Welspun Specialty Solutions Limited — Q4 FY26

Welspun Specialty Solutions Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=E7e9jv3MMt4 Published: 9 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Wellspin Specialty Solution Limited Q4 and FI26 earning conference 0:09 9 seconds call hosted by 361 Capital Market. This conference call may contain forward-looking statement about the company which are based on the beliefs, 0:18 18 seconds opinions and expectation of the company as on date of this call. These statement are not the guarantee of future performance and involve risk and 0:27 27 seconds uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen only mode and there will be opportunity for you to ask 0:35 35 seconds question after the presentation conclude. Should you need assistant during the conference call please signal an operator by pressing star then zero 0:43 43 seconds on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:50 50 seconds Goautam Chakraarti. Thank you and over to you sir. 0:54 54 seconds Thanks Danish. Uh and good afternoon to everyone. On behalf of Wellspan Speciality Solutions Limited, I welcome 1:02 1 minute, 2 seconds all of you to the company's Q4 and uh financial year 2026 results call. Today on this call uh we have Mr. Anoj 1:10 1 minute, 10 seconds Burakia, Chief Executive Officer and full-time director. Mr. Mr. Navin Agraal, chief financial officer uh of 1:19 1 minute, 19 seconds the company and also Mr. Percy Bird, chief financial officer for Wells One COP. The investor presentation is 1:27 1 minute, 27 seconds already uploaded on the stock exchanges and also uh on our website. Uh and I hope that you have had a chance to 1:35 1 minute, 35 seconds review it. Request you to please refer to the safe harbor statement in our presentation during today's discussion. 1:42 1 minute, 42 seconds Now we'll start the forum with the opening remarks by Mr. Baraka and then we'll open the floor for Q&A. So I'm just handing over the floor to Mr. 1:51 1 minute, 51 seconds Baraka. Over to you sir. Thank you Goautam. Good afternoon everyone. 1:59 1 minute, 59 seconds I warmly welcome you all to the quarter 4 and financial year 26 earnings call of Wellsman Specialtity Solutions Limited. 2:07 2 minutes, 7 seconds Thank you for joining us today. 2:09 2 minutes, 9 seconds I will begin with a brief overview of the global macroeconomic environment followed by insights into the industry 2:17 2 minutes, 17 seconds landscape and our company's performance before we move into an interactive question and answer session. 2:26 2 minutes, 26 seconds The global economy in financial year 26 has been shaped less by traditional cyclical demand supply dynamics and more 2:35 2 minutes, 35 seconds by geopolitical developments which have significantly impacted market conditions. The expansion of US trade 2:44 2 minutes, 44 seconds restrictions from targeted sectoral measures to broader reciproc reciprocal tariffs has introduced structural disruptions to crossber trade flows. 2:55 2 minutes, 55 seconds According to the International Monetary Fund's latest world economic outlook, global economic growth is projected at 3:04 3 minutes, 4 seconds 3.1% for 2026 and 3.2% for 2027 compared to 3.4% recorded in 2025. 3:14 3 minutes, 14 seconds The Indian economy however continues to remain relatively resilient despite ongoing global conflicts. The Reserve 3:22 3 minutes, 22 seconds Bank of India has maintained its FY26 growth forecast at 7.6% 3:29 3 minutes, 29 seconds while projecting a moderation of 6.9% in FY27. 3:35 3 minutes, 35 seconds Quarterly growth for financial year 27 is expected at 6.8% in quarter 1, 6.7% 3:44 3 minutes, 44 seconds in quarter 2 before improving to 7% in quarter 3 and 7.2% in quarter 4. 3:51 3 minutes, 51 seconds That said, the RBI has cautioned that geopolitical tensions, including developments in Iran, along with 3:59 3 minutes, 59 seconds elevated energy prices, could weigh on the outlook. At Wellspun Speciality Solutions, amid heightened volatility 4:07 4 minutes, 7 seconds and uncertaintity arising from global trade actions and demand shifts, we remain proactively engaged with our 4:15 4 minutes, 15 seconds customers. Our focus continues to be on navigating the evolving external environment, maintaining operational 4:22 4 minutes, 22 seconds resilience and steadily enhancing volumes. 4:26 4 minutes, 26 seconds I am pleased to share that during financial year 26, we expanded our market reach by onboarding 43 new 4:34 4 minutes, 34 seconds customers while continuing to strengthen strategic and meaningful engagement across our existing customer base. 4:42 4 minutes, 42 seconds From a volume perspective, total product sales volume in financial year 26 increased by 37%. 4:51 4 minutes, 51 seconds Within this, stainless steel seamless pipe grew by approximately 10% yearonear while stainless steel bar volumes 4:59 4 minutes, 59 seconds registered a strong growth of about 45% yearonear. 5:04 5 minutes, 4 seconds I would also like to highlight that overall pipe and tube volume growth got impacted primarily due to a planned 5:11 5 minutes, 11 seconds maintenance shutdown of approximately 1 and a half month during H1 of financial year 26. 5:21 5 minutes, 21 seconds Our financial year 26 financial performance was in line with expectations with strong improvement in profitability 5:28 5 minutes, 28 seconds for the year. Total income grew 21% yearonear to about 94 crores. Operating 5:36 5 minutes, 36 seconds AITA increased 52% year on year to rupees 47 crores with margins benefiting from improved operating leverage. 5:49 5 minutes, 49 seconds Cash profit after tax stood at rupees 39 crores marking a more than three-fold increase over the previous year. During 5:58 5 minutes, 58 seconds the year, our sending fundamentals were recognized through rating upgrades by care ratings 6:06 6 minutes, 6 seconds with our long-term rating improved to care AA negative and short-term rating maintained at care A1 plus including our 6:16 6 minutes, 16 seconds commercial paper. This reflects enhanced balance sheet strength and execution discipline. 6:22 6 minutes, 22 seconds We continue to advance our value added value add strategy through key accredititations and product development. 