HEG Limited — Q3 FY26

HEG Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=8mqPvyJ9ATc Published: 3 months ago

0:02 2 seconds Good day, ladies and gentlemen, and welcome to HG Limited's Q3 FI26 result conference call organized by SKP Securities Limited. 0:14 14 seconds As a reminder, all participant lines will be in the listenonly mode and you will be able to ask questions after the 0:21 21 seconds management's opening remarks. Should you need assistance during the call, please signal an operator by pressing star then 0:28 28 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over 0:35 35 seconds to Mr. Naven Agarwal, head institutional equities at SKP Securities Limited. Thank you and over to you sir. 0:44 44 seconds Good afternoon ladies and gentlemen. I'm pleased to welcome you on behalf of ATG Limited and SKP securities to this financial results conference call with the lead leadership team at ATG Limited. 0:57 57 seconds We have with us Mr. Ravi Junjunwala, chairman, managing director and CEO and Mr. Raj Junjunwala, vice chairman along 1:05 1 minute, 5 seconds with their colleague Mr. Manish Kulati, executive director, Mr. Omra Ajara, group CFO, Mr. Ravitraati, CFO, we also 1:14 1 minute, 14 seconds have Mr. Basanjen joint MD and CEO Bilwara Energy Limited. Mr. Ankur Ketan MD and CEO TAC Limited, Mr. Hin Pravin 1:23 1 minute, 23 seconds Sha, MD and CEO RE+, Mr. Punit Anandan, Group CSO, and Mr. Salil Baba, group head investor relations. 1:33 1 minute, 33 seconds We'll have the opening remarks from Mr. Junjun Wala followed by Q&A session. Thank you and over to you Ravi. 1:41 1 minute, 41 seconds Thank you and uh good afternoon friends and welcome to our financial details conference call for Q3 financial year 2526. 1:52 1 minute, 52 seconds I would like to begin by setting the context on the global steel market as its underlying trends are critical 1:59 1 minute, 59 seconds for understanding the demand conditions for the graphite electrode industry. 2:03 2 minutes, 3 seconds As for the latest data published by the World Steel Association, global steel production declined by 2:11 2 minutes, 11 seconds about 2% yearon year in calendar year 2025, falling to 2:18 2 minutes, 18 seconds 1804 million tons, which is 1.8 8 billion tons from 1841 2:26 2 minutes, 26 seconds million tons in 2024 reflecting a challenging macro macroeconomic environment and subjective 2:33 2 minutes, 33 seconds demand across major steel producing regions. 2:37 2 minutes, 37 seconds China which is the world's largest steel producer also recorded a 4.4% 4% year-on-year 2:44 2 minutes, 44 seconds decline in 2025 with crude steel production reducing from 1,5 million metric tons to 961 million metric tons. 2:57 2 minutes, 57 seconds While China's steel production has declined by approximately 7 and a half% over the last 5 years, its steel exports 3:04 3 minutes, 4 seconds have increased sharply over the same period, rising from rising by 78% 3:11 3 minutes, 11 seconds from 67 million tons to 190 million tons in 2025 over the 3:18 3 minutes, 18 seconds over these six years. Significantly intensifying competitive pressures across global steel and downstream markets. 3:27 3 minutes, 27 seconds In contrast, India continued to outperform with crude steel production increasing by 10.4%. 3:36 3 minutes, 36 seconds Yi, supported by strong infrastructure spending, resilient automotive demand, and ongoing capacity additions. 3:45 3 minutes, 45 seconds Among other major regions, the United States recorded a 3.1% YI increase in crude steel production while Japan's 3:54 3 minutes, 54 seconds output declined by 4% and South Korea declined by 2.8%. 4:00 4 minutes European rem European Union EU remained under significant pressure with steel 4:07 4 minutes, 7 seconds production declining by 2.6% on YI basis due to very high energy costs and weak industrial activity. 4:16 4 minutes, 16 seconds Against this backdrop, the global graphite electrode market continued to face challenging conditions with 4:24 4 minutes, 24 seconds customer demand remaining muted due to cautious procurement behavior and sustained pricing pressure particularly 4:32 4 minutes, 32 seconds from elevated steel export out of China and this demand conditions remained uneven across all the regions. 4:42 4 minutes, 42 seconds While near-term visibility remains limited, disciplined supply improving utilization trends in certain markets 4:50 4 minutes, 50 seconds and the continued shifts from electric arc furnace steel making provide support to the medium-term industry fundamentals. 5:01 5 minutes, 1 second In this environment, our focus on operational efficiency, cost discipline, and customer diversification 5:09 5 minutes, 9 seconds enabled us to deliver a resilient performance during the quarter, demonstrating the strength of our model. 5:17 5 minutes, 17 seconds We continued to operate at the highest capacity utilizations in the industry all around the world at 85% in previous 5:25 5 minutes, 25 seconds quarter and 89% in the last three quarters combined. 5:30 5 minutes, 30 seconds both of which are highest in the graphite industry worldwide. 5:35 5 minutes, 35 seconds Just to remind you, we have the single location largest facility in the world 5:42 5 minutes, 42 seconds uh at uh at a place called Mundi near Bopal with a capacity of 100 100,000 tons 5:51 5 minutes, 51 seconds combined with a cost structure which is amongst the lowest positions us as one of the most efficient and cost efficient 5:58 5 minutes, 58 seconds graphite electrode manufacturers globally. 6:02 6 minutes, 2 seconds Just to reiterate that these numbers are based on our Just to reiterate these numbers are based on our expanded 6:09 6 minutes, 9 seconds capacity of 100,000 tons and not 80,000 tons which was the case until 2324 6:17 6 minutes, 17 seconds reflecting a gain in the market share at a time when the electrode areness based steel production is more or less flat. 6:27 6 minutes, 27 seconds Looking ahead, the global transition towards low emission EAF steel making continues to accelerate driven by climate goals and regulatory momentum. 6:39 6 minutes, 39 seconds We once again reiterate that this transition is expected to generate incremental graphite electrode demand of 6:46 6 minutes, 46 seconds approximately 200,000 tons by 2030, excluding China, reinforcing the industry's long-term growth potential. 6:57 6 minutes, 57 seconds To the best of our knowledge, about 20 million tons of new green field electric furnace capacities have already been 7:05 7 minutes, 5 seconds added in the calendar years 2024 and 2025. 7:11 7 minutes, 11 seconds And we believe another 60 million tons would be added between calendar years 2026 to 2028. 7:20 7 minutes, 20 seconds So which is which is not too long in the in the next three years 60 million tons 7:27 7 minutes, 27 seconds and another 30 million tons between 2029 and 2030 taking the total new free new green 7:36 7 minutes, 36 seconds field electric aquous capacity by 110 million tons. 7:41 7 minutes, 41 seconds It has never happened in the history that the steel industry has added 110 million tons in the last 20 30 40 years probably. 7:51 7 minutes, 51 seconds This would increase the worldwide electrode demand by approximately 200,000 tons compared to what it was till calendar year 2025. 8:03 8 minutes, 3 seconds Construction activity of our recently announced expansion by a further 15,000 tons is progressing as per schedule. 8:11 8 minutes, 11 seconds [clears throat] 8:11 8 minutes, 11 seconds And we stand by our earlier target of completing this by early 2028 which will position us well to cater to 8:20 8 minutes, 20 seconds the incremental electrode demand all over the world. 8:24 8 minutes, 24 seconds I once again reiterate that for the last many years our exports have constituted around 2/3 of our total sales to more 8:33 8 minutes, 33 seconds than 30 35 countries covering almost the entire geography. 8:40 8 minutes, 40 seconds Our composite scheme of arrangement is on track. The NCT bench at Indor has heard the matter and reserved its order on the first motion application. 8:52 8 minutes, 52 seconds We expect to receive the order within the next one or two weeks. Upon receipt of this order and in accordance with its 8:59 8 minutes, 59 seconds directions, we will initiate the process of issuing notices and convening meetings of our shareholders and 9:06 9 minutes, 6 seconds creditors to seek their approval for the scheme. 9:11 9 minutes, 11 seconds Once the approval process is completed, we will find the second motion petition. 9:17 9 minutes, 17 seconds We anticipate that this entire scheme will be approved by NCLT by Q1 2027. 9:26 9 minutes, 26 seconds With that, I would now like to invite our CFO Ravitriati to present the financial quarters uh for financial results for the matter for the KUA quarter and then we'll open up for Q&A. 9:38 9 minutes, 38 seconds Thanks. Rabi over to you. Thank you sir. Thank you sir. 9:45 9 minutes, 45 seconds Good afternoon everyone. I will briefly walk you through the company's operating and financial performance for the period ended 30th December 2025. 