Godawari Power & Ispat Limited (GPIL) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to Godawari Power & Ispat Limited Q2 FY '22 Earnings Conference Call hosted by Go India Advisors LLP. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Sana Kapoor from Go India Advisors LLP. Thank you, and over to you, ma'am.

Thank you. Good morning, everybody, and welcome to Godawari Power & Ispat Limited earnings call to discuss the Q2 FY '22 results. We have on the call Mr. B. L. Agrawal, Managing Director; Mr. Abhishek Agrawal, Executive Director; Mr. Siddharth Agrawal, Non-Executive Director; Mr. Sanjay Bothra, Chief Financial Officer; and Mr. Dinesh Gandhi, Director. We must remind you that the discussion on today's call may include certain forward-looking statements and must be, therefore, viewed in conjunction with the risks that the company faces. May I now request Mr. Dinesh Gandhi to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.

Thank you, Sana. Good morning, ladies and gentlemen. Thank you for joining the conference -- earning conference call to discuss the Q2 FY '22 earnings of the company. I trust that you have had a look at the earnings presentation uploaded on the exchange and the company website. Before I discuss on the quarterly performance, I would first briefly touch upon debt-free strategic updates for the quarter. I'm pleased to report that with the decisions consistent and focused approach taken by the management of the company 3 years ago, GPIL has become debt-free on a stand-alone basis. This is really a dream-come-true for us, which we had decided about 3 years ago. This -- we have achieved it against the scheduled repayment period up to 2020. So definitely, it's a remarkable achievement for the company, and we are all very happy about it. With the debt-free status of the company, your company has already announced growth plans by investing into the captive solar projects and integrated steel plant to manufacture integrated steel products. Pending investments into these projects, the company has decided to invest surplus funds in -- from surplus funds generated from the cash flow -- operational cash flow of the company into bank deposits and other short-term instruments. On the CapEx plans, which were announced during the earlier quarter, I just would like to give you some updates on that. With regards to the solar project, wherein we had announced that the company will be setting up 250-megawatt solar PV -- captive solar power plant in Chhattisgarh partially to meet the increased requirements and personally to replace the old high-cost coal and biomass generating capacity. However, during the last quarter, there was a change in the state regulatory environment for setting up the -- regulations for setting up captive power plants. And in view of the changed regulation, our company has reduced the size of this project from 250-megawatt to 100-megawatt and CapEx from INR 750 crores to about INR 325 crores. The state CERC has restricted setting up of the solar capacities -- captive solar capacities to the extent of 2x the connected load. And therefore, there was a need to change the size of the project. Now this 100-megawatt project will be set up at 2 locations. We had earlier announced to set up the project at Raigarh, where we had a large parcel of land. However, in view of the lower size of the project, we have decided to change the location of the project, wherein 1, 70-megawatt will be set up at Rajnandgaon for which we already have delayed in our position. And this 70-megawatt we are targeting to complete by Q1 FY '23, coinciding with the commissioning of our increased steel billets capacity so that the company is able to draw the power from the new solar project. Similarly, 30-megawatt capacity is being -- will set up at a new location for which we have done the land specification, and acquisition is in process. And this 30-megawatt will be utilized for our power requirement at the captive mines, including trucking and beneficiation facilities being set up at the mines. The Hira Ferro Alloys 70-megawatt project, there is no change except the change in the location of the project. Earlier, the 70-megawatt Hira Ferro Alloys project was proposed at a location where GPIL is now setting up 70 megawatts, and therefore, Hira Ferro Alloys is also identified and is process of acquisition. This 30-megawatt GPIL plus 100-megawatt HFL project will get commissioned in H2 FY '23. As against the announcement made earlier, the 73-megawatt capacity with existing captive power generating capacity will continue to operate without any shutdown. However, in order to increase the operating efficiency in the coal and biomass power plant, we have decided to replace the turbine, the old turbines with a new 48-megawatt, high-efficiency turbine, which will enable us to generate 8 megawatts of additional power without any additional fuel and operating cost. So while the CapEx on this investment will be close to about INR 60 crores, which will get completed over a period of next 1.5 years. Your company is gradually progressing towards the setting up of 1.5 million-tonne integrated steel plant announced earlier. We are presently in the process of finalizing the technology and equipment details. Land acquisition is also underway, and we expect to file for