Jindal Steel Limited (JINDALSTEL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Jindal Steel & Power Limited, JSPL, 2Q FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jashandeep Chadha from Nomura. Thank you, and over to you.

Thank you, Yashasvi. Good evening, everyone, and thank you for joining in the call. Without much further ado, I'll hand over to Mr. Vishal Chandak, the Head IR for JSPL. Vishal, over to you.

Thank you very much, Jashandeep. Good evening, everyone. On behalf of Jindal Steel & Power, I welcome you all to the Q2 investors briefing. We have with us Mr. Pankaj Malhan, CEO for the Angul Plant; Mr. Sunil Agrawal, the CFO. Unfortunately, Mr. Sabyasachi Bandyopadhyay, our Whole-Time Director, had to go for an urgent work, so he couldn't join the call. So I will hand over the call to Sunil sir for his opening remarks, thereafter which we will pick up the Q&A. Over to you, sir.

Thanks, Vishal. So good evening, everyone. Wish you a very happy Diwali, and hope you have all enjoyed the festival season. I welcome you all to the Q2 FY '25 performance briefing of JSP. Indian steel production for the quarter was 36.2 million tonnes, down 1% quarter-on-quarter basis. However, apparent steel consumption grew 4% sequentially. Steel prices remained under pressure due to continuing surge in imports and declining exports. Exports continued to trend down by 15% on quarter-on-quarter to 1.3 million tonnes, while imports saw a sharp increase of 44% sequentially to 3.2 million tonnes. India remained net importer of steel for the second quarter in a row, reflecting ballooning import from both FTA countries and China. Net imports for the quarter saw a massive 1.69% -- 169% sequentially jump. Despite the strong inflow, both FTA countries and China, your company reported a healthy performance reflecting the agility in operation and diversified product basket, while maintaining a strong balance sheet. Now, our production grew by 4% Y-o-Y to 1.97 million tonnes. However, sales for the quarter witnessed a drop of 8% on a Y-on-Y basis to 1.85 million tonnes. The decrease is mainly due to the plant shutdown in Raigarh facility, while Angul plant witnessed an uptick of 4% in production quarter-on-quarter basis. Net revenue for the quarter stood at INR 11,248 crores, down by 18% on quarter-on-quarter, largely due to reduction in sales volume and softening of steel prices. On the cost front, coking coal prices were down by $35 per tonne and iron ore price down by INR 500 per tonne, in line with our guidance given our Q1 briefing. Our SMS costs remained flattish on account of seasonal impact on techno-economics. Our adjusted EBITDA on a consolidated basis for the quarter was INR 2,124 crores, and EBITDA per tonne stood at INR 11,467 per tonne, down by 15% on a sequential basis. Accordingly, PAT declined by 36% on quarter-on-quarter basis to INR 860 crores. We expect a reduction of around $20 to $25 per tonne in coking coal prices in Q3 FY '25. We have taken a price hike of INR 1,000 to INR 2,000 across products in Q3 so far. Demand post-season -- festive season is good, and prices are holding up. We expect H2 to be better than H1, driven by strong seasonal demand and lower input costs. Our consolidated net debt is INR 12,464 crores at the end of quarter, which has increased from INR 10,462 crores reported in last quarter. Increase is driven by payout related to expansion at our Angul project. Net debt-to-EBITDA is at 1.21x, which is still below our deadline of 1.5x and continues to be the best among large steel players in India. Our CapEx in quarter stood at INR 2,642 crores. With this, cumulative CapEx spent under the current expansion program is around INR 20,562 crores. Regarding the expansion project at Angul, same is progressing well as per the schedule communicated earlier. We are hoping that we will deliver the project in record time. With this, I will conclude and hand over for Q&A sessions. Thanks. So now I will hand over to Vishal.

Thank you, sir. Yashasvi, can you please open the line for the Q&A.

[Operator Instructions] We'll take our first question from the line of Amit Dikshit from ICICI Securities.

Congratulations for a good performance in a very testing quarter. I have 2 questions. The first one is related to the DRI second plant, which appears to have been delayed to Q4 FY '27 from Q3 FY '26 if I look at your presentation. So just wanted to know the reason for the same. And wouldn't it impact your metal capacity or -- and finally the steel capacity?

