Godawari Power And Ispat limited (GPIL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Goddavri Power and Spot Ltd. Q4 and FY26 earning conference call hosted by Monarch Network Capital Ltd. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone floor. Please note that this conference is being recorded. I now hand the conference over to Sahil Sangvi from Monarch Network Capital Limited. Thank you and over to you, Sahil.

Thank you, Anish. Good afternoon, everyone. It's a pleasure to welcome you on Giafub Godavari Power & Export Ltd. Please note that today's discussion may include certain forward-looking statements and therefore, this must be viewed in conjunction with the risks that the company faces. We are joined today by Mr. Abhishek Agrawal, Executive Director, Mr. Dinesh Gandhi, Executive Director, Mr. Sanjay Butra, Chief Financial Officer. May I now invite Mr. Sanjay Putra to present the company's business outlook and performance, after which we'll open the floor for Q&A. Thank you and all to you, sir.

Thank you, Sahil. Good afternoon, everyone, and thank you for joining us on today's call. Our financial results and other presentations have been uploaded to our website as well as the stock exchanges, and I trust you have had an opportunity to review them. I will now briefly walk you through the key highlights of the results, following which we will open the floor for a question and answer session. We are pleased to say that FY26 has been a year marked by several significant milestones and strategic achievements. Despite software realization, GPI delivered good setup numbers, with revenues remaining steady and EBITDA and PED margin strong at 23% and 15% respectively. On the operational front, DPI delivered a strong performance in FY26. Successfully achieving its production targets across key segments. Sponjaran structural rolled products in farewell has surpassed their targets with production exceeding 100% of plant levels. Meanwhile, mining, pallets, and billets achieved 92%, 95%, and 96% of their targeted production level respectively. In FY26, healthy production ramp-up was seen across iron ore mining, pallet production, and structural roll products. Q4 witnessed robust YUI growth in pallets, sponge iron, and structural roll products, supported by capacity ramp-up and healthy demand. The sales volume in FY26 showed an increasing training pallets, sponge iron, galvanized fabricated products, and structural roll products. In Q4, the growth momentum of sales volume remained strong, led by pallets and structural role products. Q4 witnessed sequential improvement in the realization driven by better pricing momentum across the steel value chain, while F526 realization remained softer across key products. Coming to the consolidated financial performance. FY26 revenue remained stable, while Q4-FY26 revenue recorded a strong 41% quarter-and-quarter growth, supported by a safety production ramp-up, higher sales volume, and improved realizations. FY26 EBITDA stood stable at 1,253 crores, whereas Q4-FY26 EBITDA increased by 38% YUI basis and 91% QRQ basis. to Rs 439 crores. FY26 pet also remained stable at 802 crores, with Q4 FY26 pet rising to 280 crores. Cash flow from operating activities improved by 29% to 1,157 crores, driven by a strong operational performance and efficient working capital management. GPL continues to maintain a hectic balance sheet with the case. The stand-alone performance during FY26 also remained stable and healthy. The stand-alone alone path growth of 19% represent dividend income from ardent steel and exceptional income on sale of the stake in ardent steel. However, in the consolidated results, the stake held in Ardent Steel has been de-recognized upon disinvestment of the stake held in Ardent Steel. Further, dividend income and profit on sale of the stake of Ardent Steel does not form part of consolidated results, and therefore consolidated pay was lower as compared to the standalone pay. Coming to the key achievements and strategic updates. I am pleased to say that GPL received environment retrieval and consent to operate from the CECB in February 26 for the capacity enhancement of the ARRI-ROG device from 2.35 to 6 million tons. The ramping up of the capacities has already begun in a phased manner with full-scale operation targeted from TAS 528. The iron ore vanification plant capacity expansion at the Aridongri Vines increasing capacity 10 fold to 6 million tons is targeted for cavisting by Q3FY27. EPIs also received CTO from CCB for capacity expansion of dispenser and division from 0.59 million tons to 0.65 million tons. HB wire from 0.1 million ton to 0.115 million ton. And for an additional 7 megawatt waste-hit recovery waste power plant, taking the total waste-hit recovery power plant capacity to 49 megawatts. DPL commissioned its 2 million ton ironwood pellet plant in December 25, taking total pellet capacity from 2.7 to 4.7 million ton. The plant is India's first to use advanced natural gas-based great technology, marking a shift from conventional carbon-intensive processes. GPL is progressing on its 0.7 million ton CRM complex project with on-site construction expected to commission by July FY26. Other four key equipment lines have been placed and advanced payments have been released for all major process lines. The project is targeted for commissioning by MASFY27. GPL is setting up a 20-Gigawatt-based project for which soil testing has been completed and construction of the compound wall is currently underway. We have signed long-term agreements with EV power for grade 1 628 AH LAP sales and with Shanghai Semi Roche Energy Technologies for BC's balance of system supply securing the project supply chain. This project is expected to commission from March 27. The Board has approved the setting up of a 1 million integrative steel plant for manufacturing structural steel and wire rods. Land acquisition and environmental approval are in place while consent to establish is awaited. Discussion with equipment suppliers and project engineering are underway with construction expected to begin in October 26. DPI is also expanding its captive solar power capacity by over three times. Currently, from 165 MW to 540 MW to support captive consumption across iron ore mines, additional 2 million impellable plant, CRM, and upcoming integrated steel plant operation. In addition to current 165 MW, the company has commissioned solar power capacity of 25 MW yesterday only, and additional 100 MW is expected to be commissioned by July 26. On the ESG front, the company has completed most initiatives under its energy efficiency and decarbonization project, reinforcing its commitment towards achieving net zero carbon emission by 2050. As part of its EV-led transition towards greener operation, GPL has invested in 10 EV dumpers, 24 EV loaders, and 15 EV excavators during the year. The adoption of electric transportation has reduced operating costs by nearly 75% and lowered carbon emission by around 88% compared to conventional legal vehicles. The company has plans to ship the existing transport fleet to EV fleet to reduce emission and cost savings, which shall be announced in due course. Now coming to the market outlook. Global ironwood prices remain relatively resilient during FY26 supported by steady demand from China, supply-side disruption, and healthy steel production in emerging economies such as India, benchmark 62% heavy ironwood prices largely traded in the range of $95 to $110 per metric during recent months. On the domestic front, India witnessed the sharp rise in the iron ore imports and reached a seven-year high of 12 million ton plus in FY26, driven by strong steel demand and shortage of high-grade ore required by domestic meals. Despite higher domestic production, imports increased significantly, highlighting a robust consumption plan in the Indian steel sector. Looking ahead, the medium-term outlook for iron ore pilots remains costly, balanced, ensuring steel demand in China, and expected ramp-up of new low-cost supplies on Shindow project in Guyana. However, rising steel conditions in India and increasing preferences for high-grade iron ore are expected to provide structural support to demand going forward for pilots in high-grade iron ore. On the pellets run, demand for premium-grade pellets continues to strengthen globally, end decarbonisation initiatives, and the gradual shift towards gas-based DRI steelmaking. Industry reports project the global iron pellet market to grow at a cadre of around 5-6% over the next decade. Supported by increasing adoption of cleaner steelmaking technologies, looking ahead, India's pellet demand outlook also remains positive. Supported by ongoing steel capacity expansion, and the industry's growth focus on low carbon and high-grade raw materials. In conclusion, backed by the competitive advantage of captive iron ore mines, a strong net cash position, Ongoing capacity expansion and a straight-short ASD focus, GPL remains well positioned to drive sustainable value creation through operational excellence, solar rate cost optimization, and the continued support of all stakeholders. I would now like to open the floor for questions and answers.

Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. Next question comes, our first question comes from the line of Manav Gogia from Yes Securities Limited.

Please go ahead.

Yeah, hi. Very good afternoon and thanks for the opportunity. So, to follow, a lot of congratulations on a good set of numbers for the photo. My first question is on the iron ore mining guidance. I might have missed in the opening remarks, but for FY27, if we go to slide number 17, we have a guidance of 3.4 million tons for FY27. So now, I think last call, we were guiding that we would be doing somewhere around 4.5 to 5 million tons. So what's changed? Is there some delays in the ore production? Can you please just help me with that?

Yeah, so a couple of things. Firstly, so the guidance that's given is the net usable R&O, which will be sent to the pellet complex for using it, because we will be benefiting the R&O in the mine itself, once our six million, the Benefishing Plant Commission. So, the actual mining will be close to about 4 to 4.25 million tons this year, you know, because 1.5 million will be BMQ, where the recovery will be less than 50%. So, about 0.8, 0.75 million tons of iron ore will be, you know, waste waste buildings. So, the actual iron ore mining production will be about 4 to 4.25 million tons. But the guidance we have given is the net usable iron ore coming to the plant for making pellets, which is about 3.4 million tons. So, this year, we will be doing about 4 to 4.25 million tons of iron ore production, and end of Q3, early Q4, we should be able to hit the rated capacity target of 6 million tons, and from FI28, we should be able to mine 6 million, and the actual output consistently usable for pellet plant will be about 4.5 million tons. That's how you want to see it.

Oh, thank you for that. And this 3.4 also includes ore from Borea Tipu or is it purely hurried only?

No, see Borea Tipu, you know, last year mining was hardly about 0.3 million tons. This year we'll be doing about 0.5 million tons because again Borea Tipu is a very low-grade ore. So currently we are bringing it to the plant and benefiting where the recovery is hardly about 40%. So, even if you do up on 0.5 million this year, the usable iron ore will be about 0.25 million, which is very substantial. So, 3.4 will be the net usable iron ore this financial year, which will be going to the ferret plant.

Okay, understood. So, to get it in a nutshell, we will be buying roughly one, one and a half million tons of iron ore for our pellet.

About, yeah, close to about a million ton, but that will drastically come down post-Diwali, which is remember, once we are able to achieve the railing capacity post-monsoon. As a year whole, we can see a total mining to be about 4.5 million tons, including Boreh Dippu. Net usable iron of about 3.4-3.5 million tons for this financial year.

Okay. And, you know, the new mine now, putting in the ore. From this year onwards, how do we see the landed cost of port changing? Do we expect it in the 2,900, 3,000 rupees per ton?

No, this year, unfortunately, so if you see now, so because of the diesel escalation and the shortage all over because of the war, so our transportation cost is already up by, you know, 2,250 bucks. So, but for the full year, we see the value to be at the similar levels of 3,000, and Mr. Botha just mentioned, we have started talking to the transporters. We want to complete the entire fleet to EV trucks to have a substantial saving on the diesel side. So, this year, the guidance will be at the similar levels, which is about 3,300 levels, but Q3, Q4 onwards, we can see a substantial reduction in the pricing of mining.

Sure, sir. My second question is, you know, how do you see the pricing in Q1 as compared to Q4?

See, Q1, the pricing was pretty much at the same levels of Q4 for the first half of Q1, but the second half of Q1, say, end of April, early May, the prices have, you know, softened a bit almost by 10% across the supply chain. It might be a war effect, it might be a, you know, the summer season or the heat, you know, heat wave, which is across the India right now. So, Q1, the prices have softened by almost 10% across the supply chain, end of April onwards.

So, okay, that's helpful. So, just one last question. I was looking at a slide, 25, where we have a vision for 2030 months, and, you know, we are growing substantially from the current levels. So, just wanted to get a picture of what all are you, you know, looking at from a company's long-term strategy point of view. Is it the current projects is what the estimate is, or there are certain projects which haven't been announced, or, I mean, you know, the company?

No, no, no, no. So, it's basically the top line coming from all the projects they've announced. So, if you see the best battery storage, which is about 20 gigawatts. So, if you consider about 16 gigawatts, from there, we see a top line of about 15,000 crores. A new steel plant, we see a top line of about 6,000 crores. The CRM, we see a top line of about 3,000 to 4,000 crores. And with the pellet capacity, you know, crossing 4 million this year, so put together, you know, the current complex and the project we've already announced, we see a top line reaching close to about 30,000 crores in the next 4 to 5 years.

