Maharashtra Seamless Limited (MAHSEAMLES) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Maharashtra Seamless Limited Q1-FI27 Earnings Conference Call, hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-door. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Vikas Singh from ICICI Securities Limited. Thank you, and over to you, sir.

Good morning, everyone. Welcome to Maharashtra Sings' Q1.5.5.7 conference call. Asmajali, all welcome to all.

Oh, sorry to interrupt you Vikas, your voice is speaking.

Is it better?

Yes, this is quite better.

Yeah, so from the management, we have with us Mr. Koshal Bengani, Deputy General Manager, Investor Relations and Finance. Without taking any much time, I'll hand it over to Koshal for his opening remarks.

Thank you, Vikash. Good morning, shareholders, and thank you for joining our earnings call. At the outset, I would like to inform that one of our independent directors unfortunately passed away a few days ago. Mr. Ashok Bhandari was a... Man with a stellar reputation, and his contributions are immensely appreciated by the company, and the company believes that he would have contributed much more, but due to the sudden and sad demise, we are no longer able to benefit from his knowledge and experience. Just wanted to place that on record before commencing this call. The results for the first quarter of FY27 have been... In this quarter, we have dispatched 96,000 tons of seamless pipes. Dispatches in this quarter were impacted by disruption in gas supply in April. Otherwise, we would have been able to dispatch around 1,05,000 or 1,10,000, which is the usual run rate. However, despite lower production, margins were not impacted. The encouraging sign in the current environment is that our order book has improved materially from when it was last reported. The order book currently is at 1,709 crores, which is an improvement by 31% from when it was last reported. After many quarters, I am pleased to inform that 42% of the total order book Our orders from the oil sector and 20% of the total order book are export orders primarily to the U.S. and Canada. These two segments specifically are higher margin segments and we should see the benefits of this order book in the coming quarter. On the treasury front, there is an improvement in other income on a quarterly basis. With an amount of 175 crores. The previous year average per quarter was around 97 crores per quarter. And this improvement in other income is primarily driven by the improvement in the equity markets, which has been recently seen. On reviewing our Q1FI27 performance versus Q4FI26, revenue improved by 3% to 1266 crores, EBITDA declined by 23% to 184 crores on account of lower production. However, PAT improved by 150% to 271 crores on account of better other income. EPF in this quarter was 20 rupees per share. A point to note here would be that The immediate performance in the first quarter is not so reflective of the way we perform in the next quarter or the quarter after that because the revival in the order book and the kind of orders that we've been able to accumulate in the past few months has pleasantly surprised us. Due to the lower expenditure in the oil and gas sector in the previous few years, we were waiting for a revival, and we believe that the revival is just around the corner, as is indicated by the data which is coming in. I would now request Vikash.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself, you may press star and two. Participants are requested to use handsets while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of Sakheed Kapoor from Rapport Co. Please, go ahead.

Yeah. Namaskar, Koshal Bhai. I hope I'm out of good.

Yes, Namaskar, sir.

Yeah, yeah. Thank you, first of all, for the opportunity, and thank you for hosting, because we are hosting the call today also, and thanks to the management. It is after a gap, and we hope for the continuity of all, and I hope all good at your end also. Firstly, Kwasilji, if you could just dwell further on the optimism on your opening remarks, in terms of... How is likelihood the EBITDA margin trajectory or the EBITDA pattern going to shape up on the basis of the closing order book? And also, since you have a mixed, we have the articulated here that it makes it also skewed better. So if you could just give us some more color such, that would suffice.

On slide 15, the order book is detailed. In that slide, I have mentioned that 714 crores worth of orders are from ONGC and Oil India, which is the oil sector, which is generally a higher margin segment. In addition to that, 20% of the total order book is from the export segment. Which is again a higher margin segment. Further, these special orders of 100 crores of cylinder pipes, which has also been mentioned, is also there. All of these dispatches are likely to take place in the second quarter with a little amount being spilled over onto the third quarter. So, the point which I was making was that almost 63-64% of the total order book comprises higher margin orders, which is a pleasant surprise for everyone, because this has not been the case in the past few years.

