Sambhv Steel Tubes Limited (SAMBHV) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Sambhav Steel Tubes Limited Q4 FY26 Earnings Conference Call, hosted by Monarch Net Worth Capital 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 this conference, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sahil Sanvi from Monarch Network Capital Limited. Thank you, and over to you, sir.

Thank you, Darwin. Good evening, everyone, and welcome to the Sambhav Steel Tube Limited earnings call to discuss Q4 and full-year FY26 performance. Before we begin, we would like to remind you that today's discussion may include certain forward-looking statements which should be considered in the light of the risks and uncertainties outlined by the company. Joining us on the call today are Mr. Vikas Kumar Goel, Managing Director and CEO, Ms. Anu Garg, Chief Financial Officer, Mr. Vikas Agarwal, Additional Executive Director. I'm Mr. Mayank Agarwal, AVP CEO's Office and Investor Relations. We would like to congratulate the whole, the management, the whole team at Sambow for the very impressive set of numbers. I now invite Mr. Vikas Gowell to take us through the business outlook and key financial highlights following which we'll open the floor for questions. Thank you and over to you Vikasji.

Thank you, Saeed. Good evening, everyone, and thank you for joining the Armin's Call. I hope you had the opportunity to review our financial results and investor presentation filed with stock exchanges. I will take you through the key strategic updates, operational highlights, and financial performance of the company for the year and quarter ended FY26, followed by discussion session. I am pleased to share that FY26 has been a landmark year for the summer. With a growth of total sales volume by 37%, revenue 60%, EBITDA 79%, and PAGE by 147%. Our performance reflects the strength of our integrated business model, discipline, execution capabilities, and the continued focus on operational efficiency and value-added products. Before turning to the financial highlights, let me update you on strategic initiatives and expansion progress. We continue to make steady progress on our capacity expansion plans. As communicated earlier, our greenfield projects at KESDA and KUTRAEL 2 are progressing as scheduled. The first phase of expansion, having 3,600,000 per annum stainless steel capacity, remain on track for commissioning in Q4 financial year 2027. Under our brownfield expansion program, we We are expanding our ERW and tubes. Capacity by 1,500,000 ton per annum through direct forming technology with an estimated capex of 50 crores. Upon completion, our total ERW pipes and tubes capacity will increase to 0.5 million ton per annum. Further, we have successfully completed the public hearing of our proposed 30 megawatt captive power plant at Sarora, which has an estimated capex of 150 crores. This project is expected to make the Torora unit self-sufficient in power requirements and improve overall operating efficiency. Strengthening our stainless steel strategic further, we have signed MOU with the Ministry of Steel under the PLI Scheme 1.2 for stainless steel CR coils for the manufacturing of thinner gauges coils. I will do application. We are also pleased to share that we have executed six additional MUs under the co-branding for stainless steel pipe manufacturing. With this addition, a total of 10 MUs are now live under this initiative. Further discussion with several other partners. Pistol performance. This is a high margin, high value-added offering in line with our long-term strategy vision. Thank you. For donation, the price range of $179.00 to $276.00, with EBITDA margin remain over 11%. Paid more than doubled to $143.00, while Paid margin improved from 3.8% to 6%. Delivered ROCE of 16% despite continuous trapex. Our case conversion cycle Thank you.

We will now begin 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 requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Meeraj from Sameeksha Capital. Please go ahead.

Thanks a lot, and congratulations to the entire team for a wonderful set of results. Sir, I have a question regarding the KPEX plan that we have now. So, on the last call, we had discussed that the KPEX, total KPEX figure was up. Approximately 930 crores, this may say, you have 200 crores already cut the data, and in this quarter, you've announced another 200 crores worth of capex. Now, in the balance sheet, you have 100 crores worth of current investments, and if I just look at the current year's OCF, also you're doing at least 200 crores of OCF. So, if you can just break down, my first part is if you can just break down the current total CAPEX plan and how much of it is already completed and how much of that CAPEX plan will be debt funded and how much will be internal accrual funded. That's my first question.