Got it. That is helpful. Thank you. All the best. I'll join back the queue for more.

Thank you so much.

Thank you.

Ladies and gentlemen, you may press star and 1 in order to ask a question. Next question comes from the line of Sunil Jan from Nirmal Bank Securities, Private Limited. Please go ahead.

Yeah, thanks for taking my question, sir. My question relates to more of a EBITDA growth, what we had seen quarter on quarter. So if we see the prices has remained more or less same for pellets, though we had seen increase in other commodities. But the delta seems quite high in EBITDA growth as compared to what we had seen in the prices increase of the pellet.

There are two reasons. One is, there was a carryover inventory of IMO pellets of about 89,000 tons in Q3, which got sold in Q4. So, the additional EBITDA has come from there. Plus, our new pellet plant started production end of Q3, which is December, and we were able to reach to a 70% capacity. So, the additional volume of pellets came in from there. And lastly was our mining production, which was about 2.4, 2.35 till last year. We got the EC approval, you know, at the third week of February. So in March, we could do the extra mining for almost about 2, 2.5 lakh tons. So majorly these three factors contributed to the additional EPTA compared to Q3.

Okay. And, sir, second question related to this. So, 20 gigawatts overall you will be doing. And can you give the timeline how it will be starting? First, you will be starting 5 gigawatts, and thereafter, how you will be doing that? Sure, sure, sure.

So, see, with the current development, we should be able to commission the first line by end of Q4, which is March 27. So, first year, as a 28, we expect to do, you know, a 5 to 6 gigawatt of output, which is hardly at about, you know, 30, 40%. Second year, we want to split it to about 70%, which is at about, you know, 12, 13 gigawatts, 14 gigawatts. And from third year onward, we expect to do, you know, about 17 gigawatts. So in the next two to three years, we should be able to reach to 90% capacity. That's how we have planned it for the phase one of 20 gigawatt line.

And if you can talk about the margin in this base business?

See, when we started the project, when we conceived, you know, we were expecting a margin of roughly about, you know, 7 to 8 percent. So today, if you see... Today, the price of one container is close to about 80 lakh rupees per megawatt hour, which is about 4 crore rupees per container. So, when we conceived this project, it was supposed to be about 7-8%, so about 3 and a half, 4 lakh rupees margin. But with current demand coming from Indian sector, you know, with the grid stability and all those things, the margins have gone up almost to 12-13% at the moment. But still, if you consider a very conservative figure of 7-8%, on a, you know, 80 lakh per megawatt, we do about 4 lakh rupees of, you know, net margin. And this is that you can multiply to a 16-18 gigawatt line. That's how we have conceived the project. So we are 4.5 lakh rupees per megawatt hour into a 16 gigawatt line. It comes to about 700 crores, if everything goes well. Yeah, yeah, great.

Sir, something related to this only, like how we are related to anything increase in lithium prices, your lithium sales prices, if that happens, then how we are safeguarded?

See, so as Mr. Botha announced, we have done a long-term tie-up with a tier one Chinese company called EVE. So the way we have, you know, priced the entire supply of the cells, it is index-based, where we have captured a few important components which contributes to the manufacturing of lithium cells. So if the market goes up, the supplier will pass on the price to us. If the market goes down, it will be vice versa. So, For example, if you see, you know, six months back, the prices of lithium sales are about $37, $38 per watt, which is now at about $55 per watt. In the same way, you see, six months back, the price quoting in India was about 70 lakh rupees per megawatt hour, and today, the price quoted for the same container is about 85 lakh rupees per megawatt hour. So, eventually, any increase, substantial increase in the sell price will be eventually passed on to the buyers in the Indian market to maintain the margins. So, the pricing you've done with the supplier is on index base so that, you know, it is fair to both the parties. Okay. Great, sir. Thank you very much. Thank you.

Thank you. Our next question comes from the line of Amman Kothari from Equitas Investments. Please go ahead.

Yeah. Thank you for the opportunity for asking questions and congratulations, sir, on the wonderful set of results. Sir, I wanted to get a... Our current understanding on the iron ore environment that we're seeing, recently we've seen that it has been hovering around 105, 110, currently around 107. So do you think these prices will be stable for the next of the year and with them being at these prices, our spread will eventually increase? See.

If you see about 15 days back, the prices also trust about 110, 112 levels as well. With this watch situation and, you know, the currency fluctuation, the prices have softened a bit. But as you see the international reports, I feel this year the prices should remain above 100 levels for the entire year. That's what the international report says. And there is demand from China. Importing to India is also happening because of, you know. Availability of iron ore in India is not up to the mark. So, I feel $100 plus should be the target for the entire year on iron ore side.

Got it. And, sorry, and for the pellet plant, I think you mentioned, sir, it is a gas-based pellet plant that we have set up?

Yeah, so earlier we were using coal gas. So now from coal gas, we have shifted to natural gas. We have done a seven-year MOU with Gale for supply of natural gas. So a new plant is running 100%. The fuel is natural gas.

So, sir, with that, I think you clearly explained in the last call the difference between a coal-based DRI pellet and a gas-based DRI pellet. So, you clearly stated we would not want to look into, let's say, a DRI that's gas-based, but with this, are we looking at that kind of an export market?

We are, see, definitely with CBAM coming into picture, with demand from, you know, export market, and with the capacity of pellet being added to India, the whole idea was, see, we want to be export ready. So whenever we see the domestic demand is on the, for example, today the domestic demand is on the weak side, you might hear where Godawi start exporting pellet from, you know, from the next quarter. So we want to be future ready, and that was the whole idea. Plus, we also saved about close to over 100 crores of capex, you know, on the coal gas efficient side to, you know, to generate the same kind of fuel. So, 100 crores capex was saved on the capex side. Plus, we are future ready whenever export opportunity is there. That was the whole idea.

Got it. And, sir, for the coal, I think you mentioned last time that South African coal prices had increased because of the supply it got. So, can you just give us an idea on how the prices are hovering for this quarter?