Just to get some bit on the color on the number part, when we look at our Q1 number with the type of outages because of the gas issues, and I think the labor was also a factor, we did an EBITDA pattern in our guided range of 15,600, and now taking into account the mix, the export, the high value. What should be the likelihood of the EBITDA pattern for the coming quarter with the confirmed order book in execution now? If you could just give us some more color and how is volume likely to shape up for the year or for the entering two, three quarters, if you could give us some more color.

Specifically on the number, I would not like to comment because it varies on the kind of products that we dispatch in a particular quarter. But what I can say with reasonable confidence is that margin should be maintained, if not improved, in the coming quarters. On the dispatch front, dispatches in the first quarter were impacted. Due to disruption in gas supply in our Telangana plant in the month of April, that has been resolved, and we should see dispatches in current water of around 1,05,000, 1,10,000, which would mean that a yearly average of around 4,10,000 to 4,30,000. Would be reasonably possible. 410,000 tons to 430,000 tons would be reasonably possible.

Okay, sir. Sir, we did 420 or 419 radar for Acquire 26. So that number may interrupt to the 430 radar.

Yes.

Just in continuation to that, what is the update on the finishing line for the southern unit, and whether we will garner any benefits of the same for the current year?

On the finishing line, we have placed orders of 107 crores and made payments of 89 crores. We... We are still waiting for the finishing line to be completed, but maybe next quarter I will be in a better position to give you a specific update.

Okay, so can you explain to us, is it the geopolitical setup or the long-time delivery of machineries that are visited, because these are inordinate delays in our commission of finishing line, and I stand corrected, if I may have, if you could just explain to us.

In the past year and a half, we were not pushing this aggressively because the market was not so buoyant. But the revival in the order book in the current situation will push the company to complete the finishing line sooner rather than later.

In fact, in continuation to the same, can you give some more color on the grid pipeline now, and also how is the tendering process currently looking, both from the oil PSUs and also from the export market, which you have just mentioned that has revived, and the contribution would be higher, I think, so far, for the entry here, and then some more funds.

I would refrain from commenting on the bid pipeline, but I will give you some data points which will probably give you a better sense. In financial year 2023, exports were 25% of total dispatches. In financial year 24, exports were less than 5% of total dispatches. In financial year 25, exports were again less than 5% of total dispatches. In financial year 26, exports were less than 10% of total dispatches. And in the first quarter of FY27, exports were... Around 22% of total dispatches. I think you should be able to make a reasonable assessment on how things are positioned for the future.

Okay, sir. And since we do not have the closing order book for the March 26th closing order book, can you give some color or that exact number of what the order book was in the month of May or March? Any number which you have, which is comparable to this 1,700 crore number?

The number which I was referring to earlier was 1,303 crores, which was the number which was reported in the call for Q3. The number for Q4 would be around 1,300 crores only. So not much change.

That is a very significant aspect on our quarterly business, which you have just explained to us also. Sir, I would also like to add a word on the update on the scheme. I think so some, if you could just like to mention about what are we exactly planning to do, I think so some revision is also there, which was expected to be submitted. I am referring to the three companies or the three portfolios for Maharashtra Seamless. If you could just explain to the shareholders what exactly it is, what are the rationale and the thought process behind it.

There is no update. The scheme has been withdrawn.

Okay, sir. Sir, lastly, sir, on the change in inventory, so that is also attributed to the lower dispatches only, and that will get corrected in the end-frame corporate. So, there is nothing more to read into it.

Correct.

Okay, and last point on the premium connection, sir. When we look at your presentation slide, give me a second, sir, slide number 10. We have seen that for the June quarter, under the Jindal premium connection, the ITD value has moved up from the closing balance of 10 crore to 14 crore. So firstly, with respect to the premium connection part, Where are we in terms of, on the JV, which we have expected on some collaboration, and what does this minor increment in the ICD signify?

The joint venture agreement with JFE was done through our wholly owned subsidiary, Jindal Premium Connections Private Limited. And we have commenced operations on manufacturing of premium connections and we have successfully dispatched few orders. The increase in ICD exposure to our wholly owned subsidiary is because the wholly owned subsidiary has started manufacturing and it requires few equipments and initial funds to Start. The capacity of this plant is around 8,000 to 10,000 tons per year. It is a value-addition product, and we have mentioned in our earlier calls that the company is focusing on developing and improving its basket of value-addition products, and Premium Connections is one of those. And we have successfully done that. We also have...

