Indian Metals and Ferro Alloys Limited (533047) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the earnings conference call of Indian Metals and Ferro Alloys Limited, arranged by Veritas Reputation. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Aryan Rana from Veritas Reputation. Thank you, and over to you, sir.

Thank you, Rao. Good evening, everyone, and thank you for joining us on this conference call to discuss Indian Metals and Ferro Alloys Limited, which is IMFA's financial results for the third quarter of fiscal year 2025 ended December 31, 2024. IMFA, India's leading fully integrated producer of ferroalloys has delivered a resilient performance in Q3 FY '25, despite a challenging market environment, reinforcing our focus on long-term value creation and operational excellence. Over the past 3 to 4 years, IMFA has transitioned to profitability driven by strong share price appreciation. Also, over the last 2 years, IMFA's market cap has more than doubled and share price has surged by 89% while EPS has grown at an annualized rate of 8.3%, the stocks, 24% annualized gain has gained over this period outpaced EPS growth, reflecting increasing market confidence in the company's future. In the past year alone, IMFA shareholders have earned a total shareholders return, TCR -- TSR sorry, of 10%, including dividends, while the 5-year TSR stands at an impressive 51% per year, reinforcing our track record of delivering value. Despite headwinds in the commodity markets, our strategic long-term contracts and cost optimization efforts have helped us mitigate the impact on Q3 FY '25 results, ensuring steady performance in a dynamic environment. Our financial results are available on our website and the stock exchanges for reference. Before we begin, I would like to remind you that today's discussion may include forward-looking statements that involve risks, uncertainties and other factors that could impact future performances, and that should be considered to be in the context of our business risk and market conditions. Joining us on the call today are Mr. Prem Khandelwalji, CFO and Company Secretary; Mr. Bijayananda Mohapatraji Whole Time Director and Chief Operating Officer; Mr. Saunak Guptaji, CFO Designate; Mr. Binoy Agarwallaji, Head Power Business Unit; Mr. Sandeep B Naradeji, the Head Mines Business Unit; and Captain Suresh Babu, Head Ferro Alloys Business Unit. We'll start with a brief overview of our Q3 FY '25 performance, followed by an open floor for questions. With that, I will now hand over the call to Mr. Prem Khandelwalji, our CFO. Over to you, sir. Thank you.

Thanks, Aryan. Good afternoon, everyone, and thank you for joining us on today's earnings call for Q3 FY '25. This quarter, our performance came in below expectations with the profit seeing some pressure due to market conditions. While this is not the outcome we had anticipated, we remain focused on navigating these challenges with a disciplined approach to operations, cost management under the strategic planning. Looking ahead, we expect some further contraction in the next quarter as certain headwinds persist. However, we are taking proactive steps to mitigate risk and enhance efficiency, ensuring that we are well positioned for a recovery when conditions improve, which is likely from next month onwards. The expansion and diversification plans are going on track. With Kalinganagar Phase 1 construction to start from next month, and ethanol from December '25 or January '26. With Kalinganagar Phase 2 thereafter, we are well poised to double our ferrochrome capacity in the next 3 to 4 years. We appreciate the continued support of our stakeholders and remain committed to delivering long-term value. Thank you for your trust, and we look forward to discussing our performance and outlook in greater detail during this call. Thanks.

[Operator Instructions] First question is from Manan Vandur from Wallfort PMS.

Sir, I had a few questions. The first question would be that what are the production and sales volume figures of ferrochrome this quarter?

Just a moment, let me see. The production was 65,865 tonnes and sales, 65,490 tonnes.

Production usage, 65,000?

65,865. And sales 65,490.

65,490, okay. Sir, second question would be, what is the cost of chrome ore per tonne for this quarter?

It's INR 9,085 landed at Choudwar.

INR 9,085. And sir, what is the cost of coke per tonne?

Coke is around INR 14,628.

INR 14,628. So that would be for half -- a tonne, right?

Yes, it's the consumption value, I'm telling you it's a part of -- cost, yes.

Correct. Correct. So INR 14,628. And sir, cost of power this quarter?

It's INR 18,671.

INR 18,671. Sir, per unit, how much should it be?

Per unit variable cost is INR 4.03, and the total cost is INR 5.27.

Okay. And sir, the last question would be the what is the average selling price of ferrochrome this quarter?

This quarter, selling price has come down, it is around INR 96,943.

