BMW Industries Ltd. ($542669)

Ladies and gentlemen, good day, and welcome to the BMW Industries Limited Q4 FY '26 Conference Call hosted by Arihant Capital Markets Limited. [Operator Instructions] I now hand the conference over to Mr. Ronak Osthwal from Arihant Capital Markets Limited. Thank you, and over to you, sir.

Thank you. Hello, and good afternoon to everyone. On behalf of Arihant Capital Markets Limited, I thank you all for joining into Q4 and Full Year FY '26 Earnings Conference Call of BMW Industries Limited. Today, from the management, we have Mr. Harsh Bansal, Managing Director; Mr. Vikram Kapur, Chief Financial Officer; and Mr. Sanjeev Sancheti, Investor Relations at Uirtus Advisors. So, without any further delay, I will now hand over the call to Sanjeev sir for their opening remarks. Over to you, sir.

Thank you. Good afternoon to all the participants. Before I hand over the call to Mr. Harsh Bansal for his opening remarks, I would like to draw your attention to the safe harbor statement included in the earnings presentation. I request all the participants to kindly review the same and have a good look at it prior to the commencement of the Q&A session. Thank you. Over to you, Mr. Bansal.

Thank you. Good afternoon, everyone, and thank you for joining us for the BMW Industries Limited Quarter 4 and Full Year Earnings Call. With this quarter's performance, we closed FY '26 on a high note with the company delivering a strong performance alongside meaningful progress on our strategic priorities. The results reflect not just improved capacity utilization and disciplined execution, but also the strength of our operating model and the momentum we are building as we enter the next phase of growth. We are delighted to report our highest ever quarterly and annual profits. For the quarter gone by, operating income stood at INR 210 crores. Operating EBITDA for the quarter came in at INR 58 crores with a margin of 27.5%, while Profit After Tax came in at a record INR 33 crores, translating to a PAT margin of 15.4%. For the full year, company delivered operating income of INR 665 crores with operating EBITDA of INR 165 crores and a margin of 24.8%. Profit After Tax stood at INR 81 crores, reflecting a healthy PAT margin of 11.9%. The performance is a direct outcome of our disciplined approach and improved utilization of assets. During FY '26, the company witnessed strong operating momentum across its downstream businesses with CRM complex production increasing to 718,000 metric tons and annualized utilization improving to 70.9% from the December number of 66.9%, reflecting a stronger capacity utilization and improved operational efficiencies. The Pipes and Tubes segment also recorded a healthy production growth during the year, with production increasing to 201,000 metric tons from 177,000-odd metric tons in FY '25. Our focus on sweating the asset base is expected to further strengthen return ratios in the years ahead. We believe this sets a strong foundation for further improvement in return ratios as we scale. Reflecting on this performance, the Board has recommended a final dividend of INR 0.43 per share, resulting in a payout ratio of 12%, reinforcing our commitment to delivering consistent shareholder returns while continuing to invest in growth. Net debt during the year stood at INR 364 crores with a net debt-to-equity ratio of 0.45x. Net debt also includes debt drawdown on account of the Bokaro Greenfield Project to the extent of INR 143 crores. Net debt-to-equity, excluding borrowings for the Bokaro project, stood at 0.27x. Importantly, healthy and consistent operating cash flows enabled the company to invest INR 109 crores of internal accruals into the expansion at Bokaro. FY '26 has been a pivotal year operationally, marked by strong progress on our Greenfield Downstream Steel Complex at Bokaro, which remains on track for phase commissioning starting Q1 FY '27. In anticipation, the company has begun establishing its sales and distribution networks, ensuring we are well positioned for a seamless ramp-up. We have also made significant advancement in our sustainability journey through our partnership with the Indian Oil Corporation for the supply of Piped Natural Gas at Bokaro, enabling cleaner and more cost-efficient operations. Looking ahead, the company is entering a transformational phase of growth, driven by higher utilization of existing capacity and the phased commissioning of ramp-up of the Bokaro Greenfield Project. As the business evolves towards a more integrated and balanced operating model, combining its established conversion strength, with a proprietary sourcing and distribution framework, the company expects to capture a larger share of the value chain while further expanding and diversifying its customer base. We reiterate our earlier guidance of a CAGR of approximately 75% over FY '25 to FY '28 period, supported by the phased commissioning and ramp-up of Bokaro Greenfield Project, along with continued organic growth across the existing business verticals. In line with the above guidance, operating EBITDA and PAT is expected to grow at a CAGR of nearly 45% and 40%, respectively, over the same period. EBITDA and PAT margins are expected to gradually stabilize at around 12% to 13% and 5% to 6%, respectively, by FY '28 as the benefits of integration, scale and operating leverage begin to materialize. Given recent developments, we believe that the industrial landscape of Eastern India should get into a favourable phase of transformation. We hope that stable and progressive policy supports rising infrastructure investments and a stronger push towards industrial development in the region will provide positive tailwinds. With strong execution momentum, capacity expansion progressing as planned and a clearly defined strategic roadmap, the company remains confident in its ability to scale meaningfully, enhance profitability and create sustainable long-term value for all stakeholders. With that, I will now open the floor for questions. Thank you.

