AIA Engineering Limited (AIAENG) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the AIA Engineering Limited Post Results Conference Call. This is Sagar. I'll be the moderator for your call today. We have with us the management team of AIA Engineering Limited. [Operator Instructions] I would now like to turn the conference over to the AIA Engineering management team. Please go ahead, sir.

Yes. Thank you so much. First of all, a very warm welcome to all of you on the conference call for AIA to review our second quarter numbers. As usual, I also have Sanjay bhai on the line with us. He is in transit and possibly with us for another 15 minutes. So please pardon him and us that he may have to drop off early. And sincere apologies for preponing this, again, because of this transit issues. And as we know, a lot of people came back to us saying either they are already on holiday or getting on to holiday and we thought it's best to prepone it and accommodate everyone. Quickly, I'll run through the highlights for this quarter and then a small commentary, and then we'll get into Q&A. This quarter continues to be flat in line with the first quarter of this year at 60,000 tonnes -- 60,330 tonnes, representing sales of INR 1,030 crores, slightly above INR 1,004 crores in the first quarter of this year and compared to 77,000 tonnes and INR 1,273 crores of revenue that we've done in the second quarter of last year. If I'm moving on our other operating in terms of the export benefits portion comes from INR 28.93 crores -- sorry, comes to INR 13.70 crores, which is in line with our exports for this period. Our ForEx and treasury income is at INR 90 crores and thereby leading to an EBITDA of INR 366 crores, almost comparable to INR 372 crores of EBITDA in the first quarter and down from INR 444 crores that we did in the second quarter last year. Our profit after tax is at INR 256 crores -- INR 256.72 crores, again, almost in line with the first quarter of this year, which was at INR 259.58 crores and down from INR 323 crores in the second quarter of last year. We have the note uploaded, which mentions the breakup of our other income, which is treasury, foreign exchange and export benefits. Happy to share more detail on it if required. From a working capital standpoint, this year, we are at about 115 days of total working capital, which includes raw materials at 55 days, work in progress and finished goods at 76 days and receivable at 74 days. And then there is credit deals that will get reduced from that. So that is working capital is in line and our stock and debtors represents the lower volume of production and sales that we have seen compared to the previous period. Coming on to an important slide on the breakup of our segment-wise sales. As you will see that our mining sales outside of India is at 39,800 tonnes slightly up from 36,700 tonnes from the first quarter, but down from 52,000 tonnes in the second quarter of last year. Our non-mining is almost flat and in line with what we have done -- full year should be in line with what we've done last year. So the half year number now is at 120,922 tonnes compared to 151,000 tonnes that we've done in half year last year with 2 quarters of 60,000 tonnes of sales that we've done. Some other housekeeping numbers. Our net cash is at INR 3,212 crores, which is after the buyback payout that has been done. There is a small debt of about INR 120 crores and the net cash figure is after that. All our other operating metrics are comparable. We have planned for CapEx of about INR 250 crores, which includes our investments -- equity investment in renewable power, the rubber liner plant that we are setting up and the 36,000 tonne expansion for grinding media. So that -- all of that comes about INR 250 crores, and we'll continue to spend that over this year and whatever space over the year after that. So with that said, I will move on to the commentary for the quarter and the big question on the slower sales in this quarter and last. I think what we are seeing now is our 3 larger themes, and I'll have Sanjay bhai expand on that a little more. But the key things are that we are seeing some slowdown at some mining customers where our offtake just looks to be a little lower. What we thought will be caught up in second and third quarter looks to be a little more systemic and structural more than 3 or 4 large customers are going through a destocking process. So material that was supposed to be invoiced and shipped out is being deferred to later quarters and maybe a destocking cycle is something that we may have to face with more customers and just supply chain issues that have boggle -- bogged us for last few quarters with the Red Sea consequence, where shipping rates not only went up, but containers were not available. We are seeing some pushback from customers on saying there is strategic uncertainty on account of the supply chain and wants some more time before they go back with business with us. So all put together, it's a 30,000 tonne impact for this quarter. But overall, we did 292,000 tonnes last year, it looks to be a 10% lower revenue volume, either way, whichever way you slice it for this full year. So closer to 255,000 to 260,000 tonne mark for the full year. And there are -- the conversation on growth and new customer addition. We are -- and we've maintained this last many quarters about all the efforts that the business that the management is putting into augment our presence to sharpen our offering and increase the value that we offer to the customers. We are extremely confident, optimistic about things but at the same time, conversion is just taking time and it is causing us as much grief just about the time that it is taking and there is no change in that conversion cycle timeframe that looks to be coming up. We will continue to put in all our efforts, and we hope that important conversions from forge to chrome come along soon, and we'll be happy to share progress on that as that happens. We'll have Sanjay bhai chime in with his thoughts on this, and then we can go on to Q&A. Sanjay bhai?