Thank you, Miraj. In the last quarter, in the last call, we have spent on 200 crores, which is now increased Uh... So further, capex will be done from the debt itself. Additional capex that we have announced this quarter is around 200 crore rupees. Both are more or less de-bottolicking and operational efficiency capex. Power plant will give me power cost saving of around 60 to 60. Thank you. So, with 50 crore of investment in my pipe mill through DFT Road, I will be unlocking a value, operating value of around 40 to 50 crore rupees. So, this 200 crore rupees will give me an operating boost of around 100 to 120 crore rupees. This 200 crore we have planned to do investment through internal actual and certain amount of debt. At maximum, we will be taking 150 crore of debt and balance will be through our internal accruals. So, this is the two capex that we have announced and this is the debt and equity matrix of these two capex currently.

Perfect, understood. So, sir, now we have two different captive power plants. So, after the installation of both of these plants, how much of our power would be captive?

In Saroda plant, with this 30 megawatt power plant, we will be 100% self-sufficient. In Kejda, we are doing 25 megawatt of power plant installation, which will have self-sufficient for phase one of my rolling wheel, phase one of my Kejda unit. We still have to import certain amount of electricity from the grid, but going forward, we have planned for that to integrate with our power plant system.

I understood. Okay, great. And so my last question, so we set up a huge target that in the next four or five years, we want to reach 2 million tons of finished seal capacity. So just wanted to understand your thought process and your internal discussions on how do you plan to maintain certain debt to EBITDA level targets or restrictions or, you know, when would you decide that you might need some further equity fees or anything on the debt prudence, That you guys have thought of.

The main purpose of IPO that we have brought is to

go financial prudent and reduce our debt. So management as a whole are very prudent on raising debt capital or debt growth is where we are very much skeptical about. So going forward, we have certain internal metrics upon which we will be raising debt. Let's say our long-term debt will not be more than 1.5 times of our network. And or my long-term debt should be 1.5 times of my forward EBITDA. So this is the two metrics upon which we are operating. First, secondly, in terms of future growth planning of 2 million ton of finished product, We have a bifurcation of let's say 10 million ton of MS pipe and tubes, sorry, 10 lakh ton of MS pipes and tubes, 3 lakh ton of coated product, and approximately 7 lakh ton of stainless steel coil. So this is the composition of our product mix for 2 million ton of 2030 installed capacity that we plan to achieve.

Understood, sir. Got it. Thanks a lot.

We will have 10 to 12 percent of Market and 10 to 12% of stainless steel flat product or coil market in 2030. So that is what we aspire to achieve.

That's great, sir. Thank you so much for the detailed answer, and we hope to see more detailing on the KPX plans we'll discuss in the coming quarters. Thank you so much, sir.

Thank you, Miraj.

Thank you. Participants, to ask a question, you may press star and 1. My next question is from the line of Vinit Thakur from Plus91 Asset Management Company. Please go ahead.

I said congratulations and great results. So, I would like to know what is the case for next three years as you are reaching for the phase two and phase three as well. Phase one will be complete by FI 27, end of FI 27, and then when you are planning to announce phase two and phase three.

Product line in our product portfolio. So current CapEx figure as a whole is very difficult to code currently because phase two and phase three of Kejda, the product composition is yet to be defined. So in coming quarters, we will be giving you the exact CapEx figure once stage one is operationalized and certain products get announced in near future.

Sir, could you give me the Capex figure for next two years? What would be the console Capex figure for as of two years without the phase 2 and phase 3 expansion? Hello.

So currently we have around 934 phase 1 of Kejda, 200 crore for internal operational efficiency, that is power plant of 30 megawatt and 50,000 ton of DFT line. I can leave me and I'm...

Sir, we saw a, we saw, we've seen a good, we've seen a good EBITDA per tonne this year, especially Q4. Could it be a sustainable EBITDA per tonne going forward and could you explain why the EBITDA per tonne was being this quarter?

This quarter is... H.R. Quail, the prizes. It depends on the ATAR coil prices and the raw metal prices, but we still believe 7500 to 8000 rupees for our Q1.

