Bmw Industries Ltd — Q4 FY26

BMW Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=aGC-KuNDhc4 Published: 6 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the BMW Industries Limited Q4 FY26 conference call hosted by Arant Capital Markets Limited. 0:12 12 seconds As a reminder, all participant clients will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:21 21 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the 0:29 29 seconds conference over to Mr. Ron Koswar from Arian Capital Markets Limited. Thank you and over to you sir. 0:36 36 seconds Thank you. Hello and good afternoon to everyone. On behalf of Arian Capital Market Limited. I thank you all for 0:44 44 seconds joining into Q4 and full year 26 earnings conference call of BMW Industries Limited. Today from the 0:53 53 seconds management we have Mr. Hush Bunson managing director, Mr. Vikram Kapoor Chief Financial Officer and Mr. Sanjivit Sanjayi investor relations at UA. 1:04 1 minute, 4 seconds So without any further delay I will now hand over call to Sanji for their opening remarks. Over to you. 1:13 1 minute, 13 seconds Thank you. Good afternoon to all the participants. Before I hand over the call to Mr. Hush Mansul for his opening 1:20 1 minute, 20 seconds remarks, I would like to draw your attention to the safe harbor statement included in the earnings presentation. I 1:27 1 minute, 27 seconds request all the participants to kindly review the same and have a good look at it prior to the commencement of the Q&A session. Thank you. Over to you, Mr. 1:36 1 minute, 36 seconds Bson. 1:40 1 minute, 40 seconds Thank you sir. Uh good afternoon everyone and thank you for joining us for the BMW Industries Limited quarter 4 1:48 1 minute, 48 seconds and full year earning call. With this quarter's performance, we close FI26 on a high note with the company delivering 1:56 1 minute, 56 seconds a strong performance alongside meaningful progress on our strategic priorities. 2:02 2 minutes, 2 seconds The results reflect not just improved capacity utilization and disciplined execution, but also the strength of our 2:10 2 minutes, 10 seconds operating model and the momentum we are building as we enter the next phase of growth. 2:16 2 minutes, 16 seconds We are delighted to report our highest ever quarterly and annual profits for the quarter gone by. Operating income 2:24 2 minutes, 24 seconds stood at 210 crores. Operating EITA for the quarter came in at rupees 55 uh sorry 58 crores with a margin of 27.5%. 2:34 2 minutes, 34 seconds While profit after tax came in at a record 33 crores translating to a patch margin of 15.4%. 2:42 2 minutes, 42 seconds For the full year, company delivered operating income of 665 crores with 2:48 2 minutes, 48 seconds operating of 165 crores and a margin of 24.8%. 2:54 2 minutes, 54 seconds Profit after tax stood at 81 crores reflecting a healthy tax margin of 11.9%. 3:01 3 minutes, 1 second The performance is a direct outcome of our disciplined approach and improved utilization of assets. 3:09 3 minutes, 9 seconds During FI26, the company witnessed strong operating momentum across its downstream businesses with CRM complex 3:18 3 minutes, 18 seconds production increasing to 718,000 metric tons and annualized utilization improving to 70.9% 3:26 3 minutes, 26 seconds from the December number of 66.9% reflecting a stronger capacity utilization and improved operational 3:35 3 minutes, 35 seconds efficiencies. The pipes and tube segment also recorded a healthy production growth during the year with production 3:42 3 minutes, 42 seconds increasing to 201,000 metric tons from 177,000 odd metric tons in FI25. 3:50 3 minutes, 50 seconds Our focus on sweating the asset base is expected to further strengthen return ratios in the years ahead. We believe this sets a strong foundation for 3:59 3 minutes, 59 seconds further improvement in return ratios as we scale. 4:04 4 minutes, 4 seconds Reflecting on this performance, the board has recommended a final dividend of 43 pesa per share, resulting a 4:11 4 minutes, 11 seconds resulting in a payout ratio of 12%, reinforcing our commitment to delivering consistent shareholder returns while continuing to invest in growth. 4:21 4 minutes, 21 seconds Net debt during the year stood at 364 crores with a net debt to equity ratio of 0.45x. 4:32 4 minutes, 32 seconds Net debt also includes debt drawdown on account of the Bukaro Greenfield project to the extent of 143 crores. Net debt to 4:41 4 minutes, 41 seconds equity excluding borrowings for the Bokaro project stood at 0.27x. 4:47 4 minutes, 47 seconds Importantly, healthy and cons consistent operating cash flows enabled the company to invest 109 crores of internals into the expansion at Bukar. 4:58 4 minutes, 58 seconds FI26 has been a pivotal year operationally marked by strong progress on our Greenfield downstream steel complex at Bukaro which remains on track 5:07 5 minutes, 7 seconds for phase commissioning starting quarter 1 FI27. 5:11 5 minutes, 11 seconds In anticipation the company has begun establishing its sales and distribution networks ensuring we are well positioned 5:18 5 minutes, 18 seconds for a seamless ramp up. We have also made significant advancement in our sustainability journey through our partnership with the Indian oil 5:26 5 minutes, 26 seconds corporation for the supply of pipe natural gas at Bukaro enabling cleaner and more costefficient operations. 