See, this quarter will be very well covered within the limits. So, our average pricing should be somewhere about, you know, 12,500, 13,000 rupees. But Q2 onwards, because of the war impact, the C-Shed has gone up substantially from 15, 15 dollars is almost, you know, across 20 dollars. Dollar is up from 93, 94 levels to 97 levels. So, there is a substantial impact on the import price from Q2 onwards, at least by 15, 20 percent.

20%, okay.

Yeah, yeah, yeah, yeah.

At the moment, it is. And domestically, we wouldn't have a problem for the 40% mix that we have.

No, see domestically, so at the moment, we are close to over 100% using imported coal. We have been using imported coal to maximize the production levels in the DRI. But any given point of time, we can always switch to domestic coal, and the availability of domestic coal is abundant. There is no supply or gut in supply of domestic coal sourcing. So, we can switch whenever we want to. So we are carefully monitoring this watch situation, and if we see the situation is not dying down, so going forward, we might shift to some part of domestic coal for DRI.

Got it. Perfect. And just a last question before I join back in line. I think we have established some really good tie-ups in terms of our best setup, how we are progressing with EVE, with Roche and other players. Sir, can you just give us a sense on how do you think this market is going to play out in India? Because we've seen a lot of players announcing the Capex or announcing the expansion into best projects that they would do. Can you just give us a bit light on how our talks with potential customers or early pipeline talks are progressing?

See, at the moment, we haven't gone to the market yet. We want to get into the market once we know we can deliver, you know, after a certain time period. So, we intend to go into the market, you know, end of Q2, which is, say, about September, August. But see, it's an open market. People do feel the initial capex in the lower side, but it's actually not. And the challenge will be, you know, a continuous supply from tier one components across the globe. So that is the reason we feel the market is going to be competitive. But eventually, what quality components and how you, you know, make the container eventually will play out. So, once you deliver in the market, then only probably, you know, you can see who is able to deliver and not able to deliver.

Yeah, okay, sir. Because I think in terms of capabilities as a team, China is the number one player in battery energy storage, and since they're sorting components from most of those types, I think we should be in a very good capability.

Yeah, so we also, so recently just to, you know, inform all the stakeholders, we recently also have tied up with FIMR, which is a talent-based company. They have a plant in India for PCS, and we have tied up with a Gujarat-based developer for AMS, which is compulsory as a part of battery storage by the Indian government. So we are continuously doing long-term tie-ups with key component suppliers so that we have a continuous supply for all the components on a regular basis.

Got it. Thank you so much, sir. I'll just join back in line.

Yeah, thank you.

Thank you. Ladies and gentlemen, if anyone who wishes to ask a question, may press star and 1. Our next question comes from the line of Vinit Thakur from Plus91AMC. Please go ahead.

Hi, sir. Thank you for the opportunity. Congratulations on getting numbers. So, I would like you to throw some line on the EBITDA margin. What would be our conversion ratios? How do the conversion ratios work right now? From mining to pellets, pellets to fungi. That would be great, sir.

The conversion from mining to pellet is about 2,000 rupees, and from pellet to DRI, including thermal coal, of course, so it comes to about, so the conversion cost, operating cost is about 2,000 rupees from pellet to DRI, and remaining is your coal and iron ore cost. So, I know it's about 40%, coal is about 35%, and remaining is the operating cost. So, today, if you see a breakup of, say, my production cost is 20,000 rupees, sort of that, pellet will be about 10 rupees, coal will be about 8.5 rupees, and remaining 15 rupees will be operating cost. That is a breakup for the DRA.

Okay, and sir, could we be taking a whole structural product because there's been quite an incremental QOQ and YOY growth on those products?

Yes, so a couple of things. Once, so we took the RRs for the rolling mill, which we had designed. There was some modification required to, you know, improve the quality and upgrade the production. So that modification was over in end of Q3. So that's why you are seeing a substantial increase in the roll product production from Q4 onwards. And now you can see this production happening on a continuous basis, quarter-on-quarter, because the milk is now, you know, quite stable, and there is activity of the product in the market. So we have a healthy order book of almost six months on RAS path. So now you can see these volumes on quarter-on-quarter basis.

So, sir, what would be our capacity and what would be the utilization for this year, we are expecting for F527?

See, so, total gold product, including Godavari, we should do about somewhere about 3.75 lakh tons for the entire year.

Okay. Thank you, sir. I will join by the question to you again for asking another question.

Thank you.

Thank you.

And this question comes from the line of Stuti Agarwal from Chhattisgarh Investment Limited. Please go ahead.

Thank you for the opportunity. Sir, regarding the exceptional line item in TNL, you had mentioned in your opening remarks that the difference between a positive, like from a positive 36.69 crores at standard level to a negative 18.29 crores at console level is due to the non-inclusion of Profit on sale of Arden still. So, could you please give us a bifurcation between this profit and, I guess, the write-off of pre-operative cost of thermal power plant?

Yes. See, in other income, there is a 91 crore item of dividend from Arden still limited, associate company. Thank you. There is around 73 crores profit on sale of the stake of adent steel, which is appearing in the exceptional item in stand-alone results. Okay, and this method is on cost-to-cost basis, but when the consolidation comes, on equity method, the profit recognized in stand-alone on cost basis is eliminated, and only 17 crores. Profit is there on the entire transaction of this identity stake sale. 17 crore gain as exceptional icons and around 37 crore or 36 crore write-off of the first trial Godawri Energy preoperative cost. So, net-to-net 17 crore loss in consolidated balance sheet as exceptional loss.

Okay, so that's all from my side. Thank you.

Thank you. Our next question comes from the line of Yogansh Jaiswani from Mittal Analistic. Please go ahead. Dear consumer, please proceed ahead with the question. If you are on mute, please unmute yourself and proceed with the question.

As there is no response, we'll move forward to the next participant. Our next question comes from the line of Sinclair Disreserve from Lelka Securities. Please go ahead.

Hello, can you hear me?

Yes, please. Yes.

