Jindal Stainless Limited (JSL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Jindal Stainless Q2 FY '24 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Dixit from ICICI Securities. Thank you, and over to you, sir.

Good afternoon, everyone. On behalf of ICICI Securities, I welcome all the participants for Jindal Stainless Limited Q2 FY '24 Conference Call. At the outset, I would like to thank the management for giving us an opportunity to host this call. From the management, we have with us today Mr. Abhyuday Jindal, Managing Director; Mr. Anurag Mantri, Executive Director and Group CFO, and Ms. Shreya Sharma, Head, Investor Relations. Without much ado, I would like to hand over the call to Ms. Shreya to take this forward. Over to you, Shreya.

Thank you, Amit. Good afternoon, everyone, and a warm welcome on the call. We have shared our Q2 FY '24 earnings presentation with the stock exchanges, which is also available on the company's website, and today's call discussions will be on the same line. Please note, some of the information on this call may be forward-looking in nature and is covered by the disclaimer on Slide 2 of the earnings presentation. Now I would like to hand it over to Mr. Abhyuday Jindal, our Managing Director. Over to you, sir.

Thank you, and good afternoon to everyone, and I'd like to welcome you all to the Q2 FY '24 earnings call. I'd like to first discuss the key business highlights of the quarter, following which Anurag will take you through our operational and financial performance. Looking at the operational performance, we delivered satisfactory volumes in Q2 FY '24 amid muted global demand. On the other hand, domestic volume increased owing to a robust domestic demand due to government's push for stainless steel in strategic sectors. There is also a strong pre-festive demand in the Auto segment besides other consumer-facing segments. On the operations front, I would also like to share, we have successfully commissioned the incremental capacity of our hot strip mill in JUSL. With this, we have reached 3.2 million tonne capacity of our hot strip mill in Orissa. As active contributor to the Make In India mission of the government, it is a constant endeavor to substitute imports in critical areas. To support this mission, our R&D department created an environmentally friendly product technology for rolled flat plates. These plates are used in industries like petrochemical, thermal power and oil and gas. On the export front, we are facing challenging macroeconomic conditions, weakened global demand and pricing pressure. This has affected export volume on a quarter-on-quarter basis. However, we have maintained sales in certain global geographies with our continuous innovation and efforts to explore new markets and segments. On the import side, the unchecked inflow of subsidized and substandard foreign imports continue to distort the level playing field against Indian manufacturers. Chinese imports have increased by nearly 55% year-on-year. We hope the government will take notice of the continuous and dampened imports by China, which is hurting the sector, especially the MSMEs, as well as the government's vision of an Atmanirbhar Bharat. I'm happy to share that all our efforts and hard work are being recognized and are strengthening stakeholder confidence. CARE has upgraded our credit ratings to AA from AA- in view of our consistent improvement in sales volume, our higher than envisaged EBITDA per tonne, along with steady improvement in debt coverage metrics. Our endeavor is to focus on more innovation and paradigm shifts in the stainless-steel ecosystem. To further this vision, Jindal Stainless and IIT Bombay have signed an agreement to establish a chair professorship at the institute. This chair will support and enhance research in industrial processes and product technologies in the stainless-steel sector. It will drive more innovation and research in the field of steel metallurgy and support our goal to create new benchmarks in durable and sustainable infrastructure. Moreover, as part of our Stainless Academy initiative aimed at skill building and creating awareness about the benefits of stainless steel, Jindal Stainless conducted 25 fabricator training programs in various Indian states during Q2 FY '24. Recently, the Bureau of Indian Standards has also introduced three grades, namely N5, N6, N7, meant exclusively for stainless steel using utensils and kitchenware applications. It is an important decision for the welfare of the consumers as critical issues of health and hygiene are involved in food contact materials. In line with this, Jindal Stainless is among the first to apply for and secure certification for these grades under the enhanced standards. On the ESG front, our efforts towards sustainability and responsibility were facilitated at several industry forums as we received several prestigious award for our energy efficiency and carbon reduction initiatives. As we remain committed to a greener, more sustainable future fueled by environmental responsibility, I'm happy to share that Jindal Stainless has also become a member of Responsible Steel, a global nonprofit multistakeholder standard and certification initiative. Now, with this, I would like to hand over to Anurag to discuss the operational and financial performance. Thank you.

