Kiri Industries Limited (532967) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 and 9 Months FY '26 Earnings Conference Call of Kiri Industries Limited. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Good morning, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Kiri Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the third quarter and 9 months of the financial year 2026. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management participating with us in the conference call. We have with us Mr. Manish Kiri, Chairman and Managing Director; Mr. Jayesh Hirani, Vice President, Accounts and Finance; Mr. Suresh Gondalia, Company Secretary; and Mr. Ranjit Singh Chugh, CEO, Indo Asia Copper Limited. I would now request Mr. Manish Kiri to give us his opening remarks. Thank you, and over to you, sir.

Good morning, everyone, and welcome to the earnings conference call for the third quarter and 9 months of the financial year 2026. I hope you are all keeping safe and well. Let me start first with giving you an update on the most important development that has happened in our company in the last quarter, something which we have been waiting for more than 10 years. The last day of the quarter, end of the calendar year brought with it a moment of profound significance for the company and the group. On 31st December 2025, a day that will remain recorded in our corporate history, the 11 year legal battle surrounding our DyStar shareholding finally came to an end. With the Singapore court's decision culminating on this date, the receiver remitted $689.03 million to the company, including $603.80 million towards the sale of shares and the additional amounts towards legal costs and discretionary payments. This exceptional value realization is net of expenses and is accounted at approximately INR 5,854 crores marks not only the closure of the long-standing dispute, but also the beginning of a new strategic chapter. The timing of the resolution arriving at very close of the financial quarter and the calendar year provides a symbolic and practical reset, strengthening the company's financial foundation as it enters the next phase of growth. Thus, the quarter stands as a turning point, a period where resolution has strengthened the company, and expansion has become both possible and imminent. The Board has deliberated extensively on the utilization of these funds and believes that the most prudent and value-accretive approach is to prioritize investment in long-term strategic initiatives rather than declare dividends at this stage. This was an important point I would like to highlight the beginning of my address. I understand that this has been a question and concern that many of our investors have expressed to us, but I think it is very important to understand that the company has fought this court battle without any external equity funding. And it has been a very long, tedious and expensive battle for the company. So we sincerely hope that everyone understands that the first thing the company must do is to put the current state of affairs of the company in order, improve the financial and operational health and finally secure its future endeavors. Only after these things are put in place, can the company think of aspects like dividends and buybacks, et cetera. Please also understand that as a promoter of the company, I have spent the maximum amount of time and energy fighting this legal battle for the company. And yes, the easy and most obvious way out would be to pay myself along with other shareholders, the dividend, but I support the Board in its decision to first secure the future of the company. Hence, I would sincerely request all participants today to refrain from asking questions regarding the same topic as this decision is final and firm taken by the Board of the company after extensive deliberations. As you know, the company has embarked on a large greenfield copper and fertilizer project, which requires significant equity infusion, contingency buffers and working capital support during execution and ramp-up. In addition, the material capital gains tax liability arising from DyStar transaction is required to be discharged before March 15, 2026, and the core dyes business will continue to require working capital support. Considering these commitments and the transformational potential of the copper and fertilizer businesses, the Board believes that retaining earnings at this stage is the best long-term interest of the shareholders. Execution of the integrated copper and fertilizer product is well underway. Key approvals, including environment clearances have been received and land acquisition is substantially completed. Site development activities, including boundary walls, fencing, soil testing, initial civil works are currently in progress. Major equipment orders for the rod and tube plants have been placed and advanced payments released, construction already started at site. Tata Consulting Engineers Limited has been appointed as the owner's engineers to oversee detailed engineering and execution of the project. Raw material sourcing arrangements covering over 4.8 million tonnes per annum of copper concentrate capacity provide long-term supply visibility. The project is progressing in line with the internal timelines and is expected to be a key long-term growth driver for the company. Now with that said, let me brief you on our financial performance, followed by an update on operational highlights and our strategic updates. On a standalone basis, revenue from operations for quarter 3 FY '26 stood at INR 162 crores registering a year-on-year growth of 3%. However, the company reported an EBITDA of INR 58 crores, including the quarter on account of dividend income and reimbursement of legal costs. For the 9 months period ended FY '26, standalone revenue from operations stood at INR 537 crores, reflecting 14% year-on-year growth and EBITDA of INR 65 crores during the period. On a consolidated basis, revenue from operations for quarter 3 FY '26 stood at INR 174 crores. Revenues declined sequentially in line with the standalone business, reflecting lower volumes and subdued demand conditions across global markets. At the operating level, the company reported consolidated EBITDA of INR 53 crores on account of dividend income and reimbursement of legal costs, as I mentioned. For the 9 months ended FY '26, consolidated revenue from operations stood at INR 589 crores, registering a 10% year-on-year growth. During the period, the company reported a consolidated EBITDA of INR 59 crores. During the quarter, profit after tax was significantly impacted by exceptional gain of INR 5,854 crores arising from DyStar transaction. In addition, profit was supported by positive contributions from associates and joint ventures. On the operational front, dyes and dyes intermediates business continued to operate in a challenging environment during the quarter, marked by subdued global demand and competitive pricing pressure across selected product ranges. The company maintained a strong focus on operational discipline, cost control and working capital efficiency, prioritizing margin protection over volume-led growth. Input cost volatility and limited pricing flexibility continued to impact margins. In response, company adopted a selective approach to production and order execution, optimized product mix and continue to drive efficiency improvements across its manufacturing operations. The joint venture Lonsen Kiri continued to deliver healthy operational and financial performance during the quarter. Improved capacity utilization and steady domestic demand supported strong profitability, contributing positively to consolidated results of both quarter 3 FY '26 and 9 months period. In summary, as FY '26 marks a defining phase for Kiri Industries, while near-term operating conditions remain challenging, the resolution of DyStar matter has significantly strengthened company's financial position and strategic flexibility. We remain focused on operational discipline, prudent capital allocation and disciplined execution of the copper and fertilizer projects, which are expected to drive long-term value creation. We appreciate the continued trust and patience of shareholders. As discussed earlier, the proceeds from DyStar transaction are being deployed for long-term value creation and therefore, topics such as dividends or share buybacks are not the focus at this stage. Accordingly, we would appreciate if the questions on this conference call are focused on company's current business performance, its strategic directions, future expansions, et cetera, our new and existing businesses as well. With that, we can now begin the question-and-answer session. Thank you very much.

