IFGL Refractories Limited ($IFGLEXPOR)

Ladies and gentlemen, good day, and welcome to the IFGL Refractories Limited Q4 FY '26 Earnings Conference Call hosted by Monarch Network Capital Limited. [Operator Instructions] Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Network Capital Limited. Thank you, and over to you, sir.

Thank you, Samir. Good evening, everyone. On behalf of Monarch Networth Capital, I welcome you all to the Q4 FY '26 Earnings Con Call of IFGL Refractories Limited. We are pleased to have with us the management team being represented by Mr. Mihir Bajoria, Managing Director; Mr. Mukesh Rawal, Chief Director; Mr. Manoj Rakhecha, Chief Executive Officer at Monocon; and Mr. Amit Agarwal, who is the Chief Financial Officer. So we'll have the opening remarks from the management followed by Q&A. Thank you, and over to the management for the opening remarks.

Good evening, ladies and gentlemen. Thank you for joining us on IFGL Refractories Limited Q4 and FY '26 Earnings Conference Call. Joining me on the call today are Mr. Mukesh Rawal, Director; Mr. Manoj Rakhecha, CEO Monocon; and Mr. Amit Agarwal, CFO; and SGA, our Investor Relations Advisors. I will now have an investor presentation have been approved on the stock exchange and company website. We trust you have had the opportunity to review them. Before we begin discussing the business and industrial environment, I would like to take a morning to introduce myself. I'm Mihir Bajoria, Managing Director of IFGL Refractories. We're associating with the group spend almost 2 decades, having formally signed the business in [indiscernible]. Over the years, I've had the opportunity to work closely across varied asset tier global operations. A significant part of it was based in the United Kingdom, where [indiscernible] operations, considering that direction by [indiscernible], our U.K. subsidiaries. In addition to my direct operational respondents, I work closely with the leadership team across our business worldwide participating in strategic decisions, leading performance and supporting growth initiatives across geographies. Having the quite evolution of IFGL [indiscernible] strengthening our position in India to billing a diversified global [indiscernible] platform and develop a deep organization of both our business and the industry we sold. Today, our data is expanded responsibility owned [indiscernible] that our focus remains on continued long-term value creation, operational excellence, in maintaining the strong relationships we have built with customers, employees, suppliers and share growers. As part of this next will stage go, we will be strengthened our leadership structure by aligning and continuing the cost our India and international operations. I'm pleased to share that Mr. Mukesh Rawal will be transitioning back to India to [indiscernible] Director and CEO, India operations. [indiscernible] IFGL Group since 1983 that before I was born, actually, just to point out, I believe more than 4 decrees of experience across the refractory iron and steel industry. [indiscernible] the United States and the Head -- and Head of [indiscernible] Americas operations. Over the years, we have built deep editions across the industry, the global refractory and steel ecosystem and is widely affected by customer and industrial participants. These extensive industry knowledge and leadership experience will further strengthen our India business as we pursue our [indiscernible] ago. At the same time, another international operations and will oversee our global business businesses across key international. Manoj is a long-standing member of IFGL family being [indiscernible] experience across corporation, commercial management, supply chain and international building development. [indiscernible] group, we have no leadership position across India, China and United Kingdom, [indiscernible] serving as Commercial Director [indiscernible]. General Manager of PNG new from China. Deputy CEO of our India business. We have also successfully late development or [indiscernible] reinsuring the to execute complex projects in live operation. Together aggregated RNG and Mukesh brings a powerful combination of deep industry expertise institutional knowledge and international operating experience. Importantly, these appointments represent continuity rate ensues. Both leaders have been layered in IV Group for many years to progress a further understanding of our customers, products and operations in case. For our customers, suppliers and business partners [indiscernible] commitment good quality, reliability, aviation and service remain unchanged. This strengthen leaders structure positions us well to capture future opportunities across both domestic and international markets. With that, let me share a few thoughts on our [indiscernible]. FY '26 was a year revenue execution and strategic progress for IFGL were characterized by a challenging global operating environment marked by elevated raw material costs, pricing pressure in certain markets, geopolitical uncertainty and relatively subdued export demand. Despite [indiscernible] continue market share gains across key customer accounts. Operations continue to demonstrate strong momentum, benefiting to [indiscernible] production levels expanding customer engagement and our ability to deliver differentiated products and technical solutions. This reflect the trust of the company's place in IFGL's products, technology and service capabilities. [indiscernible] was impacting by a combination of higher input costs, including employee costs, lower export contribution and changes in our product mix, we remain focused on improving operational efficiency, optimizing complement, strengthening manufacturing performance and retaining resident cost management. We have also continued investing in product development, customer engagement and operational capabilities that will support future role. Looking ahead, we need the [indiscernible] constructive fee. Industry forecast against the global steel demand is stabilizing after a prolonged period of adjustment and is expected to return the brand and if over China, which has been a significant year in global steel demand in recent to be nearing the quarter [indiscernible] side. [indiscernible] developed markets such as Europe, the United States, India, Japan are expected to [indiscernible] recovery after several years of subdued demand. This is an important development for the global refractory industry given the strong correlation with steel production and extraction consumption. India continues to stand out as one of the most attractive steel market globally. Sustained investments in infrastructure, railways, manufacturing, renewable energy, over development and industrial expansion continue to support long term growth. The country's ongoing capital expenditure cycle and manufacturing addition provides significant opportunities for both the steel and the factory sectors. In addition, we continue to see engaging opportunities emerging across developing markets, the industrialization infrastructure investments remains growing driving, means in backdrop IFGL Limited division, our diversified closed footprint across India, Europe, the America and other [indiscernible] market, allowing us to participate in market in growth opportunities while reducing the dependence on any single geography. Our strong technical capability, nonstanding income optimization [indiscernible] product portfolio and established manufacturing later providers with a solid platform position. As we enter FY '27, we are seeing only stabilization across relate factors and impacted profitability during the previous year. We remain mindful of geopolitical developments and macroeconomic uncertainty, we are confident in the long-term fundamentals of our industry and IFGL diluted capitalize on emerging opportunities. Our priorities remain clear strengthening customer partnerships, gaining market share including operational efficiency, driving innovation, enhancing profitability and creating sustainable long-term value for statement. With that, I will now hand you over to [indiscernible] to discuss the operational and financial performance for the quarter and the year in greater detail. [indiscernible] and over to you, [indiscernible].

