Rajratan Global Wire Ltd — Q4 FY26

Rajratan Global Wire Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=hVI9VKeF_s4 Published: 3 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to Rajatan Global Wise Limited Q4 FY26 earnings conference call hosted by 361 Capital Markets. 0:13 13 seconds As a reminder, 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. 0:23 23 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:35 35 seconds I now hand the conference over to Mr. Shares Raja from 361 Capital Markets. Thank you and over to you sir. 0:44 44 seconds Yeah. Uh good evening all. Thank you for joining us for Rajat and Global Versus Limited fourth quarter of FI26 earnings 0:51 51 seconds conference call. uh during this call from the management side we'll be hearing from Mr. uh Sunil Chia uh chairman and managing director uh Mr. 1:01 1 minute, 1 second Ashawadan uh CEO and uh deputy managing director of the company uh Mr. P Jane uh 1:07 1 minute, 7 seconds CFO Rajatan Thailand and Mr. uh Hit Jane CFO Rajatan India. I would now like to turn the call to uh chairman and 1:16 1 minute, 16 seconds managing director uh for the opening remarks followed by Q&A. Sir uh you may begin now. 1:23 1 minute, 23 seconds Yeah. Yeah. Uh thank you Sesh. Uh and thank you all the participants for your 1:29 1 minute, 29 seconds interest in Rajatan. uh and I'm happy to uh you know say that we are meeting in a 1:37 1 minute, 37 seconds very exciting times when the uh global businesses are affected by you know a 1:44 1 minute, 44 seconds geopolitical situation uh war situation in GICC countries lot of businesses are 1:51 1 minute, 51 seconds affected supply chains are uh disturbed okay but uh our company has been able to 1:59 1 minute, 59 seconds perform Well, in spite of all the difficulties and uh we have a mix of you 2:06 2 minutes, 6 seconds know good news and some not so good news. Good news is that uh we have been 2:14 2 minutes, 14 seconds able to achieve the uh highest ever uh sales tonnage. Our sales uh on yearon-year basis have increased by 18%. 2:24 2 minutes, 24 seconds We have done more than 133,000 tons of total sales from three locations and uh 2:33 2 minutes, 33 seconds in particularly in this quarter we could not achieve the ITA targeted IITA that 2:40 2 minutes, 40 seconds is because of the uh high prices of raw material there was a sudden increase in uh steel prices beginning from January. 2:50 2 minutes, 50 seconds So from January till March the prices went up by almost 10,000 rupees a ton uh which uh we could not pass on to the 2:58 2 minutes, 58 seconds customer and uh that is why the IITA percentage in this quarter has gone down. Coupled with that the availability 3:08 3 minutes, 8 seconds and the price of uh energy was a difficulty which also affected the ITA 3:14 3 minutes, 14 seconds margin particularly in this quarter. So but we have been able to pass on the 3:21 3 minutes, 21 seconds price increase in the current quarter and uh we see a robust demand from all our customers uh in India as well as in 3:30 3 minutes, 30 seconds Thailand and globally also. So I can say that uh this year uh should be another 3:38 3 minutes, 38 seconds growth year for Rajatan and we target to grow our business uh in volume by around 3:45 3 minutes, 45 seconds 17 18% uh in the current year also. With this uh I'm happy to answer all your questions along with my team members. 3:55 3 minutes, 55 seconds Thank you so much. 3:58 3 minutes, 58 seconds Thank you. We will now begin the question and answer session. 4:03 4 minutes, 3 seconds Anyone who wishes to ask a question may press star and one on the test telephone. 4:10 4 minutes, 10 seconds If you wish to remove yourself from the question queue, you may press star and two. 4:15 4 minutes, 15 seconds Participants are requested to use handsets while asking a question. 4:20 4 minutes, 20 seconds Ladies and gentlemen, we will wait for a moment while the question cube assembles. 4:57 4 minutes, 57 seconds The first question is from the line of Sanesa KS Securities Private Limited. Please go ahead. 5:05 5 minutes, 5 seconds Yeah. Uh good evening sir. Thanks for opportunity and uh sir sincerely appreciating the performance in this 5:11 5 minutes, 11 seconds global volatile uh situation. My question was regarding uh can you please 5:18 5 minutes, 18 seconds uh highlight upon and talk about exports business opportunity region wise for our uh we wire and even some non tire 5:27 5 minutes, 27 seconds segment globally. 5:32 5 minutes, 32 seconds So uh Sanjay we won't be able to give very specific information but generally uh Yeshua Adan is handling the global uh 5:41 5 minutes, 41 seconds business so he will answer you what are the developments in different markets. Yeah. 5:47 5 minutes, 47 seconds Uh yeah. Hi. So because of volatility to be honest uh the only impact that we've 5:55 5 minutes, 55 seconds seen till now is uh disruption in shipping especially from our Thailand 6:01 6 minutes, 1 second plant. But uh overall the uh development of export market remains robust for us. 6:10 6 minutes, 10 seconds Uh there are many uh companies that have already approved us in Europe. Uh and we are under regular supplies to them since 6:18 6 minutes, 18 seconds last 6 months. Uh definitely ensuring that the material reaches them on time is something that uh we are struggling 6:27 6 minutes, 27 seconds with since last uh 30 40 days. But I think that should ease out. And uh also 6:35 6 minutes, 35 seconds in American market uh the demand still continues to be robust. So we were 6:41 6 minutes, 41 seconds expecting that the geopolitical issues will create or reduce the demand but it has not happened till now. 6:51 6 minutes, 51 seconds That's great. So basically it's in tire segment itself or in non- tire also we are looking I would say I would say 70% of the 6:59 6 minutes, 59 seconds efforts and development is happening in uh tire segment in terms of number of counters and number of plants but today 7:09 7 minutes, 9 seconds uh non- tire segment volume is also uh substantial but this r ratio will keep changing because you know tire companies 7:17 7 minutes, 17 seconds take a long time to approve uh products are faster approvals and volumes come in faster. 7:24 7 minutes, 24 seconds So it's a mix of both right? Yes. 7:29 7 minutes, 29 seconds Um um Sun I one question for you was regarding our Chennai Chennai plant. uh 7:36 7 minutes, 36 seconds can you share uh uh the ideology of working where we have shifted uh many uh 7:43 7 minutes, 43 seconds tire industry uh supply from Chennai and we are uh catering to some low margin customers from indoor. So how do you see 7:52 7 minutes, 52 seconds that panning out in near future and how do you see that uh capacity over there and do we need any capex in any each of the plant further? 8:03 8 minutes, 3 seconds Yeah. So uh you know uh last quarter Chennai utilized capacity almost 85 90%. 8:12 8 minutes, 12 seconds Okay. Uh if you look at their exit rate uh against 30,000 tons capacity they 8:18 8 minutes, 18 seconds have been producing 20 to 2300 tons per month. Okay. And that is why we decided to put in the money for balance 8:27 8 minutes, 27 seconds equipment and uh some equipments have started arising and we'll become a 60,000 tons capacity plant by second quarter of this financial year. Okay. 8:39 8 minutes, 39 seconds This year our plan is to sell around 35,000 tons from uh Chennai uh to all 8:46 8 minutes, 46 seconds the customers who are in that region. So we will be able to cater to customer in 8:52 8 minutes, 52 seconds North India who might be a lower price customer. Okay. So as specified earlier, we don't want to lose our market share. 9:03 9 minutes, 3 seconds Okay. As long as uh the product is giving us some contribution, we want to continue with our high market share and 9:12 9 minutes, 12 seconds uh entire sector our market share has again reached to uh 40 to 43%. 