[Operator Instructions] Our first question comes from the line of Yeshvant Rajput from Nirmal Bang Securities.

Now my question is some part of expansion of copper plant was expected to start in 2026, '27. So when do you expect that to start? And what is the revenue target from the Indo Asia -- when do you expect revenue coming from Indo Asia copper?

So Yeshvant ji, thank you. We are on track as the earlier targets that we have set. And we are expecting the first phase to start operations on April 2027, 1st April, that is the target date. It may be a month earlier, but we are expecting the full first phase operational from April 2027 to March 2028, that is next year. And that will generate the overall revenue of somewhere between INR 20,000 crores to INR 25,000 crores. That is the expected top line from the first phase, which is almost half of the total revenue, which we are expecting on a full year, full operations.

And this will be both from copper and fertilizer both or you are just expecting this revenue from copper only?

No. This revenue is coming only from copper and the fertilizer revenue will start in 2028. The current dates, which are on track is the quarter from September to December 2028, where fertilizer would be fully operational. All other facilities, precious metal refineries, all other parts of smelters, everything would be operational by that quarter. So that is the timeline, which we are strictly following.

And what EBITDA do you expect in this plant -- in the copper plant, EBITDA margins or -- if you can throw some light because the first year of operation, so there will be some light on...

Yes, 2027, '28 financial year, we are expecting the EBITDA of at least INR 1,200 crores to INR 1,500 crores. And of course, once fully operational, part 2028, '29 and then fully '29-'30. So gradually, the EBITDA will ramp up year-on-year. And within 3 to 4 years, the projected target EBITDA to achieve is somewhere around INR 4,500 crores to INR 5,000 crores.

The next question comes from the line of Harshit Khadka from RoboCap.

I just want to understand that how much CapEx are we going to incur in FY '27.

So FY '27 -- I mean '26-'27 and '27-'28. These 2 years, we would be deploying on CapEx almost somewhere close to INR 12,000 crores to INR 13,000 crores. That is the amount that would be spent both on copper and fertilizer project together as combined.