Thank you, Mihir. Good evening, everyone. It's a pleasure to be speaking with you all of you today. As Mihir mentioned, I will be transitioning back to India to take over the role of Director and CEO of Indian operations. Having spent the last several years leading our Americas business, I had opportunity to closely observe the global industry trends and customer requirements across the markets. I'd like to part return, I'm excited by the opportunities ahead and remain confident in the long-term growth prospects of both the Indian industry and IFGL. With that, let me now take you through the performance of our domestic business and some of the key developments during the quarter and the year. Revenue for quarter 4 FY '26 stood at INR 276 crores, registering a growth of 2% year-on-year. For FY '26, revenue reached INR 1,904 crores, reflecting a healthy growth of 14% over the previous year supported by continued strength in our domestic and international business. Our domestic business continued to demonstrate strong momentum, delivering 7% year-on-year growth during the quarter and 20% growth for the full year, with the revenues reaching INR 864 crores. Over the last several years, our strategic focus on the market share gains, customer engagement and product expansion has enabled us to consistently perform industry growth and sustained healthy growth momentum. As many of you are aware, our increased focus on domestic market over the last few years have been particularly revolving. We continue to strengthen our position across the key customer accounts and remain confident in our ability to grow at a significantly higher than the underlying market growth over the medium term. These steel industry continues to announce substantial capacity expansion plans, which we believe will drive increased refractory demand across the product categories. Given our board from the portfolio strong technical capability and established customer relationships, we are well positioned to participate in these opportunities. And another important trend that is working in our favor is including preference among the street producers to partner with the full-grain refractive solution providers. Today, IFGL has evolved a comparison to [ Frankie ] solution company, enabling customer source a wide range of product and service from a single trusted partner. This has helped us gain market share from smaller and more specialized players while deepening our engagement with both large and integrated steel producer and emerging stream manufacturers. At the same time, our total refractory management model continues to gain acceptance across the customer. Through total factory management, we moved beyond supplying individual refractive products and in trade provide integrated retractive solutions, technical support, application expertise and performance optimization. This strengthens customer relationship improved operational ability and create more substantial long-term business opportunities. While the broader refractory industry continues to face pricing pressure and inflationary cost trend, we believe the challenges are cyclical in nature. Certain key raw materials continue to remain aggregated due to higher energy costs, trade rates and currency movements. We are actively engaging with the customer regarding price revision and discussions are progressing constructively. While this conversation take place, we remain [indiscernible] about achieving a reasonable pass-through of cost increases going forward. During the early part of FY '27, we also experienced certain logistic challenges relating to LPG availability arising from geopolitical development in West Asia. We had opportunity. We had appropriately informed the stock exchange and regarding the situation. I would also like to highlight a few notable achievements during the quarter. One important milestone was successful completion of our first energy optimizing furnace or EF campaign using aligning system completely designed and manufactured at our [indiscernible] facility, including the term blocks. Achieving more than 1,000 heat in made [indiscernible] is a significant accomplishment and reflect the growing technological capability of our domestic operation. It also reinforces our commitment towards supporting the Indian steel industry to locally developed advanced refractory solution. We also achieved one of the highest port put lives in 300 ton laser at [indiscernible]. This achievement highlights the performance, reliability and technological strength of our advanced forest solution and further strengthens our positioning in the second methodical segment. Another strategic development during the year was the progress made under our technical transfer initiated between Chapel refractive U.K. and our Indian operation. I'm pleased to say that Phase 1 has been successfully completed, including product recipe transfer, knowledge sharing and joint product development activities. We have also introduced certain attractive plastic ramming production into Indian market with manufacturing facility in [indiscernible] and the similar transfer of technology and trial order for the same has been received. We are now preparing for the next share evolving site trials and customer allocation, which we believe will open up additional growth opportunities in the future. As part of our strategy to enter new customer accounts and expand our presence across certain product categories, such as bricks and fasting [indiscernible], we have accepted a relatively competitive pricing environment in the select opportunity. While margins in these categories may initially [indiscernible] we view these agents or strategic investments that help us build customer relationships, expand market share and create opportunities for the broader product penetration over that time. On the CapEx front, we continue to remain disciplined and prudent in our capital allocation approach. Work related to our proposed greenfield project in Khurdha Odisha has picked up. At the same time, the Board continues to evaluate the pace and the structure of the future investment in line with evolving market conditions and strategic priorities. We will provide further update on specific plans that finalized. Before I conclude, I would like to reassure all our customers, partners and stakeholders that lead leadership transition do not alter our commitment to them in any way. While responsive, which is within the management team are evolving, there has been no change in our customer relationship, service standards, technical capabilities or strategic direction. From a customer perspective, premiums business as usual backed by the same commitment to quality, liability and innovation that's always defined by IFGL. With that, I would now like to invite Manoj to provide an update on our international operations and overseas business. Over to you, Manoj.