Thank you, Abhyuday. Good afternoon, everyone, and a warm welcome to the call today. As highlighted by Abhyuday, we delivered consistent performance amid a challenging global scenario. Let me discuss in detail the operational and financial performance during quarter 2 of FY '24. During Q2 FY '24, the volume increased by 26% on Y-o-Y basis and remained steady on Q-o-Q basis. The standalone revenue rose 14% Y-o-Y to INR 9,720 crores EBITDA, and PAT increased by 54% and 74% to INR 1,070 crores and INR 609 crores respectively on a Y-o-Y basis. The H1 standalone revenue increased 19% Y-o-Y to INR 19,748 crores. EBITDA and PAT increased by 44% and 59% to INR 2,188 crores and INR 1,275 crores respectively on Y-o-Y basis. On the subsidiary front, I would first like to give you an update to our Indonesia subsidiary, PT JSI. The Board has approved the proposal to explore the option for selling, liquidating, divesting equity stake in PT JSI. The decision was taken due to unfavorable market conditions in Indonesia, which is flooded by Chinese imports. On the other side, Indonesian market is dominated by Chinese players and therefore, major markets such as U.S. and European Union have levied severe trade protection measures on export of stainless-steel products from Indonesia, resulting in lack of level playing field for us. Consequently, in this challenging environment, PT JSI's operations become unviable. This step will help mitigating the potential operational losses and have positive impact on consol results in future. I'm happy to share that the Board has also approved an interim dividend of 50% of INR 1 per equity share for FY '24. The aggregate payout will be nearly INR 82.34 crores. This will be the third dividend in last 6 months after the merger of JSHL, leveraging the strength of combined balance sheet. On the balance sheet side, as you noticed, there is a considerable improvement in our debt position with 27% reduction in the standalone net debt to INR 2,149 crores as compared to INR 2,956 crores outstanding as of June 30, 2023. This is also being reflected in our leverage ratio, with net debt-to-EBITDA improved to 0.5, with net debt-to-equity maintained at 0.2 level. Now on CapEx side, as guided in the previous quarter, the CapEx including JUSL during FY '24, expected to be around INR 3,200 crores to INR 3,300 crores. As of H1 FY '24, out of this total CapEx, we have already spent close INR 2,000 crores. If you recall in our last call, we guided INR 800 crore increase in debt level over March '23 level, which is now expected to increase only by INR 200 crores to meet the FY '24 CapEx of INR 3,200 crores. So earlier we were expecting to close FY '24 with a debt level of INR 5,400 crores, including JUSL. Now we are improving the closing debt guidance for March '24 to around INR 4,700 crores. With our focus on digitization, I would also like to share that Jindal Stainless has become the first Indian corporate to execute a path-breaking live shipment transactions through EBL, powered by public blockchains involving different platforms of vendors, shippers and banks to make it completely paperless across geographies. This was kicked off in G20 Trade Ministers Meeting between India and Singapore. On the demand outlook, we are confident that domestic stainless steel demand will continue to rise with robust economic activities in infrastructure supported demand. Enhanced project activities in ethanol, petrochemical, water treatment and nuclear segments will further strengthen the stainless steel ecosystem. With this, I would like to end my discussion and would request the moderator to open the floor for Q&A session.

[Operator Instructions] The first question is from the line of Kirtan Mehta from BOB Capital Markets.

Congratulations for maintaining a strong set of numbers as well. I wanted to understand in terms of your sales mix, which we are currently running at around 2.2 million tonne level, how much it is supported by the old existing plant and how much the new plant is now contributing to the volumes?

So -- I mean, it's an integrated unit. So we are in the ramp-up phase with the expansion that we have just completed in March. And we expect in the next 2 years to be completed. So in terms of -- I can tell you, volume guidance, this year we will at least have a 20% volume growth as compared to last year. So because it's a ramp-up, I mean it's a mix of both coming out.

But is it possible to indicate how much volume is supported by the new capacity during the latest quarter?