9:20 9 minutes, 20 seconds Which had come down to 35 37%. 9:24 9 minutes, 24 seconds And uh we are also uh putting in capex for steel cord for conveyor belt in our 9:31 9 minutes, 31 seconds indoor facility. So that project of course got little delay because of the reconstruction of the shed. We have 9:39 9 minutes, 39 seconds broken the old shed uh which was made in 1989 and built up a new big shed. uh but 9:48 9 minutes, 48 seconds now that work is over and machines are getting installed and we'll be able to start trials in the second quarter of 9:55 9 minutes, 55 seconds that product also. So apart from this two capex there is no additional capex planned for this year as of today. Yeah. 10:04 10 minutes, 4 seconds So what will be that amount of capex? 10:07 10 minutes, 7 seconds No, we in in the steel cord we have already invested around 55 crores I think 45 to 50 crores and we'll require 10:16 10 minutes, 16 seconds another 25 crores to uh complete that capex and Chennai this year will be 10:23 10 minutes, 23 seconds close to 25 crores to complete the capacity to 60,000. 10:29 10 minutes, 29 seconds That's helpful. So my last question was regarding margin uptake. Can we see that establishing the rising raw material and 10:36 10 minutes, 36 seconds energy prices get pass in coming future time in this this year itself 10:48 10 minutes, 48 seconds whether you whether it is the steel price or it is other consumables or 10:55 10 minutes, 55 seconds uh even energy prices and currently we are seeing that there is a pressure on 11:03 11 minutes, 3 seconds the uh dispatches we are not able to uh meet the demand of customers to supply them on time okay because there is a 11:12 11 minutes, 12 seconds shortage of uh raw material also okay but uh I think that will become smooth 11:19 11 minutes, 19 seconds uh by end of this month and uh we'll be uh able to meet our overall production 11:27 11 minutes, 27 seconds target and sales target for this year unless something major happens again Okay. So you cannot you have to keep 11:35 11 minutes, 35 seconds your fingers crossed going another war another you know issue. Yeah. That uncertaintity will remain. So what 11:44 11 minutes, 44 seconds whatever I'm talking of is a normal situation. Yeah. Got it. Got it. 11:53 11 minutes, 53 seconds US we supply to our company in USA who 12:02 12 minutes, 2 seconds imports pays 50% duty on the product. So that amount also add adds on to the working capital cost and then customer 12:10 12 minutes, 10 seconds pays us in 30 or 60 days after he receives the material. So that credit cycle has become bigger. 12:18 12 minutes, 18 seconds Got it sir. Thank you sir. very helpful and best of luck. Thank you. Thank you. 12:26 12 minutes, 26 seconds Thank you participants. Anyone who wishes to ask a question by press star and one on the test on phone. We have 12:32 12 minutes, 32 seconds next question from Pit Vitani from Incred. 12:37 12 minutes, 37 seconds Please go ahead. Uh thank you for the opportunity. Uh congratulation for the for good set of volume numbers. Uh sir 12:45 12 minutes, 45 seconds my first question would be on raw material cost. So by telling that we are able to pass on the entire 10,000 rupees 12:52 12 minutes, 52 seconds per term which has been increased in the cost uh do we mean mean to say that we would be able to reach 38 39% gross 12:59 12 minutes, 59 seconds margin which we which we were doing in Q3 uh back in Q1 is my understanding clear 13:08 13 minutes, 8 seconds it will be a little more because uh in percentage we'll be able to maintain gross margin so on absolute numbers 13:15 13 minutes, 15 seconds because prices have gone we'll be able to do that not an issue. 13:20 13 minutes, 20 seconds Yeah. So I don't see an issue in this quarter. Yeah. 13:24 13 minutes, 24 seconds Okay. And uh I was seeing that Thailand as well as India India numbers in India there was a pressure on gross margin but 13:32 13 minutes, 32 seconds I can see that in quarter four Thailand gross margin stayed constant quarter on quarter but we have seen huge other huge 13:39 13 minutes, 39 seconds increase in other expense for this quarter as well as for this whole year. Any particular reason for the same? 13:45 13 minutes, 45 seconds Okay. Other expenses here it is not Thailand other expenses we have now one more 100% subsidiary which is getting 13:54 13 minutes, 54 seconds merged in this balance sheet that is USA Rajataman USA. Okay. So there is a cost 14:02 14 minutes, 2 seconds of around 30 crores uh which is uh for 6 months uh wherein we have uh we have 14:10 14 minutes, 10 seconds been supplying to USA on a FOB basis because the import duty in USA is on the FOB cost of the product. Okay. And the 14:18 14 minutes, 18 seconds US company pays for the shipping cost and logistic cost. So that 30 cr of cost 14:25 14 minutes, 25 seconds for uh second half of the year is booked in the USA balance sheet. Okay. So uh uh 14:34 14 minutes, 34 seconds because both the balance sheets are merged and you can't see USA balance sheet separately. You think that it has 14:42 14 minutes, 42 seconds gone up in Thailand. It has not gone up in Thailand. It has gone up in USA. Okay. 14:49 14 minutes, 49 seconds So now it is new normal that we would be incurring around 60 cost for the full year in this subsidiary or 14:57 14 minutes, 57 seconds is the export volumes are like this or uh we have a projection to increase that. So this will be further increased. 15:07 15 minutes, 7 seconds This will be so uh can you just help me explain between the AITA per turn or AITA margin differential between when we 15:14 15 minutes, 14 seconds sell in India or we sell in Thailand or we sell in USA or any other export country are the isa per turn maintain at 15:22 15 minutes, 22 seconds the same level or if you could just tell us peaking order no uh because there will be very 15:29 15 minutes, 29 seconds different prices okay logistic cost prices long-term contracts you know some orders are uh at good price. Some orders 15:38 15 minutes, 38 seconds are long-term commitment. It is very difficult to uh tell you that uh what is 15:46 15 minutes, 46 seconds a dita in USA market, what is aa in Thailand or customer wise. Okay, in Thailand we have a mix of customer the 15:55 15 minutes, 55 seconds prices ranges from something like 26,000 B to 34,000 B. Okay, so very difficult. 16:05 16 minutes, 5 seconds You can continue to assume that we'll be able to maintain this level 13 and a 16:13 16 minutes, 13 seconds half 14% safely across lines across across coordinator on a consolidated 16:21 16 minutes, 21 seconds basis on a consolidated basis and uh sir one question from my head uh this year you have also shown the segmental difference 16:29 16 minutes, 29 seconds in the quarter quarter financial about how much we have got from India how much we have got from Thailand and US and 16:36 16 minutes, 36 seconds rest of world. Uh can you break up this 17 18% volume growth which you mentioned uh region wise how much growth we expect 16:44 16 minutes, 44 seconds in India? How much growth we expect in Thailand and how much growth in USA? 16:48 16 minutes, 48 seconds So I I think we have given we have grown 19% in uh sales volume in India. We have 16:54 16 minutes, 54 seconds grown uh 17% in Thailand and we overall consolidated growth in volume is about 18%. 17:03 17 minutes, 3 seconds Okay. I'm I'm asking for uh sorry for interruption. I'm asking for FI27 the guidance which we are giving 17 18% volume growth for FY27. 17:14 17 minutes, 14 seconds U if you could just break it up further how much growth we expect in India how much growth we expect in Yes. Yes. I can tell you Thailand we are 17:23 17 minutes, 23 seconds not expecting uh 20%, we are expecting around 10 to uh 14% because there is a 17:31 17 minutes, 31 seconds capacity constraint in Thailand. Okay, we are doing some debottle making. Uh so 17:37 17 minutes, 37 seconds thin from current year volume which is close to 51,000 will grow to 55 56,000. 