Midwest Limited (MIDWESTLTD) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Midwest Limited Q4 FY26 Earnings Conference Call hosted by Go-NDI Advisors. As a reminder, all participants will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Sana Kapoor from GoIndoAdvisors. Thank you, and over to you, ma'am.

Thank you, Yusuf. Good afternoon, everyone, and welcome to Midwest Limited's Earnings Call to discuss Q4 and FY26 performance. The financial results have been uploaded on the exchanges. I hope you have had the opportunity to view the same. We have on the call Mr. Ram Kolaredi, promoter, full-time director and CEO. Mrs. Uma Kolaredi, promoter and whole-time director, and Mr. Dilip Kumar, chief financial officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request Mr. Ram Kolaredi to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.

All right. Thanks, Anna. Thanks, everyone, for joining the call. And I would like to give a few updates, which are strategic, and which will influence the business over the next few years, which have happened over the last quarter or the past year. And then we will take on the financial numbers. So I think the most important updates for the last quarter are we got a new mining lease in Galaxy, new concession Galaxy, a 30-year-old lease, and we already started producing this, and this is in revenue in the same quarter itself, and we'll start building on additional production from this base. Coming to that, in Grenade, the Galaxy demand remains strong in our local as well as Chinese markets. We've also started to add some new markets with photo blocks into the Middle East in the last quarter. So we don't see any issues on that front, and specifically countries like Algeria and Egypt have started importing blocks, which were otherwise importing slaps previously. That's an important update. And since most of the overnight is exported, I think we have a positive outlook on the dollars. We should have that place out for the next year. On the fuel front, the cost basis, on the cost, the maximum pressure will be on the fuel. But we are able to manage to some extent with our green EV initiatives, and that will be aggressively played in this year, where we will be building up on our EV fleet and also going for captive solar as well. Energy costs. On the second development, as indicated in the last We included the HPQ, high purity quads, in the phase two, which we have started building up the plant now, starting this quarter. And I think we are in line to commission the plant in next 10 to 12 months. And the first... The products of the plant will be the traditional engineering solar. The HPQ product may come a quarter after commissioning the plant, but we are excited about HPQ, and we will be one of the few companies producing HPQ, hyperlite quartz globally, which will cater to the other industries like semiconductors, solar crucibles, and all. The other very important update last quarter, which is coming from the radar space, is we have been selected as a consortium partner by the Kerala Minerals and Metals Limited, KML, and we will be starting to build a pilot plant starting this quarter. It's a six-month project, and we have allocated a budget of close to 20 crores to fund this. And this is a very important milestone for the company, which will pave way for the next three or four years, because for the first time, a private company is getting into handling monazite radars and making radar toxics. And it's the first private partner. And I think this is something that the company will build on using its know-how and capability and try to do similar projects in the next few years. So these are the key critical updates from our side, and we will address during Q&A most of it, and I think Dilip will just run you over basic broad financials.

Just to start with, last quarter we had posted a consolidated revenue of 215 crores. This major revenue is coming from the granite segment. Quads, in the last fiscal, there were, I mean, it has started. The initial technical issues we have stabilized. Now, quads started producing the processed mineral. Now, coming to the EBITDA part of the last quarter, it is 27%, again, it's consequential, I mean, the sequential quarter of 23.7%, and PAT number, 17.16%, again, it's sequential quarter of 13.48%. Overall number, as for the year-end, 645 crore is the revenue that we have posted. And Again, it's a previous year number of 626 crores, so 3% plus growth. Especially though we have produced, I mean, another 4,000 to 5,000 CBM, we couldn't convert that into sales due to the, I mean, the logistics issue which triggered in the last quarter, second of the last quarter. Otherwise, we could have added another 25 crore top line. That's on the revenue front. And overall, EBITDA, it is 27.01% compared to number of 27.43, and the BAT number is 16.49% compared to number of 17.17. Here, I'd like to give one update as a granite standalone segment if we look at these numbers. Granite EBITDA stood at 27.55% against its previous year number of 27.43, and 17.43% in terms of, 47% in terms of PAT against its number of 17.17. Because the consolidated number of 16.49 is majorly on account of, you know, some cost which is arising on account of quads, which is around 6 crore. That has, I mean, that will be stabilized in the current year because the quads started production. I think with that... The financial number of current year as well as the last quarter is pretty much in line with the previous year's numbers. And if you look at debt-wise, overall, we have reduced debt to the tune of 50 crore, and working capital days, we have reduced from 120 to 104 days. That's on the financials, Frank. Now we can pick up the questions.

Yeah, I think just a quick update before the questions on the quads. So quads, we have started full production starting last month, and so the installed capacity of the plant was close to production of 250,000, 240,000, 250,000 tons. I think our target this year is to reach sufficient capacity utilization. This quarter, every quarter on quarter, there will be growth there. And last month, we were done close to 2,000 tons. And this month, we'll be doing around 5,000 tons. And the next month, we target to around 10,000 tons. That's the target for this quarter. But that number will keep improving quarter on quarter because the plant is stabilizing and most of the issues that we faced last year are resolved. And, yeah, that is where we are on plot. So, we are not delaying the build of phase two. We are apparently starting that also, so that we also aggressively, from next year onwards, we see numbers coming from that plant also phase two. I think we are good to take away.

