Godawari Power & Ispat (NSE:GPIL) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Godawari Power And Ispat limited q one f y twenty seven earnings conference call hosted by Monarch Network Capital. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing 0 on your touch tone phone. Please note that this call is being recorded. I now hand the conference over to mister from Monarch Network Capital. Thank you, and over to you, sir. Yeah. Thank you,. Good afternoon, everyone. It is a pleasure to welcome you on behalf of Godawari Power And Ispat limited. Please note that today's discussion may include certain forward looking statements and therefore must be viewed in conjunction with the risk that the company faces.

0:50 Today, we are joined by Mr. Abhishek Azharwal, Executive Director mister Dinesh Gandhi, executive director and mister Sanjay Gupta, chief financial officer. And may I now please invite the management to present on the company's business outlook and performance, after which we will have the... We will have... We will open the floor for q and a. Thank you, and over to the management, please. Okay. Thank you, Sahil. Good afternoon, everyone. Thank you for joining us on today's call. Our financial results and earning presentation have been uploaded to the stock exchanges and our website. I trust you have had an opportunity to review them. I will briefly walk you through the key highlights of the results and progress on various projects following which we will open the floor for Q and A.

1:35 GPIL has made steady start to FY 'twenty seven, delivering resilient performance in q one FY 'twenty seven supported by healthy revenue growth, improved sales realization, stronger realization across key product segment. Sequentially, profitability was impacted by higher input cost, drawn by increased iron ore sourcing from the market and elevated coal prices following West Asia crisis. These prices are expected to ease, avoid commissioning of beneficiation plan, enabling higher captive mining, improved raw material availability, and enhanced cost efficiencies. Coming to the operational performance, our iron ore mining volume declined primarily due to space constraints for dumping of overburden in view of delaying obtaining ticketing permission in the additional allotted length.

2:31 This resulted in higher market procurement of iron ore for pellet production, leading to elevated input costs. Despite this, production grew Y o Y across product categories except iron ore mining and galvanized products. On a Q o Q basis, production remains subdued across most segments with sponge iron and wire being key exception. We remain on track to deliver our FY 'twenty seven guidance with Q1 volume achieving between 16% to 29% of full year guidance. Our evaluated product also recorded healthy Y o Y growth in Q1, led by spoiler and billet and gold production. This further supported by improved realization of most of the product, both on Y o and prior quarter on quarter basis, contributing to healthy revenue growth during the quarter.

3:23 Talking about the consolidated financial performance, q one FY twenty seven revenue recorded both Y o Y and sequential growth supported by healthy sales volume and improved realization. EBITDA and paid remained broadly stable Y o Y, although profitability softened sequentially due to elevated input cost, primarily on account of higher procurement of iron ore from market and coal prices. EBITDA and paid margin stood at 19.112.7%, respectively. Except margin improvement... We expect margin improvement from q four FY twenty seven following commissioning of the mitigation plan enabling greater utilization, captive iron ore pellets. Now coming on our key growth projects, the Aridongri iron ore mine expansion is progressing as planned with ramp up expected from q three following commissioning of the verification plan and full scale operation targeted from FY twenty eight.

4:26 The plant will strengthen the GPIL iron ore security and improve ore quality for pellet production. CapEx of $102,118 crore incurred in the in the verification plant till June 26. The 4,700,000 ton expanded pellet capacity operated at 77% utilization in Q1 and is expected to ramp up to around 80%, 85% in FY 'twenty seven as the operations scale up. In regards our integrated steel plant and CRN projects, the company has decided to keep the proposed 1,000,000 ton integrated steel project in the ABS due to on ground challenges and delays in the approval, especially the approval for water allocation, which resulting in delay in final EC and consequently, consent to set up the select plant... As as consent to set up the integrated steel plant.

5:24 Constantly, in order to leverage the benefit of the state incentives and subsidies, synergies from proximity of base plant, the point 7,000,000 ton CRM complex is supposed to be relocated to Maharashtra near Sambhadjinagar. The identification loan... Land for the proposed CRM project has been completed, and application for allotment of land has been submitted to government of Maharashtra. We expect the land allotment approval by end of August twenty fifth. The project construction activities are expected to start from October 2026. The project is now targeted to be, you know, commissioned by December 27 with planned CapEx of 1,100 crore to be funded through 550 crore of debt and well through internal approvals.

6:11 The 20 gigawatt based project is progressing well and is scheduled for commissioning in q one twenty eight. Soil testing has been completed. Construction of the compound wall is underway. Key supply agreements for major equipments and raw materials have been finalized, long term self procurement, keeping the project execution on track. The project is also supported by, you know, incentives from the government of Maharashtra. We have already incurred a CapEx of 501 current in that in the project. As regards the expansion of solar projects, you know, capacity from 165 to two ninety megawatt, the iron ore mines and additional 2,000,000 ton talent plant for captive use.

6:59 The 25 megawatt solar plant commission has been commissioned in May 2026, and a 100 megawatt project is under construction targeted for commissioning by September 26. The proposed 250 megawatt solar project has been kept in areas due to relocation of CRM project to Maharashtra in which the solar power was supposed to be consumed and also the delay in land allotment for the solar project. The 45 megawatt based project for storage of solar power plants under implementation and targeted for commissioning by q three twenty seven... Targeted for commissioning by q three twenty six, not '27.