INR 96,943. And how much do we anticipate in the next quarter, and what would be the range for it?

You see, giving the exact number is very difficult because you know we are selling on export basis also. So we'll come to know at the end of the quarter only.

The next question is from Aashav Patel from Molecule Ventures PMS.

My first question is that what is our EBITDA cost for Q3 this quarter, which went by?

EBITDA cost is INR 77,827 Aashav.

And roughly what -- how do we expect the cost per tonne to pan out, EBITDA cost per tonne to pan out for Q4, which is the current quarter.

In Q4, I think it would remain more or less at these levels.

More or less at this level.

Yes.

And sir, in terms of hypothetically speaking, if we need -- I understand that we have the CTO to double our mining output. Is that correct understanding? From 6 lakh metric tonne, we can now mine a total of 1.2 million metric tonne of chrome ore.

Sandeep, would you answer that?

Yes, sir. We have already received the CTE and CTO to double our production up to 1.2 lakh -- sorry, 1.2 million tonnes together from both the mines, Sukinda and Mahagiri. We are already having all the permissions.

All the permissions, right? So in case if you need to extract more ore, we can do it right away from day 1, we can double our...

Not right away. We have initiated the expansion project for that. From Sukinda, we will be doing 6 lakh tonnes by FY '32. So already have started working for that. We are converting our open-cast mine to underground that project has been started.

Okay. And is there a way to expedite that? Can we extract the ore faster?

No. Already because we are converting open-cast to underground. So that will take time. And according to that, we have prepared the plan to expedite.

Okay. But how long does it take to build this underground ore specifically? I just wanted to understand the laid out time line for the same, which is over next 5, 6 years, is because we have a staggered furnace coming up? Or is it a time-consuming process to develop the mine itself to extract the...

It is time consuming process. It's about 5 years to start ore production from underground. And that depends upon the type of the ore. What type of ore we are having, how is the quality of the ground. So all these conditions are taken into consideration for this.

Okay. And from Mahagiri, we can any -- which ways double the output because we were already...

So for Mahagiri, we're doing 3 lakh tonnes, 2 years back from last year, started augmenting the production. So about 15% to 20% per year. At that rate by FY '27, we will be producing 6 lakh tonnes from Mahagiri.

Okay. Got it. And how much are you targeting from Sukinda for FY '27?

That will be just 3 lakh tonnes only from open-cast.

[Operator Instructions] Next question is from Aditya from Axis Securities.

Sir, just on the previous question. So we will go to 6 lakh tonne at Mahagiri by FY '27 from 3. And Sukinda by FY '32. Is that right?

Sandeep?

Yes, yes.

Right. And can you just elaborate more on the expansion of ferrochrome from 280 KTPA to 0.5 million tonnes? How it will happen? In what phases?

Yes. Suresh, can you explain that?

Yes. Regarding this Kalinganagar project we have obtained consent to establish in the month of November. And almost major packages orders is in progress. And by March and April, we are going to release around the order of INR 400 crores. And we have already released the order of around INR 200 crores. And we are expecting to power up our first furnace by around first quarter of '26, '27 by April to June. But June, we are expecting -- June '26 we are expecting to power up one smelter and the other smelter with gap of 3 months. So that is how the first phase project expansion that will add around 96,000 for existing our capacity. And the remaining, inorganic growth also we are planning wherever it is possible.

And then in Phase 2, we'll start thereafter. So which is again likely in 3 to 4 years. So that's how we are planning to reach around 0.5 million tonnes in 3 to 4 years' time.

Okay. Any color on the inorganic part? Any particular targets we have, any advanced discussion?

No, no, no, nothing as such, we are open to that, but nothing as such at the moment.

Okay. My last question is on -- if you can throw some light on the current situation on ferrochrome prices. We have seen that in this quarter, prices have -- can we say that prices have bottomed out? And what is the outlook? Any directional color will be helpful?

Suresh?

Yes, yes. In the last quarter, there is a free fall of ferrochrome prices and the realization has decreased. So we are expecting the similar prices for the next 2 months. Anything from March onwards, there will be an uptick in the prices. And now there is a rollover of the same prices. So we are expecting the bottom out has happened in both Chinese and in European markets. So we're anticipating the market condition to improve latter part of this quarter and the first quarter of the '25, '26.