The next question comes from the line of Kevin Gandhi from CapGrow Capital.

Sir, my question was basically on the financial side. Like sir, so basically, I just wanted to know what are the pending warrants which promoter are yet to subscribe? And how much amount of the total warrants has already been received?

I think 5% warrants are still pending to get converted in April this year. And Suresh bhai can suggest the -- Suresh bhai, if you can indicate the amount which is pending, I think it's only the part of the last warrants, which is pending, correct? What is that amount in case if you -- right away?

INR 93 crores.

So INR 93 crores is pending.

INR 93 crores is pending. Also, sir, just one last question on the same. Sir, the PPT mentions that we have already invested like INR 1,000 crores of equity. Just wanted to know where this -- where the amount comes from the INR 1,000 crores of equity already done?

So if you go back 1.5 years, we borrowed $130 million as judgment funding, and that was obtained from Singapore in our wholly-owned subsidiary, which was infused in the project in India. And that $130 million as soon as the DyStar proceeds are received in January beginning, the entire loan was repaid. So that allowed us to save 1 year, and that is how we arranged by end of 2024, in fact, close to INR 130 million, like INR 1,100 crores, which we have been infusing in the project over a period of last almost 1 year and 4 months. So that is how we could make progress on the project as well during this time. And that borrowing is repaid as we speak today.

Okay. So that is basically the funding which you have taken from the Singapore, right, $130 million?

Yes, correct.

Okay. So sir, this is apart from INR 9,000 crore funding, which we are going to take for the project, approximately INR 13,000 crore project, INR 9,000 crore is something which are going to take into debt. So this is apart from the INR 9,000 crore which you are planning in 2 years, right?

This is the part of the total CapEx. So copper, fertilizer related infrastructure, all put together will cost us around INR 12,000 crores to INR 13,000 crores. And this INR 1,100 crores is part of that project of the CapEx and part of the equity, which is being infused, yes.

The next question comes from the line of Manoj Bhura from Adinath Financial Services.

Congrats on conclusion of the DyStar proceedings. Thank you very much.

Thank you so much for your patience, and thank you for your consistency in every quarter. Will appreciate your support.

My first question was regarding Makilala Mining Corporation. Any update on that? Because 16th is the date -- 16th February is the date by which they have to decide on Sodor issue, Sodor buyback. And 31st is the financial closure date for stake sale by Celsius Resources Limited. What is your update? Are we in the phase to acquire some stake or some binding agreement for copper offtake because the production is slated to start in December '27, exactly matching with our timeline.

Right. So we are right now in active discussion with Celsius, with Maharlika with respect to Makilala Mining. And there has been a lot of deliberations and back and forth on the term sheets. We had also nonbinding term sheet executed with them earlier. But now there are other participants and other partners have also come, which is a good thing, and we are expecting the conclusion in about a month's time. So we are hoping to participate there and almost in the active stage right now, final stage right now.

How much will be the financial stake in that? Can you just elaborate on that? How much we will be spending any guess or any amount?

That has not been crystallized yet, Manoj bhai, but the stake which is under discussion will range from somewhere around 20% to 40% in that range. That would be the stake that we are working on right now.

My next question [indiscernible]

Yes. But the value of the mine as per the valuations in latest and which you can see from the Celsius...

Yes, the DFS is there. Yes, definitely feasibility study is there I have seen that.

Right. And that DFS, yes, so you have seen the DFS, it is $780 million, right? That's the reserve, right? And that revenue...

And annual production from that mine is slated to be around 1 lakh tonne.

20,000 -- yes, 120,000 tonnes of copper.

120,000 annual production will be there, which is much more than what we have in Nissan Copper, which is approximately 25,000 tonnes annually.

Correct. Absolutely.

My second question was regarding financial closure for this fertilizer and as well as this copper plant. Have we reached any financial closure for that for both the units?

Not a full financial closure. We have achieved the final -- we haven't achieved the final financial closure yet. We are working on it right now in active progress. And the speed has already been expedited since the equity is in place now. So we are expecting before the end of March, we should achieve the final financial closure. We do have certain commitments from financial institutions, but we hope to achieve financial closure in the next couple of months.

Manishbhai, one simple request I was making...

