Jindal Stainless Limited (JSL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Jindal Stainless Limited Q1FI27 Earnings Conference Call hosted by Anandwati Shares and Stockbrokers Limited. As a reminder, all participants' lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand over the conference call to Mr. Parthal from Anandrathi Share and Stock Broker. Thank you, and over to you, sir.

Thank you, Pari. Good evening, everyone, and on behalf of Anandrathi Group, I thank the management team of Jindal Stainless for this opportunity to host their Q1 FY27 earnings conference call. So, we have the following members of the management with us today. We have Mr. Abhishek Jindal, Managing Director, Mr. Tarun Kulbe, CEO and Whole-Time Director, Mr. Kunjal Mehta, CFO, Mr. Kapil Arora, AVP Finance, Mr. Angad Kurana, Head Investor Relations, along with Mr. Abhishek Tambi, who is also a part of IR team. I now hand over the call to Mr. Angath Khurana to take the conference call forward, followed by which we will open the floor for question and answer session. Thank you, and over to you, sir.

Thank you, Parkip. Good day, everyone, and thank you for joining us for the company's Q1 FY27 earnings call. I hope you all had a chance to review the results and the company presentation uploaded on the exchanges and on our website earlier. Our discussion on the call will follow that presentation. Before we begin, I would like to remind you that some of the statements made today may be forward-looking in nature and are covered by the disclaimer on slide 2 of the earnings presentation. Joining me on the call today is our senior leadership team, who will take you through the key business developments and the performance for this quarter. After the remarks, we will open the floor for questions. With that, let me hand it over to our MD, Mr. Abhya Dejindal, to take you through the highlights. Over to you, sir. Thank you, Angad, and a very good evening to everybody. I would like to welcome you all to the Q1 FY27 earnings call. I would also take the pleasure to introduce our group CFO, Mr. Kunjal Mehta, who has joined us last quarter, and I'm sure you would be meeting him physically over the next few months and quarters. I will begin by outlining the key business highlight for the quarter ending June 2027 and the progress we continue to make across our priority sectors. Following that, Mr. Kulbe will take you through our operational and financial performance. Our sales volume in Q1 FY27 remained resilient year-on-year despite a challenging operating environment marked by industrial gas supply constraints and logistics uncertainties due to the Middle East crisis in the initial weeks of the quarter. In the domestic market, JSL delivered a resilient performance supported by steady demand across key end-use sectors such as automotive, railways, metros, and white goods. Building on the strategic brand transformation initiated last year, we continue to strengthen JSL's consumer-facing presence while reinforcing our market leadership across the stainless steel value chain. During the quarter, we launched a nationwide print and television campaign featuring our brand ambassador, Ranveer Singh, significantly enhancing brand visibility across key markets. We further amplified our engagement through our association with Sunrisers Hyderabad through co-branded digital content, on-ground stadium branding, social media collaborations, and customized retail activations. In addition, we expanded our presence on marquee sporting platforms through strategic partnerships with Jio Hostel and Starsports as the official Super 6 partner, Super 6's partner for the India vs. Afghanistan series, enabling large-scale audience reach and brand recall. Together, these initiatives will help strengthen top-of-mind recall, support channel partners through co-branded outreach, and enhance long-term brand equity as consumption-led applications of stainless steel scales up across India. Stainless steel demand in the passenger course segment continues to be supported by the ongoing transition from phoretic to austenitic stainless steel in Vande Bharat trainsets, further driving higher demand for value-added stainless steel grades. A key development during the quarter was ICF-10A's specification for the K-Rite project in Karnataka, which mandates the use of high-strength austenitic stainless steel for both coach shells and underframes, further expanding stainless steel applications in railway coach manufacturing. The ornamental pipe and tube segment is expected to benefit from improving market sentiments in the coming months, supported by enhanced channel engagement, focused market initiatives, and increasing downstream visibility through digital partner programs. On the export front, global trade sentiments remain dynamic and regulatory changes, evolving trade policies and geopolitical developments across several regions. Despite these headwinds, JSL demonstrated strong execution capabilities, delivering robust volumes on a quarter-on-quarter basis, while maintaining a focus on expanding into markets such as Japan, South Korea, European Union, and Americas. Quality standards are fundamental to ensuring public safety, product reliability, and the long-term strength of India's manufacturing ecosystem. Continued clarity and consistency in the quality control framework will be important in maintaining a level playing field and supporting quality-focused industry players across the value chain. We remain optimistic that the regulatory framework will continue to evolve in a manner that balances the interests of consumers, manufacturers, and the broader economy. Volatility across the globe continues to shape energy markets and global supply chains. Unavailability of industrial gases and logistical challenges negatively impacted industrial activity last quarter, and while the situation has improved, we continue to proactively track the development on these fronts. On the topic of sustainability, we continue to make steady progress on decarbonization roadmap during the quarter. Our Hissar facility achieved a 12% year-on-year reduction in greenhouse gas emission intensity, Upgrading to energy-efficient ancillaries and commissioning advanced waste heat recovery systems enables this feat. These efforts reflect a continued commitment to building a cleaner, more sustainable, and energy-efficient business while remaining firmly aligned to a long-term net-zero ambitious. With this, I would like to hand over to Mr. Kulbe to discuss our operational and financial performance. Thank you. Thank you.