6:30 6 minutes, 30 seconds AS9100D for aerospace. IBR for alloy steel bars and tubes. Norox M650 6:37 6 minutes, 37 seconds certification. Commercialization of T91 tubes for power sector. development order from nuclear power corporation of 6:45 6 minutes, 45 seconds India for nickel alloy 800H steam generator tubes which is under development at this point in time. These 6:52 6 minutes, 52 seconds milestones strengthen our positioning in high specification and regulated segments supporting sustainable growth 6:59 6 minutes, 59 seconds and margin expansion. I am pleased to share that our Breitbart project has been successfully installed and is currently under stabilization. 7:09 7 minutes, 9 seconds This initiative along with other demottlenecking and capability enhancement efforts strengthen our operational backbone and position us 7:18 7 minutes, 18 seconds well to drive higher utilization across our steel and pipe making capacities. 7:24 7 minutes, 24 seconds We remain focused on expanding our portfolio of value added products and grades while simultaneously strengthening capability and broadening 7:33 7 minutes, 33 seconds our market reach and customer base. On the sustainability front, our transition towards renewable energy has accelerated 7:42 7 minutes, 42 seconds meaningfully. The share of renewable electricity consumption increased from approximately 31% during FY25 7:52 7 minutes, 52 seconds to 58% during FY26 with the quarter 4 run rate exceeding 70%. 8:00 8 minutes This progress reflects our firm commitment to sustainability and align with our long-term ESG priorities. 8:08 8 minutes, 8 seconds I am also very pleased to share that wellspun specialtity is once again awarded with great place to work and more importantly featured in the top 30 8:17 8 minutes, 17 seconds Indian companies in midsize manufacturing. 8:21 8 minutes, 21 seconds While margins have remained under pressure due to a challenging external environment and subdued demand particularly in export markets, we 8:29 8 minutes, 29 seconds continue to execute with discipline. Our focus remains on improving throughput, strengthening core operations and 8:37 8 minutes, 37 seconds building a resilient platform for sustainable long-term growth. In the near term, we have sharpened our focus 8:46 8 minutes, 46 seconds on domestic market to drive performance while staying well positioned to capitalize on a recovery in global 8:53 8 minutes, 53 seconds demand. With that, I would now like to open the floor for your questions, please. 9:01 9 minutes, 1 second Thank you so much, sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 9:12 9 minutes, 12 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 9:21 9 minutes, 21 seconds Ladies and gentlemen, we'll wait for a moment while the question assembles. 9:30 9 minutes, 30 seconds The first question come from the line of Manish Dooshi from 361 Capital Market Limited. Please go ahead. 9:37 9 minutes, 37 seconds Hi. Hi. Uh, am I audible? Uh, yes. Yes, you're very audible. 9:42 9 minutes, 42 seconds Sure. Uh sir, uh stainless stainless stripes volumes have declined uh 17% year on year. Can you please help me out 9:51 9 minutes, 51 seconds with uh the breakup of domestic and export mix for that uh stimulus types and accordingly uh you're on your 10:00 10 minutes comparison uh for exports and domestic mix. So Manish, I'll just correct you here. 10:07 10 minutes, 7 seconds So you know our volume of pipe year on year have not declined. They have uh increased uh you know if I talk of 10:16 10 minutes, 16 seconds financial year 25 to financial year 26 it has increased by about 10%. And as I said in my opening remarks that you know 10:24 10 minutes, 24 seconds that is basically you can say after we have had a planned shutdown maintenance during H1 of the year for one and a half 10:32 10 minutes, 32 seconds months. So our run rate if we really look at it is uh is in line with what our expectation and you know our our uh 10:39 10 minutes, 39 seconds projection was uh as far as export is concerned yes they you know uh I think export markets have been difficult you 10:47 10 minutes, 47 seconds know for the last few quarters and on pipes approximately I can tell you like last year uh we had done about 20% uh 10:56 10 minutes, 56 seconds export by volume and which has you know come down to almost 10% this 11:02 11 minutes, 2 seconds Um okay sir uh I actually wanted to know uh for quarter on quarter uh basis uh it 11:11 11 minutes, 11 seconds has declined so maybe uh you can uh so if you see it's a you know it's see 11:19 11 minutes, 19 seconds first of all there are some time differences you know uh some of the contracts that required supplies to be done in a particular period of time and 11:28 11 minutes, 28 seconds uh plus uh also there have in this time uh you know some uh some significant volume which is goods in transit and 11:35 11 minutes, 35 seconds which could not be recognized as sales you know on the 31st of March. So I think these are just I mean we uh I 11:42 11 minutes, 42 seconds would suggest that we you know on a one particular quarter uh we cannot really gauge you know the overall uh long-term 11:51 11 minutes, 51 seconds buildup and overall you know growth in the pipe volumes. 11:57 11 minutes, 57 seconds Okay sir. Sure sure. Uh so uh my next question would be related to the order book. Uh so may I know the order book uh 12:04 12 minutes, 4 seconds value as such? Uh and how much is the pipes and how much is um uh you know parts? 12:12 12 minutes, 12 seconds I can tell you roughly you know we we are still hovering as we used to uh you know roughly around 200 crores worth of 12:19 12 minutes, 19 seconds order book uh and also it's a fact that the proportion of uh export has 12:25 12 minutes, 25 seconds definitely reduced you know over past periods. 12:29 12 minutes, 29 seconds uh normally we would always give uh you know the uh let's say uh uh projections 12:37 12 minutes, 37 seconds or indications based on time periods. So our objective always is to have a pipe order book of at least four to 5 months 12:44 12 minutes, 44 seconds which has come down uh to you can say about 3 months and here we have projects uh or let's say you know plans in place how to get back to four to 5 months. 