Bansal Wire Industries Limited ($BANSALWIRE)

Ladies and gentlemen, good day, and welcome to the Q4 and FY '26 Conference Call of Bansal Wire Industries Limited. From the management, we have Mr. Pranav Bansal, MD and CEO; and Mr. Ghanshyam Gujrati, CFO, to take the discussion forward. We also have the Investor Relations team from Adfactors. [Operator Instructions] Please note that this conference is being recorded. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. Please note the disclaimer mentioning these risks and uncertainties are on the disclaimer slide of the Investor Relations presentation that has been shared earlier. I would now like to hand the conference over to Mr. Pranav Bansal for the opening remarks. Thank you, and over to you, sir.

Yes. Thank you. Good afternoon, everyone, and welcome to Bansal Wire Industries Q4 and FY '26 Earnings Call. Joined --joining me today is Mr. Ghanshyam Gujrati, our CFO, and I trust you've had the opportunity to review our financial results, press release and investor presentation, which are available on the stock exchanges and on our website. Now let me start by saying that this year has been a year of a lot of major changes for the company. In fact, I would say that we have completely transformed ourselves through the process and have emerged stronger and sharper. Let me highlight some of the major events of the last year. First and the most important would be our improved focus on ROCE and cash flow generation. As part of this approach, we deferred our backward integration project, undertook a comprehensive review of operational efficiency and realigned our strategy towards our core competencies. And as a result, we were able to generate a cash flow of INR 333 crores, exceeding our initial target of INR 250 crores, and we remain on track for achieving our total target of INR 600 crores by '27. And by doing this, we have also remained well positioned to fund our growth ambitions while maintaining financial discipline. Second, even though there was a fire incident in our steel court shed, which led to a delay in our approval process, we made meaningful progress in strengthening our specialty and value-added wire portfolio with IHT wire demonstrating a strong momentum, Phase 1 ramping up in line and with even -- exceeding our expectation. We also received a faster-than-expected approval. Phase 2 of the expansion is also progressing as planned, adding 6,000 tons of capacity on the existing 9,000 tons. Even on the steel court front, we have made a major breakthrough and are expecting -- our very first trial order very soon. Next, we started our LRPC wire product with 18,000 tons of capacity, which is also towards the end of this year, started generating positive EBITDA. During the last year, we also strengthened our B2C segment with a focused strategy on expanding our distribution network, enhancing brand visibility and introducing customer-centric product offerings. This -- segment has also started picking up, and we have launched 16 new product offerings for the western and southern part of the country. Turning to our manufacturing footprint. Our installed capacity now stands at approximately 680,000 metric ton with the Dadri facility continuing to anchor our growth. During this year, we added about 120,000 tons of capacity at Dadri, completing our first phase of this expansion. This facility not only supports volume growth, but also enables us to deliver high value-added products with improved consistency and better operational efficiencies. And last, and I would say one of the most important event, which is something we are all dealing with, particularly in the month of March, we saw some disruptions due to geopolitical tension involving Iran and Israel, which led to volatility in global energy markets and supply chain challenges. We also experienced a temporary disruption in natural gas. Our production took a cut to 35%, which also had a short-term impact on our production schedule. Despite these headwinds, our volume remained resilient, increasing by 33% for the full year, while EBITDA and revenue grew by approximately 20%, reflecting our underlying strength of our business. As we enter the next year, we anticipate a relatively subdued start, particularly in the first quarter given the ongoing situation. However, we are proactively taking measures to mitigate these impacts and remain confident in our ability to navigate the near-term challenges. But once conditions stabilizes, we still expect us to return on our targeted 20% growth trajectory, supported by our strategic initiatives and already available capacity. I'll now hand over the call to Mr. Ghanshyam Gujrati, our CFO.