Next question is from Madhur Rathi from Counter Cyclical Investments.

Sir, I wanted to understand, we have INR 1,750 crore CapEx to increase our production capacity as well as create a new ferrochrome...

Madhur, you're not audible.

Sir, is my audio, right now better?

Yes, little better.

Yes. So sir, I wanted to understand what is the payback period expected from this INR 1,750 crores CapEx that we'll be doing on ferrochrome?

No, I didn't get you. What is the?

Sir, what would be the payback period for these investments that we are making in increasing production at all these three lines, they are on a steady state, like based on the past 5, 6 years of pricing, we have -- we might have taken an estimate projection. So on that, what would be the payback for this?

No, it's very difficult to project any payback as such because you know our industry is very cyclical. So if the prices are good, then it can be 2, 3 years also. But if it is not so good, then it could be 5 to 6 years. So giving any number -- predicting any number is very difficult.

Okay. Got it. Sir, we have got into ethanol production. So I wanted to understand how much are we going to invest on this? And sir, why are we getting into ethanol when we are a metal player? So what is the rationale behind getting into ethanol?

This point, we have explained it in quite a detailed manner in the last con call also, that we have some surplus capacity available in Therubali. And Therubali, we are not expanding ferrochrome because of logistic disadvantages. So we are utilizing our idle capacities there. And that is agriculture built where enough of raw material is available. So we are utilizing our idle assets there to generate some money. That was the idea. So it's a 120 KL plant with roughly INR 150 crores of investment, which will generate around INR 300 crores of revenues and EBITDA margin is expected around 10%.

Next question is from Manan Vandur from Wallfort PMS.

Sir, my question was on coke. So where do we get this book from? This is X?

Suresh?

Yes, yes. Coke, which we get -- ultra low-cost coke from Colombian region. And we are also getting semi-coke from China. There are two sources.

Colombia and China.

Yes, yes.

Next question is from Joe Shah from Seven Seas.

Today morning, we had excellent CNBC TV18 interview of our Managing Director. It was very informative. Now Prem, I have one question. Now we have signed up 25-year renewable power agreement with Jindal Group. Now at present, what price we are buying this renewable power?

The power will commence by June '26. That is in line with our requirement.

Right. No, but what price will be paying for this?

Sorry?

What rate will be paying for renewable power?

That is ex-generator bus tariff is INR 3.84.

Okay. Okay. Okay. So that is similar to our thermal variable cost -- thermal power variable cost, right?

At par, thermal variable. Yes.

Okay. Okay. Okay. Good. Good. Good. Okay. And now, Prem -- one more, Prem. Now do we have any expansion plan for ethanol, because the ethanol demand is going up and government of India is also increasing price and encouraging ethanol production. Do we have any expansion plans for ethanol?

So we're already putting up one plant, Joe. So once that is operational, then we'll see. What are the nuisances in the business, then we'll decide.

Okay. Now one question for Sandeep. Now South African situation, our MD also mentioned is very bad. From Power angle, Eskom is having so many problems. And same with the Transnet, all the logistics. So nobody is going to South Africa for investment. In the past, impacted, IMFA had taken bold steps of venturing to Indonesian coal mine, which did not succeed, that is a different story, but we had the guts to go to Indonesia. So can we -- are we -- can we look for some good chromite mine in South Africa to buy at cheap rate, which will supplement our chrome ore supply for the ferrochrome production. Do we have any such plans? Or are we exploring this opportunity?

I don't see any opportunity there, Joe. Because we have enough ore here itself. And we have enough plans to expand our capacity in India. So no point in going outside and exploring opportunities there because it's unknown terrain. And I don't know whether any lucrative mines will be available there. In the past also, we scouted throughout the world and nothing good was available. So again, unnecessarily wasting time and money, I don't think is proper there.

Sure. And I think our quality of ore, chrome ore or lumpy chrome ore is much better than South African chrome ore, right?

Yes. Yes.

The price is also much more attractive. Our cost of this product is about INR 9,000, which is more than -- quite less than $200 UG2 price of South Africa today.

Yes.

Next question is from Divya Agarwal from Ficom Family Office.

So my first question is, what is the reason for the softening ferrochrome prices? And what are the nature of steps taken to counter the impact of this softening prices per prices, ferrochrome prices?

Suresh?

