Gravita India Limited (GRAVITA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Gravita India Limited Q1 F527 Earnings Conference Call hosted by Anti-Stock Broking 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 after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star, then zero on your touchstone phone. I now hand the conference over to Mr. Manish Mahavar from Antic Stock Broking. Thank you, and over to you, sir.

Thank you. Warm welcome to all the participants on the 1Q FI27 earnings call of Gravita India. Today, we have with us leadership team represented by Mr. Yogesh Malhotra, full-time director and CEO. Mr. Sunil Kansal, full-time director and CFO, Mr. Naveen Sharma, ex-P director, non-board member, and Mr. Anand Jand, investor relations on the call. Without any delay, I would like to hand over the call to Mr. Marotra for opening mark, post which we will open the floor for Q&A. Thank you. Over to you, Yogi G. Thank you, Mr. Manish.

Good afternoon, everyone, and welcome to our Q1 FY27 earnings call. Thank you for joining us today. I hope you've had the opportunity to review our financial results and investor presentation which have been uploaded to the stock exchanges. During today's call, I will take you through the key business developments, strategic initiatives, operational highlights, and financial performance for the quarter. Following my remarks, we will be happy to take your questions. Building on the momentum of the previous year, Even as geopolitical uncertainties persisted globally, during Q1 FY27, our strategic capacity additions, richer value-added product mix, and consistent operational execution translated into another quarter of robust financial performance, with 4% growth in volumes, 42% in revenue, 29% in EBITDA, and 14% in FAT on a year-on-year basis. This performance underscores the resilience of our diversified recycling platform and our disciplined approach to execution. As we navigate an evolving global environment, we remain committed to operational excellence, portfolio diversification, prudent capital allocation, and sustainable growth, enabling us to capitalize on the expanding circular economy opportunity while delivering long-term value to our stakeholders. Before discussing our financial performance in detail, let me first walk you through the key strategic developments during the quarter that continue to strengthen our growth trajectory. A significant global milestone with the London Metal Exchange brand listing for lead metal produced at our division, at our lead division at Mundra, Gujarat, under the brand name Gravita M. This recognition places Gravita among a select group of Indian secondary lead recyclers whose products are approved by the LME. The accreditation is one of the most stringent global quality benchmarks for lead metal and reinforces our commitment to world-class manufacturing standards, product consistency, and operational excellence. Thank you. To continue to strengthen our manufacturing footprint in line with our long-term growth roadmap, our total installed capacity now stands at 4.97 lakh metric ton per annum, and we firmly remain on track to achieve our target for scaling this to over 8 lakh metric ton per annum by FY29. A key milestone during the quarter was the successful expansion of our Fagi Jaipur-led specialty. Where we commissioned an additional 40,500 metric tons per annum of lead recycling capacity, taking the plant's total capacity to 75,819 metric tons per annum. This expansion was completed with an investment of approximately Rs 30 crores, entirely funded through internal accruals, reflecting our disciplined capital allocation approach. The strategic consolidation is expected to strengthen operational effectiveness, improve cost efficiency and enable better utilization of the group's resources. Diversification into copper continues to progress well. Following the acquisition of Rastri Metal Industries Limited, the integration process is advancing as planned, with operational synergies gradually being realized across pre-government manufacturing logistics. We have a steady progress on the development of our 29,400 metric ton per annum copper recycling facility at Gujarat, which is being set up with an estimated investment of approximately Rs. 160 crores. The project remains on track for commissioning within the next 12 months, as previously guided. The project will continue to be funded through internal accruals and will further strengthen our backward integration, expand our value-added product portfolio. and support long-term profitable growth. The company has earmarked the total capex of Rs. 1680 crores through FY29, with Rs. 850 crores allocated towards strengthening the existing businesses, while the balance will support entry into new recycling verticals, including lithium-ion batteries, copper and steel. Ikra upgraded gravitas long-term graduate rating from AA- to AA. This upgrade reflects the company's consistently improving financial profile, prudent capital allocation, robust cash flow generation, and disciplined balance sheet management. Financial performance. Revenue for Q1FI27 stood at Rs. 1475 crore, registering a year-on-year growth of 42%, driven by higher capacity utilization across key segments and continued operational efficiencies. Value rate products accounted for 63% of consolidated revenue during the quarter. Adjusted EBITDA for Q1FI27 stood at Rs. 145 crore, up 29% year-on-year. with EBITDA margins remaining healthy at over 9.80%. Consolidated PAT came in at Rs. 106.39 crores reflecting a year-on-year growth of 14%, while PAT margins remain over 7.21%. During Q1 FY27, with total volumes increasing 4% year-on-year to 55,455 metric tonne per annum. The copper segment operated at 50% capacity utilization during Q1 FY27, contributing Rs. 376 crores in revenue. As the subsidiary continues to ramp up capacity utilization, the segment is expected to progressively scale its operations and make a meaningful contribution to Gravitel's top line. In Q1 FY27, EBITDA per tonne for the lead, aluminum, plastic, and copper segments stood at Rs. 24,181, Rs. 25,175, Rs. 10,197, and Rs. 55,151, respectively, supported by better realization and improved operational efficiency. In our long-term growth outlook and our ability to deliver on Vision 2030, with a strong pipeline of capacity expansions, continued business diversification, and an increasing share of value-added products, and unwavering focus on operational excellence and capital discipline, we are well positioned to achieve our strategic objective and create sustainable long-term value while capitalizing on the growing global circular economy opportunity. That's all from my end. I would now request to open the floor for questions and answers. Thank you. And over to you, Mr. Moderator.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask questions 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 requested to use handsets while asking questions. Ladies and gentlemen.