Sir, could you explain why the EBITDA button was quite high this quarter for us? Like, what was the factor affecting us?

Thank you. Thank you. The price of U4 has been enhanced in December, because the abundance of the production of the Hr coil has been converted to the consumption. There is no extra capacity for the Hr coil in the market. Going forward, I think that the price of the Hr coil will be fine. Thank you. Thank you. Good morning, everyone, and welcome to the

If we apply 27, we can expect EBITDA in the.

Could you give me a make-up of the realizations for each of the perhaps that you have or are we still not calculating it if you do have the numbers?

So, currently, see, our system doesn't allow us to calculate because we are fully integrated in all the departments and all the plants are interlinked. So, currently, the transfer pricing and all is not happening the way it should have been happening. So, the bifurcation in terms of EBITDA per return on the product basis will be difficult. But in terms of realization, I would say for Q4 2026 black MS5, we have achieved around 55 to 60,000, depends on the product and size. GP, we have achieved pricing of around 65 to 75,000, depends on again pricing, product and the size range. SS200 series, we have achieved a pricing of around 120 to 135 per ton, 145 lakh per ton. And for SS300, we have achieved a pricing of around 182, 190 lakhs per ton. So if you see the current quarter price of black pipe is in the range of 57 to 60, GP is around 75 currently hovering around and SS is around 135 and SS200 is 135 and SS300 is around 200 to 110. So that is the current price.

And sir, if you can give me individual production volumes of the product, if it's possible, if not, then also it's possible.

For Q4, so I think you can take a reference from there.

No, I don't know, sir.

And sir, one last question. What would be the peak utilization of MS, SS, GP, and ERWGI pipes? Like, what will be the peak utilization after the demodeling app is gone through and the new capacity comes?

So, in SS segment, we are going to achieve around 60 to 65% of the utilization because we have announced, we are about to receive a consent to operate for our brownfield expansion by this weekend. So that will have, with that capacity expanded, we will have 60. I should utilization for MS pipe and call 65 to 70, MS pipes and tubes. And for GP, we can achieve around 80 to 90 easily. So we are not currently working on GI, we are working on GP pipes and tubes. So that utilization we are expecting around 80 to 90%. For ERW, approximately 70-75% at max. That is the utilization that we can achieve after our DFT comes in line.

Could you, sir, explain the DFT and the AOD process, like, what is the beneficial aspect to it, like, if you could explain, sorry.

DFT is a direct forming technology. A direct income relation has no benefit, but the benefit of the size of you can get a benefit, like, today, if you get an order for a size, then it will be the same as we have the same. Thank you. Thank you. We will convert it to DFT.

Thank you, sir. Thank you so much, sir.

Thank you, Vijay.

Thank you. Ladies and gentlemen, to ask a question, you may press star and one. That is star and one if you wish to ask questions. Our next question is from the line of Mahek Talati from Agility Advisors. Please go ahead.

Hello, sir. Thank you so much. We did not have any inventory gain in this quarter. We mentioned that we are increasing our ERW capacity by going to 1.5 million tons. So, we will be increasing our backward HR point and HR point capacity as well

for this DH.

We are just improving our HR Coil manufacturing facility in-house. Just after that, transfer to asset manufacturing facility to Keza. We can produce 10,000 of HR coil in-house. So we are planning to convert that material to the pipe.

Okay, understood.

And what will peak debt after completing all that?

For the capex that is announced, we are expecting a peak long-term debt of around 800 crore rupees at max. to 300 crore rupees of working capital. So that is what are total debt figures that we are looking at at the peak level for the current capex that we have announced. You are saying whatever the price increase in terms of realisation, whether it has been 100% pardoned to EBITDA level or not, so I think 50 to 60% is actually pardoned to the EBITDA level. One percentage is around 50%.

Okay, so we can expect similar kind of an EBITDA, around 8,000 to 8,500 in Q1.

But we would give you a range of 7,500 to 8,000 currently, but if the work proceeds and if the market anomaly still lies there, we are hoping for the best. But 7,500 to 8,000, looking at current quarter, is quite achievable.