the environmental approval for the project during the current month. The environmental approval, land acquisition and the other project-related details shall be finalized over a period of next 1 year, and we expect the construction to start only after next Diwali. Thereafter, this project will require about 2 to 2.5 years to commission. This project, we plan to mainly fund it through the internal approvals of the company. And if required, we shall raise the debt at an appropriate time, taking into account that the overall debt to EBITDA of the company shall never exceed 1:1. The -- now I will touch upon certain other major developments during the quarter. As you're all aware, the capacity for our Ari Dongri iron ore mine has been announced to 2.3 million tonnes with the grant of the approval -- environmental approval. And with this, the company has started utilizing 100% of the captive iron ore for our steel manufacturing facilities. In order to improve the efficiency as well as the higher production in the mine and to utilize low-grade ore, we have decided to set up the iron ore crushing and benefication facilities at the mine. And the CapEx for the mine, which was earlier announced to be about INR 25 crores, is now -- leave us to INR 125 crores. The credit rating of the company has been recently upgraded from A stable to A+ stable by the CRISIL. The rating upgrade reflects the company's healthy business profile, driven by integrated operation, established market position and improved financial risk profile. As you're all aware, the merger of Jagdamba Power was 25-megawatt power project was dropped in view of differences over the valuation. The company continues to draw power from Jagdamba earlier then -- earlier arrangement of the power purchase agreement. And the same arrangement will continue till an alternate agreement with the management of Jagdamba is finalized for acquired -- acquisition of this 25-megawatt power project because with the reduction in the size of solar project, this is a long-term requirement of the company. And at some point of time, we will try and reach an agreement with the existing management of the Jagdamba and acquire this unit. We -- there was another development with regard to our solar project with the healthy cash flow generation of the company, and the proposed scheme for divesting this stake in solar projects, SPV has been withdrawn, although we continue to explore the possibilities for divesting this stake at an appropriate time, at a valuation which is considered reasonable by the management of the company. We shall come with this to the shareholders for trades approval as and when agreement in this regard are executed with the potential buyers. The -- another development during the quarter was relating to Hira Ferro Alloys. Hira Ferro Alloys, which is having a 60,000 tonnes of Ferro Alloys capacity with captive power generation of about 30 megawatt has become subsidiary of your company with the stake of 52.79%. This stake is likely to go up to 56% in the near term with additional subscription in the press capital issue of Hira Ferro Alloys, which was announced earlier. The -- I'm also pleased to report that the stock’s fleet and bonus, which was approved by the Board of Directors of the company, has been approved by the shareholders. We have already credited the split share to the account of the shareholders. The allotment of the bonus has been completed in the last Board meeting. And now the process for crediting the shares in the shareholders' account is underway. Now coming on the results, without taking much of your time, I'm sure you must have all looked at the numbers of the company. Just to give you a brief on the same, on the Y-o-Y basis, the revenue of the company increased 32%, primarily driven by the higher realization. The average realization of the talent during the quarter was about INR 13,000 a tonne, about 10% lower than the realization of the last quarter. However, it is 3% increase -- higher as compared to the same quarter last financial year. The steel business realizations were almost flat on a quarter-on-quarter basis, but up over 50% as compared to last year. The EBITDA of the company stood at about INR 436 crores for the quarter. With reduction in debt, the finance cost has come down by 73% Y-o-Y. And consequently, the pace is increased to about INR 296 crores to INR 96 crores, up 185% Y-o-Y. Coming on the business outlook of the company, the iron ore prices have fallen from a peak in domestic market from 9,600 to about 6,200 in last 4 months for 62 material. However, as the steel demand improves seasonality, iron ore prices have again started to recover. The pellet prices, which have ticked at about INR 16,000 a tonne, has come down to INR 11,000 a tonne during the last quarter and now sharply recovered to about INR 13,000 a tonne. The prices have recently gone up about by 20% in view of the increase in the input cost, mainly the coal cost, thermal cost for manufacturing loan products in the second plant. We expect the iron ore and pellet and finished steel demand to remain healthy going forward. And we also expect the company to post the healthy cash flow going forward in the near to medium term. With this, now I would like to open the floor for the questions and answers. Thank you very much.

