Midwest (NSE:MIDWESTLTD) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Midwest Limited q one FY twenty seven earnings conference call hosted by Go India Devices LLP. As a reminder, Please note that this conference is being recorded. I now hand the conference over to miss from Go India Advisors LLP. Thank you, and over to you. Thank you, Nisha. Good afternoon, everyone, and welcome to Midwest Limited earnings call to discuss q one FY twenty seven performance.

0:49 The financial results have been uploaded on the exchanges. I hope you have had the opportunity to review the same. We have on the call mister Ram Kolaredi, promoter, full time director, and CEO missus Uma Kolaredi, promoter and full time director and mister Dilip Kumar Challasni, chief financial officer. We must remind you that the discussion on today's call may include certain forward looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request mister Ram Kolareri to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for q and a. Thank you, and over to you, sir. Thank you, Shana.

1:35 Hi, everyone. Thanks for dialing in the call. I'm happy to share that we have started the year with a strong note in terms of numbers. In terms of growth revenue, we have a growth of compared to Q1 last year to this Q1, we have a revenue growth of 35%, EBITDA 25 and a PAT growth of 27%. This is we also have to note our major cost factor is coming from diesel. And we have faced lot of volatility, especially higher prices on diesel for the last quarter compared to the q one of previous year. In spite of that, I'm happy that we are posting these numbers.

2:23 And most of these numbers are coming from the Grenite. The in terms of quartz, we have have the production for the last quarter, which is... We generated around 5 crores of revenue. And we have said this quarter will be a big jump from that number. And then a month on month or quarter on quarter, it will be increasing until we reach a throughput of 15,000 tons per month eventually, and we'll be stabilized the plant at the eventual number. And we are in line to reach the target for the year end. The other development I would like to bring is the...

3:11 An important MOU signed with the Indonesia state owned company, So Parminas is a a state owned company of Indonesia, which is designated to explore, mine, and value add all the critical minerals in Indonesia, including rare earths. And they... And we have the first private company to have an MOU with them where we get access to the... All the resources in the entire country and our focus being rare earths. We already identified the first two projects, which our team will be starting to work on. Now this MOE will be translated into an agreement to form a JV along with them, and I think you'll find developments on that during this quarter, which we'll update you in the next meeting.

4:01 The other important update I would like to bring during this quarter is in... For Sri Lanka project, the policy which we're waiting is finalized, stratified, and it is in place. And post that, we have received the necessary communication from the government to to complete the data points, wherein we are confirming our production, our investment, and our timelines to them to develop this project. I think that is the final milestone before we receive the eventual license. I think that is also expected during this quarter, which we will... So there there was no progress for the last twelve months, and this is the big milestone where there's a progress, and they're ready to start finishing the last leg. So I think we we should be looking at developing the project starting next... Sometime next quarter.

4:58 So these are the important updates. We are in line for our long term growth. And in fact, we are getting more opportunities that we see. For example, prominence was not a plan. It happened to happen, and we were... We happen to be at the right time. Given where we are, we will be taking all the relevant opportunities where our margin profile is maintained. And if our goal as... Is right now, we're looking at projects that we take up right now that start delivering numbers and revenues in the next twelve to eighteen months. And we we are... There's a lot of projects coming up in terms of error, but I think we are looking at early commercial projects as a priority, and that will be a priority. Apart from that, I think the updates on on on the last quarter are continuing where we are the second phase plant or the HPQ inclusion all remain in in line to what has been discussed.

5:59 Yeah. So I think that's the update from my side. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants may press star and one on the touch tone telephone to ask a question. Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touch tone telephone.

6:54 The first question is from the line of Aravind from Equiventure Capital Advisors. Please go ahead. Hello, sir. Good afternoon. Am I audible? Yes. Okay. Sir, I would like to understand... We have a sister concern in Midwest Advanced Materials. Right? Hello? Yes. So I would like to understand that nature of... Primary nature of business. So can you elaborate? So advanced has been into production of permanent magnet. So they are... Their business is from oxide to... They are toxic to permanent magnet. So that... That's where their focus is.

7:44 Okay. Okay. And, sir, I would like to understand what was the volume with regards to quartz in this particular quarter, q one? Approximately, 5,000 tons is what we have sold. Okay. Okay. And by what time... Probably by end of q three, can we expect 15... Us to be producing around 15,000 tons... A thousand tons per month? Yes. So this quarter, we're looking at around 20,000 and the next quarter... But but by the end of this quarter, we'll be able to touch a run rate of 10,000. So next quarter, we can move 10 to 12,000. I think q four will be exceeding 15,000. That's the plan.