7:48 Sorry. Upon completion of planned projects, the capital solar power capacity will reach to two ninety megawatt, and solar storage capacity will reach to 45 megawatt. The crystal has reaffirmed the concrete rating of the company at double a minus stable for long term facilities. I'm also pleased to mention that GPIL has recognized among India's 500 most valuable companies in 2025, Burgundy private Harun India list, 500 list reflecting growing scale, strong business fundamental, and sustained value creation. On ESG front, the company has completed initiative under energy efficiency and decarbonization program.

8:36 The 6.9 megawatt WRHB plant has been... Has commenced commercial production, taking total capacity to 49 megawatt. GPIL is also advancing its decarbonization efforts through five TPD carbon capture utilization project in collaboration with IIT Mumbai for which civil work is underway and completion targeted by end of FY twenty seven. The company has demonstrated offers a strong focus on reducing carbon intensity with CO two emission pattern of steel trade under two internationally recognized chamber, carbon border adjustment mechanism, CABM calculation independently assessed by SGS and Wall Steel Association, ISO one fourteen thousand sixty four standard.

9:27 Under CFM technology, based on the total carbon basis, emission intensity stood at 3.180 CO2 tonne in Q1 FY 'twenty seven, improving 1.9% quarter on quarter and 4.2% Y o Y from two... 3.244 ton fixed carbon. The... Under the, Wild Steel Association methodology based on fixed carbon basis, emission is 10... Intensity is two two point four eight five ton, CO two per ton of, steel production in Q1 FY 'twenty seven, remaining broadly stable quarter on quarter and Y o Y is against target of 2.4920 fixed by government of India.

10:19 Overall, Q1 FY 'twenty seven reflects improved carbon efficiency under framework, while WSA base remains stable. As a part of its EV transition towards greener operations, GPIL has added five new dumpers during the quarter, taking fleet to 15 EV dumpers, 24 EV loaders, and 15 EV excavators. The adoption electricity electric transportation has reduced operating cost by nearly 75%, CO two emission by around 88% if compared to the conventional diesel vehicle. Now coming on the market outlook, India's iron ore production is expected to rise to 8% to three forty to three forty five metric tons during million tons during FY 'twenty seven with most incremental supply coming from captive mines, while pellet production is to at provisionally 120,000,000 tons in FY 'twenty seven.

11:24 Up from 109,000,000 metric tonnes in FY 'twenty one, led by Odisha and Maharashtra. The demand remains supportive, driven by rising steel production, higher pellet usage, which shift towards higher Doctor grade pellets. However, industry utilization remained constant at 65% due to rigid exports, limited hydro availability and margin pressure. Globally, iron ore prices remain resilient, close to about 95 to 105 tons supported by healthy mill margin and inventory destocking despite picking Chinese steel consumption. While additional local supply from project presents downside risk, iron ore prices broadly remain stable closer to about 5,005 thousand R500 ex miles, while pellet prices are in the range of 9,000 to 11,000 per ton, with current levels at around 10,000 rupees a ton.

12:29 Meanwhile, India's steel demand outlook remain strong, supported by infrastructure, housing, railway, and manufacturing investments. In conclusion, I would like to mention that the advice from the mining assets, the strong balance sheet, ongoing capacity expansion, and focus on ESG and cost optimization, GPIL remains well positioned to drive sustainable long term value creation with clear road map and strong execution focus. Company remains confident of achieving its vision 2030 targets of four x, increasing revenue, three x growth in EBITDA and. We remain committed to delivering on our growth ambition and create value for all stakeholders.

13:17 With this, I would like to conclude my opening remarks and open the floor for q and a. Thank you, and over to you, moderator. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch tone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we'll wait for a moment while the questions are assembled. The first question is from the line of from Yes Securities Limited. Please proceed. Yeah. Hi. A very good afternoon, and thank you for the opportunity.

14:04 So my first question comes, you know, around the steel plant that now is getting delayed again. So just wanted to get your sense of if, you know, you could help me in understanding, are there any specific milestones or conditions that need to be satisfied before, you know, the board revives this project? And also now going ahead, should we continue to build this steel plant into the company's medium term expectations, or should now we view it as an optional growth project rather than a, you know, committed CapEx plan? Good morning. On the first question, the milestone which we expect was the water water allocation. So earlier, we were given a LOI by the state government for the water allocation.

14:50 But once we got back to them for the confirmation letter, so then there were challenges because of which the entire water allotment of 9.4 something MCM has been delayed. It's been almost been six, months now. So that is the reason the project has been kept on hold. And from an initial angle, I think you should keep the seed plant as an option now for the medium medium term growth. Okay. So we are keeping it as an optional? Yes. We... So... Till till the time, we don't we don't get the water approval and all. We really don't know what's gonna happen. So better to keep it as an option now. Okay. No. No. That that is quite clear. But but but just to follow-up on the same because, you know, your slide on the Vision 2030, the numbers over there for revenue and EBITDA, I believe that still includes any, you know, commitments coming in from the field plant. So how should that be in 2013? Or No.

15:50 No. No. That doesn't... No. No. That doesn't include. It's mainly on the CRM complex, which will get commissioned in q three of FY twenty seven, which is December 27, and the debt back is shorted project, which is well on track. So we have revised the guidance. If you see our earlier presentation, it was 4x and EBITDA level, but now we have removed the steel part from that investor presentation. Yes. Yes. Okay. No. That is quite helpful. So second question comes on just pertaining to these challenges that we are seeing out for the steel plant. This doesn't have any impact on the rest of the projects, like, the best on CRM mail because now the CRM is now shifting towards Maharashtra. See, because because CRM was coming on the same land in the steel plant, and we're not getting the desired approval for the water allotment. So that is the reason we have decided to take this step and move clearing complex to Maharashtra.