5:34 5 minutes, 34 seconds Looking ahead, the company is entering a transformational phase of growth driven by higher utiliz utilization of existing 5:41 5 minutes, 41 seconds capacity and the phased commissioning of ramp up of the Bokaro green field project. As the business evolves towards 5:50 5 minutes, 50 seconds a more integrated and balanced operating model, combining its established conversion strength 5:57 5 minutes, 57 seconds with a proprietary sourcing and distribution framework, the company expects to capture a larger share of the 6:04 6 minutes, 4 seconds value chain while further expanding and diversifying its customer base. 6:10 6 minutes, 10 seconds We reiterate our earlier guidance of a CAGR of approximately 75% 6:18 6 minutes, 18 seconds over FI25 to FYI28 period supported by the phase commissioning and ramp up of 6:25 6 minutes, 25 seconds Bokaro green field project along with continued organic growth across the existing business verticles. In line 6:32 6 minutes, 32 seconds with the above guidance, operating ebita and fat is expected to grow at a caggr of nearly 45 and 40% respectively over the same period. 6:44 6 minutes, 44 seconds EITA and fat margins are expected to gradually stabilize at around 12 to 13% and 5 to 6% respectively by FI28 as the 6:53 6 minutes, 53 seconds benefits of integration, scale and operating leverage begin to materialize. 6:59 6 minutes, 59 seconds Given recent developments, we believe that the industrial landscape of eastern India should get into a favorable phase of transformation. 7:09 7 minutes, 9 seconds We hope that stable and progressive policy supports rising infrastructure investments and a stronger push toward 7:16 7 minutes, 16 seconds industrial development in the region will provide positive tailwinds. With strong execution momentum, capacity 7:23 7 minutes, 23 seconds expansion progressing as planned and a clearly defined strategic road map. The company remains confident in its ability 7:31 7 minutes, 31 seconds to scale meaningfully, enhance profitably and create sustainable long-term value for all stakeholders. 7:39 7 minutes, 39 seconds With that, I will now open the floor for questions. Thank you. 7:46 7 minutes, 46 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the just telephone. 7:56 7 minutes, 56 seconds If you wish to remove yourself from the question queue, you may press star and two. 8:02 8 minutes, 2 seconds Participants are requested to use handsets while asking a question. 8:08 8 minutes, 8 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 8:26 8 minutes, 26 seconds We have first question from Shlok Badir from Swan Investments. 8:32 8 minutes, 32 seconds Please go ahead. Thank you for the opportunity. Am I audible? 8:40 8 minutes, 40 seconds Yes. Yes. Please continue. Yeah. 8:44 8 minutes, 44 seconds So Hi, just wanted to understand on the concern level as you indicated that AITA margin that's stable around 13 14% over 8:53 8 minutes, 53 seconds by FYI 28. So can you give a breakup in terms of our existing business and how 9:00 9 minutes the Bokaro performance will play out over the next two to three years? So uh thank you for the question Slo G. 9:09 9 minutes, 9 seconds uh one small correction the AIA will stabilize at 12 to 13 not 13 to 14 9:15 9 minutes, 15 seconds uh the existing business as is will uh we don't see any meaningful investments 9:22 9 minutes, 22 seconds happening on this side uh as of now. So whatever benefits come will be on account of increased capacity 9:29 9 minutes, 29 seconds utilization. For example, from the tubes division where we have created substantial capacities but are fairly 9:36 9 minutes, 36 seconds underutilized. So over the next two to three years we expect the utilization levels to go from the existing 30 34 odd% to closer to 60 to 65%. 9:48 9 minutes, 48 seconds So that is for the existing business. uh on the Bokaro side I think we've spoken about uh the capacities that are being 9:56 9 minutes, 56 seconds created and that's a part of the presentation uh Shimona can you just open that screen please uh where over 10:03 10 minutes, 3 seconds the next uh 12 to 15 months as we continue to commission various parts of the project uh those volumes will come 10:12 10 minutes, 12 seconds in and then FI 28 we will scale up those volumes in a meaningful manner uh so I mean those numbers are there uh for you 10:22 10 minutes, 22 seconds to see. So is it safe to assume that if we ramp up our capacity of tube in a existing business? So the revenue of 665 10:31 10 minutes, 31 seconds crores that we reported in FI26 can go match up to 800 or 900 crores. 10:37 10 minutes, 37 seconds such a peak revenue one can assume for your existing facility and what sorts of integration benefit like 10:47 10 minutes, 47 seconds once you are starting in a I mean as for your presentation the phase one of a bokaro is expected to come on stream in 10:54 10 minutes, 54 seconds Q1 so can you also throw some lights which all facility is coming in Q1 so on the first part I think your 11:02 11 minutes, 2 seconds assumption is fair in terms of uh the top line that can be derived from the existing businesses. Uh on the second 11:10 11 minutes, 10 seconds part of your question, uh we are looking at uh starting salable production of the colorcoded section in this quarter with 11:19 11 minutes, 19 seconds and this will be then followed in subsequent quarters by uh the galvaloom facility, cold rolling, pickling etc. 11:27 11 minutes, 27 seconds Okay. Okay. So color and then it will be g value. So once the project is completed on the Bokharo where we are 11:35 11 minutes, 35 seconds spending near about 800 odd crores what sorts of IR are we working on I mean in terms of if one was to look at the pay 11:42 11 minutes, 42 seconds period I understand that the capacity will be fully operational once in FI29 but if you look at the IR what sort of 11:49 11 minutes, 49 seconds IR one can look at it so you know our base case for an 11:56 11 minutes, 56 seconds investment is a 20%. So uh this in this case it's uh I mean it's safe to say it's above that almost five four and a half I guess. 