HEG Limited — Q4 FY26

HEG Limited Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=LWT_CKKUb5Q Published: 13 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the HG Limited Q4 FY26 earnings conference call. As a reminder, 0:11 11 seconds all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:19 19 seconds you need assistance during the conference call, please signal an operator by pressing star and then zero on your Touchstone phone. Please note that this conference is being recorded. 0:30 30 seconds I now hand the conference over to Mr. Rajesh Majunar from 361. 0:36 36 seconds Please go ahead. 0:39 39 seconds Yeah. Good afternoon everyone and welcome to the Q4 FY26 AG Limited uh earnings conference call. We have with 0:47 47 seconds us today uh the management team represented by Mr. Ranjan Walat chairman, managing director and CEO and Mr. Rendan Bala, vice chairman, Mr. Mr. 0:57 57 seconds Manish Kulati executive director Mr. Om Prakash Amira Group CFO Mr. Ravitraati CFO HG Limited Mr. Punit Anand Group Cso 1:07 1 minute, 7 seconds Mr. Sil Baba Group Head Investor relations apart from this we have HG Green Tech team as well for any queries 1:14 1 minute, 14 seconds uh on that uh with much ado about uh on this uh I hand over the call uh to Mr. 1:20 1 minute, 20 seconds Ravi Jin Wala chairman waiter and senior over to you sir thank you Rajes and uh good afternoon 1:29 1 minute, 29 seconds everyone and welcome to our financial results conference call for the fourth quarter and full year 2526 1:36 1 minute, 36 seconds let me begin this discussion with some broader industry contra context according to world steel association 1:45 1 minute, 45 seconds global crude steel production in Q1 January March 2026 1:51 1 minute, 51 seconds uh stood at around 459 million tons marking a decline of roughly 2% year on 1:59 1 minute, 59 seconds year while registering a sequential recovery of about 8% versus Q4 of last year. 2:10 2 minutes, 10 seconds This is mainly China driven. We have seen this phenomena of higher production in the last quarter of the year by 2:16 2 minutes, 16 seconds China. uh lot of times in the past and this normally tapers down to more reasonable levels as we come to H2. 2:28 2 minutes, 28 seconds China typically follows a cyclical production pattern with output moderating in Q3 and four to align with 2:36 2 minutes, 36 seconds environmental and policy targets which is close to about a billion tons of steel production followed by a strong restart in Q1 practically every year. 2:49 2 minutes, 49 seconds Excluding China, global steel production stood at approximately 212 million tons in Q1 2026, 2:58 2 minutes, 58 seconds which is a decline of about 1.3% over Q4 2025. 3:05 3 minutes, 5 seconds Among some ski key steel producing regions, India continues to be a standout performer recording around 5% 3:14 3 minutes, 14 seconds quarteronquarter growth supported by strong infrastructure and construction activities. 3:21 3 minutes, 21 seconds The US too saw a modest growth driven by steady industrial demand while Europe remained relatively muted. 3:31 3 minutes, 31 seconds Japan, Brazil and several other large steel producing countries were broadly flacked to slightly negative reflecting ongoing softness. 3:44 3 minutes, 44 seconds China continues to face domestic demand pressure resulting in elevated export levels. Chinese steel exports are now 3:51 3 minutes, 51 seconds running at over about 100 million tons on an annual basis which continues to impact global pricing and drive 4:00 4 minutes increased trade protection measures worldwide. 4:06 4 minutes, 6 seconds At the same time, current geopolitical tensions amongst amid conflicts in the Middle East are contributing to 4:14 4 minutes, 14 seconds volatility in energy markets and supply chains. 4:19 4 minutes, 19 seconds We are we are clearly witnessing an acceleration in the region regionalization of steel trade driven by 4:27 4 minutes, 27 seconds rising protectionist measures globally in response to structural over capacity particularly in China. 4:37 4 minutes, 37 seconds measures such as section 232 in US anti-dumping safeguard actions in Canada, Mexico, India, Brazil and 4:46 4 minutes, 46 seconds similar steps across other regions are reshaping freight flows in Europe. Carbon border adjustment 4:54 4 minutes, 54 seconds mechanism generally called CBAM is a key structural change by imposing a carbon tax on imports of steel. 5:06 5 minutes, 6 seconds It incentivizes lower emission steel production or export which is only possible through electric 5:13 5 minutes, 13 seconds car funders. In parallel, the EU's upcoming tariff rate kota regime 5:20 5 minutes, 20 seconds coming as early as 1st of July 2026 is expected to further restrict steel 5:27 5 minutes, 27 seconds imports into EU and thus increase its own steel production which has seen a decline constantly quarter after quarter. 5:38 5 minutes, 38 seconds This is particularly significant for electric steel making excluding China about 50% of steel is already produced 5:46 5 minutes, 46 seconds through electricers which is which and the share is expected to rise further given its significantly 5:55 5 minutes, 55 seconds lower carbon intensity compared to blast furnace/ basic oxygen furnace roofs under CBAM 6:04 6 minutes, 4 seconds reduce exports of steel to Europe Europe are expected to increase favored electric based steel due to its carbon footprint advantage. 6:16 6 minutes, 16 seconds As a result, we expect a structural and positive change in electric steel production with a strong pipeline of new 6:26 6 minutes, 26 seconds capacity additions of electrices globally. 6:30 6 minutes, 30 seconds This directly supports long-term demand of demand growth of graphite electrodes. 6:38 6 minutes, 38 seconds To the best of our knowledge, about 20 million tons of new green field electric furnaces have already been have already 6:47 6 minutes, 47 seconds been commissioned in the last 12 to 18 months all over the world. And we believe an additional 60 t 60 million 6:55 6 minutes, 55 seconds tons are at different stages of implementation. 6:59 6 minutes, 59 seconds which should be in production by 2028 and another about 30 million tons by 2030. 7:07 7 minutes, 7 seconds The total new installations of electric arinuses all over the world except China 7:14 7 minutes, 14 seconds would thus be a little over 100 million tons. 7:19 7 minutes, 19 seconds This kind of a growth in electric car furnace based industry is unprecedented in the history of the steel industry and 7:27 7 minutes, 27 seconds is expected to translate into incremental electrode demand of around 200,000 tons by 2030 excluding China 7:38 7 minutes, 38 seconds and we are very well placed to meet some of this new demand with our rec recent expansion from 80,000s to 100,000 tons. 7:48 7 minutes, 48 seconds And as you are aware, we have already announced our next expansion to 115,000 tons, which is likely to be operational by early 2028. 7:59 7 minutes, 59 seconds In this backdrop, our focus on operational efficiency, cost discipline, and customer diversification 8:07 8 minutes, 7 seconds has enabled us to deliver a resilient performance during this quarter. 8:12 8 minutes, 12 seconds We continue to operate at healthy utilization levels which is probably the highest uh all over the world averaging 8:21 8 minutes, 21 seconds more than 90% for the whole year as well as the past three four immediate quarters and this is based on our expanded 8:30 8 minutes, 30 seconds capacity of 100,000 tons reflecting strong operational efficiency low cost and disciplined planning 8:39 8 minutes, 39 seconds at our plant near Bopal. Our plant near Bhopal remains the largest single site location of electrode plants anywhere in 8:47 8 minutes, 47 seconds the world with a capacity of 100,000 tons which makes us one of the most competitive cost companies due to its size and location in India. 8:59 8 minutes, 59 seconds Looking ahead we remain confident of the long-term growth opportunity for our company. 