Okay, understood. Okay, thank you.

Thank you. Participants, to ask a question, you may press star and 1. That is star and 1 to ask a question, ladies and gentlemen. Our next question comes from the line of Mehul Panjwani from 40cents. Please go ahead.

Hello, sir. I have a lot of robust numbers. I have a lot of robust numbers. I have a question on slide number 9. In slide number 9, we have presented our existing capacity and the rest is the post-expansion capacity. So, the post-expansion capacity is getting all the products? How do we elaborate on this slide?

Last sentence, you will say that we will meet the last sentence.

Yes, the slide number 9, the post-expansion capacity, I assume that it will be in 2030, right?

Correct, 2030. No, it will be 2030, it will be light radiation.

And the expansion capacity is 20,32,000. What are we producing right now? Only one product, is it?

Currently, we are operating in two segments. That is carbon steel segment and stainless steel segment. In carbon steel segment, we have two products. One is ERW pipes and tubes, and secondly is GP coils and GP pipes. And in stainless steel, we are currently manufacturing a stainless steel coil of 200 and 300 series.

Right. So, now that our capacity is about 58,000 stainless steel, we have also expanded.

Now, as I have told you a little bit earlier, we have undertaken a process of debottled wrecking, which we have expected to be in this week. So, the construction of our plant...

Okay, and this is our first unit, right, for the greenfield expansion, we are creating a valuable asset, right?

Thank you. We are now, we have just completed our downfill expansion to achieve.

Thank you.

Sir, as and when, we will announce our progress, but a broad milestone is that we have shown the 12,000,000 tons in slide number 9, it will be executed in three phases. The first phase, which we have already announced, was 930,000 crores. It will have our 3,000,000 tons of install capacity, stainless steel coil. Similarly, two different phases, phase two and phase three, but product composition is not final.

However, what we have targeted is carbon steel pipes and troughs. We will develop 10,000,000 in the next four years. We will develop our capacity in the next 3,000,000. We will do coated steel in the next 3,000,000. We will do coated steel in the next 7,000,000.

Okay, sir. Now, this is the expansion of the economy. Will our EBITDA per ton improve or sustain it? Because our EBITDA margin has come much better this year. How will it impact EBITDA per ton?

Sir, last year, when we looked at Q2 and Q3, our beta margin was slightly lower level, so this is depending on the raw material price and HR coil prices. HR coil price, HR coil, HR pipe rate decides how many manufacturing companies are today, which convert to the pipes to HR coil. So, HR coil's base is about 45,000. Now, it is about 56,000 rupees per time. So, 20% of the move is also our gain. Of course, raw metal pricing is also bigger. Steel's overall prices are bigger. Thank you very much, everyone, and welcome to the call. Thank you. Thank you. The call is at par. So, it will not go very high, as we call it. So, our data is also a point that we can achieve that. If I talk about next year, we can achieve that in 7000 to 8000.

Okay. And, Sir, are the margins steady? 13% of the average?

Sir, that means you can take 10 to 12. Thank you. If there is no minimum, if there is no minimum, if there is no minimum, and if there is no minimum, we can do it.

Okay. And sir, the revenue that we are doing, is that we have enough market, enough demand to, that we have already captured.

What do we do? So, we have to understand that the steel consumption in each sector is a lot. Now, if you look at the solar sector, we have to do 135 gigawatts, we have to do 500 gigawatts. So, we have to do 4 million tons of steel consumption. We have to do 25 crores square feet, which is a target of 100 crores square feet. Thank you. Good morning, everyone, and welcome to the call. Thank you. Thank you very much. Good morning, everyone, and welcome to the call. Thank you.

Yes, sir. Sorry to interrupt.

We request you to please feature in the question queue if you have any further questions.

Sir, I would like to request a question. Last, sir. What has the impact on our quarterfills and if it doesn't have any questions, what can the impact be?

Sir, we are totally, mostly depending on our in-house power requirement from our captive power plants. Secondly, we have commissioned our LPG, LNG-based... We have received our energy requirement from LPG to LNG in January, 2020, so just before our war, we have successfully commissioned our, we have converted our line from LPG to PNG, and very few people are using PNG. Most of the time, our plants were up and running.