Sorry, Mr. Manoj, those were your 2 questions, I would request you to...

Yes, yes. That is last question. Please permit me. Manishbhai, my simple request was there. Indian capital market is very robust. You could have taken money from the market. You should have paid some dividend. Although you have asked everybody to refrain from saying on dividend buyback, but still I can't resist because all the shareholders are waiting and they have waited for long.

I don't think company has raised any money since 2010 from the market at all. But Manoj bhai, your assessment is well taken, right? And let me address it in a pragmatic way that you know very well that company has not been able to grow for the last 15 years. If you go back in the history, at least from 2011, '12 onwards till now, right, we have not been able to grow ourselves. So there is a backlog of growth, which all of us have been facing for the 15 years. And I'm sure that the shareholders who have waited for 10 years and who have been waiting to see the value creation in the company should be aligned with us or should be excited with us to see now exponential and transformative growth that I have highlighted during this call, and that is where we have embarked upon. So we are covering up 10, 15 years of gap in a huge upside and multi-scale expansion, which we have put all our efforts on. So if you appreciate that the future of the company would be completely different from where it stands today. And not only that, we are aligning ourselves with the growth of the country as well. When you look at the sectors and the products that we have selected, all are falling in the critical metal, mineral and the requirements of the country itself. So if we do not do right now and wait for 5 years, we might miss the sector which we have selected. So I think I understand that the short-term expectations on dividend could be there in the market. But as I mentioned, the company after long deliberations and discussions, the Board members, all of us decided to strengthen ourselves first. So that is where we are. And I hope you support going forward in the journey of tremendous value creation, which we can do.

The next question comes from the line of Viraj Mahadevia from MoneyGrow.

I'm a little new to the company, but congratulations on the big monetization. Two questions. One is for the copper smelting plant, where do you plan to get the raw copper from smelted?

I think there are 4 countries who are major suppliers to India, and we would get from those, which includes Chile, Peru, parts of Africa and Australia. So I think these are the places where the copper concentrate and copper ore supplies are based there. And we are in the process of tying up our requirements with the miners in all these countries, which has been continuously ongoing for almost last 1 year now.

Understood, sir. Any reason why getting into copper smelting, is there a supply-demand mismatch in the domestic country in copper smelting and hence, you're looking to get into that?

Yes, that is correct. So we are less than half of our current requirement of 1.8 million tonne approximately to 2 million tonnes of copper, which is going to increase to at least 3 million tonnes by 2030 on the conservative demand projections, the research reports, and we are significantly lower in production compared to the consumption in the country.

So it would be an import substitute then?

It is 100% import substitute. And also the fertilizer, which we are going to produce is 100% import substitute. So everything going to be import substitutes, which is going to come out of our facilities.

Understood. Sir, on the fertilizer front, my second question...

Sorry to interrupt, Viraj, please rejoin the queue. The next question comes from the line of Burramsetty Suresh from Burram Financials.

Manish, sir, I'm so many years -- you remember sir, I'm participate so many conference calls, Suresh.

Yes. Welcome.

Sir, I am waiting for so many years from the Kiri, sir. Actually, will win the case, okay, is good things happening. But shareholders -- I'm not happy, sir. So many years you can -- at least you can think the shareholders' question, sir. so many years waiting sir, I will purchase [indiscernible].

See, we have deliberated exactly what you are asking. Today, also, if you go through the detailed management note, which we have disclosed yesterday and if you go through those numbers, you would see that the entire objective of the company as well as management is to embark to create shareholders' value, right? And that is where the entire focus is for the next 3 years. So you are right, along with you, we, as a promoters, principal shareholders, also all of us have been waiting for creating a larger value for the company and its shareholders. So we will definitely deliver and we request you to have a long-term view on the projects that we are embarking on.

The next question comes from the line of Tanay Desai from 11H Advisors.

This is Tanay, individual investor from Ahmedabad. Congratulations on the long fought case and wishing you the best for the upcoming journey. Sir, the first question that I had was with regard to what kind of senior management we have planned to deploy across all these projects, both domestically as well as internationally, if you can highlight that particular process because there has been a recent senior management reshuffle as well. So what is the strategy going forward? And what is the competency that we are building into the company? And the second question, sir, is a more financial-related question with regard to the subsidiary structure of the company, particularly, sir, Claronex and whether the projects will be executed from Claronex or from the India entity. That clarity would be very helpful.