9:05 9 minutes, 5 seconds Construction of the additional 15,000 tons expan expansion is progressing as planned and we 9:12 9 minutes, 12 seconds continue to target completion by early 2028. 9:17 9 minutes, 17 seconds This will further strengthen our ability to serve incre incremental global demand at a competitive cost. 9:25 9 minutes, 25 seconds To summarize, while near-term conditions remain next, the structural shift toward 9:31 9 minutes, 31 seconds electric arena steel making supported by decarbonization policies and trade realignments in the world continues to 9:40 9 minutes, 40 seconds strengthen the long-term demand outlook for electrodes. 9:44 9 minutes, 44 seconds And with our scale, cost leadership and high utilization levels, we believe HG 9:51 9 minutes, 51 seconds is very well push positioned to benefit from this transition. 9:57 9 minutes, 57 seconds I would like to clarify a point on our investment about on in Graphtech. 10:03 10 minutes, 3 seconds I'd like to reaffirm that our position remains unchanged. This this was undertaken as a deliberate long-term 10:10 10 minutes, 10 seconds investment and our conviction continues to be anchored in the structural foundations fundamentals of this 10:16 10 minutes, 16 seconds business rather than near-term market movements. Cyclical volatility is intrinsic to this industry and interim 10:25 10 minutes, 25 seconds fluctuations in no way alter our outlook or our resolve. 10:31 10 minutes, 31 seconds We remain fully committed to this investment and we are confident in the long-term value it will create for our stakeholders. 10:41 10 minutes, 41 seconds We are pleased to inform that the compos composite scheme of arrangement is progressing well. 10:48 10 minutes, 48 seconds The NCT convened meetings of the equity shareholders, secured creditors and unsecured credit creditors of ATG 10:57 10 minutes, 57 seconds are scheduled for Tuesday 5th May to seek their approval of the sale. 11:03 11 minutes, 3 seconds Subject to shareholder creditor and other regulatory approvals, we anticipate that the scheme could be 11:10 11 minutes, 10 seconds approved by the LCT sometime in the second quarter of this financial year. 11:16 11 minutes, 16 seconds With that I would now like to hand over to our CFO party to take you through the financial performance for the quarter. 11:23 11 minutes, 23 seconds After which we will open the floor to the question. 11:34 11 minutes, 34 seconds Thank you sir. Uh good afternoon everyone. Uh thank you for joining us. I will briefly explain our performance for 11:43 11 minutes, 43 seconds the quarter end and for the full year and at 31st March 2026 11:50 11 minutes, 50 seconds compared to last year we have shown strong growth in volume as well as in revenue our sales volume increased by 11:57 11 minutes, 57 seconds 20% which helps our revenue grow from rupees 253 12:02 12 minutes, 2 seconds crores to rupees 256569 crores. Total income also increased to rups 2660 cr 12:12 12 minutes, 12 seconds from rups 2279 cr. 12:17 12 minutes, 17 seconds Oura increased from rups 388 cr to rups 497 cr with margins increasing from 17% 12:26 12 minutes, 26 seconds to 19%. Our operating margins remained stable in the range of 15 to 20% during 12:33 12 minutes, 33 seconds the year with more than 90% capacity utilization during the year. 12:40 12 minutes, 40 seconds DBT has increased from rupees 148 crores to rupees 246 crores which is a growth of 66%. 12:48 12 minutes, 48 seconds Net profit also increased from rupees 101 crores to rupes 181 crores. This improvement came from higher volumes, 12:57 12 minutes, 57 seconds better control on input cost and focus monitoring on all fix it cost. 13:05 13 minutes, 5 seconds The company remains financially strong with no long-term debt as of 31st March 2026. 13:13 13 minutes, 13 seconds It had a treasury of around rupees 792 crores. 13:18 13 minutes, 18 seconds Coming to the quarterly performance, we reported a loss of rupes 189 crores. 13:24 13 minutes, 24 seconds This is mainly attributable to unrealized losses arising from share varies and impact on foreign investments and rapid depreciation of rupee which 13:34 13 minutes, 34 seconds led to 5% within this quarter. These are entirely unrealized assets and we have 13:40 13 minutes, 40 seconds taken impact of them in the books as per the applicable Indian accounting standards. 13:47 13 minutes, 47 seconds Excluding the unrealized losses, our operating margins for the quarter is intact and is reasonably comparable with these previous quarters. 13:57 13 minutes, 57 seconds The board of directors has recommended a final dividend of rupees 3.4 per equity share face value of rupees 2 subject to 14:06 14 minutes, 6 seconds shareholder approval at the upcoming annual gender meeting. For more details, the full presentation is available on 14:14 14 minutes, 14 seconds the company's website and desktop exchange. We are now happy to take your questions. Thank you. Over to you. 14:25 14 minutes, 25 seconds Thank you very much. 14:26 14 minutes, 26 seconds We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on the other phone. 14:35 14 minutes, 35 seconds If you wish to remove yourself from the question queue, you may press star and two. 14:42 14 minutes, 42 seconds Participants are requested to use handsets while asking a question. 14:47 14 minutes, 47 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. 14:55 14 minutes, 55 seconds Our first question comes from the line of Amit Loti from Aditya Berla Capital. 15:05 15 minutes, 5 seconds Please go ahead. 15:06 15 minutes, 6 seconds Good afternoon. Thanks for the opportunity. My first question is on pricing. So during the quarter, Graphtech announced a price hike and we 15:15 15 minutes, 15 seconds are getting a sense that there is a growing customer acceptance around the price hike given that the electrode cost is now less than 1% of the steel prices. 15:24 15 minutes, 24 seconds So if you could quantify how much price hike we are looking to take starting from this financial year and then is 15:31 15 minutes, 31 seconds there a similar cost increase for needle coke as well? 15:36 15 minutes, 36 seconds Manish will you will you take this question? Yeah. 15:39 15 minutes, 39 seconds Yes sir. Um air as you know we book orders let's say 3 to 6 months. So as we speak we are about uh booked almost 15:48 15 minutes, 48 seconds until September. And for the unbooked orders, we are definitely looking at price increase. Now it depends from region to region how much uh price we 15:57 15 minutes, 57 seconds can get and also uh I would uh say that we already have some increase in cost due to these energy freights. So the 16:06 16 minutes, 6 seconds price increase uh is very necessary to be done. How much will be the quantum? 16:11 16 minutes, 11 seconds Whe 300, 400, 500 is very difficult to say at this stage. how much uh every region steel companies are able to 16:18 16 minutes, 18 seconds absorb and also what our competitors are doing at this stage. But definitely towards S2 there has to be uh our our 16:27 16 minutes, 27 seconds aim is to have price increase not only to pro protect our margins but to help improve further. 16:35 16 minutes, 35 seconds Okay. But does it implicitly mean that uh we are going to have some cost impact in the first half of the year uh even before the price hike rolls in? 16:46 16 minutes, 46 seconds It'll be it'll be it'll be there but not to that extent because you see some of these energy prices and because of a 16:54 16 minutes, 54 seconds long longer product cycle see let's say for example if gas price are going today or furnace oil are going through today but when they will actually those 17:02 17 minutes, 2 seconds products are made in two months and get shipped. So there'll be a lag in that but yes certainly there'll be some uh price increase 17:10 17 minutes, 10 seconds I mean some cost increase sorry noted and my second question is on green tech uh particularly for TCC where are 17:20 17 minutes, 20 seconds we in terms of customer qualification process and how fast can we ramp up once it gets commissioned basically my 17:27 17 minutes, 27 seconds question is are there any technology or qualification bottlenecks that are left to be resolved over the next 6 to 12 months I can think. 