Yeah, thank you for giving me the opportunity. I wanted to ask, what is the revenue guidance for FY27 and the EBITDA margin guidance for FY27?

The revenue, we should, we should, top line should be 6,000 plus with a new pellet plant operating at close to 80%, 80, 90% capacity. So, there will be the additional volume and the additional revenue coming from there. As other volumes remains almost constant. And FI27 guidance, see, at current market level, we should, we should be able to do somewhere at about 24, 25% of, you know, at Aribita levels, at current market levels. It's a very, you know, difficult to comment, you know, such an early stage of the financial year, but looking at the current market scenario, 25% we should be able to maintain the retail levels and top line should cross 6,000 crores with the additional volume of pellet coming Got it. Thank you.

Thank you. Our next question comes from the line of Sahil Sangvi from Mona Capital. Please go ahead.

Hi, congratulations again for very good results. My first question is, on the pellet, if we have to see the quarter-quarter realizations, it's not moved at all versus the market pricing. So what's happening over here, if you can help us understand the reasons and how can pellet prices look for FY27?

See, thanks, Aiz. So, on the Q4, we see the pellet pricing hasn't moved much compared to market because, you know, there was a phase where we were not able to do mining at the full capacity because of the EC section. As EC got delayed, you know, right from October, November, then finally it came in end of Feb. So, we were not able to produce the same volumes of high-grade pellets where we, you know, draw a premium for more than 1,000 rupees. We had to make the, you know, 63 commercial pellets. So that is why you are not able to, you know, see a difference in the pellet pricing compared to the market scenario. There was a major reason, no other reason beyond that. And on the FI27 guidance, so see, as the mining production goes up from Q3 onwards, once monsoons are over, the product mix of high-grade will start going up drastically. And that will definitely show a difference between the pellet pricing for Godawi and the others in the market. But that will happen from Q3 onwards, as the mining production starts going up post-monsoons.

Got it, got it. Perfect. Thank you. That's all for myself. Thank you. Thank you.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Yogansh Jishwani from Mithril Analytics. Please go ahead.

Hi, am I audible?

Yes, you are. Please proceed.

Thank you for the opportunity. Congratulations to you and the entire team on a good set of numbers. So, just wanted to understand on the new mining and the pellet plant scale-up that you were explaining before. So, earlier we used to mine 27-28 lakh tons of ore and simultaneously convert that into pellet. While this time, because of the verification plant, you are saying that the mining would be higher, over 4.5 million. Well, it ready or would be three and a half million. So, why is there a change in that if you could help me understand, sir?

No, so there is a slight correction. So, earlier we used to mine about 2.4 million tons. If you see our last year's mining production, it was about 2.35, 2.4 million tons. This year, we have done about 2.7, 2.8 because we were able to get the EC in Feb and there was additional production in March. So, that was there was additional increment. Till last year, Boratipu was not in operation. We started Boratipu operations last year only, where we did the mining of 100.2 lakh tons. So, if you compare with basis that, against a 2.4 million, we will be doing about a 3.4 million ton. So, straightaway, a jump of almost a million ton for this financial year. So, if you compare basis that, 3.4 is usable, and actual mining will be 4 million plus. And from next year onwards, at full capacity, the actual mining will be 6 million ton, and usable will be about 4.5 million ton after beneficiation.

Okay.

Because earlier, there was no beneficent plant in the mines. The 0.6 million plant started last year. So there was a little bit of beneficiation. And further we go up once we commissioned the new plant of 6 million tons.

Got it. So, if you could broadly explain, how does the economic and margin change once we do beneficiation? Because then, ideally, we are extracting more ore and converting to lesser pellet, if that number works out that way. So, then, how does the margin or the economics work in case of beneficiation planning?

So, I'll tell you, so, just to give a very brief explanation, we benefit, so average grade in the mines is about 59-60 SE. We want to benefit that, upgrade that to a 67 concentrate, basis which we will be making a high grade 65 pellets. So, once you do that, about 15% of iron is wasted in the form of failings. So, if you do 100 tons of mining, about 85 tons of concentrate, you will be getting to feed to the pellet plant. This is one scenario. And the second scenario is, we will also be mining a BMQ, which is a low-grade magnet type, where 35, 38, F3 will be upgraded to again 65, 67. In that, the recovery will be close to only 40%. So, when you put together a whole, the recovery, basically 6 million, will be close to about 70-80%. So, about 20-25% of the entire iron ore will be wasted as a tailing. So, on a 6 million, if you subtract 25%, you get about 4.5 million tons of iron ore, usable iron ore of a 65-plus concentrate. That is how it works. Because if I don't benefit, if I may use a 60 AC iron ore, I will get more value, but my AC in the pellet will be below 59, which is not sellable in the market. So I will have to benefit to upgrade the AC content. That is the whole idea.

Got it. And sir, I think a couple of calls ago, you had mentioned that by benefiting at the mine, you will be saving some logistics cost as well. Because I think now you were spending more on the plant. So what was the number if you could share or if there is any change in that number?

See, so currently the fret is about 1,000 rupees. So, if you are able to, you know, remove 10-15% of wastage inside the mine, so straight away a 150 rupees of saving you will be doing on the fret side. Earlier, we were doing beneficial inside the pellet plant in the rifle complex. So, we were losing on the fret. Now, from QC onwards, we will be benefiting inside the mine. So, straight away, there will be a saving of about 150 rupees per ton on the final concentrate being sent to the plant for usage. Got it, sir.

That's very helpful. Thank you. I'll get back on to you.

Thank you.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1.

Our next question comes from the line of Vedant Sartha from Nirval Bank Securities, Pvt Ltd. Please go ahead.

Hello.

Hello. Yes, you may proceed with the question.

So, just wanted to know any of our plans to increase our mining capacity or pouring into new mining, like new any rare earth or anything or increasing our iron ore mining capacity?

