Bansal Wire Industries Limited (BANSALWIRE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1 and FI27 conference call of Bansal Wire Industries Limited. From the management, we have Mr. Pranav Bansal, MD and CEO, and Mr. Gansham Gujdati, Chief Financial Officer. To take the discussion forward, we also

have an investor relation team from AdFactors PR.

As a reminder, all participant lines will be in the listen-only mode, and there will be 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 your touch-tone phone.

Before we begin, I would like to mention that the sum of the statements made in today's discussion may be in forward-looking in nature, and may involve risk and uncertainties.

Please note that. Disclaimer mentioning this risk and uncertainty are on the disclaimer slide of the Investor Relations presentation that has been shared earlier. I now hand the conference over to Mr. Pranav Bansal for opening remarks. Thank you, and over to you, sir.

Yeah, thank you. Good morning, everyone, and welcome to Bansal Wire Industries Q1 earnings call. Joining me today is Mr. Dhancham Raj Gujarati, a CFO, and I trust you've had a chance to go through the results. First half of the quarter was impacted by higher input costs. The business environment improved, the conditions improved meaningfully in the later half of the quarter, enabling us. I would like to emphasize, however, that we responded to this situation with agility, to a mix of operational recalibration. Importantly, our operating capacity as of today stands at around 6,80,000 tons, and we are pleased to say that we are back to the normal level of operations with steady and comfortable. On strategic front, the quarter has actually been quite eventful. Thank you. The HTWire business continues to make good progress and has been ahead of our initial expectations. Customer approvals are progressing well, and we are seeing encouraging traction as the business... On the B2C front also, we made meaningful progress during the quarter with the introduction of our new range of steel wire products for the farming center. The response has been encouraging with these products, contributing approximately 10% of our sales already. This marks a promising new growth avenue for the company and reflects a broader strategic focus on diversifying our product portfolio while strengthening the Bansal brand beyond its tradition. I'm also pleased to share that we generated a free cash flow from operating activities to the tune of about 120 crores during the quarter, which reflects the continued discipline we are bringing to the working capital management and overall capital. Good morning, everyone. Second, our speciality portfolio is beginning to contribute more meaningfully. To gain market share remains at the core of our growth philosophy. It is what has driven our journey so far, and it remains our sharpest focus area, even going forward. We are increasingly seeing the tangible outcomes of the investment and strategic initiatives undertaken over the past few years, and we remain confident.

Good morning, everyone. Let me take you through the financial summary for the quarter of the F by 27. Our revenue for the quarter is today Rs 1168, reflecting a growth of around 25% on a year-on-year basis. EBITDA for the quarter came in at Rs 57, and net profit for the quarter is today Rs. As Janosar already mentioned, our sales filing for the quarter is to date. While the quarter one is seasonally a softer quarter, and the temporary industrial gas shortage impacted production during the point of the quarter. Underline the demand across hour and market remain reasonably steady. And the call is true. operating cash flow of Rs. 121 crore during the quarter, reflecting our continued focus on Thank you. Thank you, Max.

Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are required to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Kunal Sharma with Veritas Advisors. Please go ahead.

Yeah, hi, hi, Tim. Good morning, and I'm hope for a moderator. Yes, you are. So, Pranav, just firstly, I would like to hear from you that how will you rate this result, quarter one. And so, Pranav, let's say if this war remains for another few quarters, as the oil price is again at the elevated level, and then how does Bansalwar reach with respect to the growth and the margin per se? And will this issue again persist on the growth and margin, or are we ready to move with the strong guidance and the range that we have given?