9:57 9 minutes, 57 seconds For the 9 months ended December 2025, revenue from operation stood at rupees 1,965 10:04 10 minutes, 4 seconds cr compared to rups 1,616 crores in the same period of last year. 10:12 10 minutes, 12 seconds For Q3 FY26 revenue was rupees 656 crores versus rups 4,477 10:21 10 minutes, 21 seconds cr in the corresponding quarter of the previous year. 10:26 10 minutes, 26 seconds Avida for the 9-month period was rupes 623 crores up from rupees 393 crores of the previous year. 10:35 10 minutes, 35 seconds On a standalone basis profit after tax for the 9 month of FY26 was rupes 344 10:41 10 minutes, 41 seconds crores compared to rups 163 crores in the same period of last year. 10:48 10 minutes, 48 seconds On a consolidated basis, profit after tax stood at rupees 455 crores as against rupees 189 crores in the previous year. 10:57 10 minutes, 57 seconds Our balance sheet remains strong. The company continues to remain long-term debt-free and maintained a treasury 11:05 11 minutes, 5 seconds balance of approximately rupees 1,155 crores as of 31st December 2025. 11:14 11 minutes, 14 seconds Looking ahead, we are confident that any improvement in the industry can significantly boost our profits. 11:20 11 minutes, 20 seconds The detailed presentation has been uploaded on the company's website as well as with the stock exchange for your reference. We would now be happy to take your questions. Thank you for your time. 11:33 11 minutes, 33 seconds Over to you, Naven Gi. 11:37 11 minutes, 37 seconds Uh in the meantime, I just have an announcement. 11:41 11 minutes, 41 seconds We just spoke about this NCT order which is supposed to be which was supposed to be coming very soon. We've just a minute 11:49 11 minutes, 49 seconds ago got this got this in our hand right now. Thank you very much. 11:57 11 minutes, 57 seconds So I'm sorry sir. Go ahead. 12:04 12 minutes, 4 seconds No no no I have finished. 12:06 12 minutes, 6 seconds All right. We will now begin with the question and answer session. Anyone who wishes to ask questions may press star and one on the touchstone telephone. If 12:14 12 minutes, 14 seconds you wish to remove yourself from the question, you may press star and two. 12:19 12 minutes, 19 seconds Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 12:28 12 minutes, 28 seconds To ask questions, please press star and one. 12:38 12 minutes, 38 seconds The first question is from Rohan Kra from Singularity Asset Management. Please go ahead. 12:44 12 minutes, 44 seconds Hi, thank you very much uh and congratulations for uh declaring great results. I'm very happy to see the utilization that you the company has 12:52 12 minutes, 52 seconds been able to clock. I have three quick questions. If uh number one if Rabin uh you can repeat the statement that he made about the MT order that uh just 13:01 13 minutes, 1 second before the Q&A started. Second is I wanted to understand get a sense of the realization that the company has been clocking in this quarter and what is the 13:10 13 minutes, 10 seconds overall realization that is expected for the full year in dollar terms for the graphite electrodes and third question is uh if you can indicate the product 13:19 13 minutes, 19 seconds mix of the graphite electrodes between ultra high power and high power please thank you to 13:27 13 minutes, 27 seconds see the first the first figure that you're talking about I mean obviously it's a competitive world and we don't want to give any number 13:36 13 minutes, 36 seconds uh but it's not very difficult I mean you we know the turnover you know the capacity utilization we know the total 13:43 13 minutes, 43 seconds capacity of the plant it's not it's not very difficult to to calculate that but don't don't ask me to give that number 13:53 13 minutes, 53 seconds and your second question was s about the product mix between ultra high power and high power 14:01 14 minutes, 1 second it is it It is more or less in the region of 70 75% ultra high power. 14:08 14 minutes, 8 seconds Got it. And sir, the statement that you just made on the NCT that you got some information about a minute ago. 14:16 14 minutes, 16 seconds We just got that. I mean, as I was just saying that we are expecting it soon. It just so happened that while we were speaking the order came. 14:25 14 minutes, 25 seconds Okay, great. Thank you. 14:33 14 minutes, 33 seconds Thank you. The next question is from Ahmed Madab from Unifi Capital. Please go ahead. 14:40 14 minutes, 40 seconds Yeah. Uh thanks for the opportunity. Uh my question is on the volume growth. So uh is it fair to expect our 9 month volumes would have grown by about 20%. 14:52 14 minutes, 52 seconds Yes. I mean I I gave you the I gave you the utilization rate and and our 15:00 15 minutes capacity is 100,000 tons. So it's very simple to calculate from there. 15:06 15 minutes, 6 seconds Okay. Sure. So I'm assuming 20% plus minus. Uh why I'm asking this is I just want to understand if we have improved 15:12 15 minutes, 12 seconds our volumes by 18 to 20,000 tons. Uh where have we gained market share from? 15:18 15 minutes, 18 seconds either is it from the uh Japanese competitors or the Chinese players because graphec has improved volumes 15:26 15 minutes, 26 seconds about 6% graphite has improved by a few percentages. So I'm just trying to understand from which players which sort 15:34 15 minutes, 34 seconds of uh geography have we gained market share and in which end market uh Europe or uh Middle East or whatever or India 15:42 15 minutes, 42 seconds which geographies you have gained market share if you can just uh give some sense you see there are only four five major 15:51 15 minutes, 51 seconds regions in the world and uh US is the only country which produces more than 70 72% 15:59 15 minutes, 59 seconds of their total steel through electric car out wonder. So that is by far the single largest market after China 16:06 16 minutes, 6 seconds and then rest everybody is like 30 35 40%, Europe is about 40 about 45 to 50%. 16:14 16 minutes, 14 seconds So so we have gained market share everywhere. I mean there's no one specific region that we are catering to. 16:20 16 minutes, 20 seconds We have been catering to more than 30 35 countries all over the place. 16:26 16 minutes, 26 seconds So wherever the market is, I mean we have gained a little bit of market share. Okay. 16:33 16 minutes, 33 seconds And you would like to add from which sort of players have we gain shared from? 16:38 16 minutes, 38 seconds Is it fair to assume you've gained from Japanese players or uh Chinese players? 16:42 16 minutes, 42 seconds There only there are only basically three or four bigger players in this industry. Now I mean there is there's an 16:49 16 minutes, 49 seconds American uh company, there's a Japanese company and then there are a couple of very small companies. So so it's very 16:57 16 minutes, 57 seconds difficult to to give you a particular name because everybody sells a little more in one area, little less in another area. 17:07 17 minutes, 7 seconds So so obviously we probably have gained from uh each one of them a little bit here and there. 17:14 17 minutes, 14 seconds Okay. Sure. And in terms of your annual pricing arrangement uh would you like to give some sense despite I mean all the 17:23 17 minutes, 23 seconds tariffs and everything is we try to assume a broad realization will remain more or less the same over from whatever 17:31 17 minutes, 31 seconds arrangements or the contracts we have put in for some of the geographies. 17:38 17 minutes, 38 seconds You see a lot of these orders have been negotiated on a 12-month basis, especially in US 17:45 17 minutes, 45 seconds and in other other countries, some some companies negotiate on a quarterly basis, others do it on a six-monthly 17:53 17 minutes, 53 seconds basis. So, it's not easy to give one simple answer to that. But but yes, I mean we are I would I could safely say 18:02 18 minutes, 2 seconds that at least 50 to 60% of uh whatever volume that we are going to sell in the 18:09 18 minutes, 9 seconds next year we we have settled everything for the 50 60% kind of a number. 18:17 18 minutes, 17 seconds Got it. And for that the pricing sense uh will be more or less similar to what we have done last few quarters or will 18:24 18 minutes, 24 seconds there be a major Yeah. Yeah, you are right. 18:29 18 minutes, 29 seconds Okay. Got it. And uh another question was uh with the still with 18% Darf, I'm 18:36 18 minutes, 36 seconds not sure how much uh disadvantage or advantage we have compared to other competitors in US market. So for our 18:44 18 minutes, 44 seconds business mix overall you have spoken about I think 20% in US America's. So that sort of number should sustain in US 18:52 18 minutes, 52 seconds or will there be a significant uh business mix shift for us uh for different geographies for 2026. 