What would be its contribution? I think so, it is being clubbed under share of profit in associate and joint pension. That is where its profitability would appear when we will execute the order?

No, it is a wholly owned subsidiary, so there would be a line-wise consolidation.

Okay, sir. So, for this first quarter, there is no contribution as of now?

There is contribution of general premium connections. It is a only-owned subsidiary. So, the financial performance of the only-owned subsidiary will be consolidated with that of the stand-alone entity.

Sir, when I look at the stand-alone number, it is 1091 crore sales firm operation, and consolidated also is the same number. So, where we will find this number, sir?

You will not find it separately. It is consolidated.

In the stand-alone or only?

Can you quantify for that? In the consolidated financials, the subsidiary is consolidated with the stand-alone financials. The financials of the subsidiary is consolidated with the stand-alone financials.

Yes, sir. So that will not appear in the revenue, it will not flow through the P&L in the revenue and then the PBT? I just wanted to understand.

It will, it will. For subsidiaries, line-wise consolidation is undertaken. So, sales of stand-alone will see an addition of the sales of the subsidiary as well. And so on for every line item. This is applicable on all subsidiaries.

Correct. So, this 1091 is having the general premium connection embedded in it.

Yes.

Okay, can you quantify, sir, what have been the contributions in the value-added aspect, if some more color would have been given, and what should be the annual contribution then?

I have already spoken enough about it. As I said, it is a market of 8,000 to 10,000 tons. So, overall, it will not make a material difference, but it will lead to a situation where... Decline in profitability is limited on account of value-addition products. That's why all companies want to develop value-addition products because they are small in the capacity and high in profitability.

And lastly, sir, as investors have been requesting for the cash utilization, so since the scheme has been withdrawn and now the press, I think the press process would be delayed. So what should investors be... Being looking now for the cash utilization and any more color or what should be the near-term timeline that we should be waiting to hear from the promoter and the board on the utilization and the new effective scheme, if any. Any thought process you would like to share now?

There is no update. Whatever I said earlier remains as of now.

I will join the queue, and my best wishes to the entire team, and my condolence on the demise of Bandariji, sir. A real gem from Kolkapa. Thank you.

Thank you, sir.

Thank you, Sakeh. A reminder to all participants, if you wish to ask any questions, you may press star and one on your touchstone telephone. We have our next question from the line of Ankur Savariya, an individual investor, please for help.

My question, first question is, why did not we have a CONCON last quarter, sir?

Any particular I am not sure how that is relevant to the financial performance or the growth prospect of the company. It was not done. It was not done.

Okay, sir. Rajit, and after long...

It is me asking, why have you not participated in all of our earlier calls?

Fine, taken, sir. Not an issue. It is good that now the commentary from the management after a long time is very positive on the order book. My question is, after this coming to the month and yearna by the government, do you think that will also contribute in our order book in near future?

I was not able to hear you very well. Can you please repeat?

Sure. So the government has announced the Samundhir Mantan Yojana, under which they want to explore oil in the deep sea. So will this also positively affect our company? Will we be a part of it?

On the face of the announcement, it should positively impact the company because we are an oil and gas sector supplier. Any development in the oil and gas sector prospects will benefit all oil and gas sector participants. The advantage that we have in particular is that we have the maximum size range, the maximum Basket of value-added products and the maximum capacity to supply to the oil and gas sector in India. As and when there is an improvement in expenditure, we will see a direct benefit to Maharashtra Seamless.

What is our capacity utilization as of now?

Capacity utilization is around 70-75%. We have an active capacity of 5,500,000 tons, and we manufacture and dispatch anywhere between 4,100,000 to 4,300,000 tons per year.

And now we have seen that you have given a capital allocation and it is approximately the same for the last 3-4 years. Now, once you are saying that you are going to go ahead with the capital allocation from now on, so do you foresee a good demand coming in the sector after a long time, sir?

