Bansal Wire Industries (NSE:BANSALWIRE) Q1 2027 Earnings Call

0:02 Ladies and gentlemen, good day, and welcome to the Q1 and FY twenty twenty seven 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 Relations 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 question after the presentation concludes. Before we begin, I would like to mention some of the statements made in today's discussion may be forward looking in nature and may involve risks and uncertainties.

0:49 Please note that the disclaimer mentioning these risks and uncertainties 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. Yes. Thank you. Good morning everyone and welcome to Bansal Wire Industries Q1 earnings call. Joining me today is Mr. Ghansham Das Gujarati, our CFO. And I trust you've had a chance to go through the results, press release and investor presentation, all of which are available on the stock exchanges and on our website. Now before I delve into specifics of the quarter, let me spend a moment to touch upon the operating environment during this quarter. This year, we entered the quarter with an added layer of complexity as the ongoing geopolitical tension in West Asia created near term volatility across global supply chain, leading to a temporary disruption in the availability of natural gas.

1:50 Consequently, profitability during the first half of the quarter was impacted by half by higher input costs and operational disruptions. However, business environment improved and the conditions improved meaningfully in the later half of the quarter, enabling us to a gradual recovery in operations. I would like to emphasize, however, that we responded to this situation with agility. Through a mix of operational recalibration and increased reliance on alternative energy sources, we were able to progressively restore production levels. For the quarter, sales volume stood at 112,000 roughly. More importantly, our operating capacity as of today stands at around 680,000 tonnes and we are pleased to say that we are back to the normal level of operations with steady and comfortable margins.

2:50 On the strategic front, the quarter has actually been quite eventful with several of our key growth initiatives crossed meaningful milestones during the period. In our steel core business, we received our first trial order from one of India's leading tire manufacturers during the last quarter. Given that domestic demand in this segment is largely met through imports, this milestone validates the capabilities we have built and marks an encouraging step in our journey. While the qualification progress is rigorous and typically takes time, but we are pleased with the progress that we've made so far. Our IHT wire business continues to make good progress and has been ahead of our initial expectations.

3:35 Customer approvals are progressing well and we are seeing encouraging traction as the business gradually scales up. We also expect our OHT wire business product to commission shortly. Therefore, together these products strengthen our specialty product portfolio and position us well to address larger opportunities in higher value added segments. 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, sensing and poultry segment. The customer response has been encouraging with these products contributing approximately 10% of our sales already during the last quarter.

4:22 This marks a promising new growth avenue for the company and reflects our broader strategic focus on diversifying our product portfolio, while strengthening the Bansal brand beyond its traditional industrial channels. I'm also pleased to share that we generated a free cash flow from operating activities to the tune of about INR120 crores during the quarter, which reflects the continued discipline we are bringing to the working capital management and overall capital efficiency, even in a seasonally soft quarter impacted by these operational challenges. Now coming to the outlook, while the quarter did witness subdued demand and some destocking at the customer end, our assessment of the underlying business is that our fundamental challenges are almost over, demand indicators are gradually improving, industrial gas availability is easing and our strategic initiatives are all progressing well. So looking ahead, we are still working towards achieving a growth of 20% for the rest of the year.

5:24 This confidence is anchored in a few things. First, our business continues to gain market share. Our core business especially continues to gain market share across all end markets, driven by stronger customer relationship and a widening product mix. Second, our specialty portfolio is beginning to contribute more meaningfully as approvals advance and volumes scale up. And finally, our capacity both installed and being added give us the runway to support this growth without disruption. Continuing 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 of creating sustainable long term value for all our stakeholders.

6:24 With that, I will now hand over the call to our CFO, Mr. Bansal Wire Industries who will take you through the financial highlights of the quarter. Thank you. Thank you, Punjab, sir. Good morning, everyone. Let me take you through the financial summary for the quarter of the FY27. Our revenue for the quarter stood at INR1168 crores, reflecting a growth of around 25% on a year on year basis. EBITDA for the quarter came in at INR57 crores and net profit for the quarter stood at INR 20 crores. As Janusar already mentioned, our sales volume for the quarter stood at INR 112,000 as compared to INR 104,050 crores in quarter one FY twenty six.