Good evening, everyone. Welcome to the call. I would like to begin by providing a detailed overview of our operational and financial performance. JSL reported a resilient consolidated financial performance in the first quarter of FY27. Revenue, EBITDA, and PACT All grew year-on-year 10.5%, 1.4%, and 7.7% respectively, despite a challenging operational environment, where there were multiple complexities like industrial gas unavailability and logistics uncertainties. These two factors, particularly the gas crisis, that impacted production balance in the first few weeks of the quarter, impacting our finished goods sales volume, which were down by 7.3% year-on-year. Amid severe gas shortage during the first few weeks of April 26, JSL's focus remained on value-added product mix and thinner product segments during the quarter, supporting the company's profitability. Our subsidiaries also saw production disruption during the quarter, but despite the challenges, they supported the group's overall EBITDA. As a result, we are pleased to report a stronger balance sheet. Solidated net debt had further reduced to Rs. 2950 crores, with a net debt-to-EBITDA ratio at 0.53x, and a net debt-to-Equity ratio of 0.14x, reflecting our prudent fiscal management. Our announced CAPEX plan remains on track related timelines. Downstream expansion projects in Jajpur, Hissar, will continue to stabilize production and certification of our recently commissioned 1.2 million tons per annum, a stainless steel mail shop in Indonesia. With our LARP projects progressing well, we remain fully committed to deliver on our sales volume target of 3.5 million tons per annum by FY29. The company is taking energy mix, such as introducing quite natural gas rooted in quality, customer service, and cost leadership. GSL remains the biggest stainless steel company. Invite the moderator to begin the Q&A session.

Thank you very much. We will now begin 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 hands-up while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from Goldman Sachs. Please proceed.

Yeah, hi. Good evening, everyone, and thanks for the opportunity. Congratulations for delivering robust numbers, despite a very challenging macro environment. A couple of questions from my side. One is on the sales volume, while, you know, we saw it decline in this quarter because of obvious reasons. Now, how confident we are of delivering 8% to 10% growth in FI27 on sales volume? And the question is that we also saw an impressive surge in exports. So was it something opportunistic, or do we see it continuing going ahead, that exports would remain around 11% of our sales volume?

Thank you, Amit, always for your question. So, as of now, you know, because we are still, we had given our guidance for H1, we would still like to stick to the numbers that we had began the year with, and we're quite confident that we should be able to achieve. But if any change is there, then in H2, I would be coming up with fresh numbers. And from your export query, so as per absolute volume, export has stayed consistent quarter on quarter. It is only because of this lower base of sales. Percentage in export is looking slightly higher, and you would like to maintain this volume of export. Because as you know, EBITDA maximization is always going to be a strategy, and export does help us in maintaining that.

Okay, that's wonderful. So, the second question is that about the 1.2 MPPA project in Indonesia, in which Mr. Kolbe alluded to in his remarks, just want to understand when will the contribution from that project start in terms of additional sales volume, and also if you can highlight the performance of RTHD in this quarter.

Indonesia, our Seen Mail shop, now it has started ramping up, this is what I will say, and here onward gradually the sales will start coming up from there because it was under some local approvals and certifications which were required for the shop to do the business that was the process it was going through. So, now I think we are reaching to a state from where the volumes will start selling. So far as Rathi is concerned, there, the quarter one was impacted again by the fuel as well, and that is why the capacity utilization was lower. Otherwise, from the operations point of view, we were already hitting Rathi capacity utilization of around 80%.

