. No it does not include trading revenue. 8:08 8 minutes, 8 seconds That's great. So so uh we can see an increase of revenue this quarter. So going forward we can expect the same in uh same increase in Q4. 8:18 8 minutes, 18 seconds Yes. 8:20 8 minutes, 20 seconds So, so with the with only the Q4 remaining in the financial year, do you believe that the full year revenue guidance is still achievable? Like 8:28 8 minutes, 28 seconds specifically if we expect Q4 revenues to exceed 200 crores uh so that your guidance will be met. 8:36 8 minutes, 36 seconds Uh I think we are well on track to do that. Yeah. 8:40 8 minutes, 40 seconds Okay. So we can expect a good good good revenues uh in the Q4 better than are you I mean what you're trying to say 8:48 8 minutes, 48 seconds is that will we achieve 400 200 crores Q4 revenue? 8:52 8 minutes, 52 seconds Yeah because because if if you if you have given a uh if a revenue guidance of 15%. Uh so is that achievable in the if 9:02 9 minutes, 2 seconds you do 200 crores in the fourth quarter can we expect that to happen? 9:08 9 minutes, 8 seconds Not a specific number but at least that I will just come into that. I'm not sure whether I can give you a specific number but needless to say uh I think the trajectory will continue. 9:19 9 minutes, 19 seconds Perfect. Perfect. Ala could you share the current unex uh unexecuted order book as of date and the expected execution timeline over the next three to four quarters. 9:28 9 minutes, 28 seconds So the you know the our order books uh are more time based than specifically value based. the values are more 9:36 9 minutes, 36 seconds indicative than uh anything else. Uh so the the CRM contract uh remains for 5 years. The 9:45 9 minutes, 45 seconds tube contract as earlier indicated remains for uh I think 3 years and uh the extension in the TMT contract is for 9:53 9 minutes, 53 seconds 12 months which means till November 26 and uh the volumes which have sorry the 10:01 10 minutes, 1 second values which have been indicated earlier uh remain conservatively on track. 10:08 10 minutes, 8 seconds Understood. So coming to your contract part. So in your FY26 Q3 press release you had mentioned uh the contract being 10:16 10 minutes, 16 seconds in the final stage stages of the negotiations with a key customer with expectations of normalization in volumes. So could you update us on the 10:24 10 minutes, 24 seconds current status of the contract and whether volumes have started stabilizing? 10:28 10 minutes, 28 seconds Uh we are talking about the TMT contract if I'm not wrong. 10:32 10 minutes, 32 seconds Uh yes there was I I I guess it is it was with the uh Tata Steel. No, I mean most of my contracts are with 10:40 10 minutes, 40 seconds Tataststeel, so that is a kind of a given. But yes, the TMT contract has been renewed and uh it's a 12- month uh 10:48 10 minutes, 48 seconds contract for now. Uh we are discussing uh longerterm options and yes, the volumes have stabilized albeit a little lower but they have stabilized. 10:59 10 minutes, 59 seconds Okay. And sir in this quarterly uh presentation in one of the segment other segment has grown about but 95.6% 11:09 11 minutes, 9 seconds yearonear. So could you explain what this segment comprises and the reason for such a sharp increase in the quarter. Should we consider this 11:17 11 minutes, 17 seconds increase in other segment as a one-off or do we expect a structural improvement and sustained contribution from this 11:24 11 minutes, 24 seconds segment in the coming quarters? So you know the uh others include some of the smaller plants and smaller revenue 11:31 11 minutes, 31 seconds streams uh uh which and the reason why we don't put them into individual is because they were too small to put. 11:39 11 minutes, 39 seconds However, going forward as and when they continue to get larger we will consider splitting them into their own verticals. 