Jindal Stainless Limited (JSL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Jindal Stainless Limited Q4 FY '25 Earnings Conference Call, hosted by JM Financial Institutional Securities Limited. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashutosh Somani from JM Financial Institutional Securities Limited. Thank you, and over to you, sir.

Thanks, operator, and welcome, everyone, to the call. I'll first thank Jindal Stainless for giving JM Financial the opportunity to host today's call. Without much ado, I'll hand over the call to Shreya Sharma, Head, Investor Relations, Jindal Stainless, to introduce the management. Over to you, Shreya.

Thank you, Ashutosh. Good evening, everyone, and a warm welcome on Q4 FY '25 and full-year earnings call. From the management team, we have with us Mr. Abhyuday Jindal, Managing Director; and Mr. Tarun Khulbe, CEO and Whole-Time Director. We have shared our Q4 FY '25 earnings presentation with the stock exchanges, which is also available on our company's website, and today's call discussion will be on the same lines. 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 our Managing Director, Mr. Abhyuday Jindal. Over to you, sir.

Thank you. Thank you, Shreya, and good evening to everyone, and welcome to the Q4 FY '25 earnings call. I would first like to discuss the key business highlights for the quarter ending March 2025, following which Mr. Khulbe will take you through our operational and financial performance. So as we reflect on the economic landscape, India continues to demonstrate strong resilience and growth momentum. As you know, IMF has recently projected India's GDP growth at 6.2% for 2025. This positive outlook provides a significant advantage to the stainless steel sector, which is closely correlated with GDP growth. And building on this momentum, our sales volume in FY '25 grew by 9% on a year-on-year basis, supported mainly by strong domestic demand driven by railway sector, automotive industry, infra and strategic projects in oil and gas, power and other industrial sectors. We are also witnessing robust demand in the pipe and tube segment with our branding initiative of Jindal Saathi playing a pivotal role in driving growth and improving our market share. On the global front, though the uncertainties prevail, the outlook remains directionally positive as now there is a level playing field to export in the U.S. market with better parity on the duty front, which is expected to support our competitive positioning. Additionally, we are seeing signs of recovery across Europe. While Germany is currently experiencing some challenges, we expect a positive turnaround supported by fiscal stimulus measures. We are also continually exploring new markets and actively expanding our presence in key regions such as Japan, South Korea and the Middle East to name a few. I'm also happy to share that we have acquired a 9.62% stake in M1xchange. This is India's leading RBI license trade platform. This investment is expected to create strong synergies by digitizing the supply chain ecosystem and reducing the working capital cycle, paving the way for cheaper credit access for our entire global value chain, including the deep tier channel. On the ESG front, I'm happy to share that we now host the largest captive solar plant in the state of Odisha with a cumulative capacity of over 30 megawatts. This initiative will reduce our CO2 emissions by 32,000 metric tons per annum, substantially lowering the facility's reliance on conventional grid electricity. We have also signed an 11-megawatt long-term power purchase agreement for our subsidiary, JSL Super Steel, with Sunsure Energy to achieve our net zero targets. On a group level, currently, 11% of our group's power consumption is met through renewable sources. With the commissioning of all our announced renewable projects, this share is expected to rise significantly to around 30% to 35%, marking a major step forward in our sustainable journey. With this, I would like to hand over to Mr. Khulbe to discuss our operational and financial performance. Thank you.

Hey, everyone. Thank you, Abhyuday. Good day, everyone. Welcome to the call. I would like to begin by providing a detailed overview of our operational and financial performance, starting with the quarterly results followed by the full-year highlights. We delivered record sales on a sequential basis to 6,42,841 metric tons in Q4, an increase of 13% year-on-year and 9% on quarter-on-quarter on the back of robust domestic demand. Our Q4 EBITDA stood at INR 1,061 crores affected by unfavorable global economic conditions leading to stainless steel pricing pressure and negative inventory valuation. In FY '25, we delivered our highest ever sales volume, an increase of 9% on a year-on-year basis despite our exports falling 24% during the period, which is showcasing robustness in domestic demand for stainless steel. Our EBITDA stood at INR 4,667 crores. On the balance sheet side, despite FY '25 being the year of significant investment with around INR 4,570 crores spent on the acquisition and CapEx, we successfully maintained our net debt at INR 4,005 crores in line with March '24. This reflects our continued focus on working capital optimization and preserving a strong balance sheet. We believe this position us well in navigating the current global macroeconomic challenges. On the leverage side, we are comfortably placed with net debt to EBITDA below 1 at 0.86. I would like to inform you that as part of JCL recent buyback offer of 21.13% for INR 158.4 crores, along with the earlier stake sale of 4.87% in 2024, JSL has now fully exited its 26% holding in JCL. This complete divestment has yielded a total consideration of INR 194.89 crores. I would like to inform that the Board of Directors has approved a final dividend payment of INR 2 for Q4 FY '25, taking total dividend payment for FY '25 to INR 3, which is 15% per equity share with a face value of INR 2 each. Furthermore, to optimize cash flows at the group level during quarter 4 FY '25, JUSL declared a dividend of INR 245 crores to JSL. This brings my remarks to a close. I would now like to hand it over to the moderator to begin the question-answer session.