17:39 17 minutes, 39 seconds Yeah, if there you can answer this directly then. 17:47 17 minutes, 47 seconds No, he doesn't seem to be there. You go ahead. 17:50 17 minutes, 50 seconds Okay. So, in terms of uh the customer acquisition, I mean you are aware that we had set up our Pit plant for uh 17:58 17 minutes, 58 seconds sampling etc. more than 18 months back and you'll be very happy to know that we've made a very very good progress 18:05 18 minutes, 5 seconds with all the leading OEMs across the uh world because Indian cell capacity is all delayed as it seems uh but we are 18:14 18 minutes, 14 seconds actively working with all the Indian ones as well as uh the uh companies like 18:21 18 minutes, 21 seconds LG, Panasonic, CL etc where we are in different stages of uh sampling but uh 18:28 18 minutes, 28 seconds you the sampling uh works are going extremely well as well as the plant commissioning there is no change in the 18:35 18 minutes, 35 seconds plant commissioning date from April and uh we hope that you know in the first year itself we'll be able to have a 18:43 18 minutes, 43 seconds decent uh 40 to 60% kind of capacity utilization because of the customer listing acquisitions that are going on 18:51 18 minutes, 51 seconds right now so there are no issues on technology that we are facing currently okay noted Thank you so much. Thank you. 19:02 19 minutes, 2 seconds Thank you. The next question comes from the line of Rajesh Majunar from 361. Please go ahead. 19:10 19 minutes, 10 seconds Yeah, good afternoon again sir. Uh I wanted to know the sales volume for the quarter and uh why the revenue was lower? Is it because of lower realizations or lower sales volume? 19:22 19 minutes, 22 seconds Yeah. Raj G uh about this Q4 there's a slightly less volume to the tune of I 19:28 19 minutes, 28 seconds guess about a thousand tons and uh some uh depression in price but that is only because of our regional sales mix see we 19:38 19 minutes, 38 seconds are we are shipping to 40 countries so which which uh which lots which customers where they're going but 19:45 19 minutes, 45 seconds there's no depression in price per se because uh in the market it's just because of our seismic makes and order 19:52 19 minutes, 52 seconds makes which goes quarter on quarter. So this quarter we had some low price orders going which dragged down a price 20:00 20 minutes a little bit but that's in April May June you will see it quickly coming back up. So it's it's very temporary. So that 20:08 20 minutes, 8 seconds did cause some some uh dent in the operating profits. 20:13 20 minutes, 13 seconds Just a related question is there any disruption because of the Middle East and what proportion of sales are we selling there? See the annually we do 20:21 20 minutes, 21 seconds about 20% sales in Middle East and Mina region, Middle East, North Africa. Yes, absolutely. There's a disruption the 20:30 20 minutes, 30 seconds orders which we had from uh all these customers like uh Kuwait and Saudis and they're all have to be postponed. So 20:39 20 minutes, 39 seconds instead we had orders from other customers. So they are being given precedence. So they are going now and as 20:47 20 minutes, 47 seconds soon as the state of Hormus opens and business normalizes the pending orders which we are holding uh for Middle East 20:54 20 minutes, 54 seconds they will also quickly be shipped and sir uh one more question from my side is that we've seen a huge rally in 21:02 21 minutes, 2 seconds crude oil so that will impact the needle coke prices. So uh as you're uh you're covered till September you said on your contractual side are you covered for the 21:10 21 minutes, 10 seconds needle coke site as well how much are you covered for and how much will that cost increase percolate to us from which uh half and will the price increase happen simultaneously with that? Yeah. 21:22 21 minutes, 22 seconds Uh you see we are covered for needle book purchases and needle book shipments starting from their origins till end of 21:30 21 minutes, 30 seconds June. So by the time they arrive they take 45 days to arrive and our electro product processing is another 45 days. 21:39 21 minutes, 39 seconds So it safely uh covers our costs until September from the needle go side. How it doesn't protect us from the other 21:47 21 minutes, 47 seconds materials which we get from India or doesn't protect us from energy but purely on needle side we remain protected until September. 21:58 21 minutes, 58 seconds Okay. And uh so one strategic question one last question from my side is that uh do you see the rise in gas and energy prices as an impediment to the electric 22:07 22 minutes, 7 seconds arc furnace and the CBAM team because uh as I understand that the energy requirement in electric arc furnace is almost nearly three times more than that of a blast furnace. Yeah. 22:19 22 minutes, 19 seconds You see these energy prices actually depends in Europe etc. how much uh see there power is a major cost for a 22:27 22 minutes, 27 seconds electric arc for a steel plant. So that energy and the mix of power generation which they have in Europe and US I I 22:37 22 minutes, 37 seconds don't think it'll cause any direct uh hit to electric steel making economics 22:44 22 minutes, 44 seconds because they it depends on power power at what price they can get the power in their country. So there may be some 22:52 22 minutes, 52 seconds indirect connection but uh see there there are gas based power plants but they're uh more in middle east rather 23:00 23 minutes than in US or Europe. So maybe there's some marginal impact but doesn't doesn't 23:08 23 minutes, 8 seconds change anything actually and CM is on track there is no derailment of that 23:13 23 minutes, 13 seconds CM CM is applied already actually they will see a reduction in steel imports in 23:21 23 minutes, 21 seconds um in EU which will encourage the local steel plants to run at a high utilization and high demand from of graphite electrode from Europe. 23:32 23 minutes, 32 seconds Okay, thank you sir. Uh just to just to add these European steel companies basically have no option. I mean as you 23:41 23 minutes, 41 seconds all know electric aress emits about 25 30% of carbon as compared to the same 23:49 23 minutes, 49 seconds steel produced through blast wers. So with the CBAM and X euro per ton uh 23:57 23 minutes, 57 seconds demand I mean um in duties and everything that Europe has is applying now from 1st of July whether the cost is 24:05 24 minutes, 5 seconds hex or x plus something they will have no option I mean there's no way that they can pay that kind of cbam duty and 24:14 24 minutes, 14 seconds still be able to export their steel so they'll have to shift from blast furnaces to electric furnaces already I Europe is already 50 55%. 24:25 24 minutes, 25 seconds And Europe is adding at least 25 to 30 million tons of new electric car furnaces. Some of them have already come in, some of them are under construction. 24:34 24 minutes, 34 seconds Uh so by 2030 according to our information and we believe this figure 24:42 24 minutes, 42 seconds is more or less accurate uh because we are exporting 70% of our products to all parts of the world. So people are always 24:51 24 minutes, 51 seconds always on the road meeting this customer here and that customer there. 24:56 24 minutes, 56 seconds So close to 100 million tons of new electric car AR furnaces are scheduled to come in out of which 2022 are already 25:05 25 minutes, 5 seconds in operation and we believe about 30 million tons is going to be operation within uh 26 27 and 28 25:15 25 minutes, 15 seconds and another 30 35 million tons in uh 2028 and 30. So that adds up to about 25:22 25 minutes, 22 seconds 100 million tons and that requires a lot of electric that will require a lot of electrons and 25:30 25 minutes, 30 seconds u except uh our expansion uh there is no there's nobody who has even announced anything as as yet it 25:38 25 minutes, 38 seconds takes two to three years to even make a small uh brownfield expansion as you know in our case. 25:49 25 minutes, 49 seconds Thank you. 25:52 25 minutes, 52 seconds Thank you. The next question comes from the line of Ahmed Mad from Unifi Capital. Please go ahead. 