Thank you, Mukesh and Mihir for a very good introduction. Good evening, everyone. As I take on the responsibility of leading our international operations, my focus remains on strengthening our global businesses, enhancing operational performance and deepening customer engagements across key markets. Let me begin with our international business performance during financial year '26, where market conditions remain mixed across geographies despite signs of improvement in certain regions. Revenue from the U.S. market grew by 26% year-on-year in quarter 4 FY '26 and by 25% during financial year '26. More importantly, this growth was accompanied by significant improvement in profitability with margins in our U.S. subsidiary now reaching high-teen levels. From an industry perspective, the U.S. steel market remains healthy. We continue to see investments in new facilities as well as modernization and expansion of existing plants. Recent developments, including Nippon Steel's acquisition of U.S. Steel are expected to support increased activity and refractory demand over the medium term. Our Americas platform covers not only the United States, but also Canada, Mexico and select Latin American markets. We continue to see stable demands across the region, with the Mexican market, in particular, offering attractive long-term opportunities. We have also expanded our product offerings across several customer accounts, which is helping us strengthen customer relationship and increase our share of business. Given the typical qualification cycle in the refractory industry, we believe a number of these opportunities will progressively contribute to growth over the coming quarters. Overall, we remain positive on the outlook for the Americas region and expect it to continue being an important contributor to our international growth going forward. Moving to our U.K. and European operations. We have witnessed encouraging progress across our business during FY '26. Sheffield Refractories continued to perform strongly, delivering healthy growth during the year. supported by operating leverage benefits and sustained customer demands. We have also successfully completed Phase 1 of the technology transfer initiative with our Indian operations and are now progressing towards Phase II involving Side 12 and customer validation. In addition, we are evaluating opportunities to extend certain technologies and product capabilities from Sheffield Refractories to our China operations over time. At Hofmann Ceramics, our turnaround initiatives have started yielding results with losses reducing significantly during the year. Operational performance remains stable and several cost optimization measures have been implemented. We expect the business to move closer to breakeven as we progress during FY '27. Monocon also reported a recovery in revenues despite loss of a key high-margin customer in the U.K. market due to the plant closure. Monocon is working parallelly with a multidirectional approach to target new geographical spaces, new products and addition to the technical and sales marketing team. We remain focused on restoring profitability and are targeting breakeven performance by Q4 FY '27. We have also expanded our product offerings into the foundry segment, creating additional avenues for growth. More broadly, the outlook across the U.K. and Europe appears more encouraging than what we witnessed over last few years. Order book activity has improved and customer engagement levels are strengthening. We are also seeing increase in policy support for domestic manufacturing, infrastructure and defense-related investment across several European markets. These developments are expected to support steel production and consequently refractory demand over the medium term. While market conditions remain competitive, we believe the region is gradually moving towards recovery. and we remain well positioned to benefit from the improving environment. Overall, while certain international markets continue to face challenges during FY '26, we are encouraged by the progress we made across our businesses. Americas continued to deliver strong growth and profitability. Sheffield Refractories has demonstrated excellent operational performance often turnaround is progressing in the right direction, and Monocon is seeing encouraging traction across customer additions and product approvals. More importantly, we are beginning to see early signs of improvement, demand across several international markets. Order books are strengthening. Customer engagements remain active and investment in domestic manufacturing, infrastructure and steelmaking capacity across key regions provide a constructive medium-term outlook for the refractory industry. As we move into FY '27, our focus remains on driving profitable growth improving operational efficiencies, leveraging technology across the group and strengthening customer relationships across all our key markets. With that, I would now like to hand over to Amit, our CFO, for financial performance.