12:06 12 minutes, 6 seconds Yeah that's all from my side. Thank you and all the best. Thank you. 12:12 12 minutes, 12 seconds Thank you. A reminder to all participants anyone who wishes to ask a question may press star and one on the 12:19 12 minutes, 19 seconds touchstone telephone. We have next question from Dash Javi from Crown Capital. Please go ahead. 12:27 12 minutes, 27 seconds Uh hi uh good evening sir. Thank you so much for taking my question. Firstly congratulations on a great set of 12:33 12 minutes, 33 seconds results sir. Uh just your voice is very unclear. May I please request you to kind of repeat? 12:41 12 minutes, 41 seconds Yeah. Hi is this better sir? Can you am I audible? Yeah yeah yeah. Uh so thank you so much for taking my question sir and congratulations on a great set of 12:50 12 minutes, 50 seconds numbers sir. I just wanted to harve a bit upon the you know capeex the you know phase one that we are going to start in Q1. So can you just tell me the 12:59 12 minutes, 59 seconds ramp up? How will it happen? Like uh is the you know in H1 will we you know need to you know put out some testing and 13:06 13 minutes, 6 seconds then the commercial production can happen by Q2 or Q3. How would the ramp up be and what kind of revenues can we 13:13 13 minutes, 13 seconds expect from you know phase one in FI27 sir? So uh Garcil G we have not gone 13:20 13 minutes, 20 seconds into detailed economics and projections about what kind of revenues we can expect on a breakdown manner. We've 13:28 13 minutes, 28 seconds given a overall uh guidance in terms of uh up to FI 13:35 13 minutes, 35 seconds and you know I I would like to stick to that but in terms of your uh uh you know part of the question of how much we are 13:44 13 minutes, 44 seconds looking in terms of color coding and all that. So color coding will come online. 13:47 13 minutes, 47 seconds You should have some sales in quarter one but meaningful sales will only happen by quarter two because once we 13:54 13 minutes, 54 seconds start production uh you know uh we will take time to stabilize on quality volumes acceptable uh acceptability of 14:03 14 minutes, 3 seconds the product etc. So this is why we are not giving a breakup quarter-wise revenue estimate [clears throat] uh but 14:10 14 minutes, 10 seconds we've given a a more broader longer term guidance. Yeah, I was not wanting a quarter wise just like in terms of a 14:19 14 minutes, 19 seconds rough range like in FI27 what could we you know expect from this because uh why am I coming to this also 14:27 14 minutes, 27 seconds is because as the revenues ramp up we'll have but the cost will be nearly fully right now our IITA will dilute a bit so 14:34 14 minutes, 34 seconds just wanted to understand how would that kind of work I don't want any exact number just a rough you know broad color will also you know be fine sir 14:43 14 minutes, 43 seconds so we refrain from giving any kind of quarterly on quarter guidance but uh yeah the second part of your question Di 14:52 14 minutes, 52 seconds where you're looking you mentioned about dilution of the IITA so the it should be seen in the context of a changing 15:00 15 minutes business model and not really a dilution so if you look at the absolute returns in of AITA numbers there is a substantial increase but because we are 15:08 15 minutes, 8 seconds in a conversion model today and we will be in a buy and sell model tomorrow. So the uh the absolute numbers will be 15:17 15 minutes, 17 seconds reflected accordingly. 15:20 15 minutes, 20 seconds So it's not really a dilution uh if you consider the change in model. 15:26 15 minutes, 26 seconds Uh oh. Okay. Uh fair fair enough. And so I just ask one question for in this terms of accounting because we are 15:34 15 minutes, 34 seconds starting the phase one right now the depreciation and interest will start hitting from Q1 right like uh that 15:42 15 minutes, 42 seconds we will be capitalizing it uh on a phase manner depending on which part of the project we uh commission and therefore 15:50 15 minutes, 50 seconds accordingly on a quarteronquarter basis whatever we commission will get capitalized and and reflected in uh in the numbers. Yeah. 15:59 15 minutes, 59 seconds Yeah. Oh okay okay fair enough. Thank you so much. So that's it from Thank you. 16:04 16 minutes, 4 seconds Thank you. The next question is from Priya from Valu Money. Please go ahead. 16:19 16 minutes, 19 seconds Yeah. Your line is open. Please go ahead. 16:29 16 minutes, 29 seconds I think we can take we will take next question. 16:36 16 minutes, 36 seconds We have next question from Mr. Bhavesh as an individual investor. Please go ahead. Uh good afternoon Mr. Gun. 16:44 16 minutes, 44 seconds Congratulations on a good set of results. Uh my first question is on the revenues. Uh so we have observed a sequential improvement in uh revenues 16:52 16 minutes, 52 seconds from Q3 with a strong uptick in Q4. So should we expect this momentum to continue in the coming quarters particularly leading up to the 17:00 17 minutes commissioning of phase one of the Bokaro plant? 