Sorry to interrupt sir, the line for Sanjay, sir, is disconnected. I'm just reconnecting his line.

Okay. While he joins, I think I'll just preempt a few questions from investors on the overall market sentiment and this unusual lower tonnage that we have seen in the last 2 quarters. It's a first for us over last more than 18 years that we've been listed, there hasn't been a quarter where we have seen this. We do recognize that things don't -- there is this classical situation where more than one thing go against you or the just outside your control. And maybe this is one such year. We are hoping that we emerge sharper and stronger out of it, but it is a year that looks like there will be some down -- reduced revenue for the year. Did you -- is Sanjay bhai back on?

Yes, sir. His line is connected.

Sanjay bhai, we have just finished there, if you want to add to...

Yes, good afternoon to all of you, and happy Diwali in advance. So as we explained and as Kunal elaborated, there are 3, 4 very distinctly, I would say, a bit unusual circumstances or factors that we are facing. Perhaps after a very long period of time. So one, there is a distinct impact of reduction in offtake by customers who have placed their orders. But they are not following up with POs simply either because of perhaps destocking? Or perhaps they are waiting for the price to correct, thanks to the freight still being pretty high, thanks to the supply chain. And we are not -- I don't see this as a structural reduction, but we are more analyzing it and understanding this to be more cyclical rather than structural in nature. So one fundamental issue is that while our efforts for conversion continue, it is this reduction or a little less order intake that we are receiving from the customers who are generally -- whose POs are generally coming in very regularly is what is bothering us a little bit. Having said that, 2, 3 things on the positive side. So we have in fact, started our supplies though a bit slow to Canada. Similarly, we are working very aggressively on several mines, supply chain challenges and freight issues are definitely concerning us, but we feel that perhaps freight seems to be going down a little bit. And in the coming quarter, it should look a little better. But as we distinctly beat the maths and understood the situation, on a very realistic note, we see a reduction in sales to the extent of maybe 20,000, 25,000, 30,000 tonnes this year, which, as I elaborated is cyclical in nature, nothing structural. We are very hopeful that all the conversions on which we are focused, several mines we are currently working. It might happen that we may be able to catch up, but it's very early in the day to make any guess and it is rather safe to say that there could be a little decline about 5% to 10% in the overall sales this year. Having said that, margins continue to remain robust, everything else opportunity-wise, everything else remains to be robust. So we are keeping our fingers crossed and hoping for the best. Secondly, it is early in the day to hazard a guess about how the next year is going to look like. So if 1 or 2 large contracts that on which we are working, they fructify, things can very significantly change. So we are hoping for the best. But on a conservative note, we don't want to give any guidance about next year until maybe we reach the 3 -- quarter 3 results, and we have a little clarity on the new initiatives that we are working the regular uptakes -- for whom we are already there onboarded through long-term contracts. So I think with this Kunal, let's go on to the Q&A.

Okay. Thanks, Sanjay bhai. And if you do drop-off, please Sanjay bhai it's okay. Yes.

Yes, yes. Actually, I'm just boarding the flight, so it could be a little challenge actually. But I'm there on the call until -- till at least another few minutes, yes.