[Operator Instructions] First question from Shlok Bharti from SWAN Investments.

Just wanted to understand on the consol level, as you indicated, the EBITDA margins will get stable around 13%, 14% by FY '28. So, can you give a breakup in terms of our existing business and how the Bokaro performance will play out over the next 2 to 3 years?

So, thank you for the question, Shlok Ji. One small correction. The EBITDA will stabilize at 12% to 13%, not 13% to 14%. The existing business as is will, we don't see any meaningful investments happening on this side as of now. So whatever benefits come will be on account of increased capacity utilization, for example, from the Tubes division, where we have created substantial capacities, but are fairly underutilized. So, over the next two to three years, we expect the utilization levels to go from the existing 30%, 34-odd percent to closer to 60% to 65%. So that is for the existing business. On the Bokaro side, I think we've spoken about the capacities that are being created, and that's a part of the presentation. Can you just open that screen, please? where over the next 12 to 15 months as we continue to commission various parts of the project, those volumes will come in. And then FY '28, we will scale up those volumes in a meaningful manner. So, I mean, those numbers are there for you to see.

So is it safe to assume that if we ramp up our capacity of Tubes in our existing business, so the revenue of INR 665 crores that we reported in FY '26 can go max up to INR 800 crores or INR 900 crores, that's the peak revenue one can assume for your existing facility? And what sort of integration benefit like once you are starting in, I mean, as per your presentation, the Phase-1 of Bokaro is expected to come on stream in Q1. So can you also throw some light which all facilities coming in Q1?

So, on the first part, I think your assumption is fair in terms of the top line that can be derived from the existing businesses. On the second part of your question, we are looking at starting saleable production of the color-coated section in this quarter, and this will be then followed in subsequent quarters by the galvalume facility, cold rolling, pickling, et cetera.

Okay. So, color and then it will be a galvalume. So, once your project is completed on the Bokaro where we are spending near about INR 800-odd crores, what sort of IRR are we working on? I mean, in terms of, if one was to look at the payback period, I understand that the capacity will be fully operational once in FY '29. But if you look at the IRR, what sort of IRR one can look at it?

So, our base case for an investment is at 20%. So, in this case, it's, I mean, it's safe to say it's above that.

[Operator Instructions] We have next question from Darshil Jhaveri from Crown Capital. Your voice is very unclear.

Congratulations on a great set of numbers, sir. So just wanted to harp a bit upon the CapEx, the Phase-1 that we are going to start in Q1. So, can you just tell me the ramp-up? How will it happen? Like is the, in H1, will we need to put out some testing and then the commercial production can happen by Q2 or Q3? How would the ramp-up be? And what kind of revenues can we expect from Phase-1 in FY '27?

So, Darshil Ji, we have not gone into detailed economics and projections about what kind of revenues we can expect on a breakdown manner. We've given an overall guidance in terms of up to [Indiscernible] and I would like to stick to that. But in terms of your part of the question of how much we are looking in terms of color coating and all that. So, color coating will come online. You should have some sales in Q1, but meaningful sales will only happen by Q2 because once we start production, we will take time to stabilize on quality volumes, acceptability of the products, et cetera. So, this is why we are not giving a breakup quarter-wise revenue estimate, but we've given a more broader longer-term guidance.

