Indian Metals & Ferro Alloys (NSE:IMFA) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Indian Metals and Ferro Alloys Limited Q1 FY 'twenty seven Earnings Conference Call hosted by AdFactors PR. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Gupta from Air Factors PR. Thank you, and over to you, Mr. Gupta. Thank you, Ranjit. Good evening, everyone, and thank you for joining us on Indian Metals Ferro Alloys Limited earnings conference call for the First Quarter Ended 06/30/2026.

0:49 Today, we have with us Mr. Subrikanth Pandha, Managing Director Mr. Sana Gupta, Chief Financial Officer Mr. Vijayananda Mohapatra, Full Time Director and Chief Operating Officer Mr. Suresh Babu, of Ferro Alloys Business Unit. We will begin the call with the opening remarks by Mr. MD, Mr. Sudrakan Panda, who will provide an overview of the company's business performance, key operational developments and the outlook of the business. This will be followed by the question and answer session. Before we begin, I would like to remind everyone that certain statements made or discussed on today's call may be forward looking in nature and should be viewed in the conviction of the risks and uncertainties that the company faces. A detailed explanation of this risk is included in the earnings presentation that has already been shared on the stock exchanges.

1:38 The company does not undertake any obligation to publicly update these forward looking statements. With that, I would now like to hand over the call to Mr. Subrakhan Panda. Over to you, sir. Thank you, Vaibar. At the outset, let me welcome all of you who have taken time out from your busy schedules to attend this investor conference call to discuss IMFA's Q1 FY twenty twenty seven results. As I'm sure you will agree, this is a real breakthrough quarter where in terms of both revenues as well as profitability, it's the highest ever. And that's a reflection of not just firm prices, but also tonnage from our KNR2 acquisition coming into play.

2:25 I will not get into the details of output and all of that because that's shared as part of the presentation which we have uploaded to the stock exchanges. But suffice it to say that as against average output of about 65,000 tonnes in a quarter, in Q1, we have touched 80,000 tonnes. As you know that going ahead, are also looking to commission the KNR1 greenfield project, where the first furnace we have already initiated the process of heating the refractory lining. And so we expect first tapping around the third week of this month.

3:19 What we are looking at from the core business, which is Ferro Alloys, is that there is substantially more tonnage waiting to come online. So that will help us going ahead deliver record performance. So just to put that in perspective that as I mentioned in Q1 FY twenty seven, we are looking at about 80,000 tons, but when all furnaces are up and running, which we expect by I mean in fourth quarter when everything is stabilized that we will be looking at about 120 odd thousand tons. So there is a full 50% increase in tonnage which is coming.

4:04 One point here I would like to point out that in all our interactions we had while we never we generally don't give any guidance with regard to tonnage, but given that there is so much happening in terms of greenfield, in terms of the acquisition, so we have given some indications. As far as FY 2027 is concerned, we had indicated 400,000 tons, but we're going to tone it down a little bit because while we were able to switch on all furnaces at KNR2 in the month of March and in fact got a little bit of production, but some of the transformers we are we feel should not be loaded beyond a certain point.

4:49 So we are playing taking it a little safe, if I can put it that way. We have already ordered two sets of transformers plus a spare. So sometimes in Q2 or Q3, we will be looking to replace the two sets of transformers where we have a little bit of concern. And secondly, as far as the gas cleaning plant is concerned, again, some work needs to be done on that and therefore we are restricting load a little bit to ensure that we comply with emission norms. So when all of that is sorted out, I think we will be able to push the load higher as we had indicated. But as I said, just to be transparent and clear, we're toning down the guidance a little bit for FY 2027.

5:38 So I think there will be a lot of questions. So let's go into the Q and A mode, and I'll do my best along with my team to respond to your queries. Thank you. Shall we open the line for questions? Yes, please go ahead. Thank you. We will now begin the question and answer session. The The first question comes from the line of Josh Shah with Seven Seas. Good day, everyone.

6:44 Today is a bit busy day because after AGM, concluding at AGM, we are starting with the phone call. Anyway, now, mister Panda, I understand we expect to sell Ferrocom to India, and I understand that FerroCom demand in India is bit weak mainly because of our stainless steel flaps are imported from China, and the stainless steel producers are happy converting them into finished product. For benefit of ferrochrome, use of ferrochrome is going to China and not to India. So, like, in steel product, there could be restrictions on imports of stainless steel pro... Rock, especially stainless steel flips. So they know they will have to produce stainless steel flips in India using Indian Ferrochrome.