8:32 Okay. Okay. All the very best, sir. Thank you. The next question is from the line of Arjit Agarwal from Stepfred Capital. Please go ahead. Hello. Yes. Sir. My question is like what utilization level do you expect costs to reach EBITDA breakeven? So this financial year, I think we'll be we are planning a profit, not breakeven.

9:18 We'll be making some profit out of the operations. So I think the but optimum profitability of optimum EBITDAs, we'll be seeing next year. So breakeven for your question, breakeven will be achieved maybe in Q3. And then at the end of the year, you will see profits, sub profits. Okay. And my question is one more question is about the Sri Lanka plan. So when they will start contributing? So Sri Lanka, there is technically a delay of almost six months due to the policy.

10:04 We are... We... So I think we'll... Can start internally timeline is we can start breaking the ground somewhere in October. So I think from that point of time, we should look at twelve to fifteen months for the plant build out and start operations. Okay. Okay, sir. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. A reminder to all the participants to press star and one on the touch tone telephone to ask a question. Participants who wish to ask a question may press star and 1.

10:54 The next question is from from Yash Purbe from Inward Research. Please go ahead. Yeah. Hi. Good afternoon, sir. So my first question is on the recently signed MOU. Sir, can you give more details about it than the timeline that... By when can we expect some significant milestone in that? So the the... Why we are looking at Indonesia interestingly is I think I'll give you just a brief. In rare earths, there are heavy rare earths and light rare earths. So NDPR, which is a neodymium, percidium are light rare earths. And the heavy rare earths that we are looking at are dispersing in terbium.

11:42 Now India Indian monazite, which is there in Indian states, Indian coastline has only light railers. We don't have the heavy railers. Heavy railers are only in certain geographic areas, which are already mostly contracted or acquired by the Chinese companies. So... Which means there are very less territories where we can access to DYTB. And the reason DYTB is important is every powerful magnet which goes to defense, aerospace, or any critical applications need heavy rare earths close to four to 5% as a coating or onto the rare earth material without which you cannot make those products.

12:28 So so for strategic and critical industries, it is essential. We... And Indonesia has deposits called ionic clays. They are geological deposits, different from monazites, which have the heavy radars. So this MOU is giving us access to not only right... Light radars, but also heavy radars. So the initial deposits being targeted are ionic clays, which are not there in India or many geographies. They're they're Indonesia. So we we will be converting the MOU to agreement or this quarter itself most likely, and next quarter we'll be forming a JV. The percentage and then... And the equity share of the JV is is just being discussed.

13:17 Now the will be contributing capital. We will also be contributing capital in the share that we... The JV is formed, And we will be and and we will be operating this JV for a long time, maybe... So the activity, the mine... The MIDWESTLTD mining lease, then we will explore... We will be starting to mine, extract the the oxides out of it. And that is the scope of this initial JV that we're forming. And this JV is not just one project, can be for multiple projects across the country. But, obviously, we'll start with one or two, and then we'll we'll try to increase as we go. There could also be projects where we are building out and we are still doing exploration.

14:05 But, realistically, it's very interesting. And the light railers are already the light railers are expensive, and the and the heavy railers are four times... Four to five times more expensive than light light railers. So it is it it is strategically important and also margin profile wise. Heavy railers are much more attractive in in overall scheme of things. So I think once you once you form the JV, from there, should look at twelve months... Twelve to fifteen months again to plant build out and then operate those mines and get into cash flows. And, sir, what kind of return of feedback can we expect from this project? It's still a initial stage. We cannot...

14:52 But, usually, the the cost of extraction is very similar to what we get in MonoZeig, but you get added heavy data. So it's a very... It's a... So usually, heavy data products are significant in terms of margin profile. But the key is the the key is there needs to be enough volume. And, luckily, in Indonesia, we're finding enough volume of the case to build a plant. And, sir, can you put some light on what kind of CapEx would be needed for this project? And this will be apart from the 300 CapEx we are already doing that are existing project? So it will be similar. It will be more because of overseas project. Those are those are project profile is similar. We're taking the the difference between care line, whereas care line, tailings are already ready. Here, we'll be mining the clear from the earth and then taking it to the plant. So the CapEx will be higher and also versus project, usually CapEx higher. So I think the CapEx will be close if the first project will will be higher than Kerala, but the absolute number, I think we'll be able to give you next... During next call because we're still doing a lot of work on the project report right now, which will be ready in the next forty five to sixty days.