To answer that question, let me break our Q1 into two parts. The first 45 days is when we saw an exponential increase in all our raw metal prices, not raw metal, consumable prices, majorly gas and other packaging and, you know, other consumables. To the tune of about 5,000 rupees a ton on a blended basis. Now, as a company, we took a very conscious decision not to pass this over to our customers. On the firm rate of orders that we already have. We generally carry about 30 to 40 days of orders with us. So, that 30 to 40 days of order, as a company, we took a call that we will absorb that cost. Because we have been with these customers and they have supported us for such a long time, we want to support them in this time and not renegotiate on the committed orders. So, that went with about 2 rupees a kg EBITDA margin. We took a hit from 7 rupees a kg blended and we came down to 2 rupees a kg, wherein we absorbed all that cost. Once we had that cost increase, the new orders that we booked were, again, with the right prices. There, we were getting the 7, even, in fact, 8 rupees a kg blended margin. So, the second half of... So this is how the first quarter was. After the 30-40 days of order move, we were back to normal. The only disruption for us was that our volume was not growing by 20% because there was a dip in demand. Now, as of today, even with all of this crisis today, we see that the demand is there. We've been able to grab higher market share, and the B2C segment also held us in the last quarter to gain market share. So, as of now, even with all these cost escalation, this has been called on, and we are back to the 7 to 8 rupiah kg EBITDA levels. So, which gives me a confidence that we will be able to achieve our target for the next three quarters of the year. Understood. So, just to follow up on the margin and the pricing which you sold, that 2 rupees kg that we absorbed instead of passing it to the end consumer. So, on the margin, like, so, though we run a cost plus model, so, is that the reason behind the margin during the quarter has impacted and quite badly to, I guess, for our percentage? Yeah, so we operate at a cost-plus model, wherein any increase and decrease... that we take in our raw metal or even consumable is passed on to the customer. But now in steel, we carry about 30 to 40 days of stock. Now to create a natural hedge in the system, what we do is that 40 days of inventory is also covered with 30 to 40 days of fixed rate orders. So that, you know, we do not get into a cycle of commodity pricing. But in this case, because In this case, that strategy affected us badly because we already have 30 to 40 days of order book, and the cost escalated drastically immediately. from the next... In this case also, we could have passed this on, but due to the relationship that we've had with all our customers, we try to support them and not renegotiate in the already committed orders. But the day we got an increase, from the very same day, any new orders that we booked were with an escalated price. So any new orders that I booked from 1st of April also, I was maintaining my margin. Therefore, we took a temporary hit of 30 to 40 days of order book. That is all that was. Other than that, the whole quarter, we have operated on regular margins. Okay. So, from next quarter onwards, we will be back to 7.5 to 8% margin. From almost May 15th, we are already back to 7 to 8 rupees a kg margin. That is why you see a blended 4.5 or 4 rupees a kg. Otherwise, the first 45 days, we operated at 2 rupees a kg every time. Got it. Okay. So, and my second question on the steel core. So, we secured the first trial order from the leading Indian tire manufacturer. So, I just wanted to understand a basic understanding that first we now shifted from the pilot project to the trial order book, the last in a couple of quarters we alluded, and which means the customer has been approved the steel core supplier like this. And we start getting an order book from the respective tire manufacturing community. So is that my understanding, correct?

Yeah.

So in this process, in the approval process, there are two stages. One is a sample approval, and then it goes to field trial or bulk trial. So we have passed the sample approval stage with most of our customers. We are on to the second stage. In fact, there were some customers that were very pleased with the results that they got in the sample approval. Therefore, they skipped the second stage of a field trial and moved directly to bulk trial orders. So, this is one of those customers who skipped the field trial process, and they have shifted to directly product trial. So, we've received the first trial. There are stages of four trials to be held in this particular case. So, yeah, with a couple of months for each trial, I think we should be there.

Okay, and if you can share the quantum of the order book from the manufacturing company, and if

I'm not, is that an MRF that you can share? I can't comment on the name, but what I can tell you is it is a trial order, so there is no order book on the street there. So, once we pass on these changes, then we will get a confirmed order book. So, right now, this is on a trial. Okay.

And when are we expecting to get the final order book from this kind of customers?