7:33 So this is one suggestion. I need your comments, please. Thank you. I would not like to comment on that because there are multiple issues in terms of demand supply and other issues. So it would not be prudent of me to comment. But yes, in general, I have always held a view that whether it comes to stainless steel or any other commodity or any other product that its Indian industry is confident and wants a level playing field. So if there is unfair competition, then that is something that should be looked into. But I would just like to limit my comments to that much. Mister Okay. Shah, have you done with the question? No.

8:23 Can I ask you one more question? Sure. Yeah. Now Ferro Comprolene of Samancor and Glencore from South Africa will start and expectation is that they will produce 4,500,000 tons of Ferrocone per year. So now what would be its impact on short term Ferrocom private as well as on Commod private? I understand from our MD's comment that in the past that in long term, it will balance out because Chinese Ferrocom products will shift to South Africa. But what will be the impact on short term impact on Ferrocom private? Thank you. You for your question. So as we have discussed in the past, my view is that the special tariff, which has been announced by Eskom for South African producers, are other two producers.

9:18 That, I mean, certainly makes South African ferrochrome more competitive. I think the jury is still out as to how competitive they become with this power tariff. But having said that, generally, our expectation is that we would like we would expect to see in terms of chrome units. That means if they if the South African producers consume more chrome ore themselves, then it would logically should lead to less chrome ore being available for Chinese. Now again, something which is evident is that if South African production increases, and I don't think the number of 4,500,000 is right because at the moment, only Glencore has switched on, I believe, Lion one and Suresh might have the numbers, but I think it's something like seven hundred eight hundred thousand tonnes expectation, but and including others.

10:11 But whatever that number is, that clearly, if ferrochrome production in South Africa goes up and China doesn't compensate in terms of lesser output, then you will see some sort of glut. And that is going to impact everybody, including the South African producers themselves because they have made it repeatedly clear that $0.62 is not something which is very, very attractive, but something that they need to stay in need to get to stay in the game. Having said that, we are confident about our competitiveness and our resilience. And we believe that with different sectors also starting to ask for special tariffs like manganese, etcetera, that we may see some short term turmoil, even that, I'm not so sure.

11:07 But clearly, I think it should balance each other out. And that is where also the point I made at the beginning that even if we see some price correction, please keep in mind that we have another 50% volume coming in. So that will certainly provide a boost to our numbers in subsequent quarters. So we are quite by the grace of God, we are quite confident. Thank you. Next question comes from the line of Tisha Chamriya with Trinita Asset Manager. Please go ahead. Good evening, sir. Am I audible?

11:54 Yes. Yes, sir. So my question was that you have already answered it halfway. So given the current Ferrochrome pricing environment, where does our company believe it sits on the global cost curve? Like, have there been any recent operation in... Initiatives that have strengthened your competitive position related to the South African and Kazakh producers? So it's very difficult to accurately pinpoint where we stand. But suffice it to say that we are fairly competitive and resilient, as I mentioned a little while ago. And therefore, what we believe is that we are we will be able to hold our own whatever may be the circumstances.

12:46 And I'm not sound and I'm the situation is not as gloomy as one might think. As I said, very clearly, we expect that increase in ferrochrome production in South Africa should lead to a reduction in chrome ore because if that doesn't happen, then this whole exercise of giving a special tariff to encourage restarts, we'll again get all it will not work out well. So that is one. So we are fairly competitive on a global scale, if I can put it. If I can ask Suresh to sort of talk a little bit about some of the initiatives that we have done in terms of digitalization and other Kaizen initiatives, etcetera, that we are taking. So Suresh, in a couple of minutes, if you can just give a little update on what you have been some of the initiatives you have been spearheading to enhance our competitiveness.

13:39 Yes. Thank you, Bharat. So we have initiated digital twin at one of our location and we are horizontally deploying in other locations also. So this is basically to make the operator intervention as a less and cost optimization model. And we're also initiating the guidance series at different locations to optimize the cost. So we will be very competent as far as the throughput cost is concerned. Got it. And, also, China is, like, the key driver for the global telecom demand. And based on your customer interaction during the quarter one, are you seeing any improvement in the seamless fee production or inventory replenishment?