Good morning, everyone. Good morning, everyone, and welcome to the call.

Okay, thank you so much, sir. Thank you very much for your wishlist. Thank you.

Thank you.

Thank you for the opportunity, sir, in relation to the entire team. In slide number 38, I see that the inventory has jumped up significantly to the tune of 40%, although we have increased the number of distributors by 10% and the dealer by, say, around 40%. So in spite of having these increase in dealers and distributors, we see that the inventories are up by 40%. May I know the reason for that, sir?

It is in line with the revenue. If you look at the revenue, it's about 2,400 crores, so 40% revenue increased, and the stock increased. Last year, the two new products, the steel and coated products, just started, so the stock of the government or the finished product or the work-in-progress, Thank you.

Thank you, sir. And again, from slide number 38, I see an investment of 100 crore in the concurrent asset. Can you just close some light on that 100 crore of investment that is there?

How long?

Slide number 38, sir.

So, we have excess funds at the March year end. So, we just have parked the excess 100 crores in the liquid fund, which is highly insignificant risk involved. And since it is invested in mutual funds, so we have shown this in current investments. And that is converted into cash at any time.

It is in non-current investment, if I'm not wrong. Sorry, it's in current investment. The last question, yes, it's current investment. The last question, if I may extract, is that we are completing the entire EPEX-WAS, say, Q4, Q7, right? So what percentage of PA 1.2 will be able to work? That's the extent that we are going to have.

Shashi, sorry to interrupt, but your line is not very clear. Members of the management, I hope you have the question.

Yes, it was clearly audible to us. I repeat the question again.

I repeat the question again.

So, PLI scheme that for the thin-gauge cold-roll coil that we have received, We can evaluate till 2030 or 2031 or so, but it will be capped at around 200 crore rupees or the install capacity tonnage production. So either of them do condition. So let's say 2027 Q4 we will be commissioning. So we will have three to four financial year.

Thank you very much for all the elaborate answer. Congratulations to your entire team and all the best wishes.

Thank you. Participants who wish to ask questions may press star and one. That is a star and one to ask a question. Our next question is from the line of Chandresh Malpani with Niveshaid. Please go ahead.

Thank you so much for the opportunity or congratulations. Good set of numbers. Sir, my first question was that you had a lot of information about the MS side, and why this Epicta button expansion came. Sir, what is the stainless side? Because in one of your answers, you mentioned that the 300 series realization has reached around 2 lakh to 2 lakh 10,000. While in Q4, it was about 1 lakh 80 to 1 lakh 90,000. So, what is the situation there? And in the last quarter, there was an import window. So, what is the update there?

Thank you. Thank you. If we start the case, then we have to sell some stainless steel hr coil, and we have to go to the utensil section, and we have to go to our unfolded sectors, and we have to go to the 400 series. Good morning, everyone, and welcome to the call, everyone, and welcome to the call, everyone, and welcome to the call.

10-20% के आस्परस ही हम 300 सिरीस करेंगे.

Thank you.

Thank you. Good morning, everyone, and welcome to the call. Good morning, everyone, and welcome to the call. Good morning, everyone, and welcome. Good morning, everyone, and welcome to the call.

Okay. Okay, sir. Answer is a TFT, you have announced the IRW site. Basically, when we have the capacity online, how much in-house, coils, pipe aligns, and outside issues are now currently?

Currently, if we have a pipe production of 20,000 per month, we are doing in-house, and 4-5,000 outside HR coils. Thank you. Good morning, everyone, and welcome to the call. We will be able to do this with the call. We don't have turrets available for large sizes or special sizes. Thank you. Thank you.

Okay. Got it, sir. And, sir, last question, sir, working capital cycle, like, we have maintained it very well, and, uh, 16, 17 days, when we maintain it, even when, uh, you know, we have stainless steel, which is a B2B business, so how do you see these days going forward, when, you know, 60 percentage of stainless steel, our business contribution will come from revenue?