We will keep you updated. It is still to be seen, you know, how long they take to try it out. Then we have to give them a second trial, how all of that works. So, the results of all of those will be defined. Generally, from our experience till now, we see that it will take about two to three months for each stage of trial. So, if we take, let's say, four trials or three trials, it can take up to... We are not the only customer, so we are expecting more trial orders within this quarter. Another question on the CFO that we have, I guess, during the quarter, that we reached to almost 800 crores combined for FI27 and FI28. So what has led us to accelerate the guidance for CFO? As earlier, I guess, we were supposed to be at the 600-odd crores, but we can just throw some light on it. So, the 600-odd crores was our guidance for last year and this year combined. Last year, our target was 250 crores, against which we did almost 330 crores. This year, our target was 350 crores, against which even in the last quarter after these challenges, and even though we did not get a good EBITDA or a good PAD, we still were able to manage 115 crores of cash flow. So, yeah, I think our initiatives have paid off, and, you know, we are on that journey. So, we are quite confident, given the last five. You'll not be able to achieve, so it's important for us to, you know, target. Are we now back to the 75% plus utilization

since the production has been started?

Yeah, right now the demand is back, so we are operating at a good level.

Good.

Thank you, Sam. Thank you so much. Thank you.

Thank you. Next question comes from the line of Aditya Bhartia from Investor Capital Services.

Good morning, Pranav. Pranav, you mentioned that we should be back to 20% kind of a growth for the remainder of the year. I guess you were speaking about volume growth. And if we consider 7 to 8 rupees of EBITDA per kg, last year we were having closer to 6.5 to 7 rupees. Does that mean that even on a profitability on a per-tran or a per kg basis, there can be a 10% increase? And therefore, at the EBITDA level, we are looking at 20% volume plus 10% EBITDA increase, which makes it 30% kind of a total EBITDA increase. Is that how you're kind of thinking about it?

Sir, hi, good morning. So, yes, we are looking at a 20% volume growth. Our EBITDA guidance would also still remain 20%, although I agree that we, you know, we started this quarter with a higher EBITDA base, but, I mean, we have three quarters to go, so, you know, you never know. So, you know, we would like to be a little comfortable here and, you know, say if we are gaining, let's say, 20% volume, then our EBITDA would also at least grow by 20%, if not more. Anything outward of this is still to be seen. A lot of uncertainty is still.

Understood.

Also, if you could speak about IHT, OHT wires, what proportion of revenues and volumes would be coming from IHT today, and how large can OHT become? How exactly are the profitability metrics for these kind of wires? So IHT and OHT combined, right now we have 9,000 tons of capacity, which will reach to 15,000 tons with OHT commissioning. So, as a product combined, I think we have gotten good response from the customers here. In IHT, just to give you an example, next month we are targeting 50% capacity utilization. And within this year, we see that we will reach to an optimum utilization level already in IHT because our approvals are on very advanced stages. Most, 80% of the customers have already given us approvals, only 20% remain, which are also in very advanced stages. So, I think, yeah, this product has done well. On the EBITDA side also, although we do not see meaningful EBITDA today, because we are operating still at, let's say, 35-40%, but once we reach an optimum capacity utilization, Thank you.

Per ton basis, how much does that work out to be?

In IHT, I would say about 10 to 20 rupees a kg in that range.

Understood. Understood.

Lastly, on the B2C business, of course, this business has scaled up quite sharply and in a fairly short time. What is the ambition that we are having? What are the targets that you have set for yourself in the B2C business? And how exactly does the profitability differ from our conventional B2B business? Sure. So, the B2C segment that we have tapped into, this is in the low-carbon side of business, which contributes to about 50-55% of my total volume. Now, in that low-carbon, our ambition is to reach 50% or more through B2C. So, 50% of my business in low carbon should come from the B2C segment. On a blended basis, that would mean 25% of my total sales should come from B2C. That is their mission. And from 5% to 10% is what we have gained in the last one year. So, we have doubled our market share in B2C or our sales in B2C, sorry, last year. So, this is the kind of growth that we have already seen, although we were operating at a lower base. But yeah, I think we still see a lot of growth potential here. A lot of our initiatives have paid off well. This is a good segment. And on the margin front also, this is better than our B2B side margin. So I would say about 20-30% extra.

In order to ensure that the management will be able to address all the questions from the participant, we request you to kindly limit your question to two questions per participant. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of D.R. Jain, the Sapphire Capital. Please go ahead.

Hi, sir. Am I audible?

Yes, yes.

Thank you.