Okay, okay. Great, sir. Thank you so much, and all the best.

Thank you. The next question is from the line of Alok from Motila Loswal. Please proceed.

Hello, everyone. Good evening. I just had a couple of questions. So, first is on the sharp increase in the power and fuel cost, which is mainly the gas price increase. So, how is the cost trending now in the second quarter? Would we see a very similar trend of first quarter continuing? And so where could we see the EBITDA button moving because from the current levels of 1Q? That would be the first question.

Okay. So see, the gas costs, what, I mean, like in our case, it was more of propane and LPG because that is where the restrictions were imposed by the government. And we were compelled to buy from the open market, whom server was having the stocks. And the prices went even to the three times before the war started. Now, two things have happened. That one, we reduce our dependency on propane and LPG because we started using pipe natural gas in our Orisa plant. That process we started. And also, the prices have also toned down than what the peak they saw. Now, to answer your question that whether it impacts EBITDA per ton, basically, these kind of costs increase, we try to pass on to the customer in both ways, either when they go up or when they come down. So, we normally do the business.

Got it. And also, we had guided for around 18,000 to 20,000 of EBITDA per ton during the first half. So, does that number stand revised now slightly higher in higher end of the range?

Although we would still be sticking to that, we would still be sticking to the guidance that we started with. And if any change required, then the end of next quarter, I will come back with fresh numbers.

Sure, sure. Just last question. So, any color on the volume growth we could see for, we are targeting for this year based on the various issues related to production and, you know, geopolitical situation, what kind of volume growth?

Definitely, there was a dip like we shared already because of these uncertainties and gas shortage in Q1. So, we are trying to make up those shortfall and the volume. And again, by Q2, I will come back with exactly what we feel the year-end would look like.

Sure, sure. Thank you, sir. That's all from my side. Thank you.

Thank you. The next question is from the line of Sumangal from Kodak Securities. Please proceed.

Yeah, good evening. Thanks for the chance. Just continuing on the previous one, is it possible to share what was the volume impact because of the gas shortages? And was there any cost inflation that could not be passed? I mean, I believe given that there will be some bit of lag in the pass-through. So, had this issue not been there, how the quarter would have shaped up just based on our estimate?

Thank you. We were not able to pass on maybe 100% of the gas price increase.

Okay, so both margins and volume would have been better?

Volume definitely would have been better. That much I can tell you. Margin is a factor of multiple things.

And say from 2Q onwards, are we going back to normal or it's going to be a gradual recovery?

In terms of?

In terms of volume. True.

No, it will always be a gradual recovery. There is no magic wand that we have that, you know, suddenly you can create that. So, it will be a gradual recovery over the next few quarters.

Got it. I have one question with respect to Europe. So, generally, just want to understand, I mean, how is the CBAM implementation evolving and how is it shaping for us as a geography?

So, you know, we have kept ourselves absolutely ready. We have got all the verifiers that are internationally accredited already with us. What we are waiting for is still European Union to appoint the verifiers. So, we as a company, like, you know, we've already spoken about how we've invested in Unigold Energy, Green Hydrogen, we are anyway a scrap-dependent player. So, we are keeping ourselves absolutely robust and ready every time whenever we've got from DJSI, Sustainalytics, or S&P-approved agencies, everywhere our scores are coming on the higher side and top of the industry numbers. But directly to, say, what, European Union, we are still waiting for them to appoint the verifiers. And we will maintain because now the European Union has also reduced the quota and we are quite confident that we will entirely meet that quota requirements ourselves.

Got it. And out of the 10% volume mix, how much would be Europe in exports?

Almost 40%. Okay, Europe and US combined is around 60%. So, yes, you can take it fluctuate between, if I say Europe, 30% to 40%.

Got it.

This is why we have already developed other markets.

Understood. All right, I'll join back with you. Thank you and all the best.

Thank you. The next question is from the line of Pinakin from HSBC. Please proceed.

Thank you very much. My question is essentially that in the medium term, when do you expect to start new CapEx programs, given that your balance sheet has improved materially and cash flow generation remains strong?