The first question is from the line of Amit Dixit from ICICI Securities.

Congratulations for a good performance under very challenging circumstances. So a couple of questions. The first one is on EBITDA per ton. Now in Q4, we saw EBITDA per ton dropping below INR 14,000 after quite a few quarters, actually quite many quarters. So just wanted to understand the profitability trajectory from here because export sales don't seem to be going up as a percentage of overall and other conditions possibly remain similar. So how do we see EBITDA per ton trajectory going from here? And what would be the guidance for FY '26? That is my first question.

Thank you, Amit. I'll take the first question. So we're already seeing some improvement in our EBITDA per ton margin in Q1 of FY '26. And overall, now we're giving a consolidated guidance for the entire year between INR 19,000 to INR 21,000 EBITDA per ton. And definitely, like you're saying, we are seeing some improvement signs in export. So even though we are announcing a 10% export volume, this is at a higher base. So compared to last financial year, actually, we are hopeful that we should get at least a 25% to 30% growth in our export.

Okay. That's great. The second one is essentially recently, we signed an MOU with the government of Maharashtra for a considerable investment over here. Now we do have spare land at Chromeni as well. So just wanted to understand, are we still evaluating both the options or we plan to expand it both these locations? I mean how is it going to be in future?

Mr. Khulbe, would you like to take this up and I'll add on?

Sure, sir. So actually, we are constantly looking at our future growth because our land availability at both the plants gradually is coming to the complete utilization. So we are looking for a long-term growth. And definitely, we have evaluated all this. But eventually, we have found that Maharashtra is one of our major market and also looking at the kind of support and the conditions, which we believe are quite favorable to the industry, we feel that for our next larger growth plant, Maharashtra is something what we have zeroed on. Chromeni land we will keep on evaluating for the other possibilities as and when they arrive, and then we will make our decision accordingly.

Yes, absolutely. So like Mr. Khulbe said, we definitely are evaluating both states in absolute detail. But as of now, Maharashtra is a state that is giving us more support, more incentives our customer base is the biggest. So we'll be very close to the customer. So from all sets and purposes, Maharashtra is looking like the one that we're going to take forward. But like we mentioned, this is a little long-term project for us, and we will be taking it in that manner only.

So the ultimate capacity of this plant that would be set up in Maharashtra, would it be similar to Jajpur? Is it fair to assume that?

It will be bigger. It will be -- we're looking at close to almost 4 million tons. But over a period of 15 years, if you say.

Okay. So 4 million tons over a period of 15 years?

Yes.

We take the next question from the line of Rajesh Majumdar from B&K Securities.

So sir, just on the EBITDA per ton, if I were to ask you a question that this figure of INR 19,000 to INR 21,000 is a standalone figure, right, not including JUSL [inaudible].

Consolidated [taking] JUSL, Chromeni, everything combined, now we would like to give a consolidated figure.

Okay. So it's a consolidated figure. Okay. And sir, how sure are we of this? Because earlier, we had guided a range of 18,000 to 20,000 and more or less we are following that number for the last 3 quarters and then suddenly, we dropped to 13,800. So would you say 4Q was a free quarter? And if so, for what reason specifically, if you could give us some kind of clarity on that?