16:12 Okay. Thank you. Those are my questions. Thank you. The next question is from the line of Chirag Gandhi from Asset Investments. Please go ahead. Yeah. Hi. Can you hear me? Yes. Hi. Yeah. Yeah. Thank you for the opportunity. Actually, I joined the call a bit late, so I missed out on the opening remarks. I wanted update on the quartzcom... Plant... Phase one plant. Like, have we already started mining the... Sorry. Started the commercial...

16:57 Commercialization of the plant. And are all the treating issues with this phase one project has been behind us? Just wanted to check that. Yes. We have started the commerce operations. The two things issues behind us. I think that will be shown in the numbers this quarter. And as indicated earlier, we'll have a month on month, quarter on quarter growth. We'll be stabilizing by the year end at around 15,000 tons plus above per monthly. And by when we'll not only be breaking it, we'll also be generating some profit by the year end. That is the plan. Understood. And what would be the update on Phase two of this plant? Phase two, we are already started building out.

17:44 The only changes some machinery was going to come from China. We're looking at alternate options now. So we will be in line to commission the Phase II in the next within the next ten to twelve months. Understood. Understood. And what would be the CapEx outlook for this year and for the next year as well? Outlook. CapEx on watts would be approximately 125 crore. Okay. This is this will be entirely for Phase two of the project, right? Yes. But it's split over current year and next year. It's split over current year and next year. Okay. So our total CapEx outgo will be one twenty five growth between this and the next year. Right? Or it's Yes. Will be a higher number because we have other projects also in the phase of build out. Right?

18:39 Yeah. This is for quads. Okay. And what would be the CapEx for the Sri Lankan project? Sri Lankan project for plant building is around INR 120 crore. Okay. Okay. And the last question is on our Granite business. Like can you explain us how did the quarter went by and how is the demand shaping up for the rest of the year? Demand is good. You can see from the numbers, we're 35% top line growth. I think if you remove the quartz part, we are still above 30. So I think the demand rate is good. The pricing wise, we have we have had a better realization. The attention is on the cost factor, though we showed growth on all the fronts.

19:29 The fuel is something which we are working aggressively on. Luckily, if you look at current quarter compared to Q1, the fuel price have rationalized a bit, but are still far from what they were previous year. We hope that once the volatility set, we go back to the previous levels and all that is directly flowing to the numbers without us doing much than what we are doing now. Apart from that, I think from cost factor, the electrification is something we are in line. And we are aggressively pushing that most of the electrification expenditure is done this year itself. Understood. Are you giving any revenue and EBITDA guidance for FY 'twenty seven?

20:18 Granite wise, we will be achieving whatever we have recorded in the last few years, it will be more or less in the same lines, except unless we have this diesel price impact, we will be like maybe 50 bps to 100 bps kind of range we will be in the same lines as last year's. So on overall basis, what will be the revenue growth and EBITDA margin that we are just guiding for FY 2027? FY 2027, we'll be close to we're estimating around INR $8.40 crores.

21:09 Again, it's just past year's number of INR $6.45 crores. Okay. And EBITDA margin will be upward of 26%, 27% for this year comfortably? Yes. It'll be in the same range, except the quads are related weighted average factor, if at all, there is little impact to that extent that will impact on the EBITDA. For the current year, next year, there will be full fledged volumes coming in from the quartz. I think the EBITDA would be better. But this year, there'll be a little weight factor on that. Understood. Understood. Thank you. Those are my questions. Thanks. So to add to this, the diesel cost is almost 30 per... 13% for us as a cost head.

21:57 So to add to this, the diesel went from 85 rupees to $1,251.30 rupees a liter. So you can see a lot of manufacturing industries that are heavily dependent on diesel. Their EBITDA margins were heavily under stress. As we're down one ninety basis points. That's it in this quarter with this kind of impact, diesel cost impact. The reason being that we were very proactive and we we got our fleet electrified from... And, you know, one of the vehicles we are expecting, we electrified that suite of the fleet, and then we pack it together with solar. So our OpEx costs are less dependent now on diesel fluctuations. So that's the... And we are going to electrify... Continue electrifying the fleet to further reduce the diesel impact. So war, no war, we will not be affected on the granite margins going forward.

22:56 And we've also increased the prices slightly. The prices price hike would be in the range of what, upward of 5% or it's like around 3% to 5% in the Granite? Around that range. Around that range. So we will be able to recoup the margin decline that we witnessed in this quarter by, let's say, 2Q, given we have already Yes, seen some rationalization in fuel yes, we should be. And also fuel has come down by a certain extent. That is also helping. And the currency also... So, yes, the car... We will be able to more or less go back to the norm. Yeah. I mean, another war and another really big hike is really, you know, can be predicted. But, you know, we are on in the journey of electrifying the heat. So whatever we can reduce the impact constantly compared to...