17:04 17 minutes, 4 seconds So uh Pavi thank you so much for the question and welcome back. Good to hear you again. Uh I don't think the same 17:11 17 minutes, 11 seconds momentum will continue because you know if you look at the existing numbers they don't reflect Baru and uh with the existing business other than certain 17:20 17 minutes, 20 seconds capacity utilization variations we are not seeing any meaningful change. When it comes to Bukaro like I mentioned uh 17:27 17 minutes, 27 seconds to Darren Gzi we will have meaningful uh sales topline reflected starting from 17:35 17 minutes, 35 seconds quarter two in quarter one there will be some but I won't want to club those sales with these sales for the you know 17:42 17 minutes, 42 seconds for the benefit of not confusing you understood that was helpful. So next question is with respect to the trade 17:50 17 minutes, 50 seconds receivers that has increased significantly from approximately 80 crores to in FI25 to around 150 crores 17:57 17 minutes, 57 seconds in FI26. So could you elaborate on the key drivers behind this increase? Is it this was if you even look at the 18:05 18 minutes, 5 seconds receivable days I think uh this was all on account of one of our key customers uh holding back payments because of 18:13 18 minutes, 13 seconds March quarter. Uh and this led to this number. We actually got the payments in early April. So it was more of a timing 18:20 18 minutes, 20 seconds issue but uh anyway it uh it got reflected in the balance sheet because it's a 31st March. 18:28 18 minutes, 28 seconds Understood sir. S uh next question is on the uh downstream plant. So the presentation indicates that the phase one commissioning will happen in Q1 27. 18:37 18 minutes, 37 seconds So since we are already in the month of May uh could you provide a more precise timeline for commissioning? are we 18:44 18 minutes, 44 seconds looking at late May or June and what is the expected timeline for uh phase two and additionally I would request the 18:52 18 minutes, 52 seconds company to issue a press release once it commissioned phase one so that all the investors are well then aware of course of course so I'm sure you will uh 19:01 19 minutes, 1 second hear about that uh when we hit uh the proper commissioning but we expect to start uh some form of cold trials before 19:10 19 minutes, 10 seconds the end of this month and hot trials in June And of course once we get to salable material uh you will be I mean you'll be able to uh read the releases. 19:23 19 minutes, 23 seconds Okay sir. So uh on this book facility so it is focusing on higher value added products. So could you share from uh 19:31 19 minutes, 31 seconds your goals market strategy have you identified or engaged with potential customers in the automo infra solar 19:38 19 minutes, 38 seconds defense engineering space and uh I'll I I'll proceed with the further part. 19:47 19 minutes, 47 seconds So not specifically the uh sectors that you mentioned it but uh I want to give you the comfort that we've already started uh going to market and 19:56 19 minutes, 56 seconds discussing with potential buyers uh without you know without mentioning specific uh industries. 20:02 20 minutes, 2 seconds So so these will be driven Mr. Bhaves uh to ensure the management is able to address questions from all participants. 20:12 20 minutes, 12 seconds Please limit your questions to participants. 20:14 20 minutes, 14 seconds Please join the feedback. I'll join that. Sure. Sure. Thank you. Thank you, sir. Uh we have next question from Mr. 20:22 20 minutes, 22 seconds Shankit as individual. Please go ahead. 20:26 20 minutes, 26 seconds Uh yes sir. So we have a listed here uh Manakia color quoted. So they are also into uh uh the business which we are 20:36 20 minutes, 36 seconds doing apex in. So can you just throw a light like they do a bita margins in the range of 5 to 9% and we are guiding um 20:44 20 minutes, 44 seconds somewhere around 12 to 13% at stabilized levels. So how are we how is our product mix different from them? Can you just throw some light on that? 20:54 20 minutes, 54 seconds So uh you know uh two things uh San G one I think our business model on a blended basis is different. 21:05 21 minutes, 5 seconds So Okay. So the 12 to 13% is not just for 21:12 21 minutes, 12 seconds the uh no it is a blended guidance the company's 21:19 21 minutes, 19 seconds guidance and not the Bokaro plant guidance. So that is one. The second is I think our capacities uh uh on a 21:28 21 minutes, 28 seconds complete basis differ substantially which allows us to uh maximize our uh efficiencies of scale. 21:37 21 minutes, 37 seconds Okay. And uh exports will be uh what chunk of our revenue going forward because um they have significant chunk of their revenue as exports. 21:48 21 minutes, 48 seconds So we can't give you a specific number but uh I think it'll be safe to say that we will be looking at the export market 21:56 21 minutes, 56 seconds uh very seriously and uh EU will be one of the key markets uh given that 22:04 22 minutes, 4 seconds I I wouldn't want to discriminate against anyone. So you know I'll give all markets the benefit of having that wonderful product. 22:14 22 minutes, 14 seconds Fair enough. Fair enough. Yeah, that's all. Thank you Siti. Thank you sir. 22:22 22 minutes, 22 seconds The next question is from the line of Ajit Siti from Hiko Quantum Solutions. Please go ahead. 22:29 22 minutes, 29 seconds Yeah, thank you for the opportunity. Uh so you are guiding for around 75% revenue share next three years. So could you help us understand the key growth 22:38 22 minutes, 38 seconds driver behind this guiding and also how confident are we in achieving this target? Do we currently have a order book or customer visibility supporting this growth outlook? 