19:03 19 minutes, 3 seconds Our product mix is not going to change much here and there. I mean it could be a couple of person plus minus uh but not 19:10 19 minutes, 10 seconds not more than that. we will we are not going to lose market share in in any part of the world because of any reason 19:17 19 minutes, 17 seconds and whether it is US or Europe or Southeast Asia or wherever of course to the extent that we'll have to still pay 19:25 19 minutes, 25 seconds 15% duty uh to that extent uh there will be a hit but uh but we don't want to for the 19:34 19 minutes, 34 seconds long-term basis we don't want to lose a customer so we will abroad that Got it. Thank you. 19:44 19 minutes, 44 seconds Thank you. 19:46 19 minutes, 46 seconds The next question is from Rajes from 361 Capital. Please go ahead. 19:51 19 minutes, 51 seconds Yeah. Hi, good evening everybody. So, uh sir, I was wondering about investment in graphic. Now it is worth half the value 19:59 19 minutes, 59 seconds that we invested in and uh the state grav is going in in another two quarters that company may actually close down 20:06 20 minutes, 6 seconds partially from what I understand. Uh is that a correct assessment first of all and secondly what do we do with the investment? 20:14 20 minutes, 14 seconds No we don't think so. I mean there's no scope for any company in this industry to close down because with the kind of 20:22 20 minutes, 22 seconds growth in the electrode demand that we are talking about we are talking from 150 to 200,000 tons increase in the demand of electrodes in a in a market 20:31 20 minutes, 31 seconds where the total production capacity is not more than 500,000 tons. So I I'm we not anticipating any situation where any 20:40 20 minutes, 40 seconds one of us is going to go out of business. I mean something something or the other will have to happen to every one of us 20:48 20 minutes, 48 seconds otherwise I mean if you are talking about a 175,000 t country which is what graphic is 20:56 20 minutes, 56 seconds closing down you're talking about what about 30% of the total world capacity going out of business that 21:04 21 minutes, 4 seconds I'm not talking about full closure partial closure because as per graphic uh cost cash cost the production rate is 21:12 21 minutes, 12 seconds somewhere around $3,700 and from next quarter the US tariffs are also going to come down to 18% for Indian exporters and they've mentioned in the call that 21:21 21 minutes, 21 seconds uh that would lead to lower realizations coming going forward. So does that mean that the the company has a net? 21:28 21 minutes, 28 seconds No, no, no. For uh for us, you see us uh customers generally decide everything 21:36 21 minutes, 36 seconds practically 100% of their needs at the beginning of the year for the whole year. So the prices and the quantities 21:44 21 minutes, 44 seconds and everything is more or less frozen for the whole of uh 2026. So there is no negotiation happening right now in America especially. 21:56 21 minutes, 56 seconds Okay. But assuming prices to remain where they were and they're already at the kind of peak realization of $4,000 and they're still making about 65 22:05 22 minutes, 5 seconds million losses every quarter, it can you know I I don't see it coming down significantly. So that is a dire scenario for a company with a net worth 22:14 22 minutes, 14 seconds of just about $450 million. uh that's what I thought that maybe uh some capacity because you've seen it in even 22:21 22 minutes, 21 seconds in Mishia pack that some capacities have gone down have closed is it possible that some capacity of graphic gets closed 22:30 22 minutes, 30 seconds I I don't see that I mean if you if you heard their conference call and if if you saw all their reports they are saying the same thing everybody is 22:39 22 minutes, 39 seconds saying the same thing that the demand of electrode is likely to increase by 150 to 200,000 tons And at in the next 2 22:47 22 minutes, 47 seconds 3 years and as I as I gave you the figure recently I mean the in the last 2 three years capacity of 20 million tons 22:56 22 minutes, 56 seconds of new electric arises have already been added. So that 20 million t additional capacity means about 30,000 tons of 23:03 23 minutes, 3 seconds demand in the next 2 years. uh we have the data for each company each location 23:10 23 minutes, 10 seconds of uh uh the new plants which are coming in let's say US is the main 23:18 23 minutes, 18 seconds uh country where more and more and more electric aquinuses are being built because US is the only one place where 23:25 23 minutes, 25 seconds 70% plus steel is produced through electric aquinus minus without US that average is about 40 42%. 23:35 23 minutes, 35 seconds And so as I said 20 million tons has already been added in the last two years. Between now and end of 28 which 23:44 23 minutes, 44 seconds is only 2 and a half 3 years away. We have list of at least 25 to 30 million tons 23:52 23 minutes, 52 seconds which are coming and we more or less know which plant is going to be commissioned in which month in which 24:00 24 minutes quarter in the next 2 years and so at least this 20 plus 30 which is 24:07 24 minutes, 7 seconds likely to come in the next two two and a half years is 100% coming because where 15 20 30 or 50% % work has 24:18 24 minutes, 18 seconds already happened at the site and the and these companies committed millions of dollars of investments. 24:25 24 minutes, 25 seconds So 20 30 40% investment has already committed the work has started orders have been placed for all the equipments. 24:32 24 minutes, 32 seconds So all these are bound to come and unless there is a total U-turn 24:40 24 minutes, 40 seconds and unless there is a total U-turn in the in the world towards carbon emissions and everything it is not 24:48 24 minutes, 48 seconds likely to happen and all this additional EF electric furnaces are only coming 24:54 24 minutes, 54 seconds because because of carbon emission as you know the same steel produced through electric arc furnace versus the blast 25:02 25 minutes, 2 seconds furnace emits the 1/5 the carbon. That's the only reason why new and more and more electric furnaces are coming. So 25:10 25 minutes, 10 seconds that story is not going to go away anytime soon. 25:15 25 minutes, 15 seconds Yes sir. So that's a different point that 100 it is possible instead of 100 80 will come 25:22 25 minutes, 22 seconds but for for this industry even 80 or even 70 million tons of new electric car 25:30 25 minutes, 30 seconds furnace resulting into a demand additional demand of 125 to 150,000 tons is a very big huge number. 25:39 25 minutes, 39 seconds I understand that in the graphic call they also mentioned that China has a capacity of 800 KT of which nearly 200 25:46 25 minutes, 46 seconds KT or is coming in the UHP market and uh that is also operating at about 50% utilization. So it is is it possible 25:53 25 minutes, 53 seconds that the additional demand get filled by Chinese electrodes? That was my related question actually. 26:02 26 minutes, 2 seconds You see, China of course produces much more than the rest of the world produces in terms of electrodes, but they are 26:09 26 minutes, 9 seconds still pretty far away from producing the correct the right ultra high power 26:15 26 minutes, 15 seconds electrodes that we talk about. So while they are taking away the market share 26:22 26 minutes, 22 seconds from all of us on the small size electrodes what we call non- ultra high power but uh they are very far away from 26:32 26 minutes, 32 seconds uh meeting the quality standards that we are able to meet or Americans are able to meet or the Germans or Japanese all 26:39 26 minutes, 39 seconds the western players so to say. So that risk is not there at least in the foreseeable future. 26:48 26 minutes, 48 seconds Right. So, so last question on this. Uh, so do we increase our investments in because we already invested about 283 cr 26:55 26 minutes, 55 seconds at a much higher level. So, do we increase our investment in graphic or we stay put or what is the final uh decision on? 27:02 27 minutes, 2 seconds So, we are we are staying put. I mean as when we when we took this view uh and started buying some shares of 27:09 27 minutes, 9 seconds Graphtech we were we were we were very clear that uh we we are we are in it on 27:16 27 minutes, 16 seconds a for a long haul and we you see till the till that last Friday when the results were declared these shares were 27:24 27 minutes, 24 seconds $1.9 $19 right and it went up from current level of $7 to $19 over in the last 6 9 months. 27:36 27 minutes, 36 seconds So these bumps will keep coming in any industry. But we are really we are here for a on a long-term basis. We are not 27:43 27 minutes, 43 seconds bothered about this. Neither we were going to sell at $1.8 or $18 27:51 27 minutes, 51 seconds nor we are going to sell at the current price at $17. Okay. Thank you so much. 28:02 28 minutes, 2 seconds Thank you. The next question is from Rohit from I thought PMS. Please go ahead. 