Mishra Dhatu Nigam Limited (MIDHANI) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to MIDHANI's Q3 FY '25 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over Mr. Amit Dixit from ICICI Securities. Thank you, and over to you, sir.

Yes. Hi. Good afternoon, everyone. On behalf of ICICI Securities, I welcome all the participants for MIDHANI's Q3 FY '25 Conference Call. At the outset, I would like to thank the management for giving us an opportunity to host this call. From the management, we have with us today Mr. M. Gowri Sankara Rao, Director Finance and -- additional charge of Chairman and Managing Director; and Mr. T. Muthukumar, Director P&M. Without much ado, I would hand over the call to Mr. Sankara Rao to take this forward. Over to you, sir.

Yes. Thank you, Mr. Amit. My dear esteemed investors and representatives of financial institutions, most welcome to the -- today's our financial highlights presentation. MIDHANI is a very huge company. And for the quarter 3, our results, I would like to mention, as far as revenue and VoP is concerned compared to the last year, same quarter FY '24 and FY '25, little dip is there. However, in the form of EBITDA, PBT and PAT, there is an improvement. Last year, we did for the same quarter, INR 251.98 crores revenue. This year, it is INR 237.97, a dip of 5.56%. Last year, we have done VoP of INR 279.28 crores. This year, it is INR 257.45 crores, a dip of 7.82%. Whereas when it is coming to EBITDA, last year, for the past quarter 3, it is 17%, INR 42.11 crores. This year, it is INR 59.44 crores, it is 25%, an increase of 41.15%. I will explain in detail the reasons for the same. Same way, PBT also, there is a growth from INR 18.92 crores of last quarter -- last quarter 3 of FY '24 to quarter 3 of FY '25 is INR 36 crores, an increase of 90.27%. Same way PAT also, it is -- last year it is 5%, INR 12.49 crores. This year, it is 11%, INR 25.27 crores, an increase of 102.32%. For 9 months, if you see, there is -- last year, FY '24, we did INR 667.18 crores whereas this year, cumulatively, we did INR 663.54 crores, more or less at the same level, only 0.55% -- 0.55% is the dip. Coming to VoP, it is INR 865 crores -- INR 865.77 crores last year. This year, it is INR 736.46 crores as our intention is to reduce the higher inventory as we have discussed in earlier several meetings. We have concentrated more on revenue than VoP. Coming to EBITDA. It is -- last year, it is 20% for 9 months. This year it is 22% from INR 135.55 crores to INR 148.02 crores. The same PBT also has gone from INR 66.29 crores to INR 78.88 crores. PAT is INR 44.88 crores to INR 53.92 crores. That means nearly, we have seen some 2% growth in EBITDA and 1% -- 2% growth in PBT also and 1% in PAT. Mainly this is because this year, we have an advantage of price reduction in raw materials on account of nickel where compared to last year, we see prices have come down. So in some cases, prices increased, nickel being used maximum in MIDHANI because all the raw materials will import from foreign countries, previously not available. So there is a reduction on account of nickel. Some prices like titanium, sponge, moly, though it has gone up, we could manage, we could save nearly INR 29 crores on account of raw material price reduction and INR 19 crores on account of consumption. Another thing I want to tell, in addition to raw materials, we also consume plant reverse, we say scrap, but it is a plant revert, plant returns. This can also be used there. All this precious raw materials will be there in the composition base, which normally we value recoverable basis when that consumption is there also, it will impact on profitability. Compared to last year, there is an improvement on this also. Clearly, last year, our consumption of virgin materials to scrap is around -- average is 66% to -- 66%, virgin and 34% plant reverse, whereas this time, it has come down to around 65% to 55% virgin and 45% is scrap, due to which we could gain in the consumption also and also, as I told raw material prices. And as far as the order booking is concerned, 2024-'25 FY '25 is an excellent year for MIDHANI. We have already booked nearly INR 1,115 crores worth of orders, and we are expecting in this 2 months -- 2 to 3 months, we will get another INR 550 crores. So we'll reach INR 1,700 crores worth of orders in this year. As of today, we have nearly INR 1,906 crores orders -- executable orders are there. So we hope quarter 3, quarter 4 of FY '25 and all the quarters of FY '26, a good picture can be seen in MIDHANI. Even coming to the CapEx side also, we have invested -- with a major investment is not there, still, we planned around INR 60 crores to be invested in this year on CapEx, already INR 40 crores we completed, balance INR 20 crores also we are going to invest now. Major plants -- future plants also is there in the company and MIDHANI also is developing various new alloys requirement for the aerospace and some requirements of energy side, and also some naval side also, we are developing. Even whatever earlier, MIDHANI has done in certain some products on army side, tank side, certainly, we are expecting certain barrels -- gun barrel also. We are expecting to reenter the market. And other alloys also as last time also we discussed like Ultra -- AU -- Advanced Ultra-Supercritical alloys also we wanted to develop, which will be used by BHEL for electricity generation, where here also we are expecting. We have already discussed with IGCAR who is developing that alloy. With them, they have also placed a developmental order, and we have also involved in this further development, which is already established. Once the orders comes from BHEL, we'll be able to execute very sizable figure of this alloy. In addition to that, so many other materials also we are doing. And we are expecting -- earlier MIDHANI is getting -- got the order of nearly some INR 2,000 crores from ISRO. Now again, we are -- those order is mostly completed, very nominal quantities are pending. This year, at the end of the year, we are expecting to get another INR 200 crores to -- INR 200 crores order we will get. With that also MIDHANI -- because it is already an established for managing stage. So we will be capable of supplying the same material within a year as we have a facility available now, our Wide Plate Mill, which can be used and -- supply the items. Other one is the rings are there, the [PSLV] own facility is there and funded facility. And we also have the facility. We are taking up. If that is successful, entire INR 200 crores can be executed in 1 year. This is from my side. With me, my Director, Production & Marketing, Mr. Muthukumar is there also GM Marketing, Mr. A.K. Sharma; AGM Finance A.P. Rao also is available here. Now I'll request the investors to raise your quarries, if any, on MIDHANI, we will try to explain you. Thank you.