16:41 Maharashtra, again, we have opted for or a industrial belt, where it's a plug and play model just like the battery storage. Land will happen by end of this month. And as you said, Gandhi said, we should commence the activities on ground by October. So CRM, there is a delay of almost six months, but CRM will be on track, and please consider seed plant as in whole as of now for medium term. Okay. Oh, understood. So just a follow-up on the CRM. We are now moving closer to our BSS facilities. Right? Yes. So what benefits will take place either for the CRM complex or for BESS in terms of cost? I mean, from moving the product from to Maharashtra or, you know, just now moving the plant directly over there.

17:29 See, on the the battery storage side, it was always planned in Maharashtra only. So there are no changes in the battery storage project from day one. On the CRM side, the additional advantage, what we're gonna charge is, you know, the local consumption of the value of the steel, which we're gonna be producing. So Maha Maha being an automobile hub. Right? And a lot of our products will be consuming automobile. So we expect, you know, a demand growth local in Maha, which will add to the benefit of CRM. For raw material, there is a lot of supply like JW, then Dolby, then there is Akinmetall in Gujarat. So we don't we don't see a challenge in procurement of HR foil on the consumption side. Maharashtra is a big state for the consumption, and that is why the initial policy of Maharashtra government is giving us those benefits in terms of, you know, adjusting and other other things. So we feel shifting CRM is actually a boom to us by shifting to Maharashtra rather than.

18:27 Understood. Understood. Yeah. Sure. So my next question, you know, comes on the remining side. So we faced some challenges this particular quarter in terms of the production from the mining. So is it expected to continue for Q2 as well? And yes, we are... Okay. No, no, no. So so so so tell you... So the the mines had basically two lands. One was a private land where you always started dumping. All the formalities are over, and we have start... Started drilling the land for dumping. On the on the on the government land, last year, the approvals are pending, which is which we'll be allowed to enter the land and do the tree cutting and all. So that should that should happen in q two. From q three onwards, we expect the mining production to ramp up and eventually achieve full capacity from q four or earlier q one exponential year. So q two, you can expect the same numbers in terms of mining production.

19:23 Understood. So we'll continue to have a higher procurement from the merchant miners for No. See, q two, David. So q two, if if you if you realize, we have already informed the investors last month only, we have shut down one of our new... The new 2,000,000 plant because of iron ore from the market as well as the cash pricing. So Q2 will be done in terms of ferret production and mining numbers. Q3 onwards, we expect to run the ferret capacity at full production, and mining ramp up will happen from Q4 and eventually full capacity from Q1 of FY 'twenty eight. Understood. Understood. That is quite helpful. Yes. So just one follow-up more. Now the beneficiation plan is coming in from q three. Right? And Yes. Can you just help me in understanding, you know, how should we look at the quarterly trajectory of the tivore availability?

20:14 Because you're seeing Q4 is where we ramp up to full mining production activities, right? And post the pellet sorry, post the beneficiation plant coming in and iron ore mine production ramping up. What sort... Are we going to completely eliminate the merchant iron ore procurement? That would be the right way to look at it? See. So q three, you can say we'll still... So we'll be running it... Pellet plant at full capacity. The purchase of market would be still about 25, 30%. And from q four gradually, it should come down below 10%. And finally, in FY twenty eight, it should be 100% captive. That is the target. Okay. Understood. That is Yes. Helpful. Sure. Sure. I'll... I have more. I'll join back to queue for more. Sure. Thank you, George. Thank you.

21:06 Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. Participants who wish to ask a question may please press star and 1 at this time. The next question is from the line of from Equities Investment. Please proceed. Yeah. Okay. Thanks for the opportunity. So the first question was just to follow-up on the previous one. That is 3,000,000 guidance that we've given for. That is after including for verification. See. So, basically, verification is more on the input side. The 3,400,000 guidance given for the full year for the mining production, which is basically a usable ore for ferret plant. That is still on track. That is very much on track. So we're not devising our mining guidance for the full year. 3,400,000 we have given for this year, and it is very much on track.

21:57 And the rest will be the market purchase, 1.2, 1,300,000? Yes. Yeah. No. So in that case, see, what'll happen is our our parent production will be on the lower side, we expect. So accordingly, our market purchase for the full year will be on the lower side because we have already shut down another pellet plant last month, and I think that we continue to remain shut in this quarter. So, accordingly, the purchase for market in terms of volume will be slightly on the lower side. Got it. And, sir, the reason for shutting down the direct production, obviously, first was the iron ore, but how big is the gas supply issue for us? Is it expected to normalize post q two? See... No. So to be... See, I think there was a little misunderstanding. So we are able to secure the 100% gas from the from the supplier. But the issue is as per the new guidelines of PNRGB, so the value... The purchase value of the gas has gone up drastically. It's almost up by 40, 45.

22:55 So purchasing iron from the market and also getting gas at a higher price, that makes pellet plant operation commercially unviable. And that that was what we have stated in our statement last month. The commercially in the current market scenario where steel is down and pellet prices starts all time low of about 800 rupees in the starting of July, it makes pellet pan commercially unbibed to purchase on the market and use expensive gas. Fair. Fair. Fair. Makes sense. So the second question is on the iron ore pricing. So this year, we have seen iron ore come down to around $94. We further expect that the CMO 2 project should ramp up by the end of this year and further double down the next year. So how do you see the iron ore market pricing for the next one, two years?