25:59 25 minutes, 59 seconds Yeah, thank you for the opportunity. Uh just picking up from the questions you answered uh before uh my turn. For Q4 if 26:08 26 minutes, 8 seconds you can quantify what was the sales volume we have quoted 94%age capacity utilization but in terms of sales volume 26:16 26 minutes, 16 seconds compared to last quarters you can quantify how many thousand tons have been impacted because of logistics or any other reason 26:25 26 minutes, 25 seconds yeah did I say a thousand tons almost between Q3 and Q4 hardly a thousand tons got impacted 26:33 26 minutes, 33 seconds because these orders these orders had to postponed. Okay. 26:40 26 minutes, 40 seconds But you divert it. You will divert it here and there. You not either divert it. See, most of it most 26:49 26 minutes, 49 seconds of the postponements got diverted and there's the impact of only $1,000 less in Q4 compared to Q3. 26:58 26 minutes, 58 seconds Okay. Got And as as Manish and Manish as you were telling me I mean because the situation is so desperate. 27:14 27 minutes, 14 seconds You see the steel companies in the Middle East are desperately uh placed as far as the raw material and everything is concerned. They don't want 27:22 27 minutes, 22 seconds to store their plant and uh and they are prepared to pay $2 $300 27:29 27 minutes, 29 seconds extra for electrode to be to be sent by road. 27:36 27 minutes, 36 seconds Instead of 20 $30 cost that we were incurring to take the electrodes to any Middle Eastern countries, 27:44 27 minutes, 44 seconds I believe uh there is a way that you can take the electrode to some Middle Eastern port by ocean. 27:51 27 minutes, 51 seconds then it takes as much as $200 to $300 to truck it down to the location of the plant and they are prepared to pay for that. I mean obviously $300 per ton of 28:01 28 minutes, 1 second electrode means nothing to them rather than choosing the steel plant. Correct. 28:08 28 minutes, 8 seconds Sure. Got it. And in terms of pricing uh as you said you are already booked till September but I'm assuming post September uh contracts you will be 28:17 28 minutes, 17 seconds probably doing now or maybe uh a few months down the line. So in that renewed 28:23 28 minutes, 23 seconds uh committed volumes do you see any significant price increase or are you already into those conversation of 28:31 28 minutes, 31 seconds increasing the price? You can probably give some qualitative and quantitative comment from the same 28:38 28 minutes, 38 seconds team for all the new inquiries we are receiving. Now we are pricing it accordingly. We are taking into account how much our costs have increased and 28:47 28 minutes, 47 seconds some price increase was anyway necessary. So we are with every all inquiries don't come in one go they keep 28:53 28 minutes, 53 seconds coming every 2 days 3 days 1 week 10 days. So every customer has their own buying ways. So we are offering 29:00 29 minutes increased prices in the market and we are quite hopeful that uh some amount of the price increase uh should get uh 29:08 29 minutes, 8 seconds absorbed and see the industry should be willing to do that but also depends on what our peers group is doing how how much seriously they are pursuing the 29:17 29 minutes, 17 seconds price increase. Uh so we will see but we have started offering increased prices uh for the uncommitted volumes. 29:25 29 minutes, 25 seconds Sure. And in terms of sorry to interrupt sir may we request you return question. 29:34 29 minutes, 34 seconds Thank you. 29:35 29 minutes, 35 seconds Our next question comes from the line of karthikar pandi. Please go ahead. Yeah. Hi. Uh am I audible sir? 29:44 29 minutes, 44 seconds Yeah. Yeah you are. 29:46 29 minutes, 46 seconds Yeah. Uh thanks for your opportunity sir. And uh so uh although I understand the whole investment rational and the 29:54 29 minutes, 54 seconds knowhment multi-year tailwind that we have but uh just some uh nuances that I 30:00 30 minutes wanted to understand from you. So uh needle capacity uh supply is a constraint that we have in our industry. 30:09 30 minutes, 9 seconds Now uh that capacity the demand for that is from our industry as well as from the anode industry. Now when we are saying 30:16 30 minutes, 16 seconds that we are adding 120 KT of you know incremental demand. So and again there are reports of around 100 KT of addition 30:25 30 minutes, 25 seconds of demand from anode cell. Now somewhere down the line the whole math is not adding up to the existing needle 30:32 30 minutes, 32 seconds capacity and then there are no uh recent capacity addition also happening in the needle coke industry. So I just wanted 30:40 30 minutes, 40 seconds to understand how are we going to fulfill the ex uh 120 KD of demand given the fact that we are also not backward 30:47 30 minutes, 47 seconds integrated like west players. So some light on that from your side. 30:53 30 minutes, 53 seconds I I'll I'll tell you a little bit. I mean it is it is motivating me to tell you something which somebody asked and we we didn't answer that question very 31:02 31 minutes, 2 seconds clearly. Uh the only reason that we decided to invest whatever we invested to buy graphic shares was primarily 31:12 31 minutes, 12 seconds because that is the only graphite company in the world who is 75 to 80% backward integrated. I'm talking of 31:20 31 minutes, 20 seconds graphic that's the only graphite company who has a graphite who has a needle core plant of its own uh to the extent of 31:29 31 minutes, 29 seconds about 75% of their own capacity. So if you go back to five years ago, six years ago when the electrode prices went up by 31:38 31 minutes, 38 seconds three, four, five times over a period of time, the same thing happened with needle coke and the needle 31:46 31 minutes, 46 seconds coke prices went up from about $1,000 to about $4,000 in a matter of five, six, seven quarters. 31:54 31 minutes, 54 seconds Graphtec was the only company which had about 80% uh of their captive requirement was uh 32:02 32 minutes, 2 seconds is being met by their own cope plant. So while they made a lot of money like all the other graphite companies made 32:09 32 minutes, 9 seconds because of price increase on electrodes but they were in a unique position that uh they made an additional $2 to $3,000 32:18 32 minutes, 18 seconds for on the needle coke while people like us or the Japanese or graphite India or any anybody else except graphic 32:27 32 minutes, 27 seconds had to pay had to had to buy needle cope at about3 to $4,000 higher than what it used to in a matter of less than a year. 32:38 32 minutes, 38 seconds So, so our logic of buying these shares about two years ago, one and a half year ago was simply this that uh if if and 32:48 32 minutes, 48 seconds when we see the same time and the same days as as we saw five six years ago when uh electrode prices will go up and 32:57 32 minutes, 57 seconds backed up by needle coke while all of us all others except graphic will make lot of money in electrodes. 33:06 33 minutes, 6 seconds But this is the only company in in a unique situation that they will not only make money on electrodes, they'll also make a lot of money on needle core. 33:16 33 minutes, 16 seconds So this was a very simple logic uh for which we we invested and of course I mean in the stock market you 33:26 33 minutes, 26 seconds can never be 100% right or you can never be 100% wrong. So at the price uh when we started buying it was it looked like 33:34 33 minutes, 34 seconds a steal and it did go up by 30 40%. And we decided not to sell and it went down by 33:42 33 minutes, 42 seconds 30 40%. It has recovered a lot in the last 2 3 months but again it's just a 33:49 33 minutes, 49 seconds matter of time. I mean as soon as we see some uptick and some of these 100 million tons of electric car furnaces 33:58 33 minutes, 58 seconds starting operations which uh some of this has already started as soon as we 34:04 34 minutes, 4 seconds see that we we see a shortage of electrode we see if if there's a shortage of electrode there'll be a shortage of needle go for sure. 34:15 34 minutes, 15 seconds That was a simple reason that uh we were looking at uh we we we went ahead and invested that money. 