22:49 22 minutes, 49 seconds So uh thank you for the question Ajit G. 22:51 22 minutes, 51 seconds It's actually not a guidance of the next two years. It was a three-year guidance starting from FI25. 22:57 22 minutes, 57 seconds Uh and so 75% CAGR up to FYI 28 and this is not an annual on annual basis. It's a 23:05 23 minutes, 5 seconds three-year CAGR. Uh so that is part of the that is one part. The second part of yours was the product mix and everything and order book and it's a little early 23:14 23 minutes, 14 seconds for us to be uh uh accumulating an order book because my plans are not yet commissioned but uh in subsequent calls 23:22 23 minutes, 22 seconds I'll be happy to you know talk about the order books etc. But a lot of these products are not long gestation sales 23:29 23 minutes, 29 seconds periods you typically have a uh order to delivery uh gap of maybe about 2 weeks. 23:37 23 minutes, 37 seconds So the order book kind of becomes a little uh moot. Uh the other factor being that because some of the 23:46 23 minutes, 46 seconds components are highly volatile in nature for example zinc or aluminium or magnesium going forward. It would be 23:53 23 minutes, 53 seconds very difficult for us to take long forward orders uh without a proper current hedging strategy. Uh you know 24:01 24 minutes, 1 second that could expose us to substantial uh downside risk. 24:07 24 minutes, 7 seconds Understood. So could you help us understand the key competitive advantages of the company and what differentiate us from other players in the industry? 24:18 24 minutes, 18 seconds So I think uh I without going into too much detail on that I think this is all a part of the presentation pack but needless to say yeah you know we've been 24:26 24 minutes, 26 seconds around in the in the service sector for the last 40 odd years. We've been working with key customers in the Indian 24:34 24 minutes, 34 seconds steel industry. We are one of the largest uh downstream steel processing 24:41 24 minutes, 41 seconds operations in the country. Uh one of the single one of the largest single location tube capacities in the country 24:48 24 minutes, 48 seconds there. So there are a whole bunch of things. I think we are one of the few players that are present across verticals along with you know logistics and things like that. So uh I mean for 24:58 24 minutes, 58 seconds more detailed thing it's it's a part of the presentation pack. Okay. Thank you sir. 25:05 25 minutes, 5 seconds Thank you. 25:07 25 minutes, 7 seconds Thank you participants. We will remind anyone who wishes to ask a question may press star and one on the touchstone telephone. 25:18 25 minutes, 18 seconds We have next question from Priya from value money. Please go ahead. 25:23 25 minutes, 23 seconds Uh thank you for the opportunity. How much of the new bokaro capacity will be consumed internally across the value chain versus sold externally? 25:33 25 minutes, 33 seconds and uh can you uh quantify the integration benefits from reducing intermediate outsourcing and purchases? 25:41 25 minutes, 41 seconds So uh really I'll answer the first part of the question. I'm not sure I understand the second part. So I'll come back to you on that. But on the first 25:49 25 minutes, 49 seconds part, if you look at the uh you know, if you look at the the product profile of 25:55 25 minutes, 55 seconds Bokaro, uh we have about uh uh 5 to 600,000 tons of pickling capacity. We've 26:03 26 minutes, 3 seconds got uh a cold rolling capacity of 3 to four lakh tons and then on top of that we've got galvanizing GI uh and zam 26:12 26 minutes, 12 seconds capacity of about 5 to six lakh tons. So and and color coating of about two lakh tons. So if you look at salailable products it'll be the differences 26:20 26 minutes, 20 seconds because the highest value add is the color code. So the leftover of about let's say four three to four lakh tons will be in the form of galvanized 26:29 26 minutes, 29 seconds uh golium or zam and if there is any other balance it will be in the form of fcr or srpo. So there is a trickle down 26:38 26 minutes, 38 seconds but the overall sales from the unit at peak will be about six lakhs. 26:45 26 minutes, 45 seconds Okay sir. And like and question 26:53 26 minutes, 53 seconds value wise benefit internal consumption say so the internal consumption has two factors clearly to you know my cost of 27:02 27 minutes, 2 seconds procurement goes down because uh I'm able to uh kind of uh control my own raw material. The second is I'm also able to 27:11 27 minutes, 11 seconds control my quality which becomes very critical over here uh because uh the cold rolling mill will ensure I have a 27:19 27 minutes, 19 seconds good product and control on the galvanizing galum and zan which further adds value to my control on the color coated. So one of course is reducing the 27:28 27 minutes, 28 seconds cost of raw material. The second is the control on quality. 27:34 27 minutes, 34 seconds Okay, got it sir. And as one more question, how are spreads behaving currently across HR, CR, GI and 27:41 27 minutes, 41 seconds colorcoded signals? Have regions price movements improved uh realization or compressed down margins? 27:50 27 minutes, 50 seconds So you know uh if you look at long-term averages, the spreads are fairly stable. 