[Operator Instructions] The first question is from Anil [indiscernible] from [indiscernible].

Am I audible, sir? Am I audible? Congratulations on good set of numbers. Just few quick questions. Sir, as you mentioned that you are developing supercritical alloys for BHEL, does this refer to the ultra-high megawatt thermal power plant that the government had? And these alloys are regarding to that project?

Yes, yes, you're right.

Sir, what would be the tentative size of, I mean, such the entire industry as such for the supercritical alloys? And what is the government ambition on all these -- the ultra high megawatt power plant in terms of megawatts?

Megawatts, can you -- our DPM will be...

Now it is in development stage only. Now they're completing [Technical Difficulty] that is under development stage and they have been established there. And since it is under establishment, now there is going to be -- they're thinking about 5 mega projects, but full detailing is not known to us.

But we have submitted our bid -- our budget report to BHEL. It will be big figure. Based on whatever successfulness we got, we have submitted a very big figure. Once that is finalized, we'll let you know. But it is very good turnaround to MIDHANI.

Sir, I believe this is -- in this industry, we are the only one Indian players we have placed bid for this order. I guess the other bidders would be foreign, right? So we are looking at some kind of import substitutes in these kind of alloys.

Yes.

Sir, and what will the duration if the order materializes for us? I mean, 2 years, 3 years, 5 years?

Alloy has been already developed, okay? So if you split -- actually, whatever budget is available, we have given. They are comparing with the input. So the formal approval has to come from the government. So once it is done, there will be tendering process. After tendering, MIDHANI will get the order. So when MIDHANI gets order, like every other alloy which we do, it depends upon the product type. We're able to start delivering it within 6 months of time from the date of delivery, from the date of order because the products are available in [indiscernible] even in the budget report.

Okay. Sir, coming down to the SMRs and using our titanium chemistry -- titanium-alloy chemistry, so what is your thought process given the finance minister also emphasized on, I mean amending the entire act allowing private participation and a lot of companies have started hunting for technology partners in reactors. So what would be your thought process on this entire industry that's panning out because they have given a target of about 100 gigawatts of nuclear by 2047. So your understanding on this particular industry. And I guess we are the only ones in the titanium-alloy industry -- would be using -- would be, I mean alloys for a number of components. We've also done some projects in past with respect to the coastal side nuclear plants, if I'm not mistaken.

Titanium we are not...

See initially power plant [indiscernible]

Second generation plant. It is supra light. It is not...