Yes, yes. The prices basically impacted by the Chinese steel consumption, they have oversupplied the steel in this quarter. So now they are diluting their steel stocks. So that is the main reason there was no consumption for the ferrochrome. So many of the smelters at China is in under pressure and they are operating at a lower capacities.

And what are the steps that have taken to impact this -- to safeguard us from the softening chrome prices?

See, we have an integrated model of operations. So we have an impact, but because of our integration -- integrated model and also the depreciation of rupee is helping us to take these -- or absorb those shocks.

Okay. Secondly, what is the cost structure differential between the nonintegrated producers and IMFA, given your comments on the current conditions, which are unsustainable for nonintegrated producers?

Nonintegrated producers buying over rate power, the cost of the production comes around INR 1,09,000 to INR 1,10,000, that is INR 1,10,000. Whereas IMFA, we had produced -- cost of production is around...

EBITDA cost INR 77,000.

INR 77,000 -- INR 77,827.

Okay, sir. Got it. And thirdly, I want to think on the ferrochrome prices? Will this improve from here on? And can you list some specific factors to back this up based on the demand and supply dynamics going on into the market?

See, we are expecting the ferrochrome prices will be an uptick from the first quarter of the coming year, and maybe the latter part of this quarter. So already the prices are bottomed up, and same prices rollover in this month and also for February.

But sir, what gives you the confidence that there will be an uptick in the prices?

Because there is no rise in the -- drop in the Chinese prices in the last month. So generally, the free fall in stopped and the rollover happened with the same price. So there is a sustainable -- it is not a tenability to operate at this level. So we are anticipating there will be a reverse of the price.

And lastly, what are the latest set of data points from China, which we should be watchful for, given your comments on poor economic data from China?

In this year, they have made a 5 percentage growth as per the annual target and similar level of expecting in the coming year also. But of course, the vacations will be over in the coming month -- in this month. So the positive turnover may be anticipated from the March onwards. This quarter is more of wait-and-watch quarter for China.

[Operator Instructions] The next question is from Rajesh Agarwal from Moneyore.

Sir, I always track Jindal Stainless cost of ferrochrome, but this quarter, their cost has not fallen down. So why our realization has come down, if you take a mixture of spot and long term?

No, we can't comment on JSL here, Rajesh.

Okay. Generally, because the difference is INR 5,000 per tonne, but this time, it is INR 10,000 per tonne. Their cost was 1 lakh 7,000 and our realization is around 96,000. So I've been tracking for the last 3 years that it was almost INR 5,000 per tonne.

We can't compare in that manner. I don't know how they're accounting...

The spot prices are lower or the long-term prices which we entered is lower?

Sorry, come again, spot price?

Because we have a mixture of both spot and long term now. How much is long-term percentage, Prem?

Long-term percentage is roughly around, Suresh, 40%?

40%.

60%, I think.

60%. And what was the realization on that?

The realization is around INR 0.82 average realization.

Average realization. Okay. INR 0.82. It comes to how much rupee per tonne?

Rupee per tonne, it is coming around...

For the contract. For the contract, I'm asking.

So for this quarter, the average price is coming around INR 0.81. It comes around 90,000, 89,000 to 90,000.

Okay. That is the reason. And sir, how much will the volumes go in '25, '26? How much capacity will come in on that in the next financial year? Our volumes can go up by?

Next financial year, volumes can go up by another 50,000.

50,000. Okay.

50,000.

We were able to sell completely?

Yes, yes.

Okay. And sir, why don't we sell at spot if we have a better realization?

Suresh?

We have a long-term agreement. So our customers are long term in nature. So wherever we have some part available, we are selling at spot. In the domestic market also, we have an exposure. We have increased our exposure in the last quarter.

Last quarter. Okay. Wherever we get a better price, we can sell in spot also?

But we have much long-term agreement. So that is why whatever the available quantity, we're also selling at spot.

Okay. It is for how many -- a yearly contract or 2 years or 3 years?

Quarterly.

Quarterly. So every quarter, we have flexibility. If the spot is higher, we can sell in spot?

No, no, no. We have a mix of the contracts, Rajesh. Some contracts have 3 years. Some contracts have 5 years. Some contracts are monthly or 1 year. So there is a mix of contracts, long term and spot. The prices are [ determined ] every quarter -- prices are [ determined ] every quarter, but the contract tonnes and those things are for 3 years, 1 year, like that.