28:09 28 minutes, 9 seconds Yeah, good evening sir. Uh congratulations on really very strong numbers and congratulations on the demother as well sir. Uh my first 28:18 28 minutes, 18 seconds question was uh so can you just help us understand how uh we are uh given where we are in the cycle and we've been 28:26 28 minutes, 26 seconds talking about it in the last many calls in terms of realizations being really low but you continuously posting 28:33 28 minutes, 33 seconds continuously posted very good uh margins. So I mean if you can really share uh uh some uh more insights on 28:42 28 minutes, 42 seconds what is enabling us because uh if you look at the Indian peer and even if you look at the some of the Chinese 28:50 28 minutes, 50 seconds companies numbers whatever is available everybody is uh needless to say uh graphed but uh we are sort of uh a clear 28:59 28 minutes, 59 seconds outlier in this. So what has really happened uh in this cycle that has enabled us to do this kind of uh 29:07 29 minutes, 7 seconds divergence? If you can please share that that will be really really useful. 29:14 29 minutes, 14 seconds How do you want me to respond to that question? I don't know. I mean the I cannot I cannot talk about uh my 29:21 29 minutes, 21 seconds competitors and uh obviously the facts are facts. I mean you know what is their 29:28 29 minutes, 28 seconds annual revenue you know the price of electrode and by that you know what is the tonnage that they have sold and what 29:35 29 minutes, 35 seconds is the tonnage that we have sold obviously there is a there's a difference in cost of production I mean 29:42 29 minutes, 42 seconds that's the advantage of uh plant in India versus a plant in Germany or France or Japan 29:50 29 minutes, 50 seconds and and the second thing is uh if you if you look at all the graph five players which is graphic and the Japanese 29:58 29 minutes, 58 seconds company Resonac and two of us in India we we have by far the single largest plant at one location our plant is 30:07 30 minutes, 7 seconds 100,000 tons the average of other plants will be like 50 55,000 tons 30:15 30 minutes, 15 seconds and except graphite India who has a plant in India all other plants are either in Germany or France or Italy or US 30:23 30 minutes, 23 seconds or German uh Spain, Japan. So obviously we 30:30 30 minutes, 30 seconds have a cost advantage being in India and um and the size when when you are talking of a 100,000 30:38 30 minutes, 38 seconds ton plant located in India versus a 50,000 tons average in Germany or France or US or Japan, it is it makes a huge difference. 30:54 30 minutes, 54 seconds So the other question was sir I mean if I look at the realizations you you yourself mentioned that the realizations 31:01 31 minutes, 1 second have been at uh pretty low numbers for many quarters now and if you look at the utilization for the industry also it is 31:10 31 minutes, 10 seconds much lower uh even graph tech in this call they mentioned that they don't see any uptick in utilization and extremely 31:18 31 minutes, 18 seconds competitive market is is continuing and you also mentioned that for 26 you uh you don't see much change in realizations. 31:26 31 minutes, 26 seconds So uh I mean given that there is this uh consistent uh over capacity in industry 31:35 31 minutes, 35 seconds despite shutdowns uh uh how do you see the uh uh I mean at 31:43 31 minutes, 43 seconds at the same time you've been saying that this uh uh the additional 30,000 tons of electrode market has been there and 31:51 31 minutes, 51 seconds another 30 35,000 electro market is going to come in next few years. So but still the pricing is uh is still 31:59 31 minutes, 59 seconds challenged. So I mean what what is your sense on that? 32:05 32 minutes, 5 seconds You see this 20 million tons new electric car owners capacities have just been finished let's say in the last 6 32:14 32 minutes, 14 seconds months 9 months 12 months and that that's a number which everybody knows. I mean we we can give you the names on a 32:21 32 minutes, 21 seconds when you if we speak to you one to one we can give you the names of this 20 million tons in the country and the size 32:27 32 minutes, 27 seconds and everything. So and and being steel industry I mean when you put up a 20 million t new capacity it takes 2 months 32:37 32 minutes, 37 seconds 3 months 6 months to stabilize to reach 80% 90% 95%. So gradually this capacity 32:44 32 minutes, 44 seconds utilizations are increasing and as I said this this year and 28 32:51 32 minutes, 51 seconds between now and 28 two two and a half years again we have a list of 30 million tons we know the names we know the 32:59 32 minutes, 59 seconds country we know the locations and we practically know at which what stage is 33:06 33 minutes, 6 seconds plant A plant B plant C plant because most of these investments ments and new capacities are being added by our existing customers. 33:17 33 minutes, 17 seconds Practically there is no new steel company emerging anywhere in the world. 33:21 33 minutes, 21 seconds So all these expansions are happening by all the established names which are already our customers. 33:29 33 minutes, 29 seconds So so and since we are a regular supplier to them, we keep meeting them uh at their work locations. So we know 33:38 33 minutes, 38 seconds more or less whether they are coming in July of 2026 or 27 or 28 or whatever. So 33:46 33 minutes, 46 seconds it's even if it is 20 instead of 30 it's fine. I mean these things will happen 6 months here and there delays 33:54 33 minutes, 54 seconds are bound to occur in any place. So if 20 has already come in which will let's 34:01 34 minutes, 1 second say stabilize more and more this year and another 20 if not 30 is coming in 34:09 34 minutes, 9 seconds the next 2 three years. So every ton means I mean you need more or less 1 and a half to 2 kilos. So a million ton 34:16 34 minutes, 16 seconds means 1500 to 2,000 additional tons of electrodes required. So if you're talking of 20 25 million tons, you're 34:24 34 minutes, 24 seconds easily talking of uh 20 to 35,000 tons of new demand. 34:32 34 minutes, 32 seconds A and the and the plants which have been closed down in the last 3 four years. uh it will be very difficult to restart 34:40 34 minutes, 40 seconds those plant after closure of 2 three years in uh in the western world to restart that plant 34:49 34 minutes, 49 seconds is not going to be very easy and especially uh you you'll be surprised when I tell you that HG we came with with this plant 34:59 34 minutes, 59 seconds in Bopal in 1976 which is exactly 50 years today. This is 35:06 35 minutes, 6 seconds the last new green field plant put up anywhere in the world. 35:11 35 minutes, 11 seconds So all these plant that we are talking about uh the American company and the European companies and the Japanese companies they are much much older than 1976. 35:23 35 minutes, 23 seconds So it's not easy to it's easy to close these plants because of their cost structure because of their 35:30 35 minutes, 30 seconds size. again I mean if you go through the list of the plants which have closed down in the last 2 three years they are all in the region of 30 35 40,000 tons. 35:43 35 minutes, 43 seconds So it's it's simple to calculate a 30 40,000 t plant in Germany or Japan or US 35:50 35 minutes, 50 seconds or France their cost versus a 100,000 plant in India. We we and in fact uh despite 36:00 36 minutes everything that we spoke about we just announced about 6 n months ago that we are adding another 15,000 tons and the 36:08 36 minutes, 8 seconds work has already started we we have already placed most of the long-term delivery items and we are ready we 36:16 36 minutes, 16 seconds should be ready by middle to end of 2028 between two two and a half years from now. 36:23 36 minutes, 23 seconds So as we keep adding more and more capacity, obviously our cost per ton keeps coming down 36:32 36 minutes, 32 seconds and we have this advantage of one large plant and that large plant being in India versus Germany versus Japan versus US. 36:43 36 minutes, 43 seconds The this is a very this is an inherent advantage of uh any plant in India. 36:53 36 minutes, 53 seconds Right. Thank you very much sir for that very detailed answer. So one more question was sir as this new addition sort of comes through in terms of uh in 37:02 37 minutes, 2 seconds terms of uh end customers putting in new plants and both both the Indian pairs almost now at peak utilization if you 37:11 37 minutes, 11 seconds will. Uh so do you see that being a very big uh uh reason or that that could be 37:19 37 minutes, 19 seconds one contributing uh reason for the realization to start inching up because as you said all the other plants are losing money and it doesn't make uh 37:28 37 minutes, 28 seconds sense to run those plants at these kind of realizations. So does that then probably lead to an improvement in 37:35 37 minutes, 35 seconds realization at sometime uh as these new plants come in sometime this year and and in the next couple of years. 37:44 37 minutes, 44 seconds Yeah, exactly. I mean obviously the demand has to increase. I mean this 20 million tons which is already in operation 37:52 37 minutes, 52 seconds it may take another 6 months 9 months 12 months to reach 70 80 85% capacity utilization. 