Thank you, Manoj. Let me give you a brief on the financials, starting with the [indiscernible] financial highlights. Total income for the quarter 4 FY '26 [indiscernible], reflecting 2% year-on-year sale. For FY '26, total income was INR 1,117 crores, up by 10% year-on-year. Gross margin was 43.1% for FY '26 and 43.8% for FY '26. Margin was better during the quarter due to a [indiscernible]. EBITDA for Q4 FY '26 stood at INR 32.8 crores and [indiscernible] year. EBITDA margin was 1.8% for the quarter and 11.3% for the year. Margins were impacted by limited product mix changes and lower export contribution during that period, additionally had exceptional impact approximately INR 0.5 crores was recognized during the quarter at INR 5.2 crores for the year on a Hofmann implementation of new levers. Adjusted [indiscernible] only for the exceptional items stood at INR 13.2 crores [indiscernible] FY '26 and INR 42 crores for FY '26. Breaking it down further by domestic and export rates. The domestic business continued to divest strong momentum delivering 7% year-on-year growth [indiscernible] it, 20% growth in FY '26 with revenue reaching INR 864 crore, our strategic focus on the market share gain has enabled us to consistently outperform industry growth and consume 20% growth over past several years. Export revenue declined by 11% in FY '26, primarily due to geopolitical uncertainties and external market engines impacting certain key [indiscernible]. While demand recovering the assets have been rested volume trend has started improving and remain optimistic on a progressive recovery going forward. Let me move forward to consolidated financial highlights. Our consolidated financial highlights also include our interactions. Total income for Q4 FY '26 [indiscernible] year-on-year to [indiscernible]. For FY '26, total income stood at INR 19 04 crores, reflecting year-on-year growth. EBITDA for the quarter was [indiscernible]. For the year, EBITDA stood at INR 136 crores. EBITDA margin was 8.6% in quarter 4 FY '26, [ 7.7% ] [indiscernible]. The quarter included an exceptional item of approximately INR 4 crores and INR 5.2 crores for the quarter and the year in a respective year on account of level. Adjusted tax after company exceptional items stood at INR 15 crores for quarter 4 FY '26 and INR 40 crores for FY '26. And also, I would like to highlight a few points. Firstly, mediating for [indiscernible] when our reported earnings will no longer be impacted by annual nondebt within our [indiscernible]. With respect to our financial business, we continue to maintain a strong balance sheet. As of March 31, 2026, consolidated debt stood at [indiscernible] by cash and cash equipment was [ INR 170 crores ], [indiscernible] 21.5% [indiscernible] our continued commitment to recording shareholders by maintaining a disciplined approach with capital inflation and funding future growth opportunity. With this, I will now leave the floor open for question-and-answer.

[Operator Instructions] Your first question comes from the line of Lakshminarayanan with Tunga Investments.

Yes. While it is encouraging to see our consolidated revenue cross a good milestone of INR 1,900 crores or so, the 5-year downward trajectory in our return metrics is a core area of concern for many investors. Could management outline the concrete operational triggers or asset utilization strategies you would like to do to reverse the trend and lift our capital efficiencies back to where it was 5 years back? That's my first question.

I think to just answer your question that 5 years back, market conditions were different. Now market conditions are different. But obviously, with our new strategies in place, we are working towards increasing our margins and revenue. So I believe going forward, we'll be able to demonstrate the results which were there 5 back. And I think Manoj wants to add something on the international side.

Yes. So towards the international business, obviously, the American growth story is there, which is helping the cost and the turnaround what we have implemented in Hoffmann and Monocon, so in a year's time, you will see the results, which will by itself answer your question what we were 5 years back. And just to add what Amit just mentioned, obviously, when you mentioned about capital efficiencies and stuff like that, obviously, there's been a lot of CapEx in the recent past. So all those products which are now going to mature and come to the market.

One more thing I would like to add that we discuss with some other people that our U.S. doubled back. So we hope to do better in other graph.

I think the domestic volume growth and market share gains are there, it's highly commendable. But at a consolidated basis, it's been disappointing. Of course, I think there are reasons because we had to take a write-off and so on, right? My second question is that in terms of our balance sheet, right? So working capital has actually expanded significantly, and I think we are holding higher inventory lines. So what are the plans to bring down this, what kind of inventory management practices you'd like to do so that you can increase the cash conversion cycles as we move forward?

Sure. If you compare our last year cash flow versus this year cash flow, we have our overall working capital cycle and we have generated cash on this working capital cycle. And we rightly pointed out our inventory in between, but we have managed it again and are on declining trend. And we continue to monitor it very closely.

Okay. Okay. See, earlier, we were aware a cash-rich company. And then right now, the [indiscernible] has become a net company. And of course, we are also doing the CapEx commitment. So the management planning to -- how are you balancing this capital deployment versus debt? And then there is a cash flow generation has also been -- it has improved, as you mentioned. But how are you managing the complexity of debt increasing on the one side and then you want to expand so that CapEx is there, but there are issues consolidated, there have been issues. So how are you prioritizing and I just want to understand that so that we don't balance sheet?

Yes. Your point is well taken that we are ensuring that we are not over our balance sheet. You see our balance sheet, the debt we have is a very negligible kind of debt we have in our books. And see, as you mentioned that we had some amount of cash a few years back and now debt. So we have invested a lot in India plant in and develop, which will give us return in future. We do see a robust steel market growth in future to capture that growth, we need to invest and leverage that. So that's the story. So we are under control CapEx investment for sure.