23:53 You know, even the worst quarter is down by 90 basis points. So you can imagine the minimizing we are doing efforts to minimize. The biggest lever in this is the volume growth. Right? Revenue growth. So if if revenue growth is able to absorb most of the other costs, fixed costs, and I think that revenue growth, we'll be able to meet, we feel as of now. So I think should not be a big concern right now. Understood. Understood. And maybe the last question is, what is the average relation we're able to get it in the quartz business? Around INR 10,000 per ton, rupees per ton. Quarter. Yes, yes, yes. Okay. Thank you.

24:45 Thank you. The next question is from the line of Dipesh Jay from Mania Finance. Please go ahead. Yeah. Am I audible? Yes. So Yeah. Many of my questions have been answered. I just wanted to understand what are the key factors of the q and q... Q on q decline performance. Was it some seasonal impact during the quarter? Yeah. I mean, in essence, ideally, one compares q one of last year, last fiscal to q one of this year.

25:30 Because usually across the industries, q four has the highest peak sales usually. So so ideally, instead of comparing q q one to q four, if you compare q one of this year to q one of last year, it's grown by a 35% revenue. Revenue has grown by 35%. And adding to that, as far as specific industry, we are most of the material is being sold to China and exports are to China. And Chinese New Year is the biggest influencing factor in that time line. It's like Diwali for them where they reset all their stock and start buying in bulk in volume immediately after to start up for the year.

26:15 And that typically happens during January, February time. So historically also, our q four revenue has ranged between 30 to 38, 40%. I think last year, it was 35% of the overall year revenue. So that is also historically constant for us. So this year also, I think, there there will not be any different. Right. And could... What is the... How is the phase two expansion of COGS per business progressing? And could you provide some details out of that? Yeah. One second. Yeah. We have spent around very marginal amount, and we have finalized now the suppliers' orders and all.

27:04 Q2 and Q3, you will have significant outflow that we have planned for. Out of INR 125 crore, approximately INR 60 to 70 crore would be spent in the next two quarters. And the remaining amount would be, like, the fourth quarter or the early next quarter of the early quarter of the next financial year. And by when do you think segment of quartz will reach the breakeven? Quartz breakeven. So quartz breakeven, I think we'll be breaking when we touch a production of 10,000 tonnes on a monthly basis. I think that is what we'll be doing sometime end end of this quarter... Next quarter for sure. So 10,000 tons is...

27:53 But our aspiration is 15,000 tons per month run rate. So I think we'll be ending up making profit this year. Right. And that would not need the phase two expansion also. Right? I mean, we No. Okay. The cap... In in the current plan, we can go up to 18,000. I think 15,000 is optimum average that we are looking at, and then setting that as a base and then going, like, higher than that. Right. And could you provide any FY twenty seven guidance for production, sales, volumes across the key business segments? I think we have absolute numbers and not the unit numbers, but we can give you that. Estimated revenues for the year 05/27 is approximately INR $8.40 crore And out of which, 720 will come from Granite, and a hundred hundred and twenty will come from Quartz.

28:54 EBITDA levels, Granite wise, will be in line with our EBITDA of our previous years. And quads this year would be a little low than expected because, you know, it's the first year of stabilization. Then the volumes are also a little low. The absorption cost, I mean, the overhead absorption and all are... I mean, taking the bite of it. And next to financial year, there'll be a full fledged contribution coming in from Quats. Right. And also that would increase the operating margins also when the cost business would Yes. Absolutely. Okay. So there will be an improvement on ROE with that? Yeah. There will be deployment, and the revenues will start coming in. And this this ROE... Current ROEs are basically because we have raised fresh capital and zone that is sitting there. There's no... That's deployment, and revenue is coming out from that deployment should scale up the ROC or ROEs.

29:56 Okay. What about the overhang of the promoter holding of 77%? Are are you planning any fundraise or any... So... I mean, and is there any other plan which... Wherein this promoter holding will come down to 75%? Because We have enough time. Selling from the promoter would actually be seen as negative. That's the reason I'm asking this. No. We have enough time, and I don't think we're looking at it in near term to get down to 75%. Yeah. I think three years is what we are told, and we are not even done with one year. Yeah. Right. Right. Thank you so much, guys. All the best. Thank you. Thank you.