So Pankajji, if you can respond.

Yes. Sure. Thanks, Amit, for this question. We are working on our strategies to make sure we deliver the volumes as early as possible. So our entire focus is right now in terms of having volumes that we think the first scale would come from BFP approved. So that's one area where we are actively pursuing our project strategies. And we are very hopeful of delivering the timelines that we've stated. And definitely, we are working on the DRI stream, which would be the next in line.

No, sir, my question is that since the DRI is delayed, your availability of metallic would get delayed. So won't it impact our crude steel capacity reaching 15.75 million tonnes per annum by end of FY '26 because it is delayed to Q4 FY '27, which is a very significant delay from the earlier Q3 FY '26?

Q4 FY '27.

This is 3Q -- Amit, this is actually 3Q FY '26 only. It seems there has been some typo over here, the numbers have a little -- moved haywire over here on the DRI. So DRI is on track for the third quarter of FY '26.

So there is no delay...

I apologize for the goof-up over there, but it's 3Q FY '26 only and not 4Q FY '27.

Okay. So essentially, the timelines are unchanged. That's a good relief.

Let me reiterate over here. There is absolutely no change in any timeline, and we are on track to deliver what we have promised on the revised timelines. In fact, the blast furnace is scheduled to get commissioned in Q4 itself, and we are at the advanced stages of the commissioning.

Okay. The second question pertains to the captive coal mine, if you can highlight the quantity of coal that was supplied in this quarter? And what is the ramp-up flow commissioning schedule of the mine?

Okay. Thanks, Amit, again for this question. Our mine's ramp-up is as per the plan. We mined close to 1.3 million tonnes in quarter 2 from our Utkal C mines. And going forward, we're also in a very, very advanced stage of opening up our Utkal B1 lines.

Okay. So when can we expect all these mines to get opened? And is there any testing permit that remains at this point in time?

We are very hopeful of starting our Utkal B1 in quarter 4 of this financial year.

We'll take our next question from the line of Amit Murarka from Axis Capital.

Just following up on the question on the coal mines. I think it was also kind of expected that the EC will be increased for Gare Palma and Utkal C. Any update on that?

This is work in progress, but the main focus right now is -- for us is Utkal B1 start-up, where we have received all the approvals. And we are in the process of opening up of this mine now.

So, Amit, just to add on to what Pankaj sir has mentioned, we will not be short on coal, so we will not need to buy any coal from the markets. So even if the EC doesn't come as per our scheduled timeline, which we believe it will be there, we will not be short on coal. So we will only be having more surplus coal over there.

Sure, sir. That's very reassuring. And also on the slurry pipeline, I believe it's due in Q4 FY '25. So that's also on track, right?

Yes. Amit, I think this is one of the most exciting projects. And with the change of the guard right now in Odisha, there's a lot of excitement about this project, and we're getting full support in terms of expediting the completion of this project. Good part is we've almost completed 80% of the project as of now when we are talking.

Sure. Sir, also to understand it right in terms of the cost reduction or margin expansion projects now, I mean that will be the key project going ahead, right, incrementally speaking?

Yes, this is one of those projects.

And could you just maybe refresh the understanding once, like how much is the anticipated cost savings from once the slurry pipeline is in place?

So, Amit, if you remember in our previous calls also, we have mentioned that we would not be in a position to give you an item-wise breakdown on what are the cost savings on slurry pipeline, on HSM ACPP-II. But again, as we've mentioned, our entire CapEx program is based on the fact that we would generate a very high teen of ROCE. So I'm sure you would be able to back calculate the kind of total project savings out of there.

We'll take our next question from the line of Indrajit Agarwal from CLSA.

A couple of questions. First, bookkeeping question. How were the NSRs this quarter versus last quarter? And how is the spot NSR versus a 2Q average?

Yes. So I will just explain. So our steel NSR for the quarter was INR 54,603 as against last quarter of INR 55,845.

And what is the spot?