So, already, Pinak and VA, over the last few years, have been regularly investing in our capex, and as of now, the main focus is to increase our downstream finishing cold-loading capacities. So, by next year, you will see an increase from 2 million ton to at least 2.67 million ton increase in our downstream cold-loading capacities.

Actually, this year, CapEx plan is also what we have provided. The guidelines is around 2,800 crore, which is on cost. And all this is basically to create this downstream more value-added product.

Gold rolling is what the market demands, and that's where we are investing.

Got it. And when do you expect to have more clarity on the Maharashtra investment?

So, Maharashtra investment, actually, unfortunately, we can say that we are still working on the land. In India, land acquisition, particularly at the scale at which we are trying, or we have to, looking at the kind of plants we have to set up, takes a little bit of time. Maybe give us another one or two quarters, and then we'll come out with our detailed plan on the Maharashtra.

Things are progressing well. It is definitely taking more shape every quarter, but I think we still need another quarter or two till we are absolutely clear-cut on our plans. Like I said even last time, I don't want to mention something and then come back and revise it again and again. So, once absolute clarity and confidence is there, then I would first myself approach all of you to commit and give that clarity on Maharashtra.

Got it. That is very helpful. Thank you very much.

Thank you. The next question is from the line of Satyadeep Jain from Ambit Capital. Please proceed.

Hi. Thank you. Just on the volume guidance, I know you'll update the guidance at the end of 2Q, Maybe can you share what's the volume growth looking like in the last two months, maybe June and now July also? Is it possible to share directly what's, so that it's easier for us to gauge where the volume growth is?

It's too early to share these numbers. If you give us another quarter, Satyariv, then definitely I'll come back.

On the export, you mentioned you're developing other markets, South Korea and all is what we saw. Yes, Japan or Korea will be a big area. Is there a similar profitability as compared to Europe? Absolutely.

We are only targeting these markets if we are seeing substantial margin improvement and margin increase in those areas. Because two things, as our philosophy always mentioned, domestic market is our focus and priority, and second is EBITDA maximization. So, in these These geographies, we will only go and we will sell limited products. We cannot compete with a local mill selling vanilla grains of stainless steel. So we will only sell those grains or those products where we're getting a good margin profile, which is why we're targeting countries like South Korea, Japan, Brazil, which has the ability to pay us good margins.

The potential for, I know export mix had been stagnant for past few quarters, Then you also have the CBAM in Europe. Is it possible that given this market fee, export percentage increases for you in the next couple of years?

Export percentage, again, we don't see a major increase because domestic will be our priority. You know, so that's why the first or maximum allocation will be given to domestic market, and then only we will look at export. Plus, these geographies will take a little larger time to increase our hormones. Entry in Japan has been very good. Korea, we have a good presence. But to further increase volumes, I think it's over a few quarters that we can target. This only if we are not able to maximize supply into domestic market.

And the HRAT, is it on time for commissioning towards the end of the year? And the SMS also that you commissioned, given what you're seeing right now, do you expect the SMS slaps from there to come to India, Which means that you maybe replace it with your own EAS in a way for... No, add that.

Everyone has to understand that is never the case to replace our own melting per se. You know, so it is again, wherever we are getting the lowest production cost and cheapest cost, we will try to maximize that. But we will continue to melt in India also and increase the melting in India also and source slabs from our asset in Indonesia. And HRAP and all our other CRAP downstream projects are absolutely on track, and every few months, they are coming on stream.

And just, I mean, one more point, let me tell you that we always have the flexibility to bring even HR coils from Indonesia in place of our slabs or getting them converted, depending upon the need. That flexibility remains with us.

Thank you.

Thank you. The next question is from the line of Ritesh Shah from Investec. Please proceed.

Thanks for the opportunity, sir. First, a few questions. First, any update on anti-dumping duty, QCO? How are we looking at it?

So, dialogue with the government is on and it's constantly happening. Anti-dumping, we had a meeting a couple of weeks back with DGTR, DG, and it's definitely moving in the positive direction. They are appointing verifiers now, and I hope next few months I'll have more clarity to provide also, and yeah, public hearing is scheduled for 9th September also for that, and Ritesh, what was your second question, anti-dumping was one, and QCO, QCO, I think again, it's something that we are in dialogue with the government, we expect that this extension that we've given to March should not be further extended, We have gone and explained to them that how important QCO is for good quality material to come in the country. We don't want our products, infrastructure to be built on Chinese substandard products. So there is some level of realization. I think it became a larger topic because QCO was not suspended only on stainless steel, but a plethora of goods and goods that were coming into the country. So I believe now government is understanding and realizing, but I feel on QCO until March 27, we will not see any reversal. After that is what we are trying that it should not be further extended.