14:27 Or how does that shape your outlook for the second half of the FY 'twenty '7? So I don't think I have the numbers for FY 'twenty seven. But yes, stainless steel production has grown. I mean it may not be very aggressive growth, but about 2.5% to 3% growth is there globally, if you look at it. And secondly, I think from a point of view of what is supporting prices at the moment, it is actually cost pressures because of availability of ore and pricing of ore, which is supporting ferrochrome prices. And of course, as you well know that because we have a captive chrome ore mines, we are by and large insulated from that situation.

15:16 You. Mr. Chamaria, please rejoin the queue for more questions. Next question comes from the line of Pativ Johnson with Anand Rakhi. Please go ahead. Hi, sir. Congratulations on a great set of number on the record quarter. It was a fantastic result, sir. Sir, just wanted to quickly check on a couple of things. I'm sorry. Actually, I missed your opening remark. I just wanted to get your understanding on this entire South Africa now considering that, you know, the volumes have actually started picking up from Rafay, though they are down compared to last year, but they are still much higher than Q1. So what is your understanding on that? Because eventually, would be selling it to China at the end of the day.

16:01 Yeah. So a couple of things on that part is, as we have discussed on the call, I have discussed on the call several times in the past two quarters that unquestionably with $0.62 tariff being available to Glencore and SalmonCore that they have switched on their more efficient furnaces, and that is what you're seeing an increase in output. And as you correctly said, it is less than it is more than what it was in Q1, but of the calendar year, but less than the corresponding quarter. So again, we believe that this needs to be looked at in terms of chrome units. That is if Ferrochrome increases, then logically, chrome ore should supply should reduce. And that will impact ferrochrome production in China.

16:50 Having said that, if that were not to happen for whatever reason, keep in mind that South African miners and integrated producers have the possibility of selling just the ore. So it doesn't make sense, logically speaking, to convert it into Ferrochrome and drive down prices and make less money themselves and for everybody else. But where is that balancing point or the tipping point? And is it possible to fine tune it to that with that efficiency? It's I think we'll have to wait and watch. But the other point I made in my opening remarks is that as against 65,000 tonnes production on average in Q1 FY 'twenty seven, we have a volume of 80,000 tonnes.

17:36 And by the end of the year, financial year, that is, so the fourth quarter, which is January to March twenty twenty seven, we will be looking at a full 50% higher volume at roughly about 120,000,125,000 tonnes per month. Patif, I don't know if you caught my other comment about we are slightly toning down the production guidance at KNR overall because we were indicating about 400,000 tonnes for FY 'twenty seven. But while we have been able to start the four furnaces at KNR two, but a couple of furnaces, I think, we are not loading the transformers fully because these are units which have not operated for a long time.

18:26 And therefore, we are looking we have ordered two full sets of transformers and a spare. And over the course of Q2 and Q3, we will be replacing the slightly doubtful transformers with the new ones and also some work on GCP needs to be done. So these are the unexpected surprises that one has when it comes to an acquisition, especially one which had not been running. But this is bar for the course. And again, from a results perspective, volume I mean, even with these volumes, we will we are expecting fairly attractive numbers in Q2 and going ahead. Okay. That's actually quite helpful. So basically, when you say 120,100, you mean to say your volumes for 2027 will be about three sixty thousand, $380,000 kind of a range, instead of 400,000?

19:18 Three eighty thousand is what we are expecting for the year. If you remember, we had said 400,000 tonnes. That's where we were hoping that we can based on what we had seen during all the checkups that we had done while taking over the unit, that we will be able to load it a little more. Broadly, again, Suresh, I think can confirm that about six to seven megawatts is lesser loading is happening. We also didn't have they also didn't have adequate power availability. So that has come through another. Suresh, how much? 15 MVA? 15 MVA, yes, yes. 15 MVA is a handset load. So all of that will impact Taraj a little bit. But as I said, prices at the moment are more than making up. And even $3.80 plus will still be a significant boost in terms of tonnage.

20:14 Thank you. Mr. Jones, sir, please rejoin the queue for more questions. Next question comes from the line of Maran Vandoor with Wolfe or PMS. Congratulations on the number. Sir, I just had one question around your realizations... EBITDA realizations. So few quarters back, you have said that our EBITDA realization for interrupting. Sir, Mandu, there's a lot of disturbance from the background. Okay. Okay. Yeah. Can you hear can you hear me now? Yes. Please go ahead. Okay. Sorry for that. Sir, just the question was that earlier two two two, three quarters back, once about the EBITDA profit, you had stated that our average EBITDA would be around 20,000 rupees. But then you said that because of the plants being closer to the different ports, it's going to help us and raise it to around 22,000 something.