But if the demand locally is good, why don't -- why we need to enter into contracts?

There is a constant in the demand here in local market. There is a constant how much you can sell here. Whatever we are producing, we can sell the entire quantity in domestic market.

Okay. But if the demand goes up, then we can sell?

Yes, obviously. Then wherever we get a better price, we'll try to sell there.

So that flexibility is there in the system?

Yes, yes.

[Operator Instructions] The next question is from Saket Kapoor from Kapoor & Co.

Yes. [Foreign Language] Sir, firstly, you mentioned about this 50,000 additional capacity, which we will be selling. That is a ferrochrome we will be selling in H2. So if you could just elaborate on the same.

Yes, we are expecting this Kalinganagar Phase 1 to be operational by April to June next year, and by September, the second furnace. So both the furnaces should be operational by end of September. So 6 months, we should be getting around 40,000, 45,000 tonnes next year.

So sir, for financial year 1st April 2025 through 31st March 2026, in that period, we will have this 50,000 additional capacity because...

No, no, no. FY '27, we are talking about.

So this year, it is going to be the same trend which we have -- will be executing for this year next year [indiscernible]?

Yes.

And sir, I also missed this Chinese part of the explanation, which sir was mentioning. So if you could just negate once again the reason for the Chinese smelter switch-off and all [indiscernible]?

Suresh?

Chinese prices. Chinese -- there was a free fall of Chinese prices from the month of November mainly due to the [ oversupply in the industry ]. So they are not -- the ferrochrome producers are not able to sell their product and the prices are so low. So they have not been able to continue the smelting operations. So they are diluting their stock, and we're anticipating that there will be reverse in the prices in the coming first quarter of the financial year '25, '26.

Okay. And just, sir, the chrome ore is the component and also nickel. So have we seen the same trend? I've not observed the price trend for nickel and all. So other commodities that goes into stainless steel have also behaved in a similar pattern since the output has gone down?

Yes, yes. Similar tendency in the nickel. But in the coming months onwards, the nickel prices are expected to rise from the Indonesia [ support industry ].

Okay. Sir, a couple of questions on the P&L side. When we look at our other expenses line item for this quarter, the balance is INR 106 crores. And the comparable number for last year was INR 88 crores. So any -- but understanding why this increase. What explains this increase?

It's mainly on account of repairs, maintenance and outward carries, I mean, the freight cost. Those 2 things have gone up. That's why the other expenses have also gone up from INR 88 crores to INR 104 crores.

And sir, [ freight ] prices have been trending lower with now Donald Trump administration in [ annual ]. Have you seen the spot prices or the freight cost trending lower?

Suresh?

Yes. Freight cost in the last quarter increased, but now it is softening.

Is there any quantification you can give? Additional cost on the [indiscernible] because of the higher freight cost on a comparable basis?

You mean the rupee? In terms of rupee?

Yes, sir. Yes, sir. Impact on...

Those breakups are not available now. So we'll have to look into that.

Sir, now coming to the coking coal part of the story, sir. I think so in Australia, there are some natural disturbances in the mining activity. So that also changes the outlook for coking coal going ahead? And the pressure on margins can accelerate because of that? What is our thought process on the same?

Suresh?

Coke prices, we are actually sourcing from Colombia. And the prices are almost flat for the quarter. And the similar prices, we are expecting in the coming quarter also.

Okay, sir. And for the coal prices, which we use for power generation, those linkages and prices are constant? Or what are the trends there?

Coal prices for power plant will remain same as Q3 FY '25.

Okay. And last 2 points. Firstly, about during this interview and all, there were some talks about this inorganic expansion and some expose -- something on the block by Tata Steel. Sir, can you explain? Does Tata Steel have anything on block for ferrochrome mines or the chrome ore facilities? What is the buzz around, sir?

No. See, we can't comment on the rumors, Saket. It's not proper for us to name anybody. So our expansion plans are on track, and we are going ahead with that. And as we said earlier also, if we get any opportunity in organic growth, definitely, we'll look at that. But nothing reportable at the moment.

Right, sir. My question was not whether we participate or -- I was just trying to understand, just like in the case of [Foreign Language]. But in that sense, only I was asking whether in Tata Steel case also, there is some bit of story coming up or what is the asset that Tata Steel is looking because generally, Tata Steel does not exit the business in the segment, which is [indiscernible].