17:45 17 minutes, 45 seconds That is why I'm saying 10 11% growth in volume in Thailand but balanced growth 17:51 17 minutes, 51 seconds of uh to make it to a consolidated 17% will come from India because Chennai 17:58 17 minutes, 58 seconds capacity is ramping up and we have little growth possible in uh tithapur 18:04 18 minutes, 4 seconds factory and in all these numbers I'm not uh including steel cord. So steam cord 18:11 18 minutes, 11 seconds will be trials and it will take some time before we talk of volumes of that product. Yeah. So next year you can you 18:20 18 minutes, 20 seconds can estimate 155,000 tons of total sales if things remain normal globally. Yeah. 18:29 18 minutes, 29 seconds Uh yeah I was asking about not plantwise growth. I was asking about region while region wise revenue growth like USA we 18:38 18 minutes, 38 seconds last year we did 200. So the revenue huh so USA will further grow uh I'll be like 18:45 18 minutes, 45 seconds this year export from India has grown by 250%. Okay. But in different markets we 18:52 18 minutes, 52 seconds choose where to supply from. Okay. So matching both this uh is little difficulty. Okay. We look at the 19:00 19 minutes transportation cost capacities available in different plants. Okay. But uh we have a plan to grow around 30% in North 19:09 19 minutes, 9 seconds America. I can tell you and uh yeah and some growth in Europe which will be around 50%. 19:17 19 minutes, 17 seconds and Southeast Asia 10 15%. Because we were suppliers in South Asia, Southeast 19:24 19 minutes, 24 seconds Asia for many many years. So not many opportunities uh left for us. 19:32 19 minutes, 32 seconds North Europe you mentioned 50% 5050. Yeah. Yeah. Because the base is low. 19:38 19 minutes, 38 seconds Yeah. And Southeast Asia you mentioned around 10%. Yeah. 10 10 to 15. Yeah. 19:44 19 minutes, 44 seconds 10 to 15. base is high and uh US we see bigger opportunities. Yeah. 19:54 19 minutes, 54 seconds Got it. Got it. And uh sir if you could if you could mention about working capital difference like you mentioned uh 20:01 20 minutes, 1 second if we sell to USA we take additional 30 40 days to receive our money because of the long supply chain. What would be the 20:09 20 minutes, 9 seconds difference between this the working capital in India and Thailand? Do we receive it in 30 days or 60 days? 20:15 20 minutes, 15 seconds Thailand is overall every 30 days and uh India is about uh you know 50 to 60 days 20:26 20 minutes, 26 seconds and then some working capital for uh stocking and finished good and raw material. So 20:34 20 minutes, 34 seconds but export has a longer working capital cycle because Europe shipping line takes 20:40 20 minutes, 40 seconds 45 days to reach. USA takes anything from 45 to 60 days and then there is a credit to be extended. Yeah. 20:50 20 minutes, 50 seconds But so we would continue to see short-term loans at a higher working capital loans at a higher range for next couple of years until we reach to a mature stage. 20:59 20 minutes, 59 seconds Yeah. Yeah. it is good to borrow at 7 7 and 1/2% okay and invest in a profitable 21:07 21 minutes, 7 seconds business so uh working capital borrowing will continue 21:15 21 minutes, 15 seconds I'll join back in the queue thank you so much sir yeah thank you thank you we have next question from the line of 21:23 21 minutes, 23 seconds vinit takur from plus 9 91 over sir Yes, good afternoon. 21:31 21 minutes, 31 seconds Uh yes, congratulations on the volume growth. Uh sir, I wanted to know what would when would we see a margin reversal to the 21:40 21 minutes, 40 seconds expected levels of around 13 to 14% as we had spoken on 9 months. 21:47 21 minutes, 47 seconds Yeah. So as told you in the earlier question you know the margin dip is because purely because of the sudden 21:55 21 minutes, 55 seconds increase in vot price in January, February, March which we have been able to pass on to customers in the current 22:04 22 minutes, 4 seconds quarter April, May, June. So you will see the margin coming back to 13 13 and a half in the current quarter itself. If 22:13 22 minutes, 13 seconds everything remains normal, if there is another situation, some another breakout 22:20 22 minutes, 20 seconds event happening in the world then yeah and sir uh so like uh we had spoken 22:30 22 minutes, 30 seconds about the wire rope uh expansion as well and the steel cord expansion as well. Uh so what is the timeline of the steel 22:37 22 minutes, 37 seconds cord when would it be online itself and yeah so wrote and steel cord R1 okay earlier we were telling that it is a vro 22:46 22 minutes, 46 seconds project but now it's a similar product but uh we have decided to make the same 22:53 22 minutes, 53 seconds product which was what was being made in the same factory in Greece so and that will start uh production in trials in 23:01 23 minutes, 1 second second quarter and we'll take some time for approval and uh you know regular production. So you can expect bigger 23:10 23 minutes, 10 seconds revenue next financial year and in all our discussion and projection we are not including bigger numbers of this product. 23:20 23 minutes, 20 seconds So sir as I know steel cu uh gets a higher realization and it has a higher market. 23:26 23 minutes, 26 seconds It is it is it is not that steel cord for tires. This is a steel cord for conveyor belt. Okay. 23:33 23 minutes, 33 seconds Yes sir. So very niche product in a niche market. Yeah. 23:38 23 minutes, 38 seconds So sir, what would be the capacity of the uh the total capacity of this uh plant is 10,000 tons a year and the 23:46 23 minutes, 46 seconds okay uh generation at current level of pricing the top line possible from this investment is around 150 kores. That 23:56 23 minutes, 56 seconds would be I'm assuming in three to four years to reach peak utilization. Would it correct? Two years. Two years. Yeah. 24:05 24 minutes, 5 seconds From next year onwards FI 29. 24:08 24 minutes, 8 seconds 29. Correct. Got it. Sir and sir, what would be the average realization for steel uh steel cord? 24:16 24 minutes, 16 seconds Different sizes, different prices, but on an average 150 rupees a kg. 24:22 24 minutes, 22 seconds And what are the margins on this product? 24:29 24 minutes, 29 seconds current sales and if you look at financials they beta margin as of today are around 20%. 24:36 24 minutes, 36 seconds Okay but we'll have to see going forward. Yeah how it works out. 24:42 24 minutes, 42 seconds I'm sir there is a debt increase as well in shortterm and long term. Uh what would be the peak that we are assuming post the cape cycle once it's completed? 24:53 24 minutes, 53 seconds Yeah, I have been telling that this is the peak but because of business situation our volumes in uh uh North 25:01 25 minutes, 1 second America have grown substantially which has in which needed more working capital so we had to borrow. Similarly uh capex 25:10 25 minutes, 10 seconds in steel c and uh remaining capex in uh Chennai 25:17 25 minutes, 17 seconds required more uh you know term loan but we have paid around 50 crores of term loan in the current year also. So that 25:26 25 minutes, 26 seconds is the company culture. We keep borrowing and repaying and we still feel rather than diluting equity we should 25:35 25 minutes, 35 seconds continue borrowing at a lower cost. uh and uh you know save dilution of equity. 