37:58 37 minutes, 58 seconds So this 20 million itself will require 25 to 30,000 tons of electrodes and then we are talking about another 30 38:07 38 minutes, 7 seconds 35 million tons before 2028 right and the capacity that we are 38:16 38 minutes, 16 seconds putting in or even what the other Indian companies putting in would that not uh 38:22 38 minutes, 22 seconds sort of uh put a break on the price increases because we will have those 38:28 38 minutes, 28 seconds volumes to sort of cater to. So I mean uh we can continue to 38:35 38 minutes, 35 seconds uh gain more market share and out out the other players. So uh so what is your sense on that? 38:45 38 minutes, 45 seconds Manish would you answer that? 38:48 38 minutes, 48 seconds Uh yes sir. See uh like chairman said uh so the demand which is coming is much larger than what we are uh adding. So we 38:58 38 minutes, 58 seconds are talking about 200,000 and coming up to 2030 and the plant which we are building today that that 15,000 39:05 39 minutes, 5 seconds additional capacity is going to come on stream in the first quarter early uh 2028. 39:12 39 minutes, 12 seconds So by the time a couple of more electric furnace plant would have come up and we also we also think that this is for the 39:19 39 minutes, 19 seconds last two three years the seal has been stagnant declining in some regions and there there will be a turnaround. So we 39:27 39 minutes, 27 seconds expect that this 15,000 would easily get absorbed right 39:33 39 minutes, 33 seconds and if you and if you follow some of our international competitors and even 39:41 39 minutes, 41 seconds graphite India you will probably hear the same thing everybody is talking about the same 20 million tons 30 million tons demand increasing by 50 39:50 39 minutes, 50 seconds 100,000 tons so so everybody has the data from the same source And basically the source is all our customers themselves. 40:02 40 minutes, 2 seconds Right. Right. 40:04 40 minutes, 4 seconds Sorry one more question on graphic if if you if if I can. So I mean you've mentioned to a previous uh question that 40:11 40 minutes, 11 seconds you don't see them going under and as you I I mean uh but but just from their survivability 40:20 40 minutes, 20 seconds uh or for them to make even decent amount of profits the realizations have to significantly go up from where they 40:27 40 minutes, 27 seconds are right now. So I mean uh while uh while you I mean I understand that 40:35 40 minutes, 35 seconds it's not like uh a year of or even two years that you're looking at this is a long-term investment and you're looking 40:42 40 minutes, 42 seconds at the overall industry dynamics but I mean clearly they're an inefficient player uh given where they are located. 40:50 40 minutes, 50 seconds So how do you see the survivability or or let's not say survivability but them making even like uh at least half your 40:58 40 minutes, 58 seconds margins or half your tough margins forget uh speak. So I mean because the costs are what they are right I mean you 41:07 41 minutes, 7 seconds can't change them you can't change where their plants are located. No, we should not be talking about them 41:14 41 minutes, 14 seconds honestly about their cost debt. That that is you missed their corn call which happened few days back. So you're on the wrong corn with this question. U you 41:23 41 minutes, 23 seconds can't say yes of course prices should go up for everybody. The the prices prevalent today are one of the lowest. 41:30 41 minutes, 30 seconds All these are very right. Um we we we have a big plant at one place. So of course our costs are lower than do in 41:37 41 minutes, 37 seconds India. But uh I think we should uh we would like to avoid answering um questions on competitors costs and all that. 41:50 41 minutes, 50 seconds Thank you. We move to the next question. 41:52 41 minutes, 52 seconds The next question is from Vun Pindo from Nan Capital. Please go ahead. Hello. Hi sir. Am I audible? 42:01 42 minutes, 1 second Yes. Yes please. 42:03 42 minutes, 3 seconds Uh hi sir. Congratulations on a wonderful set of results. Uh I just had a few questions regarding the 42:10 42 minutes, 10 seconds bookkeeping. So currently uh the dividends that we get from you know like the hydro power assets in which segment 42:18 42 minutes, 18 seconds is that reported? Does that come under the share of profit and loss from the associates? 42:27 42 minutes, 27 seconds Yeah [clears throat] my my colleague is uh going to answer that question. Punit. 42:32 42 minutes, 32 seconds Hi so punit on this side. So BL which owns the hydro asset hasn't given any dividend to HG in last couple of years. 42:43 42 minutes, 43 seconds Uh whenever the revenue will comes the revenue will be shown in the other income. 42:49 42 minutes, 49 seconds Understood. So the profit you see on the associate is the profit which birada energy has made and since it's an 42:58 42 minutes, 58 seconds associate so we show a proportionate profit in consolidated financials of HG 43:05 43 minutes, 5 seconds understood uh but then the uh revenue that comes under or the share of profit that comes from Bilvara that technically 43:13 43 minutes, 13 seconds from the power business only right so uh currently yes uh Bilada energy 43:19 43 minutes, 19 seconds largest revenue is coming from the hydro uh assets. Apart from that uh we have the best company underneath that uh 43:29 43 minutes, 29 seconds which will generate the profits uh in coming quarters. Uh plus uh since Bilada Energy is also sitting with liquid money 43:37 43 minutes, 37 seconds cash uh they there's other income coming in Bilada Energy because of that which has been in FDS and all. 43:45 43 minutes, 45 seconds Understood. Understood. So currently the other income that we are seeing in the P&L what does that include? 43:53 43 minutes, 53 seconds So other income which you see in the P&L is primarily the income of the liquidity liquid assets which we have in HG per se. 44:04 44 minutes, 4 seconds Understood. 44:05 44 minutes, 5 seconds Uh Rabi uh Rabi yeah sorry please. Uh and sir like the currently like apart 44:13 44 minutes, 13 seconds from the hydro power assets if you're looking at the HG green tech business uh we have the energy storage you know 44:20 44 minutes, 20 seconds the best for the IP and the best for the commercial and industrial use right uh currently do we have any sort of revenue 44:28 44 minutes, 28 seconds from that business so uh currently the revenue largely is 44:35 44 minutes, 35 seconds coming from yes we have revenue from our business best company which is Plus. Uh but it it is not significant compared to the hydro revenue which we are making. 44:47 44 minutes, 47 seconds uh you will see uh the right numbers of revenues from the best and our IP business 44:56 44 minutes, 56 seconds and the best tender which we have already won and in which we are being declared as L1 from uh from say the 45:04 45 minutes, 4 seconds quarter one of FI28 in the okay quarter HG green tech will also hold HG green 45:13 45 minutes, 13 seconds tech will also hold uh the anode business which will also O contribute uh in the revenue but that will come in FI29 right? 45:24 45 minutes, 24 seconds Uh so our plant is getting commissioned uh by the quarter 1 of FI 28 and uh so 45:34 45 minutes, 34 seconds we have assumed a certain capacity utilization in FI28 but yes the peak revenue will come from FI29 but you will 45:42 45 minutes, 42 seconds see a contribution from TAC also in FI28. 45:48 45 minutes, 48 seconds Understood sir. And sir lastly like post the de merger will there be any debt in the green tech business. 45:57 45 minutes, 57 seconds Uh surely there will be a debt uh the debt which we will be securing for doing our projects which is uh the anode uh 46:05 46 minutes, 5 seconds the the CNP they will be having the debt. So um um I think in January we did a detailed uh presentation on HG Green 46:14 46 minutes, 14 seconds Tech where we mentioned uh the entire project uh which we will be doing in uh in coming two two to four quarters and uh the subsequent debt along with that. 46:25 46 minutes, 25 seconds Understood. Sir can you just call out the number what could be the debt in the greater business post the de merger? 46:34 46 minutes, 34 seconds post the de so if you ask me uh post the de merger which will be done in by 46:40 46 minutes, 40 seconds quarter one of fi 27 uh the the debt will be negligible there once the de merger is done 46:48 46 minutes, 48 seconds uh it will be not be ne it will be negligible uh there will be no debt there per say but uh once the company is 46:55 46 minutes, 55 seconds uh created and all the projects will be on full go that time the debt will be coming so for example 47:03 47 minutes, 3 seconds the the best tender which we have won for Gujarat and the Maharashtra tender where we are L1 whenever those projects 47:11 47 minutes, 11 seconds have been our PPR has been signed then money will be mobilized for that likewise in anode also today uh we 47:19 47 minutes, 19 seconds haven't taken any debt per se today as in date from the there's a contribution of a large equity from the from the company 47:29 47 minutes, 29 seconds we are utilizing that but we will be doing it in the next Once the scheme has been done the money and deployation. 