We will wait for a moment while the question queue assembles. To ask questions, please press star and 1.

The first question is from Sumangal Nivesha from Kotak Securities. Please go ahead.

Yeah, good afternoon, sir. Thank you for the chance. Sir, my first question is on the volumes. So I think this is one of the first quarter where we've seen a year-on-year decline in light volume. So if you could explain what is the reason and... How are we planning to recover the lost opportunity and some guidance for FY27 and FY28 in terms of lead volumes? And secondly, on the copper division, what is our expectation in terms of ramp up and margins? Are these levels of margin sustainable? And if you could just update on our capex and expansion plans with respect to copper.

Um, so, um, there was a... 15-20% of our imports come from the Gulf Territory, and even the imports that come from other territories, part of it comes through. May be some impact of this. This is an opportunity because there is a scrap shortage in India, and because of this, there is a demand supply... We are using this opportunity to increase our profit margins. So, although there may be some impact in terms of top-line growth, but we are expecting similar kind of bottom-line or EBITDA margins in the next quarters also, as far as lead is concerned. But the overall growth would probably come, revenue growth would come from the addition of copper. So, you can expect the long-term growth to be in line with the FY 2030 vision plan that we've already mentioned many times.

Sir, I just wanted to know your volume guidance for FY27 across the divisions, and what sort of EBITDA per ton can we expect in copper as volumes ramp up?

Sir, it's extremely difficult to talk about on a division-wise. There is some disruption which is still not back to normal. So you may see some volume. We will expect. The capacity expansion is already in place. The only thing is that this supply chain disruption, as soon as we can recover from this, we would be able to grow. And what we are doing is to... Also, because...

Got it. Just one last question. If Consul, sir, is there on the call, if we can get net debt and working capital as on OneQ?

Net debt is close to 150 crores at this moment, and working capital cycle is also close to, again, 95 days. and the working capital cycle is also increased for copper. And still we have significant inventory under transit also. So this is also the reason where the working capital is slightly higher at this moment.

Got it. Thank you so much and all the best, sir.

Thank you. Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. Should you have follow-up questions, we request you to rejoin the queue. We take the next question from Amit Dixit from Goldman Sachs. Please go ahead.

Yeah, hi. Good afternoon, everyone, and thanks for the opportunity. A couple of questions from my side. The first one is again on copper division, while you mentioned in your prepared remarks that the capacity utilization is 50%. Now, when are we going to ramp it up to 100%? And currently, if you look at the margins, I mean, I'm talking about EBITDA margins here. It's like 5.2% in this quarter, while the company delivered 8% in last year. So how do we bridge this gap? And thirdly, on corporate itself, how differently we are sourcing corporate scrap in terms of our selling strategy to make sure that we get the optimal utilization of this particular asset? So that was the first question.

First of all, in terms of using more capacity, increasing the capacity utilization, we are working on certain bottlenecks in the manufacturing stream itself, which will probably be up and running by the end of this financial year. So it will take at least this financial year. So there will be some ramping up that will take up by making a better product mix. We have already set up some plant and machinery, which is required to de-bottleneck the whole operations. As far as the overall EBITDA margins are concerned, it would, as I mentioned, it would remain in the same vicinity of around 55,000 rupees per tonne. There would be some slight increase. Last year, if you look at the total... Good morning, everyone. This will slowly increase, and then... 65,000 to 70,000. And to add into this, the percentage for... This time, the average LME of copper is around $30,500. Hence, the percentage terms, it would be diluted. But however, you should look upon us on EBITDA per ton.