[Foreign Language] That is a business outlook, so we can't comment on that.

Yes, sir. And lastly, sir, [indiscernible] this would be a favorable call for you also next quarter and on. You are retiring from the organization?

Yes, yes. I think Saunak Gupta is going to take over as CFO from 8th of March.

Yes, sir. So you will be there with the organization as a consultant? Or this will be the...

Yes, I'll continue as senior adviser here. But Saunak Gupta is going to be in chair from next call onwards.

Okay, sir. My best wishes to you, sir. All the best to the team, sir. We hope that -- and one point was about in the notes, which was also mentioned, that...

Sorry to interrupt. We move to the next question. The next question is from [ Koshak ] from Wallfort PMS.

Sir, I just want to understand. Jindal Stainless has announced a very aggressive expansion plan. So the ferrochrome that will be required for them, is that available in India currently?

You should be asking that to them, not to us. We can't comment on their business plan.

No. But I'm just asking in ferrochrome point of view, is that much ferrochrome available? They've announced 10 million tonnes of -- 1 million tonnes of capacity expansion. So the kind of ferrochrome, the quantum that is required in that kind is available right now, the capacity. Is that kind of capacity commercially feasible right now in the country?

Suresh, do you have any idea?

No. At present, we are producing less ferrochrome because of the [ more ] concepts. Much information at this moment is not available.

Next question is from [ Shubha ], who is an individual investor.

Hello? Sir, am I audible properly?

Yes, [ Shubha ].

Sir, first of all, congratulation for the results in this difficult quarter. As I understand that the prices were quite challenging, still we have been able to maintain our good prices. Sir, my questions are -- there are 3 questions. And first question is from the mining sector. So sir, what is our stripping ratio for the ROM which we are expecting? And what is the grade of ROM?

Sandeep?

So the stripping ratio for [indiscernible] 1:3.47. And grade went from -- there are -- I mean, from low to high grade. So these are high grade...

Bifurcating to like -- what is the grade of high grade and low grade?

Low grade is less than 40%. Low grade is less than 40%. Medium grade is up to 52%. And from 52% onwards, that is high grade.

That's fine, sir. But what is the grade -- what is the average grade which we are producing, sir, average?

We are producing in the range of medium grade. So in general, grade is not taken into percentage and which terms are low grade, medium grade, high grade. So we're at average medium grade.

And what is the [indiscernible], sir?

Around [ 3.2 ].

3.2, sir?

Yes, yes.

Sir, you mentioned -- my next question is like you mentioned that the chrome ore landed cost is 9,085, right, sir? So sir, what is our specific consumption of chrome ore, sir?

Specific consumption is around 2.5 tonnes per tonne of ferrochrome.

2.5, sir?

Yes, 2.5.

Okay. Okay. And sir, you also mentioned that the cost of coke is 14,628 in the previous answer. So sir, what is our specific consumption of coke, sir?

6.5 tonnes.

I could not understand.

6.5 tonnes per tonne of ferrochrome.

So 500? 0.5? 500 kilos, sir?

500. Yes, 0.5. Yes, 500 kg.

Okay. Okay. And sir, you also mentioned that you are importing from 2 regions, mainly Colombia and China. So like what is the average percentage which you are using? Like say what is the percentage of Colombian coke and semi coke, sir?

Suresh?

It is up on the requirement. It varies from 70-30, 60-40. So Colombian coke and semi coke.

Sir, Chinese one is semi coke, right?

Yes, Chinese. Yes, yes.

Okay. Okay. Okay. And sir, like in the next quarter, like are we expecting any further reduction in costs? Like you mentioned that repair and maintenance costs have gone up. [ Our freight cost ] has gone up. So like what is our quarter -- like you also mentioned that our total EBITDA cost is somewhere around 77, right?

Yes, yes.

77,827 in quarter 3. So what is our like tentative expectation from quarter 4 or quarter 1 '26 onwards [indiscernible] cost?

Quarter 4, we're expecting to remain same. And difficult to predict at the moment for quarter 1 next year.

Okay. Okay. Sir, last question from my side. Like you have mentioned that like 60% of the sales, we are doing exports because of our long-term agreement. 40%, we are selling...

No, no, no. We are exporting 90%. Out of that, long term is 60%, 70% and balance on a spot basis.

So sir, out of the -- so 90%, we are exporting. And 10%, we are selling in domestic market.

