Shera Energy Limited — Q3 FY26

Shera Energy Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=IS8UmvAwvlY Published: 2 months ago

0:00 Ladies and gentlemen, good day and welcome to the Q3 and 9month FY26 results conference call of Sher Energy 0:08 8 seconds Limited hosted by Kidden Advisers Private Limited. 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. 0:24 24 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on 0:31 31 seconds your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:39 39 seconds Ronak from Kirin Advisor Private Limited. Thank you and over to you sir. 0:44 44 seconds Thank you. On behalf of Kirin Advisor, we welcome you all to the conference call of Sher Energy Limited. From the 0:50 50 seconds management team, we have Mr. Nastin Shik chairman and managing director and Miss Joti Buh company secretary and 0:58 58 seconds compliance officer. Now I hand over the call to shi over to you ma'am. 1:05 1 minute, 5 seconds Afternoon everyone. I hope you all are doing well. It is my privilege to welcome you all to the Shira energy limited earning conference call for the first n months of the financial year 26. 1:18 1 minute, 18 seconds I am communicative and compliance officer of the company and today I will present a comprehensive update on our financial and operational performance 1:26 1 minute, 26 seconds outline the key development during the period and share strategic priorities and outlook for the business going forward. The first nine months of this 1:35 1 minute, 35 seconds year have marked a phase of decisive execution and accelerated momentum for Sher Energy. We have not merely built on 1:42 1 minute, 42 seconds the foundation laid over the past few years. We have strengthened it, expanded it and converted it into the tangible 1:50 1 minute, 50 seconds growth. At Shira Energy, we are a focused and integrated manufacturer of non-ferris metals including copper, 1:57 1 minute, 57 seconds aluminium and brass. Our products are extensively deployed across critical sectors such as transformers, motors and 2:05 2 minutes, 5 seconds electrical cables, underscoring our relevance in core industrial and power infrastructural value chains. 2:13 2 minutes, 13 seconds Over the years, we have built a fully integrated manufacturing platform that spans the entire production cycle from 2:20 2 minutes, 20 seconds melting and casting to extrusion drawing and finishing. This end to end capability strength our quality control, 2:27 2 minutes, 27 seconds enhances cost efficiency and reinforces our ability to deliver consistent high performance products at scale. 2:36 2 minutes, 36 seconds On the backward integration front, we are in the final stage of commissioning our copper cathode facility in Zambia. 2:44 2 minutes, 44 seconds This project will significantly enhance raw material security, reduce import dependence and strengthen margin design. 2:51 2 minutes, 51 seconds Commercial production is set to commence shortly with phase one targeting an annual capacity of 1200 metric tons and 2:59 2 minutes, 59 seconds an estimated revenue potential of approximately USD 12 million. This marks a critical step towards securing 3:07 3 minutes, 7 seconds upstream control and improving profitability. 3:10 3 minutes, 10 seconds Simultaneously through forward integration, we are aggressively expanding into higher value added segments such as electrical conductors, 3:18 3 minutes, 18 seconds super fine wires and solar driven. This strategic move position us closer to end use application and enable us to 3:26 3 minutes, 26 seconds capitalize on the accelerating growth in renewable energy and power infrastructure. Selectively with these 3:33 3 minutes, 33 seconds initiative establish a seamless value chain transforming Sher energy into vertically vertically integrated 3:40 3 minutes, 40 seconds globally competitive force in the non-ferris metal industry during the first nine months of FI26 we 3:48 3 minutes, 48 seconds continue to make steady progress across our strategy priorities we industry's 3:55 3 minutes, 55 seconds sen energy liquid has enhanced its capacity for electrical conductors and super fine wire is reinforcing our 4:03 4 minutes, 3 seconds forward integration and widening our product mix. During 9 months of FY26, we delivered a strong financial performance 4:11 4 minutes, 11 seconds reflecting steady growth across all three metrics. On a consolidated basis, total income increased by 30% to rupees 4:19 4 minutes, 19 seconds 1182 K compared to rupees 909 K. In the same period last year, a beta rose by 4:26 4 minutes, 26 seconds 55% to rupees 66 K while profit before tax grew by 67% to rupees 34 K. Net profit stood at 4:35 4 minutes, 35 seconds rupees 25 K resisting an increase of 57% as on US and EPS improved by 49% to 4:44 4 minutes, 44 seconds rupees 8.01 from rupees 5.36 on a standalone basis. Total income was 4:52 4 minutes, 52 seconds rupees 759 crores up 21% with AITA at rupees rupees 30 cr up 44% CBT at rupees 5:02 5 minutes, 2 seconds 12 cr up 38% and net profit at rupees 9 cr up 32%. The growth in profitability 5:10 5 minutes, 10 seconds reflects higher operating efficiency of better production mix and an increased contribution from value added segments. 5:18 5 minutes, 18 seconds Looking ahead, we are entering a very exciting phase of our journey. Our immediate focus is on scaling of the Zambia operation from 100 metric tons at 5:28 5 minutes, 28 seconds Ry to 5,000 metric tons annually over the next few years. 5:34 5 minutes, 34 seconds We have planned a capital investment of rupes 300 crores to rupees 500 cr for this expansion. We expect the backward 5:42 5 minutes, 42 seconds integration through copper cathode production to improve our margins by 15% to 20%. While our forward link business 5:50 5 minutes, 50 seconds such as conductors and solar cables are expected to add another 7% to 10. 5:55 5 minutes, 55 seconds Alongside we are continuing to invest in technology acceleration, product innovation and operational efficiency to 6:02 6 minutes, 2 seconds ensure sustainable growth in the years ahead. Thank you all for the time, help and continued support. 6:15 6 minutes, 15 seconds Ma'am, shall we start the Q&A session? Yes. 6:22 6 minutes, 22 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 6:30 6 minutes, 30 seconds star and one on the Touchstone Telephone. 6:34 6 minutes, 34 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants, you are requested to use handsets while asking a question. 