23:41 See, I feel iron ore will keep hovering between 90 to $100 because the project will take some time to ramp up. Plus the demand in India is definitely growing for iron ore. If you see a lot of board board based projects are starting importing iron ore. So I feel iron ore should remain in the levels of between 90 to 100 depending on the, you know, market to market. Yeah. You don't feel INR going down to $90 soon. Okay. Got it. And with the verification we'll have, we will able... We'll be able to command a much better price in terms of quality. See, basic verification will mainly help us in reducing the mining cost because right now, I'm benefiting the entire ore in factory complex by paying a transportation of thousand rupees. So by now benefiting in the mine, my mining cost will go down of usable concentrate, which will feed to the pellet plant.

24:31 So we we... The idea is to reduce the mining cost and improve on the possibility. That is why putting up a benefit plant in the mines now. Got it. Perfect. And just last question before I join back on the queue. Sir, do we do any sensitivity for iron ore pricing? Let's say, if there's a five, 10% fall in iron ore prices, what could be the impact on our revenue or profitability for that matter? If if if you ask me, right, a 100 rupees down in iron of pellet, we'll we'll we'll lose 40 crores in a year based on the 4,000,000 production of iron of pellets. It's very simple. Iron cost still doesn't impact so much in terms of pellet prices. Pellet prices are mainly driven on, you know, the steel sentiment. For example, today, if you see, the steel elements are slightly down. So that's why the pellet prices were below 9,000 rupees.

25:19 But last couple of weeks, the market is revived almost by 10% in the domestic. So pellet prices are back to 10,000 levels in the domestic. So I would say pellet plays more in control in our cost economics rather than the iron ore prices. Okay. And pellet prices, as you mentioned, are entirely driven by your steel economics and steel demand? Yes. Yes. Definitely. Definitely. Definitely. Okay. Thank you, sir. I'll just join back again in the queue. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. To ask a question, please press star and 1 now. The first... The next question is from the line of from Analytics.

26:05 Please proceed. Hi. Thanks for the opportunity. Am I audible? Yes. Yeah. Thank you, Abhishekti, for the real elaborate answers. Just one question on the three things that we are doing. So the pellet plant is already up and running. Right? Like you said, we're not operating it, but it's up and running. And then we'll be having... Yeah. And then we'll be having a verification that's coming up and the mining scale up. So once all these three of our major actions come into force, say, suppose end of FY 'twenty seven, so FY 'twenty eight onwards, what kind of benefits do you see coming into our books? If you could quantify that broadly, like you touched upon that we'll save thousand rupees per ton in transportation with the verification at mine. If you could just break it down in a little more granular format, just help us understand how much our EBITDA per tonne can change with all these three things combined?

27:05 Just to give you a very brief recap, currently, our mining costs stand about between INR 3,000 to INR 2,500 depending on the production. So our target is to bring down the mining costs below INR 2,700 from FY 'twenty eight. So verification is a part of it. Again, the EV deployment in the mines is again a part of it. The whole idea is to bring down the mining cost. So 100 rupees saving the iron ore, so that we give a, you know, a bit of $45.50 crores on a five, 6,000,000 production of iron ore. The idea should be down the mining cost, and that's why all these initiatives have been taken. So that is on the first side. Ferrous production expect to be at full capacity from FY 'twenty eight, which is about 4,500,000 tonnes. So straight away, you know, with higher volumes, that will give us a higher number of in terms of profitability.

27:50 So these two are the major reasons for iron ore mining and the pellet. Right. And, sir, with the more iron ore mining that we can do, will this volume help us in generating some business, or we can't sell because of the the the feeling that we have of 40,000,000 something on the credits... 47,000,000... 47 lakh on the credits. Sorry. Let's see. We are allowed to sell as a captive miner as per new MMDR act. We're allowed to sell 50% of our iron ore in the market at at at the additional royalty of 150%. But that is only possible if you are able to feed 100% your pellet plant. So in the longer term, we have no intention of selling iron on the market. We want to make 100% iron on captive to the pellet plants. And going forward, maybe two, three years down the line, if we feel the opportunity there is there, we are still able to, you know, have a surplus, know, then only we'll think of selling in the market.

28:41 But at the moment, we have no plans of selling I know in the market. Rather, we'll try to solve it and keep keep mind it's running longer. Fair enough. So FY '28, at least we don't have any plans to sell No. No. No. No. No. No. And, sir, if you could just help me understand what is the conversion rate based on your dedicated iron ore to your credit? See, it's in terms of quantity. Yeah. It is it is about... Depends between 1,500 to 1,800 rupees on on annual basis. Sorry. Your voice broke, sir. I couldn't hear. It's it's between 15 to 1,800 rupees on annual basis. $1.05 double 0 to $1.08 double 0. Okay. Okay. And, sir, broadly, like you said, as of now, you're not looking to sell iron ore, but suppose we decide to sell in future, what kind of delta would you capture? Is it safe to assume that the delta that you captured in is much more versus what you capture in iron ore, and hence, we don't want to sell iron ore outside?

29:48 See, the the first thing is if you wanna sell iron ore, we have to pay 150% royalty on lumps and 250% royalty on fines. So straight away, a thousand rupees of delta goes away if we if we intend to sell iron ore in the market, and the delta in pellet is almost 4 rupees. So, commercially, it doesn't make sense to sell iron ore, you know, in the near term. Unless pellet prices really, really crash to below a thousand rupees, then probably, you know, we can think of selling iron in the market, but I don't see that happening very soon. Got it. And one last question from my end, sir. So in FY '28, there will be very limited volume growth. Right? Now the major growth will come in on a steel business once the CRM mail comes up. Right? And Yes. Other than that, the main driver for our EBITDA growth would be from the BESS once it comes line...