So we have raised -- increased prices in the range of INR 1,000 to INR 3,000 across the product basket that we have -- already in opening remarks, I have already mentioned that.

That's clear. And what kind of iron ore inflation can we see in this quarter, in third quarter, broadly as things stand today?

Indrajit, let me put it this way, when I look at the iron ore prices, vis-a-vis steel prices today, iron ore prices are back to August levels -- Feb levels, where steel prices are still down by almost INR 2,000 from those levels. So if you look at iron ore prices, they need to go down substantially if you have to pick up -- they have to be in tandem with the steel prices. Otherwise, we see spot spreads compressing compared to simply putting on the iron ore prices and FX.

Lastly, can you help us understand the current HSM run rate? What is the current run rate?

Mr. Agarwal, I'm sorry, your voice is muffled. Can you use your handset mode, please?

I'm actually on handset. Can you just help us understand what is the current HSM run rate at which it is running currently?

We're running at almost 40% utilization of HSM.

And can you help us understand the progress rate? By end of fourth quarter, can we get to like 85% kind of utilization?

We're just waiting for the metallics to come. And once they are there, the ramp-up would be very easy. The good part is we've already seeded the market with our products.

Indrajit, it is very easy for us to ramp up the HSM because now it's stabilized completely. But since we are staffed for the metallics, we would -- further ramp-up would only be possible after our blast furnace is commissioned.

We'll take our next question from the line of Parthiv Jhonsa from Anand Rathi.

Congratulations on a good set of numbers. My first question is pertaining to debt. Debt has been consistently increasing over last couple of quarters. So any guidance on the reduction on that side because it is continuously increasing over the last few quarters.

No, I will just pick up. So actually, we are expecting that H2 will be better than H1, and we are expecting higher EBITDA from our operations. So certainly, we are looking at our CapEx plan as well. So we are restricting ourselves that the net debt will not go up too much. So we are targeting, as we are stipulated, 1.5x. We will be much below than that.

Any number on the reduction, sir?

Just let me add over here. We are right now very close to our peak debt numbers, okay? Given the fact that the commissioning-related payouts have started happening while the production has yet to come in. So obviously, the profitability is not there, while the cost has got all embedded over here. So the leverage looks higher compared to our own timelines as well as the gross level and net level debts are also higher. But from here, I think we are only going to see a reduction in both the leverage absolute terms as well as on the ratios.

All right. All right. And sir, my second question is on coal. Any guidance for the Q3, what kind of numbers can we perceive for coal?

Normally, we don't give any guidance of operating parameters, but we are comfortable in terms of driving home through our own mines.

All right. If I may, can I just squeeze in one more small question? It's pertaining to your Australian subsidiary. It is still consistently facing losses. So any color on that side of the business? When are you...

Right now, Australian business is under -- taken under care and maintenance. So we are not burning much cash there. So that's it.

So, Parthiv, if you look at the overall pool, the difference between stand-alone and consol is largely driven out of normally these overseas subsidiaries, but also from the JSOL or the Odisha expansion, okay? As the Odisha expansion continues to ramp up, you will see a wider gap between stand-alone and consol, okay? So the burnout is not at all at the overseas operations because as we highlighted in the past also, the overseas projects or subsidiaries are all based on driving their own cash flows and [indiscernible] and expenditure. There is no movement of cash from the parent to the overseas subsidiaries. Yes. Odisha project is in a ramp-up phase, so obviously, we'll see some -- a bit of challenge over there, but that's pretty normal with any project, which is on an expansion phase. I think from next quarter onwards, we would see that declining.

We'll take our next question from the line of Kirtan Mehta from BOB Capital Markets.

We mentioned that we are comfortable about the coal availability for the year and we don't need to purchase the external coal. I believe we are operating our existing Syngas plant at around 50% capacity. Would we be able to ramp that up to 100% with the now domestic coal availability? And will that improve the availability of metallics?

So that's a very good question. And we are right now working comfortably with 50% utilization of our coal gasification plant. This gas ramp-up is expected to happen with our cold rolling complex coming online now. So we are looking at the capacity utilization of coal gasification to go up to around 70% by the end of this financial year. And we are comfortable in ramping it up through our own coal itself.