12:56 12 minutes, 56 seconds Similarly on the steel normally you know we would desire to have a order book of three months and which has also uh come 13:04 13 minutes, 4 seconds down to about two months but I think these are uh temporary uh you can say 13:10 13 minutes, 10 seconds you know temporary u situations and as the market uh you know currently stands 13:19 13 minutes, 19 seconds uh we feel that uh with this improvements that we are seeing in the external markets or in the export 13:26 13 minutes, 26 seconds markets particularly in next two quarters we'll see a you know big change coming back to the order books 13:34 13 minutes, 34 seconds okay sir uh let's hope for that uh sir I have another question related to the u 13:41 13 minutes, 41 seconds you know uh the guidance as such uh can you help me out with uh volume growth which we are expecting for uh stainless 13:50 13 minutes, 50 seconds steel bars and pipes for the coming year so uh Manish had it been a very steady 13:58 13 minutes, 58 seconds state market it would be much easier you know to really give a guidance like last year we knew that there were volatility 14:06 14 minutes, 6 seconds and you know based on that we had some plans and we had given a guidance that we will grow by 20 to 30%. Now despite 14:13 14 minutes, 13 seconds uh you know unexpected Iran conflict that started you know we could still uh you know we could still get that growth 14:21 14 minutes, 21 seconds and we could still deliver and like in previous quarters also we had said that next year also we are definitely looking 14:28 14 minutes, 28 seconds at growing by 20 to 30%. But you know this is a guidance with you know based on firm plans firm strategy uh you know 14:37 14 minutes, 37 seconds as and you know firm business plan that has been already built. Now this definitely I would say uh if things 14:45 14 minutes, 45 seconds externally becomes better we can perhaps achieve even better. So so we cannot 14:52 14 minutes, 52 seconds completely discount you know the external environment which still remains very uncertain and very volatile. 15:01 15 minutes, 1 second Yes, agree to that. Uh lastly sir, I have questions related to the current numbers. Uh uh we can see that the 15:09 15 minutes, 9 seconds payable days uh have actually increased to somewhere around 140 145 odd days. Uh 15:16 15 minutes, 16 seconds any uh any reason why there is a sharp increase? 15:22 15 minutes, 22 seconds Well, these are I mean uh depends on the customers and depends on the projects. 15:27 15 minutes, 27 seconds Uh first of all see important is uh you know whether the payable days are 15:34 15 minutes, 34 seconds overdue or they are not so they are not right. So if we are selling into projects wherein by design you know the 15:41 15 minutes, 41 seconds the let's say deferred payment is for 60 days or 90 days or you know likewise so uh when we are selling more into India 15:50 15 minutes, 50 seconds more into strategic sectors normally the payment terms are little more deferred than you know exports. So, so that may be the reason that you know uh some some 15:59 15 minutes, 59 seconds days have increased but I think that's uh pretty well within the norms. 16:06 16 minutes, 6 seconds Uh um no uh I I was talking about uh payable base as in to the suppliers uh are are payable. 16:18 16 minutes, 18 seconds I think that is uh yeah I think uh CF CFO can really address. 16:23 16 minutes, 23 seconds Let me just uh pitch in here. uh our payable days based on sales was say around 130 days uh in the previous year. 16:29 16 minutes, 29 seconds Now it is around 160 days. So this is a minor uh change which has happened and uh these are like uh norm of business. 16:40 16 minutes, 40 seconds So time difference basically if you see uh you know this is reported at the end of the month but then uh maybe in two months this will come back to 130 or 16:49 16 minutes, 49 seconds maybe even 120 because if you see uh you know the cash balance has increased so it is only that uh when they are falling due then you are paying them. 17:00 17 minutes Okay sir got it got uh that's it from my answer. Okay, thank you. 17:06 17 minutes, 6 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star anyone on the touch from telephone. 17:18 17 minutes, 18 seconds Our next question come from the line of Shasha from Equir Securities Private Limited. Please go ahead. 17:25 17 minutes, 25 seconds Yeah. Hello sir. Uh so uh just first question with respect to order book that you mentioned right. So uh may I know 17:32 17 minutes, 32 seconds what segment or industry this uh demand is largely coming from for from the perspective of our order book. 17:40 17 minutes, 40 seconds So it's not uh I would not say any particular it's again a mixy we have been discussing these segments where we 17:47 17 minutes, 47 seconds operate and I think uh the same sectors we are operating at this point in time as well. Steel particularly if you ask 17:54 17 minutes, 54 seconds me it's a it's a very wide range. uh it goes into so many sectors and then we are selling into let's say forggers or stockholders who are niche stockholders. 18:04 18 minutes, 4 seconds So we really would not know as to where it'll end up uh at all times. As far as price are concerned as I said uh you 18:13 18 minutes, 13 seconds know our uh are almost 85 90% sales are happening in domestic and there uh you 18:21 18 minutes, 21 seconds know our focus is absolutely on only strategic uh sectors. So most of the sales obviously is coming from energy uh 18:29 18 minutes, 29 seconds which includes oil and gas, thermal uh some bit from nuclear. This is one sector that we are that we are really expecting to grow over next two to three 18:37 18 minutes, 37 seconds years time and we are you know we are completely uh let's say uh uh ready you know to to grab that opportunity. 18:46 18 minutes, 46 seconds Okay. And uh we uh we are we also seeing some good traction from the export side as well and from the order book perspective. 