So, as I said, OHT, IHT combined, we are looking at 10 to 20 rupees a kg EBITDA. It is a little early to say right now, but this is the kind of range that we are targeting. But we will reach there, you know, once we reach an optimum level of utilization, which will be within this year.

And that would be like a 70-80% neutralization?

Yeah, once we reach 60% plus is when we will start to break even, and I think 70-80% is when we should see.

And I hope for those caravans.

So, as a company now, from the last one year, we've been working a little differently from what we have been doing in the past. So now, you know, our thought process is to put in about 200-250 crores every year to keep growing at 20-25%. We'll cap our capex at about 200-250 crores every year to give us runway for every year, for each year. So this year also should be...

And, um, I'll get back in the queue. Thank you.

From the line of Rahul Garish Shah with the Glowstar LLP.

Yeah, good morning, everyone.

Other expense this quarter has increased by 26 crores. Can you roughly break that into how much was due to extra fuel cost and how much was due to additional cost due to the new sociality plant whose commercial production has not started?

Rough figures, maybe 50-50 or 25-75.

So, I would not be actually able to give you some specific numbers here. What I can say is, on the gas front, our cost has almost tripled in some plants, and in some plants, it has increased by almost 100%. So, blended, I think, our gas cost has increased by about, let's say, 1.5 times. So, yeah, that is definitely there.

Okay. And the new speciality plant, the new steel cord, and the B2C segment, will we be able to book any meaningful revenue in F527?

Yeah. So, already in the first quarter, 10% of my revenue has come from B2C. Okay. Which is only growing every month. Although for B2C, second and third quarter are seasonally soft quarters. First and fourth quarters are better. But still, we should see meaningful growth from the B2C segment. And in the speciality front also, IHT, OHT, as I said, this month we are targeting, next month, sorry, we are targeting about 50% capacity utilization. Within this year, we are looking at an optimum utilization. So, about 60% to 80% kind of a capacity utilization by the end of this year, we are looking at in IHT and OHT. In IHT especially, OHT will also be commissioned by the end of this year. So, next year, we should see more numbers coming from OHT. Steel core also, we have made meaningful progress by getting our first trial order. But, yeah, there is still a long process.

Thank you.

Jigarjani with Noama PCG Research. Please go ahead.

Yeah. Hi, sir. Thank you for taking my question. I hope I'm all right. Sir, my question is basically on your volume guidance. So, given 20... The numbers, it basically implies almost 1,45,000 kind of volume every quarter, if I just divide it by three. So what is giving you the conviction of having such high volume growth? Is it new customer additions or new products?

What is giving you that confidence too?

Thank you. So if you divide the 20% growth, you can divide it into three equal parts. One third of the growth comes from our regular customers by increasing market share or just by growing with the customers. One third comes from existing customers. And one-third comes from new products that we get into. So, every month, almost, our R&D team develops 20 to 25 new SKUs. Every year, we have a target of developing 250 new products. So, this product mix also gives us this kind of an increase. So, all these three combined, we have generally been able to maintain the 20% growth overall. Some year, it could be a little less. Some year, it could be a little less. 20% average is... The numbers, then it basically implies over the next three quarters almost 1,45,000 kind of volumes. We have maintained 85 to even 90% capacity utilization. In fact, this is the sweet spot for us. So, on the capacity front, I think we are covered. We faced some hiccups in the Dadari facility when we started it. It was a green field project. But now, even though hiccups are clear, we are seeing a good ramp-up happening there. So, yeah, as of today, we see a good demand, and as of today, we don't see why we will not be able to meet that demand because we have the capacity either in hand or at our disposal whenever we require. Great to hear. Just last, final question is on margin. So, we operate on a cost-plus basis. Thank you. So, sir, as I explained earlier, we operate, we have kind of created a natural hedge in the system, wherein the inventory that we have, about 70-80% of that inventory is already booked against firm rate of orders. So, therefore, whether there is an increase or decrease in my steel prices, it is passed on to the customer. Any inventory loss also is passed on to the customer. Now, here, the only difference could be that in one quarter, our opening stock and closing stock The second quarter will cover it up because we already have orders. Thank you. Our only issue was that... This is from the very same day. And, you know, we try to support our customers here as much as we could. But herein also, all new orders that we took was within increase. So that, yeah, this principle has worked well for us. Come out of this flying. So, yeah. Understood. Great to hear and best of luck, sir.