7:12 While the quarter one is seasonally a softer quarter and the temporary industrial gas shortage impacted production during the part of the quarter. Underlying demand across our end market remains reasonably steady. On the cash flow side, we delivered a healthy operating cash flow of INR 121 crores during the quarter, reflecting our continued focus on tightening working capital cycle. With that, I will conclude my remarks. Thank you. Thank you. Ladies and gentlemen, we will now begin with a question and answer session. First question comes from the line of Kunal Sharma with Veritas Advisors. Please go ahead.

8:30 Yes. Hi, hi, Tim. Good morning and I am hope I am audible. Yes, you are. Yes. Pranav, just firstly would like to hear from you that how will you rate this result quarter one. So 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 Bansal Wire 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? So to answer that question, let me break our Q1 into two parts. The first forty five 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 other consumables to the tune of about 5,000 a tonne on blended basis.

9:31 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. So the first and we generally carry about thirty to forty days of orders with us. So that thirty to forty days of order as a company we took a call that we will absorb that cost because we have been 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 INR 2 a kg EBITDA margin. We took a hit from INR 7 a kg blended and we came down to INR 2 a kg wherein we absorbed all that cost. Now once we had that cost increase, the new orders that we booked were again with the right prices.

10:20 There we were getting the seven even impact INR 8 a kg blended margin. So the second half of the quarter went with INR 7 to eight a kg margin. In fact, 8 a kg margin, but if you adjust it with a lower base, it came down to INR 7 a kg. So this is how the first quarter was. After the thirty, forty days of order book, 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.

11:08 So as of now, even with all these cost escalation, this has been piled on and we are back to the INR 7 to eight a 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 a follow-up on the margin and the pricing, which you told that INR 2 kt that we absorbed instead of passing it to the end consumer. So on a margin like so although 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 four odd percentage? Yes. So we operate at a cost plus model wherein any increase or decrease that we take in our raw material or even is piled on to the customer.

12:00 But now in steel, we carry about thirty to forty days of stock. Now to create a natural hedge in the system, what we do is that forty days of inventory is also covered with thirty to forty days of fixed rate orders, that we do not get into a cycle of commodity pricing. But in this case, because this case that strategy affected us badly because we already have thirty to forty days of order book and the cost escalated drastically immediately. It was not that it will escalate from the next orders. It escalated immediately. Now 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.

12:52 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 April 1 also, I was maintaining my margin. Therefore, we took a temporary hit of thirty to forty days of order book. That is all that was. Other than that, the whole quarter we have operated on regular margins. Got it. So from next quarter onwards, we'll be back to 7.5% to 8% margin? From almost May 15, we are already back to INR 7 to 8 a kg margin. That is why you see a blended INR 4.5 or INR 4 a kg. Otherwise, the first forty five days, we operated at INR 2 a kg EBITDA. Got it. Okay. So and my second question on the the field call. So we secured the first trial order from the leading Indian tire manufacturer.

13:47 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 scale cost supplier like approved us as a scale cost supplier, and we start getting orders order book from the respective tire manufacturing company. So is that my understanding correct? Yes. So in this process, there are 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.

14:36 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 have received the first trial. There are stages of four trials to be held in this particular case. So yes, 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 MRF that if 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 honestly So once I once we pass on these changes, then we will get a confirmed order book.

15:30 When are we 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? This we will keep you updated. It is still to be seen 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 define the timeline. 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 what six to eight months, but we'll keep you updated. This is not the only customer, so we are expecting more trial orders within this quarter also.

16:17 From other customers. Okay. My another question on the CFO that we have, I guess, during the quarter that we raised to almost INR800 crores combined for FY 2027, FY twenty twenty eight. So what has led us to accelerate the guidance for CFO as earlier I guess we were supposed to be at the INR600 odd crores, if you can just throw some light on it? Sure. So the INR600 odd crores was our guidance for last year and this year combined. Last year, our target was INR250 crores, against which we did almost INR330 crores. This year, our target was INR350 crores, against which even in the last quarter after these challenges and even though we did not get a good EBITDA or a good PAT, we still were able to manage INR 1 crores of cash flow.