See Kirtan, actually, we, -- as you know, as Abhyuday mentioned, the ramping up is happening in the right direction. The only thing is that because we do also the slab imports and trading. So we don't want to have a very specific thing. Our overall idea is to improve the sales and margins in that. That new capacity is expected to be fully utilized by next year. So what we guided that we will gradually ramp this up and it's on track for that.

Fine. And one more question in terms of the sort of the margin outlook looking forward. So we have seen some bit of easing of the nickel as well as the raw material prices, and at the point, stainless is also easing. So how do you see the margin environment doing over near next 3 to 6 months?

So see, raw material prices are actually -- eventually get passed through. But here one thing I would like to highlight, last 6 months, there is a big anomaly which has happened between chrome ore and ferrochrome. So ferrochrome prices have not increased to the extent that chrome ore prices have increased. Chrome ore prices have jumped up more by more than 30%, while the ferrochrome prices have just jumped up 4%, 5%. So there was obviously a delay in the pass back to the consumer because that's based on the ferrochrome prices. So margins from raw material perspective, I think to that extent that pressure remains. But I think the large question remains, what Abhyuday covered in his opening remarks, is the Chinese imports, which actually keep distorting the pricing ecosystem. So considering all this, we have...

Despite that, we are not changing our guidance. So it will be, even to the end of this year, around, you can say INR 20,000 per tonne.

Right. And just one more...

[Operator Instructions] We take the next question from the line of Ritesh Shah from Investec.

I have four questions, if allowed. Sir, first is Tsingshan JV, what is the progress and the time lines? Second is Rathi Steels, the investment has already been done. Are we looking to up the capacity over here? What's the incremental CapEx and time lines? So first is Tsingshan second is Rathi. Third is JUSL. This is specifically for Mr. Mantri. There is a pretty strong cash flow at EBITDA level over here, but we do not see the decline in debt. It's only INR 20 crores. So I just wanted to understand the cash flow bridge? And again, specific to JUSL, how are we looking at the volume tonnages for 3.2 million tonnes. That's something that you have commissioned? And lastly, for Mr. Jindal, if you can detail out on the capital allocation framework, the three buckets? And congratulations for putting this framework out.

So first two, in terms of our investment in Indonesia with Tsingshan is on track. We expect the operations to start by Q1 of FY '25. So those are on track and it is closely being tracked. Our senior team is right now in Indonesia. So I'll have a real report by next week. But everything, whatever I've spoken to them when they were there, everything seems to be on track. Secondly, for our Rathi, we expect operations to start by December. After our investment of around INR 206 crores, we have invested another INR 100 crores more to stabilize, ramp-up, improve the plant efficiency equipment. So that will all be completed by December, but if your question was, are we further enhancing our capacity in Rathi, not as of now. After this, we would like to see how the unit performs. It's our first entry into long products, so are we meeting our numbers, our target market, and how the market performs. Only after that, we can enhance. There is capacity available to enhance -- I mean, space available to enhance there, but that will only be taken once we really get into it.

On your question of JUSL strong cash flow, you are right. So basically, JUSL earned -- or over close to INR 400 crores EBITDA in H1. And there was a strong cash generation after paying the interest of around INR 100 crores and the CapEx numbers and all the things. So as on 30th September, as you know, it's a job work model. So there was a receivable which got built up from JSL, because JSL -- receivables of JUSL were not paid. And therefore, there was a debtor outstanding in JUSL book. With that cash, idea was that -- because JUSL debt is actually a long-term debt of 17 years. And recently, their rating has been upgraded to AA-. And consecutively, you will see in coming quarter that we have got a rate reduction -- considerable rate reduction in JUSL now. So it's a long-term, low interest rate debt. Therefore, we wanted to upstream the cash. And I would be happy to say that on 7th October, post the quarter, these receivables were then knocked off and there was a dividend of INR 200 crores, which was paid by JUSL to JSL. So that cash has come to JSL. So basically, that cash was anyway lying as a payable in JSL book, but then formally when JUSL announced the INR 200 crores dividend, which is completely received by JSL and to that extent that their debtors have also come down. So the cash has been upstreamed to JSL. And this will also not be taxable in JSL hand, because JSL is also consecutively paying the dividend. So there would not be any taxability. So it's a more efficient upstreaming of the cash from the cash generating subsidiary.

