Electrosteel Castings Limited — Q3 FY26

Electrosteel Castings Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=eYmiiEQbo0o Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Q3 and 9 months FY26 earnings conference call of Electro Steel 0:09 9 seconds Castings Limited. As a reminder, all participants line will be in the listenonly mode and there will be an opportunity for you to ask questions 0:17 17 seconds after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on 0:25 25 seconds your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Hil 0:32 32 seconds Kenya from EY LLP. Thank you and over to you sir. Uh thank you Ikra. 0:40 40 seconds Good evening everyone on behalf of Electro Steel Casting Limited. I welcome you all to the company's Q3 and 9 9 0:50 50 seconds months FI26 earnings call to discuss the performance of the company. We have with us from the management team Mr. Mad 0:58 58 seconds Kiriwaltime director, Mr. Sunil Katyal, whole time director and CEO, Mr. Ashoto 1:05 1 minute, 5 seconds Agarwal, wholetime director and CFO and Mr. Gorav Sani, general manager of finance. Before we proceed with this 1:13 1 minute, 13 seconds call, I would like to draw your attention to the fact that today's discussion may contain some forward-looking statements that are 1:22 1 minute, 22 seconds subject to various risk, uncertaintities, and other factors which would be management's control. 1:31 1 minute, 31 seconds We kindly request you to bear in mind that there may be uncertaintities while interpretating such statements. We would 1:39 1 minute, 39 seconds now start the session with opening remarks from the management team. 1:43 1 minute, 43 seconds Afterwards, we will open the floor for an interactive Q&A session. I will now hand over the conference over Mr. Sunil 1:53 1 minute, 53 seconds Katyal for his opening remarks. Thank you and over to you sir. 2:00 2 minutes Good afternoon everyone and thank you very much for joining us today. 2:05 2 minutes, 5 seconds At the outset, I would like to mention that this is a period of resilience for the company as well as the ductile iron 2:13 2 minutes, 13 seconds pipe sector where we are navigating short-term challenges which now gradually are getting better 2:22 2 minutes, 22 seconds visibility on the road ahead. For the quarter, our sales volume of ductile iron, cast iron fittings was down by 3.5%. 2:35 2 minutes, 35 seconds quarteron-quarter basis and realizations also declined. 2:40 2 minutes, 40 seconds Thus, it has impacted our top line which was partly compensated by the sale of intermediary 2:48 2 minutes, 48 seconds products such as cokes, pongiron, pigarin and feraloys. 2:54 2 minutes, 54 seconds I would like to share our perspective on the current environment and how we are positioning ourselves going forward. 3:04 3 minutes, 4 seconds Over the past few quarters, the domestic water infrastructure sector has gone through a challenging phase as all of 3:12 3 minutes, 12 seconds you know and this quarter also reflects that environment. 3:18 3 minutes, 18 seconds Demand for ductile iron pipes has remained subdued largely due to temporary delays in 3:27 3 minutes, 27 seconds government spending under JM at both central and state levels. 3:33 3 minutes, 33 seconds Drinking water and urban infrastructure projects which are closely linked to government funding saw much slower 3:42 3 minutes, 42 seconds execution during this period. As a result, industry-wise production levels 3:48 3 minutes, 48 seconds were impacted and also the pricing remained under pressure. 3:56 3 minutes, 56 seconds As mentioned in our earlier con call would like to emphasize that this slowdown appears to be temporary rather 4:04 4 minutes, 4 seconds than structural. We all know that uh during the budget uh discussion when the government has come out with whatever 4:12 4 minutes, 12 seconds are their plans regarding the funds on JJM and all that and uh definitely the focus of the government remains which 4:21 4 minutes, 21 seconds definitely is bringing a better sentiment to the uh whole water infrastructure sector. 4:28 4 minutes, 28 seconds We are now seeing definitely early some signs of improvement. After that funds 4:37 4 minutes, 37 seconds uh releases under these key water supply programs like Amrut and JJM are just starting to resume in the 4:45 4 minutes, 45 seconds remainder of this year. According to multiple recent reports, the government of India has revised the Jeljan mission 4:54 4 minutes, 54 seconds budget outlay for the current financial year 2526 to approximately 17,000 cr in the 5:03 5 minutes, 3 seconds revised estimate which may be released before March 26 5:11 5 minutes, 11 seconds in the budget presented on 1st of February 26 for the Next year 67,600 crores has been allocated against JGM. 5:24 5 minutes, 24 seconds These developments reiterate our confidence that the recent slowdown was largely administrative and fiscal in 5:33 5 minutes, 33 seconds nature and not due to any shift in policy intent at the government level. 5:42 5 minutes, 42 seconds We expect demand conditions to improve gradually with a stronger rebound expected from now onwards. 5:52 5 minutes, 52 seconds Coming back to our performance, despite these headwinds, ElectroSteel has managed its operations with discipline, 6:02 6 minutes, 2 seconds prudence and lot of focus on cost reductions. Our strong footing in the 6:08 6 minutes, 8 seconds overseas market has helped us in strengthening our exports. 6:15 6 minutes, 15 seconds Export volumes during the quarter was up 11% Q on Q basis. 6:23 6 minutes, 23 seconds Our balance sheet remains strong reflecting the company's financial resilience and conservative approach during these challenging times. 6:34 6 minutes, 34 seconds Looking ahead, the long-term outlook for the water structure sector remains positive, 6:43 6 minutes, 43 seconds India's structural drivers such as rapid urbanization, rising per capita water demand, climate 6:52 6 minutes, 52 seconds resilient infrastructure needs, replacement of aging pipelines, 6:59 6 minutes, 59 seconds interconnectivity of different rivers etc. continue to be very strong. We are 7:06 7 minutes, 6 seconds also eyeing for demand for pipes coming from river linking in coming few years. 7:14 7 minutes, 14 seconds The government's continued focus on improving safe drinking water to every household and strengthening seage and 7:23 7 minutes, 23 seconds water network supply supports sustained demand over the medium to long term. 7:32 7 minutes, 32 seconds So with this I would like to hand over the floor to Mr. Ashutto Shagarwal our whole time director and CFO for taking you through the financial highlights. 