Operator, we can move on to the Q&A please.

[Operator Instructions] The first question comes from Bhoomika Nair from Dan Capital.

Sanjay bhai, Kunal bhai. I heard your commentary on the volume kind of challenge that you're seeing in this year. So just want to understand is that -- is it that the conversions are taking longer, we had added actually the mining liner facility as well? So how is -- at least that should have seen some growth and if you can also comment how the U.S. market is panning out whether volumes are steady there? Or have they fall in post the ongoing litigation out there. If you can just give some more color where exactly are you seeing? Are you seeing the drop in any specific ore kind of a thing, which is more platinum, iron ore or something like that, then that can help us understand a little more. Because if I look at it, if you're looking at something like 260,000, 270,000 tonnes kind of volumes for the full year, almost over a 4-year period, we've not really seen growth. While I understand it's too early to give guidance for next year, then logically, then next year, should we come back to the 320,000, 330,000 tonnes kind of a number, which is still just be 20,000, 30,000 tonnes kind of incremental volumes over '24 or do you find that, that would be a big challenge as of today to even provide that kind of visibility?

Yes. I try Bhoomika. Thank you for your questions. And you've got a few questions rolled into it, so I'll try and address each one by one. Let me start by a question on U.S., right? I think the matter, as you know, every jurisdiction takes it quite seriously, and we are only allowed to say so much on public platforms, while the matter is subjudice. But our business there broadly continues as is. I mean there are nuances there, but I mean we are -- you've seen the disclosure that we made about the interim CVD that has been applied. And so we continue to cooperate, work, depend and do -- make sure we put out the most relevant information promptly. So U.S. continues as is, and we are doing everything that we can for the dumping there.

Volumes there in the U.S. market are intact, and we have not seen any kind of a decline. Would that understanding be correct?

Yes, broadly, yes. The volume looks to be okay. I mean, like I said, I will be constrained in speaking much about it. But the business continues its steady business for us, which has been developed over many years, and that continues as is. So moving on to the next question that you had, which is about the ore. So the offtake I think there are -- all these -- there is 2 pillars of the issue that we are seeing. One is the logistics and the supply chain and just the anxiety or the discomfort customers would have around that uncertainty, right? So that is 1 pillar and that on and off and that's going along. And the other is around the -- what's happening at the customers' end. I think there are more times where there's just general -- it's a little optical commentary that you would hear from mining companies suggest things are okay and things look to be okay. But we are just seeing a soft conversation. Now whether that is temporary, whether it's going to be a little longer tenure, it's still too early to call that one out. But -- and that's -- one of the consequences for that is just the destocking conversation where they're just saying that, okay, we've got more stock. We just not buy for next 2 quarters or the next 1 quarter or maybe next 3 quarters and continue the conversation forward. Now that destocking generally does not happen unless they're looking at a little softer outlook, right? So -- but we are too small of comps in the [indiscernible] to have any view beyond this. But we are just seeing softness at the customer end and that's resulting in the situation. So that is one aspect. And the second, the pillar that I said, which is the supply chain is just real right in our case where any new customers coming on board or customers who have been having a conversation or just bought it for a period want a little more comfort on the whole supply chain issues, right? If they are all like Sanjay bhai mentioned it looks that the worst is behind us, right? What happens with the Red Sea, the rates have -- the whole China container thing came along, right? The global geopolitical space is a very funny situation where it's impossible for any company to have a certain view about which way to go with it. So we are staying in place, right? We are there. We are making sure we are giving all comfort. We are not defaulted on or delayed on any delivery, right? We added more stock last quarter to make sure that no customer is impacted. But it is a conversation and there is some consequence on us for now. You asked about the mining liners. I think it remains as -- continues as flat. We've not been able to add what we were looking to add this year from that space. And variety of factors. The irony is that we are becoming the more confident we get about the consequences that we can participate in at the customers' end and the more irony about it, that it's just taking longer. And there's nothing else I can say to -- allay that question, but it's all business as usual right now. It's just this interim stage. It looks like. But that volume the 292,000 tonnes, the 10% lower volume this year compared to last looks to be a reality for now. What happens next year, I would just take a quarter or 2. Is this an early sign of mining companies feeling a little less excited about the future that these are things that we don't know today. This is just a temporary housekeeping action. But we are seeing more than one ore type and more than one geography face that. So it may not be as -- we cannot dismiss it. Yet, it is not something that we can say for sure that it's an issue. So...