Yes.

Is that 10% [ upgrade or pure FC ] only?

No, no. It's ferrochrome, proper ferrochrome.

So sir, what is the average realization which we are getting in domestic market, sir?

No, we don't have the breakup like that. I can give you the total realization, which is around -- I said 96,000 earlier.

Understood. There is no data. Okay.

96,943 average realization.

Okay. And sir, what is the grade of ferrochrome which we are selling? Average grade which you are selling overall?

Yes, I think it is, what, 61%, 62%.

Yes. It is 61 to 62 percentage.

Next question is from Joe Shah from Seven Seas.

Prem, our best wishes for your new career as IMFA adviser. I hope like S. P. Mathur, you will also have a very long term with IMFA. My best wishes for you. And also best for Bijayananda Mohapatra, Saunak Gupta and also [ SRA]. My best wishes for you. Now to new team, my request is after last few days, IMFA has lost a lot of money because market cap [ weather ] has gone down very much sharply. So please see how this market cap can be protected. I know these market operations are not in your hand, but still even finance minister also stepped in when market crisis. So if we are facing the similar situation, so production of shareholders' value is also management responsibility in a way. So please see what else can be done. And Prem, one more suggestion. Now in my city of Mumbai, every day, millions travel by train. Millions of people travel by train. And we don't find any one wearing COVID mask. So COVID is gone now. So we lost 4 AGM, physical AGM because of COVID. Now COVID is no longer there. So if I'm the pioneer coming AGM, we should have a physical AGM where people can come and meet the new directors, to understand them and with more interaction. So please consider. Saunak, also consider this physical AGM for the next -- this '25, '26 -- '24, '25.

Yes. Thank you, Mr. Shah. Yes, point noted. We're looking at that.

Next question is from [ Akhilesh V. ], who is an individual investor.

Am I audible?

Yes.

Yes. Sir, I had a few questions. First one, in our long-term contracts, what is considered as the benchmark price, which is the benchmark price based on which the pricing is decided?

Suresh?

Yes. In POSCO, it is around INR 0.86.

No, no. He is asking about what is benchmark price.

Benchmark is power price we are considering.

And it gets fixed for the whole quarter? It's fixed for a quarter? Or how often it changes?

No. This changes every month in Chinese price.

Okay. So when you say that some Chinese prices came down to INR 0.75, et cetera, so that is reflecting in this benchmark and in our realization already?

Yes, yes, yes. Already in this quarter, we suffered because of the fall in the prices.

Okay. And our spread on this benchmark with the customers are renegotiated every year or the spread is also fixed long term like 3, 5 years, et cetera?

No, we have quarterly negotiations of prices with South Korea and POSCO. And others are based on the quantities decided for the year, but this price is varied on the benchmark.

I got the benchmark part, but your spread on the benchmark, whatever it is plus. And also, this is exports price or freight also is fixed for the whole quarter or for the whole month with your...

This is FOB prices.

FOB price. So for now, it's not affecting our profitability if freight is going up or down?

Yes, yes.

And sir, today, with our current production capacity, what would be our global production share of FC or ferrochrome?

You are asking at the level mix -- at what level we are doing?

No. 2.5 lakh tonnes ferrochrome capacity today. So what is our global production market share? That's what I want to know.

So it is around approximately -- it around 80 million, 90 million in production [indiscernible].

Sir, your voice is not clear.

Suresh?

Sir, your voice is not clear. I'm not sure if it's clear to moderator or others.

Mr. Khandelwal, we can't hear you very clearly. Your voice is breaking.

So the global production you're asking?

Yes, yes.

How is the global production? It is around 90 million tonnes.

90 million. Okay. So we are around 3% of global production. Okay. And I also want to wish Mr. Khandelwal all the best for his future. It was a great pleasure to interact with him on these calls, and we'll miss his presence.

The next question is from Saket Kapoor from Kapoor & Co.

Sir, you mentioned about FOB for us, our export part. That means the freight has not been part of line item. I missed that point. The freight is to be -- as you mentioned that freight costs have been higher and those costs have increased the other expenses. But you were just explaining about free on board also. So if you could just explain what you were trying to convey.

Suresh?

Yes. Our price is [ CF ] based. So freight impact will be there during this export of the material.

Sir, come again. Sir, your voice is not -- you are not very much audible.