17:14 So, yes, I think we are yes, I think our initiatives have paid off and we are on that journey. So, we are quite confident given the last five quarters that we've been able to maintain our cash flows to reach this number. Honestly, you don't target, you'll not be able to achieve. So it's important for us to target this kind of a number to achieve it. And are we now back to the 75% plus utilization since we the production has been started from? Yes. Right the demand is back. So we are operating at a good level. Got it. Okay. Thank you. Thank you so much. Thank you. Thank you.

18:01 Our next question comes from the line of Aditya Bhartia from Investec Capital Services. Please go ahead. Hi, good morning Prunav. Prunav, 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 INR 7 to 8 of EBITDA per kg, last year we were having closer to INR 6.5 to 7. Does that mean that even on a profitability on a per ton 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?

18:49 Sir, yes, hi, good morning. So, we are looking at a 20% volume growth. Our EBITDA guidance would also still remain 20%. Although, I agree that we started this quarter with a higher EBITDA base. But I mean, we have three quarters to go, so you never know in our business. So we would like to be a little comfortable here. Say if we are gaining, let's say, 20% volume, then our EBITDA would also at least grow by 20%, if not more. Anything that part of this is still to be seen. A lot of uncertainty is still remaining here. Understood. Understood.

19:37 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 hires? So IHT and OHT combined, right now we have 9,000 tonnes of capacity, which will reach to 15,000 tonnes with OHT commissioning. So as a product combined, I think we have gotten good response from the customers here. In IHT, just to give 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.

20:28 Most 80% of the customers have already given us approval, only 20% remain, which are also in very advanced stages. So I think 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, I would say that we can expect similar EBITDA like we are thinking of steel core or something like that in percentage. So the specialty wire portfolio, we look at higher EBITDA than our regular business, which is what we will get in IHT as well. Sure. And on a per ton basis, how much does that work out to be?

21:14 In IHT, I would say about ten to twenty rupees kg in that range. Understood. Understood. Lastly, on the B2C business, of course, this business has scaled up quite sharply in a fairly short time. What is the ambition that you're having? What are the targets that you 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.

22:00 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 the ambition. 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 yes, I think we still see a lot of growth potential here. A lot of our initiatives have paid off well. But yes, so that this is a good segment.

22:47 And on the margin front also, this is better than our B2B side margin. So I would say about 20%, 30% extra EBITDA per ton is what we are able to get from the B2C segment as compared to B2B in the low carbon front. Perfect. That's helpful. Thanks for now. Thank you. You. Ladies and gentlemen, 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 Dia Jain with Sapphire Capital. Please go ahead.

23:33 Hi, Am I audible? Yes, yes. So can you also provide the EBITDA per ton for the OHT wires? So as I said, OHT, IHT combined, we are looking at a 10 to 20 rupees a kg EBITDA. It is a little early to say right now, but yes, this is the kind of range that we are targeting. But we will reach there once we reach an optimum level of utilization, which will be within this year. And that would be like a 70% to 80% utilization? Yes. Once we reach 60% plus is when we will start to breakeven and I think 70%, 80% is when we should see decent margins here.

24:25 And what sort of color? Sorry, ma'am, can you repeat this? What CapEx are we targeting? 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 our thought process is to put in about 200 crores, $2.50 crores every year to keep growing at 20%, 25% kind of volume. So yes, so we will keep we'll cap our CapEx at about INR 200 crores, $2.50 crores every year to give us runway for every year for each year. So this year also it will be INR $2.50 crores in Bokra.

25:16 Okay, sir. And all right, I'll get back in queue. Thank you. You. Our next question comes from the line of Rahul Girishaw with Glowstar LLP. Please go ahead. Good morning, everyone. Other expense this quarter has increased by INR26 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 specialty plant whose commercial production has not started? Her rough figures, maybe fifty-fifty or 20 five-seventy five could be merit. So, I would not be actually able to give you some specific numbers here.

26:07 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 on an average. Okay. Okay. And So, yes, that is definitely there. Okay. And the new Specially plant, the new Steel Cord and the B2C segment, will we be able to book any meaningful revenue in FY 2027? Yes. So already in the first quarter, 10% of my revenue has come from B2C.