Thank you, Pranav sir, and good afternoon, everyone. Let me walk through the key financial and operational highlights for the quarter four and for the full year FY '26. Let me begin with the volumes. During this quarter, we delivered a sales of 1.17 lakhs metric ton, reflecting a 20% year-on-year increase. Volume were slightly lower on a sequential basis primarily streaming from the disruption of industrial gas supply and highlighted by our MD sir, Pranav ji. For the full year volume include a 4.58 lakh metric ton compared to 3.44 lakh metric ton in FY '26. Translating into 33% year-on-year growth and making the higher annual sales volume achieved by the company. This volume was sustained consistently across the quarter and supported by the broad-based demand that our [indiscernible] end market -- exposure to us. Moving to the financial first quarter for the FY '26, revenue stood at INR 1136 crore reflecting 21% year-on-year growth. EBITDA for the quarter was INR 80 crores with the margin of 7% and net profit came into it INR 40 crores up 21% year-on-year. For the full year FY '26 revenue stood at INR 4160 crores reflecting a growth of 19% versus for FY '26. EBITDA was INR 325 crores up 17% year-on-year and net profit for the year stood at INR 161 crores higher by 10% [indiscernible] healthy growth over the last year. With that I will -- conclude my remark. We can now open the floor for questions. Thank you.

[Operator Instructions] Our first question comes from the line of Parthiv Jhonsa from Anand Rathi.

Congratulation especially during the third month of the quarter, still you have been able to -- keep your volumes intact. Congratulations on that, sir. Sir my first question is pertaining to one of your opening statements where you stated that the year has started on a bit of a subdued note. Is it possible to quantify what is the issue, particularly from, say, gas, what is the gas availability today? What can be the headwinds or what can be the volume disruption particularly for Q1 of this current financial year?

Yes, sir. So Q1, we started with, of course, lesser volumes. In fact, last -- month, our volumes were cut to an extent of 35%. However, those are still -- those are back. We are now expecting about 80-85% kind of our volumes to be there. But other than volume, there is also an issue in demand as of now. Other than I would say the automotive segment, all other segments that we see, we still see a lack of demand. So all our -- customers, all segments are still undergoing these issues. And till the time this doesn't go back to normal, I am not expecting sales -- also visibility to be there. It is difficult for me to quantify this. I think we are all on the same boat, and we'll have to see how it goes. But yes, what I can say is that once we normalize, I think overall, we are still expecting a 20% kind of a number to be there, but of course, only once we normalize.

Sure. We respect that, sir, that you have kept your early volume guidance intact at say 20% growth. But just wanted to just add on to that, that despite, say, volumes are down considering the gas disruption and the demand, I believe the prices would have been much better, right, because the steel prices have gone up substantially, especially post February post -- the starting of the year. The prices are already up on the range of almost about 10%, 15%. So will that actually support your top line despite you loosing on the volumes?

Yes, I would say that would definitely support our top line, but that would still not translate to real earnings. At the end of the day, our business is still driven by volumes and EBITDA per ton. In fact, if we talk about only EBITDA because of operating at a lower base, even our cost is higher. So our EBITDA per ton will also take some hit. The revenues might be intact or might be higher. But at the end of the day, it is all about the quantities that I'm able to sell.

Is it possible to quantify that, sir, the number by any chance?

Sir, right now, it is very difficult. I mean every day is a new day, every day we have different challenges. It is definitely getting better. But yes, we'll still have to see how long this -- it happens so.

Sir, my second question was particularly to the steel court business. We have -- since IPO, practically we have been stating that the approvals would be there. However, there were some headwinds. And now I think about a quarter or two quarter call back you have stated that you'll be entering the Phase 2 trial process. This call, you have stated that you are almost on the verge of getting the first trial order of the first order. What can be the quantum and what can be the delta now that finally things have been looking up for you from that steel court vertical? And from which customer have you been receiving these orders? Which of the automobile company?

So the order we -- would be receiving would be from the top four companies in India. Yes, there -- our year started slow because of the fire incident, but we've picked up. It is -- it will be our first trial order. Once we supply that order and if the customer finds everything to be intact, then we can expect a regular order from these customers. Now when that will happen, how that will happen, we will keep you updated, but it is very hard to predict today.

So the Phase 2 trial has already been completed, right, if I'm not mistaken then?

Yes, with some -- with one customer which we would expect this order from, yes, there will not be a Phase 2 trial process. It will only be a sample and then some others...