My second question is on CBAM. Would it be possible for you to quantify what is our exact carbon intensity for both the plants separately? And is there a specified benchmark number that we are aware of set by European Union?

So, I think I will ask Angar to take these two questions offline with you. I don't have the immediate figures in front of me, but there is a lot of work done on this, and I'll ask Angar to update you separately on this.

Sure. Just a related question, what is our scrap feed right now, say, for last year, full year, and Q1 FY27?

So, at Hisar, I believe it is around almost 85% to 90% at Hisar, and at Yajpur, it is 70% to 75%.

This is for Q1 or for last?

This is, in general, I am saying Q1 should also have been the same. I don't have immediate Q1 numbers, but generally that is what we target, and a bit scrap maximization is always our target. And secondly, just again from the, yeah, please. I was just going to say from the export and European Union front, just for everyone's clarity, it is not CBAM that is going to impact our numbers in any way. It is more that this quota that has come, that is why European numbers will look lesser than what it was earlier.

Sure. And the scrap that we are using right now, what category does it fall under? Is it pre-consumer or post-consumer scrap?

You have to explain it to us also what this means, Ritesh, even I'm not aware of this.

Okay. Yeah, so I'll give a call. There's a new amendment which has come up, which doesn't allow pre-consumer scrap, but I'll call you, sir, after the call. Sir, I'll just move to the next question. Specifically for RKEF, if you could provide some detailing around how the contribution was. The reason I ask this is to what we understand is the Indonesian government has changed its benchmark on nickel ore. So it would have had impacted the profitability over here. So I think last quarter we did give some range on what the profitability could look like. Does that guidance actually change? Was it very different? And what does it mean going forward?

Well, Ritesh, this, of course, RKF business always, and we all know that nickel being very volatile, so this business is volatile, and as we always say that this business mainly gives us security of the raw material availability. In fact, you all must have heard that even when Mr. Modi visited Indonesia now, they were signing an MOU for the Salem plant on the similar line, what we have already invested. And in fact, a couple of other international players like POSCO are also going over there to invest, because these are very strategic investments and requirements, nickel being there. However, coming to the profitability, as we had indicated, that last two quarters, even last quarter, has been positive on this business, and the EBITDA has been positive from this business.

Okay. And lastly, you indicated basically ongoing projects at Jajpur, Hissar, and Kharagpur. So, would it be possible for you to provide some color around capacity and timelines over here?

I think every quarter, if I tell you, there are different stages every quarter over the next, let's say, one year, some new equipment in each of these facilities is coming up, starting with, I think, Jajpur first, then Kharagpur, then Hissar.

And then all this, like already Mr. Jindal stated before, that with all these investments, eventually we are targeting our cold roll capacity to take to 2.64 million. 2.67 billion by 528.

Sure. I have more questions. I'll join, but thank you. Thank you so much.

Thank you. The next question is from the line of Ashish Kejdiwal from Nubama Institution Equities. Please proceed.

Yeah, hi. Thanks for the opportunity and congratulations on maintaining profitability in this environment also. Sir, my question is on scrap purchases. Is it possible to share how much percentage of scrap we use do we purchase from Europe, and are we seeing any bottlenecks going ahead in that?

So, Ashish, this is the maximum effort that we did over the last few years is on our supply chain, and if I can tell you, practically maybe less than 2% or 3% comes from Europe, which is not available in, let's say, in this part of the world. Our scrap strategy is domestic and Southeast Asia, and almost 90 to 95 percent of our scrap comes from this market. Certain quantities come from Europe and U.S. as well, but very limited. Good.

Secondly, in terms of how Blaston is, which was about to come at the promoter level, any color which you can give, whether that has started or it's starting?

As you know, this is a JSL limited call. Anything on the private company side, I would be happy to take it off separately. You can always get in touch with me and I'll be happy to answer your question.