I was not wondering quarter-wise, just like in terms of a rough range like in FY '27, what could we expect from this? Because why am I coming to this also is because as the revenues ramp up, we'll have, but the cost will be nearly fully right now our EBITDA will dilute a bit. So just wanted to understand how would that kind of work? I don't want an exact number, just a rough broad color will also be fine, sir.

We would refrain from giving any kind of quarter-on-quarter guidance. But, the second part of your question, Darshil Ji, where you're looking, you mentioned about dilution of the EBITDA. So that it should be seen in the context of a changing business model and not really a dilution. So, if you look at the absolute returns of EBITDA numbers, there is a substantial increase. But because we are in a conversion model today and we will be in a buy and sell model tomorrow, so the absolute number will be reflected accordingly. So, it's not really a dilution if you consider the change in model.

Okay. Fair enough. And sorry, just last one question from my end. In terms of accounting because we are starting the Phase-1 right now, the depreciation and interest will start hitting from Q1, right?

We will be capitalizing it on a phase-wise manner depending on which part of the project we commission. And therefore, accordingly, on a quarter-on-quarter basis, whatever we commission will get capitalized and reflected in the numbers.

The next question is from Priyal from Value Money. We have next question from Mr. Bhavesh, as an individual investor.

Congratulations on a good set of results. My first question is on the revenues. So we have observed a sequential improvement in revenues from Q3 with a strong uptick in Q4. So should we expect this momentum to continue in the coming quarters, particularly leading up to the commissioning of Phase-1 of the Bokaro plant?

So Bhavesh ji, thank you so much for the question, and welcome back. Good to hear you again. I don't think the same momentum will continue because if you look at the existing numbers, they don't reflect Bokaro. And with the existing business other than certain capacity utilization variations, we are not seeing any meaningful change. When it comes to Bokaro, like I mentioned to Darshil ji, we will have meaningful sales top line reflected starting from Q2. In Q1, there will be some, but I won't want to club those sales with these sales for the benefit of not confusing you.

Understood. That was helpful. Sir, next question is with respect to the trade receivables. That has increased significantly from approximately INR 80 crores in FY '25 to around INR 150 crores in FY '26. So, could you elaborate on the drivers behind this increase?

If you even look at the receivable days, I think this was all on account of one of our key customers holding back payments because of March quarter. And this led to this number. We actually got the payments in early April. So, it was more of a timing issue. But anyway, it got reflected in the balance sheet because it's of 31st March.

Understood, sir. Sir, next question is on the downstream plant. So, the presentation indicates that the Phase-1 commissioning will happen in Q1 FY '27. So, since we are already in the month of May, could you provide a more precise timeline for commissioning? Are we looking at late May or June? And what is the expected timeline for Phase 2? And additionally, I would request the company to issue a press release once it commissions Phase-1 so that all the investors are well aware of.

Yes, of course. So, I'm sure you will hear about that when we hit the proper commissioning, but we expect to start some form of cold trials before the end of this month and hot trials in June. And of course, once we get to saleable material, you will be, I mean, you'll be able to read the releases.

Sir, on this Bokaro facility, so it is focusing on higher value-added products. So, could you share your go-to market strategy? Have you identified or engaged with potential customers in the automobile, infra, solar, defense, engineering space? And I'll proceed with the further part.

So not specifically the sectors that you mentioned it, but I want to give you the comfort that we've already started going to market and discussing with potential buyers without mentioning specific.

Mr. Bhavesh, please rejoin the queue. We have next question from Mr. Sanket as individual.

Yes. So, we have a listed peer, Manaksia Color Coated. So, they are also into the business which we are doing CapEx in. So can you just throw a light like they do EBITDA margins in the range of 5% to 9%, and we are guiding somewhere around 12% to 13% at stabilized levels. So how is our product mix different from them? Can you just throw some light on that?

So, two things, Sanket Ji, I think our business model on a blended basis is different.

Okay. So, the 12% to 13% is not just for the.

It is a blended. The Company's guidance and not the Bokaro plant guidance. So that is one. The second is, I think our capacities on a complete basis differ substantially, which allows us to maximize our efficiencies of scale.

Okay. And exports will be what chunk of our revenue going forward because they have significant chunk of their revenue as exports?

So, we can't give you a specific number, but I think it will be safe to say that we will be looking at the export market very seriously.

And will EU be one of the key markets given that?