See, at current production level, we already planned the expansion for Idonguri, and that will take care of the next, you know, till disaster. On Buretipu front, we have already announced earlier, we have plans to take the mining capacity from 0.7 million to 4 million tons, along with identification inside the mines, because again, Buretipu is a low-grade ore, about 35, 80 content, 40 content. That will take about another three years from now on. We have already started working on it. So, Buretipu should be online by, I think, F530, including verification. Once we're able to do that, so Buretipu, the output, usable output will be close to about 1.5 million tons. So, these are the current mines which we plan for. In future, if there is any new mines coming up in auction, which we feel is attractive, we are always going to explore that. But at the moment, we don't see any good mines coming up in the area. If there is an opportunity going forward, we will definitely explore it. Okay, thank you.

Yes.

Thank you. Our next question comes from the line of Vandana Rathi from Corman Capital, Investment Advisor, ILLP. Please go ahead.

Yes, sir. Very good afternoon. Sir, I have one bookkeeping question. So, I would like to understand how much was the inventory gained in Q4?

Can you come again, please? You are not audible.

How much was the inventory gained in Q4?

Inventory gain in Q4?

Yeah.

No, I think, Bhotraji, you have the figure for that? Inventory gain?

We have roughly gained 20 crores on account of unsold pallet stock carrying from last quarter and sold during the quarter. So that's higher realization, 20 crores rupees roughly on 90,000 tons.

Yes.

Oh, okay. So my next question. Sorry, I was just going to the, I was saying $1.50 crore of loan giving to the education subsidiary company for some residential free project. Do you want to announce something on that?

We have taken an enabling resolution for the time being. The school will separately go for the loan from the other sources. In the meanwhile, for the time being arrangement, we have taken this enabling resolution.

Thank you, sir. Thank you, sir.

Thank you.

Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. Our next question comes from the line of Divya Garawal from FICOM Family Office. Please go ahead.

Yeah. Hi, sir. Thanks for taking my question. Sir, only one question regarding the 2031 guidance. So, uh, basically, uh, in the guidance you have mentioned that, uh, you'll be achieving 3,000 crore fat. So that's like a 10% fat margin. So just wanted to clarification, is it because the margins are coming down because of your, uh, best project?

BES and the CRM. So both BES and CRM will be on the lower margin side. So the top volume will go up heavily, but the margins. So BES is about a 70% margin business. The CRM is about a 10% margin business. So that is the reason the overall margins are coming down, but the top line is going heavy. Exponentially, there is a top line growth.

Right, got it. And secondly, sir, I just wanted to know your outlook on the current Pellet situation domestically, and in terms of the capacity as well, are you seeing any overcapacity coming in? Just wanted to get a sense on that. Thanks.

See, at the moment, we don't see an overcapacity coming in, but... But there will be a challenge to merchant credit players who are solely dependent on market for purchase of iron ore. We can definitely see a squeeze in margins for them. But for people like Lloyd, Godavari, or other companies which are the capital resources, I don't see a pressure margin there and also on the demand supply. So, at the moment, there's no over-demand supply. Plus, export is always open. You see, today, export market is very much viable if you want to really explore. So, I don't see at the moment, going forward, all depends, you know, how the sea market grows.

Right, I got it. Thanks, thanks a lot.

Thank you. Our next question comes from the line of Varun Mehta from Welting Investment. Please go ahead.

Good afternoon, everyone. Am I audible?

Yes, please.

So I just wanted to know about the steel plant cost, which we are looking at 7,000 crores. I think three, four years back, we spoke about 1 million to be a 4,000 crore cost. So the cost has gone up, or are we doing something else?

No, so, yeah, so, you know, I personally, you know, extended an apology to all the stakeholders, because for us being in the first time in the last primary route, we did a wrong calculation, there was a wrong estimation done by us on the CAPEX side. So, again, once again, apologies. So, if you can please, you know, omit that entire story from your mind. We were wrong on the cost estimation. The current case given, our 7,000 crores is very much on the practical side. We have done a thorough study with the equipment suppliers, and based on that, we have shared the details with the stakeholders. Okay.

And what is the return on capital that we are looking at for the state?

There are a couple of changes, which there is an increase in capex. One is, earlier we had said we had no intention of putting up a coke oven plant, because there was ample of import of coke available from Indonesian and other countries. But last year, to support the local domestic coke industry, government of India had imposed restrictions on import of coke, because of which now we are investing heavily in the coke oven plant, one. And secondly, the product we're going to enter into is a valued product. It's not a PMT or a regular buyer or product. So the structure mill which we are proposing, it's a valued scheme and it has a substantial cost compared to a... So, on these two accounts, the capex is slightly higher compared to a standard 1 million seed plant, but apart from that, numbers are pretty much on the similar levels.

So, how much return we are looking at for this investment of seed plants? We are going to talk about it.

We expect EBITDA of more than 20% once the plant is operating at full capacity, because we have devaluated steel, and currently there is not much competition from the Indian market. So we should be able to do EBITDA of more than 20% going forward once the plant is in near full capacity. But again, you know, it's a commodity market, it's steel, anybody's open to, you know, invest in such kind of capex. It's just estimation, and this is which we have, you know, thought of going ahead.

And can you just share what is our cost of production for pellets, basically? We have 5,000, 5,500.

What is our basic cost for pellets?

See, if you consider annual at 2,000 rupees, with benification and everything, our current cost of pellets should be at about 55 to 50,000 rupees after benification.

Okay. And this last question is, this guidance that we have provided for 2031 on the sales part, this includes the steel revenue also?

Yeah, it includes the steel revenue, includes the first phase of battery storage, and the CRM revenue. All three.

So, the steel plant is not backing that?

No, no. So, the 1 million steel plant, the battery storage, and the CRM complex. All three.

Okay. Okay. Thank you.

Yeah. Thank you.

Thank you. Our next question comes from the line of Aryan Bhatia from Inuit Research. Inuit Research, please go ahead.

Thank you, thank you for the opportunity. So, my question is, what is generally the conversion ratio from our mining to pellet? So, from the usable 4.5 million times mine, what will the pellet conversion, and what will do the big buying from the market for our 4.7 million pellet market?