27:55 27 minutes, 55 seconds Yeah, there are, you know, short-term aberrations from time to time and in the steel industry, it's best not to focus on the short-term uh aberrations. Uh I 28:04 28 minutes, 4 seconds think long-term the spreads are positive. Okay sir. Okay. Thank you. 28:15 28 minutes, 15 seconds Thank you. Thank you. Thank you. Thank you. 28:18 28 minutes, 18 seconds The next question is from Kunal Bunal from Anandat Skyon Private Limited. Please go ahead. 28:26 28 minutes, 26 seconds Hello sir. Hi Kunal. 28:30 28 minutes, 30 seconds Hi. So sir uh I just wanted to confirm like earlier in the call you guided a 75% CADR for revenue 45% 28:40 28 minutes, 40 seconds sector and 40% CADR for PAD. So is it annual growth or combined growth till FI28. 28:48 28 minutes, 48 seconds So this is a compounded annual growth rate between FI25 and FI28. So if you 28:54 28 minutes, 54 seconds take the two numbers of 25 and 28, uh this will be a compounded growth number. 29:01 29 minutes, 1 second Okay. Okay. 29:09 29 minutes, 9 seconds Thank you sir. 29:12 29 minutes, 12 seconds Participants if you if you wish to ask any question you may press star one. We have follow-up question from uh Mr. 29:19 29 minutes, 19 seconds Bhavesh as individual investor. Mr. 29:21 29 minutes, 21 seconds Bhavesh please go ahead. Thank you for the opportunity. So I have couple of questions. So in your investor presentation slide number 16 you have 29:29 29 minutes, 29 seconds highlighted uh benefits under char industrial and investment promotion policies including capital subsidies 29:37 29 minutes, 37 seconds reimbursements our duty incentives. So could you quantify the potential financial impact of these incentives? 29:46 29 minutes, 46 seconds So uh Bab if you look at the the little script at the bottom of the page there is a reason why we are not quantifying 29:52 29 minutes, 52 seconds it is because uh we don't know the exact numbers that we will receive and so we have not even taken it as a part of our 30:00 30 minutes financial uh projections uh but whatever we receive whenever uh will be duly reflected. The other part is as a policy 30:09 30 minutes, 9 seconds that we have internally any subsidies we'll receive going forward whether it's the jakund or PLI or whatever will be 30:16 30 minutes, 16 seconds used to repay the debt. Uh and that's that's a part of our agreement we've also committed to the bank. So that's right understood. So one last question. 30:27 30 minutes, 27 seconds So could you please provide details about the [clears throat] technology and automation at the Bokaro plant and additionally uh I would like to know 30:35 30 minutes, 35 seconds your technology provided by an EP partner for this green fuel project. 30:40 30 minutes, 40 seconds So in terms of technology you know this is not uh this is not new technology. 30:44 30 minutes, 44 seconds It's been around for a long time. You've got a number of plants around the country who are using uh similar 30:50 30 minutes, 50 seconds technology. are uh uh our partners are the equipment vendors from whom we've procured. I don't want 30:59 30 minutes, 59 seconds to go into the details. I'm not sure whether I can uh disclose the names at this point. But uh what was the other part of the question? 31:08 31 minutes, 8 seconds Uh so automation uh one sir uh so uh technology provider and etc partner for 31:15 31 minutes, 15 seconds this project like ETC NT or any other no so we don't I mean we are not using N&T 31:23 31 minutes, 23 seconds but we are using uh others who are more locally available yeah 31:30 31 minutes, 30 seconds got it sir thank you so much for answering all my questions and uh all the best for the upcoming thank you thank you for you again. 31:40 31 minutes, 40 seconds Thank you sir. 31:42 31 minutes, 42 seconds Participants, anyone who wishes to ask a question may press star and one on the test telephone. 31:49 31 minutes, 49 seconds The next question is from Rohan Banwar from ASK. Please go ahead. 31:56 31 minutes, 56 seconds Hi, thank you very much sir for the opportunity. Uh my question is on the uh ZAM code product side. So can you please uh explain us the opportunity size for the ZAM codec production in in India? 32:09 32 minutes, 9 seconds So uh a wonderful question only you know so if you look at the 32:16 32 minutes, 16 seconds uh the move of the industry it's essentially towards uh more longevity 32:23 32 minutes, 23 seconds steel coating uh processes but also lighter steel and steel which provides uh more value for money. 32:31 32 minutes, 31 seconds Because of that uh we went into galvanizing, you went into high tensile steels which provide higher strength at lower thicknesses. And similarly if you 32:40 32 minutes, 40 seconds look at ZAM uh the industry is starting to move towards uh magnesium floated because of higher life uh expectancy. 32:52 32 minutes, 52 seconds Now if you look at a galvanized product, it typically has a life of about four to five years at uh at standard coating. uh now to increase the life what Indian 33:01 33 minutes, 1 second customers have been asking for is about 3x 4x coating which makes it very expensive considering zinc is currently at about three three and a you know 3.25 33:10 33 minutes, 10 seconds 25 lakh rupees per ton. Now there is only so much you can do right because I can't indefinitely keep quoting zinc at 33:17 33 minutes, 17 seconds those prices. You might as well then at some point start using zinc sheets and not steel sheets. Now to to get uh 33:25 33 minutes, 25 seconds better value for money you start looking at other alternatives. one of which is zan uh uh zinc aluminium manually same to 33:34 33 minutes, 34 seconds same coated providing provides about 5x to 6x of the life of zinc. Now if you 33:41 33 minutes, 41 seconds are able to uh provide 5x 6x life at same quoting as zinc there is a substantial value to be derived by the customers. 