Got it, sir. Again, a follow-up from here, you know, you mentioned about putting in some equipment. So, will our turnkey division be involved in that or will it be external procurement?

No, most likely it would be external procurement only at the moment.

Okay. The second question is on aluminum inclusion on MCXR. Any progress over there? I am talking about AOC-12 alloy.

ADC-12 alloy. This is still pending at the MCX level because that is their internal decisions at MCX, which commodities they want to add because all other formalities are done. So it lies with them only as of now. It is not possible to comment on this. But still we are following with them, and had one of the meetings last month, and they One of the agenda item, because this will also give them good...

Got it, sir. Thank you so much and all the best.

Thank you. The next question is from Vikas Singh from ICICI Securities. Please go ahead.

Good afternoon, sir, and thank you for the opportunity. So, I just wanted to understand that these lead aluminum plastic everywhere, our EBITDA pattern was pretty high. So, what was the advantage or the INR component in that, and what should we take as a steady-state EBITDA pattern for this division, X of the external batteries?

So, in plastic, I think our EBITDA pattern was around 10 rupees, and the...

No, sir. So my second question pertains to our commentary that we would be shifting to the new sources in terms of So just wanted to understand, since we are setting up an entirely new supply line, would that mean that for an initial few months or year, we would have a higher cost for establishing this line, including the logistic sector, and how should it impact our margin for the near-term perspective?

What we do best, and that is having our own procurement network, and that is why we are expanding into the developed economies, because most of the proper scrap comes from... Something that we've been doing in other verticals of aluminium, lead, and plastic. That we are setting up in the US, we are just setting up our own yard procurement network. So it will, in fact, reduce the...

And this should also allow you to improve the sourcing for lead as well, or lead would continue with the current channels?

And that is why we are setting up our own procurement network in developed nations also.

And sir, just one clarification if I may squeeze one more question. In terms of lithium-ion, are we looking for the entire value chain or only till the black mass? Because up till black mass there would not be much of the value addition or the profitability.

So, so, so, so, I want to, I want to, The goal is very clear that we do not want to get into a normal Manila product, as we call it. So we want to go into value-added products, and we are currently doing R&D to set up our own processing unit for black mass. The quantity of black mass is also less. So I think by the time the black mass availability improves in India, we would have already set up our refining unit for lithium. So we would be extracting all the valuable material from lithium car batteries in future.

Thank you. Before we take the next question, a reminder to participants to please limit your questions to two per participant. The next question is from Dheeraj Ram from 361 Capital. Please go ahead.

Hi, thank you for taking up the question. Can you let me know what is the capacity utilization of this new Gujarat facility that has come up and what is the one for the Fagi facility of total of 1.3 lakh ton during the quarter?

Last quarter, it was only around 45% for lead in Jaipur where we expanded the capacity, but overall capacity utilization is close to 52% for the entire group for the Q1 with the expanded capacity at Jaipur and Mudra.

Got it. And how much do we expect this new capacity as an overall of Fadi and Gujarat to run it in FI 27?

On a sustainable basis, generally it's around 70%, but it all depends on the scrap availability. As I mentioned that because of this Middle East war, the supply chain was disrupted. So we could not get enough scrap in the last quarter. As it improves, we will reach around 70% levels.

Okay, fine. And on scrap yards, in past three quarters of your presentation, at least you have increased the scrap yards from 33 to 39+. So are these scrap yards more linked towards lead or is it some other metal?

So mostly all metals, but most of these scrap yards were in developing nations. So copper was not part of it. There was only a small part of copper that used to come from these scrap yards. So that is why now we are going to set up our own yards in developmentations also from where most of the copper scrap comes. Those yards will also include lead and other products, other aluminum and plastic products also.

Last question is, however we have increased scrapyards, still we have seen challenges in sourcing. However, that is due to logistic disruption. But is there any workaround for this?

Yeah, there is a huge logistic disruption. I mean, the entire gulf from where we used to get around 15 to 20% of our total... I'll pretend that.

Your LME, the ingot that got listed on LME, is it because there is some pushback from customers or you see any demand slowdown so that you got an ingot listed on LME?

Developing new OEMs, clearly, if you have a...

The next question is from Sagar Shah from Spark PWM. Please go ahead.