[Operator Instructions] The first question is from the line of Monika Bajaj from SteelMint.

Sir, I'm just wondering that what is the operating production guidance for this fiscal and how much you either share for the domestic market and for the essential market in this fiscal?

We aim to be at 2.4 million tonne in Godawari Power and about 100,000 tonnes in Ardent. The mix within domestic and export will decrease and will be mainly driven by the market conditions since the demand and price recovery.

Okay. Okay, sir. And how much like to maybe talk about low alumina pellet market being doing and how do you see the value per pellet will be doing in light going forward in the fiscal? How do you share? And how is the market increase or decrease?

Abhishek, you'll take this?

Yes. Yes. I'm here. Hello?

Hello? Yes, sir.

Can you hear me?

Yes.

Can you please repeat the question?

Sir, I just wanted to ask that how have the low alumina pellet market been doing. And how would its market be going like going forward in the fiscal?

See there is a huge demand from the export market for the alumina, although the license have dropped significantly compared to last quarter, and domestic licenses are much better. But still we will maintain a ratio of probably doing 50% domestic, 50% export because low alumina value is attracting lot of customers from Europe and non-Chinese countries like Malaysia and Korea and all. So I feel the demand is there, of course, prices are driven by the global market. As you are all aware, the annual index is falling quite a bit. But the pellet premium, which defines the pellet market, has jumped almost double in last 4 weeks. So there is demand, and I'm sure it will remain like that because China is not targeting direct feed to their blast furnace. So probably there is demand.

[Operator Instructions] The next question is from the line of Vikash Singh from PhillipCapital.

Sir, I just wanted to understand the current spot prices for other material like sponge and billets et cetera versus 2Q. And my second question would be how is the export prices for pellets now prevailing. And given that the availability in the domestic market for iron ore has been increasing, do you think that the trend -- how the pellet prices would behave in the domestic market going forward?

Okay. I'll take this. See as far as the current prices are prevailing so sponge iron is hovering around INR 33,000, INR 32,500, which is all-time high industry of sponge iron, it has jumped to INR 35,000 a couple of weeks back but now collected to INR 33,000, whereas billet is hovering around INR 46,000, INR 47,000. So these side days are at record high -- ever higher industry of the commercial segment. As well as pellet is concerned, currently, the domestic prices are hovering on INR 30,000, which was at a low of INR 11,000 and has jumped to INR 13,000. And the export market, the prices are hovering around INR 11,000, INR 11,500. But as you all are aware, we are exporting hybrid pallets. So we will maintain the ratio. We will be exporting hybrid pellets and selling all the silicon-type pellets in the emerging market. So we will not mix of both where we've been realized a relation of close to INR 13,000 for highway as well as domestic market because we get almost $20 more for the hybrid pellets. So that will keep the relation at the same level for domestic and exports. Incase if whatever be.

And what would be our current mix in terms of export versus domestic total?

It's 50-50 at the moment, 50% domestic, 50% export.

Understood, sir. Sir, my second question pertains to our coal availability as well as the cost, if you could update us what was the coal cost in 2Q. How do you see it going forward in 3Q? Because -- and what is the availability scenario as of now?

See, as far as my -- beyond your question is concerned, we only use imported coal. So for that, we are very well covered till January, February of next calendar year. That's a very attractive price as we did a lot of advanced buying. So we are not at all impacted by the recent jump in the thermal coal prices globally. As I said, domestic is concerned, we are getting supplies from coal India, while increase, which is more than enough to run our power plants. So we have no ship on the full front. We haven't purchased any single quantity from the open market at such a high level, whether it's imported or domestic. So in terms of coal, we are very well covered at a very good prices, I would say.

Sir, any indication how that the -- till January, the prices which we have booked in 1Q levels? Or any indication of the levels at which you would have booked before...