7:42 7 minutes, 42 seconds Thank you very much. Thank you Kadali. 7:47 7 minutes, 47 seconds Good afternoon everybody for joining this call for Q3 and 9 months results of electrostatic casting limited. 7:57 7 minutes, 57 seconds Some brief informations are agendas. 8:00 8 minutes Sales volume of DI pipe fittings and CI pipe during this quarter stood to 1.3 8:07 8 minutes, 7 seconds 1.34 lakhs turns down by 31% yearon-year basis which impacted the financials of 8:16 8 minutes, 16 seconds the company also for 9 months sales volume was 4.36 lakh tons a 26% 8:26 8 minutes, 26 seconds reduction as compared to corresponding period. The decline in the volume was primarily due to slowdown in the domestic market. 8:38 8 minutes, 38 seconds However, export pipe volumes grew by 11% yearon-year basis partially offsetting 8:46 8 minutes, 46 seconds the weakness in domestic market and providing support to overall business performance 8:53 8 minutes, 53 seconds during the quarter. Other income includes income and provisions written 9:00 9 minutes back to the extent of 28 crores received from southern southeastern railways on account of railway siding. 9:09 9 minutes, 9 seconds Stand stand on level gloss debt stood to 1436 cr. This decreased by 455 crores 9:19 9 minutes, 19 seconds from the previous quarter due to lower working capital after requirement. 9:24 9 minutes, 24 seconds Long-term date stood to 46 cr and short-term date stood to rupes 1,30 crores. 9:34 9 minutes, 34 seconds Net date at a standard level. Standard level is stood to 812 crores. 9:41 9 minutes, 41 seconds During the quarter almutation award of rupees 370 crores is by the company on account of wagon scheme with respect to 9:50 9 minutes, 50 seconds southeastern railway which was unencumbered and released to the company. 9:57 9 minutes, 57 seconds I will now take up to you consolidated basis the result for Q3. 10:03 10 minutes, 3 seconds The total income is stood to rupees 1,526 cr lower on year one year primarily due 10:11 10 minutes, 11 seconds to reduced volume in the domestic market. 10:17 10 minutes, 17 seconds IITA is stood to rupees 88 crores with an IITA margin of 5.8%. 10:24 10 minutes, 24 seconds Fat was reported at a loss of rupees 22 crores. This includes an exceptional item a provision made for 38 crores towards new level laws. 10:40 10 minutes, 40 seconds On the consolidated basis the performance for 9 months are under total 10:46 10 minutes, 46 seconds income to rupes 4,62 crores IITA 474 crores and Iita margin 10.3%. 10:56 10 minutes, 56 seconds PAT 145 crores and PAD margin 3.2%. 11:03 11 minutes, 3 seconds On standalone basis for Q3 results total income stood to 1,290 crores lower 11:12 11 minutes, 12 seconds year on year with by 23% due to the lower value as stated earlier. EITA including other income stood to 83 crores with IITA margin of 6.4%. 11:24 11 minutes, 24 seconds Pat reported to 20 crores loss of 20 crores as stated earlier Q3 and 9 months results includes 11:34 11 minutes, 34 seconds exceptional item on account of provision of 38 crores on account of new level laws 11:41 11 minutes, 41 seconds highlighting on standard standalone performance of 9 months arrange under total income more or less 4,000 crores 11:49 11 minutes, 49 seconds IITA 442 crores ITA margin 11.1% % Pat reported to 142 crores. With this I 11:58 11 minutes, 58 seconds would like to open the floor for question answer session. Thank you very much. 12:06 12 minutes, 6 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 their touchstone 12:14 12 minutes, 14 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 12:23 12 minutes, 23 seconds question. Ladies and gentlemen, we'll wait for a moment while the question cue assembles. 12:34 12 minutes, 34 seconds The first question is from the line of Rajesh Agraal from money or please go ahead. Hello sir. 12:42 12 minutes, 42 seconds Hello. Any any idea how much the payment of JM has been released in starting January because lot of EPC contractors 12:49 12 minutes, 49 seconds were saying they have received money and what is the pending amount? 12:54 12 minutes, 54 seconds the the amount good evening this is Madav at the moment the 17,000 crores has not 13:02 13 minutes, 2 seconds yet been released whatever money getting is from the side of the state government because the state governments 13:11 13 minutes, 11 seconds had the budget prepared they just could not go ahead with it because the central shares were not being released 13:18 13 minutes, 18 seconds even as of now the 17,000 crores is pending cabinet approval which we are very optimistic that it 13:28 13 minutes, 28 seconds should happen in the next uh four to 5 days or maybe 1 week at best and after which the central share of 17,000 crores will be released. 13:38 13 minutes, 38 seconds If both are released then the complete money gets released by by this year by March. 13:44 13 minutes, 44 seconds Uh sir so the 17,000 cr is the central share. 13:49 13 minutes, 49 seconds Um the there will be approximately a similar amount you can say around 45% of I mean central to state is is about 13:58 13 minutes, 58 seconds 50/50 so you'll have around 34,000 crores spent this year as opposed to the 14:04 14 minutes, 4 seconds initial budget which was 67,000 crores um by the central and another 60 67,000 crores by states. 14:13 14 minutes, 13 seconds Okay. So there's a severe uh drop of almost 90,000 crores for this financial 14:20 14 minutes, 20 seconds year in in the total spending between state and center. Okay. 14:24 14 minutes, 24 seconds Uh so as soon as you feel the amount gets released will will it results into fresh tendering of fresh orders? 14:33 14 minutes, 33 seconds Most definitely sir. Um uh I'm quite uh sure that come quarter two the next 14:40 14 minutes, 40 seconds financial year things will start looking healthy again. Um even the first quarter of next year we are very sure that 14:48 14 minutes, 48 seconds things will definitely be better off than uh quarter 3 and quarter four of this financial year which I'm pretty sure is going to be the lowest point okay for our operations. 