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 1 on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Participants to ask a question, you may press star and want.

First question is from the line of Jaman Pirawad from YesSecurities. Please go ahead.

Hello. Thank you so much for the opportunity. A couple of questions from my end. Firstly, can you please state the reason for a drop in PAT on a YOY basis? And can you please explain in detail? And I also wanted to know what are the sustainable margins we should expect going forward?

See, we have two segments. If we look at the company, company traditionally is into granite production and sales, especially in the black. And last year, we have entered into quads production. Quads is extracting minerals from the mines and then processing it at our processing unit, then selling grit and powder to the quads industry as well as solar industry. That's the new segment that we have added in the last financial year. So if we look at granite as standalone numbers, we did the EBITDA stood at 27.55%. And back at 17.47%, Agnes is comparative numbers of 27.43% and 17.17%. As a granite standalone, we are intact. In fact, we have improved marginally. I mean, in terms of, you know, various initiative, cost initiatives that we have taken to optimize those costs, especially converting fuel dependency to the renewable energy. So, that's where marginal improvement, that improvement will be there in the coming quarters and years too, for the next couple of years, as we are aiming to, you know, shift our equipment from fuel base to the renewable, back integrated with solar, especially on the dump trucks. So, that's on the granite. If you look at granite as standalone, 112 crores is the path that we have achieved. The negative contribution is an account, of course, because there were initial glitches in the process that we have established in the last six months. That has contributed. That's the reason why the top line we couldn't achieve. Then there are some costs, fixed costs and depreciation and finance costs, which took around six plus pros, which reduced the number of one to 106. I hope I have addressed your point. Going forward, granite margins will be very stable, and if not, improvement year-on-year. That's a new thing for granite quads, as explained by CEO, that this year we will be doing a... We have a substantial number from the production that we have, production capacities that we have in the processing unit. And we are also aggressively establishing the second phase plant. So coming years, quads numbers also will add in. And it will have its own patent EBITDAs. And EBITDAs, what we are anticipating is, you know, And comparatively, better it does on the granite also. So that's now the coming years, we'll talk about it. That's, I think if you have any further questions that I can answer.

Okay. Okay. Yeah. Thank you for the detailed answer. Second question from my end is what is the contribution of your diamond wire segment to your top line and the bottom line?

Yeah. Diamond wire, we did about 25 crores, like this is comparative number of around 16 crores. Let us know approximately 15% is the PBT that we have on this segment.

Okay. For the top line, right? 15%.

Yes. Yes. Top line on the 15% PBT.

Okay.

Okay.

And the third question from mine is, how is your second phase of calls expansion going on? And can you please help us with the CAPEX for the same? And when do you expect the plan to be commissioned?

Second phase of CAPEX, second phase of the grant, we started build out in April. And we started tentering some equipment. We have a plan to complete it by Q4 of this year, and the CAPEX is around the 130 crores, between 120 and 130 crores. That is the plan CAPEX. And, yeah, what was the other question in this?

And, yeah, so that's it. So how was it going on with QPEC and when do you expect it to be commissioned? Q4, right?

Yeah, so once we, Q4, once we start, once we build, finish the commissioning, I think Q1 of next year, you'll start seeing the numbers coming in from this phase 2.

Okay. Okay.

Thank you so much.

Thank you.

Next question is from the line of Alok Devra from Mutilal Oswal. Please go ahead.

Good afternoon. Just had a couple of questions. First is on the quartz business. Now we have seen the plant just getting commissioned now. So you mentioned briefly that month on month we will see an improvement. But if we want to look at the year as a whole this year, you know, how much volumes we can do out of this 250KT and also the second phase, which was also expected to be commissioned, you know, a little earlier, would that also contribute anything in this year or would it be primarily the next year only?

Yeah, so I think our endeavor is to reach at least 60% of the rated capacity this year, and you'll see a quarter and quarter improvement, yes. There will be no contribution from phase two, because phase two will be commissioned only in Q4, so that will start coming in on Q1 of the next quarter. But I think the post-commissioning, the production of Phase 2 will start immediately because an integrated plant, we will not take as much time as we took to stabilize on this plant. And there are a lot of learnings which have come from build-out of Phase 2, Phase 1, which were incorporating in Phase 2. So given that, the time between commissioning and production or stabilization will be very, very short in Phase 2. So, in Q1 next year, you should see quite decent numbers coming from phase 2 added to the phase 1. And technically, based on what we have seen, the peak production that can be achieved on the current phase will be close to 75% to 80%. So, out of that, I think 60% is what we are targeting this year. Got it.