I wouldn't want to discriminate against anyone. So, I'll give all markets the benefit of having a wonderful product.

The next question is from the line of Ajit Sethi from Elko Quantum Solutions.

Sir, you are guiding for around 75% revenue CAGR for next three years. So, could you help us understand the key growth driver behind this guidance? And also, how confident are we in achieving this target? Do we currently have an order book or customer visibility supporting this growth outlook?

So, thank you for the question, Ajit ji. It's actually not a guidance of the next two years. It was a three-year guidance starting from FY '25. And so, 75% CAGR up to FY '28, and this is not an annual on annual basis. It's a three-year CAGR. So that is one part. The second part of yours was the product mix and everything and order book. I think it's a little early for us to be accumulating an order book because my plants are not yet commissioned. But in subsequent calls, I'll be happy to talk about the order books, et cetera. But a lot of these products are not long gestation sales periods. You typically have an order to delivery gap of maybe about two weeks. So, the order book kind of becomes a little moot. The other factor being that because some of the components are highly volatile in nature, for example, zinc or aluminum or magnesium going forward, it will be very difficult for us to take long forward orders without a proper current hedging strategy that could expose us to substantial downside risk.

Understood. Sir, could you help us understand the key competitive advantages of the company and what differentiates us from other players in the industry?

So, I think, without going into too much detail on that, I think this is all a part of the presentation pack. But needless to say, we've been around in the service sector for the last 40-odd years. We've been working with key customers in the Indian steel industry. We are one of the largest downstream steel processing operations in the country, one of the single, one of the largest single location tube capacities in the country. So, there are a whole bunch of things. I think we are one of the few players that are present across verticals along with logistics and things like that. So, I mean, for a more detailed thing, it's a part of the presentation pack.

[Operator Instructions] We have next question from Priyal from Value Money.

How much of the new Bokaro capacity will be consumed internally across the value chain versus sold externally? And can you quantify the integration benefits from reducing intermediate outsourcing and purchases?

So, Priyal Ji, I'll answer the first part of the question. I'm not sure I understand the second part, so I'll come back to you on that. But on the first part, if you look at the product profile of Bokaro, we have about 500,000 to 600,000 tonnes of pickling capacity. We've got a cold rolling capacity of 3 lakh to 4 lakh tonnes. And then on top of that, we've got galvanizing GI and ZAM capacity of about 5 lakh to 6 lakh tonnes, and color coating about 2 lakh tonnes. So, if you look at saleable products, it will be the differences because the highest value add is the color coat. So the leftover of about, let's say, 3 lakh to 4 lakh tons will be in the form of galvanized galvalume or ZAM. And if there is any other balance, it will be in the form of FSCR or SPO. So, there is a trickle down, but the overall sales from the unit at peak will be about 6 lakh tonnes.

Okay, sir. [Foreign Language]

So, the internal consumption has two factors clearly my cost of procurement goes down because I'm able to kind of control my own raw material. The second is I'm also able to control my quality, which becomes very critical over here because the cold rolling mill will ensure I have a good product and control on the galvanizing galvalume and ZAM, which further adds value to my control on the color coated. So, one, of course, is reducing the cost of raw material. The second is the control on quality.

Okay. Got it, sir. And one more question. How are spreads behaving currently across HR, CR, GI and color-coated segments? Have recent steel price movements improved realization or compressed down margins?

So, if you look at long-term averages, the spreads are fairly stable, yes. There are short-term aberrations from time to time. And in the steel industry, it's best not to focus on the short-term aberrations. I think long term, the spreads are positive.

The next question is from Kunal Bansal from Anantnath Skycon Private Limited.

So, sir, I just wanted to confirm like earlier in the call, you guided a 75% CAGR for revenue, 45% EBITDA and 40% CAGR for PAT. So, is it annual growth or combined growth still FY '28? So, this is a compounded annual growth rate between FY '25 and FY '28. So, if you take the two numbers of '25 and '28, this will be a compounded growth number.

[Operator Instructions] We have a follow-up question from Mr. Bhavesh, as an individual investor.

Sir, I have a couple of questions. In your investor presentation, slide #16, you have highlighted benefits under Jharkhand's Industrial and Investment Promotion Policy, including capital subsidies, SGST reimbursements, power duty incentives. So, could you quantify the potential financial impact of these incentives?