And if I may quickly squeeze in the last one from my side. Is it possible to quantify, what is the -- even a broad benchmark numbers are fine, but is it possible to quantify what is the share of, say, low carbon, high carbon and specialty in top line as well as the EBITDA? In percentage terms is also fine.

Yes. So overall, our product mix has remained the same. I think 55-ish percent of low carbon, 25% high carbon and 20% stainless steel in general. This is the broad thought process that we have, and there has not been a major change here.

But then low carbon would have much lower EBITDA contribution. So that means your EBITDA would be much higher from high carbon and stainless as compared to low carbon. Is that… If that understanding... So what is our share there at the EBITDA level?

Sir, we will not be able to give you separate EBITDA levels for all streams. What we -- we would be showing to you is the EBITDA per ton on a blended basis. This is where we focus on.

[Operator Instructions] The next question comes from the line of Prateek Singh from IIFL Capital.

So the first question was largely on the industry side, given it's a low-margin industry and we are the market leaders here, I would assume this cash problem would be faced by a lot of your competitors who are in a much smaller scale. So fair to assume that they would be in pretty much bad situation right now, if demand is weak and you can expect to gain market share despite demand being weak right now?

So sir, if you break this demand situation into different sectors that we have, I would say the automotive sector has been doing well. There we are still able to grow even through all of this. So yes, I think for us, automotive is okay. Every other sector, whether it is consumer durable, infra, all -- there, we are seeing a very sluggish demand. And this is because of two reasons. One is there has been a big price increase in steel in the last three months. And the second is, of course, the situation we are all going through. So but yes, I mean it still looks positive. Every day is getting better. So yes, let's see…

Understood. And in the past, when we had stated that to gain market share, we would be taking a hit on our margins. Is that phase largely behind us? Or do you think to gain this 20% growth this year as well our EBITDA margins or EBITDA per ton would be likely lower than what we showed this year?

No. From this year, there is no more -- there's no impact -- negative impact on EBITDA, which we are -- which we foresee in terms of our regular operations. If we grow at 20%, our EBITDA should also grow by 20%. Of course, this current situation, we have to keep aside. But once we return back to normal, I think our EBITDA per ton should be same if not better.

Okay. And lastly, what's the weight on the 2 units, I think Balaji Wires and Bansal High Carbon, which were going to be shut down. So what's the plan there right now?

So those two units, again, are operating at almost negligible capacity utilization. All of it has mostly shifted to Bansal Wire. I think maybe in the -- the last 4%, 5% that would be remaining would shift another maybe six, eight months.

[Operator Instructions] The next question comes from the line of Disha from Sapphire Capital.

So sir, firstly, you mentioned that currently also we are operating at around 80%, 85% volume. So we see 20% production cut in the month of April as well. So going forward, how confident are we to maintain this 20% sort of guidance that we have given? Do you see any downside because you mentioned that auto sector is doing well, but that contributes, I think, around 22% to our revenues. So is there any sort of downside you see to this 20% guidance?

Again, right now, it is very difficult for me to give you a number because it is a very dynamic situation that we are all in. But yes, as of now, what I see is that situation is getting better. Right now, there is sluggishness in demand, but we feel that it is getting better every day. So we are hoping for the best. But once it turns back to normal, yes, we should be able to grow at 20% because we have that kind of a capacity available with us from the starting of the year.

Given the current value we're fairly confident we'll be able to do 20%.

Once -- we return back to normal, yes, 20% growth is what we should be able to do.

Okay. And this IHT wire segment, this new segment that we added, what sort of capacity utilization were we at in Q4?

In Q4, I would not have the right figures. But yes, I would say in the month of March alone, we were at about 25% capacity utilization in IHT and which is increasing by maybe 10%, 15% -- which should increase by 10%, 15% every month.

And what sort of EBITDA per ton were received this month?

Right now, it is not contributing much. But once we touch 50% capacity utilization, I think it should turn into positive EBITDA.

Okay. And what sort of CapEx are we looking for FY '27?

FY '27 or in fact, even in the years later, I think our CapEx strategy -- is now focused on our cash flows. So what we are expecting is majority of or maybe 60%, 70% of our cash flows, we will pull back into CapEx. So maybe INR 150 crores, INR 200 crores, something like that to generate enough capacities to grow at 20%.