15:00 15 minutes The third question a lot of contractors were saying because I I heard them in the concce they will eval whether they want to take 15:09 15 minutes, 9 seconds fresh orders or not. So what's your comment or view on that because they said they bunch the fingers the money is not coming so they may evalute if they have to take fresh orders or not. 15:21 15 minutes, 21 seconds So it's a it's a situation of once bitten twice shy I would say. 15:26 15 minutes, 26 seconds Okay. Um you know once they and every businessman sir if they see opportunity 15:32 15 minutes, 32 seconds as much as they want they will not be able to prevent themselves from stepping into it. At the moment things are seeming very pessimistic. You must 15:41 15 minutes, 41 seconds understand that we humans are very sentimentally driven like how the markets are you know logic doesn't 15:49 15 minutes, 49 seconds always drive our decisions but uh you know in the in the mid to long term I'm very certain that things will go back to good normal 15:56 15 minutes, 56 seconds okay uh and sir suppose the budget which has been reduced what you sold 90,000 cr now it has come to 17,000 cr now the 16:05 16 minutes, 5 seconds this has been extended up to 28 suppose we take the net of 60,000 60,000 for next 2 years 27 and 28 you feel that is 16:13 16 minutes, 13 seconds sufficient uh that is sufficient for to complete our full full orders pending pending pending project so 60,000 crores would be central stress 16:22 16 minutes, 22 seconds share and another 60 you can say would come from state although from the current requirement it seems that the states will have to 16:30 16 minutes, 30 seconds provide a bit more because the outlay total is I think approximately 8 and a half to nine lakh crores 16:38 16 minutes, 38 seconds okay um the center has only allowed for another 1.6 odd lakh crores. 16:46 16 minutes, 46 seconds Okay. 16:46 16 minutes, 46 seconds So as against uh I think two or three 2 and a2 lakh crores that was needed. Um 16:54 16 minutes, 54 seconds you can say that there will be a 40 60 or 35 65 split between the center and state going forward over the next two years. 17:04 17 minutes, 4 seconds And so the that corruption case and everything that has been sorted out. 17:10 17 minutes, 10 seconds I'm sorry. Can could you repeat the question please? 17:12 17 minutes, 12 seconds There's a corruption case. Uh the files are pending with the PM to release the money and that are all been sorted out. 17:20 17 minutes, 20 seconds Yes sir. I I would uh look at the the progress if you see 17:28 17 minutes, 28 seconds over the last uh 3 to 5 months we've been hearing a lot of news about irregularities that have come up in JJM 17:36 17 minutes, 36 seconds which has caused the pause button to be pressed. Um now they have come up with 17:41 17 minutes, 41 seconds uh many I would say very prudent uh prerequisites to release of fund which 17:50 17 minutes, 50 seconds will make sure that this does not happen. 17:53 17 minutes, 53 seconds Um including channelizing payments through the spur uh platform directly to the contractor from the center rather than channelizing through the accounts 18:02 18 minutes, 2 seconds of the states. So this will prov allow for better control and for smoother operations. 18:10 18 minutes, 10 seconds Apart from J are you seeing tra traction in any other business any other sector a lot of DI manufacturers are saying there 18:19 18 minutes, 19 seconds are a lot of huge export orders for Middle East so are we supplying to Middle East or not that's absolutely sir around uh 40% of our 18:28 18 minutes, 28 seconds exports are to the Middle East uh in fact we are the largest exporters into the Middle Eastern market uh even if you take into consideration the Chinese. 18:40 18 minutes, 40 seconds So, Electro Steel as a company exports more into the Middle East than any other uh organization. 18:47 18 minutes, 47 seconds Of course, there are uh indigenous manufacturers who are supplying more into the market than we are, but as exporters, we are the largest. 18:56 18 minutes, 56 seconds Okay. 18:57 18 minutes, 57 seconds And how is the realization there? export orders realization um it would be at with the current 19:05 19 minutes, 5 seconds dulled down situation of the domestic market it's marginally better but usually it's the same certain specific countries have more 19:12 19 minutes, 12 seconds stringent requirements so they allow you to derive a small premium but uh overall it would be similar to the domestic 19:21 19 minutes, 21 seconds market please answer the last question uh the realization of pressure due to demand or there's any other reason for the realization to be under pressure. 19:31 19 minutes, 31 seconds It's just a demand uh supply mismatch. 19:36 19 minutes, 36 seconds Okay. Thank you, sir. Thank you. Best of luck for the future. Thank you very much, sir. 19:42 19 minutes, 42 seconds Thank you. The next question is from the line of Ishan from Akash Imprise. Please go ahead. 19:49 19 minutes, 49 seconds Uh thank you sir for the presentation. 19:51 19 minutes, 51 seconds So yeah, I could see that the gross profit have fallen by 1,222 basis points. Y 20:00 20 minutes can you share some uh like can you throw some light on why it has fallen 20:08 20 minutes, 8 seconds would so um it's largely down to three things please uh one would be the reduction in the per 20:18 20 minutes, 18 seconds ton um realization number two would be the overall lower production levels due to muted demand 20:26 20 minutes, 26 seconds and uh I would say number three there has been some uh corrections even at at 20:33 20 minutes, 33 seconds the end of uh certain raw materials which have stabilized and that's why the overall revenue per unit has gone down. 20:42 20 minutes, 42 seconds So it's mainly these three factors if you'd like to add anything to that please. 20:52 20 minutes, 52 seconds No no fair enough. I I think uh these are the major reasons but the crux of this is a mismatch because of 21:02 21 minutes, 2 seconds uh uh the manufacturing capability in the country and uh the demand going practically to around 50%. Because if we 21:11 21 minutes, 11 seconds see overall the JJM component in the total water requirement is close to 50%. 21:18 21 minutes, 18 seconds and uh uh I mean so far due to whatever anomalies have been found in the aggregation of water infrastructure 21:27 21 minutes, 27 seconds projects uh the funds against JGM have been put on a total hold so far. So it 21:34 21 minutes, 34 seconds has reduced the demand so substantially I think which has created practically MSR collapse 21:42 21 minutes, 42 seconds and uh uh and the stock swelled with every supplier. 