18:53 18 minutes, 53 seconds The export side is not only about wellspun specialtity right so overall demand has shrunk uh and you know to be 19:02 19 minutes, 2 seconds honest uh the stockholders are having lower stocks than what usually they would carry and that is all coming out 19:10 19 minutes, 10 seconds of you know lost confidence or you know lack of optimism at this point in time. 19:15 19 minutes, 15 seconds So imagine a situation if if let's say the conflict ends and everything is fine and you know European economy does bit 19:22 19 minutes, 22 seconds well then no wonder I mean we'll see flurry of demand coming but whether it will be appropriate for me to say that 19:30 19 minutes, 30 seconds this is definitely going to happen in next two quarters it's uncertain we don't know but uh eventually the demand 19:38 19 minutes, 38 seconds will come the source or the supply chains are not going to undergo drastic changes. So it 19:46 19 minutes, 46 seconds could be a time difference but eventually the demand will come. 19:50 19 minutes, 50 seconds Okay. Okay. And uh on from the perspective of the bridebar project as well of course uh you said giving a guidance will be difficult during these 19:58 19 minutes, 58 seconds times but uh on a broader basis like from the bridebar project perspective uh what what kind of uh industry or segment 20:06 20 minutes, 6 seconds are we targeting here the demand to come from and on a broader basis do we have any plans of what kind of growth do we expect this project to see? 20:15 20 minutes, 15 seconds So first of all as you know we had earlier also guided the pride bar capacity if is required as a de was 20:22 20 minutes, 22 seconds required as a deotting uh uh uh demottle lacking action. We already had some bitear capacity but which was always 20:31 20 minutes, 31 seconds falling short and we were we had to look for outsourcing and the quality was a challenge and you know to so we wanted to have everything in house and remain 20:38 20 minutes, 38 seconds ready for you know next level growth. So this was an important step which was to be taken. Number two uh you see anything 20:46 20 minutes, 46 seconds I would say 90% plus volume that get exported is all bright right so we have to have that com you know capability 20:54 20 minutes, 54 seconds ready at hand when it comes to uh exports. Third is within domestic there are certain segments like uh pipe you 21:03 21 minutes, 3 seconds know the other pipe and tube uh industry there are segments wherein the grades like uh super duplexes or nickel alloys 21:09 21 minutes, 9 seconds normally are sold as bright bars. So uh again the application for all these grades is again you know wide spectrum. 21:18 21 minutes, 18 seconds It is not that it's going into one particular industry or a particular application. Okay. Okay. I understood. 21:25 21 minutes, 25 seconds Yeah. So it's overall broadbasing of you know a value added facility and which uh also is a showcase as this is one of its 21:32 21 minutes, 32 seconds kind and customers especially the export customers will always like you know to have this kind of uh a facility for uh 21:41 21 minutes, 41 seconds gaining confidence and giving you more business. 21:45 21 minutes, 45 seconds Correct. Understood. Yeah that's it from my side. Thank you so much for answering the questions. 21:50 21 minutes, 50 seconds Thanks. Thank thank you sir. Yeah. Thank you ladies and gentlemen. You may press star N1 in order to ask a question. 22:03 22 minutes, 3 seconds Reminder to all the participant that if you wish to ask a question you may press star N1 on your touchstone phone. 22:14 22 minutes, 14 seconds Our next question come from the line of Matrica from Sapphire Capital. Please go ahead. 22:22 22 minutes, 22 seconds Yes, you are audible and agree. Thank you. 22:24 22 minutes, 24 seconds Yeah. Uh good evening. Uh congratulations on the result. Uh a few things firstly on the growth like now you mentioned there are a lot of 22:33 22 minutes, 33 seconds headwinds from the macro scenario going on. What sort of growth are you expecting in maybe on the conservative 22:40 22 minutes, 40 seconds side for this year and margin on the Yes. Sorry, please go ahead. I already said uh Matri that we are still looking 22:49 22 minutes, 49 seconds at growing anything between 20 to 30% this year. I think it will not be fair to make an assessment or declaring an 22:57 22 minutes, 57 seconds assessment what is going to happen each quarter. Right? But overall we have a strategy in place. We know which customers we are approaching. you know which projects we are working on and we 23:06 23 minutes, 6 seconds are more than confident that unless something very very drastic external thing happens we will we are 23:13 23 minutes, 13 seconds very confident we'll be able to achieve 20 to 30% could be even more depending on the market now and margin I think would not be an 23:21 23 minutes, 21 seconds appropriate for me to really talk about it what only I can talk about is that if you would have carefully seen the last year 23:29 23 minutes, 29 seconds what has started to happen is as we are increasing the utilization our operational efficiencies are kicking in. Right? 23:36 23 minutes, 36 seconds So in simpler words we can say that every additional ton you know and that too when we are chasing value over volume 23:45 23 minutes, 45 seconds which means that our growth of volume is you know despite it is 30% 35% I would still call it 23:53 23 minutes, 53 seconds modest because we have not been chasing uh volumes on you know low value lowgrade stuff 24:00 24 minutes right so we will remain focused on that and while we are focused on that so every additional tonnage that is adding 24:07 24 minutes, 7 seconds to our portfolio is only going to bring hopefully disproportionate you know margins compared to you know the 24:15 24 minutes, 15 seconds external uh the existing average. So the key remains the same what had been for last four quarters. We have been saying that 24:23 24 minutes, 23 seconds we want to utilize our capacity more and more but in a meaningful manner. 24:30 24 minutes, 30 seconds And that is what we are going to follow uh over next few quarters as well. 24:37 24 minutes, 37 seconds Correct. Uh but we've seen in the last four quarters we've seen a bit of a kind of dep or I would say like a dip on the 24:45 24 minutes, 45 seconds realizations as well. So do you see that kind of improving for the next year or you see them being like stable for next 24:52 24 minutes, 52 seconds year the realization per ton um where do you see that number going? 