21:20 So just needed an understanding that are we still on par with that or is it going to be higher about 25,000? Like, not just because the realizations are better right now, just in general over a long period. So a couple of questions. We actually don't give EBITDA guidance in terms of specific numbers, what we expect per ton. But certainly, what I had indicated is that both KNR1 and KNR2 are more competitive than Ferro Alloys in terms of cost of production. And therefore, once KNR1 and KNR2 all stabilize and we get to that 500,000 tonnes production in a smooth manner, then we will see our margins improve by about 1,500 to 2,000.

22:08 So that is what I had said. Now at the moment, on a per ton basis, if you look at for Q1, obviously, the number is a lot higher because what we are seeing is our selling price being just shy of $120,000 blended selling price. So that is significantly higher. And secondly, the point I had made is that just being a little conservative in making this statement that whatever you see a correction or don't see a correction, we have a lot of volume coming on line, which will boost the overall performance. So that's the specific statement. Next question comes from the line of Patip Joonsa with Anand Raghi.

23:07 Sir. Sir, I just wanted to quickly take the previous question forward. Considering EBITDA per tonne has actually substantially improved, I agree pricing had to play a lot of role in it. But has the benefits of that K and R one and two started some benefits started coming in, the added or enhanced EBITDA button? Not that much. And the reason I would say that is when you are ramping up load. So that's where, for some time, you are consuming power without any output and all of that. So a lot of inefficiencies are there in the initial period. So some probably is some benefit is there. It's very difficult to quantify it because as I said, there are I mean, for example, we have the renewable energy contract that we have signed up with JSW Energy.

24:03 Now we have had that corridor since June, and we are expecting the power to flow in August. So I mean, it's maybe a crore or so a month. But those little inefficiencies are there. But then it's next to impossible to absolutely synchronize it, fine tune it to that extent. So that is where I'm saying that we will see the benefit of Kalinnagar in its fullest form probably from Q4 of this year, assuming that we are able to smoothly operate the four furnaces at a higher load at KNR2 as well as the two furnaces at KNR1. Got it, sir. And sir, my last question is pertaining to the inventory. Just wanted to get... Inventory and the other expenses. Just wanted to get a sense of what is the closing stock on books as on date.

24:50 And the other expenses were relatively lower, you know, q o q. So what has led to that dip in lower other expenses? Shana, would you be able to answer that, please? Yes. So on the second question, I will answer it first on the other expenses. So as you know, the quarter four, we had said that since the call in the USD had gone up from Q3 end to Q4 range from INR89.9 million to INR94.65 million. So in our exports that we raised for MTM that is the mark to market impact of INR 32 crores has come in our financials as a negative for that. But for leftover on hand, more or less the currencies has remained similar. So those INR 32 crores impact is on the impact we had got some ForEx gain during this quarter. So that's where the maximum amount of benefit has come on the other expenses.

25:44 Besides whatever in the cost efficiency initiatives we have taken specifically on the predictable maintenance and shutdown. So there also we have got some cost benefit. So these two add up to the lower other expenses. And on the inventory side, Ferro chrome is under control as whatever is the inventory plan. On the chrome ore, we have stopped primarily we have stopped up to meet whatever is our additional capacity for next one year. So approximately after the common stock of total six lakh ton is almost half of six lakh ton is there with us. And Batya, I'd like to add one more point that in the context of dramatically increasing our ferrochrome output, we'll also have to build up a little bit of ferrochrome stock because that's about 17,000, 18,000 tonnes, which works well when we have only two locations. But now that we have a third location and higher tonnages, so this is where over the next one or two quarters, we will be sort of making sure that everything sort of settles down in a manner which is efficient. So that is why I'm repeatedly saying that Q4 onwards is when we expect to see smooth operations with inventory having reached the ferrochrome inventory having reached the level that we wanted to reach for a given a higher output. So all those

27:15 things will settle down by fourth quarter. Sir. That's quite helpful, Thank you. Thank you. Next question comes from the line of Harsh Vassa with SBICAP Securities. Please go ahead. Congratulations, sir, IR team on fantastic results. Sir, one of my questions already answered, but it was just pertaining to selling price, as you all know that the utilization per ton was around 119,000 this quarter. So is the trend continuing for 2Q as well, like currently? So, Ash, we don't generally give a guidance beyond a quarter or so because it's difficult. But having said that, Q2, we are seeing more or less results at the same level, a little bit of correction.