This is very helpful. Sir, just to understand, the numbers that you gave for debt reduction, INR 800 crores to INR 600 crores, is that gap because of this or something else, upstreaming INR 200 crores?

No, it's not only INR 200 crores. There was also a working capital optimization due to -- partly due to some of the raw material prices have also come down. So we actually have freed up almost INR 500 crores to INR 600 crores cash in the system. And that has helped us to reduce the debt further. If you recall, last time we actually guided that the debt will increase and will end up the year by almost INR 5,400 crores. Now with this type of working capital efficiency, I think we can -- and we are revising our guidance to the improvement side. And with all larger CapEx have already been met and it's on track, so maybe around INR 4,700 crores is what the closing number looks like at this stage.

Just last question for Mr. Jindal. Sir, if you could just detail on the capital allocation framework. I think it's a pretty strong move by the company. And secondly, we are evaluating the Indonesian assets, the mill which we are there. We have a loss-making entity called Iber. I presume it's the European asset. How strategic is this, and would we look to evaluate it? Or it continues to run as is?

I'll take the Iber question first. So Iber has just been a temporary phenomenon. Since the European market has gone down after the war and everything that started, that has been the negative situation. Actually, that has created in Iber. Otherwise, we are very bullish and it has done very well. If you look at the history of Iber, it has always performed well and been in profit. It is only the last 1.5 years where we've got some issues there and the market has just not taken off. Even though now it has. Now we see already our inventory levels are down there. We are again starting to send some more material to our Iber facility. The minute Europe picks up, definitely, Iber will do very well. So Iber is just a very temporary phenomenon. It is not the similar situation like Indonesia. Indonesia, even in future, we feel that the performance would not be very strong. That's why we've taken this call for Indonesia, but Iber, we're still very confident that the minute market turns around, Iber will turn around also. And this capital allocation, basically, in terms of our future expansion plans, I would still like till next quarter before I announce that, because a lot of new investments we have made that you know, Rathi, our expansion, Indonesia. So we're working on our plans. We are seeing how export market will again take off. Then by next quarter, we can announce further capital allocation.

The next question is from the line of Pratik Singhania from SageOne Investment.

With respect to this slab procurement, importing from outside and then doing the entire process, what is the strategy? Do you want to first build a market and then do the utilization level of our capacities that we have built up? Any like detailed light on this?

Pratik, slab you should see as a raw material for us. We are looking at it. -- we can either move to a slab, we can bring the slab in, or we can bring scrap and other raw materials in. So depending on what is the price or what is the kind of efficiency or improvement we're getting, that is the only time we are going to bring in the slabs. So it is not something that it is required or it is a must, it is a raw material. We see good benefit coming out of it. That is why we're continuing it. I hope that is your question that you're asking, or what is your specific question on this?

So my question was whether we are first trying to develop the market before we do the entire capacity expansion, which we are trying to be in FY '25, the ramp up?

No, there's nothing like that. The market is already there. We're market-wise growing at 7%, 8%. So it's nothing to do with the market. It is more from a margin and raw material kind of benefit. That is why we're doing it. Nothing to do with market.

And with JUSL, since the new line has been operationalized, now most of the production is happening in the new line, or we are still doing partial mix of...

It is the same. For JUSL, it was capacity enhancement. We were at 1.6. And by adding a reheating furnace and a down coiler, the capacity has gone to 3.2. So it is the same line. There's no new line that has been added.

Right. And with respect to this Chinese import, like obviously we know the trends which company has because of which you are maintaining the EBITDA margins. But a couple of points or 2, 3 points if you can highlight specifically giving you this confidence of maintaining the EBITDA margins despite this Chinese import increasing Y-o-Y?