Yeah, thank you for the opportunity, first of all, and now I have a few questions for the management. My first question was, we, in the month of February, actually, we expanded our lead capacity by 80,300 tons. So, in Mundra, Gujarat. So, I wanted to, first of all, get the number and what is the utilization of that new capacity? Was it utilized in Q1 or due to these political disruptions, we weren't able to utilize this incremental capacity? That is my first question.

Around 50%, including the capacity expansion which happened in February. As Yogesh mentioned that there was some disruption because of availability of scrap, because of this supply chain disruptions. So the capacity utilization was lower than expected. So we hope that things will improve and we are finding other sources also for scrap sourcing, including sourcing from India, sourcing from other countries. So that will hopefully in coming quarters it will improve.

So, if you talk about the overall capacity utilization, you may say that we've not been able to utilize the additional capacity, but generally it's not a linear system. So, there were times when we had scrap, and during those times we utilized the additional capacity to some extent. You can say that we've not been able to utilize the new capacities.

Incrementally, basically, you are referring to. Okay, fine. So, sir, I understand you are not giving any guidance. So, now my second question is related to our inventory, actually, and that is related to your overall margins also. First of all, I wanted to understand what is the inventory as on 30th June 2026? And related to that only, that you highlighted in the previous concourse that you will be replacing the pyrolysis oil with the furnace oil to enhance margins, especially in Mundra. So have we started that actually by utilizing the rubber capacity in Eastern Europe?

I think there is some confusion, in the sense that we are already using pyrolysis oil at our mudra capacity, and the East European plant is not... We are fast-tracking over at... In, in, in the, um, So, what we have done is that whatever capacities for the, sorry, the plant and machinery was here once forever, now we are fast-tracking copper expansion in that area, because we see it as a... In a commodity like copper, it's not a substantial amount, so we are now, what we are doing is, we are fast-tracking our copper expansion.

Then why it hasn't actually incrementally affected our margins on the positive side, sir, if we are using powerlessness oil, then?

We are not using pyrolysis oil in our Mundra facility.

Inventory as on 30th June 2026.

We have 2,040 crores, which is almost similar at market.

Thank you. Thank you so much.

Thank you. Next question is from Bharat Shah from BPS Capital Ideas. Please go ahead.

Yeah. Hi, Yogesh. Namaskar. The first and foremost, There have been some challenges, internal and external, that we've been facing for the last three to four quarters. Earlier, we had an unfortunate delay in ramping up our internal capacity, and that kind of affected our volumes. Clearly, the situation in the Gulf is affecting in many major ways. In last quarter, as you mentioned, it will continue in the current quarter. While we are attempting to mitigate that by improving profitability, At what state do you think all of these issues will be behind and will be back to the kind of growth rate that we aspire to, that we look forward to, and that we have more than delivered in the past? At what state do you think all of these issues can be kind of taken in the stride and we move ahead with the kind of numbers and the performance that we've been talking about?

Yes, sir, I get your point. But if you, I mean, so that is part of the reason why we were insisting, I mean, why we were thinking about diversification into different commodities, because we understand that something can go wrong in one of those commodities, which will impact the overall profitability and revenue growth. And that is why we've gone into copper and are continuously trying to go into and setting up different verticals. So even in this quarter, although the last years have dipped, but if you look at the overall revenue numbers, they have grown by around more than 40%. So there would always be external, you know, circumstances which will impact one of these commodities. And that is why we are continuously looking into and To see how we can manage those volatilities because of this external environment. Part of it, as I mentioned, that we have diversified into copper. The other thing that we are doing is focusing on profitability. So even though the revenue from lead or the volumes from lead have come down, we have tried to compensate it by getting better margins because of this shortage in... Now, is to. We are not having the complete kitty. Because U.S. is very expensive, so setting up our own yards when we had majority of material requirement of lead was not viable. But now with copper in place and going forward other commodities also in place, we would be able to set up these yards in U.S. which will create more... Availability of more scrap material for us. So we are continuously trying to find out solutions as we find these disruptions coming out of, you know, global problems. And if you look at the... Last five years.

Surely, Yogiji noted, I think diversification into alternate materials is a very wise one that we have done, and we have also taken other mitigating steps like alternate yards and alternate sourcings, but do you believe that In current times, when wars are a never-ending kind of affair, you never know how long these conflicts in the Gulf will go on. Therefore, assuming that we do not know anything about when it will stop or if at all it will stop, by current year end, you think we would have sorted out most of the alternate raw material supply sources?