25:44 25 minutes, 44 seconds Um so there's a very quite a spike in the other income as compared to last year. Could you shed some light on is it 25:52 25 minutes, 52 seconds like a one of uh other income is other income is gain on foreign currency fluctuation foreign 26:01 26 minutes, 1 second currency appreciation. So dollar has appreciated as we have a bigger you know 26:08 26 minutes, 8 seconds export we gained on dollar and uh Thai bath has also become uh strong. So there 26:16 26 minutes, 16 seconds is uh there is a growth uh there is a appreciation of Thai bath which has reflected in the village sheet. 26:26 26 minutes, 26 seconds Okay sir. Uh thank you so much for answering the questions. All the best sir. Yeah, 26:34 26 minutes, 34 seconds thank you. A reminder to all the participants, please press star one on the custom port to ask questions. We have next question from Sarah with the 26:43 26 minutes, 43 seconds from Yeah, good afternoon sir and congratulations on a good performance in a tough market. 26:52 26 minutes, 52 seconds Yeah. Is it possible to share what is the exports from India which we have done if I 27:00 27 minutes the total volume I can tell you from India we have done I think close to 9,000 tons this year I 27:08 27 minutes, 8 seconds can give you that number separately also okay so FI26 27:14 27 minutes, 14 seconds you know remember yes it is little more than 9,000 tons Uh 27:23 27 minutes, 23 seconds yeah volume balance is from Thailand. 27:28 27 minutes, 28 seconds Okay. So in FI26 the export from India was about 10 9,000 odd tons. More than 9,000 tons. Yes. 27:36 27 minutes, 36 seconds Right. Okay. And next year what are we planning? Uh this number can increase to how much? I mean in FI27 from India. 27:49 27 minutes, 49 seconds Yeah. So uh next year probably we are expecting to touch about uh 15,000 tons of export from India of 15,000 tons. 28:01 28 minutes, 1 second Okay. And this will be mainly from Chennai I presume. 28:06 28 minutes, 6 seconds No again specific things are very difficult to come today. Okay. Wherever we get a container wherever we have capacity. 28:14 28 minutes, 14 seconds Sure. Sure. Secondly sir, you mentioned 25 crores of capeex at Chennai for 30,000 tons. So assuming that you are 28:24 28 minutes, 24 seconds able to ramp it up in a year's time then that 25 crores can be recovered in a year's time. Is it fair to assume that? 28:32 28 minutes, 32 seconds No, I think uh you know the plan is not to ramp up so fast. uh the decision is to invest and keep the capacity ready 28:41 28 minutes, 41 seconds but uh the volumes will increase gradually only and I think the plant will also develop capability to increase 28:49 28 minutes, 49 seconds volume gradually so I think it'll be wrong to estimate 60,000 figure and then uh that next year's production will be 28:57 28 minutes, 57 seconds that much okay okay yeah and lastly sir uh on the 29:04 29 minutes, 4 seconds Chennai location being very close to your South Indian clients. Uh is it fair to assume that there could be some savings in terms of freight expenses? 29:14 29 minutes, 14 seconds Have they started realizing or it will take some time? Yeah, definitely. 29:23 29 minutes, 23 seconds Sure. Sure. Sure. 29:36 29 minutes, 36 seconds We we are very conscious that we are in a competitive market. Okay. Perfect. Perfect. 29:42 29 minutes, 42 seconds Huh. So competition will also play. The moment we pass on some benefits. 29:48 29 minutes, 48 seconds Huh. So very difficult to And so lastly, what has been our peak 29:56 29 minutes, 56 seconds market share uh in history? I mean what was our highest market share and 43 40% 43 44 30:03 30 minutes, 3 seconds so game we are back to close to that close to that exact uh uh 30:09 30 minutes, 9 seconds numbers are difficult but uh our monthly uh data collection shows that we are 30:16 30 minutes, 16 seconds back at 42 43% kind of market share in India also sir you mentioned that there are 30:23 30 minutes, 23 seconds some challenges in terms of raw material procurement so you being a market leader if you are facing challenges. Is it fair to say that your competition would face 30:33 30 minutes, 33 seconds far more challenges given uh the inflation and also the issues in terms of availability of I heard I heard that everybody in the 30:41 30 minutes, 41 seconds wire industry is having raw material issue. Okay. Huh. Yeah. 30:48 30 minutes, 48 seconds Great sir. Thank you very much and all the very best. 30:54 30 minutes, 54 seconds Thank you. We have next question from Azid Si from Eco Quantum Solutions. 31:02 31 minutes, 2 seconds Yeah, thank you for the opportunity. Uh sir, what is the KEX amount we are spending on steel cord wire? 31:10 31 minutes, 10 seconds Um close to 70 crores. 31:14 31 minutes, 14 seconds 70 crores. Okay. So uh in FY27 we had given a guidance of 37,000 from Chennai plants which comes around 60% 31:22 31 minutes, 22 seconds utilization. So it is fair to assume that we can achieve a peak utilization from Chennai plant in FY28 31:31 31 minutes, 31 seconds 28 29 by in assho said earlier it takes time to build capability okay so is a 31:40 31 minutes, 40 seconds question of our capability customer approval customer confidence lot of things are involved yeah 31:50 31 minutes, 50 seconds but let me clarify I think it's not fair to assume peak utilization so soon and that's okay. Yeah. 32:03 32 minutes, 3 seconds Thank you. We have next question from Pit Kitani from Incard NC. 32:09 32 minutes, 9 seconds Yeah. So this tax rate was very low. Any specific reason? 32:16 32 minutes, 16 seconds Yeah, it was low on a consolidated basis because will you answer? 32:25 32 minutes, 25 seconds Hello. Hello. Yeah. 32:28 32 minutes, 28 seconds Yeah. So, so in we are getting exemption on income tax after sales of 36,000 tons 32:35 32 minutes, 35 seconds and we are a bi privileged company. So the base taxes is 20% for the normal companies and privileged companies the effective tax rate comes to be 13.9%. 32:50 32 minutes, 50 seconds after after volume of 36,000 on an annualized basis. Yes. 32:55 32 minutes, 55 seconds Yeah. This 13% 10% is on entire profit or uh this is called 36,000 not even 33:02 33 minutes, 2 seconds uh entire profit 13% because it is pro rated I'm telling you effective tax rate. So up to 36,000 uh the income is 33:11 33 minutes, 11 seconds taxed up to 20% and beyond sales of 36,000 there is no tax. 33:19 33 minutes, 19 seconds It's like that's why we have seen a lower tax rate. Okay. On the PL up front. 33:28 33 minutes, 28 seconds Yeah. Thank you. Thank you. So on the PL up front, last year we did not get the PLI because of we were not able to produce the 33:37 33 minutes, 37 seconds in but this year we have done so and we are expecting 527 as well. So will this be PI benefits flow? What is status? 33:54 33 minutes, 54 seconds Hello. Uh so you audible? 34:05 34 minutes, 5 seconds Hello. 34:07 34 minutes, 7 seconds Yeah. Uh as I said uh we are knocking the doors of steel ministry. We are also making representations to commerce 34:15 34 minutes, 15 seconds ministry who is overall in charge of the PLI. Okay, they all hear us but nobody is giving assurance. I think uh it will 34:24 34 minutes, 24 seconds take some time before I can confidently say that we are getting PLI but we could not achieve first year target targeted 34:33 34 minutes, 33 seconds production as committed to them and second year targeted production was also not achieved because first year was 34:40 34 minutes, 40 seconds missed uh second year was also missed so we have requested for change in the letter okay if that is approved we'll 34:48 34 minutes, 48 seconds get PLI uh otherwise as of today the question mark is there on the PLI and in all our projection discussion we are not 34:57 34 minutes, 57 seconds including PLI as a benefit okay if if it get approved how much will be 35:04 35 minutes, 4 seconds the PLI percentage at percent on sales incremental save every year 8% from Chennai 35:14 35 minutes, 14 seconds from Chennai and total total quantum will be 40 to 50 kores in 5 years Right. 