Welcome to the line of Krakhar with Anandarati Wealth Management. Please, great. Hello? Hello? Yes. Yes. But your voice is breaking. Thank you. But your voice is... Repeat that.

I would say that we see demand from almost all sectors again. And automotive still remains strong. With that, you know, some of these initiatives like the B2C segment and speciality also has started helping us now, especially the B2C. So, yeah, overall, I think things look positive in almost all sectors. Second and third quarter are generally a little weaker in infra, but... And hit on our geometry margins, usually the size is going up. You know, then that tries to help. That is a possibility, but that depends on how, you know, the prices move or how suddenly the prices move. If it happens over a period of time, then it is all passed on to the customer. But if it happens drastically, wherein, you know, how we saw a drastic increase, if we see a drastic change or decrease in the prices, that could, we could benefit.

I'm from the line of Shibam Thorat with Perpichal.

Thank you for the opportunity. Hope I am all the well. So, sir, I'm a little new to the company, so just wanted to understand our product portfolio, specifically the specialty segments that we have recently entered, the kind of rationale that we have behind entering these segments, you know, the margin differential, if any, compared to the conventional products, and the capacity that we have for this. So, as a company, sir, we have products for almost all segments. Our major segment will be automotive, and then consumer durable, power and cable, infra, general engineering, all these kind of segments, agriculture, poultry. So, all of these segments, we have some of the other use cases in our way. As a company, you know, we've pretty much diversified ourselves as much as possible in other areas. So today, no segment for us is more than 25% of my total sale. Similarly, no customer for us is more than 3 or 4% of my total sale. So we've tried to de-risk ourselves here as much as we can. Now, just a natural thing in our system is, you know, we keep on adding new products. A specialty wire is also a new product or a new vertical that we have recently added. This will help us. For the next 20 years, you know, to keep growing at 20% or at a higher pace. This was just a natural, you know, addition. Speciality-wise, we've seen a good opportunity. In most of the products, either we are the first or the first of maybe one or two companies in the whole country manufacturing these products. And we've identified here all high-margin items with potential of high-growth areas also. For example, IHT, OHT, these are products used in automotive majorly. And in the automotive also, EV is a large part. This is a product in which we are the only, or the first Indian company to get started, and these are all import substitutes. So these are high growth areas with high margin or, you know, a higher barrier to entry. This takes a little time. That is what we've done in Steelcore. It has taken about one year already. Once we are in, I think... Could you comment on the available capacity that we have? We have put a pilot project of 20,000 tons a year. And for IHT, we have 9,000. IHT and OHT combined by the end of this year, we will have 15,000. Right now, IHT, 9,000 tons is what we have. So, about 35,000 tons of speciality product is what we have. But once we get our first order or, you know, once we start utilizing the 20,000 tons pilot project, we have planned for a bigger expansion. As a company, our vision is to reach to two lakh tons of production within the speciality wire front. So, yeah, once we achieve, you know, some level of approval and some level of quantity, I think our eye is towards the two lakh tons, which will help us grow meaningfully in the next four to five years. Got it. Got it. And just one final question. So, you mentioned that on the gas front, your costs have increased by about 1.5%.

So, I just wanted to check what is the current status on that.

Even today, our gas prices are escalated. We do not see any decrease in our gas prices today. So, all of that is still there. Our costs are still escalated. But the only change is that all of that has been passed on. So, we are operating at regular EBITDA with an escalated cost. Okay, got it. Thank you for the time.

I wish you all the best. Thank you, sir. Thank you. Reminder to all the participants, kindly limit your question to two questions only. Our next question comes from the line of Yo Karajani with Omega Portfolio Advisors. Please go ahead.

Hello, hi, am I audible? So my first question is regarding what's happened in the recent quarter. As we've seen, our margins have dipped, but we being one of the largest players, we might have absorbed it better than most of the industry. So how are we trying to take advantage of the situation where some of our weaker competitors might be facing a more turbulent period?