6:46 6 minutes, 46 seconds Further, we kindly request participants to avoid asking repetitive questions so that the management can address queries from all participants in the queue. 6:56 6 minutes, 56 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 7:12 7 minutes, 12 seconds You may press star and one to ask a question. 7:21 7 minutes, 21 seconds We will take the first question from the line of Priyanka Maheshwari from Hollani Venture Capital Fund. Please go ahead. 7:29 7 minutes, 29 seconds Uh good evening everyone. Uh congratulations on the good set of numbers. Uh so while we were going 7:36 7 minutes, 36 seconds through uh the results uh we have observed that the consolidated revenue have remained uh relatively stagnant 7:44 7 minutes, 44 seconds over the past two quarters uh being around uh 390 crores. But uh with the increase in the copper and aluminium 7:52 7 minutes, 52 seconds prices uh during the last quarter uh why this revenue has been uh has remained stagnant whereas the cost of material consumed has increased by 7 and a half%. 8:03 8 minutes, 3 seconds Uh does this mean the there has been a decline in the volume of the company during uh quarter 3? 8:13 8 minutes, 13 seconds Good evening gentlemen. 8:15 8 minutes, 15 seconds First uh I would like to congratulate you on the quality of portion that you have put but I would like to correct you 8:23 8 minutes, 23 seconds in terms of raw material where you have put that there is the increase in 7%. 8:30 8 minutes, 30 seconds The 7% increase is in price and that is reflected into your stock. If you look 8:37 8 minutes, 37 seconds at into the consumption uh where we have consumed the raw material is 88.94%. 8:45 8 minutes, 45 seconds As compared to previous quarter of 89.91% and if I compare 9 month 9 months we 8:53 8 minutes, 53 seconds have uh our consumption of raw material is 89.76% against last year's consumption of 91.40%. 9:04 9 minutes, 4 seconds So this replies your question first. 9:07 9 minutes, 7 seconds Second in terms of uh sales you are asking me that it is stagnated. 9:13 9 minutes, 13 seconds Uh no doubt there is a substantial increase in the price of raw material. 9:18 9 minutes, 18 seconds This has been constant for this financial year and last quarter there had been abnormal increase in group price that has resulted in a slight 9:27 9 minutes, 27 seconds decline in our quantity growth that last preceding half uh preceding quarter we 9:36 9 minutes, 36 seconds had a sales of around 6,862 metric ton of goods for the quarter 9:44 9 minutes, 44 seconds which in last quarter of December it stood to 6,618 9:51 9 minutes, 51 seconds metric tons. So there if you see the decline is only by 240 ts around. 9:59 9 minutes, 59 seconds But if you compare this performance as plus Q1, Q1 hour sales was uh 5870 which now stands at 667. 10:13 10 minutes, 13 seconds And if you compare for 9 months for this financial year we have touched 20 metric 10:20 10 minutes, 20 seconds ton uh 20,4001 metric t which against last year of 17,708 10:29 10 minutes, 29 seconds metric t. So there is a increase in terms of quantity sales over 9 months 10:36 10 minutes, 36 seconds but over if you compare Q3 to Q2 definitely there is a drop by around uh 10:46 10 minutes, 46 seconds 2 to 3% in terms of quantity and which is not reflected in terms of sales because the sale price has slightly gone up. 10:56 10 minutes, 56 seconds Mhm. Can you please repeat the what was the uh total volume in during 9 months FI25? 11:03 11 minutes, 3 seconds FY25 9 month for this FY25 total is 20,401.62 metric t. 11:16 11 minutes, 16 seconds All right. for 9 months. 9 months. Yes. Okay. 11:21 11 minutes, 21 seconds 9 months uh up till December from 1st April to 31st December. 11:27 11 minutes, 27 seconds And last year for 9 month was 17,708.60. 11:36 11 minutes, 36 seconds Mhm. Okay. 11:40 11 minutes, 40 seconds So there is a growth of roughly 12% in terms of quantity as compared to last year. 11:46 11 minutes, 46 seconds Q1 stood at 5,870.68. 11:54 11 minutes, 54 seconds Q2 stood at 6862.22. Q3 stood at 6 uh 617.56. 12:11 12 minutes, 11 seconds I hope I have answered your query. 12:14 12 minutes, 14 seconds Sure. Uh so just one one more thing uh we have also seen there has been an increase in uh the finance cost of the 12:21 12 minutes, 21 seconds company during uh 9 month FI26 when we compare it to uh 9 month FI25. 12:26 12 minutes, 26 seconds Uh yeah I mean has there has there been an increase in the debt uh on what what was the debt taken for if you can just 12:36 12 minutes, 36 seconds explain and dive through uh what was the aggregated average cost of debt what was the end use of that debt as well. So it 12:44 12 minutes, 44 seconds is it has a combination and use. Uh since I have told all my investors that company is in uh expansion uh is doing 12:53 12 minutes, 53 seconds their investment into Zambia for its copper cathode uh production. 13:00 13 minutes So the debt has come as long-term money also for our investment into the Zambian 13:07 13 minutes, 7 seconds operations. And if you compare uh as last 9 months uh performance it stood at 13:15 13 minutes, 15 seconds 1177 crores which was 96 crores last year. So 13:23 13 minutes, 23 seconds there has been 30% growth in terms of top line that has contri uh that has 13:31 13 minutes, 31 seconds consumed some of our working capital short-term borrowings and some portion has gone into our overseas investment 13:40 13 minutes, 40 seconds for for our backward integration and what would be the uh average cost of debt sir for all all the new debt that 13:48 13 minutes, 48 seconds has been taken average will land uh somewhere lower than 14:00 14 minutes Thank you. We have the next question from the line of Kashma from Naya Asset Management. Please go ahead. 14:09 14 minutes, 9 seconds Hello. Good evening. Yeah. 14:12 14 minutes, 12 seconds So when do we expect the Zambia production to start and how much that our contribution do we expect in quarter 4 and FI27? 14:23 14 minutes, 23 seconds As I have already uh informed my uh shareholders that uh 14:32 14 minutes, 32 seconds last month we started our production and it was on a trial basis and we made 14:40 14 minutes, 40 seconds roughly for month of January we did a one small lot of roughly 10 tons around. 