47:40 47 minutes, 40 seconds Thank you. 47:42 47 minutes, 42 seconds The next question is from Ahmed Madha from Unifi Capital. Please go ahead. 47:47 47 minutes, 47 seconds Yeah. Uh thanks for the opportunity again. Uh my question was on your remarks regarding the Chinese supply, 47:54 47 minutes, 54 seconds right? I mean uh if I quote from uh graphics con call they spoke about 2 and a half three lakh tons of USP coming out 48:03 48 minutes, 3 seconds of China. So in our conversation we have always spoken about no five major suppliers probably having about six six 48:11 48 minutes, 11 seconds and a half lons. What are your thoughts on the Chinese supply which probably uh we should account for in terms of uh 48:20 48 minutes, 20 seconds supply dynamics? So aren't we competing with uh Chinese players in Europe and other markets? 48:30 48 minutes, 30 seconds Manish will you take that? 48:33 48 minutes, 33 seconds Yes sir. Uh let me answer this. Actually most of the capacity which is in China is geared towards the non- USB grade. We 48:43 48 minutes, 43 seconds agree yes there are one or two companies which are now making USB products. But to achieve that kind of consistency and 48:50 48 minutes, 50 seconds reliability does take time and at the same time China is definitely working towards increasing their own electric arc furnace production. So some of this 48:59 48 minutes, 59 seconds capacity we hope will be absorbed inside China and outside China as you as you have seen from our results itself that HG is also a very competitive company. 49:12 49 minutes, 12 seconds So we are not as much we don't worried about their impact of their USB on us and this because we can also see the 49:21 49 minutes, 21 seconds commensurate demand coming. So it's not that the market EF demand is the electro demand is going to be stagnant and somebody will Chinese will eat into 49:29 49 minutes, 29 seconds everybody's share then we don't really agree. Uh there's demand also coming within China and from outside China to the extent of 200,000 tons. 49:40 49 minutes, 40 seconds And in terms of our uh if I just look at the segmental profitability of the electrode business excluding the other 49:47 49 minutes, 47 seconds income etc. Uh the margins have improved over last three quarters. I'm assuming there is a component of operating 49:55 49 minutes, 55 seconds leverage with higher production. Uh is there any advantage on uh raw material cost? 50:04 50 minutes, 4 seconds Not not really. It's very very marginal because uh the the key raw material is needle coke and prices have been pretty much consistent but takes a while for 50:12 50 minutes, 12 seconds the high cost the slightly higher cost inventory to go away. So there's a marginal uh drop uh in the uh consumed 50:20 50 minutes, 20 seconds consumed raw material and what you see improvement in margins is basically coming from our operating levels nothing else 50:28 50 minutes, 28 seconds and the size I mean now now that we can add another 20,000 tons from 80 to 100 So that uh gives us a cost advantage. 50:40 50 minutes, 40 seconds Okay. Sure. Uh got it. Thank you. 50:45 50 minutes, 45 seconds Thank you. The next question is from Amit Loti from NK. Please go ahead. 50:50 50 minutes, 50 seconds Yes. Hi, thanks for the opportunity and congratulations on a good set of numbers. Uh many of my questions have been answered. So as we have settled 51:00 51 minutes contract for half of the volumes for this year, would it be fair to take third quarter spreads as the baseline 51:07 51 minutes, 7 seconds assumption for electrode and needle cook pricing? So basically just in terms of gross spreads if they can sustain in the 51:14 51 minutes, 14 seconds coming quarter uh Amit for the next two quarters uh we just assume a similar price is there's 51:23 51 minutes, 23 seconds no not expect any uptick in that. So it is just going to be very very similar very very similar where of course 51:31 51 minutes, 31 seconds everybody hopes for a price increase but for the next two quarters we don't see it happening 51:38 51 minutes, 38 seconds right got it and uh then we did of course have about 50% tariff impact uh 51:45 51 minutes, 45 seconds to us even if we take let's say 10% as the share of your exports into US there 51:52 51 minutes, 52 seconds has been a significant impact from that perspective so now With that going down to 18% how much of incremental delta are 52:00 52 minutes we looking at if you can quantify some numbers in terms of how much the impact was and then how much it will be in the coming quarter 52:09 52 minutes, 9 seconds you you have to keep this in uh just a minute just okay you in fine print if you see the tariff how it is applied 52:19 52 minutes, 19 seconds uh there's a provision that uh let's say I'm just giving you an example if you are selling electrodes to somebody in 52:26 52 minutes, 26 seconds America at X and if you are buying your raw raw material or anything from America for Y. 52:36 52 minutes, 36 seconds So that Y value X. 52:42 52 minutes, 42 seconds So for duty calculation they are exempting the portion of the cost that you have already imported from US. 52:53 52 minutes, 53 seconds So right so whatever is the selling price of electrode may say that portion will be reduced. 53:02 53 minutes, 2 seconds So to that extent you saved the duty and now that duty has come down from 50 to 18 53:09 53 minutes, 9 seconds we we we are we are quite quite all right. I mean of course if this was the case of 50%. 53:17 53 minutes, 17 seconds Then it'll have a severe hit on our uh bottom line but with 18% we we are not really of course it'll hit the profit 53:26 53 minutes, 26 seconds but u it's not it is not going to be very sign it's not going to be significant. 53:32 53 minutes, 32 seconds Okay. But even with the duty hit which was clearly there for uh the third quarter in entirety and given that the 53:40 53 minutes, 40 seconds performance of our peers like graphite India and graphic it has been affected by prices our performance has been 53:48 53 minutes, 48 seconds pretty resilient. So to that extent how much of that tariff impact goes away now if you can quantify that bit. 54:03 54 minutes, 3 seconds you know more or less how many tons we are selling in America you know more or less the price and I I gave you the 54:10 54 minutes, 10 seconds formula if you are importing something from US that is exempted so 18% is still 18% but that number is 54:20 54 minutes, 20 seconds not not staggering I mean of course it will hit the bottom line to some extent but we can very easily absorb that 54:29 54 minutes, 29 seconds we a long-term player. We are not looking at the next 12 months only. I mean, we don't want to vacate the market 54:36 54 minutes, 36 seconds just because there's a duty, right? And then just one housekeeping question on other expenses. There is a 54:44 54 minutes, 44 seconds positive delta sequentially with cost reduction in other expenses. So what exactly is it coming from and then is it sustainable uh going forward? 54:58 54 minutes, 58 seconds One second. Let me Ravi is answering this CFO will answer this. Go ahead. 55:03 55 minutes, 3 seconds Yeah, the in other expenses the as compared to previous quarter it is reduced mainly because of the slightly 55:11 55 minutes, 11 seconds sales reduced in that proportion the selling cost is also reduced. That's why the other expenses is lower than the previous quarter. 55:17 55 minutes, 17 seconds Yeah, because you selling also as a cost by way of commissions and all that. So as as you can see the top line the reduction in top line so there's slight 55:26 55 minutes, 26 seconds less volumes uh is translated into sale and that is what you see the corresponding uh difference in the other expenses also. 55:41 55 minutes, 41 seconds Thank you. The next question is from Satya Vadwa from Profusion Investment Advisors. Please go ahead. 55:48 55 minutes, 48 seconds Uh hi I have two questions. one uh like you were talking about China so how competitive are their prices versus 55:58 55 minutes, 58 seconds versus ours in and what is their cost structure like I'm sure you would know um and secondly how are the contracts 56:04 56 minutes, 4 seconds for needle coke structured so if tomorrow electrode prices were to go up 20% would the needle coke companies try 56:13 56 minutes, 13 seconds and claim their pound of flesh or is that a is that a contract linked to oil price 56:25 56 minutes, 25 seconds See the needle is being contracted quarter by quarter and it's a it's a process of uh 2 months for making an uh 56:33 56 minutes, 33 seconds electrode. So we are also on the base whatever we book in the market we make sure that the cost of that required 56:41 56 minutes, 41 seconds needle coke is already locked so that if prices go up and down so we uh we don't 56:47 56 minutes, 47 seconds take a hit. So that is u let's say uh generally we wouldn't like to take a 56:55 56 minutes, 55 seconds call for more than 6 months but yeah some markets we can so that uh we take care of making sure that the cost is frozen. We know it exactly. 