By grabbing market share, honestly. As a company, we've been grabbing market share. The industry is growing at 7-8%, whereas as a company, we've grown at 20% all these years. So the thought process is to grab market share every year. Now, only in first quarter, it is not that we have come out of it weaker or our competitors would come out of it weaker. In fact, I would say we are one of the very few companies who have taken this hit wherein we took this call of not... To renegotiate in the old orders. A lot of other companies might not have. But yeah, we have been in this industry for 85 years, and our customers have supported us and brought us to this level. So we tried our best to support them. Going ahead, we already have capacity, so the only thing is that we have to utilize it.

My second question is regarding the working capital. As I've seen, we've improved our trade payable days by taking some payable financing. So that has improved our operating cash flows. But that is just substituting one liability item with another. Are there other improvements that we are making to our working capital that will make the OCF more sustainable in the long run?

We have taken two to three different initiatives everywhere. So, our inventory days have also come down, and they will continue to keep coming down in the long run, as in when we operate at a higher base, you know, those operational efficiencies will come in our system or have started already coming in. Similarly, we have done a lot on terms of our receivable days also. We have actually been able to bring down our overdues to a large extent, and now we are also renegotiating wherever we can with our customers to bring down our receivables. So, in the next one or two years, you will see a big change in the receivable pattern also that we have, which will be a structured change of why we will be able to maintain this.

Could you comment on why we are not able to get cable days from our suppliers? Because as a large player, we should have some negotiating power over there. So why are we not able to get there? Why do we have to rely on payable financing?

So, yeah, so as of now, we do not want to negotiate with our suppliers and get payable days because that will also, in some of the other way, bring down our negotiation power. So today, we have structured it in such a way that to our vendors, we are still paying advance. Which gives us a lot of leverage in the market when we have to purchase. And we are the largest purchaser of wire rods in the country today. So, yeah, this advantage is very important for us to maintain.

So, there must be some cost advantages you might be getting. Could you comment on that?

Yeah, so because we are the largest, I would assume that we should have a good pricing, and because we are the company that pays in advance, that should mean something. I can't give you an absolute number, but yes, this definitely helps us. That is why we've been able to grab market share and still grow profitably. All right, thank you.

Thank you.

See you now, everybody. Regarding return ratios in the specialty business. I mentioned that for two left-ton steel core capacity, we'd be needing around 2,000 crores of CapEx, and peak revenue potential for that would be around 2,000 to 2,500 crores, right? So it implies a pretty low asset terms of around 1x. So if I do the math, even if we get 16% EBIT margins, with 1x asset terms, at the end, our ROC would still be 16%. Last two quarters, even without specialty, we are doing 16% ROC. So, at the end, the specialty business is not adding any ROC to our company.

So, just to do some math again, on 210, we will be able to... 800 crores of EBITDA on an investment of 2,000 crores or 2,500 crores. This is the overall thought process. Revenue and, you know, percentage is not something that we really, that are really stable for us. So what is stable is PERTA and EBITDA and quantity. In the speciality wire front, which is majorly steel cord and hose wire, we are expecting this kind of a range. Therefore, we see a good ROC. But just another thing here, again, is that even in our current business, we are trying to improve our ROCs. As and when our low-carbon wire increases and with all these initiatives that we've already taken, like B2C and other, you know, cost-cutting initiatives, we are looking to go to 25% ROC in the current business also, in a very short while. So, these cash flows that have increased, you know, we've actually, even in the first quarter, we've decreased our total capital base. So, even in the current business, with or without speciality, we are looking at a 25% ROC. That is our target, and we have to achieve that.

Right, right. And, you know, in specialty segment, you must have done pretty good homework. So, if I were to say, if we compare our reps to Jiang Sujinda, I think it's the largest player in specialty segment, a competitor of ours. So, can we compete globally with them, or domestically, I got your point. Some partners, like you mentioned, that domestically, we have an absolute advantage compared to them. But let's say three, four years down the line, if we think of competing in specialty segments globally, so can we compete with them, or is it that Chinese raw material prices are lower, that exports would be totally out of our domain?