30:40 Online from q one FY twenty eight onwards. Right. Perfect. Thank you so much, sir. Thank you, and all the best to you and your team. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. Participants who wish to ask a question may please press star and 1 at this time. The next question is from the line of Sunil Jain from National Bank Securities. Please proceed. Yeah. Thanks for this opportunity, sir. This was more related to iron ore mine. You said that part of the land was private and part of the land was government. And in private land, the operation has started. So first of all, in the government land, whatever the approval is pending, what type of... What nature of that approval and will that can delay the production for a longer time?

31:36 No. See. So the the the approval which is pending is is the final approval from the state government for to the land and tree cutting. Because it is it is a government land. It's a revenue land, and there was a condition done. So there is a process that you follow, which includes the fire department as well. So the file is in the application. We are very open. We should get the desired approvals by end of September. And this is that from October onwards, we will get the land to start dumping. And thereafter, the key iron ore production can take some time? So ramp up will happen... Start happening from October onwards. But as I said, eventually, the full ramp up capacity will happen end of q four and early of, you know, q one exponential year. Yeah. But on the private land, whether we can independently start iron ore or no? Both have still No. No. See. See. We we are... We can we can start producing iron ore at 600 capacity from today itself.

32:34 Basically, we need we need an additional land for dumping of overburden. So on the private land, we have started dumping the overburden. That is where we're able to still produce the current capacity of iron ore. Once we get the government land, so the dumping capacity can improve and eventually the iron production will improve. Okay. So, basically, most let Let me me clarify. In fact, the length for dumping ground is separate from the length for mining. The mining area and dumping area is slightly different. This additional land which has been allotted is only for the dumping ground. So in that also, there are two land. One is private, and another another one is the government land. So tree cutting or for the dumping ground land is something which delayed the mining operations.

33:25 Okay. Okay. I hope it is clear to you. For mining, my full land is available. Available. Okay. Okay. Fine. Okay. For dumping, you need area, and they are the Yeah. Yeah. Yeah. This this was strictly for the purpose of dumping. Pure burden. Okay. Fine. Fine. And... But the point is, like, from the... Without that dumping, you can't increase the current IO. Yeah. I don't have the, you know, space to keep the ore burden in the mining area. Yeah. Yeah. True. And, sir, second thing related to the project we... Which we had shifted now to Maharashtra. Now whether we will have a better profitability in this project or even in the cold rolled mill capacity, any possibility of higher margin because of that or still you will go with your earlier guidance?

34:24 In terms of profitability, we don't see much change. The only positive side in Maharashtra is the local consumption in Maharashtra is on very higher side. So for us, we already have a, you know, demand available, which will save us on the transportation cost on the finished product. So that is one advantage we will get in Mirashtra. Whereas the Mirashtra policy incentive is also much better compared to Chattisgarh. So that... From that, also... We will... The incentives that we'll be getting yearly will add to the possibility of CRM complex. The shortage from day one was in Maharashtra only, and that project remains on track. Nothing changes there. So this incentive will be able to improve some margin or no? Yes. Yes. So so the incentives will improve the margin by the two, 3% for sure on on the scale and complex side. Okay.

35:11 So, I guess, you were targeting somewhere around seven, 8% so it can move up Yeah. We should we should... Yeah. Yeah. Yeah. Exactly. We should we should touch 10, 11% with incentives. Okay. Great, sir. Thank you very much. Thank you. Thank you. Before we take the next question, we would like to remind our participants. The next question is from the line of from SKP Securities. Please proceed. Thank you for the opportunity. Just wanted to understand that there has been an increase in the iron ore production cost by approximate 10%. So wanted to understand the reasoning. Is it just with respect to the natural, like, the fuel?

36:00 No. So the iron ore cost has gone up because of the higher purchase of iron ore from the market. You know the reason. Mining cost. Mining cost. Okay. The mining cost... Exactly. The mining cost again has gone up. It's it's mainly because of lower production in the mines, and the the operating cost has gone up because only production. Once we are able to achieve a desired capacity, the mining cost should automatically come down. Okay. Because in last ten years, this is the highest mining cost. Right? Yes. Yes. Because because because of the lower production in the mining side, that is a cost has gone up. Once we achieve the production, the mining cost will automatically come down. No other reason. Okay. My second question is like Plus plus plus, as mister Gandhi mentioned, of course, there's also impact of the diesel, which you can use in the mines to the operations. So that also has an impact on on on the mining operations.

36:54 Okay. Got it. My next question is, I've seen a increase in the sales volume of the pellet. So in your peer group companies also, there has been a drastic increase in pellet production and sales. So is there any specific reason behind that? No. So see, our our new pellet plant was running at full capacity. In q one, we were operating all the three plants. So that is why the additional production happened, and that is why the additional pellet sales happened. Because the capacity condition of a pellet remains constant with our DRI capacity, so whatever additional pellets will be produced will be sold in the market. So that is why you see a substantial jump in q one for pellet sales. Okay. And, sir, can you give a view on your, like, demand? How is the demand on the pellet side?

37:44 See, the demand was quite low end of June, early early July. The prices had touched, you know, COVID low of below 9,000 rupees. And that was the reason, you know, we had to shut one of our plants because the operations are commercially viable. But since the marketing market has, you know, revised in last two, three weeks, so pellet demand is better compared to probably, you know, July, and the prices also, you know, shot up by almost 10. Okay. Got it. Now, sir, like, we have moved our... We are not going ahead with our integrated steel plant. So is there any plans to use the internal pellet to make sponge or something like that? Like, how are we moving ahead if we are... Like, we have canceled our ISP plan.