11:47 11 minutes, 47 seconds But needless to say yes these are there is an increase in those businesses and those plants as well. And therefore that is reflected over here 11:54 11 minutes, 54 seconds because even Q2 26 was 22 23 cr has been consistent it's been consistently increasing 12:01 12 minutes, 1 second if you look at Q2 526 there it was 22 23.35 okay got it got it okay so thank you for 12:09 12 minutes, 9 seconds answering the questions I will I'll get back in the queue thank you babes thank you 12:17 12 minutes, 17 seconds participants who wish to ask questions may press star and one Now 12:24 12 minutes, 24 seconds our next question comes from the line of Rohan Baranwal from Deep Investments. Please go ahead. 12:33 12 minutes, 33 seconds Hello. Uh thank you for the opportunity sir. My question is on the operational highlight site. So uh looking at a 12:42 12 minutes, 42 seconds presentation which has been uh published. So the overall uh like installed capacity utilization is 12:49 12 minutes, 49 seconds underutilized and uh ignoring the incremental capacity you had in the pipes and tube seed segment uh the 12:57 12 minutes, 57 seconds capacity like utilized 30%. So is there any uh like uh challenges you are facing 13:06 13 minutes, 6 seconds on the demand side or uh like because of the steel prices? 13:11 13 minutes, 11 seconds Uh thank you Roj for that question. So typically in pipes and tubes uh uh and 13:19 13 minutes, 19 seconds the kind of conversion business that we do the capacities will get created before they are integrated into the customer supply chain. Uh in our case uh 13:29 13 minutes, 29 seconds we have created the capacity and we are very very confident that uh the customer supply chain will ramp up to that. uh in 13:37 13 minutes, 37 seconds the best case scenario you know because of the variability the size changing the number of SKUs 13:45 13 minutes, 45 seconds a good amount of capacity utilization would be in the range of let's say about 60 to 65%. So we you know from here on 13:52 13 minutes, 52 seconds we can easily double the the utilization and uh we are we are fairly confident 13:59 13 minutes, 59 seconds about that on the CRM complex. Uh like we spoke about the volumes have started picking up and we are hopeful of uh meeting our long-term averages. 14:12 14 minutes, 12 seconds Got it sir. And a followup question on the pipes and tubes uh segment only like as you said you would be like enhancing your capacity utilization to 60 to 65%. 14:23 14 minutes, 23 seconds So when can we expect that and uh what would be the uh like the plan for uh increasing this utilization? So how will we be able to uh scale up at this size? 14:36 14 minutes, 36 seconds So uh there are two parts of that uh question uh Rohan G. So one is that uh we had indicated that before the end of 14:44 14 minutes, 44 seconds the uh financial sorry the fiscal year we will get to about 7 lakh uh capacity. 14:50 14 minutes, 50 seconds We are well on track to do that and uh when we get together for the next uh quarterly corn call I'm sure I'll be able to update you on that enhancement. 15:00 15 minutes That is one. 15:02 15 minutes, 2 seconds The second is that uh the capacity utilization of 60 to let's say 65%. You know uh we are working with the customer 15:10 15 minutes, 10 seconds to see how soon can we ramp up what are the different bottlenecks whether it's logistics transportation wherever we can 15:17 15 minutes, 17 seconds help them uh debottleneck and enhance. Additionally there are new SKUs there are existing 15:25 15 minutes, 25 seconds SKUs which are manufactured at various locations by the customer. How to rationalize that? what's the cost revenue etc. So I don't want to put a 15:34 15 minutes, 34 seconds specific number on that but suffice to say that over the next two years we hope to achieve uh uh we hope to achieve it. 15:44 15 minutes, 44 seconds Got it sir. Got it. And sir on the uh new green field capacity site like on the Bkaro project uh as you as we can 15:53 15 minutes, 53 seconds see in the presentation you have uh like the total project cost would be close to 800 cr. Uh so how this like how this 16:03 16 minutes, 3 seconds capacity would be funded through and uh can you also give some more uh like highlight on the PLI scheme side as well. 16:14 16 