So let me address your second question first, where Claronex infused the initial capital, and that is the capital which we started with about 1.4 years ago. So Claronex would remain continue to be a shareholder of Indo Asia Copper Limited, again, Claronex being the wholly-owned subsidiary of Kiri Industries Limited. And the rest of the equity, so beyond INR 1,100 -- INR 1,300 crores, the rest of the equity is being infused directly from Kiri to Indo Asia Copper Limited. So 2 principal shareholders would be there of Indo Asia Copper Limited. One is Claronex, which is indirect shareholding of Kiri and direct shareholding from Kiri as well. So that is how IACL will remain wholly-owned subsidiary of Kiri Industries Limited going forward. Same doesn't apply to the fertilizer project, which is parked under Indo Asia Fertilizers Limited, and that fertilizer entity is going to be a wholly-owned subsidiary directly under Kiri Industries Limited India. So that's the second part for further clarification. Now as far as the management team is concerned, I have with me on the call today Mr. Ranjit Singh Chugh, who is the CEO of the business. And as we speak today, we have already started hiring senior management team. And the project strength today, if I understand, and Chugh saab will highlight more if you need further clarification, it is more than 50 people only on the project side is already there deployed. Second, we have taken TCE, Tata Consulting Engineers also on board. And they also have added a significant strength of technical experts on the project execution side and engineering side as well. So both together on ground, you are seeing almost 100 people on the project right now. This strength will continue to enhance month-on-month basis. So we are expecting every month, 50, 60, 70 people will keep joining. So that's how the total strength will continue to expand over a period of next 1 year. And when you talk about a senior team, the Chief Operating Officer of the company has already been hired, more than 25 years' experience in copper, will be joining soon, CFO already in place. CEO Chugh saab is already there. And the Chief Commercial Officer, the search has been going on and the interviews have been lined up that also will be decided soon. So I think the critical top team would be in place in a very short time. Majority are already on board as on today.

Thank you so much, sir. As I conclude my comment, this is a once-in-a-lifetime opportunity for the team to create a historical market cap. So just to -- on behalf of shareholders, if you can consider great governance standards going ahead and possibly a big 4 auditor in the future, that would really enhance the visibility in the eyes of both domestic and international investors. Wish you and the team all the best, sir, keep it up. Thank you.

Thank you so much. Thank you so much.

The next question comes from the line of Sunil Nangalia from Arena Textiles and Industries Limited.

Manish ji, I congratulate you on behalf of all the shareholders for winning the legal case, again, long stand for a long time. The company got a huge money the first time, and this is a very rare case in the Indian corporate culture. But sir, can you elaborate what was the reason why the price came down for INR 780 to INR 450 within a span of 30 days. I sincerely request your comments for the benefit of all the existing shareholders because what I feel is this is a circular trading. And you won the case as minority operation. But the way the prices has come down from INR 780 to INR 450 within a span of 30 days that too after winning such a huge money is really you -- I will say it's a minority operation against the retail shareholders. There is somebody involved and he was very much active in circular trading and taking the prices from INR 780 to INR 450 within a span of 30 days. I sincerely request you to please elaborate on this.

Hold on, Sunil bhai. Number one, it is not the management or company's business to manage the share price. So I would -- and whatever you are talking about, I have no idea on what is happening, not happening, why share price. We are not in the business of share price management here. I think you have miss judged and you have -- there is no point in raising any allegations either on the management or anybody. We completely deny any allegations if you are trying to raise on minority, anything like that. There is nobody involved. There is nothing from the company side here, and we are not in the business of the managing share price. Sorry, I would not need to answer your question. Market is supreme. Whatever market decide is the price, okay? We did our best. We got money. Market didn't like it. Market like it. Market likes our future plan. Market doesn't like future plan. Market would reward the value at some day to everyone who creates value. It could be 30 days, it could be 30 years, it could be 3 years, right? 30 days is not a measurement of value creation or value destruction, right? So I'm sorry, I disagree with the allegations you have raised. I do not appreciate what you have just mentioned. It is -- there is no need for me to answer any further. There are disclosures on the deployment of the funds, on the receipt of the funds. Everything has been transparently shared with the shareholders. It's market which decides whether the price goes up or down and nobody else. Neither I can answer your questions. I don't think any of the shareholders will answer your question. Go ahead.