Yes, yes, yes. So for the import coal, my levels are at 120, 125 CFR levels, which, at the moment, it is well up to almost 240 to 230 CFR levels and have stretched it to around about 170, 180 level. So our coal is covered at 120, 125 CFR levels. For pure RB1, we only use prime coal, which is called RB1 in the national market and we use only that first point I didn't make it.

Understood. Sir, just for my understanding purpose. So basically, since imported coal has now had a longer time line in terms of logistics, so we have to buy the coal from -- by end of November, right? So if prices doesn't come down by end of November, we have to import for or look for a higher coal cost or a certain portion of it can be substituted through domestic prices.

No, no, no. We do not use any domestic coal for us for quality because moment we start the domestic a portion goes down. As far as pellets are concerned that international prices have already fallen by almost $90 in the last 2 weeks because China has again -- has come in to the picture, and they want to control the prices. So the coal index, which has done to almost 240 levels starting October has come on to 140 levels already. So going forward, I'm sure we won't be back to all. I guess started coming down already internationally.

Understood. Sir, just one last question, if I can slip in. So we have reduced our power solar PV plant from 250 megawatts to 100 megawatts. But the cost has been the same one by half. My estimate was that since we had a sizable portion of our own land bank, so the cost per megawatt should have been come down in a similar proportion. So can you just explain what I'm missing here?

Yes. So Vikash, there are 2 things in this. Number one, as you are aware, because of the shortage in the China, most of the solar modules are being imported. So most of the Chinese manufacturers of the module have involved the force majeure clause and have started negotiating for the increase in price. Number two, the land bank for 100 megawatts of the project between GPIL and -- we have to do the land acquisition also phrase because the earlier project was proposed to be set up in Raigarh where we have a land parcel. But if I see the economics of the project, setting up a 100-megawatt capacity in Raigarh does not make economic sense because the transmission cost is very high from that list unlike 250-megawatt project. And therefore, with the change in the location of the project as well as the increase in the cost by Chinese manufacturers, the cost is -- tentatively has gone about by 15% to 20% for these projects.

[Operator Instructions] The next question is from the line of [ B.V. Jalan ] from KLG Securities.

My question is that if I understood correctly, the inventory level as this quarter is very high, why if it's so.

No, sir. The inventory level during the last quarter was higher, which has been sold in the current quarter, except some raw material where some of the inventory for the -- gone up. But if we get such thing, then that kind of, will keep on adding.

And what about the present and future demand of pellet?

I think Mr. Abhishek has already explained about the pellet demand. Abhishek, would you like to take it again?

Yes, yes, yes. So about the pellet demand, domestic demand is, at the moment, very good because the spun prices have reached all-time of INR 33,000, INR 34,000 levels. So whether which the margins and funds are quite high in the domestic market. And for export, as I mentioned, China is trying to reduce their carbon emission. So they're trying to reduce the direct feed to the blast furnace, which is Central because Central is one of the most pulping industries. So the demand of pellet is going up every day, and there is a huge demand of pellet in the Chinese as well non-Chinese market. So I don't see any reason that these are going to come down very soon because China, the intensity started. And now in February, the -- it's going to build. So China is very serious about the pollution. So demand of pellet will be on the upward side going forward as well.

Sir, our focus is on the domestic or export market.

No. As I mentioned, with the current valuations, we will be doing the 50-50 charges. 50% is domestic, and 50% will be exporting our high-grade pellets.

[Operator Instructions] The next question is from the line of Anuj from Anubhav Securities.

My question here is over the last quarter, that is ended 30th June, we had a profit-to-income ratio of about 48%, 49%, which has now fallen to 27.5% or 28%. You mentioned that the coal that you've got has not really impacted you -- your profitability so much because you are targeting January. So what has caused such a steep decline in the margin? And do we see these margins getting covered up? Or do we see this to be the new normal?