And also the phase one was more for solar, you know, solar glass and then and a little bit on the engineered stone. So what would be the revenue from this phase one in this year? I mean, since it is more on the solar, we would be having lower realization as compared to engineered stone. So, what is the realization we are getting currently and what could be translating to the revenue like?

So, no. So, the phase one was predominantly built for engineered stone, and solar was, I think, the breakup was 70-30. The second phase was a flip. Now, by adding HPQ in second phase, I think overall that yield also is going to increase. But anyway, we're talking about phase one. Right now on the solar, we are getting a price of 7,000. And on the internet store, it is graded. We have four grades. The range is between 9,000 to 14,000, 14,500. So each customer, depending on where he's addressing the market, he's selling to U.S., he's selling to the U.S., he's selling to the Middle East, the lower one. So we have four quality ranges. So, between $9,000 and $14,500 on engineered stone, and around the $7,000, all these prices are explained, $7,000 is the price for solar grid.

Okay, and solar would be 30% in the in the first year.

Yes, so what the plant is built for that and that is what what it will produce.

Okay, and in the so by the end when both the phases are commissioned, it will be hardly 50-50s it.

50-50 plus some HPQ. So I think the breakup will, but HPQ volume is not large. That is close to 20,000, but the value is high. So I think between these two products, it will be close to 50-50 or 60-40. There is a flexibility of 60-40 either way in the plant. So based on a year from now, based on how the market is behaving, where we have additional margins, I think we'll tweak it to get the best realization.

Sure. Just one last question. So in the first year when we are doing around 60% of the capacity, maybe like a 150 KT of volumes, right? So, I mean, what could be the margins like? I mean, is it a gradual improvement or would we be, or, you know, if you could just highlight on what the margins could be because the sense was that it would be higher than what we are making in the existing business. So would that also materialize in the first year or first year would be more like a you know catching up kind of a thing and then second year you will see the full potential margin. Just if you would highlight on that please.

Yeah, so there are fixed costs. As Dilip explained, one of the reasons we had a negative impact on overall business from Quartz is because of fixed costs that we had last year. So the fixed costs at a certain stage, they will get breaking even. But I think all those will be taken care of when we reach the 60% mark. So I think there will be gradual improvement on that, but once we cross the 60% piece around 70%, yes, we will be having healthier margins than what we are enjoying now, and the advantage being that we have leverage on raw material, then the scale and the location of the plant, and the dollar impact, all that. I think it will be an improved one, but obviously when both the phases come, then it will be a different number to look at altogether.

Yeah. Capacity utilization from 50% to the next level will definitely optimize the fixed costs, and that will add up to the bottom line, and the improvement will be there in the margins in the years to come.

Got it. Yeah, that's all from my side. Thank you and all the best.

Thank you. Next question is from the line of Rishabh from RBSA Investment Managers. Please go ahead.

Yeah, thank you for the opportunity. Firstly, I just want an update on the heavy mental science in Sri Lanka. What is the status and when are we commissioning? Is there any delay or if we just give an update on that?

Yeah, human standards, Sri Lanka, there is no progress since last quarter. So the government is, as discussed in the last call, is coming up with a policy, and there is a delay on their end, and they're likely to close that sometime in June. And this policy is for the entire industry, and the last policy was done decades earlier. And so, given that it's a reset of the entire system, so I think, but there are certain positive tips coming out of the policy, and they're making it more industry-friendly than before. So I think that is a positive. I think we have to be a little more patient. And I think we will see, once the policy is closed this quarter, I think we will see a lot of activity on the ground. But we are good to go on the ground. And that is on Sri Lanka. Yeah, and given that, I think based on what you have seen in KML and Kerala, I think India as a country is also moving fast and they want to activate a lot of projects. So our teams are busy studying certain geographies. Whenever there is any something materialized, we'll keep you posted.

Okay, and secondly, just a question on the monocyte, since we're pursuing monocyte, and I believe in certain areas, maybe in India, but sodium is a byproduct of that monocyte. Is the understanding correct?

Monazite is a by-product of peat sands, yes.

No, no, thorium is a by-product of monazite, in the sense that...

Yes, thorium is a by-product of monazite, correct.

So I understand that if India is going to go nuclear in a big way, so are we looking at thorium processing opposite here as well in the near future? How are we placed there, and do we have access to such minerals?

So, right now, the focus, right now, the actionable points are on rare earths, oxides. That is where the entire policy framework and the government pushes to get the rare earth oxides, so we become self-sufficient in the rare earth space, so we can produce our own permanent magnets to support the PLI units which are going to come up in India. Thorium, yes. India has a lot of thorium, and when we are processing from monazide to rarests, we also get thorium. Note that thorium is a product right now which the government has not given clarity yet on what they want to stockpile, they want to commercialize. There is no clarity yet, but that is there. That is there for the nation to build. But our ability to refine these oxides gives us the ability to refine thorium as well. So what the government is planning and the way their policy is setting, I think we'll get clarity over next one year time, frankly. But I think once they do that, it's a big move for the commercial side of the industry.