26:58 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 specialty 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 commission by the end of this year. So next year we should see more numbers coming from OHT.

27:46 Steel Cord also we've been meaning we've made meaningful progress by getting our first trial order, but yes, there is still a long process to go here. Okay. Thank you. Thank you. Our next question comes from the line of Vijay Ghazhani with Nuwama PCG Research. Please go ahead. Yes. Hi, sir. Thank you for taking my question. I hope I'm audible. Sir, my question is basically on your volume guidance. So given 20% growth and if I do the numbers, it basically implies almost INR 145,000 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 product?

28:43 What is giving you that confidence to do that 20% volume growth? So overall, in the last twenty years also, if you see, we've grown at about 20% every year. So we have a track record of growing at 20%. This year should also not be very different. In general, just to give you some basic understanding of how we've done that. So if you divide the 20% growth, you can divide it into three equal parts. Onethree of the growth comes from our regular customers by increasing market share or just by growing with the customers. Onethree comes from existing customers and onethree comes from new products that we get into. So every month almost our R and D team develops 20 to 25 new SKUs.

29:35 Every year, we have a target of developing twenty five two fifty 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 more. But 20% average is what we have grown so far also. Sir, why I'm asking this question is, if I look at the numbers, then it basically implies over the next three quarters almost 145,000 kind of volumes, which is almost 85% capacity utilization. So is that a fair assumption on the numbers? So historically also we have maintained 85% to even 90% capacity utilization.

30:25 In fact, is the sweet spot for us. This is where we guess we get the best capital efficiency. And with that being said, we started this year with already 6.8 lakh tonnes of capacity in hand and 60,000 tonnes of capacity that we can commission whenever required. Than that, as a company, we've made a strategy of always starting the year with 25% excess capacity available so that we can grow at 20%, 25% throughout the year. So on the capacity front, I think we are covered. We faced some hiccups in the Dadari facility when we started it with a facility. It was a greenfield project. But now even those hiccups are clear and we are seeing a good ramp up happening there.

31:11 So yes, 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 or either in hand or at our disposal whenever we require. Understood, sir. Great to hear. Just last final question is on margin. So we operate on a cost plus basis. So suppose once this issue of geopolitics and more etcetera get resolved, will we also have to kind of take any kind of inventory hit? Or how does it how will it function when the prices move in an opposite direction? We'll have to again pass it on to our customers.

31:58 But the inventory that we will be holding, which is about thirty, forty days, again, will also be to be taken the it will have to be taken by 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 7080% of that inventory is already booked against firm rate of orders. So therefore, whether it is 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 prices you might see a little differently. If we take a loss in one quarter, the second quarter will cover it up because we already have orders in hand for those prices.

32:48 So that is not going to be an issue for us. Terms of consumable also, any increase decrease is passed on to the customer. In this case, however, the first quarter our only issue was that it increased suddenly our consumable prices from the very same day. And 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 this principle has worked well for us so far. We've seen a lot of these kind of crisis before and we've come out of this flying. Yeah. Understood. Great to hear and best of luck for the future. Thank you so much.

33:34 Thank you. Thank you. Our next question comes from the line of Prakhar with Anandrati Wealth Management. Please go ahead. Hello. Hello. Yes. Yes. Please go ahead. I'm really sorry, but your voice is breaking. Sorry, still it's breaking. You may rejoin the queue, sir. Our next question comes from the line of Yogar Ajani with Omega Portfolio Advisors. Please go ahead. Hi, thanks for taking my question. My question is with regards to what is current impact margin Yogar, I'm sorry, but your voice is also breaking.

34:26 Can you remove your handset if you are using handset, please? Our next question comes from the line of Vinil Shah with Bansal Industries Limited. Please go ahead. Hello. Can you hear Yes. Yes. So I just wanted to let in the Q and A of the initiative. So Sir, I'm not able to understand your question properly. Can you please repeat?