21:48 21 minutes, 48 seconds So everybody came under cash crunch and uh business issue. So definitely these 21:56 21 minutes, 56 seconds are the major reasons but uh I think looking forward now we are expecting now things should be really looking up. 22:08 22 minutes, 8 seconds Understood. So uh do you expect the gross margin to get uh get back to the similar levels of around 50% or 22:16 22 minutes, 16 seconds something once uh once the cycle gets stabilized? 22:23 22 minutes, 23 seconds Uh honestly speaking uh we are thinking it will be somewhere midway. 22:30 22 minutes, 30 seconds It's yet to be seen because the uh uh I mean you know it takes a bit of time because it will not immediately recover. 22:39 22 minutes, 39 seconds It may gradually recover. 22:41 22 minutes, 41 seconds It is for sure that it will have a correction because at the moment where the whole 22:48 22 minutes, 48 seconds business proposition is there all around this industry is uh uh in a very um what unstable type of uh zone. 23:01 23 minutes, 1 second Uh practically everybody is in business trouble. So uh we are expecting NSR 23:08 23 minutes, 8 seconds definitely will improve but it will take some time. It will gradually start improving and possibly somewhere midway it will uh stabilize. 23:20 23 minutes, 20 seconds It won't be to the level where it was one and a half year back or so. That's what we think. 23:28 23 minutes, 28 seconds Just to add to that uh please um we also are looking at a situation where 23:35 23 minutes, 35 seconds uh going forward we'll be able to capitalize better on our uh product portfolio with the 23:44 23 minutes, 44 seconds addition of uh ductal ion vials that we will be introducing in the domestic market. So I 23:52 23 minutes, 52 seconds suppose um we can be looking at a 30 35% uh gross margin level. 24:05 24 minutes, 5 seconds Okay. Okay. Understood. 24:08 24 minutes, 8 seconds Yeah, that's it from all the best. Thank you. 24:14 24 minutes, 14 seconds Thank you. The next question is from the line of Rajesh Bandari from Nakora Engineers. Please go ahead. 24:21 24 minutes, 21 seconds Good afternoon, sir. Good afternoon. 24:25 24 minutes, 25 seconds Yeah, sir. I wanted to know 24:42 24 minutes, 42 seconds improvement. Exactly. 24:50 24 minutes, 50 seconds European Union 24:58 24 minutes, 58 seconds market because they have to get it approved at 25:08 25 minutes, 8 seconds the commission level at the union level which takes a six to 6 month to one year time period. Mhm. 25:15 25 minutes, 15 seconds So that might cause some uh delayed additions. It's difficult to quantify what will be the benefits 25:24 25 minutes, 24 seconds because we are unaware of the details of what is being signed. Um there have been some smaller uh things that are to 25:33 25 minutes, 33 seconds benefit us such as our trade deal with Oman which is going to open up that market which will make us more 25:40 25 minutes, 40 seconds competitive in that market. Um and uh similarly with the US market trade deal happening 25:49 25 minutes, 49 seconds I'm uh hoping that our other products like fittings and such will get a slight boost. Um these are not going to make a substantial difference. 26:00 26 minutes Yeah. But uh definitely once we get more details we'll be able to identify opportunities and I'm sure that we will 26:08 26 minutes, 8 seconds work towards trying to take as much advantage of that as we can. 26:21 26 minutes, 21 seconds government. 26:29 26 minutes, 29 seconds So 26:42 26 minutes, 42 seconds slowly fizzle out. Okay. Other markets like irrigation and river linking will take over. But uh the sudden uh full 26:51 26 minutes, 51 seconds stop on the outflow of capital by the government was a big uh turning point for us as our performance shows on the financial front. 27:01 27 minutes, 1 second What was the reason why they had uh blocked the payments? 27:06 27 minutes, 6 seconds So officially last uh year the the JJM had finished 27:14 27 minutes, 14 seconds and uh they they had to extend it considering the progress that was done but when they went into the details to 27:22 27 minutes, 22 seconds see what work has happened what has not not happened. Uh it it had come to the manifest that there are lot of 27:30 27 minutes, 30 seconds irregularities in the implementation. 27:51 27 minutes, 51 seconds level to understand the reality. Exactly. 28:29 28 minutes, 29 seconds instead of payment at a company level. I don't think there's so much of a problem because all 28:38 28 minutes, 38 seconds our payments majority I would say 95% of them are backed up by LCS or BGS 28:44 28 minutes, 44 seconds um at the government level towards the contractors I would say approximately 30 35,000 28:52 28 minutes, 52 seconds crores is pending which would all be cleared up with around 30 to 35,000 crores would be pending 28:59 28 minutes, 59 seconds for the works so I think with this 17,000 cr share and uh 17,000 cr come from the state all of this will get 29:08 29 minutes, 8 seconds cleared up so we'll start the next financial year on a fresh note that's this is why 29:18 29 minutes, 18 seconds exact why don't you share the exact outstanding for domestic as ra as mad mentioned we have much of 29:27 29 minutes, 27 seconds outstanding on account of JJM most of our receivables in fact you can say all our receivables are either LC bagged or 29:34 29 minutes, 34 seconds Bank guarantee bag and we have received yeah we have received collections on time. So we [clears throat] don't have significantly outstanding on account of these. 29:43 29 minutes, 43 seconds No hugely it is impacted for a business impact. You know the opportunity has been lost to do business. 30:04 30 minutes, 4 seconds compared to previous data 30:13 30 minutes, 13 seconds sir inventory 221 all inclusive including pipes and everything. 30:23 30 minutes, 23 seconds Mhm. Yeah. 30:27 30 minutes, 27 seconds No sir. Changes in inventories of finished goods, stock in trade and progress process work. 30:34 30 minutes, 34 seconds Inventory production 30:42 30 minutes, 42 seconds inventory deduction deduction from opening to closing. 31:00 31 minutes around 7 months. 31:03 31 minutes, 3 seconds 7 months or progress sir. 31:10 31 minutes, 10 seconds Sir is I think well the integration work between our team and 31:17 31 minutes, 17 seconds their team has uh picked up quite uh quite well. We've also formed a small team over here for the domestic market. 