14:47 14 minutes, 47 seconds Now the company I have further taken into some corrective modes some more uh corrections in terms of recovery and in 14:56 14 minutes, 56 seconds terms of uh productivity those f that investment is currently going on and I 15:03 15 minutes, 3 seconds expect by end of February or first week of March we will again take uh second 15:10 15 minutes, 10 seconds run of our production. So our production will stabilize. We will have some sales in Q uh Q4 of this year. But uh 15:19 15 minutes, 19 seconds stability of the entire production will happen into coming first quarter of next financial year. 15:28 15 minutes, 28 seconds And uh how would you describe the working environment in Zambia specifically the reliability of power supply and availability of field workforce? 15:39 15 minutes, 39 seconds Currently for last few months there is sufficient power into Zambia. Zambia 15:46 15 minutes, 46 seconds this this is a rainy season into Zambia and Zambia production is mainly by uh 15:52 15 minutes, 52 seconds hydro power generations. So right now we are not facing any challenges in terms of power and I expect this thing to 16:01 16 minutes, 1 second continue up till May June. Suppose that lot of solar investment is coming up and we are also into dialogue with one of 16:09 16 minutes, 9 seconds the solar company that's a Canadian company and uh soon we will be into JV uh for uh getting 24x7 power through 16:18 16 minutes, 18 seconds that investment and that project that project is coming very close to our investment where we are. 16:26 16 minutes, 26 seconds Thank you. And uh one question in the line of KEX as you said uh that uh you may intend to raise capeex of 300 to 500 16:34 16 minutes, 34 seconds K. So do you plan to dilute equity in the future? 16:39 16 minutes, 39 seconds Definitely that will be done post our smooth operation in terms of commercial that is expected in uh to start in first 16:48 16 minutes, 48 seconds quarter of next financial year. after one quarter of a smooth running that is the time I'm going to request uh for 16:55 16 minutes, 55 seconds raising up the equity into our uh uh raising the equity as well as some parting debt for our further expansion into Zambia. 17:06 17 minutes, 6 seconds Okay, thank you. Thank you. 17:10 17 minutes, 10 seconds Thank you. A reminder to all the participants, you may press star and one to ask a question. 17:18 17 minutes, 18 seconds We will take the next question from the line of Muni from MM Capital. Please go ahead. 17:26 17 minutes, 26 seconds Good afternoon sir. Uh very good afternoon sir. Uh my uh question is with regards to the initial calls, initial calls 17:35 17 minutes, 35 seconds where we highlighted that we were supposed to do forward integration and where we are supposed to sell uh fires 17:42 17 minutes, 42 seconds to our customers as in who are and we are supposed to get some machines. So are we proceeding towards that area or 17:51 17 minutes, 51 seconds we have just focusing towards the Zambia operation? 17:56 17 minutes, 56 seconds Very good question and very good to remind it uh to all the investors on the same question. I would have been uh 18:06 18 minutes, 6 seconds we are in process of procuring the machines. The machine procurement has almost been done. The machines have 18:15 18 minutes, 15 seconds already arrived from China now and now we are in phase of installation. So I expect uh in phase manner we will be 18:24 18 minutes, 24 seconds starting our commercial productions on this investment and as we start our commercial production we will be keeping all investor updated through exchange. 18:35 18 minutes, 35 seconds So machine procurement has already been done for which the term lending has already been done. The dispersement of turn loan and everything has already 18:42 18 minutes, 42 seconds been done. The machines have arrived into India. They are um in our premises now and step by step we are on the 18:52 18 minutes, 52 seconds process of commissioning it. As we commission it and we start our trials runs we will keep our investors posted 18:59 18 minutes, 59 seconds on the date of com uh commencing the production. 19:03 19 minutes, 3 seconds Great. Uh my second question is with regards to this uh the the winding wires which we sell are are these winding 19:13 19 minutes, 13 seconds wires uh useful for the higher voltage uh transformers like 765 KV or 2,000 uh 19:20 19 minutes, 20 seconds KVs or it's uh or it's basically useful for the lower voltage transformers. 19:29 19 minutes, 29 seconds As of now, whatever we are producing is in uh mid mid voltage range. Okay. 19:36 19 minutes, 36 seconds And this is the reason we have invested into our new capex where we have already procured the m machine in EV grade 19:45 19 minutes, 45 seconds transformer. The winding is called CTC conductor. They used continuously transpose conductor. So that uh machine 19:53 19 minutes, 53 seconds we have already procured. The commissioning is going on and I expect by the start of second quarter of this 20:01 20 minutes, 1 second financial year we will be into commercial production of this product production for 7 65 KB transmission lines. 20:10 20 minutes, 10 seconds Nice. So in that case our AITA per turn will increase drastically. So may I you can see our AIA lines are constantly 20:19 20 minutes, 19 seconds growing if you see on year on year basis or quarter to quarter basis. So I can 20:25 20 minutes, 25 seconds tell you last quarter our AITA was 21 20:30 20 minutes, 30 seconds Kores now it is uh 24.92 Kores and uh so 20:37 20 minutes, 37 seconds we are improving on our figure on year-on-year basis and if you compare to 20:43 20 minutes, 43 seconds last year which uh was 9 months was uh 42 which now stands at 66. 20:54 20 minutes, 54 seconds So there is a substantial growth in our AITA and our forward integration is going to add up to our AITA line and our 21:02 21 minutes, 2 seconds backward integration is further going to add up to those things. Great. Uh my this is my last question. 21:10 21 minutes, 10 seconds Uh how is the cash flow reflecting uh this year? Last year we had a negative cash flow because most of the things are getting invested or we have uh 21:19 21 minutes, 19 seconds receivables uh stuck in receivables. So this year how how would be the cash flows uh reflected by any chance? 21:27 21 minutes, 27 seconds It's going to improve sir as the profitabilities are going to improve everything is improving. 21:33 21 minutes, 33 seconds Okay. Last year we had as for FI25 it was negative for from operating cash flows. So I was trying to understand it is not negative. 21:42 21 minutes, 42 seconds Okay. Great. Okay. That's it sir. Thank you. Really appreciate it sir. Thank you. 21:50 21 minutes, 50 seconds Thank you. We will take the next question from the line of Dhraj Tolani from Kuber Advisors. Please go ahead 22:04 22 minutes, 4 seconds and please unmute your line and proceed with your question. 