35:27 Yes. So I was asking that previously you had mentioned that the demand was slowed from other sectors, only automotive was the sector which was having healthy demand. So has the industry landscape improved and now we have demand from all the sectors? That is what I just wanted to get out before you on the Sure. Demand Yes. So yes, I would say that we see demand from almost all sectors again. Even our exports have started doing well. So, yes, auto and automotive still remains strong. With that, of these initiatives like the B2C segment and specialty also has started helping us now, especially the B2C in terms of margin as well as quantity. So, yes, overall, I think things look positive in almost all sectors.

36:17 Second and third quarter are generally a little weaker in infra, But yes, I mean, overall, still good. Okay. And also my next question was that, like we had a onetime hit on our aromatics margins, usually, consumable prices going up. Is it possible that we might see a one time gain as well now that the prices have already been down as you already just reflected in the previous quarter? So that is a possibility, but that depends on how 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 how we saw drastic increase, if we see a drastic change or decrease in the prices that could we could benefit from that gain.

37:08 Okay. Thank you so much. Thank you. Thank you. Our next question comes from the line of Shivam Thoreb with Perpetual Capital Advisors. Please go ahead. Hi. Thank you for the opportunity. Hope I'm audible. Yes. Okay. So sir, I'm a little new to the company. So just wanted to understand our product portfolio, specifically the specialty segment that we have recently entered, the kind of rationale that we have behind entering these segments, the margin differential, if any, compared to the conventional product and the capacity that we have for the chip products?

37:54 Thank you. Sure. So as a company, sir, we have products for almost all segments. Our major segment will be automotive and then consumer driven world, 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 case in our wire. As a company, 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 sales. Similarly no customer for us is more than 3% or 4% of my total sales. So we've tried to derisk ourselves here as much as we can. Now just a natural thing in our system is we keep on adding new products. Specialty wire is also a new product or a new vertical that we have recently added. This will help us for the next twenty years to keep growing at 20% or at a higher pace. This was just a natural addition in our product mix.

39:00 And specialty where we've seen a good opportunity, are in most of the products either we are the first or the first of maybe one or two companies in the whole country for 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 of consumption here. Similarly, for steel cord, 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 a higher barrier to entry. This takes a little time. That is what we've done in steel core. It has taken about one year already to reach the second stage of approval.

39:49 Once we are in, I think these will contribute meaningfully in our total EBITDA. So yes, this is what it is. Okay. And could you comment on the available capacity that we have for such products or the kind of capacity that Yes. We are So Steelcord, we have put a pilot project of 20,000 tonnes 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 tonnes is what we have. So about 35,000 tonnes of specialty wire product is what we have. But once we get our first order or once we start utilizing the 20,000 ton pilot project, we have planned for a bigger expansion.

40:41 As a company, our vision is to reach to two lakh tonnes of production within the specialty wire front. So, yes, once we achieve some level of approvals and some level of quantity, I think our eye is towards the two lakh tonnes, 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 plant, your cost has increased about 1.5x on an average. So 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.

41:28 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 so much and wish you all the best. Thank you, sir. Thank you. Question comes from the line of Yogarjani with Omega Portfolio Advisors. Please go ahead. Hello. Hi. Am I audible? Yes. So my first question is regarding what's in the recent quarter. As you'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.

42:16 So how are we trying to take advantage of the situation where some of our weaker competitors might be facing a more turbulent period? So by grabbing market share, honestly. A company, we've been grabbing market share. The industry is growing at 78%, whereas as a company, we have 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 yes, we have been in this industry for eighty five years and our customers have supported us and brought us to this level. So it was yes, we tried our best to support them today.

43:15 We already have capacity, so the only thing is that we have to utilize it. Yes. 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? Yes, of course, sir. So this is only one of the initiatives. 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 and when we operate at a higher base, 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.

44:10 So we've 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 structural 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 cable financing? So yes. 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.

45:04 So, today, we have structured it in such a way that to our vendors, 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 yes, 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? Yes. So, because we are the largest, I would assume that we should have a good pricing and because we are the only we are the company that pays in advance, that should mean something. I can't say 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 over these years.