31:26 31 minutes, 26 seconds Our approval processes have started for the markets that uh TIS was not in in mainly 31:34 31 minutes, 34 seconds it would be the uh Spanish, French, UK markets and uh the Middle East and Indian markets. These are the places 31:42 31 minutes, 42 seconds where we have seen that we can contribute largely in to obstacle 31:55 31 minutes, 55 seconds u I think another uh 3 to 6 months and we will be able 32:10 32 minutes, 10 seconds sorry to interrupt You can you rejoin the queue for more questions? One one last question. 32:17 32 minutes, 17 seconds Is it permitted? Hello. 32:22 32 minutes, 22 seconds Yeah sir. Wa business or future prospect as a shareholder? What can I expect from the company? 32:31 32 minutes, 31 seconds Sir, currently the turnover has seen a growth. They follow a calendar year. So if you look at the growth of revenue 32:40 32 minutes, 40 seconds calendar year- wise, we've seen an approximate 10% growth from the previous year's operations. I am assuming that uh 32:49 32 minutes, 49 seconds with uh the synergy that will come after the approvals are in place for the other regions as I mentioned uh 15 to 18% 32:58 32 minutes, 58 seconds growth rate year on year for the next 3 to four years is quite a uh achieve 33:06 33 minutes, 6 seconds or company future prospects as a shareholder. This is my last question. 33:12 33 minutes, 12 seconds company future prospects portfolio 33:28 33 minutes, 28 seconds as they say the the demand for water and alcohol is good or bad. 33:36 33 minutes, 36 seconds So, so I 33:44 33 minutes, 44 seconds temporary slump sir I suppose next month I'm quite certain 33:54 33 minutes, 54 seconds sir let's hope for the best thank you very much thank you sir thank you thank you the next question is from the 34:03 34 minutes, 3 seconds line of UN Sha from molecule ventures please go ahead. 34:08 34 minutes, 8 seconds Uh hi sir thanks for the opportunity. Uh so I just wanted to understand first of all is that last year we have seen the 34:16 34 minutes, 16 seconds changing the JGM there was a uh 17,000 flow 17,000 K flow has been done by the 34:24 34 minutes, 24 seconds government and still uh the government is estimating the 67,000 K. So is that a 34:32 34 minutes, 32 seconds uh right understanding that the government has allocated a budget from 50 to 67 or it is uh uh likewise that uh 34:43 34 minutes, 43 seconds it is a historical state and the spending was done by the state government. 34:54 34 minutes, 54 seconds [clears throat] 34:54 34 minutes, 54 seconds Hello. 34:57 34 minutes, 57 seconds Ladies and gentlemen, the line for the management got disconnected. 35:02 35 minutes, 2 seconds Madav, sir, just stay on the line and connect him back. 35:07 35 minutes, 7 seconds So, it's okay. Meanwhile, I'll address the issue. Yes. 35:12 35 minutes, 12 seconds Yeah. So, no in fact the basic understanding of Jalivan mission is that 50% by the state and 50% by the center. 35:25 35 minutes, 25 seconds So earlier it was that center was generally for sending the funds first and then the state was accordingly 35:32 35 minutes, 32 seconds aortioning equal amount and then executing the uh project but thereafter it has been found out that there were 35:40 35 minutes, 40 seconds some diversions in these funds that is why all these delays and last few months whatever happened uh uh resulting into a non-issuance of the funds for JJM. 35:54 35 minutes, 54 seconds So going forward now the central government is saying that first state should come forward and give a plan and 36:02 36 minutes, 2 seconds also show the allocations on their part and then only the funds will be allocated by them. So they have put the 36:11 36 minutes, 11 seconds onus on the states by issuing a circular to that extent. So in view of this uh 36:17 36 minutes, 17 seconds last one month's development whereby the government now is really trying to finalize all this we are expecting that 36:26 36 minutes, 26 seconds uh possibly uh the share of the states may go in excess of 50% in the times to come. 36:35 36 minutes, 35 seconds So uh that's how it is looking like. 36:40 36 minutes, 40 seconds So sir just wanted to uh dig down deeper on this. So assuming that 60,000 ko is been allocated by the 36:48 36 minutes, 48 seconds government that that justifies that half of will be spent by the state and half of will be spent by the central or the 36:56 36 minutes, 56 seconds 67,000 will only spend by the central only. No no no no no equal amount I'm saying okay if 67 is the central kitty 37:06 37 minutes, 6 seconds the states have to spend possibly more than 67,000 so it will be 135,000 actually put 37:13 37 minutes, 13 seconds together the total okay got it got it sir yes and I just wanted to understand right now what we have seen I understand the 37:22 37 minutes, 22 seconds demand scenario but wanted to understand also the supply constraint as supply side as well so that is also one of the 37:28 37 minutes, 28 seconds product which is the uh OPC which is saying that that could replace a DI pipe. I understand that it is a very 37:36 37 minutes, 36 seconds difficult task and a tall task to shift from a [sighs] this product but why I'm coming with the 37:44 37 minutes, 44 seconds same question is uh that once there is so stringent uh things which will be going on and once the EPC 37:53 37 minutes, 53 seconds uh players have a very stringent control on their stands will they shift uh to 38:00 38 minutes that new uh pipe which is called low PVC the reason being that would be a cost control measure for EPC player and the 38:07 38 minutes, 7 seconds cost benefit for them or it is just a haywire it won't happen that way good I would answer I would say that 38:16 38 minutes, 16 seconds with the new requirements that are there to allocate funds for these projects 38:22 38 minutes, 22 seconds which include a long-term on&m period the EPC contractors will prefer putting 38:30 38 minutes, 30 seconds a ductal iron pipe which is proven in its durability and it strength over and above an OPVC pipe. If it was a 38:38 38 minutes, 38 seconds dig, lay and forget kind of project, they might still go ahead with that. 38:50 38 minutes, 50 seconds I think the line is having a problem. Yes sir, your voice is breaking. Hello. 