28:06 But again, volumes will make up for minor correction in price that we are seeing. Beyond that, let's see how it plays out. Broadly speaking, I'm quite confident that the cost structure is such that and it's not a question of Chinese buyers are just sitting, Africans will come and they will the coverages will simply shoot up because I think the disruption which was there in South Africa means that there is they are very clear that companies like us, which have really worked with them to sort of have a stable relationship, we will continue to sort of get I can't call it preferential treatment, but certainly some degree of understanding that it's not a it's a good idea to keep our supplies in the mix.

29:07 Thank you. Next question comes from the line of Ashup Patel with Molecule Ventures. Please go ahead. Thank you for the opportunity. Congratulations on our blockbuster set of numbers, sir. This quarterly result actually puts us in a different league altogether. This is the first time we are seeing the full benefit of the integrated business model, which we boast about. So my question is, sir, regarding the Q2 volume guidance. So I agree that we cannot envisage a year out. But at least for Q2, can we expect now that the KNR2 has been operating at optimum utilization, at least the two ongoing furnaces. Can we expect Q2 to have at least upwards of 90,000 metric ton sort of volume?

30:00 Look, I don't want to get into the specific of numbers. In terms of production, we will certainly go up further beyond where we are at the moment. But as I mentioned, we are also looking to build up a little bit of stock because I mean, if I just give you from a theoretical perspective, 17,000, 18,000 tonnes of ferrochrome stock is okay when you're producing two sixty five. But when you're producing 400 or four fifty, it's not adequate. So those little balancing is will happen. And Ashurban, I will reiterate a point which I have always made, which is that I advise investors not to look at IMFA from a quarterly quarter on quarter basis or what we will achieve this quarter or next quarter. But I mean, certainly, we are answerable. We should have a general trajectory, upward trajectory.

30:47 But whether it is 84,000 or 86,000 or 82,000 is not that relevant as how quickly are we able to get to 500,000 tonnes and maintain that. So that's been our approach rather than a short term play of what exactly we will get during this quarter. Shwank, I don't know if you have anything to add. Yes. I mean, we just said, so that's more or less mainly for the quarter two. What we see is the average price relation will more or less remain same. On the volume wise, there will be some incremental volume. But since we are building on the Ferrofoam stock, so more or less, it could be on a similar range. So sir... So just to zoom it out and see on a yearly stance, so I understand that this time around, what we have delivered is absolutely robust 30% operating margin, 35,000 metric ton EBITDA. This is the typical pick which we used to do.

31:50 And this we are able to do when the industry cycle is at median level. So this, in fact, reflects our benefit of captive ore. So can we just at least assume that even if there is a little bit of reduction in expected volumes by 5%, can we expect at least the quarterly EBITDA, which we posted on Q1, can we analyze that given the volume uptick, which we are seeing ahead of us? So in the interest of transparency, because we had talked about 400,000 tonnes for FY 'twenty seven at various Kora, I wanted to put that out there. While we as I said, we don't give a guidance per se, but it's if you stated a number, it is better for us to clarify why we are not achieving that number. But that apart, I think annualizing this EBITDA, again, calls for us to look at what the numbers and the margins will be two or three quarters hence, which I don't want to do. I am quietly confident, but what those numbers are, will it be slightly up, slightly down, is not something I would like to get into. Because again, I would reiterate that I think it's better to look at the general trajectory or the general sort of strength of IMFA rather than look at specifics in a quarter.

33:07 Thank you. Mr. Patel, please rejoin the queue for more questions. Next question comes from the line of B. V. Agarwal with FiCom Family Office. Please go ahead. Yeah. Hi, sir. Thanks for taking my question. I had one question regarding the expansion of Secours. So they've announced that they'll be increasing their capacity from one lakh 45,000 tons to five lakh tons by '28. And at the same time, IMFA has guided to, you know, increase the domestic sales to 40% of the total volumes. So in light of this capacity additions, how do you assess the domestic Ferrocrome market over next two to three years? Do you expect any extra supply to create an oversupply situation or expect pressure on domestic pricing and margins?

33:53 So we're not I obviously wouldn't want to comment on Fekor's plans and their time lines that is for them to clarify to the markets and to investors. But broadly, what we believe is that Indian ferrochrome demand is growing because stainless steel is growing. There has been some cutbacks. So while we have added and Paker is talking about adding, but there have been some cutbacks also. So I don't see any difficulties in that regard. In any case, like I have always said that, I mean, we sell domestically or we sell I mean, we export, there is not that much of a price difference because, I mean, the duty protection is hardly 2%, 3% or something of that sort.