That will not help us support the ramp-up at the HSM. HSM ramp-up will be more linked to the startup of blast furnace. Is that the right way to think?

Correct. So HSM ramp-up would be more linked to the metallics availability. As of now, the level of metallics that we have in the organization, we have ramped it up. It's not dependent upon coal gasification of the Syngas. It would be more on the availability of the metallics, that's as simple as that.

Right. And second question was on the slurry pipeline. I believe you were facing certain ROE-related issues, which has resulted into sort of delay in commissioning of the slurry pipeline. Could you highlight the sort of the -- how much ROE is available at this point in time? And are those issues behind us now?

Yes. Those issues are all behind us as of now. And there's a good harmony along with the new government, and we're fully confident of delivering this project now.

In terms of the pipeline status, welding status, would you be able to indicate some sort of the physical progress on the slurry pipeline as well?

I just indicated that number, close to 80% of the project has been completed.

We'll take our next question from the line of Pallav Agarwal from Antique Stockbroking.

Sir, just I had a question on our remaining CapEx. So I think our total growth CapEx was about INR 31,000 crores, and we've already spent close to INR 20,500 crores. So normally, we do have some performance guarantee-related payouts that are deferred. So is it right to understand that the balance, at least 10%, 15% of the balance amount would probably happen over the next couple of years and not immediately?

Yes, that's right. So certain retention amount that will be paid over the next 2 to 3 years timeline after commissioning of the full project.

And what will be the maintenance CapEx, sir? This is a part of the growth CapEx.

So, Pallav, our maintenance CapEx is close to about INR 600 crores on a quarterly basis.

Okay. So about INR 2,500 crores on an annual basis. Okay.

Yes, you're right.

Yes. Sir, also on the question related to metallics. So we had an arrangement with RINL, so is that -- could that be a source for metallics or we're not really getting too much metallics from there right now?

That's again, a wonderful question. We started on a good note with RINL before they had their own setup challenges. What we understand from the condition is their 2 blast furnaces are down. So they're running short of metallics themselves. So there are good developments over there on that front. And some infusion of money is expected from Government of India, so we are just waiting for the blast furnaces to be up and running before we start securing some metallics from RINL.

Sure, sir. Lastly, if you could just give your thoughts on a few reports of safeguard or anti-dumping duties being imposed? So is there actually truth to this or these are more of volume speculation that's happening in India?

Pallav, anti-dumping, we have been through the industry informing the ministry about the kind of imports that have come in the Indian space, both from FTA as well as non-FTA countries through -- on a direct and indirect routes. The ministry has taken cognizance of these imports. And in fact, in one of the conclaves, the Steel Minister himself has mentioned that he would look at this matter and respond appropriately. So we are quite hopeful that anti-dumping duty or increase in the basic customs duty of any sort should be in the pipeline. But when it will come, how will it come, it's absolutely impossible to make any -- gauge any predictions for that.

We'll take our next question from the line of Ritesh Shah from Investec.

Sir, just correct me if I'm wrong, you indicated that the HSM utilization is at 40% right now. We expect it to go to 80%, hopefully, by end of the year. You also indicated currently, DRI is at 50% utilization. Are those variables correct, sir, to what I heard?

Sorry, I'll just correct the variables. HSM is currently at a utilization rate of close to 40%. As and when the metallics from the new expansion comes in, it would be further ramped up, right? Second, you spoke about DRI. We never touched upon DRI ramp-up. It was coal gasification plant ramp-up, which is at 50% utilization because this is the amount of gas, which is needed right now to keep running our DRI at full capacity. So we -- as and when there are more consumers within the plant, the coal gasification ramp-up will happen on our own coal. I hope that...

And the utilization -- yes, yes. Sir, so you're indicating CGP is at 50% utilization, the coal gasifier.

Yes, that's what I've said because this is the amount of requirement of the gas in the plant as of now.

[Operator Instructions] We'll take our next question from the line of Sumangal Nevatia from Kotak Securities.