Thank you. See, my product mix is 17 to the days we achieved in 2026. With a lot of efforts and improvements in our planning, yes, we are in this range of our expectations. But in 2028, like my stainless steel production will be live in 2028, so in that time, my cycle will be in 25-30 days. This stainless steel advance raw material cycle, and the materials are in the market, Good morning, everyone, and welcome to the call.

And those who are currently, they can get a little variation from 17 to 25, so we can take them from 17 to 25.

Okay. Thank you so much and all the rest. Thank you, Tandesh. Thank you, Tandesh. Tandesh.

Thank you. Participants, to ask a question, you may press star and one. That is star and one to ask a question, ladies and gentlemen. Our next question is from the line of Himanshu Shivare with MB Investment. Please go ahead.

Hi, good evening. My question is, what is the percentage of inventory of raw material that you have that is bought on the old prices as of now?

Thank you. Thank you.

All right, all right.

We don't need stock loss or profit, because we are calculating in the cost basis, because we are calculating in the cost basis, because we are calculating in the cost basis. And iron or coal, which we have received, we are calculating in the cost basis.

So if our finished products are stable, our margins are maintained in the future.

Yes, yes.

Thank you, sir.

Thank you so much.

Thank you very much.

Thank you. Ladies and gentlemen, you are requested to please restrict yourselves to two questions only. If you have any further questions, you may rejoin the queue. To rejoin the queue, you may press star and one, ladies and gentlemen. That is star and one to join the question queue. Our next question is from the line of Randhir Singh with Randhir H.U.F. Please go ahead.

Then, you may proceed, sir. You are audible.

Sir, I made it. Thanks for the opportunity, sir. Sir, I have a question about the

price regarding the price of the price. What is the price of the price?

Sir, the price of the price is expected. Thank you. We will be announcing that and there, sir. Before that, announcement, doing announcement will not be prudent, sir.

The production, sir, how do you expect the equipment to start again?

It depends on the approval from the government authority, sir. Once we will have all the approvals in place for start the construction work, then we will be announcing the exact timeline for the production line, sir.

Sir, this will be a margin for you, sir?

P.L.I. scheme design हुआ है, सर, revenue का कुछ percentage incentive के ता है, तो अगर एक situation ऐसा रहा कि pricing और हो सकता है, तो जो P.L.I. scheme है हमारे लिए एक safety net के तरफ काम करेगा, सर, बट हाँ, P.L.I. के साथ अगर same price point और same cost structure में हम काम करेंगा, तो margin का improvement P.L.I. scheme के साथ होगा, सर. In the rest of the industry, the rest of the players are achieving, let's say, mobile electronics or high-value-added products, the rest of the manufacturers are showing a higher margin because of the PLI, we will also be having that benefit.

I have missed the opening remarks, and the participants have missed it, so I would like to go. This question is actually repetitive. The green field extension, Q4, FI27, is expected to be a timeline, or is there a delay?

Sajpur, now there is no delay expected. Now the timeline is intact, with God's grace, which we will be achieving by Q4 2027.

Thanks, thanks, thanks.

Thank you. Participants, you may press star and 1 to ask a question. That's star and 1 to ask a question, ladies and gentlemen. Our next question is from the line of Avnish Kumar from Ritu Finn. Please go ahead. Good evening, sir.

First of all, congratulations on a brilliant set of numbers. Sambhav has delivered exactly as per lines. Very good numbers, sir. Extremely proud to be a shareholder of Sambhav's team. Sir, my questions were like, what kind of product lines are we planning to add in upcoming two, three years? Second, Do we also have plans to add some value-added materials like color-coated sheets, the roofing sheets I'm talking about? And third, sir, what is the difference between RSS coil and general stainless SS coil?

First is, what are the three or two? So, one philosophy is clear that my current integrated set-up or my current skillset is in and around a little bit of a capex and the skill set of the project we launch. So, whatever product will be supplementary and complementary to my existing integrated set-up. So, there is no specific to be quoted as on that in this call itself. Secondly, the stainless steel that you are saying, Thank you. What is the difference between stainless steel and its chemical composition and physical properties? If I match the BIA standard and the Indian standard, both are the same.