See, so one thing that is very important to understand is that where China is hitting us is in the lowest -- I mean, it is from volume-wise also it is very low for us, and from margin-wise, it is also very low for us. So it actually impacts more on sentiments than anything else. And because they are not able to compete with us in the high-end sectors, in your auto, in your white goods, railway, lift, elevator, all these areas is not where China is dumping and impacting us, it is more in the lower, hollowware, utensils, pipe and tube. These are the kind of areas where they're impacting. So that is why it is our margin which is not going above 20 is more to the factor of exports, I can say. China, definitely, if imports are regulated, that would also help growing the market and our market share, but margins, I say it is more because exports are subdued right now. That is why margins are around 19.5% to 20%.

Right. So that was my subsequent question that are we seeing any green shoots in the European side with respect to exports?

Not immediately, but we expect from January onwards, from our market research and our customer discussions, from January onwards to pick up. Already restocking has started, which was very slow earlier, which is why in my previous answer I was saying that even through our Iber subsidiary unit, that gives us a very clear direction how the market is performing. So already because sales have picked up there, and we are sending more material to our subsidiary there, market has already started improving. January onwards, it should do better.

The next question is from the line of Mudit Bhandari from IIFL Securities.

Yes. So regarding JUSL, can you tell how much is the volume in terms of captive for JSL and for third party? And in terms of EBITDA also, how much is bifurcated for JSL and for third party? And also, going forward, will the percentage remain the same?

Mudit, the internal job work done by the JUSL in this quarter for JSL is about 428,850 tonnes. And outside sale is basically near about 1,900 tonnes.

Okay. And so...

It's mainly for internal consumption rather than external job working.

And we will continue on this model only even after 3.2 expansion?

Yes, absolutely.

Okay. Got it. And regarding standalone CapEx, so can you tell what is the remaining CapEx? Apart from NPI Indonesia and other acquisitions, what is the remaining standalone CapEx that we are to do?

See, the total CapEx, including JUSL, for this year is around INR 3,200 crores to INR 3,300 crores, of which INR 2,000 crores have already been spent, so remaining is around close to INR 1,200 crores to INR 1,300 crores.

Yes. So I'm just asking, can you just bifurcate it, how much -- for which line item it is pending?

So it's pending for, say, some of the NPI facility investment that will go, then there are some normal CapEx is also pending, which are there. Rathi CapEx also, part is pending. The Renew Power Equity, that's also pending. So it's across -- but broadly, strategically, the CapEx number which is outstanding across all these is around INR 1,200 crores, INR 1,300 crores.

[Operator Instructions] The next question is from the line of Ritwik Sheth from One Up Financial.

Sir, a clarification. In the starting of the call, you mentioned about capital allocation and talking about some CapEx plans after the next quarter. So is this regarding to some specific CapEx? Or general plan for FY '25, '26?

No, this is basically for our further expansion and increasing our stainless steel capacity that we are working on, which next quarter is when we'll be ready to announce.

Okay. Okay. Great. Okay. And sir, a couple of questions. Firstly, on the Indonesian unit, what is the current capital employed in this subsidiary?

It's around INR 325 crores to plus -- around INR 331 crores actually.

Okay. Okay. So this could be released and upstream to us. Would that be a fair assumption, or there would be some loss on this?

It is early to say. So we are exploring all the options how to do that. Some of the equipment are in very good condition. We have an option to bring it back into India. The land over there is also -- because it's strategically located in the export zone. And Indonesia, because they are becoming a key manufacturing hub, the prices have increased. So with all this -- but it is early to say. That's why we have taken enabling resolution. We are now working on exploring what can maximize the value for us and accordingly we will work out the final plan.

Sure. And what was the loss in the current quarter or the first half from this subsidiary?

The flat loss in this quarter was INR 28 crores.

Okay. Okay. And one more question on the subsidiaries only. Is it possible to give the split between the subsidiaries, including JUSL, the domestic subsidiaries and the international subsidiaries for Q2 and H1?

Yes, we can give you. Maybe we can -- there are too many numbers because Q2 and H1, and maybe I will ask Shreya to send you the numbers.

[Operator Instructions] The next question is from the line of Kunal Kothari from Centrum Broking.

So I would like to know about the CapEx plan for FY '25 and '26. So as we will be completing most of our CapEx plan in FY '24, what is there to see -- what will be the, first of all, sustainable CapEx for the entire consolidated capacity? And what has been planned for rest of the CapEx in FY '25 and '26?