34:28 34 minutes, 28 seconds Fair enough sir understood I get your point uh sir but uh according to graph tech like the 120 KT of extra extra 34:36 34 minutes, 36 seconds demand that we have seen so if I'm not wrong they have mentioned that currently of of around 650 KT one/ird has already 34:45 34 minutes, 45 seconds been supplied by Chinese players now this is not what I am saying I guess this is what graph is saying and this is 34:52 34 minutes, 52 seconds in the uh UX market so I mean uh all the quality issues are there but what do you read from this 35:00 35 minutes because uh incrementally like can we get market share in this 120 KT or like 35:09 35 minutes, 9 seconds Chinese are also increasing it like what what the what is this what is this 35:16 35 minutes, 16 seconds 120,000 tons supply that you're talking about? 35:20 35 minutes, 20 seconds Yeah. So uh if you go to graphics uh commentary in the annual report they are mentioning that around 1/3 of existing 35:29 35 minutes, 29 seconds 650 uh KT of demand that is there in the graphite electrode market currently is uh met by Chinese that is bringing down 35:38 35 minutes, 38 seconds the overall capacity utilization of the industry to 60 to 65%. Now my question is that what's stopping them from doing 35:45 35 minutes, 45 seconds the same in the incremental 120 kg of capacity that's that's required. 35:53 35 minutes, 53 seconds See sir can I answer this question? Go ahead. 35:57 35 minutes, 57 seconds Go ahead. Huh. Huh. It's way what you're saying uh what entire committee we can't say what I mean they have their own uh 36:05 36 minutes, 5 seconds reasons and logic to say uh that 120,000 tons of UHP is being supplied from the 36:11 36 minutes, 11 seconds Chinese which is fine you see uh in ch uh in China is exporting lot of electrodes and predominantly they are 36:19 36 minutes, 19 seconds all the high power grade but yes uh we will not deny that they do not export USB electrodes they do export USB 36:27 36 minutes, 27 seconds electrodes of almost the same order. We believe it's probably 100,000 out of the 4,000 400,000 they export and uh in the 36:37 36 minutes, 37 seconds the low powered furnaces and sizes let's say up to mostly up to 24 in they're definitely doing that and of course in 36:45 36 minutes, 45 seconds their phone call talks about China they they're talking about impact on them so they talk about China they also talk 36:53 36 minutes, 53 seconds about India which is fine and the capaciation they are running whatever whatever you written there 65 or 37:00 37 minutes something in the last quarter but please remember is running uh at 90% plus so 37:07 37 minutes, 7 seconds they they have to explain for themselves and we have to talk about ourselves so they explaining they have to explain to the their stakeholders why they are at 37:15 37 minutes, 15 seconds this so they are giving this reason which is fine which is totally fine but the you are saying what is stopping them 37:23 37 minutes, 23 seconds see if you're talking about HV we are a very uh I would say a very cost competitive plant because of our size 37:30 37 minutes, 30 seconds and our location being in India and so our social media costs are lower. So we when in our calls we don't mention that 37:38 37 minutes, 38 seconds because of Chinese so many USB exports we are being dented. 37:50 37 minutes, 50 seconds Thank you. Right. 37:57 37 minutes, 57 seconds So we have the next question coming from the line of uh Mr. Malan Polaria from MKP securities. Please go ahead. 38:06 38 minutes, 6 seconds Hi sir thanks for the opportunity. Uh so first question on again the quarterly number that's come out. You said there 38:14 38 minutes, 14 seconds are unrealized losses in the investments and uh that's been the reason driving the loss. If you could like 38:22 38 minutes, 22 seconds quantitatively tell us if we pull out the graphite loss and the loss on the forex instruments. Uh is there a 38:29 38 minutes, 29 seconds shipping cost hit also that is large in the other expenses uh jump that has happened this quarter? And secondly, if you could tell me uh from your contracts 38:38 38 minutes, 38 seconds when you have a fixed price contract say 6 months ahead is there a force where your clause within it above a certain level of oil price or shipping prices per se? 38:50 38 minutes, 50 seconds No. Uh I'll answer the last question uh first. uh you see uh in particularly in Middle East where freight costs shot up 38:58 38 minutes, 58 seconds from 20 $30 to more than 300. Of course we had to tell our customers and we did send letters of force major wherever we 39:06 39 minutes, 6 seconds are impacted. See some little bit cost increase it is expected that supplier will bear. So anything out of the 39:15 39 minutes, 15 seconds ordinary of course we have the right to go to our customers and tell them and we did that for Middle East and um they are 39:22 39 minutes, 22 seconds taking material FOB Mumbai and they're paying for the extra freight but we uh the the freights have also increased for 39:29 39 minutes, 29 seconds uh US and Europe but they are not yet of the order that we go back and breach our contract or request them because it is 39:38 39 minutes, 38 seconds still absorbable. See once you book a book a 6 month contract there's some cost which will go up and down 39:45 39 minutes, 45 seconds throughout the execution of the order it can go up 5%. So it is expected it sometimes gets lower because for us need 39:54 39 minutes, 54 seconds pitches energy um I mean electrical power they are all they're our major cost. So during a course of 6 months 40:02 40 minutes, 2 seconds when we commit to a certain price unless something goes really wrong we don't usually approach our customers and you know ask them for a price increase 40:11 40 minutes, 11 seconds because they can do it do it likewise suppose they keep track of our essential raw materials and if the price goes down down a shade they don't come back to us 40:19 40 minutes, 19 seconds to ask for a renegotiation of the contract. So we try to do as much visibility we have. If we have a 3 month 40:28 40 minutes, 28 seconds um 3 month our need coke is tied up and electrical power is uh is tied up then we take a safe uh call as to how much 40:35 40 minutes, 35 seconds but during the course of time some increase decrease do does happen. 40:41 40 minutes, 41 seconds Yes sir. On the first question uh with the other expenses that our CFO will 40:51 40 minutes, 51 seconds yes the in in other expenses if you see if you compare with the previous quarter then you can see that we have added the 40:58 40 minutes, 58 seconds the whatever the the fair value and losses we have added in the other expenses that's why the other expenses is looking higher as compared to the previous quarter. 41:09 41 minutes, 9 seconds That's that's in your note. I'm just uh curious apart from that there is a still large jump that has not been disclosed 41:17 41 minutes, 17 seconds in the in the note. If you could just quantify some of that for us. So the another another some impact of the the 41:25 41 minutes, 25 seconds exchange gain loss during the quarter due to the rapid rupee depreciation as as I said in my initial opening remarks 41:33 41 minutes, 33 seconds that appro 5% rupee depreciated within quarter that impact is also is there so that's why the other expenses is higher as compared to the previous quarter. 41:45 41 minutes, 45 seconds All right sir. Thank you. Thank you so much. Thank you. 41:52 41 minutes, 52 seconds The next question comes from the line of Mr. Raj Kiran Gandhi from SBI mutual fund. Please go ahead. 