No, sir, I'm talking about the size mix.

Currently, sir, we reach the narrow width of the rolling wheel and the cold rolling wheel Thank you. Thank you.

Okay, and sir, just one query. What is the aspiration that we have in terms of revenue and net profit margin in coming five years? Because sir, your product mix is different. I can't compare you with APL Apollo because you have stainless steel also. I can't compare you with industrial steel because you have MS also. So what kind of revenues and net profit margin we are looking at in the next five years? What is the aspiration?

Sir, our three product lines are currently, we have guidance that we have 10 lakh tons of carbon steel pipes and tubes, 3 lakh tons of install capacity of hotel products and 7 lakh tons of stainless steel capacity. So if we talk about 20-30, then around 60% of my capacity utilization will remain. And I won't say revenue profile-wise, but if I look at my EBITDA level, The kind of product mix that we have announced. Margin-wise, percentage-wise, our business usually a median margin of 12%, plus-minus-2% in the worst scenario and best scenario operates. So, this is our 12 plus-minus-2% margin profile.

So, sir, what do you think about 10% net profit margin in bear case scenario?

Sir, bear case scenario, net profit margin is bad that we are talking about. So, if we look at our margin profile, 5% plus minus 1% of our operating value is bad.

Thank you so much, sir, for the clarity, and all the best for your plan, sir.

Thank you, Arvani.

Thank you. Thank you. Participants may press star and one to ask a question. That is star and one to join the queue. Our next question is from the line of Romil Savalia from Shameen LLP. Please go ahead.

Yeah, hello, sir. Thank you for the opportunity to ask a question.

Sir, a question on a capital allocation side.

So, sir, the PM of Capital The current participant seems to have dropped from the queue. We will proceed to the next question, which is from the line of Mehul Panjwani from 40 Cent. Please go ahead.

Sir, thank you so much for the follow-up. Sir, I had a question about our expansion announced. So, which is the most important and significant expansion of 1.2 MMPPA, Greenfield Expansion, and Capital Power Plants, Stainless Steel Bottle Necking, and ERW Expansion, DFT Roots. So, which is the most significant part of our guidelines?

Thank you very much, Mr. Significent, we have a capex, and we are seriously taking a risk and mitigating capex and timeline, according to the management of every day. We are working on that line. But in terms of, if we see that in the volume term and in the monetary term, present to the history of our company, if we look at the case of the plant, which is 1.2 million ton finished product capacity, there is also a challenge, an opportunity, and we are executing this very seriously. Good morning, everyone, and welcome to the call.

Right. And sir, what time lines are the expansion?

Page 1, which we announced 3,60,000 stainless steel call, by queue for FY2027, we will be able to commission that, which is the benefit of FY2028, capacity utilization.

Okay, first phase. And sir, second phase?

Sir, second phase or third phase ka once my utilization of Of phase 1, if I look at it, and my capex, it will be a flavor. Then, phase 2 and phase 2 are mixed, and we will announce the timeline, sir.

Sir, now, our volume growth is 67 percent. So, we will be almost doubling our capacity? Yes, sir. Okay, and we will see the results in the first quarter of FY28.

So, FY28, it will not be linear, because if there is a new plant in the capacity ramp-off, it will take time. So, if we say that the capacity utilization of phase 1 of Kezra unit, we will be achieving the peak at Q3, Q4. So, Q1, 28, we will not see it yet, but So, if I have an average out, then my capacity utilization will be around not more than 40%.

Thank you so much, and all the best.

Thank you. Ladies and gentlemen, you are requested to please restrict yourselves to two questions only. You may rejoin the queue if you have any further questions. You may press star and one to join the question queue. That is star and one. Our next question is from the line of Isha from VT Capital. Please go ahead.

Good evening, sir. I had one question regarding how are we seeing quarter one? Is it like in tandem with quarter four, given the prices have remained strong and the demand is quite strong? Obviously, in Q2, we would be seeing a slowdown due to monsoon. But are we really expecting that great monsoon this time, which we saw last year?