35:23 35 minutes, 23 seconds Okay. 35:24 35 minutes, 24 seconds Got it. Uh and sir, I see every year we get around 3 cr of state investment subsidiary. I think it will be because of Chennai plant. How many years still we will be getting more subsidiary? 35:35 35 minutes, 35 seconds No, it is not Chennai. It is Indor. We had done investment in uh uh 20 2020. So 35:44 35 minutes, 44 seconds we were getting 30% of the capital subsidy. So whatever we had invested that year every year we 35:53 35 minutes, 53 seconds get uh you know in 7 years that disbbursement happens. Okay. So I think some 24 25 crores was sanctioned and 36:02 36 minutes, 2 seconds every year we get 3 and a half four crores. So it is that money coming to uh balance sheet from NP state government. 36:12 36 minutes, 12 seconds we'll get similar subsidy from uh for our uh steel cord investment. 36:20 36 minutes, 20 seconds Okay. And is this subsidy shown in the P&L or is it directly knocking off the capital? 36:25 36 minutes, 25 seconds No no it is it is knocking off from the uh you know investment. 36:31 36 minutes, 31 seconds Okay. And sir for this year what would what would be our wire rope volume? 36:37 36 minutes, 37 seconds We are not assuming any volume this year. 36:40 36 minutes, 40 seconds Maximum it will be 23 2 3,000 okay but right now we are not talking of numbers 36:49 36 minutes, 49 seconds in FI26 I'm asking about the year which has just passed no there was nothing from Vro nothing so there was some other wire 36:58 36 minutes, 58 seconds also we do which count to be around 3 4% which is 14,000 tons which was 14,000 tons in indoor factory 37:06 37 minutes, 6 seconds 14,000 t for FI26 Yes. 37:11 37 minutes, 11 seconds Okay. And our uh 17 18% growth projection and 1 lakh 55,000 volume projection include this these 14,000 right? 37:19 37 minutes, 19 seconds Yes. Yes. Yes. 37:22 37 minutes, 22 seconds Got it. And then last on the compet competitor up front like we have been hearing that competitor uh has done 37:28 37 minutes, 28 seconds excess excess capacity and there there is a pressure on pricing. So what makes us different uh with respect to 37:36 37 minutes, 36 seconds competitors and uh will we be able to maintain this 13 14% margin if their excess supply comes off on the road or 37:44 37 minutes, 44 seconds do we have to reduce the price and uh take a hit on margin to preserve our market share what would be the what would be our strategy 37:52 37 minutes, 52 seconds I mean if competition decides to further reduce the price to our understanding they are already losing heavily in this 38:00 38 minutes at this price if they decide to lose further Okay. I don't know. So very difficult to predict. Okay. But we are surviving and 38:10 38 minutes, 10 seconds making this fine this kind of margin in last four five years four years at least. Okay. So competition is not new. 38:20 38 minutes, 20 seconds And what would be the price difference between our our product and their product? Is there any difference or we are at the same level? 38:27 38 minutes, 27 seconds Sorry. We and our competitor uh realization. 38:32 38 minutes, 32 seconds No, no, there's a big big big big difference. 38:36 38 minutes, 36 seconds We are at on the higher end or we are on the lower end. 38:40 38 minutes, 40 seconds We are at higher end. Definitely any new entrant has to uh enter with a price cut. Okay. 38:51 38 minutes, 51 seconds Yeah. So what makes us difference that uh it's our relationship with the with the client or what is the difference 38:59 38 minutes, 59 seconds that they are purchasing? 30 years of 30 years of hard work and knowledge of this product and relationship ability. Yeah. 39:15 39 minutes, 15 seconds Yeah. Okay. Thank you. 39:20 39 minutes, 20 seconds We have next question from Siron Arya from Molecule Ventures. This call will be this calling number being recorded. 39:30 39 minutes, 30 seconds Yeah. Hello. 39:31 39 minutes, 31 seconds Yeah. Good evening sir. Uh thank you for taking my question. I uh want to basically get a bit more understanding on the new verticles that we are trying 39:40 39 minutes, 40 seconds to do finest that is wrote and clean. If I'm right we have already spent around 70 cr in the wrote fin. 39:51 39 minutes, 51 seconds We have invested 50 cr balance will be invested in current year. 39:56 39 minutes, 56 seconds Okay. Okay. And how much are we expecting uh to do in terms of revenue from wrote alone? 40:03 40 minutes, 3 seconds Peak revenue will be 150 kores which will take uh at least 2 years to reach. Uh that is just for woop sir. 40:12 40 minutes, 12 seconds Hoop is still called whatever you say. Yeah. It's the same thing. Yeah. Yeah. Yeah. Same thing. 40:19 40 minutes, 19 seconds Yeah. Uh so sir what first of all led us to venture into this segment because it is completely new for us in a solution 40:26 40 minutes, 26 seconds segment as I'll say it is not completely new it is a wide drawing product okay only and it 40:34 40 minutes, 34 seconds goes into rubber application okay so 70 80% we know the business okay and we 40:42 40 minutes, 42 seconds wanted to identify one more product for growth in Rajatan okay so we choose to 40:50 40 minutes, 50 seconds do that. Okay, it's not a very big investment anyway we are making. We'll wait and watch the performance of this 40:59 40 minutes, 59 seconds investment and then we may decide to go in a big way. But right now it is a it's 41:06 41 minutes, 6 seconds a pilot project I would say. uh but uh so the end user industry in this segment would be different if I'm uh the 41:14 41 minutes, 14 seconds conveyor belt right so it would not be at all uh definitely it is not existing client 41:21 41 minutes, 21 seconds but there is a limited growth you can achieve in the existing client and in one product okay 41:28 41 minutes, 28 seconds uh you can't expect uh every customer to buy uh you know more than 40 50% from 41:35 41 minutes, 35 seconds one supplier okay so If if we expect a growth in uh our business uh how much can we grow in one 41:44 41 minutes, 44 seconds product? Okay. So we are also uh we are also trying to identify areas of growth. 41:52 41 minutes, 52 seconds Okay. So this was an effort to achieve that. Yeah. If uh if you could give me a 41:59 41 minutes, 59 seconds rough idea sir about the potential market size of this product and if luckily works out for us you know how 42:07 42 minutes, 7 seconds much No it is a niche it's a niche product not a very global market itself will be some 70 80,000 tons okay so 42:17 42 minutes, 17 seconds but this will also teach us how to make wrote the wire ropes so the next project might be wopes Okay. 42:27 42 minutes, 27 seconds Okay. 42:29 42 minutes, 29 seconds Which are similar uh in nature and similar in properties and manufacturing process. 42:37 42 minutes, 37 seconds So this uh this is not just an experiment for us. We are trying to basically venture into this because we want to create a new segment and uh 42:47 42 minutes, 47 seconds potentially get into the virus. Am I correct in understanding that? Yes. Yes. Yes. Perfect. Perfect. Thank you. 42:58 42 minutes, 58 seconds Thank you. We have the next question from Shashank Canoria from ICI Securities. 43:05 43 minutes, 5 seconds Yeah. Uh good evening inde so thanks for the opportunity. So just wanted to check that you given a guidance of 13 and a half to 14% sustainable margins for us 43:13 43 minutes, 13 seconds in the consult basis. So are there any drivers for margin improvement organically given that we've been ramping new capacities and optimizing the product portfolio? 