Sure, sure. Lastly, you know, in terms of your products, because you are saying that every quarter we are going to commission one of the other plants, so is it possible to share, like, for example, HRAP plant, which was 1.1 million, at least when that is going to start, because that was in the first phase of the plant, which we expected for start for HRAP.

That should, around Q3 of this year, sometime it should get ready, and then obviously, it will take its time to reach its rated capacity, but sometime towards the end of Q3, it should be ready.

Okay. And lastly, sir, I hope that demand was not an issue in first quarter. It was mainly because of the gas shortage or… Absolutely not.

Absolutely, demand was never a concern or never an issue.

So, in case if because demand is not an issue and supply we have also normalized in terms of availability of gas and logistics bottlenecks have been there. So, is it safe to say that at least whatever we can produce, we will be able to sell and that could be more 10% plus growth going ahead? I know that you are not going to give fully a guidance right now, but at least trend-wise…

I'm in agreement. Whatever we produce, we will sell. But to give you this volume guidance or growth guidance, I would like one more quarter for that, Ashish. But absolutely, that much I can commit that what we produce will get sold.

And at what capacity utilization we are producing now?

At the end of Q1, we were, because of these disruptions and shortages, we were around 6, 9, 70%. It will definitely go up in this quarter.

Okay, cool. All the best. Thank you.

Thank you. The next question is from the line of Parsev Jhonsa, from Anandrathi. Please proceed.

Yeah, hi. Thank you for the opportunity, and congratulations for a good set of numbers in a difficult time. So, my first question is on the grade. Is it possible for you to quantify across each grade, 200, 300, 400?

I will take that one. I am sharing the mix in the order of 200, 300, and 400. So, in Q1, 27, it was 35%, 47%, and 18%.

Okay. So, my next question is actually pertaining to the 300. Considering, you know, you have sold 47%, which was last seen in Q2 of last year, which was at about 49%. So, it means that, you know, because, you know, 316 and a couple of other grades are a bit of a value added, you are easily able to pass on the height, not just the height, but even take up the lost, you know, EBITDA in some other grades during difficult times. Is that understanding correct?

I think this variation in one or two percent should not be seen in that light of think. A lot depends when we decide upon the mix, and like we already stated that in quarter one, we were quite focused and selective which segment, which grade, and which material to sell, focusing on our bottom line. So, in that equation, this percentage number has evolved.

Okay. No, the reason is because I think 300 series has the max nickel content, if I'm not mistaken, right, at the end of the day, and that would be one of the reasons why you are able to pass on higher prices to the consumer. Is that understandable? Correct?

Yes, fair enough. Okay.

Okay. And so my second question is pertaining to the power and fuel. As a percentage of the top line, it was about 10 or 10.5% in quarter one. I know you have answered before. I just wanted to get a broad understanding how we should model it over next two to three quarters. Now that the availability is there.

I would still say it has not gone down to below previous war level, but from its peak of in Q1, it has come down by at least 40-50%.

Yeah, that's, yeah.

It is fluctuating again because, as you all know, because of certain news slashes or certain actions taken by certain countries abroad, it does create that impact, but it is down from the high levels of Q1.

Okay, that's actually quite helpful, sir. And, sir, I have a quick one. Last question is, basically, I just wanted to quickly check, what is the inventory on books as on date? The closing stuff. If you can just give it an email or something.

Okay, we'll get back to you. I don't have it.

Yeah, yeah, yeah. No, no issue, sir. No issue. Well, I'll get in touch with the team. Don't worry, sir. Thank you so much. Thank you. Appreciate it.

Thank you. The next question is from the line of Ritwik Sage from Vanapen. Please proceed.

Hi, good evening, sir. Sir, I think a lot of participants...

Hi, Ritwik. Can you be a little louder? It's very soft.

Hi, is this better? Yeah. Sir, a lot of participants have asked you in one way or the other. I'll try in another way. Sir, has the production come back to pre-war levels as of today?

Yes, it has. It has, absolutely. We only, because like we mentioned earlier, we were heavily dependent on LPG propane, And, A, we have gone for PNG in Jajpur, you know, and the pressure and availability of these gases also improved. So, we are definitely back to our pre-war levels.

Great. So, and with this alternate fuels, you know, now we have multiple fuels at our disposal to try. So, we will be choosing the best mix of the parts.