41:59 41 minutes, 59 seconds Hi uh thanks for the opportunity. So possible to quantify this FX loss uh which is being reflected in other expenses. 42:10 42 minutes, 10 seconds Yeah, the this is Raj see the this FX loss is completely is a unrealized loss 42:16 42 minutes, 16 seconds that we should in the range of 35 to 40 crores within the quarter. 42:23 42 minutes, 23 seconds Okay. Okay. 42:27 42 minutes, 27 seconds Got it. And given that rupee has depreciated further uh from uh uh the quarter end so we should expect 42:35 42 minutes, 35 seconds something next quarter as well. And when by when will this reverse because as you mentioned this is unrealized. 42:43 42 minutes, 43 seconds Yes in case the rupee suppose is appreciated then definitely this will reverse you can see some reversal in the next. 42:52 42 minutes, 52 seconds Okay. Got it. And and uh any particular reason let's say even if uh on the gross margin side itself if I were to look on 43:01 43 minutes, 1 second a pattern basis there has been some contraction uh Q on Q. Uh so uh any 43:07 43 minutes, 7 seconds particular reason for that or it's uh yeah Raji yeah Raji explained that see when this war happened all these orders 43:16 43 minutes, 16 seconds needed to be shuffled up and down you know there were some mid orders which didn't go and some other orders which went so quarter on quarter there's 43:24 43 minutes, 24 seconds always a slight movement up and down and because of this war thing the mid east orders had to be you know postponed till 43:32 43 minutes, 32 seconds the situation normalizes and some other orders. So it depends which orders are going in which particular quarter. So it's not a cause of concern and you will 43:40 43 minutes, 40 seconds see that coming up in April to June. We are very hopeful that by the time this issues will get resolved because Middle 43:47 43 minutes, 47 seconds East is next door and we'll start pushing material as soon as the situation is clear. 43:53 43 minutes, 53 seconds Got it. Got it. So mixed turn adverse in in the sense when Middle East I presume is a better margin geography. So exchange result. 44:02 44 minutes, 2 seconds Yeah. Yeah. logistic costs are much lower for Middle East. Okay. 44:07 44 minutes, 7 seconds No, but the prices can be different. I mean, we can't talk about uh which which area. Sure. Sure. Sure. And uh uh just 44:16 44 minutes, 16 seconds in terms of your OPEX, how much of it is rupee denominated or uh and uh how much is FX denominated? I'm just trying to 44:24 44 minutes, 24 seconds presume because of the sharp depreciation in rupee maybe over time how much of realization benefit can come 44:31 44 minutes, 31 seconds to AITA? No, no. Our uh we we gain by rupee depreciation for sure. I mean our 44:39 44 minutes, 39 seconds foreign exchange outgo is only on account of needle core which is which is a smaller part compared to the total 44:46 44 minutes, 46 seconds realization. So so obviously we are a we are a net exporter. So we we more depreciation [clears throat] right. Right. So just trying to 44:54 44 minutes, 54 seconds understand what is X like X of RM how much of our cost is dollar denominated which will also then go up along with uh 45:01 45 minutes, 1 second depreciation and then I'm just trying to understand net how much benefit do we'll retain uh of the rupee depreciation depreciation 45:10 45 minutes, 10 seconds over time maybe sure no we don't want to talk about specific numbers 45:16 45 minutes, 16 seconds sure sure perfect thanks thank Thank you. 45:23 45 minutes, 23 seconds The next question comes from the line of AJS Lakani from Unifi MC. Please go ahead. 45:31 45 minutes, 31 seconds Yeah. Hi. Uh am I audible? Yeah. Yeah, you are. 45:37 45 minutes, 37 seconds Okay. Uh so thanks for the uh chance. So I wanted to understand that given that needle coke is also being used in in 45:44 45 minutes, 44 seconds batteries uh and this is again premium or super premium uh you know battery grade material. I want to understand a 45:52 45 minutes, 52 seconds little bit more about the raw material uh you know sourcing and and and and availability and capacities globally. So 46:00 46 minutes one is could you talk about where do you procure your needle coke from? Uh what is that manufacturer's capacity? Are 46:08 46 minutes, 8 seconds they adding capacity uh globally? Is needle coke capacity additions taking place? uh only to understand broadly 46:16 46 minutes, 16 seconds that if the demand for uh need coke uh gets repivoted more towards uh you know 46:24 46 minutes, 24 seconds uh towards towards the battery side uh will what kind of uh you know scarcity that could do for decarbonization and EF 46:32 46 minutes, 32 seconds that's broadly what I'm trying to understand thanks so I'll I'll take this question uh you see about four or five years ago when 46:40 46 minutes, 40 seconds the electrode suddenly went into a serious shortage and uh the prices went up by three four times and so did the 46:49 46 minutes, 49 seconds needle coke I mean obviously uh so at that time obviously we we we talked to all our three four suppliers 46:57 46 minutes, 57 seconds of needle coke so firstly uh needle coke is also a very technology based product 47:03 47 minutes, 3 seconds and uh I don't think there has been any new green field needle coke plant put 47:10 47 minutes, 10 seconds anywhere in the world in last 78 years and there has not been any new entrant in this last 70 80 years and there are 47:20 47 minutes, 20 seconds only three four suppliers in the world from Japan and US and uh so what we realized at that time 47:28 47 minutes, 28 seconds 5 years ago when the needle coke prices went up by three four times so did the electrode price 47:35 47 minutes, 35 seconds at that time we realized that uh what the price that we can pay for needle coke the battery guys cannot pay because 47:44 47 minutes, 44 seconds I believe in the battery needle poke is one of the maybe seven eight nine things which goes as part of their raw material 47:54 47 minutes, 54 seconds and uh so needle poke can be replaced by one of these six six seven other raw materials that you can mix but for 48:03 48 minutes, 3 seconds graphite electrode there is nothing that you can do you have to only use this particular needle coke which is produced 48:10 48 minutes, 10 seconds by these three four companies so at That time also while we could pay whatever sharp 48:18 48 minutes, 18 seconds increase happened in the needle coke price the battery guys could not pay that kind of a price. They had an option 48:24 48 minutes, 24 seconds to replace needle coke by something else and that something else probably is 3 4 48:33 48 minutes, 33 seconds 5 six different raw material. So if they were using let's say 10 12 15% of needle coke they replace this 10 15% of needle 48:42 48 minutes, 42 seconds coke by other four five products that they were that they were mixing in any case and needle coke capacities have not gone 48:52 48 minutes, 52 seconds up. I mean just like graphite electrodes if you if you see the last 40 50 years of graphite industry in the world except 49:01 49 minutes, 1 second HG there has not been any new expansion anywhere else in the world whether it India or in Europe or America or Japan 49:11 49 minutes, 11 seconds on the contrary there is a the the capacities have shrunk in the last four five years 49:18 49 minutes, 18 seconds uh so to that extent there was no need for the needle cook guys also to expand. 49:24 49 minutes, 24 seconds I mean they could not sell whatever they were producing for the last five seven years. 49:33 49 minutes, 33 seconds Uh sorry sir if I understand the last bit correctly you said that the needle coke suppliers were not able to sell 49:39 49 minutes, 39 seconds their desired quantity for the last four five years. 49:45 49 minutes, 45 seconds Yeah that's right when the I mean it's uh they were underutilized for a while. So if so it's not it's not 49:54 49 minutes, 54 seconds that battery and electrodes are using exactly the same kind of product. 