See, FY '26, Kunal, as just now that we are working on the strategy, and I think we'll see that how we ramp it up maybe by next quarter, we'll be able to tell better that how we'll take our next phase of CapEx. Now FY '25 will be, based on the current announced CapEx, there would be some CapEx remaining of this like some of the NPI payment depending on when they complete the project, also some of the spillover CapEx. So it may not be very high CapEx based on the current announcement. Normal maintenance, sustenance CapEx at a group level, may be including JUSL, Rathi, a bit early, but I think our sense is that because what we were running at current levels, maintenance, sustenance CapEx will be close to around INR 500 crores to INR 600 crores on an average going forward. Because Rathi capacity could also take initially -- so like not too much, it will be required into JUSL as such, but I think between Rathi and if there are some upgradations, those are actually always ongoing projects.

[Operator Instructions] The next question is from Pratim Roy from B&K Securities.

Sir, I have one question that Indonesian investment on [indiscernible]. So what kind of return one can expect in the near term, if you can throw some light on that part?

NPI payback, once it starts, is expected to be around 3 to 4 years, because depending on obviously the nickel prices in the spread, so I think once it starts, it will take 3 to 4 -- we are expecting the payback in 3 to 4 years' time.

So any IRR you're expecting, any particular number?

It's, if you see...

25% -- 20% to 25%.

And our capital allocation policy, all projects we take at least 15% plus IRR. So surely 4 years' CapEx will be higher than this.

So 25% you can say, right?

Yes.

20% to 25% IRR.

[Operator Instructions] Next question is from Ritesh Shah from Investec.

Sir, what sort of cash flows do we expect from Rathi? You indicated that we will have the operations running in December, I presume that's after 2 months. And the capacity over there was around 162 KT. So what sort of EBITDA profile are we looking at over here? How do we approach the market? That is one. And just a second question on Tsingshan, you also indicated that it's pretty much on stream. Given even if you factor the payback of, say, 4 years, 5 years, then are we looking at around INR 250 crores, INR 300 crores of incremental contribution from this particular asset as well?

So in terms of Rathi, it's still a little early. And the way that we are planning is that right now, when we start, it will be a little low margin, because it is a new entry, long product for us, long product rebar, wire rod is totally new for our company. So we want to really enter with the low-margin, low-quality kind of area. So it will not be -- it will be around, I would say, between INR 8,000 to INR 12,000 per tonne. And then gradually, as we stabilize, as our confidence in the market, in the technology, in the product picks up, then our strategy is to move to those higher variants, higher margin rates. So it's a journey, it's a transition. It is still a little too early to give exact numbers, but this is the larger plan. And your second question was on...

On NPI, so Ritesh, you are right. If you take, say, $157 million investment and say 4 years, so close to $39 to $40 million could accrue every year, so INR 250 crores, INR 300 crores.

Sure. And lastly, are we looking at any inorganic opportunities, that is one. And earlier we had indicated that we were open to scouting for nickel mines, but based on the capital allocation framework what we have indicated is 15% IRR. Will we still be open to looking at particular mine or our focus will be on more downstream assets?

We are open to all options, Ritesh. I would not like to say that it's only downstream or upstream. Depending on following a capital allocation framework, if either downstream or upstream fits into it, we will go for that. Raw material security is always something that is a good thing to have for companies of our size. So there is nothing immediately on the cards in terms of any mine or any inorganic opportunity. But now we are keeping our eyes, ears, everything open and anything that fits into our capital allocation framework, which we have also posted in our website and on our investor presentation, we would like to follow through that only.

So whatever NCLT, we are keeping an eye open that on some of these downstream facilities which keep coming in NCLT framework, we continue to evaluate actively on those.

The next question is from the line of Ashish Kejriwal from Nuvama Wealth Management.

Two questions from my side. One, if I'm looking at the cash position, we see that there was some INR 1,300 crores, which was payment against noncurrent investment. I understand that this could be because of Indonesia project as well as what we paid to JUSL. But is it possible to break it down because JUSL, I think we need to pay around INR 960 crores, and INR 600 crores we have paid for Indonesia project. So it should be something INR 1,550 crore versus cash flow suggests INR 1,300 crore. So is there any other line item where we have put this INR 250 crores, or where it is?