Got it. Sir, one, I would say, feedback also that if you can actually segregate stand-alone business also because the stand-alone business has been very, very strong in terms of several parameters over the last few years. If you can actually segregate it in terms of working capital or the way in which graphically you put it and it will be helpful to kind of really see the good old work that is done in the stand-alone so that one can appreciate the 5-year track record of the stand-alone in terms of ROEs and working capital inventory so. Just a few points.

[Operator Instructions] Your next question comes from the line of Hemkesh Khattar with Green Portfolio.

My first question is regarding the technology transfer. It's been discussed over a year now and congratulations of completed as well successfully. When can we see revenue uptick coming from this technology transplant? What kind of delta do you see in the top line?

Yes. I mean technology transfer is mainly from set refractories to India. And this is a growing market. I was -- I spent the last 2 weeks in India going across the team along as long as we're allowing the customers. So we are now putting up our total plan and identifying the customer base, which is obviously done. The equipment for installation of the refractive which we require, those are also online. So hopefully, next -- we have the plan for the next 5 years, how we are going to do. And hopefully, that will bring in -- [indiscernible] was working with the financial team to get the margins and a better margin compared to what we have been looking at on the other sectors. So hopefully, we should be ready by end of this year to enter the market full fledge not just from the technology transfer point of view, the production is all ready, the infrastructure is ready, production is ready to go. We just start the first trial August. So hopefully, by end of the year, you will see some trials coming through and then getting into the business because it's first is a trial allowing a new technology to come in with a sensitive steel consumers. So we will definitely move ahead on this one. Maybe I [indiscernible] put something together for knowledge in time to come, how we -- what we look at the delta [indiscernible].

Another question was like since 2 months have already passed in the quarter, in Q1 FY '27. So what kind of demand are we seeing now coming from both domestic and international markets? Especially in U.S. since we have done very well in FY '26. So should we expect similar growth or maybe some slower growth in the region?

No. In the U.S., we have done well last year, and we expect a major growth also this year in the U.S. As Manoj said earlier, like we keep -- we have kept our businesses wherever we have not lost customers. We are now looking into new customers also where the trials have been very successful. And maybe the first quarter results should reflect as regards to the 2 operations in the U.S. Plus, as Manoj mentioned also, the Mexican market is growing, and we are looking at some new -- I mean, we have a consistency in performance in Mexico, but we are now with Manoj informed, we are into foundry business in U.S. We are also same thing in Mexico. This is -- and then this is the whole thing backed up by excellent technical service, both in U.S.A. and Canada and Mexico. So hopefully, the results may be improving for the next year compared to this year.

Okay, sir. And in domestic market, since that has been the focus area for the management for a long time now, and it has been growing consistently. So should we expect the 15%, 20% volume growth in FY '27 as well?

At least we are targeting the double-digit growth for sure.

Next question comes from the line of Jigar Shah with [indiscernible] Securities.

So I have a couple of questions. My first question is that the domestic business. That grew about 20% in FY '26. This is significantly ahead of the Indian steel production growth. But could you help me understand that how much of this growth has come from market share gains? How much of it is from order share expansion with the existing customers? And how much is some new customer [indiscernible]?

Domestic market is site we have large steel plant and then small foundry or small steel tank, what would you say, large integrated still part and a small country. So the customer remain same in the large steam plant area, where we have added a lot of new customers in small [indiscernible]. We are limited to give a definite number personally how much we are adding here, but we have grown in every sector.

All right. And then my second question is that the U.S. business has delivered strong growth and decent margin. Is the current profitability level sustainable? And what additional opportunities exist to scale this business over the next 3 years?

I think sustainability, yes. [indiscernible], I was just telling that regarding facility, this numbers on margins are stable, and we continue to grow at this pace and future as we say that we have added we are in plan to add several technology and other businesses will add further to the [indiscernible] add further to the business continue.

For us, in U.S. One, the most important factor is we are manufacturing in U.S. for the U.S., Canada area. So we are not trading products from different geographies. So the customers in U.S. are very much appreciable of the fact that we produce in the U.K., in the U.S. and there were -- and that's where the strength lies and that's where the customer retention will follow. Additional opportunities, we were very -- we are very focused on what we are doing. Those are our core competencies of the products we make it in the U.S. And we will see within our group, what are the products we can complement the existing product portfolio. What we don't want to do is to jump on this growth story and diversify unnecessarily and lose focus on what we are doing currently. And in the U.S., because of our strong technical presence, the sustainability of the business what we are generating will always remain because the customers are seeing the difference of when they were buying from, say, a trading company and then when they move to a company with a technical presence and U.S. manufacturing, what difference you are bringing the apparently. And then that's where we will carry on maintaining those businesses. So I am a very firm believer that the numbers what we have come out for you are not one-off, but those would be sustainable quarter-on-quarter. And the team is doing a fantastic and excellent job there to back it up. So we'll just take it forward from there.

Okay. That was helpful. I have a question on the Hofmann. You mentioned that the losses have reduced significantly during FY '26. Could you quantify the improvement versus last year and highlight the key drivers we had at all over?