Okay. And just a clarification on the high purity quads. I believe last time you mentioned that we are heading towards achieving that high risk form of purity that is required. So in that, have we moved from the pilot scale where we got custom approvals? At what stage are we in that journey?

So, frankly, we have done our lab scale. We have identified the mines which can produce this. We have done the flow sheet. So, now we are building the first plant. Now, based on the sampling we have done and based on the lab study reports, there is a gradation already set up on global standards. We're able to meet that. But technically, you don't need to specifically, though we have checked with a couple of customers, this is a marketable product as long as we're meeting those specs. Now, it's like the commercial plant is coming with a large pilot as well because these are all batch processes. These are not continuous processes wherein we start the plant and you keep producing the same grid every day. So since the quality requirement is going towards 30 ppm, 40 ppm, and 20 ppm, And the raw material coming from the same mine also can vary from pocket to pocket. So the way this is done is we send it to a pilot, get our internal check, then start the batch process. That's how we're building the 20,000-ton plant at the end. So given that, the metrics required are, do you have raw material source qualifying? Yes. Do we have, have we done enough lab work and sampling and bulk sampling? Are we meeting the specifications that a company like Sibelco has made globally for the last decade? Yes. So I think pretty much today it's a demand thing. There is a lot of industry waiting for such a product. Now, obviously, where the demand is coming from, today, if you ask me, majority of the off-tech will still be China. Uh, India is, India is still... Maybe two to three years away by the time the market evolves here. So as far as the China market is concerned, it is the crucible manufacturers. They know we are already in touch with them, and they have already okay to start taking this product right away. And in fact, in this project, we are cutting down almost three layers for them. So, historically, what used to happen is the raw material used to go to... A trader, a trader taking it to China, then the trader in China, because there are long supply chains, and these companies don't want to take a chance, they will take the product and then make the payment after production. So there is a long lead of four or five months, and then it goes to the, let's say, the end user, which who is, let's say, making these solar fab guys. So, today we're cutting down almost five to six months time, and we're directly going to the supplier of solar panel manufacturer. So, given that, I think we are in a good position, and the idea is to get it right in the next nine months and start production, and post that, we have a long way to go. So, our resource base is big on building on HPQ. We're starting with 20,000 tons, but I think we can ramp up quite fast and in a bigger size. So, I think, but we'll take that call post-commissioning this plant.

Okay, that's good to hear, sir. Sir, what would be the demand trends and pricing trends in the Granite business for F27?

So, we are speaking to our core products, Galaxy and Black, and historically, we have seen strong demand. I think this year also is going to remain the same. The only trend which has changed, which I would like to update this year over last year, is post-tariff. So one of the things what has happened is a lot of countries have suffered domestically in losing some industries. So they were looking at how to generate domestic employment, and Natural Stone is one industry where you generate a lot of employment. Though for GDP impact could be very less, it will quickly absorb thousands of jobs. So given that, for example, Egypt, I just mentioned in my narrative, Egypt and Algeria are two countries. We have seen aggressive buying of blocks, which they were buying slaps otherwise. Now, this is a direct sale to us. Otherwise, it is going to our customers, and they are catering to this market. So, market repositioning is happening. The advantage in this is there is no layer is directly going to the end market, and it's an export, which otherwise is a domestic sale to domestic factories. So, I think all those market repositioning will happen. But otherwise, demand-wise, I think whatever we are producing will be easily absorbed in this market. We only have to focus on the costs. Keep them in check, especially given the fuel impact.

And just a last clarification from my end. I believe there is one more promote entity called Midwest Gold. I just want to understand in terms of new business opportunities that both the entities will pursue independently. How do you, is there understanding that all the, see, business related to heavy metal science and tariffs will only be done by this entity, and the battery side will be done from that entity? I just want to understand the, how does, you know, there is a conflict of interest of businesses. Hello.

So, as far as battery-related business is there, we are nowhere in battery-related materials nor minerals. Minerals are not there in that space in any way. And the second business of that entity is the production of permanent magnets. So, they are on the front end. Today, the problem of the country is two. One is production of the magnets, which the PLI has come for, which is the business that they are in. And the second is, how do you support these PLI units to produce oxides? So, Midwest, historically, Midwest was a mineral and processing company. We are sticking to our focus. The materials are changing, granite, quartz, HMS, or the rare earth. So, rare earth oxide is our product. Their product is a permanent magnet. So there is absolutely no intersection or prospection of products there, and the only prospect is today we are looking at oxides, and that is a long way to go, and we're starting to build on that. Now, there may need oxides in the future, which they can buy in the market. They can buy from IRL. They can buy from overseas liners, and we can sell anywhere in the world. So I think today, oxides, if you see, they are in huge demand globally. The U.S. is willing to pay a premium to what the world is, what China is offering. So I think it's a different basket. I don't see an intersection anywhere. And the way we see there is... At least in the next three, four years, there is absolutely, there is no intersection, there is no conflict. Okay. The points have been defined as the scope actually will be clearly defined. Okay, so thank you.

Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star and find it. Next question is from the line of Majid Ahmad from Pinpoint X Capital. Please go ahead.

Good morning, everyone. Hello, I'm audible, sir.

Yes, please go ahead.

Yes, sir. Sir, my question is, what percentage of energy requirement will be made through solar energy integration and select mine?

Hello from Audible.

Yeah, yeah, your Audible.

See, today most of our equipment is in, is running on the fossil fuel. If we look at our history, we have about one megawatt solar plant up and running. And now we are also converting our equipment into EV trucks, especially trucks that we are, I mean, converting as once, I mean, then X-car drills will be converted later. The conversion will further create a demand in terms of electricity rather on fossil fuel. If we... Have an opportunity, we will try and buy everything from the renewable part, but no, that will take little time because, no, we are also trying options of buying this energy from existing captive solar plants and also parallelly building our own solar plants. So, this year, probably, we will be, we have an object clause on this, which is about 0.6 megawatts, which we need to build. We are working on that. We are going to place orders shortly. And not just an addition of 0.6, we will be adding further capacity also. That's also under discussion. With that, the energy requirement of the company, maybe to the tune of 10% is what we can, I mean, 10% of the energy requirement might be coming from the renewable front, and we have long way, we can, we have an opportunity to convert that 90% also to. Maybe not completely 90% because some diesel-based equipments will still continue, especially wheel loaders kind of stuff, heavy equipment, but the remaining equipment can be converted into EV.

Yeah, to extend on that, so our total, let's say, on a cost basis, our energy requirement is around 17 to 18%. Out of which we are around, right now, we have got it down to 12-13% on fossil, balanced predominantly on green. Now, what Dilip was mentioning, there is another 10% which will convert of that this year. But overall, I think that is addressing the trucks. We are also experimenting on excavators right now this year, and I think by next quarter we will give an update. That will be a big jump. That will also take away considerable into green. But whatever we can, we are able to do. But overall, I think the flip of more green and less fossil may happen in the next two years.

So, to add to the cost, though 13% is the cost and fuel has gone up very high and, you know, we are facing an overall impact of about 4% increase in overall cost, 4% to 5%, we've managed to increase the price, renegotiate the price with the buyers, with the export buyers, and we've increased the prices this year for the coming year by 4%. And we assume the dollar also will support further. So this is more than compensating for any fuel increase, much more than that. And in fact, like they said, we are converting our feet to renewable and back integrating with solar. So those efforts are going on, even for larger excavators where the Volvos and Kobelvos are coming with new introductions for electric-based excavators. So, we are, compared to a lot of the industry that is being heavily impacted with the fuel, ours will be under full control in the coming quarter. We are confident on that.

Okay. Thank you, ma'am, for the detailed answers. And, ma'am, can you throw some light on the 30-year query lease work order that you got in Jan? Has the work started? And what is the potential contribution to top line and bottom line?

The work has started, and we already started producing. So I think this specific site, we are targeting to contribute around 10,000 to 12,000 CBM. That's our plan, and that is being ramped up quickly. And that could result in a revenue of 70 to 80 crores from that mine. And, yeah, so production already started. It's a neighboring block, so there's also a cost advantage being that we are also sharing some of the equipment with current operations on that. We are able to run it with minimum capex.

Okay, sir. Sir, are there any plans for inorganic growth, acquisition, or expansion into new geography?

On Granite, right now, no, we look at opportunity-based, but right now, I think, as you see, we've got one mine now. We're looking at something else in the next quarter, so I think we're looking at organic growth only and getting fresh concessions from the government, and quads also, you know, enough raw material, and the plant is building up, and on rare earths, where HMS will be focusing on Sri Lanka and any other projects that might come up in India itself. All these are tended by government, so there are no private projects to acquire. So given that, I think no, but if anything interesting comes internet, we'll look at it, but most likely no. Okay, sir.

That's all for my answer. Thank you, sir. Thank you and all very good.

Thank you. Next question is from the line of Abhishek Mehra from Time Capital Advisors. Please go ahead.

Yeah. So just speaking a bit more on the Sri Lanka front. So if I understand correctly, we have exploration licenses. So have we transitioned to the retention stage, if at all? And what are the renewals like? The reason why I ask this is new policy in Sri Lanka is under implementation. And I think it's due for parliamentary approval. So after that only they would be providing approvals, right? So just wanted your understanding on it.

Yeah, so we have the exploration license that has to be when we submitted all the paperwork and documentation and we've done a lot of work on other clearances to convert to mining license. So I think as soon as this policy is set, the next step is we get that mining license and then we start breaking the ground.

Okay, so when are we expecting industrial mining license to get approved? I mean, are we at a retention stage? Because in retention stage, what happens is it's only a year after that we can have a renewal, right?

No, no, no. In Sri Lanka, there is no timeline like that, specifically because of the new policy. There is no specific timeline in the old policy as well. So I think once the government approves in June, I think July we should target getting that. And parallel, we have done a lot of work. We can start building the plant as early as August post that. And it will take about a year to build the plant, nine months to one year to build the plant.