45:51 Alright. Thank you. Thank you, sir. Thank you. Our next question comes from the line of Jay Patel with Patel Query. Please go ahead. Yeah. Hi, Pranuj. Am I audible? Yes, sir. Yes. So my first question was regarding the return ratios in the specialty business. In the earlier conference, you had mentioned that for two left hand steel core capacity, we'll be needing around 2,000 crores of CapEx and peak revenue potential for that would be around INR 2,000 to INR 2,500 crores, right? So it implies a pretty low effect of around 1x. So if I do the math, even if we get 16% EBIT margins with 1x asset terms, at the end our ROCE would still be 16%.

46:40 And if I skip the current quarter last two quarters, even without specialty, we are doing 16 ROCE. So at the end of specialty business is not adding any ROC to our company. Would you like to comment on that? Sure, sir. So just to give just to do some math again, on two lakh tonnes, we will be able to maintain about crores to INR800 crores of EBITDA on an investment of INR2000 crores or INR2500 crores. This is the overall thought process. Revenue and percentage is not something that we really that are really stable for us. So what is stable is part and EBITDA and quantity.

47:26 So in the specialty 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 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, actually even in the first quarter we've decreased our total capital base.

48:13 So even in the current business with or without specialty, we are looking at a 25% ROC. That is our target and we have to achieve that. Right, right. And in specialty segment, you must have done a pretty good homework. So if I were to say, if we compare our rates to Jingda, Jingda, think it's the largest player in specialty segment competitor of ours. So can we compete globally with them or domestically, I got your point. Some quarters back 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 segment globally, so can we compete with them or is it that Chinese raw material prices are lower that exports will be totally out of our domain?

49:06 Yes. So 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 INR 10 to INR 15 kg higher price. That is not a cause that we will be able to absorb in this product. That is 50% of my margin. So, yes, I mean our target market for this is India and that is a big enough market. Even when we achieve two lap tons, are not looking at more than 45%, 50% market share, which today 60%, 65% of the market is being served through imports. So this is all that we can replace, which is big enough for us already.

50:03 It. Got it. And final question regarding our future CapEx strategy. So over the past two years, we've been pretty aggressive with the CapEx. And 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 CapEx. Because what happens is once the infra growth slows, we will be left with excess capacity and it would hurt our financials. So that's why I was asking. You are 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.

50:54 So today as a company, we need land and the basic infrastructure. Equipment, 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 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 2025% for the year, not more. So even this year if you look at it, we started with 6.8 lakh tonnes 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 INR200 crores to INR250 crores receiver.

51:44 So at the current base of EBITDA or revenue that we have to grow at 20%, we need to deploy INR200 crores to INR250 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 specialty of course. Right. Thank you. That's very helpful. Thank you and all the best for the future. Thank you, sir. Thank you. Our next question comes from the line of Aditya Bhartia with Investec Capital Service. Please go ahead. So, Prandav, my question was also on vendor financing. Just want to understand what's the road map over there?

52:30 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, mean, 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.

53:20 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 days payable. So a bit of both honestly can help us bring down our total capital base. Understood. That's helpful. Thanks for now. Thank you. Our next question comes from the line of Anil Shah with Belal Wire Industries Limited. Please go ahead. 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 sell our balance line, the Salman facility, but we do not see it being represented in the balance for the asset held for sale. But I believe that it's India's requirement. Could you just help me with that, please?

54:22 I think Bansalamji will take this question. Bansalamji? Yes. That's the Sanam facility we have said that the Sanam facility will not be disposed of only. And it will be the additional land available to us that we are thinking about that. Nothing more than that. We are doing there. Our expansion is going on there and that it will be there. Hello? Mister Bansal Wire Industries Limited, are you still there? Hello? Hello?

55:11 Mr. Shah, you may please proceed. If I remember correctly, we I think Pranav had mentioned that 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's a bit of a confusion. There's 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 all of that definitely. So some part of it we might sell, not completely because we are expanding already that. Okay, sir. Okay. Thank you very much. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Panobansal for the closing remarks. Thank you and over to you sir.

56:05 So thank you everyone for joining us today. I hope we've answered all your questions. There's anything else, please let us know. We will be happy to answer any more questions that you have. Thank you. Thank you again for your interest. Thank you so much, sir. Ladies and gentlemen, on behalf of Bansal Wire Industries Limited, that concludes this conference. For any queries, you can connect with Edvektur's IR team. Thank you for joining us, and you may now disconnect your lines.