So I can tell you some of the key drivers. So the key driver was we definitely have improved on our product mix, which are delivering higher margins but also giving better benefits and resulting in greater customer satisfaction and bringing in repeat orders. Second step was India, as we all know, is the market today for iron and steel. So Hoffman is putting a lot of efforts to market the products within the Indian region. And these are starting to show results and which will carry on the impact in quarters to come.

Okay. Sir, my last question is that how are the end market conditions in Germany and ground a lot of shaping up and what levels of demand recovery would be required for often to refer to the sustainable profitability [indiscernible].

See, German market. If we read the news, the automobile is not in very good shape. But what is getting very positive is the foundry industry because of the government impetus into the local defense industry. And because of the government impetus into the local defense industry within the Greater Europe and Germany, especially, the foundries, which are making such specialized alloys deals are definitely on an upfront. And this is where Hofmann has always positioned these products into. So that space is always there irrespective of how the general economy is doing in Germany per se or Europe in greater sense. However, also our focus on other growing areas as I just mentioned previously, in India, that helps to complement the offering of Hofmann, which then gets result -- will get shown in the top line and the bottom line. So we are very confident that we carry on the performance going forward with our strategy as well as obviously the health -- as well as the policies which the governments have in place for the domestic manufacturing. So both put together brings the positive side for Hofmann.

The next question comes from Sahil Sanghvi.

So I think you've answered on the Hofmann kind of business. But just on Monocon, if you can highlight as to what kind of products are you introducing over there? And with respect to new customer approvals, where are we? And how do we aim to turn around that business? If you can give some more details on the demand scenario.

Right. So in my remark, I mentioned, see, Monocon now we are working parallelly on multidirectional approach. We're targeting new geographical spaces, new products and addition to our technical sales and marketing team with this multipronged upward, now we are getting into geographies where we weren't there Product or areas like foundries, like other areas in steelmaking where we were not there. which I would not like to name specifically, but there is a whole range of products which is already in development. And while we speak there are quite a few trials happening all across. Obviously, the trials do take time, and that is how the very nature of the industry is. So we are working very hard to ensure that all these steps that we have put in place brings the results, which converts Monocon back to [indiscernible] for FY '27. So in short, I would summarize in these fashion for today.

And any input on the demand scenario? And are we also trying for transit in those markets?

Sorry, what was the second question after demand scenario?

Are we also trying for price hikes over there?

Yes. Price hikes, they based on the individual input costs as well as logistic costs wherever is required, definitely, we are approaching the customers and customers are not averse flat because that's the fact of the day today, number one. [indiscernible] are going with price hikes to their own customers. So that's number one. Second, in terms of demand scenario, Europe and U.K., the demand is what it is. What we are trying to create is a space for Monocon within the existing conditions and bring these product offerings to the customer where in the areas where we were not there. Number two. Number three, again, demand, as you mentioned. Now we are looking into geographical spaces where the market is growing. So we don't need to limit ourselves to U.K. and Europe. We have operations in China as well as in U.K. under Monocon, so we have a big geographical footprint to cover. So there is a space for Monocon to grow its business. So we have to be added. And we are very confident with the team we have put in place. We are doing the job what the management has interested us to do.

Got it. Got it. That's helpful. Second question would be on the Gujarat greenfield plant. Now the presentation says that we are awaiting some regulatory approval or under some regulatory approval process. So if you can give some more details on how are we placed over there? How long do you think it will take? And now where do we see the commencement of this particular facility operations?

[indiscernible] Since we answered this question last quarter or so, that's supposed to take states on the government of India and the best [indiscernible]. So we continue to do so as soon as we get any development on that, we'll get back all of this.

Okay, understood. And lastly, if you can also throw some light on the nonferrous side of the business, what proportion of our revenues are coming from that side of the business? And what are the initiatives that we are working on to increase the nonservice side of the business.

[indiscernible], if you want to add something on this?

I mean, yes, I'm just taking over so I have to go deeper into it. But what we have now, one is like we are already manufacturing alumina bricks for the cement industry that's already on having this basic brick for the rest of it, which is planned in Bach. So we are now actively doing it. The base is being made. We have entered into alumina market much higher than what we had for the first year we had generated. Basic bricks for the joint venture is also coming up. So we are building up that market. So -- and we are entering. The team what we have is well experienced in the cement industry. That is the main focus now going on for the nonferrous area. So team is now in the place. The trial -- I mean, the trials have been done. The products have been already qualified at most of the cement plant builders, cement manufacturers in whole of India. So hopefully, as soon as we are on, it's a growing market. I mean we are looking at a gradual growth over a period by the time the greenfield plant gets ready, we should be in a position to start making a bulk supply from day 1.

The next question comes from the line of [indiscernible] with SMC Capital Limited.

I just had 2 questions on product categories. The first one is which product categories are being prioritized for new product development over the next 3 years?

Let me put it -- I think this can be done between Manoj and myself. I mean this year, the focus is a big focus on technology transfer from Sheffield Refractories. And we have a very strong experienced team like earlier the Sheffield team, myself also and the team we are now putting together to get into that market. So most -- a lot of focus is now on introducing the Sheffield products from Sheffield Refractories into the Indian market. That's one part of it. Manoj?