And the product mix that -- you mentioned 55% low carbon and 25% high and 20% specialty that we expect to be pretty much stable in FY '27?

Yes, that should be stable in this year as well. That's specialty right now in percentage is nothing. So it's 20% of stainless. But yes -- in this year, specialty should also come as part of this product mix.

[Operator Instructions] The next question comes from the line of Deepak from Sundaram Mutual Fund. Please go ahead.

So my first question is with respect to our payables. So this year, we have seen a sharp spike in our payable, both in absolute terms as well as increase in the number of days. So just wanted to understand, have we structurally made any changes in the way we are sourcing? Let's say, instead of a bill, are we procuring more through dealers on account of which we are getting better credit term, hence, the payable days have improved for us?

Yes. So sir, we are still buying from our main suppliers. And most of those suppliers, we are still paying -- for them we are still paying an advance. But we're also -- we've also included a lot of discounting limits from this year, which is where you are seeing the payable going high. So this is part of the discounting facility that we have done in purchases. Our vendor is still getting advance payment, whereas we get that kind of a credit.

Okay. Okay. So if I understood correctly, you're still procuring from the steel mills, but instead of paying them on an advanced basis, you are using purchase invoice discounting where the bank pays them and you pay the bank later, correct?

Yes, absolutely.

Okay. Okay. And do you see going forward, this number to go up further? I mean to say your payable days going up higher. So as you increase your banking or discounting through let's say, the banking methods, means? Or do you think that right now it has come at a stable level?

No, sir, it can go higher as and when we are trying to reduce our total working capital days. So in that effort, it could go higher gradually.

And will that also lead to increase in our interest expense?

That will definitely lead to increase in our interest expense, but not disproportionately. So we are already paying that interest even today, but that is done through our regular limits.

Okay. Got it.

So there should not be a further increase in interest cost because of this.

And the second question is on our balance sheet. So if I see that from last presentation to this presentation, we have expanded our capacity by around 60,000 metric ton. And despite that, if I look at your balance sheet, we are having INR 213 crore of capital work in progress. So just wanted to understand what is that?

This capital work in progress is part of the 60,000 tons also, which we have installed but not commissioned till late. That will happen in this month, month of April, one. And second, this is also part of some ongoing investment to further enhance our Dadri facility. So from this 6.8 lakh ton, we would want to this year add another 1.2 lakh tons so that we are prepared for the year after this. This is where this kind of investment is going in.

Okay. So if I understand correctly, so we were in the process of adding around, I think, 90,000 tons in Sanand, right? And you are saying now that from 6.8, again, we'll be adding 1.2 lakh ton in Dadri itself. So would it be fair to assume in FY '27, you will be adding 1.2 in Dadri and let's say, 0.9 in Sanand?

Sir, that 0.9 will come towards the end of '27. We will only be able to utilize that in '28 not in '27. Therefore, for this complete year, we would still be adding some capacity here and there. For example, the ongoing IHT wire expansion of 6,000 tons is happening right now. There are some expansion for low carbon, high carbon also for us to have the capacity headroom to grow at 20% for the next two, three years.

Got it. So as per your internal estimate, let's say, by end of FY '27, our capacity will increase from 6.8 lakh to what number?

From 6.8 lakh, it should be at least 8 lakhs. And with Sanand coming in, it might be 8.5 or 8.6 something like that.

Okay. So you are saying because the demand situation is so dynamic that you would want to tweak your CapEx number? That's the correct way to read about it, right?

So our CapEx investment side should be capped at INR 200 crores or something like that. We should not be going higher than that for a year to be growing at this pace.

Okay, okay.

But if we see a good demand other than this situation, we were already utilizing a good amount of capacity even in last quarter, if you leave March aside, at least 15, 16 days of March aside, we were doing a good run rate. It is only in the last 15 days that we took a hit. Even then we were able to do about 120,000 tons in that quarter. So we should -- we will have a good opportunity. Once situation returns to normal, I think, yes, we can do something good. Therefore, the 20% number growth thought process still remains.