38:32 So what's the CapEx pipeline? Like, are we thinking in terms of something around sponge or anything like? What's latest? We haven't we haven't canceled canceled. We have kept the project on hold. You know, once we get the desired approvals, probably we'll have a rethink, you know, by what to do. On the on the consumption of pellet side, we have no plans of, you know, expanding the direct capacity. But, again, you know, getting a new land, going for the EC, it's a long run process. So there are no plans of increasing the DRI capacity. Whatever pellets will be produced will be sold in the merchant market. And there is actually a good demand of, you know, high grade pellets, be the domestic market or be the international market. We actually ship... We started exporting, which we exported two ships in end of q one and early of q two before shutting up pellet plant.

39:21 So we will keep selling pellets in the market in the longer term. Okay. And, sir, I was going through your past phone calls. Like, there has been a tendency, like, with respect to all of our approvals, there is a lot of delays. So is there any specific reason or it is just a No. I would say it it it is very... It's it's very unfortunate. There have been enormous delays at different stages when it comes to approval from the state government, but that is something which is not in our hand. And, hopefully, you know, whatever pending approvals are still there, we should... We we would... Should get it, you know, as soon as possible. That's all I can say. It's very unfortunate, but it's really not in our hands, to be honest. Okay. Got it. Thank you so much, sir.

40:07 That is... That's from my end. Yes. Thank you. The next question is from the line of from ninety... Plus ninety one Asset Management. Please proceed. Hi, sir. Thank you so much for your opportunity, sir. And some of questions have been answered. If you could just help me out with your understanding of the the iron ore cost and previous participants also have asked. But by... When do you expect to get the approval for the expansion to get... For the dumping area? As as we mentioned earlier, we are very hopeful that we should get the pending approvals by end of q two. And from q two onwards, you you can see improvement in mining production and eventually full capacity from FY '28.

40:59 That's what we and Isat. And, sir, what's the update on BEST? The project is very much on track. The groundwork has started. Everything has been placed. The machine delivery will start happening from December, and we expect to roll out the first container in q one of FY twenty eight. So the BEST project is very much on track. Okay, sir. And, sir, coming to the realizations of iron ore and they had they had seen a good peak in q four and start of q one as well. But I think in q two, they have been little softer, as you had mentioned as well. But do you think they're they're gonna get... They will have a little bit more... Little bit of lower realization going forward?

41:45 No. So if you ask on the longer term, we still feel the iron ore prices will hover around between INR 9,000 to INR 10,000 in the longer term, 9,000 being the lower side and 10,000 being on the higher side. And because we see last five months, the average pricing and our selling price also remains at our 10,000 levels. Plus, it's a commodity, and, you know, it's a cyclic business. So option down will still happen depending on the market here. We don't see major change in the in the longer term. And, sir, you had also mentioned regarding that you were exploring exports as an option for your price to... If the domestic market We did we did we did export two two vessels in July... In June and July, and then we had to stop exports because of shutting up of another pellet plant. So export opportunity is always there. Depending on the domestic demand and pricing, we always open for exports.

42:38 What what are the reason you got in June for exports? It was slightly slightly, I could say, almost at par with the domestic market, which is about 9,000 rupees explant. When the end of market... In the domestic was 9,000 rupees in in June and July. Okay. Got it. Thank you, sir. Thank you. The next question is from the line of Kartik Godawari Multiple Wealth Management. Please proceed. Yeah. Thank you for the opportunity. Sorry if this is getting repeated. I was able to join a little bit late. Just wanted to understand, during the quarter, sold down our stake in Zamu Pigments, which we had invested in a couple of years ago. I just wanted to understand the thought process, what changed, what led to this decision.

43:34 Hello?. Yeah. Yeah. So the movement, we have not sold much. We have sold, I think, it talks about about 25 crores. We are still thinking on the strategy on Jammu pigment. In fact, we had a time either to increase our stake or, you know, exceed or whatever you do. We have not yet fully decided on that. But the promoters, other family members, like, you know, their daughter and son-in-law have also joined the business. The earlier... The statement was that the...

44:19 They don't have any succession planning, and therefore planning to exit. And then we also have a lot of other things coming up in and now in Maharashtra, other things. And, operationally, that location is becoming slightly difficult for us in Jammu and Kota. So we are in process of taking a call. We have, you know, partially sold stake to the promoters. And if they desire and if they want, then we can even offload some more quantities going forward. Okay. So any expected timelines or it will be as No. No. No. No. No. No. No time lines are there on this. We are still in discussion as to how to go forward on this.

45:08 Understood. Yeah. That's it from my end. Thank you so much. Yeah. Thank you. Thank you. The next question is from the line of from Equities Investment. Please proceed. Hi, sir. Thanks for taking me back. Sir, I think last... So last to last phone call, had spoken about the TEOFR that we were going to file in quarter one of this year. So just wanted to know what's the update on that filing. So, see, Boreadipo expansion plan is very much on track. We have started preparing the documents. We also... We we will be putting up a beneficial plant inside the mines as well over which the trials are under under process.

45:54 And once everything is finalized, we will be filing the TU of a Boretipo, and we expect Boretipo expansion to happen somewhere in probably April 30, you know, FY thirty one. That is the plan. The current mining capacity is 700,000. From next year onwards, will be running at full capacity of point 7,000,000. Currently, it's running at about point two, point 3,000,000. And eventually, 05/05/2031, we will be taking the mining capacity from point seven to 4,000,000 tons. Got it. Got it. Okay. And the beneficiation plant would also be 4,000,000 tons then? Yes. So 4,000,000 mining, 4,000,000 beneficiation. And since the mines are on the lower... The the grid is in the lower side, we expect the output of a close to about 1.5 to 2,000,000 tons usable concentrate for for the pellet feed.