24:58 24 minutes, 58 seconds See realizations are a factor of two things because we are not selling one particular grade or one particular product. So realization 25:06 25 minutes, 6 seconds uh are a factor of two things. Sometimes you will find you may find while the prices have gone down the realization pattern increases because the grades 25:14 25 minutes, 14 seconds which sell at a higher price have more proportion in your sales mix. Okay. So uh to make it simple I can tell you that 25:23 25 minutes, 23 seconds the realizations have uh definitely gone down and that has gone down by you can 25:29 25 minutes, 29 seconds say about 5%. If I look at you know on a pertinent basis uh at the same time the raw material 25:37 25 minutes, 37 seconds obviously also gets corrected but may not be with the same degree and that is why the pton margins gross margins might 25:44 25 minutes, 44 seconds have taken some hit. Now those are made good by this operational efficiencies that have come in and which have uh you 25:53 25 minutes, 53 seconds can say uh which have brought in much higher you know plus you know than the difference uh of the material margin 26:00 26 minutes that got hit because of the market factors. Correct. 26:06 26 minutes, 6 seconds the the margins I feel like are going to increase through operating average and again make maybe the higher grade volume chasing that we're going to where we're 26:14 26 minutes, 14 seconds going to have the upside. So I I I can say you know with confidence that currently what's existing in the market 26:23 26 minutes, 23 seconds is perhaps perhaps the bottom you know things [clears throat] uh if you look at scrap prices of course 26:29 26 minutes, 29 seconds they you know now in last three four weeks we have seen that they have started to increase and we are watching carefully and accordingly the prices 26:37 26 minutes, 37 seconds have also started to go up but I think it's more pushed by the cost increase and less by the demand. 26:44 26 minutes, 44 seconds uh but in the last year uh FY26 I can say u you know the pricing level was perhaps near to bottom. 26:54 26 minutes, 54 seconds Mhm. 26:54 26 minutes, 54 seconds And uh the last one quarter also got hit by increase of energy cost which had to be absorbed as good companies you cannot 27:03 27 minutes, 3 seconds uh you know really uh pass on everything. So but now you know slowly the market start absorbing 27:10 27 minutes, 10 seconds the effect and then you know then that u uh plus effect will also seemingly start coming very soon. 27:22 27 minutes, 22 seconds Um uh and the one question on the effective tax rate would you expect that to be FA 27 and FA 28? 27:32 27 minutes, 32 seconds Sorry I I your voice pro. Could you please uh repeat your question? Effective tax rate for FI27 and 28. 27:41 27 minutes, 41 seconds So that is uh 25%. Mhm. 27:45 27 minutes, 45 seconds Yeah. 25%. But you see since we have uh you know the accumulated uh losses in the company of the past. 27:53 27 minutes, 53 seconds Yeah. So accordingly the defer tax asset is gets created and so uh so your PBT basically becomes a pat. 28:03 28 minutes, 3 seconds So we still have those for FI27 at least. 28:07 28 minutes, 7 seconds Yes. Yes we have uh we have uh close to you can say uh 500 crores which 28:16 28 minutes, 16 seconds culminates to about more than 120 130 crores of tax shield. 28:22 28 minutes, 22 seconds That is great. And in the presentation you mentioned that uh we have kind of been accreditated for a aerospace 28:30 28 minutes, 30 seconds application. So any any kind of color you can give on that is that a new industry that we're going to be branching out to uh any innovations we're doing on that side. 28:42 28 minutes, 42 seconds So one similar example uh of I think some other accredititation I'd explained in the past. I'll I'll just repeat that. 28:48 28 minutes, 48 seconds You see what happens is these are accreditations right? So which means that if we are selling a grade which is 28:54 28 minutes, 54 seconds say for example an X grade uh that sells for oil and gas and that also sells for aerospace. Now aerospace accredititation 29:03 29 minutes, 3 seconds means that your quality particular quality requirements of the same grade are aligned or in line with what an aerospace criticality needs. Okay. Okay. 29:15 29 minutes, 15 seconds Now what happens is let's say if there is a there is a large stockholder who is holding that X grade a particular size 29:23 29 minutes, 23 seconds would always want that with the material every other accreditation comes so that 29:29 29 minutes, 29 seconds don't have to keep you know uh multiple pieces or multiple stocks of the same material. Correct? 29:38 29 minutes, 38 seconds Are are you with me? So let's say if a if a stockholder in Germany wants to keep that particular item and if I am 29:46 29 minutes, 46 seconds offering them five certifications and aerospace is missing they would like to buy from somebody who can give them all six. 29:55 29 minutes, 55 seconds Okay. 29:56 29 minutes, 56 seconds So in a way it's a it's a confidence building that when the customer see that the company is aerospace approved I mean 30:03 30 minutes, 3 seconds obviously they you know look at you differently. And second is also a requirement for uh you know selling larger volumes into a wider base. Yeah. 30:19 30 minutes, 19 seconds Hello. Hello. 30:27 30 minutes, 27 seconds Ladies and gentlemen, the line for management has been disconnected. 30:30 30 minutes, 30 seconds Request you to please stay connected while we reconnect them. Thank you. 30:37 30 minutes, 37 seconds [music] 30:45 30 minutes, 45 seconds [music] 30:51 30 minutes, 51 seconds [music] 31:00 31 minutes Ladies and gentlemen, the line for management has been reconnected. Over to you, sir. 31:06 31 minutes, 6 seconds Hope u I could explain uh aerospace certification. Well, yes. Yes. Yes. Uh thank you so much for thank you all the best. 31:16 31 minutes, 16 seconds Thank you. Thank you so much. Thank you. 31:20 31 minutes, 20 seconds Our next question come from the line of J Bourji from J Bourji Investment. Please go ahead. 