Okay, and secondly, on the KML front, since we have the pilot project, so what is the duration for this project that it would run, and maybe when can we expect KML to make it more of a commercial project?

So it's a six-month project, and I think the start date of the project will be sometime in the first week of July. There are some, they need the land, they're allocating some land and all that, there are about four or five acres, all that will finish. But we have started placing order for the equipment, we started doing our work from our side. So six months from then, and then post immediately that, because once the plant is ready, so plant will be ready in four to five months, post July. Then you keep about a month or two to look at all the data, with all the data, then the whole purpose of the plant is to look at the yields and look at the exact flow sheet. We'll be ready with that during this ongoing process. Then immediately after that, we expected the government to continue and continuation of this to commercialize, because their idea is to commercialize immediately. It's a huge value unlock for them, and due to transition of the government, they lost some time, but I think they'll try to make up time, and we're also eager to start as early as possible. Now, the commercial plant post that, let's say eight months from now, the commercial plant and commercial plant post that will take around a year. And from then, I think we will start the first oxides coming out of the plant.

Okay. Great, sir. All of this. Thank you. That answers my question.

Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please restrict yourself to two questions only. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Bhavik Shah from Choice Equity. Please go ahead.

Hello.

Yeah, I want to ask you,

Bhavik, your voice is very low, request you to please use your handset. Hello? Yes, please proceed now.

Sir, I wanted to ask regarding the bidding for quads mines. So, there are a lot of noise in this sector. So, are you bidding with respect to quads mines? And especially on this side of India, east, west, north, south.

Yeah. So, Quad is a bulk commodity, and it is sensitive to logistics pricing. So, since our plant is based in Andhra in South India, our primary interest will be building up resources in South India, and specifically maybe Andhra and Telangana more, and also North Tamil Nadu, closer to the plant. But there are not many resources in North Tamil Nadu. So given that, Ananda Zalengar is our focus. And second is Quad's post becoming a major mineral. So the government is still yet to come out with the framework for the tendering and auctioning. So nothing has started yet in that post that last one year. And we are not in a hurry as well. We have enough reserves. So as and when that happens, we will be ready to look at assets, asset to assets specifically, As long as meeting our criteria of scale and quality, I think we'll participate.

Okay, sir, thank you.

Thank you.

Next question is from the line of Nikhil Gupta from Wayu Capital. Please go ahead.

I hope I'm loud and clear. So, my first question is on the investor deck. You have stated that your long-term three to four-year vision is to have the top-length growth of 1.5x. So, can you tentatively get the breakup? I mean, what will the tentative contribution will be some daylight cause or error?

Oh, you mean in the next four years, right?

Yeah, yeah, yeah. You mentioned the 2.5% of length growth.

So, Granite, if you look at Granite, we'll be tracking that year-on-year growth of 10% to 11%, 12%. Even this year, we produced that much, but as Dilip mentioned, we had a logistics issue in the last week of March. Specifically because post-war, once the war started February end, the logistics price increased, and there was a cost impact which we didn't want to take specifically, and that has cooled down now. So I think that given that, we will be confident of achieving that 10-12% organic growth in the night. So in four years' time, three to four years' time, wherever that number takes us. Then on quads, In the next three years, I think two phases is what we have to consider plus HPQ. Now that could give a top line of close to around 400. Around 400 crores. That is the number we are looking to target. Now, the HMS in Sri Lanka, which will be operational by then, will give another 350 to 400 crores. And that is on phase one. We have an option to build further, but I think that is what we should take. KML project, once it's commercialized, I think they're also looking at a revenue of close to 200 crores. So, basically, if you look at the overall thing at that point of time, you're looking at 1,000 in granite, then about 1,100 around that film. Three projects that we just mentioned.

And the last question is on the follow-up from the previous participant where the question was more on the other entity which was making magnets. Can you get the screen of that particular business and are promoters sending that business or maybe some other family business? I'm not sure, just asking for the clarity.

So, that is a separate management. We don't know the exact production numbers there. It's a common promoter, but separate management altogether. Yes, they're in the business of making permanent magnet and BSS.

What would be the scale of that business?

Pardon?

What would be the scale of that business?

So, in terms of scale, right now, as far as I know, they're just building out the plant right now. So, we don't have exactly the numbers, what scale they're building, and also I think they're exploring PLI, a lot of things happening there. But right now, I don't have the exact number of what scale they are.

Thank you.

Thank you. Next question is from the line of Arvind Mahadevan from EquiVentures Capital Advisors. Please go ahead.

Good afternoon. Am I audible?

Yes, please go ahead.

All right. Thank you for the opportunity. Sir, I would like to know what was the volume of quads for Q4 alone?

Q4, we did about turnover of 1.8 crore. Volume is 1,000, 1,200. Because, no, we produced some, I mean, 3,000, 4,000, due to some quality issue because of the plant. The technical issues, we couldn't process the right product and we had to reprocess it, but as far as sale is concerned, we did about 1,000 price. Understood.