My first question is on the 2 captive coal blocks. Utkal B1, we're expecting 4Q commercialization. Is it possible to share? Have we received all the approvals, the mining leases signed and if it's only execution on the ground which is happening now? And also if you could guide us with respect to Utkal B2 mine?

For Utkal B1, like I mentioned, we have secured all the approvals, and the work on the ground has already started. And we are very confident of starting this mine in quarter 4 of FY '25. And Utkal B2, we are on the ground in terms of securing the approvals. We are also hopeful it will follow its own natural course, and we should start this mine in the next financial year.

Okay. My second question is on...

Sumangal, just to clarify. When Pankaj sir mentioned on the ground, doesn't mean we are in the mine. It means the activities are at the full speed.

Sorry, I missed the last word, Vishal. What did you say, activities are at?

The activities are going at full speed. I mean, we are very close to getting -- opening the mine. But when he said on the ground doesn't mean that we had opened the mine. No, we are in a wheel.

Got it. Got it. I have one clarification on the subsidiary EBITDA, which is around INR 180-odd crores. Is it possible to share what is coming from international business as a whole, all the few geographies and for Odisha subsidiary?

One-to-one. And I will request IR team. He will get back to you for the further details.

Okay. And just one last clarification on the -- in the first half, is it possible to share what is a mix for thermal coal? How much is captive? How much is linkage? And how much is the e-auction?

E-auction, we have completely stopped buying. And -- okay, and majority of the coal is now from our own mines. We have a very limited amount of FSA coal which we have to take up. That is on account of our tapering linkage. Other than that, everything is in-house. If you want the numbers, I can -- we can discuss it offline.

We will take our next question from the line of Satyadeep Jain from AMBIT Capital.

First question, I wanted to ask on the power strategy. Recently, you signed an agreement mentioning...

I'm sorry, sir, can you use your handset mode? Your audio was not very clear.

Can you hear me now?

Yes. Are you on your handset because your voice was muffled?

I'm not on my handset.

Can you use your handset, please?

Is it better now?

Yes, please go ahead.

I just wanted to ask on the power strategy. The group signed an agreement with Jindal Renewables for 3 gigawatt of RE. You also have 1,600-megawatt of CPP yourself, another 1,000 megawatts coming up. So how are you looking at the sourcing of power and all the capacities you have? That's the first question.

So, Satyadeep, as the cloud for the green steel continues, we have signed an MoU with the group company, as you mentioned, to set up for green power in the long term. Part of which will come very soon and part would be thereafter. Now, how do we look at the rest of the power strategy? I think one of the key points here is that thermal power is here to stay. But steel will be produced more and more from the green power that we would be procuring. So we'll have a mix of both renewable as well as nonrenewable power. In the intervening period, when we have surplus, we would look at our opportunities to sell surplus amounts.

Okay. Secondly, just on the capital allocation, as you look beyond Angul II, what -- do we assume that till Angul II commissions you would not look at further expansion? Or are you -- how do we look at growth beyond Angul II organic, inorganic? When do we see that where -- some thoughts on long and flat? Is there any -- is it too early to think about that?

So, Satyadeep, we will definitely not be stopping at Angul II, okay? We have one of the best balance sheets in the industry. Angul II is going to throw a lot of cash once it stabilizes. This would be reutilized and reinvested in further expansion. But what would be the nature of expansion and the product profile, that's something we have not yet finalized. We will get back to you at an appropriate time when we feel we are ready for the next phase of expansion. But at this point in time, it would suffice that we will not stop here. The cash flows would be strong enough to fuel the next leg of growth. So we'll continue to grow. And Angul, as we had mentioned in the past also, has a capacity to house about 27 million tonnes. So our vision is to make Angul the largest single site steel plant in the world, and we will go towards that.

We'll take our next question from the line of Raashi Chopra from Citigroup.

Just clarifying on some bookkeeping questions. You had mentioned the realization this quarter was INR 54,600 and INR 55,800 was in the last year or the last quarter.

Yes. Yes. This is -- I have mentioned steel in flat products.

So this is basically the benchmark numbers. Okay. But obviously, our numbers would be different from these numbers. So these were basically the benchmark HR realization numbers.