Okay. And in this 120,000 capacity that we are looking to add in Dadri itself, would it be equally split between low carbon, high carbon and specialty or it would be more leaning towards, let's say, low carbon and high carbon?

It would be -- yes, I think it would be similar to the current product mix that we have. Not a big change. In some ways, maybe some specialty would increase disproportionately. But yes, other than that, I think overall the same.

Okay. And one just last question on this steel court business. So I think last time you indicated that we were undergoing some field trials, and now you're saying that some trial runs are going on. Is it similar to the field trials? Or is it that the field trials has been completed and you were -- you will be sending your first trial batch, and then ultimately, if that gets approved, you will start commercial supply?

Generally, the -- process is that once we receive a sample approval, the product goes for field trial. But with some customers, because of the results that they have gotten from the sample itself, there are some customers who have removed the field trial process. And therefore, we are expecting a trial order from them. Once we receive the trial order, once we supply them, they'll test it, then we can actually expect a regular supply level. So even though there was a delay because of the fire, because of this, we've been able to cover that time also.

Okay. And that is expected to happen in H2 of this fiscal year, correct?

Yes, that's the thought process. But that's only one customer. Overall, we are still expecting the other customers to be in line by the end of this year.

[Operator Instructions] The next question comes from the line of Sandeep Shah from Dalal & Broacha Stock Broking.

Yes, sir. So firstly, my question is on the Sanand balance land. So, mostly we sell up our plan for the backward integration. So in the last con call also, you had said that probably the decision to sell or to come up with another CapEx would be taken in the next quarter or so. So I mean, have we come up with any decision on that balance 50% land?

The balance 50% land we would be trying to sell it off to get that cash in. We have deferred our backward integration project. And for the next couple of years, it does not fit in our strategic investment scheme. So any decision that we take on backward integration would at least be after those two years because we already have a specialty wire, which has now turned very well for us, and the regular market of high carbon, low carbon, wherein we would want to spend more of our investments.

Got it. So the next question is with regards to our EBITDA per ton. If you look at this particular quarter, it was the lowest in the last eight quarters. I'm talking, excluding other income. So what was the volume mix?

There is not a major change in volume mix. The EBITDA per ton impact that you see would also be because of the last 15 days in March. Because -- so there was a substantial increase in our gas prices to the tunes of INR 4,000 to INR 5,000 a ton on our product level, which is something that we were not able to absorb, which is something that we had to absorb because we have a 30- to 40-day order book. So, although we have started getting that increase from our customers, but the 30- to 40-day order that we have has to go with that kind of a cost level. So we have taken some hit in EBITDA only in those 15 days.

And just any iteration of what the previous participant had asked regarding the new 1.2 lakh ton capacity that will be coming up at Dadri. So FY '27 the total capacity would be 8 lakhs, right? And utilization levels, what can we expect, I mean run rate?

Sir, that depends on how the year goes. But yes, we have already done about -- 4.6 lakh tons this year. We were expecting to increase this by at least 20% once if it was a normal situation. So whenever it turns to normal, I think we will be in that run rate.

Okay. So I mean, just to understand, when will that 1.2 lakh capacity be available?

So that will be towards the end of the year because we already are sitting on a reasonable capacity right now. So for the first half of the year, at least we don't need it. And with this situation, we have also tried to delay some things by two months or three months till whenever it normalizes. So we don't, again -- the thought process is to -- for us to be able to utilize the capacity whenever we have it. We don't want to sit on idle capacity. So we can tweak it as per our requirement.

Got it. And finally, the Sanand one entirely would be available by FY '28, right? Because that would be available in December '27, or will be the last quarter of FY '28, correct? Is my understanding correct?

Sir, we have a lot of flexibility here because we have our own machinery division. So we have a lot of flexibility as to when, which month, which quarter we need to invest, looking at our utilization levels. Our thought process overall is to generate 20% capacity every year and grow at 20%, keeping at a good utilization level.

The next question comes from the line of Samay Shah from Nuvama Wealth Management.

You mentioned that the total capacity is now at 680,000 metric tons. So would you be able to mention what is the split between high carbon, low carbon, and stainless steel? And also what were the capacity utilization on those in FY '26?