22:14 22 minutes, 14 seconds Dut response to the next part. Hello. Yes, sir. Can you order it? Yeah, very much order. 22:22 22 minutes, 22 seconds Yeah. 22:24 22 minutes, 24 seconds So, I I like I have one or two questions with me. So, I'll just start with the first one. So, um uh revenue growth has 22:31 22 minutes, 31 seconds been uh good uh like has been strong. I just wanted to know this is mainly from the volume growth or copper price growth like the realization. 22:40 22 minutes, 40 seconds It's a combination of both gentlemen. So if you see our capacity utilization last 22:48 22 minutes, 48 seconds year for uh the whole year the capacity utilization was around 73.65%. 22:54 22 minutes, 54 seconds For this 9 months we have already utilized to 79.58%. 23:00 23 minutes So there is a volutric growth as well as uh the price growth on an average 23:06 23 minutes, 6 seconds annually five to 7% there is a annual average uh price increase into all 23:13 23 minutes, 13 seconds metals and uh that uh definitely adds up to our balance sheet but uh the quantities that is also adding up it's a combination of both the growth. 23:25 23 minutes, 25 seconds M what was the like this for this quarter what was the AIA portal if you compare 23:31 23 minutes, 31 seconds EY or even what is the growth in that like a portal so this I have given you the habita 23:40 23 minutes, 40 seconds figures for this quarter was 25 crores around and this quarter we did a volume of 23:47 23 minutes, 47 seconds roughly 6.6 6 uh 6,617 metric tons. So it's a simple arithmetic calculation that we can do. 23:58 23 minutes, 58 seconds What what also I I just I was looking at the financials part. So I I I'm seeing uh the Y and growth in other income has 24:07 24 minutes, 7 seconds increased like almost double 2.3 crores to 4.6. 24:12 24 minutes, 12 seconds That is the result. You see the investment that we are doing into overseas operation some portion has gone as equity and major portions we are 24:20 24 minutes, 20 seconds lending in terms of debts. So whatever uh investment is going there against which the company is raising long-term 24:28 24 minutes, 28 seconds debt here and is being deployed as a long-term debt into Zambia. So here the interest cost is increasing which is uh 24:35 24 minutes, 35 seconds substantiated by the other income that is increasing into our Zambian operation. 24:41 24 minutes, 41 seconds So that is how it must be the finance it must it has to be accounting system you cannot square it off 24:48 24 minutes, 48 seconds so income you have to highlight separate expenses you have to highlight separate so if you see from Q uh Q2 to Q3 there 24:57 24 minutes, 57 seconds is a growth of 1.3 K of uh interest cost that is majorly going into the investment into Zambia and uh if you see 25:05 25 minutes, 5 seconds the other income from 92 is going to 263 so that is the revenue that is generated against this investment 25:13 25 minutes, 13 seconds Got it. Got Yeah. Okay. Thank you, sir. Thank you. Thank you. 25:20 25 minutes, 20 seconds Thank you. We have the next question from the line of Paris data from Purpleburn Vertex Ventures LLP. Please go ahead. 25:31 25 minutes, 31 seconds Yes sir. Uh thank you so much for this opportunity and congratulations for a strong shadow vision. Uh I just wanted to understand our outlook now for FI27. 25:42 25 minutes, 42 seconds Uh what kind of growth are we expecting for FI27 in our Indian business? Uh that's the first question. 25:51 25 minutes, 51 seconds Okay. So the growth looking to our uh uh investment into 25:58 25 minutes, 58 seconds forward integration as well as into backward integration. I expect a sizable growth in the company 26:07 26 minutes, 7 seconds but uh I shall not be in position to comment you approximate figures but these 26:15 26 minutes, 15 seconds investment whatever we have done will be into production uh within first quarter 26:21 26 minutes, 21 seconds of this financial year. So the revenue growth on these investments are going to 26:28 26 minutes, 28 seconds come up and they are going to add substantially into the coming financial year. Understood sir. 26:36 26 minutes, 36 seconds Right. So sir Andress on the margins margins for now. So for the last quarter we saw about 5.62%age 26:45 26 minutes, 45 seconds broadly operating margin. Sir, what is uh the expectation for FI27 on a sustainable basis? 26:54 26 minutes, 54 seconds Sir, if you see corresponding AIA for last financial year for the corresponding period 24 to 25 December 27:04 27 minutes, 4 seconds Q3 AITA margin was 4.51%. 27:09 27 minutes, 9 seconds Then if you uh see the preceding quarter it stood to 5.49%. 49%. 27:18 27 minutes, 18 seconds Which now is 6.24%. Pardon? 27:27 27 minutes, 27 seconds For the current quarter you mean to say is about 6.23%. 27:31 27 minutes, 31 seconds For the last quarter, last 3 month current quarter I'm not authorized to tell you. Right. 27:38 27 minutes, 38 seconds So last quarter whichever results we have published the AITA margin is 6.24%. 24%. 27:46 27 minutes, 46 seconds For Q2 it was 5.49%. 27:49 27 minutes, 49 seconds And it was 4.51% corresponding Q3 of last financial year. 27:55 27 minutes, 55 seconds So there is a constant growth in AIA. If you compare it to 9 month also last year 9 month AIA stood at 4.72%. 28:04 28 minutes, 4 seconds Which now stands at 5.61%. 28:08 28 minutes, 8 seconds So there is a growth of roughly 1% over last year in terms of AITA. 28:13 28 minutes, 13 seconds Right. So for FYI 27 you expect uh this AIA margin to 28:20 28 minutes, 20 seconds I'm not only expecting but I'm rather more confident looking to our investments coming up into forward as well as backward 28:28 28 minutes, 28 seconds integration. These investments are going to improve the ait lines of the company. 28:34 28 minutes, 34 seconds Understood sir. Right now sir on the Zambian front sir uh uh right now we are in the trial production stage. So I 28:41 28 minutes, 41 seconds presume commercial production may probably pick up as you said maybe from Q1 meaningfully. 28:47 28 minutes, 47 seconds Yeah. So uh what kind of I mean an indication of a sustainable margin on on that Zambian capacity. As of now we've 28:55 28 minutes, 55 seconds got 1200 investors. Let me tell all the investors again. Let me repeat the story of our Zambian operations. 