For 2Q and 1Q?

Right.

So for yourself, what has been the change in the realization sequentially?

Can you please repeat the question?

For yourselves, what has been the change in realization sequentially? Because if I just divide by the revenue by volume, it appears that the realization has moved up sequentially.

You're looking at stand-alone numbers, right?

Stand-alone, yes.

So on a stand-alone numbers, if you look at the volume, you would have divided the consolidated volumes. Yes.

So if you'll divide by stand-alone, then stand-alone is coming at around INR 61,695, down by 3% around from the last quarter.

Okay. And the cost -- sorry, you're saying.

So you have to divide it by last -- stand-alone sales volume is 2.03 million tonnes in the Q1. And for -- in the Q2, the volume reached 1.87 million tonnes.

Raashi, if you will -- these numbers, you'll get the numbers. So there's a decline in the stand-alone ASP as well.

Okay. So the decline is 3% on a sequential basis stand-alone.

Yes, yes.

Okay. And on the cost side, it's flattish on a sequential basis.

Yes.

Okay. So the -- okay, so the decline in the coking coal as well as the iron ore has been offset by other expenses and lower volumes.

Yes.

And just on this cost side, coking who should be down by about $20, $25 more in the third quarter?

That's right.

And iron ore?

Iron ore, we are -- right now, they slightly increased by NMDC and OMC in the tune of INR 500 to INR 1,000 per tonne. So that is there.

See, Raashi, as we mentioned in one of the answers, while steel prices have been steadily coming off, iron ore prices have recently seen a sharp spike. So as a result of which, the spot spreads are actually trending down compared to the Q3 -- Q2 numbers. So either the steel prices have to move up to realign the spreads or iron ore prices should come down because this is an artificially inflated iron ore price at this point in time.

[Operator Instructions] We'll take our next question from the line of Vikash Singh from PhillipCapital.

Sir, if I just look at the stand-alone minus the consol EBITDA, there is INR 210 crores. Just wanted to understand this year's subsidiary is contributing that much of money because this number is pretty fluctuating on a quarter -- every quarter.

So basically, this is JSOL, and this is a 100% subsidiary that we have commissioned. EBITDA is coming from that start of the operation.

And how should we look at this number going forward?

So it will improve once this operation of our JSOL streamlines and as we have said that the utilization will go up. So certainly, the volume will go up and the EBITDA will come up from that JSOL project.

Vikash, as soon as we commission our blast furnace, that's where you would see a sharp spurt in the profitability of the Angul expansion.

Understood. My second question pertains to HSM. We basically -- you said that it has reached 40% of utilization level and further ramp-up is not possible unless the new blast furnace is commissioned. So in terms of the benefit from the low-grade semis to the finished steel, that benefit we have received so far. And if you could quantify that once the blast furnace come, how much more benefit could be derived from the HSM space?

We are not selling.

So we are not selling any semis right now. So whatever the steel that we have, we are finishing that in the HSM, and we are selling the value-added products. So we are not selling any semis, right?

And the operating leverage benefit, once that -- yes, sorry, please continue.

Because the benefit of conversion of semis to HSM has already been realized, okay? And now incremental benefit of volumes will come through once the blast furnace gets commissioned. So at this juncture, we hardly have any semis to sell in the market.

We'll take our next question from the line of Ashish Kejriwal from Nuvama Wealth Management.

Sir, 3 quick questions. One, in coal mines, last quarter, we said that we are on the verge of expanding the existing EC limit of Utkal C and Gare Palma. Where we are on that? And second question is, do you -- have you said that -- we are running at a peak capacity utilization for our DRI plant at Angul? If that's the case, what is the overall capacity utilization at Angul in Q2? And third is, in terms of sales volume, last quarter also we mentioned that we will be selling more than 2 million tonne each quarter. And this quarter, though volumes have been down on production because they were shut down, but sales volume was lower than the production volume also. So are we taking -- are we getting any hit because of the logistics or some slowdown in demand? Or what could be the thing which can explain that?

So, Pankajji, just...

There are a number of questions. If I were to take one after another, DRI capacity utilization is almost at the full level in the plant as of now.