34:40 So we always retain the ability to sell more outside if we want to, but our export more. But our approach has been that as the largest producer, I think it is incumbent upon us to ensure that the domestic Ferrocrome demand is adequately met. And by no means do we feel that we are the only ones to do it. So I mean others moving ahead with their plans is more than welcome. Thank you. Next question comes from the line of Puneet Thakol with Plus91AMC. Please go ahead. Hi, sir. Thank you for the opportunity. Congratulations on great set of numbers. So I joined with my question by the representative, but could you just explain to me how the increment in the margins, what has led to and what would be sustainable margins going forward as well?

35:38 So very clearly, prices have moved up substantially. So that is what has added. But in terms of the overall number, our volume is also on the way up. So as against the standard of about 65,000 tonnes, we have produced and sold about roughly 80,000 tonnes. So it's a combination of volume as well as prices moving up. And like I said, we have more volume coming online in the next one to two quarters. So we are quite confident about the numbers that we will churn out. So post the new plant, think the Kalimalegar plant, what would be our capacity going forward? So as I said, our capacity will be about little more than zero five million tons.

36:24 We are expecting in FY 2027 about 380,000 tons, which is a slight reduction from what we had indicated earlier. And we are still maintaining 475,000 to 500,000 tons for FY 2028. Production or capacity, sir? Production. Production of $500,000 in 'twenty eight, you're saying? Yes. And so could you comment on the rest of Asia crisis and how that led to IMFA's margin increment towards what is the industry scenario going forward now post the West Asia crisis? So fortunately for us, no impact on the West Asia Crisis because we don't import anything from West Asia or sell anything to West Asia. In the initial days, certainly, there was a little bit of disruption in terms of container availability and all of that, but that has, by and large, settled down. But many of the fact that we are 95% exports at this stage, and a lot of that is going to the Far East, which is not affected by this, is obviously beneficial.

37:29 And secondly, when we talk about gas requirement and all of that, that's not relevant for any of us. Unfortunately, we have not had any noticeable impact. Yes, freight rates and domestic freight and export freight has gone up a little bit, but prices have more than made up for that. Next question comes from the line of Shivam Purohit with SBA Securities. Yes. Hello. Thank you so much for the opportunity and congratulations to the entire team for posting such a strong results.

38:14 Sir, my question is regarding the met coal cost. So recently, we have seen the met coal prices have declined or have corrected for quite some amount. And so the question pertains that the bookings that we have done during the current quarter, that is 2Q. So is the effect of those declining prices expected to be seen in the upcoming quarters, let's say 3Q or 4Q? Actually, met coke prices have moved up a little bit. Not I don't know about coking coal, but as far as metallurgical coke is concerned, it's moved up a little bit on account of Colombia, etcetera, their currency depreciation. But again, these are I mean, prices, by and large, have made up for all of those things.

39:03 Okay. So a small uptick would be the impact that would we would see in the met coal prices Not in Q2, maybe in Q3. Of three months, let's say. Thank you. Next question comes from the line of Yash Lahuti with Soyc Research. Please go ahead. Mr. Lahuti, please go ahead with your question. Mister, please unmute yourself and go ahead with your question. Since there's no reply from the line of mister, we'll promote the next in line. That is mister Saket Kapoor from Kapoor and Co. Please go ahead.

39:48 Yeah. And, mister, sir, and thank you for the opportunity. Sir, as as you mentioned correctly that the the price trends are more likely to be in the same vicinity of closer to 1 lakh 20,000 or or is it difficult to hazard a guess for for the entering quarter? And since that we have already already spoken that for for you, the visibility for a quarter that our max two is what you can guide us. So taking into... That into account, what should be the... Then the reasonable EBITDA run rate on top of two eighty one, which we did for q one? What should be modeling for the coming two quarter at least or what is the visibility from say in front of you? So again, I don't want to get into too much of guidance.

40:42 But clearly, as far as prices are there are concerned in Q2, we are seeing broadly speaking similar prices, maybe slight correction. But we will also have a little bit of tonnage, slight tonnage extra in Q2 to make up for it. And Q3 and Q4 is when we will have a much larger tonnage coming online. So while I'm not saying that prices will go down, but I would not want to hazard a guess. But on an overall basis, I think we are fairly confident of delivering robust numbers. So this Q1 number can be base also for this financial year. That is not a bad wrong understanding. Sorry? We can take this Q1 number of FY twenty twenty seven as a base for this current financial year.