minutes, 14 seconds So the proposed uh funding is already a part of the presentation ro if you see we have indicated that 70% is debt and 16:21 16 minutes, 21 seconds 30% is equity internal uh generations uh of that so the 803 is actually split 16:28 16 minutes, 28 seconds into two parts of 748 and I think 55 or something the 748 uh the debt has already been tied up with as I mentioned 16:37 16 minutes, 37 seconds SBI HDFC and yes bank of 500 crores uh and the balance we are uh you know we are already working on that 16:45 16 minutes, 45 seconds will be tied up as well. Uh the consent to establish on the balance because it involves pickling and use handling of 16:54 16 minutes, 54 seconds acid took a little more time. Uh but it's now with us and we started working on that. 17:01 17 minutes, 1 second Second question. What was the other part of the question? 17:03 17 minutes, 3 seconds The second part of the question can you repeat? 17:06 17 minutes, 6 seconds Uh my second part of the question was on the side of uh like okay so uh question was mainly on the 17:15 17 minutes, 15 seconds like the funding of these debts and also like what would be the finance cost of these debts sir. 17:22 17 minutes, 22 seconds Uh I'm not sure whether I can give you an exact number but it's very competitive uh below below 8%. 17:29 17 minutes, 29 seconds Got it sir. Got it. And sir like this green field capacity is actually focused on on towards the value added product 17:37 17 minutes, 37 seconds side like the high margin business. Uh so what could be what what is the incremental margin we can see from this 17:44 17 minutes, 44 seconds color coding or g value or this galvanizing products. 17:50 17 minutes, 50 seconds So you know I will not get into the specific individuals but uh as I've indicated the you know the topline 17:58 17 minutes, 58 seconds growth and the bottom line growths have been broadly done. Uh Bukaro plant will include a range of finished products 18:06 18 minutes, 6 seconds which includes galvanized galium zam and colorcoded. 18:10 18 minutes, 10 seconds So it's very difficult to give you uh specific productwise margins on a blended level. We've indicated 11% AIA 18:19 18 minutes, 19 seconds and uh 5% uh PAT. Got it sir. 18:30 18 minutes, 30 seconds Okay. So I have some new few more questions. I will get in the queue so that others could ask questions. 18:37 18 minutes, 37 seconds I'm absolutely okay to continue on whatever you want. 18:40 18 minutes, 40 seconds Okay. Sure. So just 18:49 18 minutes, 49 seconds on the pipes and tube segment only. Uh what would be the like the uh the 18:56 18 minutes, 56 seconds contract expiry for these products and what like how diversified uh the volumes are that can you give some more uh 19:05 19 minutes, 5 seconds lights on like the customer or the products exchanges on the side? I'm not sure I understand your question Roanj 19:13 19 minutes, 13 seconds but uh you know this is a tolling business where my customer is Tatast steel okay 19:20 19 minutes, 20 seconds uh and uh I don't think I can comment on Tatast steel's customers 19:28 19 minutes, 28 seconds got it sir and so what is the expected ramp up profile for each major product uh line for the Bokaro 19:36 19 minutes, 36 seconds plant and like how does we compare it with our internal assumptions for the IRA calculations sir. 19:44 19 minutes, 44 seconds So again I think you know between first quarter of FI27 and Q4 of FI27 19:50 19 minutes, 50 seconds all the lines will go into operation uh one by one and on the specific IR 19:58 19 minutes, 58 seconds calculations I'm not sure I can comment on that at this point here. 20:04 20 minutes, 4 seconds and sir any guidance on the side of revenue contribution coming from Bukaro in FY 2728 and further 20:12 20 minutes, 12 seconds uh we've given a blended uh revenue guidance uh but beyond that I would uh refrain 20:24 20 minutes, 24 seconds okay and is there any backward integrated like integration with the Bukaro plant uh with the existing CRM or 20:30 20 minutes, 30 seconds TMT operations in terms of sourcing or uh shared services or logistics. Sir, what kind of synergies we can play on 20:38 20 minutes, 38 seconds this side? Sir, I mean in due course we will look at optimizing on synergies but as of now these have not been assumed. 