38:58 38 minutes, 58 seconds And uh okay to clarify I mean apart from the longevity of service of ductile iron pipes there is also an issue of 39:07 39 minutes, 7 seconds microbiology and all that actually the water quality and the law I mean loss of 39:14 39 minutes, 14 seconds microlastics into the water all these are under very very strict uh I mean 39:21 39 minutes, 21 seconds checkup from medical and uh I mean hygiene point of view. So it's not looking like that this sector 39:30 39 minutes, 30 seconds really will be able to replace I'm sorry I think I was just in the bad 39:37 39 minutes, 37 seconds network area. I was mentioning that uh uh logics that are required to allow for 39:45 39 minutes, 45 seconds the payments to go through smoothly which include a stringent uh plan on O andM operations and maintenance 39:58 39 minutes, 58 seconds towards duct which usually have a lower lifespan and are generally more fragile as a as a piping material. 40:14 40 minutes, 14 seconds I think connection has a serious problem. Actually Mr. Madav uh in fact is not in uh station. He's not in the 40:23 40 minutes, 23 seconds office. He has joined from a remote place and that's why we are sorry for these intermittent uh disturbances. I 40:32 40 minutes, 32 seconds think we all want to address to your points. So that is why I mean we are all there and he has also joined from a remote location. 40:42 40 minutes, 42 seconds So we perfectly fine sir. No no that is perfectly fine sir. Uh just last point coming to this is considering the 40:49 40 minutes, 49 seconds current realization glo production and everything is happening uh with us. So I just wanted to understand when should we 40:57 40 minutes, 57 seconds expect a normalization coming back uh going forward uh and uh what are new 41:06 41 minutes, 6 seconds strategies we have been keeping in mind considering the uh scenarios which is happening right now. 41:13 41 minutes, 13 seconds Uh two points there. One is uh your first point first that uh we are expecting that now onwards actually 41:21 41 minutes, 21 seconds gradually the uh uh rebouncing of the situation should start and as very rightly said the whole of duct tile iron 41:30 41 minutes, 30 seconds pipe uh sector is in a bit of a a problem. So it may take a bit of a time maybe 3 4 months that's what we are 41:38 41 minutes, 38 seconds thinking but the market sentiment has started already getting waves of positivity 41:46 41 minutes, 46 seconds not only from the budget declaration that the government's focus remains but also from all these European Union 41:57 41 minutes, 57 seconds agreement USA that is creating a positive wave only so so It may take a bit of a time maybe 42:06 42 minutes, 6 seconds 3 to 4 months time for things to really shape up uh back. That is one part and 42:13 42 minutes, 13 seconds second is that uh we are definitely thinking that we should also have a diversification. 42:20 42 minutes, 20 seconds So uh we should add to our product basket. So we are also trying to work towards uh adding uh more products to 42:28 42 minutes, 28 seconds our kitty to bring a better stability to our overall business. 42:35 42 minutes, 35 seconds in the times to come I'm very sure and we'll be able to give you more of information once we have finalized those 42:42 42 minutes, 42 seconds and sir sorry but this is my last question just want to understand uh is there a possibility just to want to get 42:50 42 minutes, 50 seconds your view on OPC because can we add as a product category in our portfolio which will help ultimately the EPC players to 42:58 42 minutes, 58 seconds select in from a one company and ultimately we can supply ultimate have Diverse product verific diversification. 43:06 43 minutes, 6 seconds Is it a possibility we have been looking at it or we have been not looking currently? Kadali am I properly audible now please? 43:15 43 minutes, 15 seconds Yeah yeah you are. May I take the question? Yeah. 43:20 43 minutes, 20 seconds Uh sorry about my connection. And uh so sir there have been multiple uh times 43:28 43 minutes, 28 seconds that we have studied the opportunity of getting into plastic pipes but we firmly believe that uh for the applications in 43:37 43 minutes, 37 seconds the market that we are ductal pipes is the best uh material that can be used and uh we are so we believe that to get 43:46 43 minutes, 46 seconds into a pipe product that would oppose our breadandut product would uh not be 43:53 43 minutes, 53 seconds the most feasible thing to do. If we had a network of retail businesses and uh we were already investing in the retail 44:01 44 minutes, 1 second plastic pipe then we could add this to our portfolio but uh with our current line of work it does not fall well into place. 44:11 44 minutes, 11 seconds Got it. 44:12 44 minutes, 12 seconds And uh I I I we are we as an organization also don't believe that OPVC per se is a great alternative. It's 44:21 44 minutes, 21 seconds very uh commercially viable up to a certain diameter but that diameter constitutes a small percentage of our 44:30 44 minutes, 30 seconds sales right and uh yes please yeah yeah that that's quite detailed sir 44:39 44 minutes, 39 seconds I will just join back in the quer thank you so much thank you the next question is from the 44:46 44 minutes, 46 seconds line of Radha from BNK securities please go ahead Hi sir, thank you for the opportunity. 44:53 44 minutes, 53 seconds Uh sir regarding the cold block case uh 250 crores was declared and your result 45:00 45 minutes block states that using this 250 crores has been challenged by JW that is on one hand and on the other 45:08 45 minutes, 8 seconds hand uh I do understand that the soft costs are yet to be finalized but uh considering everything 1 1200 crores of assets is still sitting on your books. 45:18 45 minutes, 18 seconds So uh you know uh given the scenario how much of write off do you think uh should 45:24 45 minutes, 24 seconds be done in this financial year end um of these assets and how much uh in reality are you expecting the compensation? 45:36 45 minutes, 36 seconds Ma'am I think it's a little early in the day to be answering that question. 45:41 45 minutes, 41 seconds uh as you can see that uh there are some clear numbers that are coming out and 45:49 45 minutes, 49 seconds and these numbers are exactly what is reflected in our books. Of course the person who has to pay will always try to delay the payments. 45:57 45 minutes, 57 seconds So they're doing their part of their of what they can do and we'll have to do our part. Um eventually what will happen 46:06 46 minutes, 6 seconds is difficult to predict but uh all we can say at this moment is that whatever numbers that are reflected in our books 46:13 46 minutes, 13 seconds of accounts is what after multiple scrutinies is coming up uh by the nominated authority at the ministry 46:22 46 minutes, 22 seconds level also. So our numbers are definitely ones which are holding true and are in good faith. 