So again, Q4 definitely was one of the lowest EBITDA per ton that we have witnessed in the last multiple quarters actually. And there were 2, 3 factors to that. One thing is that we saw a dip in nickel prices. So generally, when that happens, there are always some ripple effects and it takes time to pass that on to the customer, which is an inventory kind of hit we need to take. Secondly, that was the same time when this whole trade uncertainty started with Mr. Trump taking over. And so a lot of our bookings exports were put under pressure or on hold. So we had to push more volumes into the domestic market. And always, like we mentioned that if we can definitely cater more-and-more to the domestic market and we can take a bigger share, but then we'll have to drop our margin a little bit. So we did give a substantial volume growth in Q4. It is the higher sales that we have done, but that put a little pressure on our margins. And like we said already in Q1, we are seeing the recovery happen. We're seeing our export bookings also picking up, better margins picking up, which is why we are quite confident of this 19% to 21% for this financial year. Mr. Khulbe, anything to add to this?

Yes. I'm just adding to that, absolutely, while you have totally answered it. So just to add that as we could have seen that even from Q3 onwards, the nickel in various forms, the prices have started falling. And normally, while this nickel volatility, we are able to pass on to the customers, but with some lag is what it happened. So definitely, the uncertainty of those various policies and then coupled with all these pricing pressure, all that definitely puts pressure on our pricing. At the same time, we did our best ever quarterly sales, 13% on a sequential quarter basis, we made highest ever sales. So I think, these factors together led to this lower EBITDA per ton. But yes, here onwards, because we believe that the way we see the thing, the dust has settled down globally also, the export market also, we can see, in fact, now we are finding ourselves in a better position because with the clarity of Trump tariff so-called, we are finding that as a country, we are now in a better position. Earlier, our competing countries like South Korea, Japan, EU, they were not having that 25% of tariff, which India was having. But now all of us are having the same tariff and that also is helping us in increasing our volumes and gaining a better share in the American market as well as even in the Europe, we see some better traction. So a couple all these things put together, we believe that our margin should be better than the Q4 going forward. And whatever the guidance we are providing, that is the basis of our confidence.

Right, sir. My second question is on your balance sheet. I think your debt levels are pretty low given the fact that you had substantial CapEx as well as payments towards investments last year. So my question is, is the investment in the Indonesian subsidiaries still pending? And if so, how much? And what is the CapEx left in India for this financial year?

So on this actually, on the higher levels, like for the net debt being lower, 2 major factors or 3 major factors, I'll say. One, yes, we had given the guidance that we'll be making a CapEx of INR 5,500 crores, which the actual number is INR 4,570 crores because there is some spillover. So that spillover will come in this year. That is one. Another factor is that INR 152 crores we also gained by selling the JCL -- by the divestment of JCL shares. And then we also released some working capital by some better management. So all these factors put together, we are able to reduce the net debt.

And on your second question, Rajesh, the Indonesian investment, I believe you're talking about the JV for SMS operations. So over here, half of the payment has already been released in this FY '25 financial year and the balance half what we expect to release in this FY '26, yes. So that is something which is going as per the plan and the project is also progressing as per the plan.

For FY '26 is going to be around INR 2,700 crores to INR 2,800 crores?

Including investments, right, including investments.

Yes, that includes investments, yes. So basically, the INR 5,500 crores, it includes both investments on account of acquisitions that we have done or we have announced in FY '25 and plus the CapEx, which was there, including the maintenance CapEx as well.

Right. And just a bookkeeping question. There's a loan received back from related parties of INR 1,070-odd crores. Is this from JCL or what is it?

No. Basically, this is something to do with the -- actually, we are unwinding the transaction that we have done with the Evergreat. So earlier, if you noticed in the beginning when we acquired the Chromeni, it was routed through Evergreat, so it is just the [binding] of transaction that we are doing in that space just for the better overall tax management.

We take the next question from the line of Parthiv from Anand Rathi.

Sir, my first question is pertaining to nickel. If you see over the last couple of quarters, right, and even if you see the global data, the nickel has been at a bit of oversupply globally, right? And even if you see at the warehouses, the inventory is still holding up at an elevated level compared to the other non-ferrous at the end of the day. So just wanted to know, what is your guidance, especially on the nickel pricing for the current expiry, if you can guide something because nickel has been one of the -- has been on radar and compared to its other non-ferrous actually?

Khulbe?