49:58 49 minutes, 58 seconds There's a anode grade coke which all these companies also make. So that uh the needle coke per se there's a lacks 50:05 50 minutes, 5 seconds and lacks of tons of demand in uh for the battery uh coke. So had it been true then need supplies would be running more 50:13 50 minutes, 13 seconds than full. But we have seen when the when when the capacity utilization of G industry was down in the last one or two years they they had extra capacity to 50:22 50 minutes, 22 seconds make there was abundant supply of needle coke which clearly shows that it was not exactly going to the battery applications. 50:44 50 minutes, 44 seconds Thank you. The next question comes from the line of Ken Ma from BNP fund. Please go ahead. 50:54 50 minutes, 54 seconds Thank you sir for this opportunity. Just one followup question again. 50:59 50 minutes, 59 seconds You mentioned that we haven't seen any material increasing graphite electro. 51:20 51 minutes, 20 seconds Excuse me. Are are you there? 51:33 51 minutes, 33 seconds Are we are we disconnected or what happened? Manish. 51:39 51 minutes, 39 seconds Yes, I'm there sir. Amit was asking some question when he disappeared. 51:51 51 minutes, 51 seconds So either he is disconnected or or you and us are disconnected. No no I'm also there. So I'm also connected sir all the lines are connected. 52:02 52 minutes, 2 seconds Okay. 52:05 52 minutes, 5 seconds So maybe we lost a Yes sir. 52:27 52 minutes, 27 seconds Are you there? 52:36 52 minutes, 36 seconds Just give me good. 53:42 53 minutes, 42 seconds Sir, apologies for that. Uh the previous questioner's uh question has been dropped. We have the next question who 53:49 53 minutes, 49 seconds which is coming from the line of Mr. Ron Aarwal from I thought PMS. Please go ahead sir. 53:58 53 minutes, 58 seconds Yeah. Hello. Yeah. Go ahead. Hello. 54:03 54 minutes, 3 seconds Yeah. Uh go ahead. Since uh since the side has taken a price so we expect this 54:09 54 minutes, 9 seconds uh price to be get fully pricing for 54:17 54 minutes, 17 seconds I'm sorry to interrupt Ron sir your line is not very much clear if you're using any other mode may request to use the handset please 54:26 54 minutes, 26 seconds so you're sounding muffled and slightly distant right now hello yes this is much better 54:36 54 minutes, 36 seconds Yeah. So um graph techch and graph if graph graph has taken a price like uh of around $600. 54:44 54 minutes, 44 seconds So by the end of uh this current financial years for fi 28 volumes can we expect a full price hike to be seen in our volumes also? 54:57 54 minutes, 57 seconds See they everybody is talking about uncommitted volumes. Sorry. 55:01 55 minutes, 1 second Yeah. I hope by by graph techch or we announcing that we are taking a rise of $600 $1,200. 55:08 55 minutes, 8 seconds I I wish the market the market behaved uh the market accepts whatever we are talking about. I mean it's one thing to 55:17 55 minutes, 17 seconds say that I want to do this and there's there's always other sides who negotiates with you and in this business as you know very well it's a very it's a 55:26 55 minutes, 26 seconds very long process uh very long processdriven industry. 55:31 55 minutes, 31 seconds Some products take uh the minimum time taken to produce electrode is about two two and a half months and the longest time takes as much as four to 5 months. 55:41 55 minutes, 41 seconds So obviously in this kind of a business we have to uh take orders at least for the next 3 to 6 months otherwise we can't even meet 55:50 55 minutes, 50 seconds the delivery schedules and then if you're exporting 70% to more than 30 countries it takes time for the products 55:58 55 minutes, 58 seconds to reach America. America will take like 40 45 days to to reach. So so so we we 56:06 56 minutes, 6 seconds are committed on on a certain price uh for a certain period of time and similarly we are also committed to buy 56:14 56 minutes, 14 seconds needle coke for a certain period of time at a fixed price. So there's a time lag between when you announce that you are 56:23 56 minutes, 23 seconds taking a price increase and the time that you start getting it. 56:31 56 minutes, 31 seconds Yeah. Yeah. Sure. Get it from us. Thanks. Thank you. 56:40 56 minutes, 40 seconds The next question comes from the line of Rohit 40 from Marshmallow Capital. Please go ahead. 56:48 56 minutes, 48 seconds Thank you for the opportunity. Uh the commentary is always very helpful to understand the industry of course. Um on 56:55 56 minutes, 55 seconds middle coke specifically uh uh we mentioned that we have supplies till June uh which will last us till September given how the manufacturing 57:04 57 minutes, 4 seconds works but is there any indication as to uh with the Middle Eastern crisis going on how much uh how much of an increase 57:14 57 minutes, 14 seconds we are seeing in coke prices right now because I'm guessing some amount of negotiation would have begun for the next uh shipment right 57:23 57 minutes, 23 seconds uh so far there is uh no indication we've not heard from them and maybe in the month of June or uh maybe by 15th 57:31 57 minutes, 31 seconds June or something when we actually sit down and discuss uh the next quarter contracts I don't know what they will uh come up with 57:40 57 minutes, 40 seconds understood but with the crude price increase and and there raw metal as a derivative there should be a price increase that's correct 57:49 57 minutes, 49 seconds yeah it eventually comes from oil it comes from decanted oil so when oil goes up of they are impacted and we'll see how the oil prices are behaving. They 57:58 57 minutes, 58 seconds might come down, they might stay where they are. So probably the right time when we'll come to actually know of it will be in sometime in the middle of June. 58:08 58 minutes, 8 seconds Thank you. Uh the second question is uh in the opening commentary chairman sir spoke about uh u the regionalization of 58:16 58 minutes, 16 seconds trade even in our industry right. to uh how I mean so there is a lot of uh protective measures including the cban 58:24 58 minutes, 24 seconds measures in Europe against steel imports and then um there is talk of counterveailing and anti-dumping duties in US against India and Chinese imports 58:33 58 minutes, 33 seconds uh which apparently they expect to see an outcome by September so in this increasing regionalization uh that 58:42 58 minutes, 42 seconds happening uh how do you see uh our volumes uh over the next two three 58:49 58 minutes, 49 seconds years. Do you think it would affect our volume that we can export or it won't impact us because of our cost competitiveness? 59:00 59 minutes Um I I think it all it all it depends upon how how 59:07 59 minutes, 7 seconds the whole thing goes. I mean we I mean obviously we have uh we have uh taken a very strong law firm from India and we 59:16 59 minutes, 16 seconds have taken a very strong law firm in US and and they've taken all the datas and 59:22 59 minutes, 22 seconds everything from us and uh we'll know in the next four five months uh as to what happens but we we we don't think that uh 59:32 59 minutes, 32 seconds we are doing something seriously wrong uh at least in America. where our 59:39 59 minutes, 39 seconds pricing is amongst the highest. So, but it's a it's a matter of legalities. I mean, we'll see what happens. 59:49 59 minutes, 49 seconds But the whole world is becoming very protective as we as we have seen in the last 1015 years. 59:57 59 minutes, 57 seconds Got all all I can say is that we we are we are we are the lowest cost producer. 1:00:05 1 hour, 5 seconds So to some extent uh if they if they are if these duties or taxes whatever you want to call is 1:00:13 1 hour, 13 seconds that that's at a reasonable level we can probably absorb it 1:00:21 1 hour, 21 seconds understood that was helpful sir and uh the price increase he spoke about I mean the primary driver of price increase uh 1:00:29 1 hour, 29 seconds for us in the graphite electrode industry would be driven by the cost increases related to what's happening in Middle East, right? There is no other 1:00:37 1 hour, 37 seconds reason why there's a price increase or is there something else driving the price increase? No, they're far than ours. 1:00:45 1 hour, 45 seconds So, it's not just a Middle East problem. 