31:26 31 minutes, 26 seconds Hello Anita. Congratulations. Hello. How are you? All well, all well. Uh I have a question on the raw material movement in 31:35 31 minutes, 35 seconds prices. How do we compare between the lag between the raw material movement prices compared to the price reset? 31:45 31 minutes, 45 seconds Like every other uh I would say every other u uh material 31:52 31 minutes, 52 seconds the fall in the price is captured immediately and the rise in the price takes time to to sell. So but um I mean 32:00 32 minutes on a serious note I mean you see in stainless steel I can tell you that this you know the important elements which is 32:06 32 minutes, 6 seconds the scrap and couple of important feroids which is nickel and malib denim if there are just fine tuning happening 32:16 32 minutes, 16 seconds so obviously you know it takes time to really um pass on both sides so company may get benefited for some time or it 32:23 32 minutes, 23 seconds may be at a you know adverse uh uh situation for some But when there is a stark difference like for example uh nickel increased by 32:32 32 minutes, 32 seconds $2,000 on LME over a period of uh let's say one week. Mhm. 32:37 32 minutes, 37 seconds So that gets passed on almost immediately everyone increases the price. Correct. 32:42 32 minutes, 42 seconds Right. Similarly if the scrap increase by $100 for example and which actually happened in last three four uh weeks uh the scrap and everything has gone up by 32:51 32 minutes, 51 seconds anything between $100 to $300. So that has been now captured in the costing and you know the pricing has been uh accordingly changed. 33:00 33 minutes All right. And you would say that this is larger to cost increases than demand right. 33:08 33 minutes, 8 seconds Uh yes you can say that because you see scrap is something which is a global factor. It is not it is not something 33:17 33 minutes, 17 seconds which is only Indiacentric or India dependent. So obviously when the freights have increased globally you know sea freights have increased uh 33:25 33 minutes, 25 seconds there are restrictions in the supply chain and all of that has pushed up the scrap prices across not just stainless steel scrap if you would look at mild 33:33 33 minutes, 33 seconds steel scrap also has gone up. So that is a factor and uh so that is something 33:39 33 minutes, 39 seconds which has increased the cost and due to which the prices have also gone up. 33:45 33 minutes, 45 seconds uh we are seeing little traction on the demand side but uh normally in a in a 33:52 33 minutes, 52 seconds steady state market if stainless steel has to go up by $300 $400 33:59 33 minutes, 59 seconds then it has to be you know conventionally we have seen that it is always based on demand or let's say due to demand increase but here is a mix of 34:07 34 minutes, 7 seconds both I would say understood understood and the the NPC generator tubes that we 34:15 34 minutes, 15 seconds have developed in the orders that we've got for it. What stage of commercialization are we at in that and the revenue potential in this? 34:24 34 minutes, 24 seconds So this is as I you know as we mentioned that this is the development order in first place. So this is a product which 34:31 34 minutes, 31 seconds is the heart of nuclear power plant and uh you can say that for decades you know this had been an item highly protected 34:40 34 minutes, 40 seconds because of its criticality and uh it is only very recently that uh you know the the authorities have become 34:48 34 minutes, 48 seconds open based on very detailed assessments and audits. Uh a development order has 34:54 34 minutes, 54 seconds been awarded. Now uh the process of getting you know quality assurance plans and all of that approved is a very 35:03 35 minutes, 3 seconds detailed and very threadbear. So uh so this was this award was towards the uh 35:11 35 minutes, 11 seconds end of last year and uh currently uh we have already ordered the raw material. So you can say it is in 35:20 35 minutes, 20 seconds process and we see we expect uh in in next two quarters we will make uh meaningful uh progress and uh we are 35:29 35 minutes, 29 seconds targeting that within next two to three quarters we are able to deliver successfully. Now this actually will mean a very 35:37 35 minutes, 37 seconds significant addition of uh uh you can say an approval or a you know capability in the company as this is a high value 35:46 35 minutes, 46 seconds product and all nuclear plants that get built in India and there are uh you know 35:52 35 minutes, 52 seconds if you look at uh NPCL uh policy or government policy they're looking at 36:00 36 minutes adding almost uh more than 20 gawatt in probably next uh 10 years and which is a 36:06 36 minutes, 6 seconds huge for nuclear and having this steam generator tubing approval means that not only steam generator but you know the 36:15 36 minutes, 15 seconds next criticality uh tubes which are also high value they als they automatically gets added to the capability and the 36:23 36 minutes, 23 seconds market opens for us. So this is this is like building our muscle for you know grabbing the opportunity which we are seeing around the corner. 36:34 36 minutes, 34 seconds Wonderful sir. Thank you so much pretty much with everything. All the best. Thank you. Thank you. 36:42 36 minutes, 42 seconds Thank you. Next question come from the line of Shaw from Financial Research. Please go ahead. 36:49 36 minutes, 49 seconds Yeah. Thank you for picking my question sir and congratulations. A good set of numbers. So did you mention the current order books sir? I don't know if I've missed it. 36:59 36 minutes, 59 seconds Uh okay we thanks J. Uh so we mentioned uh this approximately about 200 crores 37:07 37 minutes, 7 seconds uh in value and uh honestly not to my liking but uh that's what the situation outside is and this is this cannot force 37:16 37 minutes, 16 seconds us to start chasing volume instead of value. So we stick to our cardinal principle of only chasing value and 37:24 37 minutes, 24 seconds therefore uh despite the external conditions uh we still uh you know wish to only chase value and we have plans 37:33 37 minutes, 33 seconds and we are very very confident that in next two quarters we'll be back to our uh original state where we had like 37:43 37 minutes, 43 seconds almost 3 months of order book in steel and four to five months in pipes Okay. Okay. And sir, what would be the I 37:51 37 minutes, 51 seconds mean if you could give a perspective of the capacity utilization across various segments. 