Oh, absolutely. That goes without saying, absolutely, we will be choosing the lowest cost mix in that.

Right. And so, in the long term, does it benefit us in terms of cost?

I won't be able to answer that because, again, depending on so many factors, but it improves our flexibility, it reduces our dependence on imported gases as we were. So, in the future, if there is any kind of disruption in the supply chain, then we will not be impacted as we were in Q1. That much I can commit to you. On POS front, it's again a factor of a lot of items and areas.

For anti-dumping, anti-dumping.

So they normally call all the stakeholders and DGTR discusses with them before they make up their final decision on their recommendation.

So this is a part of the process. I think they call everybody, from producers, consumers, importers, exporters, because they want everybody's opinion and points to be taken, and then they move ahead from there. So, exact list, they don't even share with us.

Okay, okay. And the decision would be on that particular day, or it will be resolved?

No, no, no, no. It is just, it is a process that is followed, so public hearing has to happen, they appoint public verifiers who will be travelling to these countries where anti-dumping is, investigation has to happen, and then they come with their findings after that.

Okay, so that could take a couple of quarters after that as well.

Some part they have already done.

Already, quite a bit of investigation has been done. So, that is exactly what we are working towards and pushing towards for faster decision and resolution.

Okay. Great, sir. All the best, and thank you.

Thank you. The next question is from the line of Tushar from Prabhudas Liradhar, Private Limited. Please proceed.

Hi, sir. Thanks a lot for the opportunity and congratulations on a very good set of numbers. Yes. In Indonesia, you said, sir, it was under some local approval certification. So, just want to know what utilization is working as of now, and by FY27, you were guiding that it will reach 70-80%. So, is it on track? Yes.

So, yes, that is what, looking at the fast performance of our partners who manages over there, We have seen that normally in the first year of operation, they are able to ramp up to 70-80% of capacity utilization. So, that's what we are hopeful for this plant as well.

So, I don't know if it is running at 40-50 or even lesser?

Ramping up, I can say.

Okay. And on a longer term, how much SS capacities are being planned in university? Any rough cut idea you have per session?

No, nothing further as of now is planned in Indonesia. Not by us, by peers. So, as you know, SAIL has gone and done a similar deal with a government entity, and I would like to mention that it's a very, very welcome move, because it reaffirms what as a company we envisaged, and we openly spoke about that supply chains will get impacted, Indonesia Asia keeps talking about banning nickel ore export, NPI export, which is why these kind of investments are required. It also proves to other players in India how a player can go and secure certain requirements for rare earth materials, important raw materials that is not there in the country. It really is a welcome move for what government has done, And I think more and more of these type of, I would say, investments are required, which is not there in the country. Even just to, again, inform that even our competitor, POSCO, has gone and done absolute same thing what we did four or five years ago in Indonesia.

So, I just want to know on the demand outlook in a region like US, Europe, MENA is anyways under the war. It would be good if you just brief it.

Like I said, export is always going to remain a part of our strategy, but domestic is priority, and yes, as you said, because of certain markets like Europe, because of the quota system, Middle East, because of the war, there have been certain impacts, but already we preempted that as a company, and we went and developed new markets. So, South America, Brazil, Colombia, then we're developing, already South Korea, we were present. Now, we're very proud to say that Japan, which is one of the toughest countries on quality to enter, we have made a lot of breakthroughs there as well. So, we are mitigating our export strategy by adding these new countries.

So, just lastly on Rabirin and Cromini, how is their performance?

So many years have been performing extremely well. We've already reached a capacity utilization of around 80-85% and I think we'll continue to increase volume from there. Rathi also, we've gone through a lot of learnings in Rathi. It was a new entry for us and as of today, we are at a utilization of around 70% in Rathi and there we're trying to optimize and improve our product mix every quarter on quarter.

In fact, in our quarter one, I'll say Cromany was one of the major savviers for us because that was the only plant which was totally on pipe natural gas when the disruption happened. So that really helped us in whatever numbers today we are able to present to you. A major contribution comes from Cromany.

Okay, okay. And Rabirun?

Rabirun is something like, okay, let me recapture the whole thing for the benefit of everyone that when we had captured, when we had acquired Rabirun, immediately after that we had acquired the Chromini, and at that time we said that they being in the similar business, we would like to focus on Chromini, which was a larger investment, and the volume growth, what we could see. Now, we have already announced that we are investing into the coal rolling mills over there and balancing VA lines over there. And the next year, in FY27, they will be operational. FY28, these facilities will be operational. Until then, right now, it is a bit of positive, but doing very small business of polishing. Okay.