Sir, our general split in terms of capacity or in terms of utilization is generally, at best which remains within the range of 55% to 60%, high carbon which remains in the range of 25%, so maybe 20% or 30%. Its an average 25%, and stainless steel at about 20%. Specialty is right now less than 3%, 4%. Overall, we were at 67% capacity utilization.

Okay. Fair enough. That helps. And the capacity that is coming up now at Dadri of 1.2 lakh, even that will be split in the same ratios?

Yes. Broadly, that will be the ratio in which it would be.

The next question comes from the line of Pujan Shah from Molecule Ventures.

I might be new to the company, so my -- the question might be repetitive. So please spare me for this. My first question pertains to the steel court. So if I map on the industry size, that could be industry size is roughly around 2.5. And if we expect a growth rate of 11% as well, that industry could grow at 4 lakh tons, right? So in that space, first, BCART has already been planning to expand. Second, Chinese has also been expanding into Thailand, and then they are trying to supply from there. So, how we are looking at the scenario? And are we still planning to go ahead with the 2 lakh tons of capacity in this -- steel court?

Yes, sure. So you are definitely right on all these assumptions. And of course, we are planning to go ahead with this capacity. That's the main focus area for all of us in the company. Because there is only one company in India today making this, we are the only and the first Indian company to start. Therefore, we see a good traction in this product. From our current -- from all calculations that we have done so far, even the pricing looks okay. The assumption that we've made still stand correct. And there is also a duty whenever there is an import. So we also have a 10% arbitrage when we look at import prices. So it is a good business as of now. All our calculations support it. And this is the plan. Once we get our approval we -- our definite goal is still 2 lakh tons of steel court.

Okay. So sir, my second question is related to the same. So if we look at the total let's suppose in FY '31 when we conclude with our 2 lakh tons of capacity, we might spend around INR 2,500 crores. So in that thing, if we broadly calculate, we get a revenue of roughly around INR 2,500 crores to INR 2,700 crores, in which if we calculate the margin of 25%, that makes roughly calculation of INR 600 crores, right? So in that INR 600 crores, our payback should be around five to six years. Is that assumption correct? Or am I calculating something wrong?

You're absolutely right. However, because it will be spent in the next five to seven years, we've taken a ballpark range of INR 2,000 crores to INR 2,500 crores of total investment for 2 lakh tons. And EBITDA as of now will range between INR 600 crores to INR 800 crores.

Got it, sir. And sir, I just want to understand what gives us so much confidence when we have been investing because then ultimate, the total pie, if we look into it, we will be the largest catering to this segment. And if, let's suppose any competitor comes up, like, let's suppose, example, Tata Steel, so if they comes up, they might not go with a small kind of investment. They can also spend something large. So what gives us confidence that we could be the market share leader and we will able to utilize our facility up and running at 100%?

Sure, sir. So sir, there are what we at least feel a lot of barrier to entry in this product. Technology is one. To get the right people is another. We already have about 60 trained people in this field, and it is not very easy to get the right set of people. Technology also, we have exclusive collaboration, exclusive tie-ups with our suppliers. And they are probably a very limited turnkey solution providers in this product. Third, there is a long approval process. So right now, we are confident on this approval cycle, and we've been able to manage it till now as well because there is nobody in the country. But once there is a supplier, it will go back to a lengthier approval process. And lastly, I would say is also our style of investment. So because we have our own machinery division, because we have been in this industry for about 85 years, and we have this diversification into a lot of different products, we are also able to keep our CapEx per ton very low, which is the same -- case in steel court as well. The industry norm for this would be at least 50% higher than what we are looking at and which is what we've already done in the first 20,000 tons.

Okay. So sir, I just want to get some sense on the approval side. So let's suppose example, if a tire company approaches you or we approach a tire -- OEM tire manufacturer. So just to understand, they will start manufacturing our steel court applicability with a new product they have been launching, right? So if they have launched 10 products before the approval, they might be continuing with the company which they have already approved or they have been -- like let's say, for example, BCART. So if they had approved BCART, then they will continue with the process, but the new product launches will start with us. That's the assumption correct? Or they also replace the older models as well with wire courts?