So far we're supplying from very -- [indiscernible] that's not specifically titanium but anyway the nuclear power plant we are geared up with titanium production. Because, recently, we had commissioned our new titanium plant. Okay, new titanium plant. So now we are -- that is 10 tonne [RBR]. We are geared up for the -- whatever the future requirement of the titanium, which will cater not nuclear, for any other applications. So that already we had made and we have also provisions, above which there is going to be huge requirement of titanium. Then we are also provisioned that we can install further 2 more [walls] in the same space already we are having space and whatever supporting facilities for accommodating, for that we have also already installed. So MIDHANI will be geared up to take any other challenges with respect to titanium.

Sir and is the titanium -- the new titanium furnace operational? I mean earlier we were doing test runs for orders to find the consistency in quality. So is it commercialized for commercial batches right now?

Yes. Yes. Already.

It has become fully operational and we started delivering product from the new titanium facility. All our trial runs are over, now we start operating [indiscernible].

No. Titanium, we are already supplying for the strategic projects. For commercial purposes, no issue at all. More stringent specifications we are meeting. So it is not difficult for MIDHANI to produce titanium further. Only thing we have to concentrate more on getting the sponge and master alloy. That also now we are getting -- we are sourcing the more suppliers and indigenization also we are doing.

Okay. Sir, if you could also share some more detail on the ISRO order that you just mentioned that you'd got earlier orders and right now you are expecting to get about INR 200 crores order from ISRO regarding alloys?

No. ISRO, already whatever orders we have placed for the future launches also, they have taken material. Now they have some shortfalls which they are taking up. We will -- we are expecting that order by this month, year-end that means FY '25 year end, in the month of March something, we have submitted budget report. We need to finalize -- we need -- they need to finalize and we'll get some orders. That only I told, totally INR 500 crores order we are going to get, total this year INR 1,700 crores order we are getting.

Sir, out of the INR 500 crores marginal orders that we're expecting in Q4, so INR 200 crore order is from ISRO. The other INR 300 crore order we're expecting from which industry, sir?

Other miscellaneous. Maybe defense -- defense side, aerospace side, I mean it is miscellaneous other -- regular customer.

Actually, see MIDHANI, now every year we get the Q4, that you know we are a strategic producer, for giving material to defense, aero and energy -- energy sector. So now for the next year requirement, normally, we get orders in the last quarter of every year. So this year also, we are expecting order worth of about INR 500 crores, in this last quarter, okay? So that happens from all the sectors, including defense, naval, everywhere, it will -- so that will be delivered in the next year. So that happens now.

We move to the next question. The next question is from Rakesh Roy from Boring Asset Management.

Sir, my first question regarding, sir, your alloy, superalloy, which you are making for BHEL. Can you highlight the our overall market size for this alloy, for Mishra Dhatu Nigam?

This is first time developed in India, with MIDHANI. So these markets -- even this technology also, I think new. They have not yet cleared -- government of India has to clear. Once it is cleared, the thermal power plant with AUSC material, they will plan. Once that is planned, they wanted to know whether alloy can be developed in India. Maybe it can be imported also, they will see. But they asked us to develop, we developed. Now we are waiting for the final clearance from the government and inquiry from the BHEL.

Right, sir. My next question, sir, can you highlight on what is the progress of our JV with NALCO for aluminum plants, where we are currently?

Yes, aluminum plant, it is again, we have made -- that Utkarsha you're talking, that we are discussing. Whatever data we obtained, it is not so much encouraging or giving that much of investment NALCO and MIDHANI does. The benefit, again, the consultant has to firmly give recommendation. It is not some positive recommendation. Still we are studying, even ministry level also, they are studying the project. We will let you know once the final outcome comes on this. We will inform definitely, our investors.

And still yet how much we invest in this industry yearly?

Pardon?

Can you may -- how much is invested in this yearly with NALCO?

Around INR 4,500 crores. Till date, we are not -- we are -- it is only land was procured. Actually, we invested INR 20 crores, INR 20 crores. MIDHANI invested INR 20 crores in the form of capital and NALCO also invested INR 20 crores -- INR 40 crores. In that INR 10 crores, we spent on land and compound wall. No more. Only -- now whatever we appointed the consultants and environmental clearance, these things we have done that is in INR 1 crore or INR 2 crores. But ultimately, major investment was not there. Major investment will be decided based on the outcome and decision of the government on this, as this project appears not that much encouraging, profitable or viable. So still discussions are going on because the requirement of defense also very -- small in this. And other areas like transportation, like railways and logistics, car manufacturers, whoever, using the aluminum alloys is not started fully. So presently, even other suppliers, competitors also coming into the market. And imported [aluminum] by suppliers are cheaper than making in India. All these aspects they are studying. They have appointed one consultant. Their recommendation is given. We ask them to further study. Once the further report comes, then it will be discussed at Ministry level. Then a decision will be taken on this. Till such time, whatever we invested, it will be in the form of FD is only there.