We expect revival in demand. We also have started the capital expenditure a couple of years ago. It is not that we have not done anything for the past two years. We have put in a cauldron. Line at our facility in Maangau. The capital expenditure work for the finishing line at Talingana was also started in 2024. But we were not pursuing it aggressively because the market was not supporting us. But now that we have seen a revival in demand and hopefully this should continue for the coming quarters, we also want to complete the capital expenditure work. As early as we can. The project on which we are focusing right now is the finishing line at Telingana, for which we have placed orders of 107 crores and made payments of 59 crores.

So, my last question is regarding the EBITDA per turn for the ERW, and it has come down by a long margin. So, any particular reason regarding that, sir?

The ERW segment generally is a very small segment of the entire company. It accounts for less than 7% of total EBITDA. Secondly, the ERW segment comprises of two sub-segments. First, the ERW pipes which are used in the oil sector, which are API certified, and secondly, the ERW pipes which are used in the water sector, which are IS certified. Right. The margins in the... API certified ERW pipes which are used in the oil sector are much higher than the margins which are there in the IS certified ERW pipes which are used in the water sector. The variation in margin on a quarterly basis in the ERW segment as a whole is reflective of the kind of products that we dispatch in that particular quarter.

Got it, sir. At one point of time, our EBITDA per turn for the seamless type had reached somewhere about 21,000 to 22,000. And you said that it was just because there was the change in the rate of inventory that had increased our EBITDA per turn, and then it came down to somewhere about 12,000, 11,000. But slowly, it is again increasing to 15,000, 16,000 per ton. So is it again the reverse effect of the raw mature, or are we able to increase our EBITDA per ton due to our order book?

In Q1 FY27, the improvement in margins was on account of the product mix. And that improvement is likely to continue because of the order book regarding which I had spoken at length a little while ago. So, the change in inventory which you are talking about, which happens on account of mark-to-market Of the inventory that we are carrying with the current price, that adjustment was not so much of a factor in the first quarter. It was more applicable in the fourth quarter of FY26 and is usually seen in an environment where prices rise rapidly or prices fall rapidly. By prices, I mean prices of raw material which is steel billets for us in the seamless segment.

That's great to hear, sir. All the best from my side, and thanks for answering my question, sir.

Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Kaurav Khanna from CapGuru Capital. Please go ahead.

I'm an audible chef. Good morning.

Good morning, Varav.

Yeah. Sir, my question is, where do we stand on the D-merger right now?

That scheme has been withdrawn. We have already intimated the exchanges.

Oh, okay.

Thank you.

A reminder to all participants, if you wish to ask any questions, you may press star and one. Next question is from the line of Jyoti Singh from ITICI Securities. Please go ahead.

Hello.

Hello.

Hello. Yeah, good morning, sir. Thank you for your opportunity. So, my first question is regarding the order book. So, with ONGC stepping up its training program, including a significant number of new developments, how are you seeing this translate into the incremental demand for seamless files? Have you seen any meaningful improvement in the inquiry levels yet or order inflows in terms of visibility?

Yes.

Is it possible to quantify that?

I would not want to comment on the upcoming orders, but if you look at our order book composition, which has been very transparently displayed and is available in public domain, you will be able to make an assessment as to why the order book which has been reported yesterday to... Okay.

Besides, there are several reports around the increased exploration and drilling activities across the Indian eastern basins and offshore regions. So, how meaningful is this opportunity for Maharashtra Seamless? Are we seeing any customer inquiries or any orders linked to this project?

The reports that you are talking about, these reports were in circulation for the past few years, but nothing was happening on the ground in a commensurate level with the reports that were being circulated. However, in the... In the past few months, we have seen an improvement in our order book, which again has been very transparently displayed in the presentation. And I have also spoken about it towards the start of the call. Around 64-65% of the entire order book comprises high margin orders.

Okay. So, my third question is regards to the U.S. imposing duties, the tariff on steel imports, are we still cost competitive enough to win and execute orders in the U.S. market, basically given the current U.S. region?

Just one second, madam. 20% of the entire order book, so that is approximately 340 crores worth of orders, are to North America. which comprises U.S. and Canada. And despite the disruption in the Middle East, we have been able to obtain orders and dispatch to the export market.