And yes. And for the international business, I can say the product categories, which will complement our existing product range. So for example, EI Ceramics is into isostatic refractory. So we will work around products around those isostatic refractories to increase our product offering to the customer.

Got it. And my second question is regarding what were the key reasons for incorporating and operating to Monocon Australia? And what strategic role does Australia play in IFGL's global network?

So Australia has been historically very strong market for Monocon IFGL. And we have customer relationship trading over decades. So to incorporate Monocon Australia, the whole objective is to increase our customer presence, be more on time with delivery interaction, everything with the customer there. And just to make the customer feel that we are there for them on a local level.

Understood. Okay. Are there any plans on a global restructuring or patient initiative to reduce overheads, I can see there are a lot of companies operating through multiple holding structures. So are there any plans to for global restructuring.

No. Currently, what we feel is we structured the way it is. individual companies are operating in the individual spaces. So we do not have any plans to restructure what we already have.

Next question comes from the line of Harssh K Shah with JM Financial DMS.

Yes. I had just one question. So in the last few months or probably a couple of months. There have been a lot of top-level exits, even the R&D head who has come from peer company has left. You can -- if you can kind of help us understand what is really happening within the company? I mean a lot of changes. I mean it does have an impact even on the operation, whether you agree or not, but this is a bit concerning from the investor community side, when you see such level of exits on a constant basis. And also, if you could help us now understand whether all these things are sorted out and we can expect at least a stability in terms of the entire top level management.

I'm [indiscernible]. So I would like to answer your question. Actually, first of all, we've not been having, as you said, regular departures that's incorrect. We have had a few in the last few months. Our CEO, Mr. he left and a lot of the team made by him and around him and maybe they left because they wanted to go where he was going. I don't know where. But this is a regular churn of people that you see in any company. Sometimes you have less, sometimes you have more when there is when there is -- how should we say, management have changes and things I feel is quite normal as the company quite stable. And in fact, is doing quite well still. So there is no impact on anything as far as that goes.

I don't think so. [indiscernible], like I've been back things happened and all with IFGL from day 1 since 1983 till date, working across all the people and the team is absolutely in place. There is no fear or anything like undue thing. And I don't think the team is now totally stabilized. Everything will not be seeing any more further changes coming up. And it's a team which works together the top line a couple of people have been gone away, but we do have restructured certain areas, and they are all functioning very well. And I'll be back there in full time from August to continue our sustainability, the sustaining power and having the confidence in the team. In fact, the team will be growing very fast. And now when we are adding some new products, we'll be working more into that. So the customer point of view, they have the confidence in us from the vendor point of view, they have the -- and hopefully, with the investors, too. So we will continue to grow in a stable condition.

The next follow-up question comes from the line of Lakshminarayanan with Tunga Investments.

So I just look at the India stand-alone business -- the stand-alone business and then the India contribution. The last 7 years have been truly exceptional. We have grown at a CAGR of almost 22%. And just want to understand who are we displacing? Are we creating new segments because you are way ahead of any of the players, you are way ahead of any of the steel companies in terms of the revenues. So I just want to understand that particular part as to what is giving you that sustainable edge? What kind of products are actually you are filling in and whether we are moving away from piece-based or weight-based products to a more solution, which you alluded earlier. I just want to understand a bit more on that. And then coming to the exports where we actually make in India and then export, the story has been a little underwhelming if you look at the last 7 years. If you look at FY '19, the exports were around INR 267 crores. I think now it's around INR 246 crores. So it's actually gone through a cycle where it went up and came down. And we have been adding capacity, I think in [indiscernible], we added capacity in Kandla, we added capacity. I think it was for exports. So 2 parts. One is the domestic business, truly exceptional performance. And in the export business, what is holding us back? What are the changes we intend to make as we move forward because we are actually saving money for [indiscernible]. I just want to understand your view.

Thank you for your question. So basically, let's start with India. Now is the growth in world steel and metallurgical because we've had the last few decades, we've not had enough of our own steel and manufacturer and it has grown significantly in the last decade or so. And our growth has been driven by a strategy to supply to the domestic market. Earlier when we started heavily on exports. And now that India is a growth story for the world steel market sort of repositioned ourselves to cater to our own domestic market even though [indiscernible] profit margin in India, we want to cater to the India growth story. So that is -- as far as abroad and exports go, the steel markets abroad have not been so good. They have been shrinking in many situations apart from the U.S. and China, which you see a correction, all over the world, there has been huge amounts of decline in steel, like huge amount of decline, thanks to the Chinese exports. So this is something we [indiscernible] to consider India and reposition ourselves, but we will retarget exports because it's a great market for us. And this is our company grew with exports. So this is something we will reposition ourselves as the opportunities arise. And as far as you were saying about adding capacity, the thing is that different for different products. We don't have the same products we're not adding capacity for the exact same products [indiscernible] products for sectors outside of steel also. So -- and a lot of it is targeting future growth in India and abroad. So cnd,peer., heavily oriented towards export. Now we would like to keep a very large chunk of our facilities for India because India, we are expecting at least double the growth in the next year.