So all this is in this line item because it goes into the tranches. So both of the investments are in this line item only, Ashish. INR 1,300 crores includes both tranches for JUSL as well as the tranche for NPI.

So is it safe to assume that INR 250 crores is yet to be paid in one of the items. That cash flow needs to be delivered later on?

Yes, I told you that out of INR 3,200 crores, only INR 2,000 crores has been consummated. Balance INR 1,200 crore will come into the tranche for NPI.

No, no, no. My question was because I think INR 960 crores we have paid for JUSL acquisition or still needs to pay?

Yes. So INR 958 crores has been fully paid for JUSL.

Okay. So INR 960 crores has been paid. And then the remaining, out of INR 1,300 crores, it comes to be roughly you can say around INR 950 crores?

Yes, I think you can...

No, my question was that in our notes to account, we have mentioned that we have paid something like INR 600 crores on Indonesia project also. That's what I was looking at. That's not matching.

INR 600 crores, no I think...

INR 527 crores we have paid, and then INR 60 crores -- INR 80 crores further investment is there.

Yes. So around close to INR 500 crores.

Well, I will check with Shreya then. Second question was, in terms of further expansion, obviously, we will get a more sense on the next quarter. But whatever expansion we are going to do, is it safe to say that, that will take at least 1.5 to 2 years from the start date, which means that by FY '25, we will commission all our existing capacity, and maybe FY '26 could be a year where we can take a pause, and then '27 again, growth will happen?

Absolutely. I think, Ashish, at a broader level, what you're saying is correct.

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

Sir, I just wanted to understand when we give an EBITDA per tonne guidance of INR 19,000 to INR 21,000, now we are giving it including JUSL or it's still excluding JUSL?

It's excluding JUSL. Only for standalone JSL.

So with JUSL, it could be INR 3,000 to INR 4,000 higher per tonne basis. Is that the correct assumption?

Yes, that's correct.

With JUSL, the EBITDA per tonne at consol basis will be INR 22,000 to INR 24,000 per tonne.

Understood. And sir, my second question pertains to -- I wanted your thought process on the national stainless steel policy. If you could give us some insight into that, how it is going to help us, it would be really nice.

See, the basic idea is that steel and stainless steel always kind of ends up getting clubbed together. So no matter -- even though certain specific policies are meant for steel, stainless steel invariably gets added, and then we get the impact. So like one example to share that is the export duty. When export duty last year was levied on steel, stainless steel, and after multiple rounds of discussion with the ministry, with everybody, under the table, if I can say, they admitted that stainless export duty should have not been levied. But because of the kind of understanding, because there is no separate policy, separate focus on stainless steel, it ends up getting clubbed. So another example I can give is that a lot of questions I started getting last year, the iron ore [Foreign Language]. That's why everything went off-sync and off-track. So then I had to explain to everybody that as a stainless steel producer, we don't consume a single kg of iron ore. So that impact is more on steel players rather than stainless steel players. So having a policy on its own because the kind of applications, the kind of raw materials, the kind of quality standard that stainless steel has is totally different from steel and the kind of sectors that are coming up, like your desalination plant, ethanol plant, LNG terminals, pharma sector is picking up a lot, all of this requires stainless steel to be consumed more and more. So with the policy coming up, it will only help in enhancing the market, enhancing the awareness of stainless steel, and giving us our own kind of footing rather than getting clubbed with steel industry.

Understood, sir. So basically, we could get some delinking from the steel industry policies in terms of export involvement?

That is the basic idea. Delink from steel industry is the broader idea.

Sir, just last question, if I may understand. If I just deduct the JUSL EBITDA from our consolidated, then our EBITDA per tonne seems to be somewhere around INR 19,000. It is a kind of a INR 3800 per ton dip on a sequential basis. So is this because of the inventory losses or the product mix which has played into?

See, this is mainly because of export market. Export is, I mean, an important market for us, and we supply mainly to European and U.S. market, which has very good margins. That being subdued in this quarter has led to a little dip in our EBITDA per tonne. Otherwise, I don't think so we would have -- we would have done better only.