46:31 46 minutes, 31 seconds Okay sir. Second question is in the nine months uh as you highlighted that you have 46:38 46 minutes, 38 seconds executed about 4.2 lakhs of DI. So out of this uh how much uh of uh the 46:46 46 minutes, 46 seconds payments have you received and how much is pending and is there any pending of last year receivable? 46:54 46 minutes, 54 seconds I couldn't quite get that question. Could you repeat that rather please? 46:58 46 minutes, 58 seconds Yes sir. So I'm saying that um in the 9 months you have executed about four and 47:04 47 minutes, 4 seconds 4.2 lakhs of DI. So out of this uh what percentage of uh payments have you 47:12 47 minutes, 12 seconds received and uh how much is pending and is there any pending receivables uh for for the last year? 47:23 47 minutes, 23 seconds Gorov apart from our subsidiary payments which sometime run beyond 8 to 9 months could you give an answer to how 47:33 47 minutes, 33 seconds much is pending beyond 9 months in the domestic market I don't think it would be anything exactly 47:40 47 minutes, 40 seconds we yeah our our datas uh ma'am it's on time and uh in fact if you see if you compare it from March end uh the number 47:49 47 minutes, 49 seconds which was there the data outstanding it has reduced during the we are receiving collections 47:56 47 minutes, 56 seconds uh on time and domestic collections uh are around say 50 to 55 days cycle. So 48:05 48 minutes, 5 seconds uh we do not have any outstandings which are overdue. 48:13 48 minutes, 13 seconds Okay. And going forward so for fourth quarter um considering the scenario you said that you are expecting to improve after 48:21 48 minutes, 21 seconds 3 to four months only then uh uh how do you plan to execute 48:29 48 minutes, 29 seconds fourth quarter will be more of a weathering the storm situation as we have in quarter three. 48:36 48 minutes, 36 seconds So we will have to hold the fort for another couple of months till we are 48:42 48 minutes, 42 seconds able to uh start seeing improvements which I'm very optimistic about starting April. 48:54 48 minutes, 54 seconds Understood. 48:55 48 minutes, 55 seconds So 50 to 65 day cycle only you it is pending. So I am on the domestic side. 49:03 49 minutes, 3 seconds Yes sir. On the domestic side. So I'm assuming that uh at least for uh till first quarter of April 25th all payments have been received. 49:13 49 minutes, 13 seconds Is that fair? Absolutely. Yes please. 49:17 49 minutes, 17 seconds Thank thanks sir. All the best to you and team. Thank you very much. 49:22 49 minutes, 22 seconds Thank you. Anyone who wishes to ask a question may press star and one. The next question is from the line of Sakit 49:29 49 minutes, 29 seconds Kapoor from Kapoor and Company. Please go ahead. Yeah, namaskar sir. 49:37 49 minutes, 37 seconds Hope I'm audible. Namaste. Yeah. Uh sir firstly with with in terms of the Q4 deliverables uh deliverables uh we are 49:46 49 minutes, 46 seconds we will be in line of what we have done for Q3. 49:51 49 minutes, 51 seconds We will be that is the pipes and the fittings which will be delivered for Q4 also or can we see any uptake? 50:06 50 minutes, 6 seconds Hello. 50:09 50 minutes, 9 seconds uh s uh in Q4 by volume it will be similar to Q3 only. 50:19 50 minutes, 19 seconds Okay. 50:21 50 minutes, 21 seconds And sir uh in the opening remarks or during the interaction sir was mentioning about some portal through which now the entire EPC planning and 50:29 50 minutes, 29 seconds all is done. Can you mention the name once again spurse portal or something mother you was mentioning that's that is not the planning part sir 50:37 50 minutes, 37 seconds that is the payment by the of the central share to the contractor will be done through the spur portal yes spur 50:46 50 minutes, 46 seconds platform okay so s taking that into account and uh since the uh since the funding is to 50:56 50 minutes, 56 seconds be released by March uh I think so then the optics should also uh money should be better than what we 51:03 51 minutes, 3 seconds are planning as of now. We are doing it in terms of our understanding that no money is to be received by March. This 51:10 51 minutes, 10 seconds is what our uh deliverables are the guidance for deliverables is according to that aspect only 51:17 51 minutes, 17 seconds the cycle of demand is such key the government pays the contractor and then the contractor pays us. 51:25 51 minutes, 25 seconds Okay. Now the the mismatch that has happened is that because our payments are backed by LC's and BGS the 51:32 51 minutes, 32 seconds contractors had to pay us but then they are not paid by the government. 51:37 51 minutes, 37 seconds So on the pretext that this pending payment is received the contractors will start further work. So this is more of a 51:45 51 minutes, 45 seconds relief from an from a pain for the contractors than a kickstarter for demand 51:52 51 minutes, 52 seconds on an immediate basis. Once this uh pain is relieved for them then uh with a de 52:00 52 minutes onset delay they will start. So I'm assuming that that will that is the reason why we are mentioning that the uptick will start from April and not within the fourth quarter. 52:10 52 minutes, 10 seconds Okay very categorically you have mentioned that these are we have to wither the storm. So being on the promoter uh 52:19 52 minutes, 19 seconds representing the promoter side what are the course correction exercise currently in the organization that you must be uh 52:27 52 minutes, 27 seconds putting into uh implementation or in in the programming stage so that we we could be a we could be a much more 52:34 52 minutes, 34 seconds efficient organization going ahead and secondly uh I think so there was some some embargo over the promoter and our 52:43 52 minutes, 43 seconds honorable CFO also for uh uh participation ation in the capital market. So that that part of the story 52:50 52 minutes, 50 seconds is now over. Uh that period is over and now the promoter if they feel yeah so I think so that part is over 52:59 52 minutes, 59 seconds that part is over. So what I feel is that a message from the promoters would also be from in the point of the uh the 53:06 53 minutes, 6 seconds valuations at which currently the our uh our company market cap or enterprise value is uh a point of creeping 53:14 53 minutes, 14 seconds acquisition would have sufficed a lot of uh nerves for your investors since you are well below 50%. 