See, the margins -- primarily, the margins have gone down by about INR 1,000 reduction in the pellet realization as compared to or slightly more than the INR 1,000 a tonne as compared to the last quarter. This is number one. Last quarter, we had certain inventories. So the -- of the finished goods, which was sold during the current quarter. And although the turnover has increased, the overall EBITDA has gone down, primarily led by the drop in the volume as compared to the last quarter. So the slight drop in the margins from earlier quarter to this quarter is because of the volume drop, because of the reduction in the pellet realization and higher component of the finished steel sale, which is leading all too because the -- in our industry, each and every item impacts the margin. Absolute margin may not be calculated in the same manner as it was there in the last quarter. And pellet is one product where our margin component is very high. Our cost of production is around INR 5,000 a tonne, whereas the last quarter, the realization was more than INR 16,000, INR 15,000 a tonne. So that one product can impact the margin sizably for the company and on an absolute basis.

Yes. That is understood. So my query was more than -- okay. So it's based on the price and not anything else.

Yes, yes, yes. Because it's my cost also -- my cost is not changing. So my top line is impacting.

So what is the scenario now in the last month that has gone and the 2 months coming forward? Are we looking at the same status quo? Are we looking at an improvement?

It will be more or less in the line with the last quarter as of now.

Okay. So one can look forward to about 25% to 28% kind of...

Yes. Long-term margins, yes.

[Operator Instructions] The next question is from the line of Priti Singh from Vale Investment.

Congrats on a good set of numbers. Sir, my first question is what is status of the specialty steel plant that you wanted to set up? And what is the rationale behind this plant?

I think I already outlined the status of the project in my opening remarks. The project is currently on the drawing board. We are in the process of land acquisition, and we plan to find the -- file for the environmental approval in the current quarter. The rationale for this project is to grow the business of the company. Now the company is debt free on a stand-alone basis. And generating substantial cash flow, we want to deploy into the similar line of activities with definitely better value-added products. And this investment will run through over a period of next 4 to 5 years, whereas the company plans to deploy its internal generation of the funds to grow the business of the company.

Okay. Got it, Sir. And my next question is -- so why has there been a bit debt and funds high in production this quarter? And when do you expect to receive the clearances to operate at a higher capacity?

See, first to expand that in the portion in margin down that happens because the monsoon is never ideal season to operate the steel plant rain and this time special rain has been quite heavy compared to previous years, as you are all aware. So you say the margin drop, which will be recovered going forward that I don't see any issue there. And actually, about the EC, we are -- the file is probably in the last stage now, and we're confident we should get approval this quarter, early next quarter.

[Operator Instructions] The next question is from the line of Vikash Singh from PhillipCapital.

Sir, can you just tell us the Hira Ferro Alloys total EBITDA for the quarter? I understand that we have added for last 2 days only. So if you could give us the total quarterly EBITDA run rate for the Hira Ferro Alloys and any expectation going forward?

Bothraji, do we have handy available?

That is there in the presentation sir. Just a minute, the total EBITDA of Hira Ferro Alloys for the last quarter was INR 47.5 crores against INR 68 crores quarter -- previous year same quarter. And immediately previous quarter, it was INR 282 crores. Not -- 28 million or -- INR 28 crores, sorry.

Yes. INR 28 crores.

Yes, sir. Yes, sir. So sir, this could -- this is the normal run rate we got it and we can expect going forward?

Yes. As of now, that is the market condition. And mind you sir the only Hira Ferro Alloys has been consolidated only for the 2 days. That is for 29th of September. So the full impact of the consolidation of Hira Ferro Alloys has not retracted into the GPIL number, which will start reflecting from the current quarter.

And for Hira Ferro Alloys business is concerned, the market has been on the upward trend only because China has started cutting down the capacities have sterilized because of ferro alloys being a high-powered banking unit. So as everybody is aware, China is coming down heavily on power in units because of the coal prices. So ferro alloys prices has been on the upper side. There has been impact because the coking coal -- sorry, the coke for the ferro alloys has been using but still the margins are very heavy in the last quarter, I would say.

[Operator Instructions] The next question is from the line of Jaymanth Manuj, an Individual Investor.

I wanted to check with you that while you're expanding or putting more investments in the power sector, I mean some of the numbers, it's very clear that the ROCE, return on capital, from the power sector is much lower than that from the steel sector, any thoughts sir.