29:04 29 minutes, 4 seconds The investment that I'm doing is I have taken charge of a already existing second plant that was closed. 29:13 29 minutes, 13 seconds So I have made investments in rectification of the machineries and whatever it was not running. In January 29:21 29 minutes, 21 seconds I made our I started our production on a trial basis and we made roughly 8.6 metric t of copper cathodes. 29:31 29 minutes, 31 seconds Then I stopped because the recovery that I was expecting to get I was just reaching there but I found there are further scope of 29:40 29 minutes, 40 seconds improving the recovery in terms of increasing the profitability in the company. So I have taken a break of 29:47 29 minutes, 47 seconds roughly another one month where I am modifying the plant setup. I am redesigning some process plan so that 29:55 29 minutes, 55 seconds our productivity and our avita lines increase in into that investment. 30:00 30 minutes So if whatever I am proposing and whatever our team is doing and once we are into commercial production on that 30:08 30 minutes, 8 seconds which I expect to start in first week of March that will help the company to attain ITA 30:17 30 minutes, 17 seconds line anything above 15% plus 30:24 30 minutes, 24 seconds all right and so all the modifications have been done now and you think First week of March the first week of March 30:33 30 minutes, 33 seconds and second trial production will start right and whatever we are actually this is a 30:40 30 minutes, 40 seconds new technology for Sher it is a new hydromeal energy which we are also learning with our experience 30:48 30 minutes, 48 seconds so as I see what how the machines have behaved and how the process have gone we 30:55 30 minutes, 55 seconds are auditing it on process to process basis In there are more than 17 18 processes that involved into making copper 31:03 31 minutes, 3 seconds cathodes. So against our internal audit wherever we find there is some slackness into 31:11 31 minutes, 11 seconds uh efficiency in operation that we are addressing in phase manner. So I expect complete streamline will take another 2 31:20 31 minutes, 20 seconds to 3 months but second run of our plant will commence in uh first week of March. 31:30 31 minutes, 30 seconds Right. And potentially uh commercial production will take another month or two. Maybe 31:39 31 minutes, 39 seconds we are going to start our commercial production not more uh it will not be more than a month or so. 31:47 31 minutes, 47 seconds Okay. 31:48 31 minutes, 48 seconds It won't be more than that. We have already made major investments some some changes into uh you know you see the flowcharts. 31:59 31 minutes, 59 seconds So the there are blocks you have to arrow the blocks. This one first this one second one goes seventh seventh goes 32:06 32 minutes, 6 seconds first. So the process control has to be there. So some changes in the process is continuously going on. 32:14 32 minutes, 14 seconds So that uh we will be doing very soon. 32:17 32 minutes, 17 seconds The process improvisation is happening definitely you can call it just to improve our recovery in terms of copper 32:24 32 minutes, 24 seconds content what we get in or the better recovery you get the better habitas you make right sir uh sir I just joined our call 32:33 32 minutes, 33 seconds a little bit late so I just heard that you know you're looking at a capex of about 300 crores or probably mostly I think in Zambia so if you can just 32:42 32 minutes, 42 seconds explain the timeline and you know how and when do you anticipate in general so just I will answer you in our uh next 32:50 32 minutes, 50 seconds uh annual call on that. Uh I will be in position to give you the tentative dates when we are going to plan our funds. Let me streamline my operations first. 33:03 33 minutes, 3 seconds Right. And I mean just in case if that happens what kind of capacity are we looking at in Gambia then in case if we 33:10 33 minutes, 10 seconds move forward what I'm it is uh quite premature to say in terms 33:19 33 minutes, 19 seconds of quantity growth but uh the investment will be in a range that within one year 33:27 33 minutes, 27 seconds whatever capacities we have we multiply by minimum 5 to 10x from Yeah, understood. 33:37 33 minutes, 37 seconds Yeah, and generally the demand environment is broadly okay in terms of let's say you 33:46 33 minutes, 46 seconds know the copper I mean of course there is strong demand for copper cases by anyway but just your perspective on that sir I mean where do you anticipate 33:53 33 minutes, 53 seconds whatever we made whatever we made 8.6 six tons is already sold. 34:01 34 minutes, 1 second Although China quality was not that good to be sold but uh 34:08 34 minutes, 8 seconds people pick copper like anything they are picking copper like anything right there very strong demand very huge 34:17 34 minutes, 17 seconds copper is always in shortfall and hopefully we are looking at migrating to the main board in the next 34:24 34 minutes, 24 seconds couple of months broadly uh we are eligible bill now uh 17th 34:33 34 minutes, 33 seconds February 2023 we got ourselves listed into SNE 3 years we have already 34:40 34 minutes, 40 seconds completed and uh we are in process of uh completing the formalities for the 34:48 34 minutes, 48 seconds migration process right sir so hopefully the institutional participation improves eventually so 34:55 34 minutes, 55 seconds that will be good for the company well sir thank you so much definitely thank thank you Thank you. 35:04 35 minutes, 4 seconds Thank you. We have the next question from the line of Priya Jen from Green Capital. Please go ahead. 35:11 35 minutes, 11 seconds Hello. So, I'm joining up on call for the second time. Last time also I was there. So, I 35:19 35 minutes, 19 seconds was uh going through the like firstly very congratulations for getting this great set of number. You are almost you know like hitting F25 full revenue. 35:30 35 minutes, 30 seconds Mhm. Thank you madam. 35:32 35 minutes, 32 seconds Yeah. So also you know a lot of buzz is going around this metal industry which is actually now going to be a hot 35:41 35 minutes, 41 seconds thing you know like saying that company's volume valuation is going forward. Currently you are at 300 market 35:48 35 minutes, 48 seconds cap. Where do we see say right next three to five years? M cap is not the race that we are into. 35:58 35 minutes, 58 seconds uh we are responsible people to scale up the operations, take care of the money for 36:06 36 minutes, 6 seconds our investors, give them better returns, market cap and everything is dependent on the valuations that people do outside 36:15 36 minutes, 15 seconds the business. So definitely our numbers are good and uh looking to peer industries we have a 36:25 36 minutes, 25 seconds sizable uh numbers now and definitely market will be eyeing on that and um I 36:32 36 minutes, 32 seconds expect the market cap is also going to improve. 