So just to Kunal add. Bhoomika, I don't think it, as I said in the opening remarks, I don't think it is ore specific nor it is structural. But more cyclical, let's hope for the best, how it goes. We are keeping our fingers crossed. As I said, we are working on several opportunities that run into more than 6-digit opportunity you see. So it's not that we have stopped working on those opportunities. But it's just very unfortunate that the volume uptake from the customers have not happened the way we want or we had anticipated, and we cannot force them to buy, as you know. So we have to just see how it goes. But I think we're still very, very optimistic about the medium to long-term prospects. That's all I can say at this point in time.

So maybe if we can get some comfort around what is the kind of new customer interaction while the conversion might be happening a little slower because one part is the existing customers kind of destocking, so which is where there is a decline in terms of volume, but then that will be partly offset again some kind of new customers additions in conversions that are happening there.

Bhoomika, I indicated that we are working on several opportunities, which can sum up beyond the 6-digit easily opportunity. As you know, we don't share more details, we cannot. We are under confidentiality for our own protection of our own interest. And I mean that's all I can say at this point in time. So nothing -- no work has stopped. Obviously, as we say, U.S. is also turning out to be quite reasonable as we have already disclosed, Canada indicated we have started doing some supply. So let's see, let's wait for the third and the fourth quarters. We are quite working very hard. We will not like to face this kind of situation. But then we have to accept the reality this is what it is.

So in that spend, are we looking to kind of go a little slow on an expansion given utilization levels are kind of dipped a little bit. Any thoughts on that to kind of ground...

No, nothing, nothing, nothing. See our expansions will take its own pace. We are already working on further 36,000 tonnes beyond 460,000 tonnes. And this will and CapEx plans are still INR 250 crores to INR 260 crores. There is no letdown. So had I anticipated something long-term or medium term, I would have stopped my CapEx, but no. That is not the case. Clearly not the case.

Also, Bhoomika, we've already scaled down at the 80,000 tonnes became 36,000 tonnes and 36,000 tonnes is also modular. So in that sense, we will take a call, it's not money committed 1 way it's a brownfield and it is modular. So I mean, if we see that the next quarter also remains the same, I mean we can always scale that down further. But like Sanjay bhai said, in any case, it's not a material amount, large amount that we are adding in. The big thing was scaling down the 80,000 tonnes to 36,000 tonnes which we have already done, and which is -- again, which is a start stop for us to see if you want to further delay that.

[Operator Instructions] The next question comes from Priyankar Biswas from BNP Paribas.

So my first question is like as you were highlighting that there has been a destocking engine at this moment, So is my understanding correct that we have not lost any customers as such. It's just a cyclical thing. So there has been no existing customer loss at least, whatever we had.

So let me correct here a little bit. What we say is that we are trying to understand the circumstances under which the offtake has reduced. Okay. So one factor could be destocking. Yes. In a few cases, we clearly know the customer is carrying larger stocks and therefore, is slow on placing the order. But honestly, that's not the only reason. There could be multiple reasons. I think another reason worth considering is the fact that because of the supply chain and the freight challenges, our pricing has become a little less attractive because we do generally add everything. Correct. So some people would have anticipated that, yes, since prices are going down, I mean the rates are going down, let's wait for a while and then we will place the order. We have enough material. There is a possibility that -- all these factors can reverse quickly than what we anticipate. But at this point in time, we have thought it conservatively to wait and watch and see how things pan out.