Yes. I'm coming on your -- I got your point. So investment in power is for the saving of the cost, it is not -- is an IPV project. The investment which we proposed for about 170-megawatt of solar PV power plant is for replacing the grid power vis-à-vis the company is buying the grid power in the range of about INR 6 per unit. And whereas the cost of generation from the solar without interest would be hardly about 30, 35 basis point. And with interest in investment, it will not rise more than INR 2 per unit. There is substantial saving expected. So the investment is power is not an IPV wherein we want to see the ROE in the range of 18% or so. This is going to save substantial cost for the company.

Right. So if I can follow it up with this -- the additional solar plant that you are setting up, that will be for your captive consumption.

Yes. Yes. Captive consumption, yes.

And that will be replacing some of the grid power that you are drawing now.

Yes, yes, yes. So that will help us exiting the carbon neutrality as well as replacing the high-cost grid power.

That makes sense. That makes sense. Number one. Having said that, I mean, in the current quarters and the previous quarters, the sales -- power sales that you are still doing, there is still some power sales you are doing, right, in the...

That is from our IPV solar, that 50-megawatt solar same power plant, which we have in Godawari Energy and for which we are discussing about the -- divesting the stake. It is the sale of power from debt-free at company. There, we have a fixed price PPA with NTPC with that in terms, so that is an independent process, yes, that we are in the -- we are supporting to divest that investment.

[Operator Instructions] The next question is from the line of Raj Nahar from Mili Consultants.

I have some questions regarding your beneficiation plant. Now is it fully ready basically?

See, as far as the plant connection concerns, which is Raipur, the plant is fully operational. The plant is fully operational, and we have already received the consent to operate from the local permission board. So that plant is running now. And as such mines is concerned, which Dinesh mentioned, that we take about a year's time to commission the plant.

Okay. Okay. So that's -- right now, what is the capacity of your beneficiation plant now?

It is 3.28 million tonnes throughput at Raipur.

At Raipur. Okay. And that new mine capacity will be how much?

That's definitely 0.6 million tonnes.

Okay, sir. And one more question, sir, regarding this. Now are you able to realize better pricing as you have been telling that you will get about $25 extra for the higher sale?

We have been rising that very much. There is no doubt about it.

Okay. Okay. So going forward, we are going to continue now that about $20, $25, $30 extra for...

Yes, yes, yes. Definitely. Definitely. Our product is the premium product because of low alumina and higher fees because of which we will keep getting the higher premiums from the market.

[Operator Instructions] The next question is from the line of Srishti from Wellwin Consultants.

Yes. I just have a couple. So first question is on -- I wanted to know about your current dividend policy. And second, I wanted to know about the CapEx plans we are having for the Ardent. And what are the uses of that CapEx -- that cash flows we are getting from there? So that's it.

Actually dividend policy is already announced. It is available on the company's backout. We have already announced that we will distribute about 10% to 15% of the incremental cash flow for the -- in the -- for the dividend. As far as Ardent still is concerned, we are in the process of making an investment plan in that company. And till the investment plan is completed, we are deploying the funds into the short-term instruments so that as and when the investment plan is finalized, the funds can be utilized there.

[Operator Instructions] The next question is from the line of Anuj from Anubhav Securities.

Thank you for answering all our questions so nicely and clearly. One question that we face from the investors always is what are the triggers for the next quarter. So I understand ferro alloys have been clubbed with your balance sheet. That's one. What are the potential other figures that may lead to an upside in the next quarter? Those are my questions.

See, near-term trigger will be definitely higher production in the project because as you see the last quarter, there was a drop in the volume because of demand. And during this period, we utilized it for the routine maintenance period and maintenance of the plant as well. So definitely, you can see some improvement in the volume going forward in the immediate quarter. The major trigger in medium term will definitely come from the solar project, which we are in the process of commissioning over a period of next 1 year. When the impact of the higher captive mining and replacing the ore, which we are buying from the -- earlier from the market, and this is getting adjusted against the volatility in the finished process time base. So while there is an improvement, it may not reflect 100% because of the volatility in the finished process slightly. But there are 2 -- 3 more figures are there in the immediate future: the higher production from the captive iron ore mine leading to the lower cost; impact of the payroll business; impact of the lower interest cost going forward on Y-o-Y basis. Definitely, that impact is going to reflect over a period of time. So these are the near-term figure for the company. And then, of course, the profitability will continue to be driven by the pricing of the product in the market.