30:53 The next question is from the line of Alok Diora from Motilal Oswal. Just had a couple of questions. So first things on the revenue guidance which you just gave. So just wanted to understand, like we have already done around INR 190 crore in 1Q. So even if you just go and extrapolate it for remaining quarters and assuming second half is better, we should be doing $8.50 crores or so plus the courts will also be ramping up. So just wanted to understand more on the FY 'twenty seven revenue guidance. How are we seeing it? Because it seems to be a little on the lower side considering the current run rate and things will ramp up in the two h.

31:45 Yeah. Hello. We basically... As as a company, we want to promise less and over deliver. So these are considerable estimates. I mean, conservative estimates. Right. But... So if I... If you just you know, on the realistic side, it it should be, like, 200, which we are doing could kind of continue for the fourth quarter... For the four quarters and slight bump up and plus. What will be the cost revenue in this? So INR 120 crores, is it? So, yes, INR 120 crores for the cost. And of course, when it gets to optimum level, then the overhead cost will be optimized and then it will cross the breakeven mark.

32:38 But then usually, the rains are slightly delayed in quarter three. And usually, it's... The production will be slightly lesser in... Compared to quarter one also. So the... Those factors will play out, but, ultimately, this is a a conservative estimate from our side. So whatever number we are doing, we're very confident is what I would say. And if things go as planned like q one, we should definitely beat that. Got it. And, sorry, I joined call a little late. So the margin profile, which we have been doing over the efficiency this quarter, we we have been doing 27% to 29% sort of a range on a blended basis.

33:25 That should kind of continue? Or I mean, there it should be or it would be more like on the lower end of that range? So Q1 had we faced all the challenges that we could face, uncertainty, sudden spike of fuel. And so I think Q2 is tapering down in terms of uncertainties and on the cost. In terms of realization, we are more or less in line with Q1. So given that we are more relaxed in Q2. Q3, whether we can expect surprises, we don't know. We are prepared for flooding. We are prepared for rains, much prepared for rains than last quarter, that angle. Operationally side, we are strong. Any external factors, we don't know. But if things remain as they are, I think we are quite comfortable.

34:16 Sure. And just a last question. So, you know, we have seen other companies where, you know, because of the increase in the cost, they have taken some price increases. Have we have we also taken that selectively in our our segments? Or we are still in kind of a a wait watch mode, and then we'll take appropriate calls? Because many companies, you know, we have seen the... Basically, the cost being passed on to a certain extent. So just wanted thoughts on that. We already have done price increase. That that has helped us. And the second thing which has helped us in maintaining our margins overall is more or less is the volume increase. So I think we are focusing on the volume increase, which is in our control and delivering good value to the customer right now. And the price has been done. And if if if the... If further fuel, there is uncertainty, we have option to do that again also. But I think for now, for this year, we will be maintaining where we are if the costs are in line to this.

35:29 Sure. Just a last question, if I may. So the course business in the phase one, we'll be doing this $1.20 crore revenue this year. So from this phase, what could be the revenue next year, assuming by end of this year, it's almost at fully ramped up in terms of, you know, the capacity. So what could be the revenue from that in the second... In FY '28? Around $1.80 or $1.80 to $201.80. So that that that is the range once you've attached the one fifth... 15,000 per month. Got it. And and from the phase two, we'll be getting in FY '28, any material contribution?

36:19 Phase two, I think we are looking at sometime q two next year. Right? So, yes, next year, we'll be getting some numbers. But you need to keep a buffer of quarter for stabilization and streamlining production. So I think you will get production for about four months for the next year is what we should be planning around four months. Got it. Got it. So if we if we end up doing, say, what eight forty, eight fifty, which you are guiding for FY '27, so in that approximately seven twenty is for the for the granite. So whatever growth you get on 07/20 will be there for FY '28, and the 01/20 of course will be more like a one eighty to 200 in FY '28. Is is that understanding correct?

37:07 Yes. So one eighty, let's say, phase one and some part from phase two. Let's say, another 50 or forty fifty. So I think we are targeting 200 plus to definitely for next financial year. That number could be anywhere between 200 to two thirty to 40. Let's let's look at it. I think by by the... I think by end of this year, we'll be able to throw more, like, on more accurate numbers there. Right. And the seven forty, seven fifty could be more like, whatever, 10, 12% growth? Yes. So the... So if you remember in the last call, last week also, also, we have guided 12% on the Grenite. So we have beaten that by good margin. And whether that momentum will continue in terms of order book and production, yes, it is for this year. Next year, let's say, we maintain the same 10%, 12% as a conservative estimate.