1:00:47 1 hour, 47 seconds I mean, even before the Middle East problem, if you go through the quarterly results of all the all the only two 1:00:55 1 hour, 55 seconds three international companies uh so they have been losing money pretty big time even before the war. 1:01:07 1 hour, 1 minute, 7 seconds Uh so I mean my confusion is more around why now right so this what you've been saying has been going on for 3 four years probably but but around this time 1:01:16 1 hour, 1 minute, 16 seconds is the crisis more a coincidence or is it the uh I mean is it the nuts that the market needed to increase prices why 1:01:24 1 hour, 1 minute, 24 seconds this year and will it continue over the next year is it difficult to answer these questions given the volatility 1:01:32 1 hour, 1 minute, 32 seconds what what exactly was your question when you said why now? 1:01:36 1 hour, 1 minute, 36 seconds No. So what you said about see capacity has been the supply has been shutting down in the industry over the last 3 four years. Um the uh losses in graphic 1:01:45 1 hour, 1 minute, 45 seconds and the Japanese players has been going on for 2 three four years. Uh but we are seeing finally price increasing increases potentially happening now in 1:01:53 1 hour, 1 minute, 53 seconds the graphite space. Uh so uh so what is driving the price increases to happen this year and will it continue over the 1:02:02 1 hour, 2 minutes, 2 seconds next year? Uh is uh or is it too difficult [clears throat] to answer this question? 1:02:08 1 hour, 2 minutes, 8 seconds William graphite electrode industry was looking for a price rise not from now for the 1:02:14 1 hour, 2 minutes, 14 seconds last almost two years because this is unsustainable for them for the our peer group incurring losses quarter by 1:02:23 1 hour, 2 minutes, 23 seconds quarter was unsustainable. So everybody was hoping for things to turn around and price rises to happen. But if you say 1:02:30 1 hour, 2 minutes, 30 seconds why now probably is the last straw on the camel's back that now with this additional Middle East thing war it's it's not totally unsustainable for them. 1:02:39 1 hour, 2 minutes, 39 seconds So uh I think now this is this was the right time if if not now then when it's like that but as you said while about 1:02:48 1 hour, 2 minutes, 48 seconds the timing then I should say that all of us including HD were looking for a price increase to happen for last quite a few 1:02:57 1 hour, 2 minutes, 57 seconds quarters and it didn't happen and overall o over and above now there's a middle situation rise in energy rise in 1:03:03 1 hour, 3 minutes, 3 seconds freight so the last on the camel back and Thank you for your answers. You've been very helpful. Thank you so much. 1:03:14 1 hour, 3 minutes, 14 seconds Thank you. Your next question comes from the line of Akillesh from MK Glob. Please go ahead. 1:03:20 1 hour, 3 minutes, 20 seconds Yeah. Hi. Uh good afternoon sir. So my first question is on the utilization uh of graphite electrode. So how much exactly it has been for the fourth 1:03:29 1 hour, 3 minutes, 29 seconds quarter because uh uh you know as we said the volume is only impacted by thousand tons but it does not return in 1:03:36 1 hour, 3 minutes, 36 seconds the Q3 numbers because in Q3 we had said that 85% utilization is there. So on my numbers it is coming at around two and a 1:03:44 1 hour, 3 minutes, 44 seconds half thousand tons for the quarter difference. So can you please explain that? 1:03:51 1 hour, 3 minutes, 51 seconds See the capacity utilization when you say we talking about production how much we produce and then the sales wise. So 1:03:58 1 hour, 3 minutes, 58 seconds if you strictly talk about capacity utilization on production actually it's 95% for the quarter and sales wise uh it 1:04:07 1 hour, 4 minutes, 7 seconds is it is less than that overall for the year it is more than 90%. 1:04:13 1 hour, 4 minutes, 13 seconds Okay so on production wise 2 and a half thousand tons of number the difference what I'm getting is correct. So on the sales volume we are down thousand times. 1:04:22 1 hour, 4 minutes, 22 seconds Down thousand times absolutely will. 1:04:25 1 hour, 4 minutes, 25 seconds Okay. Sure. And the second question is that uh why other income has gone down during the quarter? Does it only 1:04:32 1 hour, 4 minutes, 32 seconds constitute the uh interest income or any other uh part of uh income is al also included in this and how should we see 1:04:40 1 hour, 4 minutes, 40 seconds it going ahead for the on quarteron quarter basis? 1:04:45 1 hour, 4 minutes, 45 seconds Yeah, the [clears throat] other income in the quarter is yeah, income in the quarter is lower due to the loss in the 1:04:53 1 hour, 4 minutes, 53 seconds uh the fair valution loss which we have classified in the other expenses. That's why the income is is coming in the quarter is lower sides as compared to 1:05:01 1 hour, 5 minutes, 1 second the previous quarter and going forward it will be in the in in the same line as we we are in the previous quarter. 1:05:10 1 hour, 5 minutes, 10 seconds Okay. Okay. And lastly sir from my end uh last quarter in Q3 we had guided for 1:05:17 1 hour, 5 minutes, 17 seconds the sustainance of aida margin of around 22% for the next couple of quarters. 1:05:23 1 hour, 5 minutes, 23 seconds Clearly in Q4 because of all these middle east crisis uh we could not sustain that kind of margin. So how should we see it now going ahead for the 1:05:31 1 hour, 5 minutes, 31 seconds quarters and for FY 2728 if you could shed some light on that. 1:05:38 1 hour, 5 minutes, 38 seconds uh according to me in the first two quarters April to June July to September see all along these quarters we have been as Raviti said we've been between 1:05:48 1 hour, 5 minutes, 48 seconds 15 to 20 and we have closed this year also at uh 20 now these two quarters where we have uh committed volumes it 1:05:56 1 hour, 5 minutes, 56 seconds should be around again around maybe around 17 18 or something I can't hazard a guess it depends upon what happens in the balance of the quarter should be 1:06:05 1 hour, 6 minutes, 5 seconds around that number if you want to correct me these words. 1:06:10 1 hour, 6 minutes, 10 seconds So these are correct. So the range will be the range will be the 20% we can say for the next uh first quarter and two second quarters. 1:06:20 1 hour, 6 minutes, 20 seconds And for this whole year it will be more than 20. Is it good to say that? Yes. Should we? 1:06:25 1 hour, 6 minutes, 25 seconds Yes. Plus% should be should be. 1:06:32 1 hour, 6 minutes, 32 seconds Yeah. That's it for Thanks. 1:06:35 1 hour, 6 minutes, 35 seconds Thank you ladies and gentlemen. We will take that as the last question for today. I now hand the conference away to Mr. Ravi Janjin for closing comments. 1:06:56 1 hour, 6 minutes, 56 seconds So I guess if there is no no further question uh so let me thank all of you and for taking so much of uh interest 1:07:04 1 hour, 7 minutes, 4 seconds and asking us some very very very probing question probing queries and uh this forces us to think about uh 1:07:14 1 hour, 7 minutes, 14 seconds answering all these things which we'll a couple of things maybe we would not uh think about otherwise. So thank you very 1:07:21 1 hour, 7 minutes, 21 seconds much and I hope uh you continue to ask us these uncomfortable questions and we are able to satisfy you. Thank you very 1:07:28 1 hour, 7 minutes, 28 seconds much and I look forward to meeting you again in 3 months time. Thanks. 1:07:34 1 hour, 7 minutes, 34 seconds Thank you members of the management. On behalf of HG Limited that concludes this conference. Thank you for joining us and you may now disconnect your line.