Yes, that is the key figure, obviously.

Yes, yes, yes.

What is your gut feel on the prices? Do you think this China mess will help us?

I think Abhishek has already outlined. We are confident that this pricing level where we are currently is likely to sustain over a medium period of time.

[Operator Instructions] The next question is from the line of Shikhar Mundra from Vivog Commercial.

Hello?

Yes.

Yes. So I just missed the pricing of the pellet pricing. So what are the prices in the second quarter? And what's the current pellet prices?

It is closer to the same, about INR 13,000 a tonne.

Okay. All right. And so -- and what was the volume drop in the second quarter? And how much is the volume expected in the third quarter?

I think these numbers are there in the presentation. You can have a look at it there.

Okay. All right. And for the solar plant, what is our expected -- the EBITDA to be generated from the 70-megawatt solar plant? And when is the date of commissioning?

See, solar, one project we are targeting, 70-megawatt by Q1 of next financial year, that is April 2022. And rest of the 100-megawatt will come in the second half of the FY '23.

And what is the EBITDA expected from the 70 and 100 megawatts?

This project will generate about, say, 70-megawatt project which is for about, say, 10 crore units and 10 crores unit will translate into INR 4 per unit as against the current prices. So INR 40 crores for enough of the additional EBITDA there. And similarly, we do this new investment of 70 megawatts will be in the same line. So you can expect close to INR 100 crore additional EBITDA going forward from the solar.

[Operator Instructions] The next question is from the line of Jaymanth Manuj, an Individual Investor.

Yes. I wanted to check on your strategy for coal sourcing, i.e., are you in a wait-and-watch mode or given the current consensus you have some longer-term forward plan on the coal availability, imports or bidding internally, is there something?

See, for the coal -- yes, for the coal side, we had no issue because we have to believe till January -- end of January, early Feb, which is almost even to power one. And the market size moving down just it is only in the last 2 weeks because of China's intervention. And whenever we buy volumes, we buy it in index. So that index all automatically, the prices are going down. So the whole trend we had no issues outsourcing as well as the pricing.

So you'll wait for the extending orders beyond everybody.

Yes, yes, yes. My next -- that would coming in January, which is almost 2x. So by then, the price is further pulled down because of China's intervention.

Got it. Great. And if I may ask, which countries you are importing the coal from?

Australia and South Africa.

Australia and South Africa. Okay. Because there's a political impact also.

Yes. Within China and Australia.

The next question is from the line of Anil Sharma from AB Capital.

Sorry if I missed this earlier, but I just wanted to check on your plans in terms of Ardent steel. So are you planning to sell your entire stake in Ardent steel? Or will you keep it maintained at this particular level only?

We'll maintain at this level.

[Foreign Language] it can be maintained.

Yes.

And one more thing I wanted to check about that 30-megawatt of solar plant that's coming up. So what are the capacities that are actually coming up in that particular location? And where is that particular 30 megawatts coming?

So this 30 megawatts is coming in Chhattisgarh only. We have done a particular location of land identification, and the acquisition is in process currently. But it will be somewhere in near to the Raipur division only.

Okay. Okay. And lastly, just one more thing. Any inorganic growth opportunities in steel that you're looking at?

Sorry, come again?

Are you looking at any kind of inorganic growth opportunities in this?

Looking at our size and the investable surplus currently, there is no good projects available. As we understand. So if there is an opportunity, we are open to definitely looking at it.

Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Dinesh Gandhi for his closing comments.

Yes. Once again, good morning, everyone. We have tried to answer all your queries in the call. If you have any more queries, you can directly reach us or our investment relation from Go India Advisors, and we'll be happy to answer all your questions. Thank you very much. Thank you, and thank you for your time Thank you very much.

Thank you.

Thank you. Thank you, everyone.

Thank you, everyone. Thank you.

Thank you. Ladies and gentlemen, on behalf of Go India Advisors, LLP, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.