Okay, sir. So see, nickel definitely, as you said that supply and demand, yes, there is always particularly in the NPI form that situation is there. And definitely, it puts pressure on the nickel pricing and NPI pricing as well. But at the same time, predicting what prices it would go is a bit difficult because ultimately, it's a commodity. But what we see is that the kind of pricing the nickel is maintaining when it goes below this, our understanding is that it is bringing a lot of pressure on the NPI producers. And as we have seen many of the NPI producers have closed their plant because they could not sustain that pressure. The good thing is that in Indonesia, the efficiency or the cost of production of the nickel is one of the lowest. Our partners are also one of the most -- having one of the best efficiencies in the world. So we believe that we still are able to or rather I'll say that our cost will be the least affected would be there. But eventually, to predict the price is a difficult thing, but looks like to be bottom out kind of a thing. And here onwards, okay, there can remain some the fluctuation or the volatility, but let's see. Would you like to add something?

And if I can further add that always that the reason that we went to Indonesia for nickel pig iron was the main reason was raw material security. If you see globally now with all this protectionism happening with CBAM and ESG taking such a front, and we were always a scrap-dependent player. And we saw that certain countries have started banning scrap or protecting their materials. And being a 3 million ton player going to 4 versus then our expansion, we definitely needed some nickel security and Indonesia as a country has also started banning nickel ore export. So that is the main reason that we went to Indonesia.

Sir, my second question is pertaining to your 3 entities what you have acquired over the last couple of quarters that is Chromeni, Rabirun and Rathi? I believe, Chromeni has already started its operations. So just wanted to know what exactly is the capacity utilization and when you expect a complete ramp up. As far as Rabirun concern, I believe there were some issues. I think the production was not yet started, right? If I'm not wrong, right? So just wanted to get a clarity on it. And my last question, if I may squeeze is just pertaining to the ratio between 200, 300 and 400 for the current quarter?

Yes. So on Chromeni, what I can tell you is that when we took over this plant, this plant was closed for almost 4 years. But within 6 months of our taking over, we are able to start the plant. And within 3, 4 months of operation, we started from December onwards, we are already hitting it or running it or hitting the capacity utilization of say around 55% to 60% and we believe by the Q3, Q4 of this FY '26, I think we should be around 70%, 75% of capacity utilization. So that is on Chromeni. On Rabirun, strategically, we are using right now that plant more of value-added product. We have some polishing line there. So we are creating or we are producing value-added products. Yes, pipe and tubes, we are not producing over there. Strategically, I mean, that we have taken. So we are focusing more on producing the value-added products from there. Rathi, again, we are running now around 75% of capacity utilization we are able to run that plant also at that level. And in that plant, we are focusing and gradually increasing our stainless steel rebar production from there. And because this stainless steel rebar, gradually, we are finding particularly in coastal regions and all this acceptance and demand is there in the infra projects.

All right, sir. And if you can quickly get back on the 200, 300 and 400 series breakup for the quarter?

Yes, Parthiv, I'll say in the sequence of 200, 300 and 400 series. So for the quarter, it was 37%, 47% and 16%.

We will take the next question from the line of Ritesh Shah from Investec India.

Sir, I think you indicated INR 19,000 to INR 21,000 of consol level EBITDA per ton guidance. Is my reading right?

Yes.

Right. Sir, what would be the proportionate volume growth that we are looking at for FY '26? And if any color on '27 as well?

So we're quite comfortable of 9% to 10% volume growth for FY '26.

Okay. This is lower than what historically we have indicated on the guidance. Is it more to do with the macro? Or are there any other variables that we are looking that it plays out on any specific large orders that you would like to highlight?

No, it's more on the macro. And as more clarity comes in the global trade scenario, I think we can definitely come with a higher guidance, but I think 9% to 10%, we're quite comfortable. Mr. Khulbe, would you like to add something?

So sir, I think, at this stage, this is what the guidance we are providing.

Sure. And can you highlight CapEx guidance for '26 and '27 and if you could provide a broad split over there?

For FY '26, the CapEx guidance we are providing around INR 2,700 crores.

So Ritesh, there is no new CapEx which is added in this INR 2,700 crores. So what has happened in last FY '25, there are certain CapEx which are getting spilled over into FY '26. So those CapEx-plus what was already announced when we came up with a larger INR 5,700 crores plan. So put together both the amount, it is somewhere around INR 2,700 crores spend that we see for FY '26.

Sure. And would it be possible for you to detail the rationale behind the recent acquisitions, the smaller ones that we have done, specifically on the tech side?