The next question comes from the line of Bhavesh Khandelwal, an individual investor.

So sir, I wanted to check -- so this is close to around further -- I mean, I think close to around INR 12,000 crores, which we are planning to invest, right, in this copper side. So INR 5,000 crores, INR 6,000 crores is like what we get. So what -- how do we plan to get the remaining? Is it through debt or dilute the equity? What is the plan?

In the form of borrowing. So it would be 70-30, 35, 65 depending on the final financial closure would be the equity and debt ratio. And accordingly, the borrowing will take place.

Okay. And second thing -- the second question is, so I mean -- I wanted to take a little pinch of salt. So copper is like slightly a -- I mean, it's a slightly tricky sector, right? Because, for example, you talk about Sterlite Copper, it's an environmental issue, people protest. Is this slightly a risk? I mean, of course, the rewards are too high as well. Sir, just wanted to check because we already fought a long battle. So wanted to know your thoughts that why we pick this sector and how do we mitigate?

Sure. So the number one, as I addressed earlier, the selection of sector based on the future demand, the requirement in the country, the home market and the import replacement, 100% import replacement. So these are the rationale and the logic points because of which we are entering into the sector. And that also after a lot of deliberation for a few years before deciding into entering this sector. Number two, as you mentioned, copper being a volatile sector. But on EHS side, environment and safety, the latest technology, which we have adopted, the way we are setting up the entire facility is zero liquid discharge and zero pollution. So every waste is being converted into byproduct or used to make value-added products, let me put it this way. So that's number one. Number two, the emission standards have been worst by standard that we have adapted to achieve in this facility. So -- and the entire project is operating or will be operating on renewable energy without any coal handling, any coal at the site. So on a global level, such kind of facility would be a very high standard and high-level EHS following facility. So from that point of view, and which is very critical and important point, we have ensured that from environment compliance, from health and safety standards, we will achieve one of the highest global performance standards here. That be rest assured. And accordingly, we have selected our machineries, equipment, the technology and whatever is the latest and best available as of today.

The next question comes from the line of Viraj Mahadevia from MoneyGrow.

Sir, sorry, picking up on my question earlier regarding the fertilizer business. So are there a lot of competitors in the field you're getting into because generally, fertilizers tends to be quite competitive, cyclical and volatile.

Right. So the logic of fertilizer here is the phosphatic fertilizer, which is DAP and NPK. On an average, we import in the country around 8 million to 9 million tonnes per year. And we would be making almost 1 million -- 1.1 million tonne phosphatic fertilizer for replacing purely imports. So from that perspective, it becomes a domestic and the national requirement to sell and having opportunity to sell within the country itself. Gujarat, where the plant is located, the consumption is somewhere around 600,000 to 700,000 tonnes a year, less than 1 million. But it provides us an excellent base to distribute all across Saurashtra, South Gujarat, covering a large part of that area. And fertilizer being a coproduct for us, let me put it a value-added product for us because smelting generates waste acid called spent sulfuric acid and spent sulfuric acid is converted into phosphoric acid and then phosphoric fertilizer. So this value chain is being captured here by converting waste into value-added products. And that's how these both products are, to some extent, linked by using waste of one as a raw material into the other. So that is how they both are connected.

Understood, sir. And makes complete sense. Are there other players such as GNFC, et cetera, that are setting up these capacities for import substitution? Or even after your capacity, will India still be importing the balance?

No. Even after our capacity, India would still continue to import at least 7 million to 8 million tonnes. So yes, there is still ample room...

May I speak?

Yes.

Yes. Good afternoon, everybody. Good morning and good afternoon. This is Ranjit Singh Chugh. As far as fertilizer is concerned, as of today, the only project which is coming up is from Hindustan Zinc, which again, like us, have embarked upon converting the sulfuric acid so produced in smelting of zinc into fertilizer, again, it is NPK. Those -- that plant will be operational somewhere by this year-end, '26 end. It will add around 7 lakh to 8 lakh. So yes, Hindustan Zinc is coming up. GNFC as of now has not announced any project that will come up. So apart from that, other serious players are still contemplating to add volumes, but nothing concrete has come on to the horizon as of now.