Okay, so you're not audible, but still, I could guard your question. So, as said earlier, we'll be doing about 0.8 to 1 million tons of procurement of iron ore this year to run at full capacity, and that should drastically come down from Q3 onwards once monsoons are over. And the conversion from mining to pellet, as I mentioned, it's after benification of all kinds of ore. It is about, so if you mine 100 tons of iron ore, you will get about 75 tons of usable concentrate of high-grade to feed to the pellet plant. So if you do a 4 million mining, 4 million mining, you get about 3, 3.2 million tons of usable iron ore for the pellet plant.

Got it. And on the second of the roles, there are caps pretty. So Ken, why is the breakdown of our roles for the caps pretty? How much is the wire rod? How much is the image on? And how much is the galvanized product?

Okay, so for this financial year, so the virals will be close to about 2.2 lakh tons, which will be further drawn to, so virals will be 2.2, further rolled to 1.1 lakh tons of HB wire, and on the structural side, that will be about 1.2, 1.3. So put together, we're doing about 3.7, 3.7, and take the total roll products this year.

Okay, thank you. Thank you.

Thank you.

Thank you. Our next question comes from the line of Ajit C.T. from ICO Quantum Solution. Please go ahead.

Thank you for the opportunity. So, my question is on the CRM complex. So, in the previous phone call, we have guided for 50% utilization in CRM complex in FY28. So, are we on track to achieve that guidance?

Yes, at the moment, with the current status being, you know, shared with all the stakeholders, a little earlier by the Bhutwaji. So, at the moment, we are on track. We are hopeful to commission the first line by end of Q4, early, you know, Q1 exponential year. And that's why you have taken a very conservative guidance of 50%, which is at about 3, 3.5 lakh tons of CRM complex for FY28.

And so, how can we expect the further ramp-up of capacity going forward?

From FI 29, we should be at about 90% capacity for sure. Okay, thank you. Yeah, yeah, yeah.

Thank you. Our next question comes from the line of Rohan Mehta from Statici. Please go ahead.

Hi, sir. Thank you so much. Good afternoon. Just a couple of questions. So currently, the Indian pellet prices seem to be around 10,000 bucks and the global price is around 11,500 bucks. What I wanted to understand was, what is the delta because of the higher freight costs that we are looking to export?

And can you come again, please? We're not audible initially. Sorry.

So, Indian pellet prices seem to be around 10,000 rupees, and port market is around 11,500, if I'm not mistaken. But because of the higher freight costs, what is it that we are looking as delta to export?

See, so currently, if you talk about from my plant to, say, China, just for a number, including the threat cost, it is coming at about 3,000 rupees. So if I'm selling it 10,000 rupees ex-plant, so my export price to be at the similar level has to be somewhere about 13,000 level, which is not the case. But today, the Indian prices are about 9,500 rupees, and with the dollar inflation, today, if you want to export, we can easily achieve more than 9,000 rupees ex-plant. So, the delta is now hardly less than $10 between domestic pricing and export pricing.

So probably sometime in the next quarter or this quarter end, we should start exporting. That is what if I'm looking at correctly.

See, it all depends. If the Indian market continues to remain on the lull side, which is at the moment because of XYZ reasons, and the export market remains at the level, so we might see some volumes going into export.

And those reasons currently in the Indian market, is the Lloyd extra capacity or just monsoon coming up?

See, to be honest, Lloyd hasn't hit the Chathirgarh market at the moment right now. 90% fellers are going into the Chathirgarh market. So Lloyd hasn't touched the Chathirgarh market at the moment. But there is a demand, there is a lull in the steel demand. There is no selling in the finished side. The prices are expected almost by 10% in the last few weeks. So the overall sentiment is weak. Based on that, we have started exploding the export market. No, then. Perfect.

And the second question is on the best front. Just like everything else, the 5-6 gigawatt hour for the next year is a conservative guidance or that is what we are looking to achieve? No, it's a very conservative guidance. Perfect. And in the 231 explanation that we are assuming, we have not considered the phase 2 of the best thing. Is there a reason for that?

No, there's no reason. We thought whatever we have announced, whatever the projects have started taking shape, we want to give our estimation, which is that. Phase 2, when it will come, how it will come, we don't know. Because battery storage itself, it's huge. It's a heavy tech industry. Hello? Go ahead. So, we haven't considered phase two. The only reason is because it's something which is very new for us. We want to establish the phase one. We want to run the plant at full capacity. And based on that, we want to decide whether or how we want to, you know, go ahead in the phase two. Whether we want to get into exponent capacity in phase two or whether we want to go into backward indication and enter into a cell manufacturing with the technology tie-up. It's a very nascent stage for us to decide for the phase two. So, that's why we only give an estimation based on the current projects taken up.

No, that is perfect. Thank you so much.

That's it from my side. Thank you.

Thank you. Our next question comes from the line of Manav Gogia from YesSecuritiesLimitator. Please go ahead.

Yeah, thanks so much for the opportunity again. So, we just wanted to know one clarification. The new steel plant of 1 million tons that we have, this is a blast furnace or this is a DRI route?

No, this is a blast furnace route. See, we have no intention of getting into a cold-based DRI because it's... It becomes very challenging to, you know, be cost-effective in producing steel and compete with the big guys. So, it's a brass furnace route, which is a conventional route in India at the moment now. We did ponder over the gas-based ZRI route, but looking at the current, you know, supply discussion and dependency on import of natural gas, you know, we thought it's better to go with the conventional brass furnace route, at least for the phase one.

So, this will include the 1 million ton blast furnace, 0.7 million ton of coca one as well, right?

No. So, the blast furnace capacity should be, the hot metal should be about 1.1, 1.2 million ton. There is a 0.5 million coca one, non-company coca one. There will be a... A 1 million sinter plant. So our idea is to 50% pellet and 50% sinter because we want to also hedge a pellet bet. We don't want to keep selling pellets in the market. So 50% pellet from a new plant will be going to the blast furnace. And then the remaining steel complex, right, from converter to the finished side.

Got it, got it. And secondly, what sort of land parcel? I mean, we have roughly 452 acres, right?