20:49 20 minutes, 49 seconds Thank you very much sir. I I think that's answer major majority of my questions. Thank you very much. I will get Thanks. 20:58 20 minutes, 58 seconds Thank you. 21:01 21 minutes, 1 second A reminder to all the participants, if you wish to ask questions, you may press star and one. Our next follow-up 21:08 21 minutes, 8 seconds question is from the line of Bhavesh, an individual investor. Please go ahead. 21:14 21 minutes, 14 seconds Thank you for the opportunity, sir. Sir, on the Greenfield Boaro plant, uh, are we still on track for commissioning of 21:20 21 minutes, 20 seconds phase one by April uh, 2026 and should we expect meaningful revenues in the same quarter? 21:27 21 minutes, 27 seconds Uh so number one bi yes we are on track. 21:31 21 minutes, 31 seconds Number two uh you know considering this is a completely new business and uh we will be sourcing some of our raw 21:39 21 minutes, 39 seconds materials to begin with. There is a ramp up phase uh there will be meaningful revenues for me. I'm not sure as an investor if you will find it meaningful here. 21:50 21 minutes, 50 seconds No no if if it crosses like 200 250 if it crosses the 20 30% mark uh then 21:59 21 minutes, 59 seconds I don't want to get into uh individual short-term uh uh kind of guidance 22:07 22 minutes, 7 seconds I think we have given an overall guidance uh 75% 75% I I agree that 75% so to achieve 22:17 22 minutes, 17 seconds that 75% next year you would cross well under it's not it's not it's not next year B 22:24 22 minutes, 24 seconds it's over the next two years so it's a CAGR it's a CAGR it is it need not be exactly equal every year 22:32 22 minutes, 32 seconds which is why we've given a 2-year indication and not year- wise because the ramp up of capacities are going to happen over the period right 22:39 22 minutes, 39 seconds that's a three year right 3 years yeah whatever with with the base of FI25 it is 3 years 22:47 22 minutes, 47 seconds but if if when we come to 26 it will become 2 years. So with the base of whatever guidance we have given we've given on the base of 25 22:56 22 minutes, 56 seconds five right right correct once the once the uh project is fully commissioned we will uh come back with 23:03 23 minutes, 3 seconds the more precise guidance for the next financial year. 23:08 23 minutes, 8 seconds Understood. So so uh here you will be producing a lot of uh products different products. So but I want to understand uh 23:17 23 minutes, 17 seconds the difference between zinc aluminium mag magnesium which is the zam products and the colorcoded sheets. So if I have 23:24 23 minutes, 24 seconds to uh differentiate between two products which will be the highest margin product will it be zam or will it be the colorcoded sheets? 23:33 23 minutes, 33 seconds Come again just the last part please. 23:36 23 minutes, 36 seconds So highest so highest margin between these two products which which one would it be? So you know if you look at the 23:42 23 minutes, 42 seconds value uh addition profile of the complex the base metal is gold material which 23:49 23 minutes, 49 seconds will then be converted to galvanized or galvolium or zam 23:56 23 minutes, 56 seconds galvanized is zinc with some minor alloys. Galvolume is a substantial amount of aluminium and zam is zinc aluminium plus about 3% of magnesium. 24:09 24 minutes, 9 seconds the in terms of value addition these three either of them can then be used as 24:16 24 minutes, 16 seconds a base metal for color coding so that becomes PPGI PPGA or PP zap prepainted 24:25 24 minutes, 25 seconds all three products and because that is the the highest value addition in the plant I mean that kind of answers your 24:33 24 minutes, 33 seconds question uh the flexibility then allows us to change between the finished 24:40 24 minutes, 40 seconds products to depending on whichever uh gets us the highest margins. 