33:53 33 minutes, 53 seconds One of the impediments today is that even though there is demand there is not adequate supply. you will see supply coming onto the market over the next few 34:01 34 minutes, 1 second years, one of which will be ours. Um, and once there is adequate supply, we expect that market to also develop much 34:09 34 minutes, 9 seconds faster. So, you know, this is kind of a chicken and egg story where you you can argue that there is no demand because there is no supply. 34:19 34 minutes, 19 seconds So uh yes there is a lot of demand from uh you 34:26 34 minutes, 26 seconds know host of sectors solar is one of those because today any EPC supplier in the solar sector has to give commitment 34:34 34 minutes, 34 seconds guarantees of let's say 20 or 30 years but uh zinc quoting does not provide 34:41 34 minutes, 41 seconds those kind of lives whereas zam does. So you know we uh we are actually quite positive on that. 34:50 34 minutes, 50 seconds sir and what is the premium pricing we can expect like what would be the premium we expect compared to like uh GI 34:59 34 minutes, 59 seconds or GL products galvanized I am not actually uh there there is a little bit of premium but then you know 35:07 35 minutes, 7 seconds this is like looking into a crystal ball because in the future I don't know how much supply uh or how much demand will be there but needless to say there is a 35:16 35 minutes, 16 seconds marginal premium over GI uh now If there is a case made of value derived by the customer then you know some of that 35:25 35 minutes, 25 seconds value can be converted to uh rupees and dollars I guess. Correct. 35:31 35 minutes, 31 seconds Uh on the pipeline field side so what what is the current utilization level and uh what is the TNT businesses which 35:39 35 minutes, 39 seconds remains relatively low despite the current expansion. So what are the key bottlenecks do we see on that thread 35:46 35 minutes, 46 seconds sir? So on the PMT rolling mill side we have uh you know raw material constraints on the customer side. Uh we 35:55 35 minutes, 55 seconds are working with them to see how some of those things can be uh sorted out. What can we do in terms of uh enhancing our 36:02 36 minutes, 2 seconds uh capabilities if that would help. On the pipes and tube side, you will notice that there has been a substantial 36:09 36 minutes, 9 seconds increase in the installed capacity uh which has gone in the last uh you know last year from less than six lakh tons 36:17 36 minutes, 17 seconds to uh about 7.32 lakh tons. Today on a utilization level even though we have 36:24 36 minutes, 24 seconds increased utilization by about 30% overall we are still at about 34.2%. 36:31 36 minutes, 31 seconds Now we expect stable state tubes and pipes utilization to be in the range of about 60 to 65%. 36:39 36 minutes, 39 seconds Uh and we hope to get there over the next maybe two to three years. Mr. Ron, please rejoin the queue. 36:49 36 minutes, 49 seconds Ladies and gentlemen, in order to ensure the management is able to address questions, please limit your questions to per participants. 36:57 36 minutes, 57 seconds Participants if you want to ask any question you may press star one on your test on telephone. We have next question from Shlo Bhartier from Swan Investments. Please go ahead. 37:08 37 minutes, 8 seconds Thank you for the opportunity once again. So I just wanted to understand once a facility commence in Bkaro what 37:16 37 minutes, 16 seconds sorts of working capital cycle one can assume because I can understand that in month of March because of a higher data 37:24 37 minutes, 24 seconds days from uh one customers has taken a hit but on a steady state basis if you just want to understand the BARO dynamics what's the working capital 37:32 37 minutes, 32 seconds cycle once you look at the Bokharo unit so we are targeting a working capital cycle of about 30 days in Bkaro 37:41 37 minutes, 41 seconds uh but you know uh I mean a lot of it will depend on uh uh where we buy the 37:48 37 minutes, 48 seconds steel from uh what is the product that we ultimately sell uh how much inventory we need to carry on the FC side etc but 37:57 37 minutes, 57 seconds uh I think it's fair to say between 30 to 40 days is is comfortable and the entire production from the Moaro 38:05 38 minutes, 5 seconds would be under our brand right BMW that's right And what sorts of 38:12 38 minutes, 12 seconds advertisement expenses are we planning to incur to establish the brand BMW in the market? 38:21 38 minutes, 21 seconds So this will essentially be a B2B. So I don't see very high advertisement spends because you know whatever will come only 38:30 38 minutes, 30 seconds after FI 29 FI30 because up to that stage our focus is on you know B2B enhancing uh volumes and moving more and 38:39 38 minutes, 39 seconds more product. So I don't see substantial B2C kind of ad spends. Uh there will of course be some but they'll primarily be 38:48 38 minutes, 48 seconds targeted towards B2B sales. So is it safe to assume that are we going to replicate our existing business? 