Yes. So I think just to interject that. So I always believe that our proposition is very strong in exports. So even if the exports -- even if the global steel is shrinking, our proposition in terms of cost, quality and delivery is not just higher than comparables in those countries, right? So therefore, in spite of that, the exports have been a little underwhelming. Is it a chosen strategy -- I mean, of course, you mentioned that you want to actually focus your efforts more on India. But are you pulling back from some of the earlier markets in Europe for various reasons or Europe or U.S.? Is it a chosen thing that you actually stepped out of certain accounts in those places in spite of the proposition being strong?

So in some cases, there are geopolitical considerations in exports. it, like I said, it's a shrinking market in the U.K., for example, the amount of steel plant shut down. I was in the U.K. working for 2 or 3 years, the number of steel plants shut down Europe, especially in Western countries, this environment drive which in some ways is short because ultimately, you need steel, right? And if the steel is coming from 20,000 kilometers away from China and burn all the fuel, it's not [indiscernible] not burning that carbon's happening is a lot of countries, especially in Europe are kind of pivoting away from the [indiscernible], and like I said, the certain spaces, the growth has stalled because they have reached saturation point. And then there is always the Chinese exports, which they do a lot of dumping. So we are not -- it's not a conscious decision to move away from exports. We are sort of catering right now because we were not -- we were trying to develop new relations within India cater to the Indian -- Indian steel plants. And obviously, you can't juggle what you have, the resources that you have but we've now taken on manpower to kind of address these concerns and we will make a renewed push as and when the [indiscernible].

Sir, on the India business, you talked about sectors other than steel also. So if you can just explain which are the other segments you have focused in the Indian market, number one. Second, you also alluded in the earlier part of the call that you want to actually become a solution provider. And I just want to understand what has been the journey so far because I understand that some of our products are sold on pieces, some of them are sold on heat, some of them are sold on even kilos, right? So how the transition has happened in India? And what are the spaces we have actually occupied, which we were not there maybe 5 years or 7 years back?

So primarily, we were always -- our traditional is in steel flow control, which is the final part of steel manufacturing. We have expanded within steel to other parts of steel manufacturing process. we have expanded -- started expanding into cement and glass, which again, that is completely new to us. A few other metals like aluminum. And to address your other question about -- you mentioned that some products are sold on heat, some products are sold on piece, products are sold by the [indiscernible], I don't know how you describe it maybe think of it as a type of cement, which is sold by waste. As far as heat go, the same product sold by piece, it can be sold by heat because it's performance based. So some customers want perform [indiscernible].

Also getting into what we call a trust management, just trying to do the entire -- you have a team in the plant. Is that something which you have expanded your presence? I just want to understand that part.

Also getting into what we call a trust management, just trying to do the entire -- you have a team in the plant. Is that something which you have expanded your presence? I just want to understand that part. So basically, this is -- I think what you're asking is about the service, so basically, you send to a steel plant and you manage a certain aspect of the production and you're into the manpower and also the product being used. So that is -- that generally you get payment by the weight of the steel produced and things like that. So nowadays, earlier it was not the case, but nowadays all large steel plants are getting into this because they find it's very, very efficient for them they don't have -- they reduce the manpower. If there are any problems, then they kind of pass it on to the -- but at the same time, kind of it's a benefit to the company comp because we are in control of how the product is used. So we're not dependent on anyone -- somebody else in the steel plant mismanaging the product, which can happen. If you -- for example, certain products need to be heated to certain before they apply. Otherwise, they can develop which is unsafe. So this is -- we've always been into it, but now more and more steel plants want this, and we are finding it's something that works for us overall. So we are getting into more and more.

Got it. Just one last question on domestic, right? So there has been an increase in raw material costs, which you actually mentioned, right? So is it still both raw material availability as well as cost has actually continues to be on the higher level now? Or you're seeing that it is getting moderated as we step into the coming financial year?

I mean, see, the thing with raw materials is that unfortunately, India does not have a large amount of natural minerals. Therefore, we import a large amount of our minerals. And we have this makes very heavily dependent on shipping prices, which you can get a letter shipping container $600 a period from A to B and, okay, now it's [ $500. ] And you just have -- we have no option because of the global prices. And obviously, you're going go up 8 or 10 shipping price double, triple, that makes a big difference to your raw material costs, which themselves because of geopolitical pressure and situation fluctuate very heavily. So this is something we completely -- we obviously try to always negotiate with our suppliers to bring costs down. But this is something, again, we are really, really under -- how should I say, we really have to work with what the global prices are for raw material and shipping. And as you're aware, there's a lot of geopolitical issues with regards to oil prices and things again, further evolving sit [indiscernible].

Thank you. Ladies and gentlemen, we will take this as a last question for today. I would now like to hand the conference over to the management for closing comments.

I hope we have all been able to answer most of your queries. Thank you very much for them. They're always very helpful to hear the opinion and questions of our investors. We look forward to your participation in the next call. For any queries, you may contact SGA, Investor Relations Adviser. Thank you, everyone.

Thank you.

Thank you all.

Thank you. Bye.

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