24:47 24 minutes, 47 seconds Understood. Understood. Uh sir and uh this plant is being developed on your own land. So uh if you could share the 24:55 24 minutes, 55 seconds approximately approximate land area in acres so so that we can get an idea how big is the land. 25:04 25 minutes, 4 seconds So the land has been leased from uh the Jarkand Industrial Area Development Authority. It's uh there are two 25:12 25 minutes, 12 seconds separate plots across the road. So the primary plant which is a 755 crores investment is a 40 acre plot and the 25:19 25 minutes, 19 seconds balance where the pickling and the acid regeneration facility are that's about a 5 acre plot. So it is not owned. 25:28 25 minutes, 28 seconds No, it's leased. It's a long-term lease. 25:31 25 minutes, 31 seconds It's a long-term lease uh from the government. 25:33 25 minutes, 33 seconds That's most of the businesses manufacturing are on long-term leases only. 25:39 25 minutes, 39 seconds So in one of your calls, I remember uh an investor asking you about the land. 25:45 25 minutes, 45 seconds So you said it is available but I wasn't sure whether you told him about whether it is owned by the company or whether it is leased. So 25:53 25 minutes, 53 seconds you can go back to that. You can go back to that uh call and check but it's not owned by us. I doubt if I would have 26:01 26 minutes, 1 second said it's owned by us. Available could be either way, right? Yeah. 26:05 26 minutes, 5 seconds So what what will be the lease cost for this land for your very detail specific? It's 26:13 26 minutes, 13 seconds difficult for me to give you exact numbers on these you know. I don't Bab I don't want you coming back to me three calls later and said 26:24 26 minutes, 24 seconds but uh just wanted to understand uh uh what what will be the expense no I think I think the le the lease cost 26:31 26 minutes, 31 seconds in the lease prices in Jakart again this is a this is not a land that we recently took uh because the land has been with 26:39 26 minutes, 39 seconds us for some time so it'll be very difficult for me to exactly understood understood understood it's an old land and uh You are just putting like a building plant on it now. Got it. 26:51 26 minutes, 51 seconds It's a 40 year 40 acre land. So it's a huge project. I feel now a huge huge land. 40 acre means I mean 27:05 27 minutes, 5 seconds 40 acre is like quite quite a big project. I see now 800. 27:15 27 minutes, 15 seconds No. So the the B plant will be handling close to six lakh tons of steel per anom 27:22 27 minutes, 22 seconds and a lot of the steel will uh go through multiple processes. So we need a substantial amount of land to not only 27:30 27 minutes, 30 seconds move the material around but for the facilities for the auxiliary facilities and we must also remember that uh you know because of the green laws 27:39 27 minutes, 39 seconds [clears throat] and everything we have to have our green belt which covers about 30% uh of the land uh as per 27:46 27 minutes, 46 seconds regulation. So yes so there is a you know internal movement etc etc. So we do need land for uh 27:54 27 minutes, 54 seconds so this is a very uh long-term lease not not like 3 five years it no no no these are all these are all 30 28:03 28 minutes, 3 seconds 35 year leases which are generally renewable in our case it is a renewable lease the government in my view does a 30 35 28:11 28 minutes, 11 seconds year lease so that people don't just uh take the land and it uh in case the investments have been made there is 28:20 28 minutes, 20 seconds genuine uh reasons is the government in all the cases that I know tends to renew it again and again. 28:27 28 minutes, 27 seconds Got it. Got it sir. So coming to your debt side. So when do you expect peak debt levels and how should we think about the trajectory of interest cost 28:36 28 minutes, 36 seconds over the next few quarters and what would be the expected debt to equity ratio? 