38:55 38 minutes, 55 seconds Definitely we have we have a one solution customer but are we in touch with the couple of big names in the 39:02 39 minutes, 2 seconds Bukaro for converting the calls into the final product and selling back to them. 39:08 39 minutes, 8 seconds I mean that's the we are not in touch with anybody for conversion at Oh okay okay okay. 39:17 39 minutes, 17 seconds And in terms of what the debt I mean definitely 800 crores is a bigger cap you'll be sending it and you'll be 39:24 39 minutes, 24 seconds drawing a debt from the bank but of course the completion what sort of peak debt one can assume on the company level 39:34 39 minutes, 34 seconds so I think uh once we look at the completion of the commissioning of this project uh that will be the peak debt uh 39:44 39 minutes, 44 seconds and we're not talking about the working capital etc right But uh in terms of long-term debt, we'll be at the peak by let's say in the next 39:52 39 minutes, 52 seconds 12 to 15 months because see currently our total debt on the book is almost 370 cr of 135 40:00 40 minutes shortterm borrowing right so this 4 370 crores can we probably take it around 40:08 40 minutes, 8 seconds 800 crores or 700 crores the end of fi 28 that's fair that's fair that's a fair 40:14 40 minutes, 14 seconds assumption Okay. 700 to 800 could be the numbers we sure sir. Thank you. That's all from my side. 40:24 40 minutes, 24 seconds Thank you. Thank you. 40:27 40 minutes, 27 seconds Uh sir, we have a follow-up question from Mr. Sji from Eco Quantum Solutions. Please go ahead. 40:34 40 minutes, 34 seconds Uh thank you for the opportunity s once again. So like in our legacy business at peace utilization uh what kind of revenue we can achieve? 40:44 40 minutes, 44 seconds I think uh this was a question somebody else also asked. I think it's fair to assume between 8 to 900 crores 40:52 40 minutes, 52 seconds 800. Okay. And if you're coming to your guidance of of reaching 75% cagger between FY 25 to 28. So for to achieve 41:01 41 minutes, 1 second this you have to grow substantial revenue in FY 27 and 28. So how confident you are to achieve this growth guidance? 41:12 41 minutes, 12 seconds Fairly confident. uh no reason for not being confident. 41:17 41 minutes, 17 seconds So what so I know the growth drivers be in this kind of so the primary growth driver AG is 41:25 41 minutes, 25 seconds Bokaro right my current revenue comes entirely from conversion business where there is no raw material reflected in the cost of sales but uh starting from 41:34 41 minutes, 34 seconds this quarter uh or the following quarter you will start to see a lot of uh the absolute sales numbers increasing because it will also account for the uh 41:43 41 minutes, 43 seconds you know cost of material today it's entirely services. 41:48 41 minutes, 48 seconds So and therefore the the CAGRs change substantially. 41:55 41 minutes, 55 seconds Okay. And from this stage one book capacity what kind of revenue we can achieve. 42:00 42 minutes Uh stage one we are not giving a breakdown of stage wise or quarter wise. 42:05 42 minutes, 5 seconds So I think we'll just stick with that if you see. Okay. No problem. Thank you sir. Thank you. 42:12 42 minutes, 12 seconds Thank you. Thank you participants to ask any questions. So you may press star one star N1 on your test on telephone. The 42:20 42 minutes, 20 seconds next question is from Mr. Rohan Buren from ASK. Please go ahead. 42:28 42 minutes, 28 seconds Sir Ro the line is open. Yes. 42:30 42 minutes, 30 seconds Yes. So uh my question is on the Bokaro quoted steel side. So what kind of Aida margins are we expecting on the like the 42:39 42 minutes, 39 seconds quoted steel business versus the legacy conversion business? And the question is yes sir. 42:45 42 minutes, 45 seconds So we are not giving breakups of uh Bukaro and uh existing businesses. We've 42:51 42 minutes, 51 seconds given a companywide uh estimate. Uh and further uh I think it's a little early to give you productwise breakdown of 43:01 43 minutes, 1 second pereta. I think those will come in due course and with the investment of 800 cr. So what kind of ROC we are expecting with 43:10 43 minutes, 10 seconds the with this business with the new plan which you are expecting. 43:15 43 minutes, 15 seconds So on a blended basis we expect 15 we expect to reach 15 plus 43:23 43 minutes, 23 seconds and how much would be infused through uh debt and what would be the equity we are looking to raise for this investment. 43:30 43 minutes, 30 seconds You know on a total cost of 83 crores our debt equity is at uh roughly 250 to 300 of equity and balance of debt. 43:44 43 minutes, 44 seconds Got it. So and will this be funded me uh through like cash flows coming from the current capacity? 43:52 43 minutes, 52 seconds Uh yes primarily. Got it. 43:56 43 minutes, 56 seconds Next last question is sir given the shift towards the valuated product how uh like we should think about the blended margins improvement in the over the next two two to three years sir. 44:06 44 minutes, 6 seconds So we've given a guidance of uh aa blended aas in the range of 12 to 13% and pat in the range of 5 to 6% uh on a blended basis. 44:19 44 minutes, 19 seconds Got it sir that answers my question. Thank you very much. Thank you. Thank you Roji. 44:25 44 minutes, 25 seconds Thank you. As there are no further questions from the participants, I now hand the conference over to management for closing comments. 44:36 44 minutes, 36 seconds Yeah. Thanks uh everybody for taking out time uh to join this call. Really appreciate. If you have any further queries, please feel free to get in touch with us. Thank you. 44:48 44 minutes, 48 seconds Thank you. On behalf of Capital Markets Limited, that concludes this conference. 44:53 44 minutes, 53 seconds Thank you for joining us and you may now disconnect your lines. Thank you.