46:43 1.5 to 2,000,000. Okay. Yeah. And And it could be about 40%. Yeah. Yeah. Okay. So tail off would be much higher indeed. Yes. Because of the grade of the lowest. The average grade in the mine is somewhere about 45 to 50. So, of course, the tailing will be on the much higher side to maintain the output of the consent date of sixty five hours. Got it. And, sir, you gave a proper update on how our best is progressing in terms of supply arrangements, in terms of... Or domestic EMS also being finalized. Are we having any conversations or discussions around the commercial arrangements about any customer discussions or how we're looking to progress around that? See, we have already tied up with the domestic EMS. We already tied up to domestic PCS as protect to the government of India, where currently 20% of your entire system has to be from, you know, made in India. So we already achieved that. And in terms of commercial sales, from August onwards, we have started quoting our containers in the market, and we will be... We'll start participating in tenders for future supplies.

47:48 Got it. So this week, the tender where we'll be, you know, participating is alive. Exactly, sir. It's mainly... It's... It it it will be mainly with a back to back guarantee to the developer, only participating tenders. So we'll be doing a back to back guarantee. It's even the bid. So we'll be the supplier for that particular project. That is all we intend to, you know, go ahead with the sales. Got it. And just on the ferro or galvanized products, I think we saw a decline also in galvanized product volume for this quarter. Any particular reason why we saw a particular decline? Usually, you know, usually, bringing a monsoon, the the the the deliveries on the lower side, the projects get delayed. So that is why the galvanizing products you can see is on the lower side. Once the monsoons are over, you will see the volumes back in, you know, at the desired level. It's just a seasonal effect. Nothing else.

48:43 Got it. And, sir, just my last question. I think you had explained it very well on on last con call, the difference between a b f and a Doctor pellet. So since you had mentioned that we have already started exporting and the Doctor pellet, the gap is command a much higher premium. Is it something that we will look at in the near term, or we'll be focusing only on the domestic market? No. We we have we are very... We very much have plans to, you know, enter the Doctor market, which is mainly The Middle East. One... But that can only happen once we are able to, you know, feed 100% from our mind because they need... They are very specific quality conscious. So once they're able to do that, we have plans to enter the Doctor market as well because of the higher premiums. So once only will be running up with the verification plan, we can then probably do the?

49:34 No. I would say that will happen only once we're able to feed 100% of our credit capacity from our mines because then we can we can start playing with the with the quality of product. That So will happen in FY twenty eight once we are able to achieve the highest level of marketing. Okay. Yes. Yes, sir. Yes. Very much. Yes. Perfect. Thank you. Thank you so much, sir, for taking the word, and good luck, sir. Thank you so much. You. The next question is from the line of from. Please proceed. Good afternoon, sir, and many thanks for the opportunity. Sir, my first question is, as your... One of the pellet plant is on shutdown, should we expect any change to the company's FY twenty seven pellet production guidance of 4,000,000 ton?

50:21 Although we haven't devised, we're still evaluating, but you can expect the volumes to be slightly on the lower side. Once we have a full final guidance, internally, we will we will, you know, we will let... We will inform all the investors. But you can expect a slightly lower guidance for the entire year since one of our parent plants is already shut for us almost forty five days now. Okay. So should it meet 4,000,000 or it will be No. The... No. No. I think I... No. No. The production will be slightly on the lower side, but with exact guidance, we will come back in some time. Okay. Once we have a full clarity once we have a full clarity. Yeah. Okay. Okay. Sir, my second question is, how do you see the pellet market outlook for this system in terms of demand, pricing, and margins, particularly with rising domestic supply and subdued export demand?

51:11 See, the prices did such, you know, lowest two two months back, but with the steel demand going up slightly, the prices have again gone up a 10%. But still feel in the longer term, the prices will keep hovering between 9,000 to 10,000 rupees.. Okay. Okay. Okay, sir. Thank you very much. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. To ask a question, please press star and one now. The next question is from the line of Rohan Mehta from Startez. Please proceed. Hi, sir. Good afternoon. Am I audible? Yes, please. So couple of questions. First, our cost of materials have just gone up by 40%.

52:01 As I understand, we procure the materials one quarter back. So let's say we might have procured our material in about February or March when the West Asia wasn't as impactful. So can you just segregate this cost for me? See, on on the total iron ore total commodity cost, which is mainly for us iron ore and and the imported coal, So domestic coal was at least stable. So iron ore contributes about 75% of the increased cost, and 25% was the imported coal. Just to be very specific in terms of number, our imported coal cost was about 10,500 rupees for, you know, q four and early q one. Now it's almost 30,000 rupees. So straight away, 25% impact because of the best Asia crisis, and 75% is mainly account of iron ore for purchasing from the market compared to our online.

52:53 So that will be much more impactful in the quarter two because just you said the imported call cost call cost has gone up much more? Yes. Q two will continue to remain on the higher side because the prices still have not reduced compared to q four levels. Dollar was there. The shipping trade is still on the higher side. Index is slightly lower because of the current crisis, but still on the higher side. Okay. And on the natural gas side, sir, when do we expect some sort of normalcy? Is there some timeline where this force majeure will just expire and we may get it at the No. No, Fari. To be honest, we have been in touch with the supplier, Gale, but he has he has no guidelines. It's it's it's a heavy situation. You know, how the war unfolds every day. So as you know, things are very un... Irrational right now. So we just hope for the best. Yeah. Absolutely.