Yes, sir. Yes, sir. So we are setting up, as we speak, we are setting up our own yard operations in the U.S. and we are very sure that by the end of this year we will have set up our own procurement network in the developed nations. So which will more than take care of this gulf disruptions if it keeps on continuing. But we are very confident that, because some of the material has started coming in from those geographies also, although it's still a little costlier because of this increase in logistic cost, but we are very confident of coming back to normal and, in fact, increasing the overall procurement by the year-end.

Okay, but just one last thing. On the copper, if I had understood earlier, we were looking at a profit of about 65 per kg. So, while 55 is much higher than our competition, but I still thought it was, we were aiming at about 65 a kg, and this I am mistaken about it.

Yes, so initially we mentioned that it will slowly go up from around 55 to around 70 to 75, but that will take around 2 to 3 years. By the end of this year, we believe that it will go up to around 60. So what we are doing is we are increasing our capacity utilization currently and trying to de-water leg the whole operation so that we improve some profitability from that. And then, of course, there is some, you know, optimization in terms of procurement also that will happen. And then eventually when we set up our own, you know, Backward integration. When we integrated the current operations with the Gravita operations, then we will take some more benefit out of that and the overall profitability in that case would be around 70 to 75 rupees. Sorry, 75,000 rupees per term.

Okay. Thank you.

It will happen in stages, sir. It will happen in stages, sir.

Thank you. And all the best, Yogesh.

Thank you, sir. Thank you very much.

Thank you. The next question is from Kush Nahar from Electrum PMS. Please go ahead.

Yeah. Hi, sir. Thank you for the opportunity. So, a couple of questions. So, first on the copper business, since we are doing some de-bottlenecking and we'll slowly ramp up, what would be an approach utilization exit rate that we can see in Q4FI 27, which will then normalize and become the new normal for 28? And, uh, similarly, uh, considering the ROC, ROE, the ROC levels of the company in general has been around, uh, 20%. So after the addition of copper, do we see, uh, the company level ROCs to go towards that or it will be a bit, uh, dilutive in nature.

So, see, the current utilization is around 50% in copper. By the end of this year, we are expecting it to go up to around 60% plus. By just the bottlenecking and trying to change the product mix, it will go up to around 60%. That is the first part. And this 20% ROC is including the copper business right now. Future, there would be some improvement in the EBITDA numbers of copper, and slowly we believe that in the next three years, we would come back to around 25% plus CAGR, because the copper business would also start giving us around 25% ROC.

So as of now, it is lower than 20, right?

Yeah. It's 20. It's 20 currently. So it will improve from here.

Okay.

You know, there are various reasons why this is less than 20, around 20 in this quarter, and part of it is that we have not been able to utilize our own capacities in lead, aluminum, and, sorry, lead, basically. So that has also contributed to a little lower ROC. When the capacities in lead would also start, I mean, when we start utilizing lead capacities also, then there will be slight improvement overall in the total combined ROC, and then we can expect some improvement in the copper business also going forward.

So, we have recently done this equation where we have already paid some premium for acquiring this company. And that was the plan only that we will map up this equation and get the better ROC.

Yeah. And so, secondly... Yeah. So, secondly, what would be the operational income, which is reported in the other income that we normally disclose?

So, operational income is, the total other income, which is reflected in, is 47 crores, which is reported, out of that, 35 crores is operational and 13 crores is...

And lastly, if you could mention, what will be your domestic sourcing percentage in Q1 for our India plants?

So, domestic is almost 35%.

Good night, sir. Thank you.

The next question is from Direndra Kumar Patro from SPARC PMS. Please go ahead.

Hi, sir. My question is regarding the call of another income. Of the 47 crore, he said 35 crore is operational income and 13 is unoperational. So how sustainable is this 47 crores or 35 crores of operational income going ahead in the future quarter?

This operational income is part of the overall operational... What we gain on one end is an operational gain. We look on the hedging part where it shows in other expenses. When we gain on the hedging part and lose on the operational part, it's seen as operational income. So whenever this operational income is lower, the income from the business would be higher.

The additional income is zero or no. So this is the effect of 40 pages, right? Thank you very much.

Participants, please stay connected. Yes, sir. Participants, thank you for patiently holding your lines. Over to you, sir.

I think we can have a next question, please.

Sure. The next question is from Netra Deshpande, from Mireya Asset Shere Khan. Please go ahead.

Yeah, thank you for the opportunity, and thank you for this. Just my first question is pertaining with the 45,000 of additional capacity of lead that was about to get to commission in Q1, FY27, and it will remain for the pending for some government commission. So with the installations, I've already completed as you said in the last call. So what would be the incremental value contribution which is expected out of this? And what's the status about this aggregation capacity? Hello, I'm all even.