37:57 Got it. And margins, when you say plus, the quarts will stabilize, so the margins will start inching up. FY 'twenty eight, you know, I mean, if we are doing one hundred eighty crores, which is almost the peak revenue, which could be... Which we could get from the phase one. So what could be the blended margin looking like? I mean, it would be more like inching towards the 30% mark, or it would still be slightly lower than that number? Because quartz is expected to have a much higher margin profile as compared to the granite business. Yeah. Quad is a... I mean, there will be a little better contribution in the next financial year because the number which is coming from quads would be a little higher. I mean, in terms of EBITDA, EBITDAs would be close to 30, 30, little...

38:54 About 30%. And overall blended EBITDA might be around 29, 30%. Got it. Got it. Got it. Yeah. Fine. I, I think... Yeah. That's all from my side. Thank you, and all the best. Yeah. Thanks a lot. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touch tone telephone. The next question is from the line of from Stepfred Capital. Please go ahead. Hello? Yes, sir. You're audible. Yes, sir. So my question is, in the previous conference call, you have guided to 100,000 tonnes of production in FY 'twenty seven.

39:45 However, Cuban FY 'twenty seven sales is around thousand tonnes only. So is it still achievable when they 50,000 tonnes? Or what are the challenges in the production side or demand side? So first, the challenge is on the production. We have been facing some challenges last quarter to streamline the production. It's a technical issue that technically is just sorted. We will not be able to do we are not doing 150,000 tonnes. We are we'll be doing around 120,000. So that is the effect of that. And all the guidance and numbers that we have just discussed till now is based on 120,000 tonnes. Okay.

40:33 And what will be the mix of engineered stone and solar in this quarter? Engineered stone and solar. Yeah. Around the 60 to 65% is in stone balance solar. I think sixty five thirty five is a reasonable assumption. Sixty thirty? 30. 65% tangerine stone, 35% solar. Okay. And are we on When the phase two cards were commenced, it will be done. It is... It will be in June for FY twenty seven.

41:24 Phase Phase two parts? Yes. Phase two parts, we just... We'll take another ten months to... Next year, we'll be commissioning the plant. So I think you'll see the numbers only coming in from next year. We were also waiting a bit to stabilize this plant. So now that is done. So we are going ahead. And I think next year, whether it's ten or twelve months, we'll commission the plant. As discussed on the call previously, we'll see some revenue from that next year. Thank you.

42:20 The next question is from the line of Manish Gupta from Equinox Investment Advisors. Please go ahead. Yeah. Good afternoon. I'm sorry I joined the call a little late. Could you talk a little about your Kerala JV with the the Kerala government? Yeah. So post signing the... Post the the last development, there is no development this quarter primarily because there is a new government there, and they're just settling down. In fact, there is no new MD also for KMML appointed yet. So there are some bureaucracy and internal issues in deploying some offices. So KML, there is no activity post that. We are hoping that once the new MDN, the new team comes in place, we will start progressing that in in continuation to that. Now a timeline on that, we frankly cannot estimate because government thing. But one thing I would like to highlight here, the current administration is poor development, and they are concerned about commercial commercial activities in the state and increase the state revenue.

43:30 So I think once the team is set, we believe that things will move faster. But until I think we'll have to wait a bit. Hopefully, this quarter, that team should be there, and we should see some activity from next quarter onwards. Yeah. Could you understand that? And regarding policy logjam, do you have any visibility when you think it should get settled? Yes. So there is a a development this quarter, which I updated the the policies. We were waiting for the policies. The policies done streamlined, ratified all the box have been checked from policy. And also, after we have received a formal communication to reconfirm our capacities, timelines and investment into the country.

44:18 So that is being done as we speak. And then I think that was the last milestone. So from they said they have done. From our side, are presenting all that information and project report, final project report. I think once that is there, we expect documentation to be done sometime this quarter itself and we can start developing the project from next quarter onwards. So I think we are at the final stage. What we have been waiting for long is panning out now this this quarter. That... That's great to hear. That is CapEx. So correct me if I'm wrong. We have almost about $809,100 total CapEx plan. This...

45:05 You said 125 crores for, 150 crores for ports. Kerala, again, I think 300 crore in Indonesia, a little more than Kerala. So what are the plans for Ketasar funding? Is it going to be more debt oriented, or you are planning to raise some equity also? Yeah. If you look at Kerala, Kerala is basically pilot plant unless we get into a kind of a commercial plant arrangement with the new government. So it's basically a pilot plan which will not cost much. It's a insignificant cost. As far as phase two is concerned, it is a fresh equity that we have raised. It's it's not a CapEx that we just need to spend as per the time line.