53:50 And at what pellet prices does it make sense to produce at these gas prices? See, at these at these levels, it it it... We are evaluating our operation for the third plant. We are also talking to the suppliers if we are able to secure the required quantity of volume to run the pellet plant. If we do so, we will definitely come back and announce it to the investors. But at the moment, it is under shutdown, and we feel August will also be a shutdown period. September, there might be a possibility that we make it start the third operation for the third plant. Okay. And just the last question. So at current capacity expansions, we won't be needing any debt. Right? If the plan doesn't come into the picture? See, to be honest, as we've clearly said, the field plan is put on hold.

54:38 We have no clarity. So if if you see the steel plant requirement of funds, we were taking almost a huge debt, you know, to fund the steel plant. Since it's on hold now, so we don't need to borrow any money for funding our current projects. We are very much... You know, we have sufficient free cash flows to fund entire projects now. Perfect. Thank you so much, sir. That's all from my side. Thank you. Thank you. The next question is from the line of from Investments. Please proceed. Thank you for the opportunity. Sir, I just wanted to know, was there a revision in the budgeted CapEx for the CRM rolling of... For the CRM project?

55:24 Yes. So earlier, the CapEx in this was about, I think, 993 crores. Now it's about 1,100 crores. It's mainly an account of, you know, the onetime cost will be incurring in account of the land in Maharashtra and other basic infrastructure. Earlier, the entire complex was coming up in... It's gonna be the steel plant. So a lot of common infrastructure cost was getting absorbed. Since now CRM will be independent, so it's a one time cost will be... Which we have to incur to, you know, start the plant, which is the land, the infrastructure, the transition lines, and other things. So that is why the CapEx is above almost about 15, 20% compared to the previous CapEx announcement of $9.50. Okay, sir. Alright. But the total funding So the entirely 200 crores is not by increase of CapEx. From working capital, margin money is also included in 1,100 crores.

56:18 So, actually, the increase will be much lower. And, sir, what will be the land cost estimated? Land cost, ma'am, Haraji or land? Closer to $45.50 crores. Land cost to about 50 crores. Yeah. Yeah. Yeah. And the land the land parcel is about 35 acres. Okay. And, also, expected commission... Commissioning date will be in December 27, which is q q three of FY twenty eight. Okay, sir. Thank you. That's all. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, Please limit your questions to two per participant.

57:08 The next question is from the line of, an investor. Please proceed. Yeah. Good afternoon, sir. Sir, my question is regarding the cash utilization. We already have some healthy cash on books, and we would be... For a steady state pellet price, we would be making something more than thousand thousand 200 crores every year. And now that steel plant is shelved, so what are your plans with regards to utilization of the cash? If you ask come back, sir. We will Yeah. We'll come back later this CapEx over the CRM and, you know, base project. And let this have the full clarity on integrated skill plan, and then we'll come up with the, you know, plan for the case.

57:54 Okay. Okay. Thank you so much. Thank you. The next question is a follow-up question from the line of from Yes Security Limited. Please proceed. Yes. So just one question I had on, you know, CapEx. How how should we now take a look at FY '27 and '28? Because now the still CapEx is no longer part of it. You know, we have given numbers in our presentation. We have given the numbers. Only only those numbers. Yeah. $527.28, how much will be the CapEx? Okay. Got it. And and in terms of pricing for q two... Oh, sorry. Not pricing. In terms of pellet production, should we assume the $6.75 k 1,000, or would that be the right way to look at it?

58:45 Sorry. Come again, please. So for pellet production in... During q two of FY twenty seven, should we assume 650 to 700 k t in 100 for this particular quarter in terms of pellet production? No. So if if we happen to keep keep the plant shut for the entire quarter, the numbers will be on the lower side. Okay. So at the moment, you talk about somewhere about 500 kt. Okay. Got it. Yeah. Thank you. The next question is from the line of from plus ninety one Asset Management. Please proceed. Yeah. Hi. Just one... This question. Since you said we'll be funding all of our CapEx going forward through internal approvals, what will be our new CapEx for next three years excluding the... If you ISP is not in the medium term growth?

59:42 See, for the CRM, we have inside the CapEx of 1,100 crores out of which about 80 crores have already been spent. So about thousand crores on the CRM side. On the battery storage side, we have already spent about close to INR 500 crores. The remaining CapEx of close to INR $708,100 crores will be spent in this year and next year. Plus on the remaining CapEx, but overall, we we increase our CapEx of close to about 2,000 crores for remaining FY '27 and entire FY '28. So for... And with '27, you're saying the thousand crores to $212,100 crores and '28, you're saying 2,000 crores And '29 But, sir, you are in presentation. How much will be in which year? You can report the presentation. Shall I tell you the payment one? No, sir. I have... I I do have it, but twenty to '28. I wanted to '29.

1:00:32 You have any predictions in '29. No. No. No. No. No. Projection as of now. No. No projection as of now. Got it, sir. Thank you. Thank you. That was the last question for today. I now hand the conference over to the management for the closing comments. Over to you, sir. Yeah. Thank you very much for joining us on this call. We hope that we have been able to address all your questions. Should you have any more questions or require any clarification, please get in touch with our investor relation team at Go India Advisors. Thank you very much. Thank you very much. And with this, we conclude this call. Thank behalf of Godawari Power And Ispat limited, that concludes this call. Thank you for joining us, and you may now disconnect your lines.