36:34 36 minutes, 34 seconds Of course we are going to put good numbers and investors will be get attracted and they actually eventually they look up to the company's valuation. 36:43 36 minutes, 43 seconds So my question yeah and told me that where we can see Sarah going forward. 36:49 36 minutes, 49 seconds Ma'am as I have been always committed for our growth and uh it's almost 30 years of my working into this uh line 36:58 36 minutes, 58 seconds and uh I still say Sher is going to multiply 37:05 37 minutes, 5 seconds at the rate what we have been doing for last 3 four years. our multiplication is going to be 37:14 37 minutes, 14 seconds further multi into multiplication numbers. So very soon the top lines 37:20 37 minutes, 20 seconds company I'm expecting to scale up to 2x within uh within two years. 37:30 37 minutes, 30 seconds So everything uh is going to scale up. Yeah. Also any guidance for FI 27? 37:39 37 minutes, 39 seconds Madam as the investment that we uh we are supposed to do our project is on time and we are rather working on this. So 37:48 37 minutes, 48 seconds new capex uh we have done roughly 60 70 crores of new capex which definitely 37:57 37 minutes, 57 seconds will start giving revenues in the second quarter of coming financial year and so backed by those and uh the natural 38:06 38 minutes, 6 seconds growth in terms of 7 to 8% and share energy the standalone growth of 5 to 7% in terms of quantity I expect the growth 38:14 38 minutes, 14 seconds to be in the range of 40 to 60% anywhere in between. 38:21 38 minutes, 21 seconds Fair. I'm looking to look forward to the update. That's it from me. Yeah. Okay. 38:30 38 minutes, 30 seconds Thank you. A reminder to all the participants. You may press star and one to ask question. We have the next 38:38 38 minutes, 38 seconds question from the line of Surya Narayan Mayak an individual investor. Please go ahead. 38:45 38 minutes, 45 seconds Hello. Am I audible? Yes, you are very much. 38:50 38 minutes, 50 seconds Yeah. Hi Nasim sir. Uh congratulations for great set of numbers and uh uh great 38:56 38 minutes, 56 seconds set of window uh in Zambia to set of uh you know refineries uh in the Kop. So 39:04 39 minutes, 4 seconds just my my questions and real of uh understanding is uh related to not to 39:11 39 minutes, 11 seconds the profit and loss account or let's say working of the boots rather than the the capacity buildup that is uh go that is 39:19 39 minutes, 19 seconds going on since over over the years in the downstream as you are looking at the offstream at Zambia. So to understand 39:27 39 minutes, 27 seconds what kind of collar is available color of revenue is available for fi 2728. 39:35 39 minutes, 35 seconds So what I am stating uh your capacity uh will is that your aluminum intensity is 39:43 39 minutes, 43 seconds uh going off and slowly uh from ever since in effect 23 uh your copper intensity is going down whereas brass is 39:52 39 minutes, 52 seconds nearly so and so around at around 16%. I mean if I say if I if I can give you the 39:58 39 minutes, 58 seconds numbers capacity aluminum is around 47 copper it is around 37% and brass it is 40:05 40 minutes, 5 seconds 17%. And you are fairly uh attaining the aida margin uh in in relation to the industrial peers of around 5 to 6%. So 40:14 40 minutes, 14 seconds there is no problem on that. So my understanding is that now the growth that is visible in the downstream 40:22 40 minutes, 22 seconds uh is the looking at the utilization of around close to 77% in copper for F526 40:31 40 minutes, 31 seconds exit and aluminum uh around 82% and brass is almost 90%. So we don't have much room in the aluminum and brass 40:40 40 minutes, 40 seconds rather there is some room in the copper side. So is my understanding right that no we we have little bit room from 75% 40:49 40 minutes, 49 seconds or to maybe 90% in the cor 40:58 40 minutes, 58 seconds and and looking at the looking at your industrial peers uh starting from 41:04 41 minutes, 4 seconds precision to KS to Ramat no wires to vidya wires everybody is in the range of 41:12 41 minutes, 12 seconds around purely copper area around 30 37 or minimum 35,000 tons peranom. So we 41:20 41 minutes, 20 seconds are nearly halfway through. So what is my understanding that to what extent you are trying to scale up the downstream 41:27 41 minutes, 27 seconds copper uh facility in uh in India you know entering into different areas 41:35 41 minutes, 35 seconds of the uh energy sectors or industrial sectors or let's say consumer sector or auto sector so those are the sectors you 41:43 41 minutes, 43 seconds are you are interested and where is the cap where is the capacity built up I'm not seeing in the copper downstream 41:53 41 minutes, 53 seconds Surya I think you are exhaustive exhaustive analysis person 42:00 42 minutes but this you are good at your job. What I am 42:07 42 minutes, 7 seconds good is at my job. I am least interested in what my peer industries are doing. I 42:14 42 minutes, 14 seconds am rather more interested what my machines are capable of. How I can streamline my processes? How can I 42:22 42 minutes, 22 seconds substitute the copper with aluminium growing demands? How fast I can switch over from one metal to another metal? 42:31 42 minutes, 31 seconds How fast I'm compatible to match the industry demand before it comes into picture. So, Sher is one of few players 42:41 42 minutes, 41 seconds in India which is present in all three base metals copper, aluminium and brasses. You won't 42:50 42 minutes, 50 seconds find precision into aluminium. You won't find KSS into aluminium. 42:55 42 minutes, 55 seconds And what is the beauty in Sher? You have you need copper we have. You need aluminium we have. So whatever the 43:03 43 minutes, 3 seconds customer I give this option to the customer to decide what he wants to buy. 43:08 43 minutes, 8 seconds If my customer is looking to the price the copper is going up he wants to switch over to aluminium and take their technology supported by aluminium we are 43:17 43 minutes, 17 seconds there to support them. So I have designed my production to support my customers at every time. I have you 43:24 43 minutes, 24 seconds would have never seen since you have studied our company for years. So you would have never seen a quantitative 43:32 43 minutes, 32 seconds decline or any decline in shape of trajectory in the company. Metal prices 43:39 43 minutes, 39 seconds go up sometimes. Aluminium has a pressure, sometimes copper has pressure. 