So if I may put it this way, like what I understand that at least what I can understand from my interactions in the forged market, especially in China. So there has been excess capacity, and they have been flooding the market with very cheap material at this point and supplying finance also in some of the mining geographies. Is it also one of the reasons that the differential between let's say ferrochrome and forged has become quite high in certain places, and that's why there is a reluctance to convert. Or is there some other reason?

I don't, Kunal, if you can throw some light on this.

Forged question is -- I don't think that in the scheme of things where we're saying there's a 2 million-plus market chrome is very less presence already, even if I go from 15% to 20%, that's still our 100,000, 200,000 additional chrome markets. I don't think that is a material factor where forged -- anything happening in the forged market can influence. I mean that's a one-way street as far we are seeing it. Just on the order of -- the cost differential is let's say 2% but we are adding 98% of value in terms of throughputs and other things, right? The recovery, the down process and all of that. And it is never -- the whole premise on which we are building the chrome opportunity is on all the other benefits that chrome offers along forge. Any additional lower cost of forge does not change that -- the value proposition. I think that is the growth portion that we are talking of. The earlier question that you had is what is happening and what earlier participant was asking is -- it is a combination of all of these things. There could be a customer or 2 that -- there are very few other players in the space. So there could have been situations where the order has moved from here to there. But it is a combination of all of these things. It will not be fair to say one way is that has led to the situation.

And if you can share like, which geographies are impacted because as you said that U.S. is not that impacted and Canada you have resumed. So I'm wondering where exactly is the impact?

Canada is still to -- yet to resume. It's still there at pre -- our presence there is still yet to come through. I think we will not want to get into more details, like Sanjay bhai explained it. There are plenty of nuances here in our business, and it will be difficult to really get granular beyond this, Priyankar.

Just last question from my side because we used to be quite a meaningful player in Brazilian iron ore earlier. And what I understand is we have continued discussions in LatAm copper, particularly Peru and Chile in those geographies. So what are our progress in these 2 areas at the moment? Because Brazil, the antidumping duties are now gone. So how are we progressing? And how does the market look?

So Brazil antidumping, there's only the CVD portion, as they call it, there's one portion that's still active. The dumping has been -- the duty has been terminated in Brazil. So again, South America remains to be a large -- it's one of the largest forge markets. And as you know, copper is one of the largest commodities in that region, and it's absolutely a market of interest, and all our work is fitting in with that opportunity. So there is absolutely 0 hesitation in saying that we have a solution that brings disproportionate benefits to the clients. Correct, especially in a context where their costs are going up, they want have their grades -- the throughputs are going down. We believe that our product fits in. It is a little frustrating for the time that is required to do that. But that's an effort that we'll have to make, right? That's the investment the company has to make in terms of resources and just continuing to keep up with the customer. So South America, to answer your question remains absolutely the market of interest and there's no change in that thesis.

Strong efforts are continued in those markets for conversion, humongous efforts right now.

So whatever Brazil iron ore because we used to be quite strong, like with Vale and others. So how is it looking? I mean we were very strong in iron ore at that market. So how is it looking there?

Priyankar, again, granular question and one market and one customer may not be the whole story, right. So I think we'll just defer back to requesting not to get too granular, but nothing's changed. It is business as usual as far as we are concerned. There's no structural situation that we are looking at that probably changes at thesis.

And just 1 more in. So in the other expenses, I see that the other slide item that is there is on the higher side despite lower production in this quarter. So any expenses that may have gone up? I mean just for my understanding.

Sorry the line for the chairperson is disconnected. Sir, please stay connected while I reconnect the line. Ladies and gentlemen, we have the line for the chairperson reconnected. Sir, please go ahead.

Yes, so, Priyankar, the other expenses includes our professional and legal expenses and a lot of our legal trade depends costs have been in this 2 quarters. There was a lot of work for Brazil and U.S. has happened and those milestones was in this quarter. So that is where it's appearing that way.

And the freight still continues to be a major component, freight.

Yes. The rest is what is what the balancing, nothing that is worth noting.