So, if I go to the public report and the

public publications, then this is below normal month. In the circle itself, people are talking about, but last year was phenomenally a bad year in terms of monsoon, because it was a prolonged monsoon, let's say 4 to 5 months. The monsoon was decided in November and December. So, if there is a L-Leno effect and a below normal monsoon, But we believe that... For us, as a steel industry, there is a bit of demand. If the monsoon is normal, the demand will be the same as the cyclic, Q2 and Q3.

And so, what EBITDA for China are we expecting in Q1? Is it in line with what we saw in Q24? Or is there any difference that we can see because of the pricing scenario change?

So, we would like to give you a guidance of 7,500 to 8,000 rupees per ton for Q1 FY27.

Okay. And, sir, this 1,60,000 capacity for ERW that we have announced, when do we expect this to come online?

By Q4, F by 27, ma'am.

Okay, it will start. And what would be the utilization in 28? Would it be, like, greater than 60-70%?

It will be around that range only that you have quoted, ma'am.

Okay, okay. That's it from myself. Thank you. Thank you.

Thank you. Participants, you may press star and one to ask a question. That is star and one to ask a question. Our next question is from the line of Vinit Thakur from Plus91 Asset Management Company. Please go ahead.

Hi, sir. Thank you for the opportunity again. Sir, I just want to know the SS value chain that we have currently. How does it work? Because I was trying to figure out we have around 58,000 tons of capacity, which is going to 116 as of this weekend. But we have done, we have said a 169,000 tons of sales in SS. How is it working, sir? It's possible in that. I'm just trying to understand.

Thank you. Last year's stainless steel production. Now, in 2021, it's around 5,500 to 6,000. Depending on the thickness of the material, we produce more.

Sir, assuming that the saleable product is CR-coils, the saleable product is always CR-coils, not HR-coils. We can switch either or whenever we want.

Existing facilities are CR-coils.

Okay, sir, which includes lab as well, 1,69,000, sir, working from the project, how does it happen? And how does it translate? If you can give me the understanding of it.

As well, let's say, 169 May. And then we convert it into. All three, then we reach a production quantity of around 1,59,000. But again, the sellable out of these three is only CR coil. And hence, the sale quantity is only, you may say, 49,000 tons. Because the slabs and the HR coil got captively consumed, right? Correct. the production number and the sales number. Because at two levels, we are captively consuming everything and not selling in the market.

Correct. So sir, HR to CR ka ratio or conversion ratio?

HR to CR ka? HR to CR ka conversion ratio, I think, around 98% recovery hoti hai, so 2% would This could be a rolling loss you can say.

Sir, sir, when we talk about MS, we also talk about sponge wiring that only slabs, HR and CR are counted in intermediate.

No, in the SS value chain, slabs and HR are counted in intermediate because we have a three-step process. We have actually the liquid metal of stainless converted into slabs, so this is the first step. Then slabs get converted into HR coil, this is the second process, and the third is where we do the cold rolling of HR coil. It's a three-step process.

And, sir, MS-KRB same thing, right?

So MS-KRB same thing, right? Before the melting, we also manufacture sponge iron.

Correct, sir.

So, one step, we add a carbon steel, and in case of coated steel, there is an additional process, where we do cold rolling. So HR, first we do the cold rolling, and then cold rolling, we do the galvanizing of that CR coil, and that galvanized coil is converted into pipes.

So sir, correct me if I am wrong, so what we are producing CR-Coil, we do convert directly into pipes also, which we call it CR-FH-Pipe. So, 40-45% would be going to galvanized, right?

No, not 40-45, I mean, 90-95%.

90-99% will go to galvanized, and then what's our job? You'll be like, I'm CRFS, CRFS, and I'll think, yeah. Okay, sir. Thank you so much.

Thank you. Ladies and gentlemen, we will take that as our last question for today. I would now like to hand the conference over to the management for closing comments.

Thank you very much.

Thank you. On behalf of Monarch Net Worth Capital Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.