Okay. I can take that. So this is actually a very interesting and a very, I would say, good step taken by us. The basic idea is to reduce our working capital burden by providing more credit to our customers, not directly, but through this platform. So that was the basic idea to get closer to the larger customers, larger supplier base also go directly, let's say, to the source of supply and provide credit to them, provide this facility to them so that we get some benefit in terms of pricing also, we are able to expand our reach. So we are quite bullish and quite excited about this acquisition actually. I mean, investment.

Sure. Just last follow-up. On working capital, what you indicated, possible to quantify what sort of advantage that we'll get out of it, over 2 years, 3 years? And secondly, on the reported numbers, payable days have also increased substantially. Is there any one-off over there? Or is this structurally a number that we should be looking at?

Shreya, can you take this one?

Is your question linked to the -- what is the advantage that we are going to get with this Mynd Solution acquisition?

Yes, that is one. And secondly, on the reported numbers, payable days have increased. Is there a one-off? Or is there something different which has happened this time around?

Yes, sure. So I'll take the first one first. So basically, with the acquisition of Mynd Solutions, this is going to support our working capital reduction in a way because as we are growing on the volume side, we are also targeting our customers, which are OEMs and most direct sales to the deeper market. So there it is going to support the overall working capital and whatever is the utilization rate today because it also goes into the vendor financing and the customer financing. So it is going to overall improve the working capital situation for the company at the group level. I hope that helps you understand.

And the increase in payable days from '24 to '25?

So there is also on the working capital side, internally, we are doing some changes for the better optimization of the working capital. So there are certain advanced payments that we used to do it to the vendors. Now we have moved it on to LC payment. So that is also one of the reasons for the increase in payable days that you see.

Sure. And FY '27 CapEx number? I'll just join back the queue after this.

So CapEx number for FY '27, it will also some part of it depend on how much is going to be spent from FY '26. And I think the more clarity when we get by mid of the financial year, so we will provide you the number for '27 as well.

We take the next question from the line of Ritwik Sheth from OneUp Financial.

Just a couple of questions. Sir, first of all, have we done any representation with the government for the high amount of imports on the stainless steel in the country? And would you like to comment on this?

No, absolutely. This dialogue is continuously on with the government. And even in our last call, I mentioned that the government is definitely receptive to the fact that globally, there is a lot of protectionism going on. India as a country is relatively open and growing. So there is definitely threat to injury. And one thing that we discussed and with our data and everything that safeguard was not the right step to pay for stainless steel. A, it is short term in nature and the data was not supporting a safeguard implementation. So now what we are working with the government is actually on antidumping duty for stainless steel, where according to them, we are quite confident that this can sail through. We are just currently, I would say, collecting the data, and we'll be applying for it within this month, hopefully.

Okay. And what would be a reasonable response time that you would expect? Because last call, you had mentioned that we are running behind the steel industry by a month, so?

That was when I mentioned that safeguard and then we went and had the discussion with GTR, which they then recommend after that, that the supply antidumping. So that's why I'm saying the data collection is being worked upon right now as we speak. So hopefully, within end of this month, we should apply.

Okay. And say, 3 months would be a reasonable time to get some response from the government?

That is then on the government, to be honest, but you can say maybe 3 to 6 months, definitely, we should get some duty. We'll definitely be pushing and making all efforts from our side.

Got it. And the second question is on the CapEx commissioning update for the Indonesia JV and the Jajpur downstream capacity. Is it on schedule to be completed by end of next year?

Yes. Indonesia SMS JV will definitely come up by mid of next year and also our downstream capacity also by end of -- Mr. Khulbe, mid of next year to end of next year?

Yes, sir, that is what we are targeting.

Yes.

Okay. Sir, just a hypothetical question. We have slightly reduced our EBITDA per ton range given the macro environment. But just in case this import -- the antidumping duty is levied on stainless steel, would the volume increase for us?

Volume and margin should increase for us.

We take the next question from the line of Tushar Chaudhari from Prabhudas Lilladher.

Sir, in this quarter, if I look at your numbers, is there any one-off in other expenses or any of the expenses? Why I'm asking is basically ferrochrome prices have also come off. Nickel and stainless steel were largely -- nickel has fallen on a quarter-on-quarter basis. But on a Y-o-Y basis, it is largely flattish. So why the decline in EBITDA per ton last year, we had given -- basically there was impact of negative inventory valuation also as well as impact of Red Sea event. So was there anything this quarter?