So, from this order book, how much of the tariff burden is being absorbed by the customer versus the Maharashtra seamless?

Entirely. We will not absorb any cost incidence.

Okay.

Thank you. We have our next question from the line of Sriram, an individual investor. Please go ahead.

Thank you for the opportunity. I just have one question. You know, are we seeing any benefits of the anti-dumping duty? And given that the existing duty will expire in next year in Jan, do we expect the duty to be continued beyond that? And what is the company's action plan to ensure its continuation?

I am not in a position to give you the kind of answer that you want from me because implementing or renewing a duty on which product and at what level is not within my control or the company's control. We can only petition the government individually as a company or together as an industry to make necessary adjustments to the duty level. An encouraging sign is that the duty has been extended on an interim basis from October to January, which means that they are looking into the data and they found reasonable cause to make an extension. I will not be able to give you a specific response or a definitive response that... Duty will be renewed or at what level. But since we are continuing our capital expenditure, we are positive on the prospect of the industry and the future of the company.

But, sir, is it benefiting us now? I mean, what is your sense?

It is benefiting us. It was... Sorry, it has become less prohibitive than it was before, but it is still better than no duty.

Okay, fine, sir. Thank you. Got it.

Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. We have our next question from the line of Saket Kapoor from Kapoor Co. Please go ahead.

Yes, sir. Just in continuation to what the earlier speaker and you replied about the extension of the anti-dumping duty timeline, sir. So that was 2027 and then now for 4 months to 28. But if you could just give the timeline in year-wise also, Phil, what is the duty?

The duty was, the duty was, From 2016 to 2021, then from 2021 to October 2026, and last month it was temporarily extended from October 26 to January 27, pending completion of review of the extension of the tenor of the duty.

And just correct me here, earlier we have also introduced some new products which were not covered under the anti-dumping regime at that time because they were not produced in the country. And MSL was, I think, so what we are doing there. So, is that we also put coverage and keep our attention in the next time?

We have put in the petition that whatever the products are covered, they are covered.

You have earlier explained that China was, there were imports from products which were not covered in the anti-lensings. Hence, they were benefiting from the thing. So now, if there will be an overall review of the things in the entirety, then this product will also be included.

Correct. May be included, yes.

Right, sir. Sir, if we take now the optimistic scenario because of the closing order book and your commentary, then what should now be the new timeline of execution of the capexes in terms of the Nagothane part of the story, which is a large capex of pot mill upgrade? Master, I would like to understand the sequence now. For Narchet Fundly, you have clarified that we are now pushing forward for the competition so that we can participate in the improved order execution. So when will the biggest capex of the hotmail update at Nagothane will follow success?

We have not started that project at all. We are focusing on completing the Talingana project first, and then we will get back to you.

And to put into the factors that will lead for upgrading and all are not still in place. So we will first capitalize on our campaign.

And why you keep repeating the same thing? I have already clarified that we have not started that project and we are focusing on the Salingana project. Specifically on the Salingana project, I also informed you that I will give you a definitive update in the next call. What more do you want from me?

No, sir. I was only trying to make myself understand. You are absolutely correct on your thought process. And last point is only, sir, wage revision part on the employee aspect. And the availability of labor. So, if you could just give us some color, how is our mail and our work being insulated, or how is the employee availability and the cost inflation in terms of the employee expenses likely to be, or what have been captured with the new code and all?

There was an incidence of 3 crore rupees, which was captured in the fourth quarter of the previous financial year. Apart from that, the regular increments of employees have already been undertaken. There is nothing else to add on this point.

And availability of labor is also not an issue for consent for our needs. Right, sir. Thank you for once again for the call and for giving all the elaborated and pointed answers. My best wishes to the team. Thank you.

Thank you. I remind it to all participants, if you wish to ask any questions, you may have a star and one on your touch. Don't tell me. Next question is from the line of Amit from Determined Investments. Please go ahead.

Yeah, thank you so much for the opportunity. Can you hear me?

Yes, Amit. We can hear you.