The next question comes from the line of Kevin Gandhi from CapGrow Capital.

My question was again to Mr. Ranjit. Sir, just asking about the copper plant. So don't you think Kiri might suffer from the overcapacity of copper because many big houses are actually entering into the copper smelting. So what is your view? How do you see the situation?

I mean, who all are entering into copper? Today, -- let me start again. Today, India is producing, including Adani's production at around 0.8 million or 8 lakh tonnes. Today's capacity -- today's requirement stands already Manish ji has said around 18 lakhs and very conservative. In fact, the market study, which was done 1, 1.5 years -- around 2 years back, which talked of 30 lakh tonnes or 3 million by 2030. That did not factor into the transitional -- the transformation which India is going at present in last 1 or 2 years in manufacturing of -- I mean, in going into huge AI data centers and manufacturing of chips. So -- and both of these are high guzzlers of power. And the moment we talk of power requirement, straightaway copper comes into play. I mean, in each and every aspect of copper manufacturing -- sorry, power requirement, copper comes into play, whether it is transmission, whether it is storage, whether it is putting up transformers, everything requires copper. And when we talk of any other player coming into the picture in next 3 years, yes, we know Aditya Birla Group is coming up with expansion, which will be in tandem with us. I mean they will also come into play by 2028 as we come into operation. They are adding 0.4. So right now, we will be -- first phase, we are adding approximately from smelting route around 0.35. But with scrap route, we are adding up to 0.5. So even if we consider 0.5 and 0.4 from Aditya Birla Group's Birla Copper plant, it will be 0.9. So we will be at 1.7 million tonnes by 2028 end. By that time, our requirement, I'm pretty confident would have crossed 3 million -- more than 3 million. But right now, the studies are saying 3 million, let's stick to 3 million as of now.

Okay, sir. Got it. Sir, just one last question on your -- because I am actually new to the sector. So please -- so basically, 5 lakh tonnes is what we are planning for copper smelting another 5 lakh tonnes, which we are planning for, I guess, copper anodes and copper rods.

No, no. Wait, wait. We are planning 0.35 lakh from smelting route and 0.15 lakh from secondary route. So the total copper LME grade copper production, we have embarked at 5 lakh tonnes as of now, which is Phase 1 of our plan. And out of that 5 lakh tonnes of copper, we'll be converting in-house to value-added products to the tune of 3.2 lakh tonnes, I mean, copper rods and copper tubes primarily. So that comes to around 3 lakh plus if we add -- when we add foil, which will be a very small plant, 2,000 to 3,000 tonnes. So around 3 lakh -- out of 5 lakh tonnes, 3 lakh will get converted into value-added products balance 2 lakh will be sold as cathode in the market as of now.

The next question comes from the line of Bharat Kumar from BKY.

So my question is how positive we are in terms of getting the stake in the Celsius Mining Company? And what is the backup plan do we have if everything does not go well?

So let me address your question, Manish Kiri here. See, the primary feedstock that we will be received from Chile, Peru and all other countries would be more than 1 million tonnes. As on today, out of our 1.2 million tonne requirement of smelter approximately 1 million tonne is a quantity indicative confirmation that we have already received from various miners in the form of supplies. We have not invested either our equity. We do not plan to invest any of our equity into any of these other mining projects. We would be just having offtake agreements to purchase, correct? The Celsius or the Makilala mining, which was discussed, is an opportunity that we are exploring as a first initiative to have some equity into a mining project, right, where we can secure certain offtake on a much longer period and a little bit favorable pricing. So the dependency for the copper project is not [indiscernible] at all. It is only the addition if it happens and when it happens. If it doesn't happen also, it doesn't affect our project at all, 0. No impact at all.

Okay. And my second question is on the existing business. Now since the [ ISS share ] deal is done and the textile market should improve, do we see our existing business to grow and make better profit, better margins?

Yes, because the entire legal cost is going to go away. So our operational EBITDA would now reflect quite positive earnings going forward. And we hope to have good results on the traditional and operating business as well for dyes and chemicals.