So like you mentioned quarter-on-quarter, there has been a dip in nickel prices. So that is why Q4 was a little dampened. Mr. Khulbe, you were saying something?

No, no, sir, I think in the initial questions also, we explained this that there was a pricing pressure for different reasons on stainless steel, and that is what pushed our...

If I repeat, one was on the nickel, like you mentioned already, quarter-on-quarter, there was a dip. And secondly, it is that because Mr. Trump had come in at the same time beginning January, February and made those announcements. So that put the global trade supply into a bit of a confusion, tailspin, everyone was waiting and watching what's going to happen. So despite that, we pushed volumes into the domestic market. And as always, when we push more-and-more into the domestic market, we have to enter into the low margin sectors because already the high margin, high-quality sectors, we already have a majority market share. So those are the 2 main factors that led to a drop in our EBITDA per ton margin, which already in Q1, we see that recovery.

Okay. And sir, I missed your first thing also. You said you were saying regarding exports. It should grow by 25% in FY '26. That's what.

Yes, over last year. Over last year's export volume.

Over FY '25. But then, so do you expect domestic to slow down because...

No, not at all, not at all. Again, it is from -- again, the idea is always to maximize EBITDA. So if export is giving us better margins, then I don't need to enter those low-margin sectors in the domestic market. You understand. So that's why we will give a little more capacity to export if we're getting better margins there. Domestic market in India is definitely the fastest-growing market, growing at 10% to 12%, which is exactly why we are planning our next round of expansion in Maharashtra.

So just to add, sir, Tushar, as Mr. Jindal said that we are definitely aiming at this export market. But at the same time, we are not ignoring the domestic one. And in the export, while we are aiming it, but at the same time, we are very much aware of the fact that globally, the situations also change and they are very dynamic in nature. So our objective remains this. But yes, but we are -- alternately, we are always prepared to move in the direction where the best value is available.

Understood. Sir, last, if I could squeeze in, this Maharashtra project, which you are talking about, can we expect first line to come in FY '31 or something?

It's a bit long short, but yes, normally, the greenfield projects in India in general, take 4 to 5 years gestation period is there. So your guess is probably the mine guess as well.

And now Chromeni, we are not going to expand anywhere, basically on the 400-acre land which we had that is on...

I think we have already stated that Chromeni land we have and we are constantly evaluating as for Maharashtra project, we have already explained and Chromeni project as and when we get any suitable facility plan or objective, we'll do over there. But at this stage, no. At this stage, Maharashtra for the larger project, Maharashtra is a place where we are working upon.

We take the next question from the line of Sumangal Nevatia from Kotak Securities.

I just missed a few details on the Maharashtra greenfield expansion project. Please excuse if it's already discussed. I just wanted to understand, by when are we looking to kind of take a final call or is it near term in the next 1 or 2 quarters, it's more like towards the end of FY '26? And also, I wanted to know what is the size in the first phase? And any ballpark thumb rule you can help us with as far as the investment amount is concerned for Phase 1?

Okay. Just to tell you that on the Maharashtra project, normally for these kind of projects, always the first step is to get an approval or get into an understanding with the government, which we have already done. We have signed an MOU. In a way, we have a project approval from the government that they are going to support us for this project. The next step goes is scouting for land, suitable land and all, which the process is on. And then we will start the project because in India, the land and acquisition of land also is a process which one has to go through. The second thing is that this project is going to come in phases. It is not that at one go, we are going to put all the facilities. In fact, all our plans are to put this project into the phases like 1 million tons-1 million tons at onetime. That's how we plan it. And I think so far as investments and those guidance is concerned, give us some more time once we start doing a bit detailing about the equipment and total facilities, which, of course, we have just rough working. But once we have more some detailing once we do, we will provide you that guidance as well.

Understood. And just one thing, I mean, whenever we finally decide to announce, will that be once we have the entire land in possession or as when the site is identified and there is some progress on land we will announce and gradually acquire the remaining part of the land?

Will come at the appropriate time. I mean this is what would be the more appropriate answer at this stage. We will come at the appropriate time and announce it.

We take the next question from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund.

Coming back to the margin drop in the Q4, you've seen the sharp drop in Q4 as well as the last Q4. In this connection, I just wanted to understand the sort of the raw material valuation policy that we use for valuing the inventory? And is there any policy which impacts -- the cumulative impact gets recognized in Q4?