43:22 43 minutes, 22 seconds Sorry I didn't get your question. So you you guided that the sustainable margins for us is 13 and a half to 14% at the 43:29 43 minutes, 29 seconds consolidated level right. So are there any drivers for margin improvement given that you're ramping up new capacities 43:36 43 minutes, 36 seconds you working on the product portfolio. So is it a case that we can improve it uh you know to 12 18 20% that we had in the 43:44 43 minutes, 44 seconds past of 15 16% is the best case uh that is possible but we would not like to guide you with that high number. 43:53 43 minutes, 53 seconds Okay, we are conscious of the fact that we are in a competitive market. Some of the participants already asked me a question. Are you scared of competition? 44:04 44 minutes, 4 seconds Will you have to further reduce the price? Okay. So, you are asking me totally opposite question. Okay. So, we are projecting and we are talking in 44:13 44 minutes, 13 seconds middle. Okay. We are not uh optimistic about 18 20%. But we are also not 44:22 44 minutes, 22 seconds pessimistic about 11 12%. Okay, we should be making a decent margin of 13 44:28 44 minutes, 28 seconds 14%. Okay, if anything better comes up, it will be you know a good surprise for all of us. 44:38 44 minutes, 38 seconds Right. 44:40 44 minutes, 40 seconds Given the fact that you already passed on the rising metal prices to your customers, do we receive any compensation for loss of profitability for Q4? Any one time compensation for? 44:49 44 minutes, 49 seconds No. No, nobody gives. Nobody gives. 44:52 44 minutes, 52 seconds Okay. Okay. And uh so last you know uh there is there is a fear among you know that the auto sales might slow down 44:59 44 minutes, 59 seconds because of some supply chain issues as well as priceex and autoians. So any demand outlook you'll be hearing from tire players regarding you know how do 45:07 45 minutes, 7 seconds you they see the market both on the domestic and the export sprint. 45:11 45 minutes, 11 seconds No when we meet our customers everybody is keeping fingers crossed. Okay. But up till now there is no negative uh impact. 45:21 45 minutes, 21 seconds Okay. But all of us are expecting April and then lot of it depends on Mr. Trump. 45:34 45 minutes, 34 seconds Okay. Right. Right. Right. Sir Lastly any any take on the competative intensity I think no demand supply 45:42 45 minutes, 42 seconds mechanics in terms of capacities domestically and globally if you can help us understand uh currently capacity is much more than 45:51 45 minutes, 51 seconds the demand. Okay. So there is a competition and some of the companies uh globally are also 46:00 46 minutes uh whether they will survive or not is not clear. So consolidation is also happening. 46:09 46 minutes, 9 seconds Right. Right. Fine sir. Uh thank you so much for your inputs and wish you all the best. Thank you. 46:18 46 minutes, 18 seconds Thank you. We have next question from Viper Muana from Stylus Holdings. Please go ahead. 46:35 46 minutes, 35 seconds Can I get a number on that? Uh, Mr. People, your line is muted. Can you hear me now? 46:44 46 minutes, 44 seconds Yes. Hello, we can hear you. Yes. 46:46 46 minutes, 46 seconds Yes. I wanted to speak good evening. I wanted to know the capacity utilization individually across our plans. What would be that for FI26? 46:57 46 minutes, 57 seconds uh you know Chennai we uh uh peak uh in the month of March which was 85 90% of 47:07 47 minutes, 7 seconds installed capacity. So we have decided to put in balancing machines to double the capacity. Uh Indor continue to 47:16 47 minutes, 16 seconds operate at 90% capacity utilization and so islanding. Okay. So our capacity 47:23 47 minutes, 23 seconds utilizations have been uh to peak level uh in both in Thailand and indor 47:30 47 minutes, 30 seconds pithampur and Chennai is ramping up. So there will be open capacity in Chennai for the next year. 47:38 47 minutes, 38 seconds Okay. Okay. And the second question would be uh for Yeshuaan as well as you that in case of exports due to the war 47:47 47 minutes, 47 seconds was there any situation that sales got affected or are in transit or we couldn't book sales or something of that sort could you throw some light on it? 47:55 47 minutes, 55 seconds Um no as of today uh other than shipping lead times have increased and there is 48:03 48 minutes, 3 seconds congestion at uh Singapore port there's congestion at the Kalobo port. Uh other than that we have not faced any disruption. 48:13 48 minutes, 13 seconds Okay. Uh in terms of and incidentally incidentally we don't have a customer in uh GCC countries. 48:20 48 minutes, 20 seconds Okay. 48:22 48 minutes, 22 seconds Okay. Okay. where the exports are totally have come down to zero. Yeah. Great. Great. That's it from my side. 48:29 48 minutes, 29 seconds Thank you for the clarification. 48:32 48 minutes, 32 seconds Thank you. Next question from the line of Mr. Sakit Kapoor from Kaporo. Please go ahead. 48:45 48 minutes, 45 seconds Hello. Yes. 48:48 48 minutes, 48 seconds Hello. Namaskar. Thank you for the opportunity. Mr. Py when you mentioned that we are we have done some installation of finishing line at the 48:56 48 minutes, 56 seconds Chennai unit and then we will have uh open capacity so can you elaborate in terms of tonnage what would be the 49:03 49 minutes, 3 seconds addition in the Chennai unit and what are we factoring in in terms of the tenage for Q1 contribution from Chennai 49:11 49 minutes, 11 seconds and then going ahead so there are many I have mentioned that Chennai we had installed 50% of the 49:19 49 minutes, 19 seconds machines So capacity was till last year was 30,000 tons per which is being doubled 49:28 49 minutes, 28 seconds to 60,000 tons per year by addition of some balancing equipments and it will happen in the second quarter. Some of 49:36 49 minutes, 36 seconds the machines are already installed and it started running. So this year we'll have a growth uh in the 49:45 49 minutes, 45 seconds manufacturing from Chennai and from uh 17,000 tons last year we are doubling our business from Chennai. 49:57 49 minutes, 57 seconds Okay. So last year tage was of 17,000 on installed capacity of 30,000. Now this year on installed capacity of 60 we are 50:05 50 minutes, 5 seconds expecting 34 uh 34 35. Yes. And capital work in progress 50:13 50 minutes, 13 seconds closing balance. How will this uh shape of this commercialization standalized? 50:31 50 minutes, 31 seconds So you will see a very small number in WIP. All this will be capitalized and up and running. 50:40 50 minutes, 40 seconds Okay. Sir when we when we look at this number for uh say 20 k increase in the control. This is pertaining to the 50:47 50 minutes, 47 seconds Thailand unit that is the debut making exercise we are doing or no thand number is very small. Thailand 50:54 50 minutes, 54 seconds number is very small. Uh on consolidated basis all this is uh pampur steel cord project and chennai balancing equipments. 51:04 51 minutes, 4 seconds There is no other WIP. 51:09 51 minutes, 9 seconds Okay. So, and in that case then the 50 cr number which you have said for the court part how much have we invested out 51:16 51 minutes, 16 seconds of Okay. Okay. 51:27 51 minutes, 27 seconds business. Okay. Then yeah. 51:39 51 minutes, 39 seconds Okay. And and steam court will be commissioned. Uh this 50 cr project will be commissioned by second we'll start trials in second 51:47 51 minutes, 47 seconds quarter but third quarter the we should be able to capitalize everything. 