28:42 28 minutes, 42 seconds So the you know the debt on account of the Bkaro project will affect the cash flow. It will not 28:51 28 minutes, 51 seconds affect the the sorry the interest will affect the cash flow. It will not affect a lot of the other issues because this is all going to be capitalized 28:59 28 minutes, 59 seconds initially. Initially so yeah please please go ahead. Please go ahead. 29:06 29 minutes, 6 seconds So so now currently we are paying five 5.5 crores per quarter. So can we expect this to increase to like 10 or 15 crores? 29:15 29 minutes, 15 seconds So what's very simple once we are fully capitalized we will have about 500 our project cost 29:22 29 minutes, 22 seconds is 800 and 500 is debt right on that 500 debt you we said the interest rate is sub 8%. Now you have 29:31 29 minutes, 31 seconds all the data for you to understand that 500 into 8% is the PL 29:40 29 minutes, 40 seconds but you will be getting the PLI money also. No. So yeah but you asking interest question. 29:44 29 minutes, 44 seconds Interest question has got nothing to do with the PLI question right? They are two separate question. 29:48 29 minutes, 48 seconds So if you if you get it after after one or two years uh some part of the money you can just repay and get the uh debt. 29:56 29 minutes, 56 seconds So I think I think we are getting into uh into operations into operational issues which are beyond my control. 30:03 30 minutes, 3 seconds You know when I get the PLI I don't get the PLI you are free to assume I'll get it next year but I may not get it. I may get it after 2 years. 30:13 30 minutes, 13 seconds Okay. 30:14 30 minutes, 14 seconds So these our guidances do not take PLIs and incentives into account for that specific reason. uh you know most banks 30:23 30 minutes, 23 seconds have a clause that any incentives anything coming from the government need to be used to pay down the loan and like 30:30 30 minutes, 30 seconds any other organization we'll do the same but uh and as and when those do come in the debts are paid down the interest 30:37 30 minutes, 37 seconds costs will go down we are talking about a year period and during that period one uh you know I am not qualified to 30:45 30 minutes, 45 seconds comment whether the interest rate cycle will go up it will go down what will happen so for need to make a detailed comment on quarterly interest costs etc is not fair. 30:56 30 minutes, 56 seconds Got it sir. Uh so last question. Uh when do you plan to list the shares on NSE? 31:02 31 minutes, 2 seconds So we are working at it. Uh hopefully you know we'll be able to give you good news. 31:08 31 minutes, 8 seconds Perfect. Perfect. Thank you so much for answering all the questions all the Thank you. 31:17 31 minutes, 17 seconds Our next question comes from the line of Mangari, an individual investor. Please go ahead. 31:25 31 minutes, 25 seconds Hello. Hi Manger G. Hi. Is my voice audible? Yeah. Yeah. Very. Thank you. 31:33 31 minutes, 33 seconds Okay. So sir, I want to ask that management previously has retained that 75% CGR over the next 3 years um divined 31:42 31 minutes, 42 seconds by the Borako. So please can you quantify the expected revenue contribution uh like from Bureau in FI 27, 28, 29 and under base. 31:55 31 minutes, 55 seconds So Mandi G I just indicated that uh we have not given a specific BARO and existing business breakup. We have given 32:04 32 minutes, 4 seconds a blended guidance uh till FI28 and uh I would like to just uh stick to that. 32:15 32 minutes, 15 seconds Okay. Okay. And sir, uh with the shift towards input intensive downstream model, how are you planning to secure HR 32:24 32 minutes, 24 seconds or sourcing and what percentage of raw material is currently passed through versus exposed to the price volatility. 