[Operator Instructions]

If you have no further questions, I think we can wrap up the call.

Yes, as there are no further questions, I now hand the conference over to the management for the closing comments. Please go ahead, sir.

Thank you, everyone. I do realize there may be more questions that you may have around.

Really sorry to interrupt, sir. We have a last-minute registration from Mr. S. Gujar from ICICI Mutual Fund.

Sorry, I joined a bit late, so pardon me if I'm being repetitive. So just a question around because the supply chain issue, we had seen this in COVID now, right? At what point do we actually go back to the drawing board to think about any expansion out of India?

So I'll be very candid with you. This is something which we, at the Board level, are very seriously debating over last couple of quarters. Even in today's Board meeting, we had extensive discussions, some technical presentations. I will only say at this point in time that we are looking at it quite seriously. But it's not so easy to take a call on this.

But I think the fundamental point is that our thesis remains for what we are doing out of India and everything else that we're doing. There will always be a conversation and discussion on whether -- what mitigation measures exist, and we will consider them. A plant outside India may or may not be in consideration, but it is -- like what you said is that we have to be in the marketplace, and we have to make sure we work on a strategy that works to our advantage. So I think if and when that becomes a serious consideration, we'll be very happy to discuss. But for now, our focus continues to with all that we are doing. Like I said with the previous participant, the point is that it is business as usual. I mean we've had a little unusual lower offtake with a few customers and things that we discussed. But otherwise, nothing really that requires urgent efforts or actions on top of that.

Sir, we have 2 more questions.

Please go ahead.

The next question comes from Ashish Kejriwal from Nuvama.

Sir, my question is in one of the answers, you said that maybe because of customers may be thinking that there could be some reduction in prices and because of that fact, maybe they have reduced the volume. So my question is do we think that if we can reduce prices or take some hit on the margins, we'll be able to increase volumes or it will not be the case?

As I meant was the freight cost, I don't think Again, I'll go back to a macro point is that thesis does not rely on cost, right? When I -- when my solution can offer -- can solve the problem of a [ hedge ] grade worsening or recovery worsening or -- where I can improve throughput into the system and produce more metal. This cost becomes incidental, right? It is not something that is a strategic conversation with the customer. What we were referring to was that one of the pillars of friction right now is the whole uncertainty around our shipping situation, which is unavailability of containers and high shipping cost and customers would sometimes get on the fence is that there is some amount of uncertainty should I just wait -- wait it out and get till things stabilize a bit. I think that's what the -- that's where the...

There was no friction of renegotiating on the pricing. Yes.

No, sir, I was just looking at for new customers.

Ashish bhai, sorry to finish the question. Lower pricing is not the answer. It is not a price conversation, right? I hope I have explained that in that -- it is not where a customer is saying, "I need a discount or a lower price. There is much more effort and engagement that is required at all times with the customer to make sure he gets a significant disproportionate benefit in all these other things that we bring to the table.

Understood. So sir, secondly, obviously, this is the case which we have been highlighting for last so many years. But if you look at the numbers for last 6 years, actually, our sales volume in the mining segment is more or less stagnant. So is it that we are not -- we are taking much more time to convert or customers...

I appreciate, Ashish bhai, sorry with that. What I was saying is that it's a little unfair to just paint the canvas with one brush stroke you do know that...