45:53 And other CapEx that we have as of now, it says no regular replacements as far as Granite is concerned. That's that's not being met year on year from its regular cash flows. Sri Lanka is... If it... I mean, that comes in, then we will be in a position to spend $120,150 crore from internal accruals. Our getting ratio today is at a point two times. Okay. We have leverage on that front. Alright. Alright. And so finally, I mean, of all the diversification that the company is doing, is there or is there or is there and then Indonesia MOU is there. Which one, you know, excites you more to become, you know, a meaningful contributor behind the night in times to come?

46:41 So if you look at all these projects independently, they're meaningful contributors. Now what do mean by meaningful contributor? If if today we're generating about 700 crores odd or 800 crores in natural stone, something which is at least 50% of that size is meaningful. Right? So Kerala, once the com... Kerala commercially happens, it it ticks that box. The Sri Lanka ticks that box. Indonesia could be much bigger. I mean, two two initial times to talk about it. So I think all these are significant contributors. Now we'll have to see... And we are working in parallel because as you have seen, the timelines when we're working with government agencies initially may be slow, but once you get all the permitting in line, it's in our control. Right? So we're geared up for that. We have the team in process all together once we... So we we can execute once we have all the ground clearance available to us. So I think we will we will take all the opportunities, whatever is mentioned in parallel. We have independent teams, and each one is significant. Ideally, we want to see all of them come into numbers, translate numbers in the next eighteen months time.

47:52 So that is the whole idea that we are working on. Got it. Got it. Thank you, and all the best. Thank you. You. A reminder to all the participants to press star on one to ask a question. The next question is from the line of Prateek Singh from IIFL Capital. Please go ahead. Hi. Thanks for the opportunity, and and good afternoon, Ram and MIDWESTLTD. So I wanted to understand, maybe I mentioned in the opening remarks, what was the year on year growth in absolute black and black galaxy in this quarter in terms of the YY percentage terms? Have you given it earlier? Hello?

48:53 Yeah. Was asking about the volume growth, sir. Volume growth. Volume growth, no. Approximately 10%. Okay. 10% in both of them. Right? 10% in volume. Yeah. In both the both the products. Okay. And just if you can remind me, you had a revenue share with... In two mines. That's my... The revenue share with the AP government. That is the Black Galaxy. Right? Or is that the Black one? Yeah. Black Galaxy. Black Galaxy. Not revenue sharing, actually. There's a So if you have a consideration that we are paying to the the lesser, that's a state owned body, and that they have a percentage of shareholding. Understood. Understood.

49:38 The last question was on this Malaysia JV. So as of now, I mean, I assume it would be in pretty early stages, but as of now, have you decided in what share would Midwest Limited, Midwest Gold, or MIDWESTLTD share the CapEx? So right now, structure that is evolving is different. There... There'll be there'll be two... What we're discussing is there'll be two JVs, and the first JV is from mine to oxide where Midwest Limited will contribute. The second JV is from oxide to magnet, which energy is going to contribute. So right now, be one JV, which will be with where we we start off. Because without the oxide, there is no meaning in producing the magnet.

50:27 Right? So I think there is a timeline difference also. We are we are starting off the first JV now. I think the other JV with energy, they are looking at sometime later. But our focus is we are good to go as of now, and our product will be oxide. So rare earth oxides, which are the the ones mentioned, heavy and light railers. And if you do see this technology partner, they'll not be equity partners nor they'll be contributing in terms of the capital. So the capital raise on on this specific JV will be between Parminas and Midwest Limited. Understood. And which of these deals is a bit more CapEx intensive, the old to upside part or the upside to battery part?

51:16 Oxide to magnet part is more capital intensive. And Okay. And... Yeah. And ore to oxide is less capital interest. Okay. So whatever outside to manage part work would be done, that will be contributed largely by the energy? Yes. Yes. Understood. Understood. And just one more question, if I can squeeze in. I understand that the bulk of your exports go to China. Have we seen any rise in freight costs due to the anesthesia war and if yes, are we able to pass it on to our customers? So usually, most of our shipments are FOB basis. So freight is always to the customer, historically.

52:01 There are some instances where do CIF also where even if the freight, we pass them to the customer. So we usually... Even a costing, we don't take it in a costing also. So it's always customer scope direct or indirectly. Understood. Thanks. Thanks a lot, and I understand. Thank you. The next question is from the line of Pala Murali from Oman Investment Advisors. Please go ahead. Hi, good evening. So what is the contribution from this silicon segment in this quarter? Pardon? Pardon, can you repeat the question? What is the contribution of revenue in this quarter from the part segment? Approximately 5 crore.