Yes, you're absolutely right. So, export for us is not going to be a good or lucrative business because of the raw material price. So, I believe as a company today, I can compete with any Chinese manufacturer on an equal cost basis. If I was to get the same raw material price, I can compete with them any day. But today, our raw material price in India for especially this kind of a business, we get a 10 to 15 rupee kg higher price. that we will be able to I mean, our target market for this is India, and that is a big enough market. Even when we achieve two left terms, we are not looking at more than 45-50% market share, which today, you know, 60-65% of the market is being served through import. This is big enough for us.

Somewhere, our utilization levels have suffered. So, do you have any number in mind that in future, a certain number when we hit certain utilization, after that only we'll be doing future capacity? Because what happens is once the infra-growth slows, we'll be left with excess capacity, and it would hurt our financial.

You're absolutely right, sir. So, as a strategy, and one unique advantage that we enjoy here is that more than 50% of our equipments, we manufacture ourselves. So, we have backward integrated into manufacturing our own machinery, which gives us a lot of flexibility in terms of deploying our capex. So, today as a company, we need land and the basic infrastructure. Equipments, we are very flexible. So, as in when we see demand. In a particular segment is when we expand. We don't have to plan a year or a year and a half in advance. We only have to plan six months in advance to put up new capacities. Therefore, the strategy is to start the year with 20-25% excess capacity to enable us to grow at 20-25% for the year, not more. So, even this year, if you look at it, we started with 6.8 lakh tons of capacity, which is 20-25% extra capacity for us to grow. That is the only capacity that we need. So, as a company, we've kept our capex to about 200 to 250 crores this year. So, at the current base of EBITDA or revenue that we have, to grow at 20%, we need to deploy 200 to 250 crores every year. So, this is what we will keep on doing each and every year. There is not going to be one year of very high capex as of now, other than the speciality of us.

Right. Thank you. Thank you. That's very helpful. Thank you. And all the best for the future. Thanks.

Thank you. Our next question comes from the line of Aditya Bharatiya with Investor Capital Service. Please go ahead.

My question was also on vendor financing. I just want to understand what's the roadmap over there, to what extent do we want to keep doing vendor financing, and at the same time, is there a scope of getting receivable days down sharply, and as the B2C business scales up, involving channel financing as well?

So, sir, we have already started doing a lot of channel financing with our customers. We have also renegotiated with a lot of customers wherein we could see that while maintaining market share, we could reduce our payables, our receivables. And other than that, also, I mean, there is a lot of scope on the receivable side. So, that is definitely in our strategy, and this year and next year, most of our cash flows, you will see, will also come from receivable days going down. So, that is definitely one of our main strategies. With that being said, there is a lot of scope in increasing our payable days. So, at least for the inventory carrying days that we have, we would want to substitute that with receivable days. Thank you for taking my question again. Actually, I had a bookkeeping question. With our previous conference, we had mentioned that we are planning to shell our balance line with Simon's facility, but we do not see it. But I believe that it is the India's economy. Could you just help me with that, please? I think Dhanchamji will take this question. Dhanchamji?

Yeah, it's the reason that the Sanan faculty, we have said that the Sanan faculty will not be affordably, and it will be the additional level available to us that we are seeing. Our expansion is going on there, and that...

If I remember correctly, we are trying to sell it and

cash it out because we had already deferred our backward integration project. So that is why I think there is a bit of a confusion.

Yeah, so there is a correction here. It is not that we are trying to sell off the entire facility. We have already started expanding in the Sanar facility with wire capex, about 90,000 tons, but we have excess land, so we will take a call on that, definitely. So some part of it we might not complete.

I now hand the conference over to Mr. Pranav Gansal for the closing remarks. Thank you. I know what to you, sir.

So, thank you, everyone, for joining us today. I hope we've answered all your questions. If there's anything else, please let us know. We will be happy to answer any more questions that you ask. Thank you. Thank you again for your interest.

Thank you so much, sir. Ladies and gentlemen, on behalf of Bansalware Industries Limited, that concludes this conference. For any queries, you can connect with AdFactorsIR team. Thank you for joining us, and you may now disconnect your lines.