Kunal, one second. Let me be a little more clear on this. So Ashish, you are right that volumes look stagnant, but please consider over last 5 years, we have actually lost more than 50,000 tonnes and then gauge them through new customer acquisitions, correct? So there was an antidumping scenario first, starting with Brazil and Canada, then South Africa in a different context, but nevertheless, so you lost more than 50,000 tonnes still the volumes not only held but they showed a 5%, 6%, 7%, 8%, 10% growth, which means that my conversion continue to happen, then came this geopolitical tension than the whole world going into a tailspin and the shipping freight going through the roof 5x twice in last 3, 4 years, please understand the challenges. And the fact my opportunity is -- and then we have continuously upgraded in terms of our capabilities. So we're talking about a GP benefit. We're talking of fantastic mining liner solutions. We are also talking of a cost reduction, which as Kunal explained though incidentally therefore important. But does it undermine my opportunity? Does it reduce my opportunity from a 2 million -- or 1.5 million to 2 million to maybe or 500,000 tonnes or knockoff. Clearly, no. What happens, yes, conversion is not exactly happening the way we think multiple challenges continue every new day there's a new challenge. But the strength of our solution is so materially powerful that there are 70 people globally working in various geographies in continuous interaction duly supported by another 100 people from India. You see it's a massive exercise. I don't think 1 or 2 soft quarters will change the whole course of the company. But at the same time, being realistic is what we thought we should convey to investors very transparently that if my own clarity is not perfect, how can I tell you, A, B or C, and that is exactly what we are conveying that does not mean that now my market is undermined or I am now facing an opportunity which is not exactly what I was talking about 6 months ago. So you have actually gained the market and now there are chances that we will regain the market that are lost. But we continue to face new challenges but we are undeterred -- absolutely undeterred about it.

Understood, sir. I think that's very appreciative that you have pre-commented that. The thing is that now, obviously, conversion is a slow business or slow-moving business. But in this time, are we facing a resistance from the customers to convert or because of which China is aggressively because they have excess production. So China is excessively marketing it. And the gap between our product and the conventional product is so huge that people don't want to change. Are we seeing such kind of inflection or not right now?

Not really, China, and we've discussed China as on a strategic note that it is more of a commodity product supply. I think the whole thesis for AIA across our both verticals and product lines is the value that we bring in terms of designs and solutions that we offer as a package. And China always had large internal market and low technology products. So it's not something that is new today. And they were always for any product that they have a larger market, they always have over capacity. So it's been there for last 15 years. So broadly, nothing changes on China. Nothing has changed between 5 years ago and now.

So sir, last question, okay, short-term, maybe some hiccups are there. But do we envisage that in next 5 years, our number can double from here?

I definitely think so. Kunal, I'm sorry, I will have to, yes, I will have to drop. Thank you, everyone, and all the very best. Thank you.

The next question comes from Parikshit Gupta from Fair Value Capital.

Am I audible?

Yes, yes, yes.

And just as a context, I am new to this company and segment. So please pardon my lack of information. I just have one structural question. I understand that the grinding media is the largest business segment for the company along with expansion plans already undertaken. So I understand that you are already mindful of the rate of growth of the requirement of grinding media. Would it be possible for you to please articulate if this growth will come mostly from the mining sector, which contributes to, I think, about 70% of the business or if you could touch upon the other segments?

All of it is expected from the mining sector, not mostly all of it.

Just a follow-up on this, please. Considering the cement manufacturers expansion, along with consolidation in the industry, especially in the southern parts of it. Would they...

This is a global business for us. India happens to be an important market but in the global sense of thing, yes, India is a larger market. And we will be natural beneficiaries of any growth that comes along. But we are not -- we are also introducing newer solutions with higher wear rates, et cetera. So in the scheme of things, the growth in cement in India per se may not be a material game changer on the -- on our overall volume, but we will surely add volume. We're just not talking and estimating that these are sometimes longer gestation projects. And estimating saying when it will fall in what calendar year or fiscal year, what volume will come is difficult to estimate.

As there are no further questions, I would now like to hand the conference over to the management for closing comments.

All right. As usual, thank you so much, it's been -- it's not been a regular quarter -- or the last 2 quarters. And I understand many of you may have still more follow-up questions. I hope we can spare Sanjay bhai on the Diwali weekend coming up, but I'm available off-line and both of us obviously will be available from next week onwards. So please do feel free to call us, and we'll try our best to help you to get a better sense on this. I wish you all a very happy Diwali and a good evening. Thank you.

Thank you very much. Ladies and gentlemen, this concludes your conference call for today. We thank you for your participation and for using Chorus Call conferencing services. You may please disconnect your lines now. Thank you. Have a great evening.