So Bhavesh ji, if you look at the little script at the bottom of the page, there is a reason why we are not quantifying it is because we don't know the exact numbers that we will receive. And so, we have not even taken it as a part of our financial projections. But whatever we receive whenever will be duly reflected. The other part is as a policy that we have internally, any subsidies we receive going forward, whether it's with Jharkhand or PLI or whatever, will be used to repay the debt. And that's a part of our agreement we've also committed to the bank. So that's right.

Understood, sir. Sir, one last question. So, could you please provide details about the technology and automation at the Bokaro plant? And additionally, I would like to know your technology provider and EPC partner for this greenfield project.

So, in terms of technology, this is not new technology. It's been around for a long time. You've got a number of plants around the country who are using similar technology. Our partners are the equipment vendors from whom we've procured. I don't want to go into the details. I'm not sure whether I can disclose the names at this point. But what was the other part of the question, Bhavesh ji?

So automation, so technology provider and EPC partner for this project, like L&T or any other?

No, no. So, we don't, I mean, we are not using L&T, but we are using others who are more locally available.

[Operator Instructions] The next question is from Rohan Baranwal from ASK.

My question is on the ZAM coated product side. So can you please explain us the opportunity size for the ZAM coated products in India?

So wonderful question, Rohan Ji. So if you look at the move of the industry, it's essentially towards more longevity steel coating processes, but also lighter steel and steel which provides more value for money. Because of that, you went into galvanizing, you went into high-tensile steels, which provide higher strength at lower thicknesses. And similarly, if you look at ZAM, the industry is starting to move towards magnesium coated because of higher life expectancy. Now if you look at a galvanized product, it typically has a life of about 4 to 5 years at standard coating. Now to increase the life, what Indian customers have been asking for is about 3x, 4x coating, which makes it very expensive considering zinc is currently at about INR 3.25 lakh per tonne. Now there is only so much you can do, right, because I can't indefinitely keep coating zinc at those prices. You might as well then at some point, start using zinc sheets and not steel sheets. Now to get better value for money, you start looking at other alternatives, one of which is ZAM. Zinc Aluminum Manganese, same to same coated provides about 5x to 6x of the life of zinc. Now if you are able to provide 5x, 6x lives at same coating as Zinc, there is a substantial value to be derived by the customers. One of the impediments today is that even though there is demand, there is not adequate supply. You will see supply coming on to the market over the next few years, one of which will be ours. And once there is adequate supply, we expect the market to also develop much faster. So this is kind of a chicken and egg story where you can argue that there is no demand because there is no supply. [Foreign Language] There is a lot of demand from a host of sectors. Solar is one of those because today, any EPC supplier in the solar sector has to give commitment guarantees of, let's say, 20 years, 30 years. But zinc coating does not provide those kind of lights whereas ZAM does. So we are actually quite positive on that.

Got it sir. And what is the premium pricing we can expect? Like what would be the premium we expect compared to like GI or GL products, galvanized?

I am not actually, there is a little bit of premium, but then this is like looking into a crystal ball because in the future, I don't know how much supply or how much demand will be there. But needless to say, there is a marginal premium over GI. Now if there is a case made of value derived by the customer, then some of that value can be converted to rupees and dollars, I guess.

On the Pipes and Tubes side, so what is the current utilization level? And what is the TMT businesses which remains relatively low despite the current expansion? So what are the key bottlenecks do we see on that side, sir?

So on the TMT rolling mill side, we have raw material constraints on the customer side. We are working with them to see how some of those things can be sorted out, what can we do in terms of enhancing our capabilities if that would help. On the Pipes and Tubes side, you will notice that there has been a substantial increase in the installed capacity, which has gone in the last year from less than 6 lakh tonnes to about 7.32 lakh tonnes today. On a utilization level, even though we have increased utilization by about 30%, overall, we are still at about 34.2%. Now we expect stable state tubes and pipes utilization to be in the range of about 60% to 65%, and we hope to get there over the next maybe two to three years.

[Operator Instructions] We have the next question from Shlok Bharti from SWAN Investments.

Sir, just wanted to understand once our facility commence in Bokaro, what sort of working capital cycle one can assume? Because I can understand that in month of March because of a higher debtor days from one customer has taken a hit. But on a steady-state basis, if you just want to understand the Bokaro dynamics, what sort of working capital cycle on look at the Bokaro unit?