But 14,000, I think you can expect a 70% utilization at an optimal level, which will contribute to around 50 crores additional.

Am I audible? Yeah. So, okay. Yeah. So, it was not audible. There is some disturbance which is coming, I guess.

Yeah, yeah, it is. This is around 50 crore rupees per month.

Okay, and over what ramp-up period it would be?

The production capacity is ramped up, but there is some logistic disruption. The scrap is not available right now? The moment the scrap is normalized, we will start ramping up the operations immediately.

My second question is about the roadmap for the timeline, as you have already said, about the copper margin targeted 25% of ROLC as the RML segment margin, which is approximately, I mean, currently, which is trading around 4, more than 4.2%. So any other, is the product mix and the structural issue with the copper alloy business, and what would be the guidance for this capacity for the overall product mix, if you can spell it, about the scale issue and all? What are the rule back and the timeline for this increasing, increasing the total margin?

Some noise. Can you please repeat the question once more?

Yes. Yeah, sure. Sir, there is a roadmap and a timeline which I am asking for the copper margins as the group company which is targeted 25% plus ROIC about this RMIL segment margin which is currently going around 4.2%. So, what would be the mix and what would be the scale issue for the, just getting the structural issue with this copper alloy business, and what are the guidance for the capacity for this major copper business?

Yeah, so in the copper business, on a sustainable basis, this is the margin that is going to remain. It will slowly go up and reach around 25%.

And what would be the capacity like 31,000 metric tons that was expected? So, what would be the further forward guidance for the copper segment specialty team? Because aluminium...

In the next three years, for copper, we would...

Thank you. The next question is from Pratham Kankariya from Quantum Asset Management. Please go ahead.

Yeah, so just one thing on this copper alloy pricing. So, you know, it differs from the pure copper. So, how should we assess the realization in the business means? And also, how do you hedge with this exposure to the underlying copper prices?

So, hedging mechanism is very similar to what we do in lead. We have generally...

Sorry to interrupt, but, sir, your line is not clear. Participants, please stay connected while we try to reconnect the management. Parashimin, thank you for patiently holding a line. We have the line for the management reconnected. Over to you, sir.

Yeah. So can you come up with a question again, please?

Oh, yeah. Am I already?

Yeah, you audible.

Yeah, yeah. Just wanted to understand this, you know, on the alloy one, so like since copper is more than 50-30% is value added, so how do you hedge this exposure to the pure copper prices? You mentioned that you have some contracts on monthly and fortnightly, so if you can just explain that, how you are mismatching this exposure.

Hello.

I'm sorry, Mr. Kankaria, the management line has dropped. Please stay connected. I'll just reconnect them. We have the management reconnected. Over to you, sir.

Yeah, so what was the question again, please?

Okay, so just wanted to understand since copper alloy is more value added and it has more alloy composition and what we trade on, what we hedging basically is the pure copper. So how are we trying to mitigate this? How are we trying to hedge? I just want to understand this perspective.

So when we make alloy, I mean, it is made out of copper and other elements. So, like zinc, nickel, etc. So, we buy all these three separately and put them together. So, whatever we buy, we hedge that same metal. So, if we are buying copper, we hedge copper. If we are buying other metals, we hedge the other metals also proportionately. So, for example, when we make brass, we use 70% copper and 30% zinc. So, we hedge based on the metal input.

Yeah, we hope that the question is answered.

Yeah, so just a second, so our VAP contribution has increased from 45 to 60, so what is the reason? Is it solely the copper division which has led to this increase?

Yeah, so copper, because copper is 100% valued content. Where we improve this evaluated content, but other than that also, because we are more focused on, and the volumes were lower, so we focused on selling more evaluated products for other segments also, like lead also. So, because of that, and without copper also, the value of the content we used to be 40-42% is increased to 50% in this quarter. So, with the focus on bottom line and... Better relation on the valued product, we focus selling more on valued content, other than copper. So, other than copper is also increased, and copper also was 100% valued. So, that is the reason it is showing as 63% valued content.

Okay, sure. Thanks.

Thank you very much. We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments.

Thank you, everyone, for participating in this call. We trust that we have addressed all your queries during this session. However, if there is anything remaining questions, please feel free to reach out to our Investor Relations team. Once again, we extend our gratitude to all participants for joining us today. Thank you, and have a great day.

Thank you very much. On behalf of Antique Stock Broking, that concludes the conference.

Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.