41:33 Well, let me not make a definitive statement because we are seeing prices at recent highs, but there is still 50% tonnage waiting to come. That's where even any slight correction will get balanced out is what we believe. But again, I would not want to be drawn into giving specific numbers because I think that would not be appropriate. Thank you. Mr. Kapoor, please rejoin the queue for more questions. Next question comes from the line of Anand Sardar with Chattisgarh Investment Limited. Please go ahead. Sir, congratulations for the brilliant set of results. Just have one question, sir.

42:20 There was a... You know, we had a 50,000 ton furnace in the KNR two, which in which there was some kind of environmental clearance spending. Do we have clarity on that, sir? Not at the moment. We are hoping that somewhere around middle of next year is when we can do that. In fact, at the current Board meeting, we have also approved a slightly higher budget because, again, when we do a more detailed review of what is the situation and what work remains to be done. So a little bit of another INR 15 crores, 20 crores or so is what we have approved in this budget. So somewhere around middle of next year or thereabouts, I mean, I don't want to give a definitive answer at this point in time because again, we will need to now move ahead on the environment clearance and all of that.

43:15 But let's see, certainly we are keen on getting that going as quickly as possible. So just to clarify, sir, you're saying that by the middle of next sometime next year, will have some clarity in further quarter, the furnace will be operational. Correct, sir? No. What I'm saying is in the next three or four months, we will have clarity whether that fund is will be up and running by middle of twenty twenty seven or slightly longer or something of that sort. Okay, sir. Thank you. Thank you. Next question comes from the line of Pranav Jay with Ageless Capital and Finance. Please go ahead. Hi, sir. Thank you for the opportunity and congratulations on the good side of results. Very happy to see the company outperform.

44:03 Sir, just going back to Q4, where you had mentioned that due to that there might be a onetime increase in cost due to the ramp up of production and which is visible in this quarter. Just want to understand, is this the peak as to what our cost escalation might be at least till Q3 since from Q4 once our operations stabilize, we can see a potential benefit like you had mentioned? So look, from a cost escalation perspective, there are two things. One is the fixed cost, which is spread over or divided over a larger tonnage. So that will enhance. But obviously, the variable cost in terms of met coke and other things have been moved up or down a little bit, that's hard to say at this point in time. We are not seeing significant risks on that front, having said that.

44:56 And sir, secondly, my one last question. We've seen Ferrochrome prices correct a little and since we passed since it is passed on with a lag, while Q2 is stable as mentioned, Q3, Q4 might see a larger dip in realizations since you already have a visibility of that? No, we don't have visibility or whatever visibility we have, I'm not comfortable sharing it. As I said, we wanted to wait and watch because there are multiple factors. There are over availability and pricing is a concern. So it's not so simple for Ferrogru prices to dip also. So but having said that, we definitely don't give a guidance for Q3 and Q4. So one is to just wait and watch. What I will say, repeat, is that we certainly have higher volumes coming on to which will see us delivering a robust set of numbers going ahead.

45:52 Thank you. Mr. Chen, please rejoin the queue for more questions. Next question comes from the line of Josh Shah with Seven Seas. Please go ahead. Mr. Prand, I want to understand the timeline for auctioning of polymetallic mines with the composite license. I understand that the development nine year deadline is 03/31/2027. Am I right? What auction are you talking about? Polymetallic mines with the composite license. No, I have not kept up with that. I'm not so I would not like to comment until I look into that. Okay. Now coming to Iran talk optimism, we believe that general belief is that Iran war has to come to an end in six months' time, and it will lead to reconstruction demand for stainless steel three sixteen L. That will be a huge demand.

46:53 So what is your take on that? Certainly, when all these geopolitical conflicts simmer down and settle down, whether it is there or whether it is Ukraine, Russia, etcetera, certainly, there will be demand. But I mean, even from an Indian perspective, there is significant CapEx outlay for public infrastructure. And we are now seeing that switch where a lot more stainless steel is being used than before. So I think within India also, I believe that there is significant demand, which we and others can cater to. You. Mr. Shah, please rejoin the queue for more questions. Next question comes from the line of Deepak Pandey with Sagun Capital. Please go ahead.

47:47 Hi, sir. Congrats on a good set of numbers. Sir, it was getting some sort of entry into critical minerals. Any comment on that? So that is something we have very clearly said that critical minerals is something we're interested in because it's certainly adjacent to our skill set. We have looked at a couple of blocks, but unfortunately not been successful in the bid. So that is something that we will keep on trying to see if we can make a breakthrough in that. But yes, Critical Minerals does remain an area of interest for us. Mr. Pandey, are you done with your questions?