Thank you. Just one question on the, you know, exports business. So, you know, times for the explanation, detailed explanation, you know, of the past 10, so fiscal 23, about 20%, and then, you know, down to 5%, and about 10%, whatever, 5 to 10% last year, and, you know, then things are picking up this year. So I just wanted to, you know, two points. One is that, so fiscal 27, you know, given your order book and what you have already executed in 1Q, you know, the trend sort of seemed to be very clear, you know, it's going to be between 15-20% of, you know, your sales. For this year, seemingly. But, I mean, how should we look at, you know, this, you know, going forward, which is basically beyond fiscal, you know, 27, going into fiscal 28, 29, how do you sort of see the, you know, export market in general and, you know, with respect to, you know, specifically, you know, your own exports? Because in the past, you, you know, as I sort of recall, you have sort of given a commentary that, you know, the focus of the company, you know, will continue to be, you know, primarily the, you know, domestic market. And the second point was, you know, on the margin side also, I was a little bit surprised because, you know, best to my understanding, you know, as far as the U.S. market is concerned, you know, the duties on. So, steel products sort of still continues to be, you know, very high because we are not part of that, you know, the changes in, you know, U.S. import duties which have sort of happened this year under Supreme Court's government. So, to the best of my understanding, steel products are, you know, steel product duties in the U.S. are under a separate, you know, section which remain unchanged, you know, from last year. So, what is sort of driving, you know, this kind of, you know, traction in U.S. exports, given the high level of duties and, you know, especially, you know, the point of margin, because you saw something to indicate that. The margins will be higher on these products, given the high level of duties, you know, which I presume that these products would be under. So, if you can just sort of provide some clarification on this point.

Regarding forecasts, let's say six months, one year, two years into the future, it is not something that we can provide because Unlike other companies, we operate on a short cycle order book. That is not something which is a norm in the industry, but it is something which we actively practice because we want to maintain a three to four month order book at all times, not more than that, not less than that. The reason why that is the case is because The duration of the order book should match with the holding period of inventory. Every time we receive an order, we immediately book raw material against the said order so that we are not impacted by fluctuating steel prices and profitability per order is maintained at all times. That is a golden principle for our company, and we have diligently followed that for the past 35 years. Therefore, for us to give a guidance six months from now or one year from now would be something which is not data-driven. And if it is not data-driven, it is not something which I would want to. Comment because it is not a philosophy of the company to overcome it and under deliver. We have always been very conservative in whatever we communicate to the general public. Regarding exports to the US, it is on account of improvement in drilling activities. In that location, we have always exported to US and Canada. It is not something which is new. It was impacted due to the tariff tantrum and before that due to a slowdown in oil and gas expenditure immediately after the boom in oil and gas expenditure caused by the Russia-Ukraine war. We have seen a revival, and we are able to dispatch through that geography despite the war going on in the Middle East.

Just a clarification, how are you sort of, you know, able to generate, you know, given the fact that, you know, U.S. tariffs specifically on steel products and, you know, pipes are principally, you know, that?

The only logical explanation would be that the selling price is even higher.

Okay, okay, okay. Things sort of seem to be quite buoyant on that respect. All right, understood. That's it for my end. Thank you.

Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and war. We have our next question from the line of broadcasting from ICICI Securities. Please go ahead.

Thank you. Koshal, just one question regarding currently the competitive intensity. I believe that last quarter, one of your larger competitors was not in the race for the orders because of the API certification cancellation. So, going forward, what's your view in terms of competitive intensity and including the imported part of it? Does the INR depreciation have made you guys a little more competitive at this point of time? So, your views on these things.

You are absolutely right. The INR depreciation has made us more competitive. Further, we have also benefited from the disruption in the API license of our competitor, and we have been able to capture orders. Therefore, we believe that we are in a better position right now and we will be able to maintain that going forward. Based on the feedback that I have received from the sales and marketing team, I think we will be able to maintain a good order book immediately going forward.

Not it. That's on my side.

Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you, shareholders, for participating in the call on a Saturday. We appreciate your inputs and guidance, and we'll ensure that all necessary updates regarding the company are made available to you. Thank you.

Thank you. On behalf of ICICI Security Limited, that concludes the conference. Thank you for joining us, and you may now disconnect your line.