51:55 51 minutes, 55 seconds debt number so I think so we close this year at long-term borrowing at 130 and 52:03 52 minutes, 3 seconds shortterm including the working capital requirement at 200 so 52:12 52 minutes, 12 seconds that is the factor already there so how much longterm 52:23 52 minutes, 23 seconds okay last year also So we have reduced the long-term loan to that extent and working capital might 52:32 52 minutes, 32 seconds be required because of high prices now because there is a price increase of around 10 to 15%. And also the increase 52:41 52 minutes, 41 seconds in volume we are talking of 17 18% volume growth which might require some working capital borrowing also and long 52:49 52 minutes, 49 seconds lead time for exports. So all these factors put together uh we don't expect any reduction in working capital 52:57 52 minutes, 57 seconds requirement rather we see some more requirement of working capital but uh term loan may not be required there will be a reduction in term loan. 53:08 53 minutes, 8 seconds Just to conclude sir in your presentation uh in your slide you have mentioned that we have robust sales pipeline established with uh market 53:17 53 minutes, 17 seconds client customers. So if you could just give us uh some understanding at least sir we were also looking for some new geographies earlier 53:25 53 minutes, 25 seconds Japan if I'm not wrong correct me there that we were trying to uh look for new customers from there that part of the 53:34 53 minutes, 34 seconds globe also so what are you trying to explain uh here and then sir one more point was in the uh in the uh in the 53:42 53 minutes, 42 seconds numbers we have mentioned within USA the revenue at 118 cr So uh tariffs 53:52 53 minutes, 52 seconds how tariff affected this case number to us 53:58 53 minutes, 58 seconds I think yes will be better but we'll be giving a guarded answer huh don't expect us to tell you everything yes hello 54:08 54 minutes, 8 seconds yeah so we had shared the export plan I think every quarter we are discussing this about setting up uh infrastructure 54:16 54 minutes, 16 seconds two years back uh which is now reached at uh final approval from customers. Uh overall our efforts is not specified to 54:25 54 minutes, 25 seconds any particular region. We see US as a big potential. Uh we also see Europe as one of the largest market for uh 54:34 54 minutes, 34 seconds beadwire and surprisingly Southeast Asia remains to be competitive but Japan is turning out to be a new 54:42 54 minutes, 42 seconds opportunity. Now all of this is just increasing our existing customer relationship to different uh 54:50 54 minutes, 50 seconds geographies. Uh the set of customers in terms of name remain the same but because they have various factories in 54:58 54 minutes, 58 seconds the world we are trying to explore opportunities uh around the globe. 55:05 55 minutes, 5 seconds Okay just to make things understandable. 55:08 55 minutes, 8 seconds Thank you sir. Can we request you to join again in the question just what just what was mentioning I was just 55:16 55 minutes, 16 seconds trying to make sense of if I may and then I jo 55:25 55 minutes, 25 seconds mentioning that we are setting up uh infrastructure so this is uh excluding the seven we have or I could not understand that 55:34 55 minutes, 34 seconds no I meant to say we've been sharing updates about this uh every quarter uh it started with setting up marketing 55:42 55 minutes, 42 seconds teams two years back which has now reached two approvals from customers from various geographies. 55:50 55 minutes, 50 seconds There is no specific region that we are targeting. Uh US also is a good potential. Europe is one of the biggest 55:57 55 minutes, 57 seconds markets for us and uh Japan also is turning out to be but it is very initial to discuss uh any specific development. 56:08 56 minutes, 8 seconds Uh I just wanted to explain that our efforts are are all over. 56:15 56 minutes, 15 seconds I joined the queue on the tariff. You please answer in the followup. How has tariff impacted 118 cr revenue from USA? 56:23 56 minutes, 23 seconds how I get it back there. Thank you. 56:30 56 minutes, 30 seconds Thank you sir. Uh we have a next question from Matisha from Safar Capital. 56:37 56 minutes, 37 seconds Yeah. Hello my Yes. 56:41 56 minutes, 41 seconds Yeah. Good evening. Uh most of my questions have been answered. Again the previous participant I think asked the question on the tariff. So if you could 56:49 56 minutes, 49 seconds uh kind of elaborate on the impact that we had on the on the US side did we have the sales most of the exports from India 56:56 56 minutes, 56 seconds or from Thailand any cash? So you know tariffs have not affected the volume or 57:04 57 minutes, 4 seconds the business because tariffs we are under section 232 where US has uh put tariff against all the imports whether 57:12 57 minutes, 12 seconds it is coming from uh India or Thailand or China or uh Mexico. Okay. Uh so we are at par with all other uh countries. 57:25 57 minutes, 25 seconds So it is not affected. It might have affected the customers there that they have to pay extra price for the product. 57:32 57 minutes, 32 seconds So we've been your question on ah yeah it is customer. Yeah definitely definitely and the sales revenue 57:41 57 minutes, 41 seconds includes the tariff which comes under our USA entity. Okay which is consolidated with this. 57:49 57 minutes, 49 seconds Yeah. Okay. 57:50 57 minutes, 50 seconds And I have answered earlier question also with this. 57:53 57 minutes, 53 seconds Yeah correct. Uh secondly on the Chennai plant so you previously mentioned that we're taking low margin uh kind of uh 58:02 58 minutes, 2 seconds like low margin sales on the Chennai side to kind of fill in the capacity and you also mentioned that there has been 58:09 58 minutes, 9 seconds like a disruption because there's lot more capacity than the demand currently that there's increased competition and consolidation happening but yet we are 58:17 58 minutes, 17 seconds increasing our capacity in Chennai we're actually doubling any reason for uh like this increase in capacity when the 58:24 58 minutes, 24 seconds margins are so in such a big pressure and also there's a pressure on the raw material sourcing. There's also pressure on the supply from us to the customers 58:32 58 minutes, 32 seconds in Europe and US. So if you could kind of show give me like a trajectory of why we're increasing the capacity in Chennai right now. 58:41 58 minutes, 41 seconds No no it's not that we are making a big investment. So uh and now we are not 58:47 58 minutes, 47 seconds selling uh any customer from Chennai where we are losing money. Okay. So all the customers supplied from Chennai are 58:56 58 minutes, 56 seconds profitable. One. Number two, we don't want to lose the market share. Number three, increase in uh production reduces 59:06 59 minutes, 6 seconds our variable cost also. Okay. And we want to be in the game. Okay. In a competitive market, uh if we are 59:15 59 minutes, 15 seconds contributing to our profitability, we do the business. Okay. So this I must have told in respect of earlier you know kind of margins 18 20%. 59:27 59 minutes, 27 seconds Okay which are not there but uh 13 14% is a decent margin to even plan an investment. Yeah. 59:35 59 minutes, 35 seconds Okay. So currently the sales from China are also we will request you to rejoin the department. 59:44 59 minutes, 44 seconds Yeah. So they are in the range of 13 to 14%. 59:47 59 minutes, 47 seconds Yeah. Yeah. Yes. Yes, more. Yeah, thank you. 59:51 59 minutes, 51 seconds Sorry. And thank you. Uh we have next question from Pit Pitani from Ende MC. Please go ahead. 1:00:01 1 hour, 1 second Thank you for the followback opportunity. Uh sir on we have mentioned that we have uh raised a bike or raised the price or passed on the cost from Q1. 1:00:11 1 hour, 11 seconds Uh so is it fair to assume that the 84 85 86,000 average realization uh would would improve above 90,000 from for this FI27? 1:00:22 1 hour, 22 seconds Yeah, it has improved it has gone beyond 90,000 is my understanding right? Yes. Yeah. Yeah. 1:00:30 1 hour, 30 seconds Yeah. Uh and uh this uh we are taking price so it applies to all across world like US and Europe Europe also we are we 1:00:38 1 hour, 38 seconds would be getting better realization. How is their agreement with us? Is it same like India or No, it's it's not that big uh increase there because dollar has become strong. 