Sir, the main consumption will happen in the existing models. In fact, in the newer models, they would choose to go with existing established players first and then approvals. So what our market would be will be the regular tires, will be the regular product that they make today. That is where we are taking the chunk.

Okay. So why do they shift? So one of the -- obviously, the reason would be -- but on the overall cost side, they might have 5% to 7% of the total cost in their total -- the manufacturing cost. So why do they shift specifically to us in the going model or the model which is up and running? And so what would be the key reason? It might be obviously 1%, 2% cost savings would be there. And second, the new product launches that have much more acceptability of our steel court versus there. So is that how works or it is very different than what I'm assuming?

No, you are right. But other than that, I think it is also a security of supply chain. Today, they are not able to buy anything from India. Everyone has to import. And I think in the last five, seven years, we've all seen how disruption happen if you are dependent majorly on imports. So I think that is one big factor. Steel court as a percentage of the total cost is not a big number, but it is everything to make a tire. So this is a very important product. And everyone, I assume and I feel that all customers would be happy to get an Indian source. This is our assumption of this product.

And continuation with the ISG and OSG, we have been kind of going to receive the BI, I think, approval from the authority. Are we on place? Do we have received or what is the current status?

Sorry, I'm not able to understand your question. Maybe you can take this later again.

[Operator Instructions] The next question comes from the line of Kunal from Veritas Research and Advisors.

Pranav just wanted to understand, are we being more conservative due to the current issues and the geopolitical issues that lead to the volume growth guidance of 20%? As earlier, I guess we used to grow at 30% plus. And even though we had guided 30%, 35%, right, in the previous calls. So just to understand your thought on guidance and going forward, like even, if you can throw some light for FY '28 or so.

Sir, as a company, even in the last 10 years, we had grown at 20%, not 30%. So there has never been a 30% kind of averaging that we have done. Our estimate for 30% was only last year, that was because there was a lot of pent-up demand that we had because we were not able to have our capacity up and running quicker. Therefore, we had a 30% estimate of quantities last year. Now that the situation is normal, I think the goal overall for the company is to grow at around 20%, 25% each year. Some year could be a little less, some year could be a little more, but 20% is the broad understanding.

So you're talking about volume growth, right?

Volume growth, yes. Volume as well as EBITDA.

Volume as well as EBITDA.

I mean, yes, the growth when -- we say growth, it is usually our EBITDA growth.

Okay. Understood. And just a follow-up that in the year of FY '26, what was the capacity utilization by the way we had?

The capacity utilization for FY '26 was 67% -- 68-ish percent overall.

Okay. And for FY '27, are we aiming to be at 80% or plus?

Sir, yes, I think 80%, 85% is where I get the best return ratios for my investment. But because every year, we also need to invest for the 20% growth next year. So we will see. I mean 70% plus is what we should look at least.

Another just a bookkeeping question, so in the previous call that you highlighted that most of the CapEx has been done and hence, the depreciation and the finance cost has been capitalized and we will going to be see the PAT growth and bottom line growth going forward. So I just wanted to understand even in this quarter, PAT was largely driven by the lower -- taxation benefits and all. So can you please throw some light? Is my reading correct?

Sir, majority of depreciation that we had to take, we have already done. Now any increase in depreciation will happen only with increase in actual EBITDA levels also. So there is not going to be a disproportionate extra investment or extra depreciation or even interest that we should see in the long run. So our thought process is whatever, if let's say, the EBITDA grows at 20%, our PAT and -- sorry, our depreciation and interest should also grow around the same range, not higher, not very low.

The next question comes from the line of Prateek from IIFL Capital.

So just a clarification for this 1.2 lakh tons that you're adding this year, the CapEx would be around INR 150 crores?

Yes, sir. Broad range that we want to remain is around INR 150 crores to INR 200 crores every year.

But to grow at 20%, this 1.2 lakh number every year will also need to keep going up because the base will keep getting better.

Yes. So as of now for the next two, three years, I think average INR 150 crore, INR 200 crore average. And then, of course, every year, it should increase by 20% our investment if we are also growing at 20%.

Okay. But after a point when you decide that you have to go into steel courts, then your volume growth may slow down because much of your CapEx would be going to low volume steel court business with the mix and EBITDA and volume would be low?