So we are targeting a working capital cycle of about 30 days in Bokaro. But I mean a lot of it will depend on where we buy the steel from, what is the product that we ultimately sell, how much inventory we need to carry on the FC side, et cetera. But I think it's fair to say between 30 to 40 days is comfortable.

And the entire production from the Bokaro would be under our brand, right, BMW?

That's right.

And what sort of advertisement expenses are we planning to incur to establish the brand BMW in the market?

So this will essentially be a B2B. So I don't see very high advertisement spends because whatever will come only after FY '29 and FY '30 because up to that stage, our focus is on B2B enhancing volumes and moving more and more products. So I don't see substantial B2C kind of ad spend. There will, of course, be some, but they'll primarily be targeted towards B2B sales.

So is it safe to assume that are we going to replicate our existing business? Definitely, we have a one segregated customer. But are we in touch with a couple of big names in the Bokaro for converting the calls into the final product and selling back to them?

No, we are not in touch with anybody for conversion at Bokaro.

Okay. And in terms of the debt, I mean, definitely, INR 800 crores is a bigger CapEx that you'll be spending it and you'll be drawing a debt from the bank. But post the completion, what sort of peak debt one can assume on the company level?

So I think once we look at the completion and the commissioning of this project, that will be the peak debt. And we are not talking about the working capital, et cetera, right now. But in terms of long-term debt, we'll be at the peak by, let's say, in the next 12 to 15 months.

Because currently, our total debt on the book is almost INR 370 crores, of which INR 135 crores is short-term borrowings, right? So this INR 370 crores can we probably take it around INR 800 crores or INR 700 crores by end of FY' 28.

That's fair. That's fair. That's a fair assumption.

INR 700 crores to INR 800 crores could be the numbers out.

Sir, we have a follow-up question from Mr. Ajit Sethi from Elko Quantum Solutions.

Sir, in our legacy business at peak utilization, what kind of revenue we can achieve?

I think this was a question somebody else also asked. I think it's fair to assume between INR 800 crores to INR 900.

And sir, coming to your guidance of reaching 75% CAGR between FY '25 to '28. So to achieve this, you have to grow substantial revenue in FY '27 and '28. So how confident you are to achieve this growth guidance?

Fairly confident. No reason for not being confident.

So the growth drivers in this guidance?

So the primary growth driver, is Bokaro, right? My current revenue comes entirely from conversion business where there is no raw material reflected in the cost of sales. But starting from this quarter or the following quarter, you will start to see a lot of the absolute sales numbers increasing because it will also account for the cost of material. Today, it's entirely services. So, and therefore, the CAGR changed substantially.

Okay. And from this Stage 1 Bokaro capacity, what kind of revenue we can achieve?

Stage 1, we are not giving a breakdown of stage-wise or quarter-wise. So I think we'll just stick with that.

[Operator Instructions] The next question is from Rohan Baranwal from ASK.

So my question is on the Bokaro coated steel side. So what kind of EBITDA per tonne margins are we expecting on the Bokaro coated steel business versus the legacy commercial business?

Yes. So Rohan, we are not giving breakups of Bokaro and existing businesses. We've given a company-wide estimate. And further, I think it's a little early to give you product-wise breakdown of per tonne EBITDA. I think those will come in due course.

And the investment of INR 800 crores, so what kind of ROCE we are expecting with this business, with the new plant, which you are expecting?

So on a blended basis, we expect we expect to reach 15 plus.

And how much would be infused through debt? And what would be the equity we are looking to raise for this investment?

On a total cost of INR 803 crores, our debt equity is at roughly INR 250 crores to INR 300 crores of equity and balance of debt.

Got it, sir. And will this be funded through like cash flows coming from the current capacity?

Yes, primarily.

Got it, sir. Next last question is, sir, given the shift towards the value-added product, how we should think about the blended margins improvement over the next two to three years, sir?

So we've given a guidance of EBITDA, blended EBITDA in the range of 12% to 13% and PAT in the range of 5% to 6% on a blended basis.

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

Yes. Thanks, everybody, for taking out time to join this call. Really appreciate. If you have any further queries, please feel free to get in touch with us. Thank you.

Thank you. On behalf of Arihant Capital Markets Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.