1:00:50 1 hour, 50 seconds So we have been able to pass on a little bit because for export we look at the international prices of raw Madrid and 1:00:59 1 hour, 59 seconds we calculate from there and uh there is an opportunity to import also. If the prices uh in global market is lower, we 1:01:09 1 hour, 1 minute, 9 seconds do import uh raw material. So global pricing is done on the global price of 1:01:16 1 hour, 1 minute, 16 seconds otherwise we can't remain competitive in the global market. 1:01:20 1 hour, 1 minute, 20 seconds Yeah. But so I can see that realization for this our subsidiary which is combined Thailand as well as US uh their 1:01:27 1 hour, 1 minute, 27 seconds realization has also improved this quarter and which has helped us protect gross margins there. uh despite increase in realization we have that we have seen 1:01:36 1 hour, 1 minute, 36 seconds that the margins have de declined by 400 basis point on ITA levels so is it fair to assume that the in Thailand and US 1:01:43 1 hour, 1 minute, 43 seconds subsidiary combined together we would be doing AITA margin of around 9 10% only or what would be the levers which would improve margin there 1:01:51 1 hour, 1 minute, 51 seconds no I had in the very beginning said that India uh ITA margin declined because of 1:01:59 1 hour, 1 minute, 59 seconds the higher price of raw material in this last quarter January, February, March, which has come back to same because we 1:02:09 1 hour, 2 minutes, 9 seconds were able to pass on the price increase to our customers. Our customers agreed to buy at a new price. Okay. 1:02:17 1 hour, 2 minutes, 17 seconds Yes. Yes. I'm asking about island and US subsidiary. Ireland and US subsidiary are same. 1:02:24 1 hour, 2 minutes, 24 seconds There is no change in their business. No substantial uh change in the business. So yeah, we are doing 9% margin there. 1:02:32 1 hour, 2 minutes, 32 seconds 9% AITA margin for quarter 4 in our subsidiary which was around 12 13 which was around 11 11.4% last quarter and 1:02:41 1 hour, 2 minutes, 41 seconds 13.5% in quarter 2. So what would be the range of margin which which is fair to 1:02:48 1 hour, 2 minutes, 48 seconds I think what is that one minute uh headline the beta margin for quarter 4.2% 1:02:57 1 hour, 2 minutes, 57 seconds question I I think we'll give you this answer separately. I don't have that calculation right now. 1:03:09 1 hour, 3 minutes, 9 seconds Thank you sir. Uh we have a follow-up question from Sony Arya. Please go ahead. 1:03:15 1 hour, 3 minutes, 15 seconds Uh sir just I just want to clear up one confusion. Uh basically you said that the global market size for cause is 70 1:03:23 1 hour, 3 minutes, 23 seconds to 80,000. It's the same as the wire of the district. 1:03:28 1 hour, 3 minutes, 28 seconds Sorry, come again. Uh you said there's a global. 1:03:32 1 hour, 3 minutes, 32 seconds No, it's different than wrote. Yeah, I'll answer that. It's different than wire rope. Uh what we tried explaining 1:03:39 1 hour, 3 minutes, 39 seconds is the method to produce steel cord for conveyor belt is very similar to wire rope. So by this project we'll be able 1:03:49 1 hour, 3 minutes, 49 seconds to also understand how to how to like method to make wire rope. So that'll give us an experience to make wire 1:03:57 1 hour, 3 minutes, 57 seconds right because earlier in the con calls past concourse we mentioned that we were setting up 10,000 and capacity for wire 1:04:04 1 hour, 4 minutes, 4 seconds ropes which now right now it's for steel corn. Yes. Yeah. So it's wrote and steel cord are same. 1:04:12 1 hour, 4 minutes, 12 seconds Okay. Uh we had bought the machines for making wrote but uh steel cord is one of the wrote products you can say it. Okay. 1:04:23 1 hour, 4 minutes, 23 seconds So application of steel galvanized steel rope for making conveyor belt then it is called steel cord but to manufacturing 1:04:33 1 hour, 4 minutes, 33 seconds process and quality or uh there's not much of the difference. Okay. 1:04:39 1 hour, 4 minutes, 39 seconds So thank you uh ladies and gentlemen we request you to limit yourself to one 1:04:46 1 hour, 4 minutes, 46 seconds question and join I think we have Mr. Kapor is a followup question from Kapor. 1:04:55 1 hour, 4 minutes, 55 seconds Yes sir. Sir only just to summarize in what what you have mentioned. Uh if you can just hear me out. Firstly you 1:05:03 1 hour, 5 minutes, 3 seconds mentioned about the general auto industry slowdown part. So if you could just throw some more light on on what 1:05:12 1 hour, 5 minutes, 12 seconds that week and secondute 1:05:22 1 hour, 5 minutes, 22 seconds and we are not expert of auto industry but we continue to see a good demand from our customers which are tire companies. 1:05:32 1 hour, 5 minutes, 32 seconds Sir can you give me the absolute impact uh on the AITA because of the increase in RN which which we do not pass on 1:05:41 1 hour, 5 minutes, 41 seconds I told you it is about 4 4 and a half% uh in the beta margin if you look at our 1:05:48 1 hour, 5 minutes, 48 seconds raw material consumption percentage from 57 has gone to 63%. 1:05:54 1 hour, 5 minutes, 54 seconds Okay. And in normaliz 1:06:04 1 hour, 6 minutes, 4 seconds we have next question from Pit Pikani from Incad MC. 1:06:11 1 hour, 6 minutes, 11 seconds Yes. Uh thank you for the opportunity sir. You mentioned to one of the previous participants that 88 crores 1:06:18 1 hour, 6 minutes, 18 seconds capital work in progress include 2530 crores of Chennai capex which we have not yet capitalized. May I know the reason why we have not yet capitalized 1:06:26 1 hour, 6 minutes, 26 seconds those because plant is fully operational machine ad 1:06:34 1 hour, 6 minutes, 34 seconds machines are on the way some machines are arrived which are to be installed and put to use. So unless they put to use and start using commercial 1:06:43 1 hour, 6 minutes, 43 seconds production start doing commercial production we cannot capitalize. 1:06:48 1 hour, 6 minutes, 48 seconds So these are these are the machines uh which that's these are the machines which are still on in transit and this is the reason why we we will be needing 1:06:56 1 hour, 6 minutes, 56 seconds only 25% more for addition. Yes. 1:07:04 1 hour, 7 minutes, 4 seconds Thank you. We will take that as our last question for today. Uh I now hand the conference over to Mr. 1:07:10 1 hour, 7 minutes, 10 seconds Sales Shaja for closing comments. 1:07:14 1 hour, 7 minutes, 14 seconds Yeah. Uh thank you all. Uh sir, would you like to make any closing comment? 1:07:18 1 hour, 7 minutes, 18 seconds Yeah. So sir, same comments. Uh you know unless there is a global change in the situation or 1:07:26 1 hour, 7 minutes, 26 seconds something new comes up uh I think Rajatan is on a path to growth. Okay. 1:07:33 1 hour, 7 minutes, 33 seconds This year we have shown a good growth last year and we are going to show a good growth next year also. So keep 1:07:41 1 hour, 7 minutes, 41 seconds watching, keep in touch and uh keep looking at Rajutan critically and thank you for asking very critical questions. 1:07:49 1 hour, 7 minutes, 49 seconds We would love to answer all the questions but or uh you know because sometimes all our answers become uh 1:07:57 1 hour, 7 minutes, 57 seconds counterproductive for us. So we don't want to uh share more information than this. I think we are quite transparent 1:08:06 1 hour, 8 minutes, 6 seconds and uh uh very very transparent and uh straightforward with our investors. So thank you very much. Bye. 1:08:17 1 hour, 8 minutes, 17 seconds Thank you. Thank you sir. On behalf of 361 Capital Markets that concludes this conference. Thank you for joining us and 1:08:25 1 hour, 8 minutes, 25 seconds you may now disconnect your lines. Thank you.