Absolutely. That's why I'm talking about investment and not just absolute volumes here. So our thought process is more on investments. Now wherever we make investments, volume could be -- different.

Understood. And sir, you said that currently you will be sending trial volumes to one of the tire customers. So whenever the final order comes, when do you think in your assessment, when can we start doing 20 kilo tons run rate in steel courts? I mean, which month or which quarter almost? Is it like three, four quarters away or more than a year away? How should we look at it?

Sir, although because of the fire, we definitely had a pushback of six months. But because of this expedited approval also, we might see some numbers within this financial year.

Okay. And currently, are we selling hose wire from that facility or hose wire still not being sold?

No, we are selling hose wire from this facility. That is where we are now almost -- we are trying to cover most of our main cost through selling hose wire.

Understood. And just last question. When you said that the gas impact in terms of pricing per ton or costing per ton was around INR 4,000 to INR 5,000. So the way to look at it is that if you are making INR 7,000 per ton EBITDA, only for those 15 days, your EBITDA would have gone down to -- INR 3,000 per ton. Is that understanding correct?

Yes… But we also carry 10 to 15 days of inventory. So our inventory also helped during that time. It was not a complete hit that we had to take for the first 15 days.

Okay. So pricing has completely gone back to normal? Or have you been able to completely pass it down or there is still some hit in terms of EBITDA per ton from gas as of now?

Sir, one good thing is that we have a very cost plus business model, wherein we keep 30 to 40 days of inventory and 30 to 40 days of order book. Now this being a very exceptional increase, consumable is not something that we are able to take on previous orders. So any orders that we booked after being impacted in our cost, we have taken our increase. So even today, the orders I'm booking are with an increased pricing considering all this increase that has taken place. But for 30 to 40 days of order book, that order will somehow go at a old price hit, wherein we are taking that price hit.

The next question comes from the line of Parthiv Jhonsa from Anand Rathi.

Just continuing on previous participant question on the gas. Just wanted to understand what is the current scenario looking? Like are your suppliers asking for a higher price or what is the escalation in the prices? Just to give a -- can we get a broad understanding as far as the gas prices are concerned?

Sir, gas prices have still not returned to normal, they are still escalated. In some areas -- in some units, it is about 50%. In some units, it has gone up to 300% as well.

So what is the whole blended escalation for quarter one?

Blended, I would say, would be at least about 50%.

So is it a fair understanding to assume that for quarter one for example if your EBITDA per ton was say about anywhere about INR 6,500 to INR 7,000 and just continuing on a couple of other commentary. Would be possible a fair assumption that at least for the month of April, your EBITDA would be in the range of, say, about up to INR 300 to INR 3,500 or is that understanding way too low than whatever current scenario it is?

Sir, it depends on. So right now we are only in April, and we are seeing -- right now, we are only in the first month, and we are seeing demand coming back. So I don't think it should -- the whole of the first quarter should go to that extent. I'm sure we will see some recovery happening. And this INR 2,000, INR 2,500 a ton level is only for the 30 to 40 days of order book. So the whole quarter is not going to be that. After that, it will return to normal. So out of 90 days I think at least 50 days of standard EBITDA we should get.

Second question is on steel court, considering one of the large global brand has [indiscernible] there in the market supplying the material to the growth [indiscernible] right? What -- how much discount or what will be the delta you need to incur to just to gain the market share? Just wanted to understand up to just push the volume, what are the kind of ASP deduction you need to consider compared to that particular industry?

Sir, right now, I think it is still too early to judge the exact pricing level. As and when we move forward in this journey, I think we will come to that. But we do not expect a very big difference between us and anybody else because right now, we are the first Indian company. So I am -- we should get that advantage at least. Not just being a new entrant, not reducing price to a very large extent.

Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to Mr. Pranav Bansal for the closing remarks.

So thank you, everyone. Thank you for staying connected. Thank you for watching us closely. I hope we were able to answer all your questions. If there are anything that is left, please let us know, and we will get back to you guys. Thank you for joining us. Thank you.

Thank you, sir. Ladies and gentlemen, on behalf of Bansal Wire Industries Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.