43:43 43 minutes, 43 seconds So we are not people who can handle the international pressures into metal. We are here to operate at the market pace 43:53 43 minutes, 53 seconds and market demand. So I have designed my operations in a way which suits my customer not dictate my customers. So I 44:03 44 minutes, 3 seconds hope I have made my point clear and the process how I want to make my company friendly to my customer. 44:12 44 minutes, 12 seconds That's right. I mean let's say my point is that we we we are at nearly about 300 44:19 44 minutes, 19 seconds cr market cap and we are aspiring to more important for me gentlemen is what is my growing EPS what is my growing 44:27 44 minutes, 27 seconds returns to my investor I'm coming to I'm coming to yeah I'm coming to that point sir because the point here is that we will 44:36 44 minutes, 36 seconds be doing the the aida margin at par with the industry but unless on And unless and until we touch more of the copper 44:45 44 minutes, 45 seconds the costliest among the base metals our absolute for your for your kind reference I'm 44:51 44 minutes, 51 seconds telling you copper does not bear higher a I'm not saying absolute I'm saying absolute 45:00 45 minutes absolute is okay but I have to design my production as per what my customer 45:07 45 minutes, 7 seconds whatever I'll making has to be bought back by by my customers. 45:12 45 minutes, 12 seconds So what is the market design? I have designed my plant and my machinery in a way I can switch from copper to aluminium within no time. 45:23 45 minutes, 23 seconds So shall I mean shall I mean shall I mean that the kind of capacity 45:30 45 minutes, 30 seconds we are having so those are quite funible and irrespective of the matter. 45:36 45 minutes, 36 seconds Since I am a technical person and I have designed my plant, my machines are suitable to run parallel in conjunction 45:44 45 minutes, 44 seconds either with copper, either with aluminium. 45:47 45 minutes, 47 seconds I can switch over my production just by changing few things and my machine can operate into copper as well as aluminium. 45:56 45 minutes, 56 seconds Okay. So if that is the case then uh when the industry is actually looking at 46:04 46 minutes, 4 seconds more of the copper intensity. So what is the issue in in our case in reaching out 46:12 46 minutes, 12 seconds to customers or our customers are not interested in us so far as copper is concerned but they are more interested in aluminum. 46:22 46 minutes, 22 seconds Every manufacturer span not only in India across the globe has its own customer bank. 46:30 46 minutes, 30 seconds The customer bank that precision has may not be the same that I have. And what I have it's not necessary that precision 46:37 46 minutes, 37 seconds will have that. So I am eating my cup of I am taking my cup of tea. They are 46:44 46 minutes, 44 seconds taking their cup of tea. Since you are not part of this business, you are 46:50 46 minutes, 50 seconds analyzing as a analyst. So you are uh asking me such question. But looking to 46:57 46 minutes, 57 seconds my industry, if you see Q three Q2 to Q3, the copper sales have declined by 47:04 47 minutes, 4 seconds 400 tons. Against 24, 100 tons. Uh last quarter we did 2,000 tons. But whereas 47:13 47 minutes, 13 seconds aluminium we increase from 33 to 30 uh 450 around and brasses we increase by 10 47:21 47 minutes, 21 seconds to 20 metric tons. So our process is such that we can change looking to the 47:28 47 minutes, 28 seconds market demand. Last quarter there was huge abnormality into prices. LME went from 10,000 to 14,000. 47:37 47 minutes, 37 seconds So market is not going to absorb 40% hike into prices immediately. You are getting me? So I'm not waiting for the 47:44 47 minutes, 44 seconds market to correct. I'm correcting my machines and pushing more onto aluminium. Those days as the prices become comparable into copper, we push 47:53 47 minutes, 53 seconds our more production into copper. It all depends on market dynamics and forces. 48:02 48 minutes, 2 seconds Thank you. We have the next follow-up question from the line of pars data. The purple one vortex ventures LLP. Please go ahead. 48:13 48 minutes, 13 seconds Uh sir, just wanted to understand in terms of our uh working capital plan, are there you know any further plans for 48:21 48 minutes, 21 seconds you know little bit you know optimally reducing the inventory a bit or you know the improving the working capital base I 48:29 48 minutes, 29 seconds mean that was question was and uh what level of debt do we expect short-term borrowings? I guess long-term borrowings is more or less sort of constant for us. 48:38 48 minutes, 38 seconds But for short-term borrowings at the end of this financial year broadly. 48:43 48 minutes, 43 seconds So I mean plan also therefore to reduce interest cost. 48:48 48 minutes, 48 seconds Uh my plan is uh not to reduce the short-term borrowing of the company. My plan is rather to increase my business. 48:59 48 minutes, 59 seconds Right sir. So uh by the end of this year what level of short-term borings we broadly expect? So I mean September was about 160 odd 49:07 49 minutes, 7 seconds m short-term boring. So what do we sort of intend? 49:12 49 minutes, 12 seconds So almost in similar levels almost more or less similar levels. Yeah. 49:21 49 minutes, 21 seconds Right. And I mean in general any plans to improve upon the inventory holding you know I mean the working capital loss that is there in inventory can that 49:30 49 minutes, 30 seconds improve further from here on in inventory holding we are maintaining roughly 60 days of uh source and we are 49:39 49 minutes, 39 seconds maintaining that right so I mean to that would be difficult because I guess some of the 49:48 49 minutes, 48 seconds other peers might have You see other they are doing only one metal. Okay. 49:55 49 minutes, 55 seconds We are doing three different metals. 49:59 49 minutes, 59 seconds So we have to manage a sufficient level of inventory for our process requirement. 50:06 50 minutes, 6 seconds We are recyclers. Our peer industries are not recyclers. 