The next question comes from the line of Yeshvant Rajput from Nirmal Bang Securities. The participant has dropped off. We'll move on to the next question that comes from Tarun Kumar.

Yes. Congratulations, sir. So sir, I have 2 questions. I heard somewhere in this call, you said first phase is going live in April 2027. Is it right? Because usually, it takes 3 years to set up a copper smelter.

Let me address -- yes, let me elaborate to you. We started embarking on project end of 2024 or beginning of 2025. Let me clarify further, correct? And what we are doing right now by 2027, as Mr. Chugh just mentioned, we would not only be smelting, but we would also be putting the value-added finished products. So the first facilities to become operational in 2027 because delivery times for the equipment and machineries are also earlier would be all downstream products. And those downstream products plants would start arriving to facility 3, 4 months from now. So it is quite on track that the downstream products will become operational by 2027 April and actual smelter and fertilizer both need to start together in the same time frame. That would become operational by end of 2028 calendar year.

Okay. So next question, sir, is -- I read somewhere about Indo Asia Copper participating in some copper component PLI scheme. So is this first phase related to that only?

Okay. So there are -- as Mr. Chugh sir mentioned, there are 3 products. One is copper tube, copper rods and there would be copper foils as well, correct? Out of these 3 copper tube has been approved in PLI scheme, correct?

And that will be the first plant which will be operational by March, April 2027.

That will be the first...

The next question comes from the line of Viraj Mahadevia from MoneyGrow Asset.

Regarding the fertilizer business, you will be building your own distribution pan-India? Or are you looking to partner with incumbents in the sector for supplying your NPK?

No, we will build our own channel.

Your own channel.

And we have already planned on that count. This year, we'll launch our branded product by trading it to start with trading. So we have 3 years lead time to put our brand in the market. So this calendar year '26, next calendar year '27. And the third calendar '28 will be doing traded products. We will steadily go up. The plan will be to, let's say, plan this year will be up to 1 lakh tonnes of traded products and only NPKs, nothing else. And then we will move to maybe 2 next year and 3 to 4 based upon the response and based upon the speed with which we build our brand.

Well understood, sir. And lastly, do you see any execution risks in either of these 2 projects, copper or fertilizers, whether in terms of technical know-how, whether in terms of committed capital, whether in terms of permissions and regulations?

Permissions, et cetera, all are clear and all are in line. There will not be any hiccup. Same goes for technology also. Primarily, we have embarked upon the latest and the best technology. When I say the latest means in last 10 to 12 years, 80% of the production of copper smelting has come from the technology which we have taken in the last 10 years. And luckily or unluckily, in last decade, the maximum smelters have become operational only in China, barring 2 or 3, which have come just recently 1 year or so, Indonesia and India. And that is where we are on to. And as far as the financial closure is concerned, Manish Ji has already given a clear line of thought that by March end, we'll complete it. So we don't see any reason that we will be delayed or we'll have some hiccups.

The next question comes from the line of Govind Goyal, an individual investor.

Congratulations to the team for such a successful completion of the such a long drawn battel with the DyStar and Longsheng. Sir, my question is regarding the acquisition. Are we considering any kind of acquisition of the companies like recycling the kind of businesses, which would complement our existing business?

Not of now. Presently, we are focusing on our smelter and the scrap within smelter utilization. So once those things are established, that could be an organic growth, which we can plan and look into.

The next question comes from the line of Venugopal Chiduruppa, an individual investor.

Any proposal rights issue because fertilizer and its cost is INR 12,000 crores. Now only you have INR 6,000 crores in bank account? Hello? Any rights issue proposal, sir? Can you hear me? Hello. Rights issue proposal, sir?

No, right issue proposal. There will be no right issue proposal, nothing.

[Technical Difficulty]

No borrowing. I just mentioned a few times earlier that we will be borrowing. The rest of the requirement would be by taking loans and not by having any rights issue or anything.

Thank you. Ladies and gentlemen, that would be the last question for today. I would now like to hand the conference over to the management for their closing remarks.

Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and at the same time, offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations managers at Valorem Advisors. Thank you, and wishing you all a great day. Thank you.

Thank you, sir. Ladies and gentlemen, on behalf of Kiri Industries, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.