Sir, any progress with regards to our subsidiary in Sierra Leone? In Africa, the subsidiary that we set up in the last quarter, we set up an office, right, in the last quarter?

Yes, yes, yes. We opened a company there. There is no specific progress in the last few weeks, which is studying a few concessions. Our team has spent enough time there. I think during the next quarter, we will have some update on that, but right now, there is no update.

Okay, and my final question, with regards to HMS, particularly in India, whom do you think is your direct competitor as such?

HMS today, only government entities are producing, IRL, KML, and once it's privatized, they'll be private, and it's a long course, so there are a lot of, from starting from Odisha to Kerala, we are envisaging a lot of projects coming up in the next decade, 10 years. Now, obviously, different companies will have different interests, but I think since we have started this vertical and we have a lot of knowledge of our team, I think we will have an advantage there as a company. And obviously, our goal is to become at least top three producers in India, private companies in that space. But I think there is enough material, enough business, and enough market in this regard. So I think we will only focus on our age and our growth.

We are the first ones to put up our pirate plant in the country for KMML. So, we'll be the first person to, we have a first right of refusal for a plant there. So, when the tenders are being floated, a lot of weightage will be given for the first person to attain that kind of knowledge. And these are licenses which have 30 years or 25 years renewable licenses, long-term licenses, once you attain the business.

Okay, fair enough. And last, last, final question. So, we have a lot of monosite deposits in Tamil Nadu and Andhra as well, right? So, if the government plans to extract that as well, do we stand a chance, particularly in Andhra Pradesh, because we have an home advantage over that?

Yes, so Andhra, we are, you know, been working there for a very, very long time, more than, you know, since inception. So, and plus, we will already have, probably, we'll be the only ones with knowledge of dealing with, you know, rare earths and with heavy mineral sands coming from Kerala. So we will be definitely participating in it and definitely between the moment they open up the tenders.

So just to give a clarification, you can't go and mine monazite on standalone basis. When you mine the beach sand, you remove the other heavy minerals, then monazite becomes a byproduct. Then when you refine monazite, thorium becomes a byproduct. So it's a chain. So when the government wants to commercialize the whole thing, first they have to tender the HMS block beach sands. Then they need a company or private company like us or others to extract that, separate that, like how we plan to do in Sri Lanka, and produce your Illuminates, Rutiles, which becomes market. Then Illuminates we can also convert to Slack, which is also, we'll be looking at further valuation there, for example. And the Monazite that comes out of it is a separate know-how altogether to take out the oxides from it.

All right, sir. All right, ma'am. All right, sir. Thank you. All the best. That's all from my end.

Thank you. Next question is from the line of Anand Sarda from Chattivgar Investment Managers. Please go ahead.

Hi. Thank you for the opportunity. Sir, is the phase one capacity 0.3 million or is it 0.25 million, sir? And what is the maximum capacity utilization?

So, the installed capacity is 300,000, but usually we consider 80% as a benchmark, so that comes around 240,000 to 50,000 tons, and once we produce that, we know that this plant has achieved its peak optimal capacity. And, yeah, sorry, what was the other question?

And sir, no, no, you have answered it. So this year, you have given a guidance of 60% of 0.3 million tons, right? Or 60% of 0.25 million tons?

No, no, 60% of 2.5, so 1.5 lakhs. Okay, okay, okay, okay.

And out of the product that you get from the quartz plant, how much is the engineered stone and how much is used for the solar glass, like a kind of a simple bifurcation, like in terms of rough percentage that would do?

So, like we have already mentioned, we will tweak the product based on market traction. So, if we find that the Middle East, the plants are getting delayed or, you know, the engineered stone is now currently we're planning for 70% engineered stone, 30% solar glass. But in case we want to, you know, we have some ready customers who want to give us a better price for solar and we are getting volumes there, which will set us for phase two, we might tweak it a little bit. So we are open to seeing because the plant is tweakable and the plant based on the market we will do. But general guidance is the plant phase one has been set up for 70% engineer stone, which is priced between $9,000 to $14,000, x factory price. And 30% solar glass, which currently we are getting about 7,000.

So, ma'am, and the same can be expected in Phase 2 as well, right? With the 0.3, we have 0.25 as the maximum.

So phase two, the capacity is again 300,000 tons. Again, we are expecting to get to 250,000 tons. And because of learning from phase one, the idea is that we reach that capacity utilization faster than in phase one. And phase two, the production is a flip with 70% solar glass and 30% engineered stone.

Okay, and the last question is regarding the PLI scheme. In the last con call, we spoke like, you know, we might participate in the PLI scheme for magnet manufacturing. So, like, as Sir said that, you know, we will be mainly be doing oxide manufacturing in Midwest and, you know, rare earth in Midwest gold. So, are we partnering with the sister company to get the whole value chain because the PLI is only for, you know, from entire value chain from oxide to metal to alloy to magnet? So, how will we participate in the PLI scheme if we are only doing till, you know, till the metal stage?