Okay. Any sign of uptick which you have seen, or we have to wait couple of quarters for that?

It has started a little bit, but we expect major uptick to happen from January onwards. They will all go on their winter vacation also. So once they're back, then we should see some uptick starting.

[Operator Instructions] The next question is from the line of Amit Dixit from ICICI Securities.

I have a couple of questions. One is on the product mix. So what was the product mix between 200, 300 and 400 in this quarter? And did the reduced level of exports actually alter this product mix in any way?

So Amit, I'll take your question on product mix. So I said in an order of 200, 300 and 400 series, it was 36%, 44% and 20% for Q2 FY '24.

Okay. And since our export level was reduced, had we maintained a similar level of export, so would this product mix have been any different? Or is it the normalized product mix that you're looking at?

So 400 would have been a little bit higher if export was there -- 400 series would have been a little bit higher and 200 would have been a little bit lower, I would say. 300, you can say, remains around 45% to 50%.

Okay. The second bit is on actually the capacity side. So now we have 3.2 HSM commissioned at JUSL. Is there a -- and since the domestic market looks so buoyant, particularly with the railway orders and all coming in. So is there any thought process to utilize this capacity to maximum by maybe rolling stainless steel slab or maybe using it for custom rolling of carbon steel, because at the end of the day, we would like to split this asset. Is it the right assumption?

See, that is definitely the target. Both areas is what we are exploring. First reference would be stainless steel and otherwise carbon steel. But absolutely, we have to utilize all our assets to 100% capacity utilization. So these are, like you said, on the cards.

And the number that you gave for volume, 20%, that includes or excludes that option?

That excludes that option.

Okay. So that is over and above...

That is over and above....

Yes. The final question from my side. We have seen that regulatory involvement becoming more conducive for stainless steel, particularly because of some of the investigations that have been instituted recently. Now Chinese imports have gone up 55%. Though it doesn't impact us directly in many of the segments, but as industry leader, have we approached the government regarding this influx? And can you give some color on what actions are being g contemplated or what investigations they are working on?

Constant dialogue is on at all ministry levels, from Steel Ministry, which is definitely our parent ministry, Commerce Ministry, and Finance Ministry. So continuous dialogues are on, and we are really trying to showcase to the government that more than Jindal Stainless as an organization, it is the MSME sector that is suffering. It is that their capacity utilization is less than 50%. How can a country like India not be dependent on manufacturing? How can we only be dependent on trade? So all these kind of dialogues are on. We have taken the support and help of media also to showcase that how much is the trade affected between India and China. How much is -- and not only to these levels, we have also approached, through our association, into the PMO. So a lot of dialogues are on, but I cannot say with a lot of confidence whether I see something happening in our favor. So it is a tough situation. You know that government is not supporting and listening to the industry despite severe dumping happening from the last 3 to 4 years. So dialogue is on. We are not going to leave this at all. It is something that we're taking up at all levels, like I mentioned already. The fight will be on. We are not going to leave it, but nothing -- no change and no new information has come out. I think also being an election year, they might take it up after only. But I can also add that when we are planning, we are taking this as a status quo. We are not taking duty coming in as any reason to reduce or anything our numbers at all. So we take this as given that no duty is there and we perform without it.

That was the last question in queue. I would now like to hand the conference back to Mr. Amit Dixit for closing comments.

So I would like to thank everyone for attending the call and fruitful discussion that we had this afternoon. I would also like to thank the management for sparing their time and elaborate explanation. I would like to hand over the call to Mr. Jindal now for any closing comments.

Thank you, Amit. And let me thank everyone else also for attending this call. I would like to reiterate that it is the strong economic activities that are pulling up core sector demand across segments. I would also like to highlight, as the national stainless policy shapes up, we are confident that the per capita consumption of stainless steel in India will increase from the current 2.8 kg in the coming years. I hope we have been able to answer all your questions in a satisfactory manner. Should you need any further clarifications or would you like to know more about the company, please feel free to contact our Investor Relations team. Thank you all for attending.

Thank you very much. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.