Well, I think rather than saying it as a part of policy overall, it could be a coincidence probably which is how we should look at this. I mean because incidentally in both the years the movement of the raw material prices are a bit similar in nature. And that is why you are seeing the results similar in this. This is not something like we are creating any policy for Q4 specifically or anything of that sort.

As a company, we don't do any sort of hedging. So this is all back-to-back.

Right, sir. Second question was about our consol guidance of INR 19,000 to INR 21,000 per ton for FY '26. Are we assuming any benefit of the antidumping duty or irrespective of the antidumping duty will be comfortable to deliver...

As things stand right now, we are quite confident of achieving 9,021. If antidumping or any other macroeconomic factor benefits us, we should be able to come with a higher guidance.

I mean, in terms of nickel or other variable also will be pass because in the longer term debt really don't impact -- it's only the quarterly impact that create, but it's more or less pass through. So that should not have an impact.

Correct.

On to the Maharashtra, basically in terms of the process, the way you highlighted it would be first would be [inaudible], the second is basically the land. Third would be basically probably the environmental and other approval. So in terms of -- would you sort of give us a bit of a time line when this project when we can look at the zero debt and the effective activity toward the zero debt?

See, normally rather than just the steps what you have stated, they are absolutely correct that for any greenfield, the first step is the approval, then the land, then the environment clearance, which you get normally on the basis of the project, whatever you plan and then you start building up the plant. Normally, this in India, in general, for our size of greenfield plant, the time is in general, the gestation period is around 4 to 5 years. And that is what we are also estimating.

Sure. And in terms of the project CapEx size, you have previously said that the first phase could be a larger because we create the infrastructure for the entire facility and then the second and third where the costs are significantly lower. So in that sense, could you also give us a ballpark figure for the 4 million tons and how much percentage of that would be in the first phase?

We will come back with the correct details when the time is right. We are still in the planning phase. And all these details, we will share openly with all our stakeholders.

Next question is from the line of Ashish Kejriwal from Nuvama Institutional Equities.

A couple of questions. One, I think FY '25 is one year where we have already started our NPI project. So is it possible to share what kind of profitability we are generating over there or still it's a loss-making because it has not reached to the optimum level?

So on NPI, I think we have earlier also stated that we have started the project. It is ramping up. And in the next couple of quarters, we believe that we should be reaching to the capacity utilization of, say, 75% to 80%. But at the same time, so far as pricing is concerned, Ashish, yes, we all understand that there is a lot of volatility in the nickel. And what kind of profitability and all this also keeps on fluctuating because of this volatility. In the long run, while we are quite -- we believe that this is going to be a beneficial project. But at the same time, when we have invested, we also look at it as a strategic project, by which we get a raw material security. Because of this NPI investment, we are into one of the unique strong positions where we can use because as a stainless steel producer, we need nickel, so we can get nickel in the form of scrap. We can get nickel in the form of NPI. And also we can get nickel in the form of slabs in case we buy or in case we bring from our JV, which we are putting up in Indonesia. So for us, this is a part of our long-term strategy. And we believe that this strategy will help the organization in the longer run because globally, it's going to be a lot of uncertainty is expected in the longer run, whether it is scrap or NPI or the nickel availability because India is in any case demand for nickel.

Understood, sir. Sir, raw material security is fine. But when we are looking at the profitability, is it possible to even share that at what nickel price we can be breakeven?

Nickel price to the extent in a way, you can say that if it is LME, more than 14,500 to 15,000, then breakeven kind of a thing we can expect. But then again, as I told you, Ashish, this keeps on changing because on the ore, what kind of premium is going on, on the ore, what kind of royalties can change. There are a lot of different possibilities which are remaining and situation is a bit dynamic.

Understood, sir. Second question is at our Jajpur plant because if I remember correctly, this Jajpur plant initially was planned for 3.6 million tons at ultimate capacity. So my question is, is there any surplus land available at Jajpur where we can, in future, if we wish, we can expand capacity either full or some part of downstream expansion or that is almost over?

Downstream, definitely, we can expand Ashish in Jajpur, which is what we are doing next 2 years. But after that, it will be kind of full because you also need to leave 30% of green belt. So because of that factor, land is kind of getting fully utilized in Jajpur. But for downstream for certain balancing, there is definitely availability. Maybe to set up another 1 million tons of stainless steel, that availability in our guess.