57:06 57 minutes, 6 seconds Of course when prices go up for everybody when the graphite electrode industry will uh make uh money of course 57:13 57 minutes, 13 seconds suppliers will not be left behind. uh they will they they will also uh increase but first it has to come from 57:21 57 minutes, 21 seconds the market first electro prices have to go up right I'm really just trying to 57:29 57 minutes, 29 seconds understand like the last cycle that happened in 2017 18 right uh when electrode prices just shot up then 57:37 57 minutes, 37 seconds needle coke lagged quite a lot and then they kind of went up so it you had this 57:44 57 minutes, 44 seconds supernormal margins for a little while and then they compressed because nil coke prices shot up despite oil prices. 57:51 57 minutes, 51 seconds So super normal margins came from the simple fact that this the kind of product we have which takes 2 months to 57:58 57 minutes, 58 seconds make. So there are certain trees in the system a certain finished goods certain work in progress certain raw material waiting because it's all getting 58:06 58 minutes, 6 seconds imported coming from out outside India something on high seas. So when electro price suddenly shot up, we did get a 58:14 58 minutes, 14 seconds question and it worked the other way around. 2 years later when the electro market fell, we took a big everybody in 58:22 58 minutes, 22 seconds the graphite industry had to take a big NRB hit. Right. Right. Okay. 58:27 58 minutes, 27 seconds This is only because of the nature of the industry. Nature of the product. 58:32 58 minutes, 32 seconds Okay. Understood. And what about the Chinese US makers? Like in the last cycle they weren't really doing any USD. 58:40 58 minutes, 40 seconds So now they've got into the USP market. 58:43 58 minutes, 43 seconds How competitive is that cost versus our cost in India? 58:48 58 minutes, 48 seconds See we I mean uh no no one else outside China has been able to really explain 58:56 58 minutes, 56 seconds how how Chinese uh price their products because if you sit with a piece of paper it doesn't work out for any product. So 59:04 59 minutes, 4 seconds we can't help it. We can just speak for ourselves that we are a competitive company, a large plant and we have all the wherewithal, the quality, the 59:11 59 minutes, 11 seconds customer base, the costing and uh we can we can fight it out. Okay, fair enough. All right, thank you. 59:20 59 minutes, 20 seconds Thank you. The next question is from Rohan Barwal from Ahan Capital. Please go ahead. 59:28 59 minutes, 28 seconds Uh thank you very much sir. Most of my questions have been answered. Thank you. 59:34 59 minutes, 34 seconds Thank you. We'll move to the next question. 59:39 59 minutes, 39 seconds The next question is from Rohit Prakash from Marshmallow Capital. Please go ahead. 59:44 59 minutes, 44 seconds Uh thank you for the opportunity. It's a fantastic set of numbers and and I always enjoy your calls given how detailed and how patient you answer all 59:52 59 minutes, 52 seconds my questions all our questions. So uh my question is on the the steam capacity that you mentioned it's coming up in Europe and US over the next five years. 1:00:01 1 hour, 1 second Right. 1:00:02 1 hour, 2 seconds um I'm not able to reconcile that data with the current capacity utilization there. So the capacity utilization of steel is I believe between 50 to 65% 1:00:11 1 hour, 11 seconds right now. Uh which means you have uh a lot of capacity line ID uh and even though new capacity will come and and 1:00:19 1 hour, 19 seconds the numbers that we are uh discussing is let's say quite large in context of the current capacity already there we're talking about 10 15 capacity coming. But where will the demand come from? Right? 1:00:30 1 hour, 30 seconds Uh without the scale demand coming through, we will not be able to uh uh utilize our I mean the incremental capacity also or the incidental 1:00:39 1 hour, 39 seconds electrode demand would not come. So the capacitation is fine but it is coming at a time when the utilization itself is 1:00:47 1 hour, 47 seconds low. So how sure we are we of the utilization for the new capacity and the existing capacity is a question that I'm not able to uh reconcile with the capacity coming online. 1:00:58 1 hour, 58 seconds No, no, it is it is pretty clear. I I'll tell you what it is. I mean, basically what is happening is and as a preamble 1:01:06 1 hour, 1 minute, 6 seconds to that you see the same steel which is produced through electric arc furnace and the same steel which is produced 1:01:13 1 hour, 1 minute, 13 seconds through the blast furnace the carbon emission on the blast furnace steel is between four to five times of the same 1:01:22 1 hour, 1 minute, 22 seconds steel which is produced through the electric furnace. 1:01:25 1 hour, 1 minute, 25 seconds So now for the last 3 four years ever since everybody in the world every country in the world is concentrating 1:01:32 1 hour, 1 minute, 32 seconds very strongly very seriously to reduce carbon emission. So there is this huge movement which is happening for the last 1:01:40 1 hour, 1 minute, 40 seconds 2 three years and in which context I just said that about 20 million tons of the new electric ar furnaces through 1:01:48 1 hour, 1 minute, 48 seconds electric through uh 20 20 million tons of steel capacity through electric ar furnaces has come up in the last uh 12 months in the calendar year 2025. 1:01:59 1 hour, 1 minute, 59 seconds Another 25 to 30 are on the way between now and 2028. So these are not additional capacities. 1:02:08 1 hour, 2 minutes, 8 seconds So they're coming in place of blast furnaces because a country like America will not allow you to produce steel in 1:02:17 1 hour, 2 minutes, 17 seconds huge volumes where the carbon emission is five times compared to the same steel produced through electric arc furnace. 1:02:24 1 hour, 2 minutes, 24 seconds So they are replacing the old blast furnace route through the electric arc furnace. So the demand of steel we are 1:02:32 1 hour, 2 minutes, 32 seconds not saying demand of steel is going going to go up by 200 300,000 tons or 2 million 3 million tons. We are 1:02:40 1 hour, 2 minutes, 40 seconds talking of demand of electrodes going up because uh there'll be more electric arc furnaces which will be replacing the existing blast furnaces. 1:02:52 1 hour, 2 minutes, 52 seconds So do you mean to see that with this capacity addition that is coming for rept across the western world you're seeing an equivalent capacity of blast 1:02:59 1 hour, 2 minutes, 59 seconds server shutting down as well is it exactly exactly that is exactly what is happening if you if you go through uh 1:03:07 1 hour, 3 minutes, 7 seconds some communication and on the websites of some of these companies like uh let's say Arsel or Mittal I I don't know the 1:03:16 1 hour, 3 minutes, 16 seconds exact I don't remember the exact number but they are doing exactly this they're closing the glass furnaces and replacing them by the new electric arc furnaces 1:03:24 1 hour, 3 minutes, 24 seconds because there is a big carbon tax that every steel company has to pay to the government as a penalty 1:03:33 1 hour, 3 minutes, 33 seconds if you if you keep polluting the atmosphere five times more by producing that steel through blast furnaces. 1:03:43 1 hour, 3 minutes, 43 seconds So the steel capacity is not increasing but equivalent amount of blast furnished steel is being closed. 1:03:54 1 hour, 3 minutes, 54 seconds Understood. Okay. So uh that that was helpful sir. 1:03:58 1 hour, 3 minutes, 58 seconds uh I mean given your exposure to the western steel companies uh do you have any uh uh commentary on uh because it's 1:04:07 1 hour, 4 minutes, 7 seconds uh in your initial comment you talked about how Chinese steel production is coming down but the exports have gone up significantly. So 1:04:16 1 hour, 4 minutes, 16 seconds how do they see this anti-involution 1:04:18 1 hour, 4 minutes, 18 seconds [clears throat] 1:04:19 1 hour, 4 minutes, 19 seconds campaign that's happening there? Do they see their impact and and how do you is there any thought on how that might evolve over the next couple of years? 1:04:29 1 hour, 4 minutes, 29 seconds Manish. 1:04:30 1 hour, 4 minutes, 30 seconds Yeah, I didn't hear the question uh clearly. The voice was not very clear to me. Can you please repeat it once more? 1:04:36 1 hour, 4 minutes, 36 seconds Sorry about that. What What were you mentioning? Are you mentioning Cam? What what exactly are you mentioning? 1:04:45 1 hour, 4 minutes, 45 seconds Over the last four years, we have seen the Chinese steel production coming down. Okay. Okay. 1:04:50 1 hour, 4 minutes, 50 seconds We have seen the exports go up over the last uh That's right. around by itself right so uh in your conversation with 1:04:58 1 hour, 4 minutes, 58 seconds your current uh customers uh and there is talk of anti-involution going on in China in terms of curbing 1:05:06 1 hour, 5 minutes, 6 seconds destructive price reduction and you can see the impact in the chemicals uh is there any clarity on if you see 1:05:14 1 hour, 5 minutes, 14 seconds export reduction or pricing improvement of steel coming from China okay no now now I have clearly 1:05:22 1 hour, 5 minutes, 22 seconds understood you see that the last five years they have the production has declined by 7 and a half plus in China. 