Yeah, so on the PLI, we have done some work. We are still doing some work on what is the strategy going to be, but the broad findings are there are going to be five PLI companies which produce close to 1,200 tons per year, which is amounting to 5,000 to 6,000 tons of magnet, right? Now, these companies will need around 2,500 to 3,000 tons of oxides. Now, India today is producing 400. So, still we have a huge gap covering just the PLI. I forget about any companies producing magnet on non-PLI-based also in the next three, four years. So I think the biggest gap we are seeing is this production of oxides. I think that is where our focus is primarily going to be. And in terms of capital intensivity, the magnet plant is highly capital intensive. The investment required for a 1,000 ton or 1,100 ton plant is upwards of 1,000 crores, close to 1,300 crores in terms of overall investment. And the margins on that will depend on the input price primarily. Today, the support price given by government based on the market price and 2150 rupees per kg what they fixed, it's close to around 18-20%. But the reverse pitting mechanism, we don't know where that will end. That will definitely be lower. So given that the biggest impact on margins is going to be the raw material feed. Number one. And second, even with an investment of 1,000 crore, if you are doing a magnet of 1,000 crore, the revenue at current magnet prices will be 500 to 600 crore, which is half the value of the CAPEX. So, given all these numbers we are studying, yes, now it is good for any company to go for validation, but at what cost of growth? If that is the only way to go. So, for example, if we are already, imagine a situation where we are already producing 1,500, 2,000 tons of oxides in next 24 years as a company, and the next only way of growth is going to be production of migrants, then yes. But today, being full with all these projects, and so we are seriously looking at how to, strategically, how to play this. But I think we will definitely have an update. When we have a metal update, we'll update you. But by next quarter, definitely we'll have clarity on this specific PLA and also long-term plan of the company in this space. But right now, I think all the pointers are towards one direction. We need more and more oxides. The world needs more and more oxides. It's a niche space that we are in, and a lot of unlock is happening in India. And I think that is where all our energy and capital should be focused right now. And the PLI will be, we are studying seriously, but how to, once we get clarity at our, we are also looking at our cash flows, our next one year budgets and all that. I think post that, we'll give you an update.

So, sir, you know, with the Kerala Mining Association, you know, I'm forgetting the name, there you're investing 20 crores with them. So there you are just investing for production of oxides, or are we doing something in the value chain to make a magnet?

No, it is a production of oxide. The pilot plant is specifically restricted to production of oxide, and this is a mobile plant. So, in the entire 20 crores that we are spending there, it's mobile post-proving the process and getting the process right. The idea is to shift it to Sri Lanka.

Okay. Okay. Thank you. Thank you so much for clearing my doubts.

Thank you. Next question is from the line of Jayant Rakovan, an individual investor. Please go ahead.

Hello, am I audible?

Yes, please go ahead.

In the financials, in the segmental report, in the granite sales, I am seeing a dip from 226 crores to 214 crores. The top line has dipped by around 12 crores, and the same effect is seen even in the segmental profit for the granite division. So, what exactly drove a lead growth in the granite business? Is it the selling price? Is it volumes?

Quarter and quarter you are seeing, 230 versus 215?

I mean, corresponding quarter. Year on year. Yes, corresponding quarter, corresponding quarter, year on year. So, March 2025 was 226 crores, and March 2026 is 214 crores. So, there is a dip of around 12 crores.

No, no, you are looking at a standalone number. Overall number, consolidated number, it is 645 crore granite.

No, no, I am talking only about the granite shell. If I see your segmental revenue, that is page 18, consolidated segmental information in the P&L. Okay. In that, if you see the quarterly numbers, the March 25 quarter was 226 crores for Granite business only, and this year, March, it is showing 240 crores. So, there is a dip of around 12 crores.

Yeah, quarter-wise, yes. That's the question I have asked. Quarter-wise, yes, and the overall number for the year, it is 645 crore versus 626 crores.

Yes, so what is the reason for a dip, quarter on quarter?

See, quarter on quarter, if you look at, we have explained this in the previous questions. We are, we have produced, but in the last week of March, last 10 days of March, there was some logistics issue because of the war. Because, you know, the logistics prices have gone up, and no availability of the ships was also a little difficult. That's the reason why we couldn't ship out the goods to the tune of 3,000 plus CBM, which could have added revenue to the tune of 25 crores.

Okay, okay. So, next year, what do we expect in terms of revenues if everything goes smooth?

Yeah. The 10 to 13% is the consistent growth is what we are expecting on the granite segment. We have witnessed a little better growth in the previous years, but on the pessimistic side, we estimate the number also. 10 to 12% is the number growth is what we can see. Okay, fine. Thank you. Thank you for this. Thank you.

Thank you. Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.

Thank you, everyone, for taking out time and enjoying the call, and hope we could answer most of your queries satisfactorily, and look forward to meeting you for the next quarter call.

Thank you. Thank you so much, sir. On behalf of Go India Advisors, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.