Yeah, so we have 450 acres, and that is more than sufficient for the entire complex.

No, well, yes, I mean, my question was here, what would be the scalability in the future if we had to go for a brownfield expansion? So, would we have enough infrastructure from if we plan to move on going ahead post 2030?

So, see, we have left a certain space for a brownfield expansion. Plus, we have also identified nearby land, which is adjoining to the current land. So, if we think we want to, you know, go for a brownfield expansion, we can always use that same parcel and buy a little bit of adjoining parcel to expand. But to be honest, at the moment, we are not thinking of phase 2, we're just considering of phase 1 at the moment right now.

Got it. And we continue to maintain that the focus will be long product, because I think we also have a CRM complex. So, we could have had a full-fledged, you know, flat product.

See, the idea, see, the problem is, see, for a CRM complex, right, for a HR mill, the minimum capacity, which is, you know, technically and commercially viable is a 2 million mill, because the width has to be, you know, 1550 plus. So, to feed the 2 million mil, we didn't have the hot metal. The entire capex would have crossed maybe 12-13 thousand crores. So, we didn't want to go that high. Secondly, you know, with the steel capacity announced by the big players, we already feel today India's market is oversupplied by HR coil. Plus, imports is always open, right? So, we thought instead of doing a CRM coil, you know, HR complex, let's just focus on to CRM, which is a valued steel, and enter into a long product where we, you know, enter into the structures and, you know, other segments. So, that is the whole idea behind not going to HRV complex here.

Understandable. Thank you. So, second question is, could you please highlight how the next couple of years would look in terms of KPEC? And what sort of debt numbers do we see coming up? Because it's 7,000 crores, I think one is to one would be the debt equity, right? Yeah, yeah.

See, the CRM, the battery storage, you know, we have already invested more than almost 40-50% in both the projects. So this year, the capex on the steel side hardly will be about 10%, which will mainly go into account of hoarding of equipment and an advance. The major capex which is going to incur in steel will happen from FY28. So, FI28, FI29 will be the major money flow into the steel plant. Apart from that, we are self-funded, you know, from everything from internal approval. So, whatever debt we have to take on will be happening from FI28 only on account of Steel Capex.

I got it. So, in a nutshell, if I have to assume for FY27, we can take a 1800 to 2000 crore KPEX number, right?

Would that be the correct way to think of it? Yes, including the balance of CRM, balance of your battery storage, and a little bit of solar, you can consider a KPEX approach to about 1500 to 2000 crores for FY27.

And 28 onwards, it can probably go towards 2,500 and 3,000.

Yeah, about 3,000 crores. About 3,000 crores per 28 and 2,000 crores per 29. Very correct.

Oh, okay. Oh, God, that's helpful. Just one request I had, I think, in our earlier presentations, we had a, you know, split of project-wise KPEX and the timelines and whatever KPEX we had incurred. If you could just bring back that from our next presentation, it would be really helpful.

Sure, sure. Well, very well noted. We will take care of that.

Thank you so much, sir.

Thank you so much. Thank you.

Thank you. Our next question comes from the line of Amanku Tharir of Equitas in the Spence Peace World.

Hi, sir. Sir, I think in the last call, we had guided that pellet capacity would be running at over 90% utilization, and we would be targeting around 4.1, 4.2 million tons. So, I think what you guided that we would be looking at around 3 to 3.2 million tons. So, any reason why we're looking at a 3 to 3.2 million tons pellet quantity for this year? No, no, no, there's a conclusion. So, pellet guidance for this year is 4 million tons.

The iron ore volume, net usable iron ore for the pellet is at 3.4 million tons. Okay, so that will be the captive one you were stating earlier. Exactly, exactly, exactly. So, the pellet guidance is at 4 million tons this year, and iron ore guidance, net usable, is at 3.4 million tons. Got it.

And it would be the same mixer, 3 and 1, sales and captive.

So, yeah, so, see, captive remains the same. Captive capacity is about 0.9 to 1 million ton. There will be no increment in captive capacity. So, the pellets, merchants will be about 3 million tons.

Got it. And as you had earlier rightly pointed out the increase in diesel cost that we have seen particularly. So, can you just give an idea on the incremental cost it would accrue us in terms of mining cost?

See, diesel, the good thing is, see, of course, we have also invested heavily into EVs in the mining as well, you know, loaded excavators. So, currently, our major concern is on the transportation side because our entire IONO comes by road. So, the diesel pricing on the rising side and looks to be, you know, at the similar levels for, you know, quite some time. We have started working on the EV and we want to replace that with EV trucks ASAP. So currently, the transportation is about 900 rupees. We foresee it can go up to a length to 200 rupees if the diesel prices continue to rise. In the near future.

1150 to 1200, okay.

Yes, yes, yes. For short term, definitely.

Short term, got it, got it. And, sir, you rightly pointed out that we're looking to transition to an EV fleet. Do you have, is there an estimate on what would be the fleet size that we're targeting and the amount that we would be committing to the same?

See, the amount of, I know we need to move at the full capacity. We need to, we need to deploy more than about 300 trucks, about 350 trucks. Yeah, same 50 trucks. So, at a full site pay pitch, it should be more than about 350 crores.

Okay, 350 crores. Got it, sir.

Yes, yes, yes. With it adding infra and other things, it should be about 350 crores at full scale.

Thank you. Participant has left the queue. Ladies and gentlemen, that was the last question for today. I would like to hand the conference over to the management for the closing remarks. Thank you, and over to you, team.

We would like to express our sincere appreciation for joining us on this conference call, and we are confident that we have adequately addressed all your queries. Should you have any further questions or need additional information? Please feel free to reach out to our IE team at GoIndia Advisors. Once again, we sincerely thank you all for your active participation and unwavering support. Thank you.

Thank you, Samusa. Ladies and gentlemen, on behalf of Kudavari Power and Spark Limited, also Monarch Network Capital Limited, that concludes this conference. Thank you for joining us and you may not discuss. Thank you.

Thank you.