37:58 37 minutes, 58 seconds We have a good headroom. I would say last year we uh utilized on steel about 38:04 38 minutes, 4 seconds 50% of the capacity which means we can uh from here we we have the uh 38:11 38 minutes, 11 seconds capability to develop our production. Of course it will happen in steps and stages and that's why we are targeting anything between 20 to 30% this year as well. 38:22 38 minutes, 22 seconds And similarly on pipes and tubes uh you can say we are we are utilizing about 60 65% 38:29 38 minutes, 29 seconds uh of the capacity and so there also we have a headroom to grow 38:37 38 minutes, 37 seconds and any guidance on capeex for the current year. 38:41 38 minutes, 41 seconds So currently see we did major capex on uh ride bar facility and some upgradations last year. So this year uh 38:51 38 minutes, 51 seconds uh we do have plans for some uh upgradations and you know automation and those kinds. We are not going to add any 38:59 38 minutes, 59 seconds great uh new facility or you know new new capacity. So I would think uh say 39:06 39 minutes, 6 seconds about 10 crores uh of total capex this year some of which is a part of a spillover from the earthw projects which 39:14 39 minutes, 14 seconds is already going on and maybe some uh some bit of new additions and upgradations here and there but nothing great nothing nothing major this year. 39:25 39 minutes, 25 seconds Thank you sir and all the best. Thank you. Thank you. Thank you so much. 39:30 39 minutes, 30 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and one on their touch on telephone. 39:41 39 minutes, 41 seconds Our next question come from the line of Sunil Jen from Minimal Bank Securities. Please go ahead. 39:47 39 minutes, 47 seconds Yeah, thanks for taking my question. Uh my question relate relate to more of uh 39:54 39 minutes, 54 seconds your own business. So how much of the revenue from the export you ask and uh 40:02 40 minutes, 2 seconds how much is the export to the Middle East uh countries where the currently the situation is disturbed? 40:10 40 minutes, 10 seconds Uh if I since your voice broke in between so in if I understood correctly you are talking of export business right? 40:18 40 minutes, 18 seconds Yeah. 40:21 40 minutes, 21 seconds Right. And uh so specifically you see we are into two products which is 40:29 40 minutes, 29 seconds bars or let's say steel. Now steel is something uh which will sell to a uh you 40:37 40 minutes, 37 seconds can say mostly into B2B right when I say B2B so if we are selling our steel uh to 40:44 40 minutes, 44 seconds a forger now the forger may be utilizing it to produce flanges or you know shafts and then exporting it to Middle East. We 40:51 40 minutes, 51 seconds may not know in all the cases how much of our steel is going and landing into Middle East area, right? Uh but I can 40:59 40 minutes, 59 seconds tell you that uh as far as domestic market is concerned, the effect seems less uh since the volumes have grown and 41:07 41 minutes, 7 seconds uh you know there we are seeing a very good traction. as far as export is concerned uh to let's say Europe and 41:15 41 minutes, 15 seconds also to Southeast Asia which are again big suppliers of steel or related manufactured component to Middle East we 41:23 41 minutes, 23 seconds are definitely seeing a dip in demand and that is what is reflecting in our proportion of exports also so similar is the case of pipes and 41:31 41 minutes, 31 seconds tubes where the tubes are going into heat exchangers or other you know different kind of equipment and then those are getting exported into various 41:39 41 minutes, 39 seconds countries including Middle So it is somewhere bringing an effect no doubt about it but if you'll ask me that 41:46 41 minutes, 46 seconds what we are directly exporting to Middle East I mean we have very very low exposure. 41:52 41 minutes, 52 seconds Okay sir that's good. Uh so second question relate to uh you said that uh this uh dist uh selling through B2B. So 42:01 42 minutes, 1 second can you define how much is uh sold through uh channel or distributors and all and uh how much percentage is direct to the consumer like OEM and all. 42:14 42 minutes, 14 seconds Well, you see uh I think our as far as India domestic which is a 42:21 42 minutes, 21 seconds main market at this point in time and export remains only 20% in steel. Uh the 42:28 42 minutes, 28 seconds culture in export market you can say uh is that most of it goes to the stockholders and they are very large you 42:36 42 minutes, 36 seconds know each of those uh and that includes the likes of Tissson Crops and the JK Metals of the world who are holding 42:42 42 minutes, 42 seconds stocks in billions and the business uh design is such that when a customer comes let's say a refining a refinery 42:50 42 minutes, 50 seconds goes into shutdown maintenance they would require 500 different items right and what we are supplying make you know 42:58 42 minutes, 58 seconds could be maybe three four five 10 items out of that. So all these stockholders are large aggregators and they you know 43:05 43 minutes, 5 seconds kind of complete the bill of material when it comes to large uh requirements. 43:10 43 minutes, 10 seconds So that is how things operate uh you know in most of the export markets including South Africa, Europe, Taiwan, 43:17 43 minutes, 17 seconds anywhere we go. Here in India, I would say 90% plus of our sales are going 43:23 43 minutes, 23 seconds directly to the uh users to the either they are forggers or pipe mills or machining companies or you know any of those. 