52:48 5 crore, okay. So under I mean, for the sales to expect in FY 'twenty eight. So you think you have update on Sri Lanka HMS. So what do you how will this the renewal shape up in the FY 2028 from this HMS? Can we assume that it would be at peak level or it can still the peak can be hit in FY 2029? FY 2027, we said that the numbers would be somewhere around INR $8.40 crores. FY 2028, there will be full fledged revenue, which is coming in around what phase one. Approximately INR 200 crore, INR 180 to INR 200. And there might be a little revenue which is coming from the phase two also.

53:37 Let's know. That number we are at to estimate probably by end of this year, we will be in a position to estimate this better. And with that and the normal 10% to 12% growth, even the conservative side if we take for the granite segment, it will be so close to crores kind of revenue. Yes. Thanks for that. So I mean, I'm supposed to ask regarding HML from this business. So how it will shape up in the FY 2011, '28, '29. So whether we can achieve the peak potential in FY '28 or maybe we can get some optimum level in FY '8 and that will go to FY 'twenty nine also?

54:31 Sri Lanka, license this is in the licensing stage. And the licenses have to be granted and we have to build out, I mean, the plant has to be built. And then the cash flows will start. And we are estimating this FY 'twenty nine, not in FY 'twenty eight. Okay. And this I think Indonesia partner, so we partnered with some local government agency and also our promoter entity on more listed end. So how do you what is the visibility over there? When do you think things get realized and we can have some sort of revenue contribution from there? So that will also be in line with I think FY 2029, we should factor in some numbers. Any... Anything progressing faster, we'll update you. But right now, we are conservative and very initial stages. So I don't think it's right to put timeline and numbers. Some... It can be faster.

55:34 It can be longer. I think next next next call, we'll give a more detailed update. Yes. I have some small follow-up on that similar one. So the... Another promoter entity, so she's also partnered in this business. So is it do you think that we can make that entity in the registered entity so that it can be subsidiary or at arms rather than separate entity? No. So the MOU the MOU was signed because the Indonesian government was interested in producing magnets also in the country. And the scope of our business is different from the scope of Midwest Energy. As it is... As I just indicated in the previous call call...

56:20 Sorry, the earlier statement, we are forming first a JV between Midwest Limited and Parminas, Indonesian company, where the scope is taking from mine oxide. That is the scope of Midwest Limited. The MOU also says that. The... Later, another JV will be formed by Midwest Energy and the nation entity to take the profit into magnet. So right now, all the activity, all the focus will be to first produce offsets, and then they will do a JV for the magnet. So there is no JV So there is level partnership between these two companies. So there is no question on Amslend coming there. And the capital raised will be between Midwest Limited and Parvina's Indonesian government.

57:13 Yes, understood. So in India, we are the market trends, so still want to be part of this government initiative. So where are we in terms of that when we can see something outcome from that in India? Are you talking about the PLS scheme of government of India? Yes. The PLS scheme is came from the government of India, but we should want and we have thoughts to participate somewhere in that entire oral cycle, either from ore to oxide or oxide to magnet or something. Yeah. So right now, we are focused on production of oxides. That is our focus, and that will be our focus for the next two years.

58:00 And once we once we do this in volume, then we look at further validation if required. But right now, think we are very busy, and the... All these projects are taken up in order to produce from mine to offset or old to offset. That will be our focus. And there and there, we are we are... Right now, from government point of view, there is... In terms of opportunities or in terms of subsidies, nothing much. And also the projects are... Can be easily capitalized, and the margin profile is good. So I don't think we are waiting for any subsidies from government for these projects. Yes. But I think that we will discuss that there will select some fixed and project managed production.

58:48 So do you think we'll participate in that somewhere in that cycle or another low motor entity would take part of that one? No, we are not looking at any magnet production as of now. All those schemes are for magnet production. Got it. Understood. Thank you. Thank you. The last question is from the line of Gursharan from GMA Advisors. Please go ahead. Any update on the activity of our subsidiary in Sierra loan? No. So we are... We have done... We we had to form a company to do some local works there and do some due diligence and apply for some licenses.

59:39 So this quarter, there's no update, and there is there is... We have looked at a couple of concessions. We shared local issues. So we are still actively looking for there. There is no minimum or no expenditure right now on on that front also. It is just the logistics of our team going there and looking at them. So I think if there is an update, we'll update you next quarter, but this quarter, no update. Okay. Thank you. Thank you. That was the last question for the day. I would now like to hand the conference over to the management for the closing comments. Thank you, everyone, for joining the call and asking all the relevant questions.

1:00:24 And, yeah, and look forward to the next call. Thank you everyone. On behalf of Go India Advices LLP, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.