53:22 53 minutes, 22 seconds And I would agree with that statement sir. 53:25 53 minutes, 25 seconds I cannot comment further to that than than just saying that I would agree to that. 53:30 53 minutes, 30 seconds Um and as for the strategy part, one bit of the strategy is uh what we did with 53:39 53 minutes, 39 seconds the acquisition of the Italian company which is a high uh high technology valve 53:46 53 minutes, 46 seconds manufacturer. Although it keeps us in the water industry, it opens up a broader portfolio and this is 53:53 53 minutes, 53 seconds disconnected to only the ductile and pipe business because bios are used regardless of the material of the 54:01 54 minutes, 1 second pipeline whether it's plastic, steel or ductile and uh this is also a high technology company. So there is a very strong moat around its product line. 54:13 54 minutes, 13 seconds As for other strategies, Mr. Katyal had mentioned rightfully that we are looking at diversifying our portfolio and uh we 54:21 54 minutes, 21 seconds are working very uh diligently towards uh creating a strong organization for 54:29 54 minutes, 29 seconds all our shareholders which uh will be robust against such uh surges and dips in the future. 54:38 54 minutes, 38 seconds A small point about s this river linking project part of ma'am I just conclude ma'am everybody has got their fair share 54:45 54 minutes, 45 seconds ma'am allow me to conclude sir when we look at the river linking project part of the story uh for the 54:53 54 minutes, 53 seconds state of Rajasthan and Madhya Pradesh they have been there have been announcement uh regarding uh the the 55:01 55 minutes, 1 second order tending and all so have we seen any anything on that front from the EPC players and what any portion of our order book is resembling about the 55:10 55 minutes, 10 seconds demand from the river linking part of the story sir sir ken betwa which is between UP and MP 55:17 55 minutes, 17 seconds are picking up faster than the one between Rajasthan and MP but uh I'm like I have mentioned in previous calls I was 55:25 55 minutes, 25 seconds a skeptic till two years back but the last one and a half years and two years I've seen that things are uh really 55:33 55 minutes, 33 seconds moving forward of course a lot of things are still at project uh DPI stage But uh definitely work is happening now 55:41 55 minutes, 41 seconds on the ground slowly and uh I'm quite optimistic that this will play out at least these two I am very optimistic on 55:49 55 minutes, 49 seconds the NP UP and MP Rajasthan projects. 55:54 55 minutes, 54 seconds Okay sir. Thank you sir. And uh we we'll join the queue and all the best to the team sir. Hope this this too fast. Thank you. 56:03 56 minutes, 3 seconds Thank you. Thank you very much sir. 56:06 56 minutes, 6 seconds Thank you. Ladies and gentlemen, you are requested to limit your questions to one per participant. The next question is 56:14 56 minutes, 14 seconds from the line of Rajesh Agraal from Manior. Please go ahead. 56:18 56 minutes, 18 seconds Sir, what was the turnover in the calendar year for the values? 56:25 56 minutes, 25 seconds Uh so taking everything in line, our turnover was approximately 56:33 56 minutes, 33 seconds uh 3 uh 37.8 8 million. So you can say close to 400 crores please and the emitter margins. 56:43 56 minutes, 43 seconds Got would you have the numbers immediately with you? 56:47 56 minutes, 47 seconds I can't remember the on the higher side of 12 13% 13% approximately okay the second question is about 56:57 56 minutes, 57 seconds sorry to interrupt you no join the queue. Thank you. Thank you. Thank you. 57:02 57 minutes, 2 seconds The next question is from the line of Ishan from Akash Empire. Please go ahead. 57:09 57 minutes, 9 seconds Uh so sir I have one question regarding like how much of the coverage in JM has been done so far. Uh is it like the 57:17 57 minutes, 17 seconds total is showing around 80%. So the actual number is 80 only or is it actual number will be close to 55 60% 57:26 57 minutes, 26 seconds sir because as you can as you might have if you see the news you will see that there 57:32 57 minutes, 32 seconds is statements that around 60% of 80% is functional 60 to 70% of 80% is 57:41 57 minutes, 41 seconds functional in fact that even leads us to a lower number. So you can say around 50 55% is what is functional uh work that 57:50 57 minutes, 50 seconds is done. For the rest of it some infrastructure has been built but those are not functional household app connections. So they will require some 57:57 57 minutes, 57 seconds more infrastructure building behind them. 58:02 58 minutes, 2 seconds Okay. And out of which out of that how much is electric expecting like is it like substantial share 58:10 58 minutes, 10 seconds that 45 at the moment? So sir at the moment around 20% of the domestic duckland 58:17 58 minutes, 17 seconds market uh is our share uh it fluctuates between uh 18 to 25% depending on how much we export. 58:27 58 minutes, 27 seconds So that is the current uh expectation. This is a domestic share anyway. Yes. 58:34 58 minutes, 34 seconds Yes. 58:37 58 minutes, 37 seconds Okay. And is it is the largest share on I would say there are we are uh the 58:46 58 minutes, 46 seconds there are two to three players all with similar capacity sir. So we all have similar market shares 20 between 18 to 58:54 58 minutes, 54 seconds 20 25% between three players and then everybody else has a 15 10 to 15% odd market share. 59:06 59 minutes, 6 seconds Got it. Got it. industry. Okay, that's it for now. 59:12 59 minutes, 12 seconds Thank you. Uh ladies and gentlemen, due to time constraint, that was the last question. I would now now like to hand the conference over to the management 59:20 59 minutes, 20 seconds from Electro Steel Castings Limited for the closing comments. 59:27 59 minutes, 27 seconds Thank you everyone for joining us today and for your continued trust in our company. 59:34 59 minutes, 34 seconds We remain committed to driving sustainable growth, strengthening our balance sheet and creating long-term value for all of our stakeholders. 59:45 59 minutes, 45 seconds We appreciate your support. Look forward for updating you in our progress in the 59:52 59 minutes, 52 seconds upcoming quarters and we are hoping definitely the things are going to look up from now onwards. Thank you very much. 1:00:00 1 hour Thank you everybody. 1:00:02 1 hour, 2 seconds Thank you on behalf of Electro Steel Casting Limited. That concludes this conference. 1:00:09 1 hour, 9 seconds Thank you for joining us and you may now disconnect your lines.