1:05:28 1 hour, 5 minutes, 28 seconds The problem is as you keep hearing in the news also reading everywhere that their housing demand has gone down a lot that real estate consumption of steel 1:05:36 1 hour, 5 minutes, 36 seconds has gone down. So despite a reduction uh in their production their exports have gone up by 78% from 67 million metrics 1:05:45 1 hour, 5 minutes, 45 seconds to 119 which are a record high. Now about the pricing the destructive pricing etc. You see like for example EU 1:05:54 1 hour, 5 minutes, 54 seconds has a duty on you you know that section 232 they have a severe duty on Chinese steel. Now EU has introduced a CBA ban. 1:06:02 1 hour, 6 minutes, 2 seconds So a lot of these Chinese steel was finding its way into EU. EU was importing almost 27 million metric tons and obviously most of that was blast 1:06:11 1 hour, 6 minutes, 11 seconds furnace based. So they if they put that additional carbon tax on that to that extent they will protect their EU industry. Similarly there is some duty 1:06:19 1 hour, 6 minutes, 19 seconds on uh Chinese uh imports into India. So uh the other countries when they are seeing low price GS hitting their own 1:06:27 1 hour, 6 minutes, 27 seconds domestic industry they are of course raising their safeguards in whatever way possible like a section 232 in US like a cam in EU like something like a 1:06:36 1 hour, 6 minutes, 36 seconds safeguard in India. So I mean whatever we can't say but so far we have not seen this destructive or the word which you 1:06:44 1 hour, 6 minutes, 44 seconds use involutionary we have not seen that in steel but yes we are of course observing how each 1:06:52 1 hour, 6 minutes, 52 seconds country is trying to protect their own industry from the onslaught of uh Chinese steel exports. 1:07:02 1 hour, 7 minutes, 2 seconds Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. Next question is 1:07:10 1 hour, 7 minutes, 10 seconds from Vijay Kumar from Immersion Learning Limited. Please go ahead. 1:07:15 1 hour, 7 minutes, 15 seconds Uh all my questions are answered. Uh basically I wanted to ask something about company's interest to increase its stake in graphite. Uh since uh graphite 1:07:25 1 hour, 7 minutes, 25 seconds is also having some stake in the company. Any view of the view on that? 1:07:33 1 hour, 7 minutes, 33 seconds Now can you repeat your question please? 1:07:37 1 hour, 7 minutes, 37 seconds Uh so it's basically about graphic we have some stake do we plan to increase since the prices come much lower and 1:07:45 1 hour, 7 minutes, 45 seconds even graphite has taken some stake in that company since the prices crash by off is there any scope of increasing the stake while it's much cheaper. 1:07:56 1 hour, 7 minutes, 56 seconds So what was the last line you said? Is there any scope of increasing the stake? That's what he meant. Do you want to increase your stake because the prices have fallen to that level? 1:08:06 1 hour, 8 minutes, 6 seconds Yes. Yeah. So uh so I I do think we should talk about it publicly. 1:08:11 1 hour, 8 minutes, 11 seconds So basically it's a we have an investment committee who takes the decision on this investment. So more than that we can't discuss anything on. 1:08:21 1 hour, 8 minutes, 21 seconds Sure. Thank you. Thank you. 1:08:26 1 hour, 8 minutes, 26 seconds The next question is from Manan Pollardia from MKP Securities. Please go ahead. Hi sir, thank you for the opportunity. 1:08:34 1 hour, 8 minutes, 34 seconds Uh my question is on the graphite anode business. I think in the last call for the de merger uh you had referred to 1:08:43 1 hour, 8 minutes, 43 seconds some margins based on power cost and you spoken about our power cost being significantly better than our competitors globally. I was wondering if 1:08:50 1 hour, 8 minutes, 50 seconds you could throw some color on that and provide some clarity. I think that would be great sir. Thank you. 1:08:56 1 hour, 8 minutes, 56 seconds Uh so hi Riju this side. So last time we had spoken in detail about uh you know that uh in the anode project almost 30% 1:09:04 1 hour, 9 minutes, 4 seconds of the cost is power cost and the state government of MP has given us a real good deal in which you know our power 1:09:12 1 hour, 9 minutes, 12 seconds prices will remain lower than 5 rupees significantly probably lower than 5 rupees for at least 5 years from today. 1:09:20 1 hour, 9 minutes, 20 seconds So that itself I mean we don't see anywhere whether it is China or anywhere else in the world where you would find 1:09:27 1 hour, 9 minutes, 27 seconds cheaper power than this today. So that should be a good advantage to us and that starts that power subsidy for us 1:09:35 1 hour, 9 minutes, 35 seconds starts from the day of commencement of operations not from today. So we'll have a good five years to take advantage of that less than five rupees. 1:09:48 1 hour, 9 minutes, 48 seconds Right. So just a quick follow up on that. Uh you had also spoken about how you are seeing like 30,000. 1:10:00 1 hour, 10 minutes Uh we seem to have lost the line for that participant. Uh we'll move to the next question. The next question is from Rohit from I thought portfolio management. Please go ahead. 1:10:11 1 hour, 10 minutes, 11 seconds Yeah. So there's one question. So out so what is the peak utilization that we can do in terms of the capacity is it like 1:10:17 1 hour, 10 minutes, 17 seconds 100% or uh I mean what is the theoret uh practical peak that we can do from the 1:10:24 1 hour, 10 minutes, 24 seconds current uh capacity 100,000 tons I mean obviously [clears throat] theoretically anybody everybody can go 1:10:33 1 hour, 10 minutes, 33 seconds to 100 but you see it's a fairly complicated it's a very complicated technology and uh that's the reason that 1:10:40 1 hour, 10 minutes, 40 seconds uh Our plant was established in 1976 exactly 50 years ago and there has not 1:10:47 1 hour, 10 minutes, 47 seconds been a new green field plant of this product anywhere in the world except China. So the technology is very very 1:10:55 1 hour, 10 minutes, 55 seconds complicated and uh just to give you uh feel of what uh the complexity that you're talking about some of the electro 1:11:04 1 hour, 11 minutes, 4 seconds the minimum time that you take to produce a small size electrode lowrade electrode is 5 to 7 weeks 1:11:13 1 hour, 11 minutes, 13 seconds and the long the longest time that you take is as high as 5 to 6 months 1:11:20 1 hour, 11 minutes, 20 seconds and so so that is the complexity of the technology. So if you are producing something where the process is like 2 to 1:11:27 1 hour, 11 minutes, 27 seconds five or 6 months, anything goes wrong on any particular day or on any of the five or six 1:11:34 1 hour, 11 minutes, 34 seconds different processes that we have to handle, uh it it it becomes a scrap 1:11:42 1 hour, 11 minutes, 42 seconds and that is the only reason that uh there has not been any new plant in the last 50 years. 1:11:54 1 hour, 11 minutes, 54 seconds Uh I I just want to add one point here that you see 100,000 of course can be made but sometimes you don't get the 1:12:03 1 hour, 12 minutes, 3 seconds ideal the uh the the product mix you like from the market. Uh of course if I limit ourselves to reduce a couple of 1:12:12 1 hour, 12 minutes, 12 seconds sizes we can of course do 100. But just to answer your question or try hazarding a guess because we will also I I will 1:12:19 1 hour, 12 minutes, 19 seconds I'm also going to see it next year how far we can push ourselves but probably 94 95 might might be you know in real 1:12:29 1 hour, 12 minutes, 29 seconds working conditions that is the I think but we have to try we already at a 90 level now we'll see with how far we can 1:12:36 1 hour, 12 minutes, 36 seconds push ourselves to 94 or 95 subject to a certain product Thanks. 1:12:45 1 hour, 12 minutes, 45 seconds Thank you very much. This is very helpful and all the very best for the coming year. 1:12:51 1 hour, 12 minutes, 51 seconds Thank you very much. We'll have to take that as the last question. I would now like to hand the conference over to Mr. 1:12:57 1 hour, 12 minutes, 57 seconds Jingjun Wallala for any closing comments. 1:13:01 1 hour, 13 minutes, 1 second Thank you friends for joining us on this call today. It's probably been the longest call uh in the last 2 three four 1:13:08 1 hour, 13 minutes, 8 seconds years and uh a lot of probing questions and uh every all of you seem to be extremely well informed about this 1:13:16 1 hour, 13 minutes, 16 seconds industry. So thanks uh thanks a lot and I look forward to meeting and speaking to you once again in 3 months time. Thank you. 1:13:25 1 hour, 13 minutes, 25 seconds Thank you very much. 1:13:28 1 hour, 13 minutes, 28 seconds On behalf of SKP Securities Limited that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.