32:33 32 minutes, 33 seconds So the first question of uh sourcing of raw material uh you know the reason for choosing of Bokaro uh including the included the proximity 32:42 32 minutes, 42 seconds to Bkaro steel plant uh Bokaro steel plant is one of the largest flat steel units in the country uh which 32:51 32 minutes, 51 seconds provides this kind of raw material hot rolled coils uh also you know you have Jamshedpur Tata steel which is very 32:58 32 minutes, 58 seconds close uh and then you've got uh the the steel steel ecosystem in Odisa which includes Tatastel Kolinga, Tatastel 33:06 33 minutes, 6 seconds Angul uh JSW and Jindal steel. So we are looking at a 33:14 33 minutes, 14 seconds range of options from where one can procure hot roll materials and uh the 33:22 33 minutes, 22 seconds you know uh because we are not manufacturing the steel we are not so 33:29 33 minutes, 29 seconds much exposed to the volatilities beyond the inventories that we hold. 33:35 33 minutes, 35 seconds uh the market moves for value added materials the market moves more in a 33:41 33 minutes, 41 seconds delta fashion. So if HR prices go up uh along the chain all prices start to go 33:48 33 minutes, 48 seconds up. If they go down all prices start to go down and so you know exposure to price volatility is extremely limited. 33:56 33 minutes, 56 seconds Yeah. It's limited to the stock that you already have which you have to then convert. Yeah. But then again in that also if you look at it from a longerterm 34:04 34 minutes, 4 seconds perspective uh on an annual basis it kind of balances out. 34:11 34 minutes, 11 seconds Okay. 34:14 34 minutes, 14 seconds So and over the medium now do you see Verco evolving into multi-product downstream hub and like what additional investments would be needed to move up the value chain? 34:25 34 minutes, 25 seconds So you know as of now Mangari G I think uh uh we've got a plate kind of full uh till FY30 34:34 34 minutes, 34 seconds uh to ramp up and uh optimize our product mix as we have indicated. So 34:41 34 minutes, 41 seconds galvanized, galvolume, colorcoded uh and zam. Now going beyond 30 at this 34:49 34 minutes, 49 seconds point is is too far in the future to take a shot. But uh the first uh priority is to ramp up. The second 34:57 34 minutes, 57 seconds priority is to optimize and I think uh till FI30 we are we are set for that. 35:05 35 minutes, 5 seconds Okay sir. Okay. And so uh is the Burakco land and infrastructure design with future brownfield expansion in mind and 35:13 35 minutes, 13 seconds what additional kicks would be required to scale capacity beyond the current plan. 35:19 35 minutes, 19 seconds So the first uh part yes the second part uh because I don't specifically know 35:26 35 minutes, 26 seconds what kind of capeex I'll need uh I am unable to put a price on that. Like I said, we are currently in FI26. 35:34 35 minutes, 34 seconds Uh I do not have additional capeex plans till FI30. 35:40 35 minutes, 40 seconds Uh you know, so I you know, I really can't put a number of that. 35:47 35 minutes, 47 seconds Okay sir. And so based on your like management's expectations in comparing downstream uh downstream steel projects 35:55 35 minutes, 55 seconds what is the expected ramp up uh core for Burco in first 12 to 24 months? 36:02 36 minutes, 2 seconds So we are looking at uh uh complete ramp up by FI28 36:08 36 minutes, 8 seconds and uh by FI 30 why I say is there will be a lot of optimizing that will happen. 36:15 36 minutes, 15 seconds there will be uh you know uh uh finetuning there will be debottlenecking uh but yes FI28 we hope to achieve a 36:25 36 minutes, 25 seconds fair bit of the ramp up okay sir that would be uh my last question thank you so much and all the best 36:32 36 minutes, 32 seconds thank you thank you ladies and gentlemen if you wish to ask a question you may press star and one 36:41 36 minutes, 41 seconds Now 37:04 37 minutes, 4 seconds as there are no further questions, I would now like to hand the conference over to management for closing comments. 37:11 37 minutes, 11 seconds Uh thanks a lot and appreciate for joining this call on a Friday evening. 37:16 37 minutes, 16 seconds Uh really appreciate and have a great weekend. Looking forward to the budget. 37:21 37 minutes, 21 seconds Thank you all so much for taking the time out and encouraging us like always. 37:25 37 minutes, 25 seconds I look forward to seeing all of you uh next quarter once again. Thank you. 37:32 37 minutes, 32 seconds Thank you on behalf of Aryant Capital Markets Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.