Thanks a lot, sir. Thank you.

Thank you. The next question is from the line of Ritesh Shah from Investec. Please proceed.

Hi, sir. Two quick questions. Basically, we see PTGMI. It has moved from a JV to a only-owned subsidiary. I presume given we have the control, so it will be consolidated. But just trying to understand what was the underlying thought process.

So, actually, Ritesh, what happened that when we were into the project stage, at that time we developed the understanding that we should have a bit of control because we all were sitting over here broadly. So, with that understanding, we were having the control over the company. But now, once it is in operation, so obviously it is easier to be operated by our partners, and that is why now they are having the control over it.

Sir, my understanding was we have the control of the asset, the board control. Who has the board control over here?

This was, Kapil, would you like to explain?

We have taken the board control, and hence this company was categorized as our subsidiary starting July 2025. In our recent announcement, what we have announced is that now this company would be associate effective from 1st of July 2026, because we have given up that right of being able to appoint majority of the board there. And why this is basically that during the construction phase, we wanted to have more influence and stay into the whole construction thing so that everything comes online in the timely manner as we had envisaged for our larger business plan. And now, since it is into operation where the partners, they are, I would say, well-equipped to run it efficiently, we have decided to take back our right, and hence, effective 2026, this company would be our associate.

Okay, so how should we read it from a consolidation standpoint? Will it be line-by-line consolidated, and then basically one should subtract it from minority or the other way around?

Now, going forward, we'll be recording the share of profit or loss as it is in the associate in our books of account. It would not be the line-by-line consolidation now.

So, incrementally, would we be giving out financials separately, at least operational assets, once we have this slab thing, actually, once it starts, it gets commercialized?

It is not required, because contractually, our right still remains as it is that we can get everything from there into India to support our planning and our business plan. So, if I

put it the other way around, when we have given a certain guidance, at that point in time, were we assuming that this will be consolidated? Now, given this moves down, would we look to revisit our EBITDA pertain guidance?

No, no. So, in our guidance earlier also, basis, whatever volume increase we were looking at, so we have factored in, like, from wherever we will have our material to be running to our machines here, so that we have already taken care of earlier and still it remains the same. Changing this, subsidy to associate does not bring any change in my, in the availability of the staff from there.

So, from a reporting standpoint also, nothing changes, but it moves down to the associate level, right?

Yes, yes.

Okay, fair. My second question, sir, you indicated in your starting remarks that we are going ahead doing more on hydrogen. I think the first plant we had at Hissar was a couple of years back.

Can you help us understand the total? Hello. Yeah, I'll just tell you, Hittar has 90 NMQ installed already. Another 200 NMQ will be coming up, I think, over next two quarters. Jajpur has 600 NMQ, which should get commissioned in this month itself, August. And then Jajpur, further, we will take from 600 to another, add another 600 next year sometime to take that to 1,200.

And how much is the total CAPEX, which has gone over here, and how should we understand the payback on the CAPEX?

I don't, I'm not. CAPEX was around 35 Watt crores, and when we approve our project, so typically we go by a philosophy of having at least an IRR of 15%.

IRR of?

Minimum 15%.

Okay. And another thing I can proudly say is that the stainless steel that is gone in this is 100% Jinder's stainless material, both in Hisar and in Jasper.

This is helpful. Thank you so much.

Now there are food caught in green hydrogen also.

Sure. This is helpful. Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to management for their closing comments. Over to you, sir.

Thank you all. In closing, I am pleased to share that we achieved a resilient performance despite the challenges of a dynamic external environment, a sharp focus on value-added products, and a relentless customer focus drove our results this quarter. Despite global uncertainties, we remain committed in supporting the Indian growth story. Our agile business model continues to differentiate us and helps us deliver robust results in this volatile environment also. I hope that we have been able to answer all your questions. Should you need any further clarification or would like to know more about the company, please feel free to contact our Investor Relations team. Thank you all once again and hope to see you soon physically next time. Thank you. Thank you, everyone.

Thank you. On behalf of Anandrathi Share and Stock Brokers Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.