43:34 43 minutes, 34 seconds Okay, great. Uh so last question related to the price increase which has happened recently. Uh so uh is there any uh time 43:44 43 minutes, 44 seconds there will be definitely a time difference between uh you procure your raw material and uh the finished goods is sold. So uh do we make uh inventory gain in that or no? 43:56 43 minutes, 56 seconds See we from from the very beginning we had been very disciplined in our raw material coverage and we don't uh you 44:04 44 minutes, 4 seconds know uh we don't take exposures which can we have seen times when uh things can really go haywire. So uh in our case 44:14 44 minutes, 14 seconds you can say we are literally sort of back to back and the inventories that we carry in our order book all the time 44:23 44 minutes, 23 seconds would nearly be the same. So if if there is an increase in raw material price, you know, whether we buy that raw material the same day or not, but we 44:31 44 minutes, 31 seconds increase our selling price and vice versa. 44:36 44 minutes, 36 seconds Okay, sir. Great. Thank you very much for answering my question. 44:43 44 minutes, 43 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and one. 44:52 44 minutes, 52 seconds Our next question come from the line of Savi Mahanti from Noama Wealth Management. Please go ahead. 45:00 45 minutes Hello. Hi sir. Um so I have two questions. So hello. Hi. Uh the first one being uh what would you estimate our 45:08 45 minutes, 8 seconds volume growth would have been if we had not taken the planned maintenance and um the second one is uh with respect to the 45:17 45 minutes, 17 seconds domestic market and currently as we focusing on domestic market. Could you give us some quantitative numbers in terms of if you've increased our 45:24 45 minutes, 24 seconds branding spends, if we've expanded our uh sales team in order to penetrate the domestic market. Thank you. 45:32 45 minutes, 32 seconds I will take the uh second part first. Of course, we are expanding our uh team as 45:40 45 minutes, 40 seconds we expand uh customer base as we have to approach uh different uh segments and different customers and you see this is 45:48 45 minutes, 48 seconds a business where doesn't where it is very rare you know that you are able to sell thousands of tons in one deal. 45:55 45 minutes, 55 seconds These are always small small numbers and therefore obviously the effort customer effort is very very high. So we are 46:02 46 minutes, 2 seconds consistently uh in you know adding capability and competence to our our sales team. Number 46:10 46 minutes, 10 seconds one. Number two uh as far as uh uh the uh uh your first part was 46:20 46 minutes, 20 seconds concerned wherein just just one thing growth growth if your shut down. Yeah. 46:30 46 minutes, 30 seconds So, so as you know I was mentioning the number uh of months that the shutdown had was taken was one and a half month. 46:40 46 minutes, 40 seconds So if I just literally take that as a mathematics you know probably instead of 10% we would have grown by 20%. 46:52 46 minutes, 52 seconds No. So do you think I mean looking at the market scenario do you think we would have been able to go ahead kitchen is my question. 47:02 47 minutes, 2 seconds Yes of course why not I mean the see this shutdown was in H1 uh and you know we always were sitting on the order book 47:11 47 minutes, 11 seconds including now. So it was a planned shutdown which was planned during FY uh 25 in the middle of FY25 and some of 47:20 47 minutes, 20 seconds those things required lot of uh you can say preparation ordering of spares and 47:27 47 minutes, 27 seconds you know ordering of uh services and so it was well planned and a major one was taken and then it started to give the 47:36 47 minutes, 36 seconds desired benefits of productivity quality you know lesser downtime and things like that and this is something that requires 47:44 47 minutes, 44 seconds to be done or is recommended to be done every 5 years, right? So, so we had completed five years ever since in you 47:52 47 minutes, 52 seconds know 2020 this this major overall was done and then I see this coming again maybe towards 30 20 uh 30 31. 48:05 48 minutes, 5 seconds Understood. Thank you. Thank you so much. Yeah. Thank you. 48:12 48 minutes, 12 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and one. 48:20 48 minutes, 20 seconds Our next question come from the line of Manish Dshi from 361 Capital Market Limited. Please go ahead. 48:27 48 minutes, 27 seconds Uh hi sir. Uh I just had one small bookkeeping question. So uh investments for this uh your FI26 has actually 48:34 48 minutes, 34 seconds increased. Can I know uh the nature of the investments? Uh that that will be all sir. 48:41 48 minutes, 41 seconds Yeah. Thanks Mali G. I think I'll request our CFO Mr. N to take up this [clears throat] question. 48:46 48 minutes, 46 seconds Yeah. Our uh investments and cash includes uh some amount of cash, some amount of FD, some amount of mutual fund and bonds investment in uh PSUs. 49:00 49 minutes Thank you. Uh thank you and all the best. Thank you. Thank you. Thank you. 49:08 49 minutes, 8 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and one. 49:19 49 minutes, 19 seconds Is there no further question from the participant I would like to hand the conference over to the management for the closing remarks. Thank you and over to you team. 49:28 49 minutes, 28 seconds Uh thanks everyone. In closing, we remain firmly focused on driving continuous improvements in operational 49:37 49 minutes, 37 seconds performance and efficiency while proactively addressing evolving customer requirements. Our strategy is centered 49:44 49 minutes, 44 seconds on capturing opportunities early, strengthening our market position and expanding our presence across both 49:52 49 minutes, 52 seconds existing markets and new geographies, laying a strong foundation for sustainable long-term growth. Regarding 49:58 49 minutes, 58 seconds this next phase, when Specialtity continues its transformation from a foundational strength to a bold and respectable contender, our vision 50:08 50 minutes, 8 seconds remains clear and focused towards maximizing stakeholders value. We trust we have addressed your questions satisfactory. 50:15 50 minutes, 15 seconds Should you have any further queries, please feel free to reach out to our investor relations team who would be happy to assist. Thank you once again 50:23 50 minutes, 23 seconds for joining us today. We look forward to connecting with you again soon. 50:40 50 minutes, 40 seconds Thank you so much sir. Ladies and gentlemen, on behalf of 361 Capital Market Limited, that concludes this conference. Thank you for joining us. 50:48 50 minutes, 48 seconds And you may now disconnect your