We couldn't hear your last sentence. Can you please repeat?

Okay. DRI utilization continues to be at the full level in the company. So there were some shutdowns, which are planned shutdowns. That's the only differentiation that we have in capacity utilization. Second, you mentioned about the EC increases about Utkal C and Gare Palma, that's the work in progress. We are working very closely in terms of securing the approvals, and we are very hopeful very soon we should get those approvals also in place. The third question, maybe I missed, if you can repeat your third question?

My question was at what capacity utilization we are working with in Angul overall, 6 million tonnes, and sales volume in second quarter, why it is lower than the production volume also?

Overall, Angul capacity sweating in quarter 2 being close to 85%.

So is this the maximum which we can do or we can elevate it without any further addition in plant?

We have seen 4% increase in terms of Angul utilization, sequential basis. And we are looking into further improving the capacity utilization.

Okay. And, sir, about the sales volume?

And the sales volume, what you mentioned, yes, we are mindful of those volumes. Of course, there were some planned shutdowns in Raigarh, which led to some drop in terms of the production as well as the finished volume. While we talk about the steel capacity, which is typically the crude steel, the finished good would be slightly lower than that, so that's what is the numbers getting reflected in the numbers.

We don't have much inventory or inventory level has not increased.

It's more or less stable levels, very marginal change in terms of sequential basis in terms of inventories.

Okay. So -- okay, so is it possible for us to give a sales volume guidance for FY '25?

I'm sorry, I don't think we are in a place where we normally give guidances on the forward, but the company remains committed to increase the capacity utilizations and deliver quality products to the customers.

We'll take our next question from the line of Rahul Gupta from Morgan Stanley.

I have just one question. Just trying to understand what has driven iron ore price hikes to the level where you say they are unsustainable. Maybe alternatively, what should drive them down, assuming global iron ore prices stay where they are? Just trying to understand if there is any structural issue with iron ore prices over here.

So, Rahul, if you look at the iron ore scenario today, the way we perceive it, iron ore is getting more and more classified as an oligopoly given that between NMDC and OMC, there's a massive supply pool. However, steel continues to remain fairly diversified among several players. So there is a demand-supply mismatch, which is apparently there, okay? Secondly, the recent push by China, the stimulus given by China has led to an increase in global steel prices as well as iron ore prices. However, the steel prices have corrected post that, but iron ore has yet to be corrected. So we believe as steel prices have corrected marginally, iron ore prices should also fall in line.

Got it. Just one bookkeeping question. What was the share of exports during the quarter?

It was 9%.

And it was 7% last quarter, right?

Yes.

We'll take our next question from the line of Ritesh Shah from Investec. There is no response from his connection. [Operator Instructions] We have a follow-up question from the line of Parthiv Jhonsa from Anand Rathi.

Just a very quick question. What can be the tentative coking coal cost savings? Did I hear correct, it is about $20 to $25 in Q3?

That's right. That's where...

Okay. And is it possible to give any guidance, sir, for FY '25 volumes by any chance?

No. Right now, we will not be in position to give you all forward-looking statements.

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

Quick ones. Sir, would it be possible for you to quantify how much was the external metallics purchase in first half? And is it a strategic decision not to purchase incremental metallics and wait for the furnace to come upstream?

Your question, we keep adjusting our strategies every quarter basis the demand of our products and in the industry. So that's how we device our strategies on a quarterly basis. And going forward, if there are opportunities existing, we will be open to this also provided it makes commercial sense.

Sure. And just quick 2 questions. Any update on railway logistics as we look to ramp up the capacities? How are we looking at outbound logistics? And specifically, if there's any update on Paradip Port? That's the first question. And second, any update on ACCP (sic) [ ACPP ] I and II? And we had plans to dismantle the older 13, 15-megawatt. Where are we on that?