Understood. And sir, lastly, when we are guiding for 19,000 to 21,000, obviously, we will have visibility for fourth quarter that now exports are recovering and whatever we have seen in the fourth quarter, that could be one-off because of inventory valuation effect and all. So do we think that the guidance, which 19,000 to 21,000 we are seeing, it is visible in first quarter itself? Or will it take something else which can extend it further?

Already it is visible in Q1.

Okay. So 19,000 is possible in Q1. And then any other things which can lead us to take it to closer to our upper end of the guidance?

Yes, definitely, like if some antidumping duty comes in or further clarity in Trump tariffs and everything comes in, then we will come with a higher guidance, but maybe after a few more months.

We take the last question from the line of Ritesh Shah from Investec.

A quick one. Sir, would you like to lay out stand-alone EBITDA per ton guidance as well?

Just to give that comfort in terms of we would prefer to give a consolidated. Otherwise, there was always some confusion in the market. So consol will be better. But anything, Shreya, Mr. Khulbe, you would like to add to this?

Yes. Sir, the reason I ask is basically we usually end up looking at the volumes that the company gives. But incrementally, there will be volumes from Chromeni. Basically, we understand that the volumes will be rolled into CR. Likewise, it would happen for the downstream assets. So basically, it could just confuse investors and analysts. So that's the specific reason why I ask for stand-alone because the base denominator will get larger and hence, optically the number will look less on EBITDA per ton. That's why specifically ask for standalone.

So basically, Ritesh, if you notice many of our subsidiaries like Chromeni, NPI, they have just started -- an associate like NPI, they have just started the operation. So they are in a very nascent stage as of now. So that's the reason why we have also decided to have for FY '26 to have a consolidated guidance as it...

And also because they are into the similar business, Ritesh, the material, there is a transfer from one company to the other company because Chromeni is a downstream process only. So in order to avoid that kind of confusion that what profit here, what profit there, it is better that we talk of the complete business process, and that is why all these related business we are putting into the basket rather than talking about them separately. And that is why we -- in fact, from the last quarter onwards, we have decided that we will discuss about all these businesses together. In fact, we believe that otherwise, it creates more confusion.

Sure. Just a point over here. Arithmetically, the ask on stand-alone will actually go larger as we ramp up the downstream and Chromeni going forward. So that was the point I was trying to lay across. Any particular update on HRAP 1.1 million ton expansion? I understand we had indicated that it stood deferred last time. Any update over here?

So the project is on. The work is going on. And in FY '27 is what this will come into the operation.

So earlier the CapEx indicated was reduced by INR 700 crores, indicating HRAP had been deferred. Now we have indicated the CapEx for INR 2,600 at INR 2,700 crores. Then what is the reason for the underlying CapEx bump if HRAP is already in progress? Are you undertaking any new projects?

So Ritesh, what Mr. Khulbe is trying to say is that it is something HRAP and CRAP has been -- the order booking was somewhere in the lag of around 3 to 4 to 6 months, but right now, since the order has been placed, the project has been on track, and we are expecting it to be commissioned in FY '27. But like we mentioned that there is no new CapEx that we are undertaking. It's whatever CapEx for FY '26 that we have announced of around INR 2,600 crores, INR 2,700 crores, that is including the spillover CapEx for FY '25 to the tune of around INR 1,100 crores and plus what was supposed to be spent in FY '26, including the maintenance payment. But otherwise, there is no new projects that we have added in between.

Sure. That helps. Last question, would you like to call out for a net debt number like we did last year, and we did pretty well over there. Just from a guidance standpoint, where we aspire to be end of the fiscal?

So Ritesh, net debt we are estimating in the range of around INR 3,500 crores to INR 3,700 crores at the end of FY '26.

Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments.

Thank you. I would like to thank everyone for attending this call. We're optimistic about FY '26. Globally, we are seeing encouraging signs along with recovery in stainless steel prices and raw material prices showing stability, which points to improvement going forward. The growing adoption of stainless steel in India, along with strong momentum in key sectors such as infrastructure, railways, further reinforces our confidence in the domestic growth story. I hope that we have been able to answer all your questions. Should you need any further clarification or would like to know more about the company, please feel free to contact our Investor Relations team, and I would be happy to meet all of you physically as well over the next few months. Thank you once again for joining.