Am I audible?

Yes, sir.

Yes. Our prices are [ CF ] based. So the wash in price -- the rise in the prices will impact us. A change in the prices will impact our selling prices.

Okay. Sir, in the management comments, Mr. Panda mentioned about margins. Further, our margins will be blocked by treasury operations. So going ahead also, sir, I think quarter-on-quarter, our treasury or the other income has remained flattened. How is the treasury book going to behave, sir? Where have we invested the treasury money? And also, what is our cash balance and the CapEx then for the 9 months?

Saunak, could you answer that?

Yes. So actually, in this market also, we are having around INR 890 crores of total amount of -- amount invested in various funds, bonds and even in some extent for the FD. And this is basically the surplus from the business which has come in. And even though the market was down, but still we have, by switching in, switching out, we have managed a good return. And that's -- if you see that quarter-on-quarter also, we have maintained it out. And from there itself, what we are getting is a good amount of interest and income from the returns of switch in, switch out from the bonds. And that's actually adding up to a PAT in the margins. So that's an important point to be noted for us. And the most important point is that we are debt-free and having almost INR 900 crores of total invested amount.

And sir, on the CapEx part, sir, how much have we spent on the -- for the expanded capacity as of for the 9 months? And how much balance we will be spending for this year? If you could just give the full number.

So as of now, we have invested about -- around INR 150-odd crores. And overall, we expect that if I go over the actual cash outlay, another INR 150-odd crores will be by end of this year, which we'll be spending it out.

Another INR 200 crores cash balance may go down from 890?

INR 50 crores to INR 200 crores will go down from that balance that we have in the investment amount.

Right, sir.

Next year, the maximum amount of cash outlay will happen in the Kalinganagar project.

And next year, sir, can you outline how much we will be spending?

So next year, we are expecting somewhere around INR 450 crores to INR 500 crores.

Okay, sir. And if we take this 9-month cash generation, sir, how much have we generated for this 9 months? Net of taxes.

So it is around, 9 months ended, INR 370-odd crores we have generated out from this.

Next question is from [ Divya Agarwal ] from [ Sikom Family Office ].

I just want a clarification. What is the benchmark that we monitor for the long-term contract? I was not able to clearly hear that. Can you repeat that?

Suresh?

So we follow [indiscernible] benchmark. So that is monthly rollovers. And for POSCO every quarter, we have a benchmark?

Sorry?

For POSCO every quarter, we negotiate based on the benchmark of the Chinese steel and also the existing market. So right now, it is INR 0.75 in the Chinese benchmark. So for the Chinese market, it is INR 0.75. For POSCO, it is around INR 0.84.

Next question is from [ Shubha ], who is an individual investor.

Hello? Sir, am I audible properly?

Yes, [ Shubha ].

Sir, I wanted for -- a couple of questions. So my first question is on the O&M cost. So what is the overall O&M cost for the quarter?

I didn't get you. O&M cost for what?

O&M cost for our smelter or whole in Kalinganagar. Total operations and maintenance cost.

No, no, we don't have such kind of breakup here. What kind of cost are you looking for, I mean, your fixed cost or...

Basically our contractual manpower costs, contractual manpower for running the plant.

Contractual. No, we don't have those kind of breakups.

Okay. Okay. And sir, I wanted to understand that specific consumption of our electrode also because this is one of the key consumables for making the ferrochrome, specific consumption electrode.

Suresh, do you have that number?

Yes, yes, yes. It is around 14 to 16 kg.

Okay. Okay. And sir, what is the specific consumption of furnace or LPG for [indiscernible]?

So this will be asked separately by way of mail. I think these are very, very minute numbers. We don't keep those numbers. We will forward this question.

Thank you very much. We'll take that as the last question. I would now like to hand the conference back to Mr. [ Abhishek Sawan ] for closing comments.

Thank you, Rao. While Q3 FY '25 presented short-term headwinds, IMFA remains fundamentally strong with a resilient operational framework and positive long-term demand outlook. As the global stainless steel market recovers, our strategic initiatives and cost efficiency measures will drive sustained growth. We appreciate the continued support of all our stakeholders and remain confident in delivering long-term value. On behalf of the Board of Directors and management, we thank you all for your participation in this call. Have a good day. Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you very much. On behalf of Indian Metals and Ferro Alloys Limited and Veritas Reputation, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.