48:36 Yes. Thank you. Next question comes from the line of Saket Kapoor with Kapoor and Co. Please go ahead. Yes. Just in continuation to the same, However, we tied up for the the selling of the incremental capacity. I think we were more more inclined to send domestically. So our team is setting up, and it it was respect to the key raw material for the coking coal, the met coal part, I missed your comment how those prices are currently trending? These two questions. So met coal prices have moved up a little bit, not terribly run, but moved up a little bit, which is again what happens if Ferrocrome prices are high. Secondly, in Colombia, etcetera, there is currency depreciation. So all of that is having a factor. But in as much as selling material Ferrocrome is concerned, as I said, it is something that we can very easily adjust from domestic to export and export to domestic. Of course, with long term customers where we have a minimum base tonnage, we will not go below that.

49:47 But broadly, Suresh, think in Q1, if I recall correctly, about 15% to 18% domestic sales, is that right? Yes, yes. Around 19% is we have sold in domestic. Yes. So that is something that we can cater to, as I said, are I mean, not from a point of view of price because clearly, there is very little duty protection. And therefore, by and large, there is parity between domestic and international prices. The only difference is the timing of confirming an order. But so we I mean, both from a domestic consumer point of view as well as some of our export consumers, customers, there is interest in picking up tonnage.

50:34 We don't as I said repeatedly, we don't see any concern on that front. Sir, Slide number 10, it speaks about our EBITDA cost per metric ton rising from closer to 82,000 tons to 86,000. So as you mentioned that the prices moved up and the RM prices also improved. So taking into account the current setup, what should be the cost of automatic term trajectory be shipping up going ahead? Or what kind of inflationary trend can we expect on this trend? See, broadly, I think what is sorry, I have actually a bit of a cold and fever, but that is why I'm coughing, my apologies.

51:21 So broadly, I think the biggest advantage for us is the fact that chrome ore is sourced from our captive mines because that is the biggest input to the cost of production. So that is by and large under control. And I mean only if royalty prices move up a little bit that has an impact. Secondly, as far as met coke and all that is concerned, a little bit up and down does happen. As I said, on account of currency depreciation in Colombia, on account of Ferrochrome prices staying high, all of that sort of translates through into input costs moving up a little bit. But that is the classical time lag as one of the earlier investors asked in the question. That classical time lag between stainless steel ferrochrome and chrome ore and metallurgical coke, except in our case, chrome ore is not impacted.

52:21 But other things move up and down a little bit. Thank you. Mr. Kapoor, please rejoin the queue for more questions. Next question comes from the line of Anishika Patel, an individual investor. Please go ahead. Ms. Patel, please go ahead. Hello? Miss Patel, yes. Please go ahead. Miss Patel, we cannot hear you. Can you come in the radio and talk? Since there's no reply from the line of Ms. Patel, we'll move to the next. That is from the line of Harsh Divaker, an individual investor. Please go ahead. Yes.

53:08 Hello, sir. So congratulations for the best record results regarding the revenue and the profit. Hello. Yes. Thank you. Yes. Yes. So I had some one or two questions regarding some coke since we had been impacted by the Middle East war due to The USA in Iran. How does it impacted the coke consumption and prices? Along with that, I want to... As much as I clarified just a couple of questions ago that no impact from as far as the West Asia crisis is concerned because we either import anything or sell anything there. But yes, certainly, freight costs for domestic and otherwise have gone up a little bit, but nothing significant.

54:01 Okay. And one more question, what is the specific like what's the coke consumption per ton of ferrokrome and overconvention per ton of ferrokrome as of now? So broadly that's 0.65 kilograms of coke and broadly 2.5 tonnes of per ton. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to Mr. Subrakhan Pandar, BMD, for closing comments. So thank you very much for taking time out to discuss. And if there are any questions that we have not been able to answer or if there were others in the queue who would like to reach out, please reach out to Investor Relations, and we will certainly make an attempt to revert to you.

54:55 And going ahead, we are eagerly waiting for the first one that's at KNR1 to start producing later this month. We will, of course, alert that alert, give an update about that. And secondly, of course, the second furnace, are expecting by end September, early October to come online. So we will keep sharing regular updates. Thank you. Thank you. On behalf of Indian Metals and Ferro Alloys Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.