Our railway logistics projects, the project -- while we are trying to drive in terms of doubling the rail line to the Angul station, that's fully on track. And by the end of this financial year, we are hopeful of completing that connectivity. We are also working internally in terms of connecting the various new units and facilities to the holding yard. Holding yard expansion is about to get completed now. So we see that project going as per the schedules that we've guided. Second, in terms of -- your question in terms of where are we in terms of ACPP I and ACPP II. ACPP II right now technically is all ready. We are waiting for the approvals to come up. We're very hopeful of starting ACPP II sometime in quarter 4, start itself. And in terms of ACPP I, which we just spoke about, once we stabilize ACPP II Unit 1, then we will start looking into the revamping of our ACPP I turbines also.

So, Ritesh, just to add to it, there are absolutely no plans to dismantle any of the existing facilities just because a new facility has come up. We will have surplus power as we have mentioned earlier. We will be selling surplus power in the market.

We'll take our next question from the line of Pratim Roy from B&K Securities.

I just want to clarify that you have mentioned in the earlier comment that this quarter, we are expecting INR 1,000 to INR 2,000 price hike. So if you quantify the number, how much extra delta in terms of NSR we can expect over -- in 3Q over 2Q, if you can give some number on that?

I could not get your question right now. If you can repeat that?

So my question is on how much NSR improvement we can expect company level for 3Q over 2Q?

Sunil, can I?

Yes.

Number one, this is a forward-looking question, and company keep revising its strategy on quarter-to-quarter basis in terms of the product portfolio itself. So we keep tweaking the product portfolio to make sure that we are able to maximize our blended NSR given the current scenarios that we are into. We also keep looking into the value addition that we bring in on to the table with respect to each and every product category also. So that's what we keep tweaking, to maximize our blended NSR.

So as I have already mentioned, so our NSR will go up by INR 1,000 to INR 2,000, that I have already spoken in opening remarks till now. That is till now, and we are seeing further rise in coming due to -- after Diwali is over. So we are seeing that the rebound in demand in the steel prices. So we are expecting further go up -- prices will go up from here.

Next question is from the line of Pavas from Birla Mutual Fund.

Just wanted to understand -- I know it's very difficult to guide for FY '25 numbers. From a broader perspective, is FY '27 will be a kind of a full ramp-up or FY '28 will be a full ramp-up?

So we are looking at FY '27 to be the full ramp-up.

Okay, sure. And secondly, you are supposed to kind of balance our finish versus crude steel. There's still scope for 1.5 to 2 million tonnes of kind of finished steel capacity to come up. Have we finalized on that?

Pavas, you have rightly mentioned, there is -- seemingly, there is a gap. And as we have mentioned, there is a [indiscernible] which is yet to come up over there. So part of that gap could be bridged over there. And we will look at adding a few other finishing lines as and when we feel it's appropriate to fill in the gap. The idea is to maximize contribution as well as EBITDA. So we will make sure the semis are brought down to the minimum going forward as well.

Sir, this full ramp-up, what does this translate to in terms of finished steel kind of a production?

That would be looking for a guidance, Pavas.

FY '27 is a full year of sale ramp-up.

We'll take our next question from the line of [ Pawan ] from NMV Securities.

Short question was that what was the share of value-added products on the sales volume of 1.85 million tonne?

It's almost 50%.

50%.

We will take our next question from the line of Prateek Singh from DAM Capital.

Just wanted to clarify. When you first said that there is a price hike of INR 1,000 to INR 2,000, that is post the quarter end? Or are we calling for a higher -- this much higher ASP versus the 2Q average?

We were saying the Q2 average versus Q3, so we have mentioned about the average price from the Q2 to till now, increase in October month.

Understood, sir. So if you don't take any further price hikes that 3Q would largely be INR 1,000 to INR 2,000 per tonne higher than 2Q. That would be the correct understanding.

Yes. Yes.

As there are no further questions, I would now like to hand the conference over to management team for closing comments. Over to you.

So I will request Pankaj sir to give a closing remark on this, sir.

This quarter, your company has delivered strong numbers despite some headwinds. We are very confident as a management team of delivering another wonderful quarter in quarter 3. And that's what we look forward to this. And we remain thankful to your questions and queries, and we'll be in touch. Offline, if needed be, Vishal can take your questions. Thank you.

On behalf of JSPL and Nomura, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.