50:11 50 minutes, 11 seconds We do our recycling operations. We do melting. We do alloying. We do nickelbased alloys. We do tubes. So you 50:20 50 minutes, 20 seconds cannot compare just one product inventory to another PR industry as a complete inventory. You getting me? Sher 50:29 50 minutes, 29 seconds is a group of company that if you grab all those groups then you will be able to compare our inventory. Precision does 50:36 50 minutes, 36 seconds uh does not have any uh recycling business. They don't do any aluminium business. They don't do any brass 50:43 50 minutes, 43 seconds business. They don't do tubes. You are getting me right? So they do just winding wire. 50:51 50 minutes, 51 seconds Winding wire is one of our product. It's not the only product right. So sir the matter Yeah. Yeah. Go ahead sir. 51:03 51 minutes, 3 seconds So our process is very much aligned with many other companies like now we are 51:10 51 minutes, 10 seconds going uh in our cathode production. Now our balance sheet will have some impact of inventory levels even with Indalco 51:18 51 minutes, 18 seconds even comparable to Vanta that is a different mining se section but when you see the inventory it will 51:27 51 minutes, 27 seconds come as a whole. So Sher is one of the company pan India that is into mining 51:35 51 minutes, 35 seconds recycling into winding into alloys into tubes into strips you won't find any other company doing all these things at 51:43 51 minutes, 43 seconds one go right so I mean when do when we work 51:50 51 minutes, 50 seconds across three metals right I mean and uh various products and not only winding wise does that give us better diversity 51:59 51 minutes, 59 seconds diversification and I mean the reason being are we cycally better protected for you it is very easy to comment on 52:07 52 minutes, 7 seconds that I am into industry I am into day-to-day working in purchase production and sales and our expansion 52:16 52 minutes, 16 seconds and we are we take our decisions on a management level which is suitable 52:23 52 minutes, 23 seconds to the company first which is suitable to the market and then which is suitable to add our profitabilities, improve on 52:32 52 minutes, 32 seconds our AITA lines, improve on our EPS lines and improve the horizon of the company. 52:39 52 minutes, 39 seconds We don't look into others what they are doing, how they are doing. We are least bothered on that. 52:45 52 minutes, 45 seconds I look into my business, what is required for my business, what is good for my business, how I'm going to 52:52 52 minutes, 52 seconds improve, how I have to scale up my operation. 52:58 52 minutes, 58 seconds All right. So, so just one final query in terms of our Zambian operation uh as of now you know the uh what is the 53:06 53 minutes, 6 seconds actual capacity that we have and you know the initial installed capacity of that plant is 100 metric t which I expect 70 53:16 53 minutes, 16 seconds uh 60 to 70% of its utilization capacity very soon in coming first quarter of this financial year coming financial 53:24 53 minutes, 24 seconds year and as we achieve and we sustain to 70% of our installed capacity then I'm 53:32 53 minutes, 32 seconds going to invest further to increase our capacities there right so I mean the yeah so as you said 53:41 53 minutes, 41 seconds so this capacity increase will take some time once this 100 m ton peranom gets stabilized and utilized well because 53:49 53 minutes, 49 seconds first quarter it will stabilize and coming second quarter and third quarter you will see new investments happening into Gambia 53:58 53 minutes, 58 seconds Right sir. So only last minute in terms of you know the size of the company that we have as of now let's say about 300 cr 54:05 54 minutes, 5 seconds market cap and we are you know sort of having plans drop another 300 cr of apex. 54:12 54 minutes, 12 seconds So it's a quite a significant and big plan and of course if the beta margins are 15% plus it makes sense to uh do that but just trying to understand okay 54:21 54 minutes, 21 seconds how will we fund it that's the only thing that I have I mean once the margins are established it's pretty clear that one should go with that kind of a 54:28 54 minutes, 28 seconds cap time everything will be planned and it will be executed that's yeah 54:37 54 minutes, 37 seconds s that was the only thing I mean given the size otherwise I think it don't you worry the company has a good 54:43 54 minutes, 43 seconds support in terms of debt raising. Also, the banks have a good trust in the operations of the company. We are a 54:51 54 minutes, 51 seconds 30-year-old company having good relations with our investors and the banks and as and when I see now it is a 54:59 54 minutes, 59 seconds time for doing this capex uh I expect the money will not be a challenge or a problem for our investment. 55:09 55 minutes, 9 seconds very last while we potentially at least we're targeting 55:16 55 minutes, 16 seconds as I heard on the call our revenue could probably double in the next probably two to that. 55:24 55 minutes, 24 seconds Yeah. So that is also I'm expecting very soon. 55:30 55 minutes, 30 seconds Yeah. So I'm saying the EPS also therefore should be equal to that or maybe better the margins will improve. 55:41 55 minutes, 41 seconds So uh if the revenue doubles probably in two to three years m right and the margins will gradually 55:49 55 minutes, 49 seconds improve there's operation and Indian operation also now becoming even more efficient. 55:57 55 minutes, 57 seconds So given that it's the case the EPS of course there will be some dilution based on this thing but will the EPS also most 56:05 56 minutes, 5 seconds likely double in 2 to 3 years you can expect so 56:12 56 minutes, 12 seconds yeah okay so that was the only question sir fine all right thank you so 56:19 56 minutes, 19 seconds thank you ladies and gentlemen that was the last question and with that concludes the question and answer session I now hand the conference over to Mr. 56:29 56 minutes, 29 seconds Ron for closing comments. Thank you and over to you sir. 56:33 56 minutes, 33 seconds Thank you for joining the call of Sher and if you have you can write to research kinadvisor.com 56:43 56 minutes, 43 seconds thank you for joining the thank you members of the management on behalf of kinadvis private limited that 56:52 56 minutes, 52 seconds concludes this conference. Thank you all for joining us today. and you will now disconnect your lines. Thank you. 57:00 57 minutes Thank you everyone. Thank you.