We take the next question from [Pranav Vasavada], who is an individual investor.

Just one question. Basically, we have -- titanium dioxide is a raw material for us. And -- but when we are looking at it since last so many years, MIDHANI has not tried to buy any ore, mine ore, for any captive consumption. If there is a plan for buying any kind of this kind of mines in the future for this kind of titanium dioxide or for anything else? Because there is a company called PTC, which has already commissioned a VAR furnace for the production of the aerospace-grade titanium ingot in the country for private sector company. Are we planning something of similar sort?

Coming to this titanium, ore, from the ore, we have to produce sponge. Sponge will be used in the VAR. From ore to sponge there is lot of process is there. It is a huge investment. MIDHANI's present requirement is around INR 1,000 to INR 1,500 crore, which will go to INR 3,000. If this type of project is to be kept, clearly the capacity should be 20,000 tonnes like that. Even PTC also, they have to put tha t facility. Now already in Kerala KMML is there. Their capacity is only 500 tonnes, that also they are not able to produce. Normally, in this, they concentrate more on titanium oxide side. So whatever sponge is required presently, everyone is dependent on the foreign source only, which is competitive and better product you will get. Presently, we are getting from other -- even PTC also, they are trying from the foreign only. In fact, they also planned, but it is a huge investment side, huge investment side. So that investment has to be seen. And there are talks that eastern side can be planned like this. It has to materialize. Otherwise till such time, we have to depend on KMML and also foreign sources only. Even KMML also, they are planning -- it is a state government organization. They are also planning for enhancing their capacity. If they enhance also, that can be used. But size-wise in India, presently, only MIDHANI is producing, maybe PTC may might be added. And if the PTC added also how much is the input required depends on that. Based on the size in future, they may decided and MIDHANI also -- but as far as the requirement, I told you, it is 20,000 tonnes like that. That much of requirement MIDHANI is not having, even down the line 4, 5 years if you take also. So investment in titanium -- making the titanium sponge or buying the titanium ore may not be -- present condition of MIDHANI, may not be suitable. So sponge only we will source from outside India by way of import. And also from KMML, which is a government organization.

Okay. Sir, only the last question. We have been -- we have this JV with NALCO since several years. but it has not fructified. And in one of the con call 2 years back, it was said that the actual whatever was envisaged and the requirement, the -- what is required anticipated is absolutely low, the demand. So what you would like to say today for this JV will go ahead or it will remain as it is on paper?

Question, he must have had, previous questioner also he asked same question. I have replied in detail. We have appointed a consultant to study the market, to see the prices of the import prices, what is our prices, who are all other people are there. So still, it is -- as far as I told, it is not an encouraging situation. That's why we are rethinking and it is discussed in the Utkarsha joint venture board meeting also. But still it is not finalized. We have to take up with the ministry to be done. And strategic requirement also very less. So definitely, something will come next -- by next another 1 quarter, something may come. It is in the last stage only, but it is not encouraging I told.

Next question is from Parimal Mithani from Credential Investments.

Can you hear me?

Yes.

Sir, I just wanted to know the decrease in raw material price is because of what [is the reason highlight]? And what is the inventory level currently?

I didn't catch you. Can you please repeat?

Can you hear me?

Yes.

Sir, I just wanted to know the raw material prices have decreased. What is the reason for that? And if you can tell the inventory, which we are carrying since long time, what is the status on that, sir?

So first question raw material prices, it is volatile. See as I told you earlier, [nickel] before this global situation Russia-Ukrain war or geopolitical situation. Certain prices have gone up, certain prices have normalized. So in that way, whatever prices earlier in the standard form, certain prices have increased and subsequently reduced, some prices are going up and down. In that way, it is -- see whatever raw materials purchased by MIDHANI is not available in India. Number of sources also less. Because of the situation sometimes we may not get the material from the required country. And the further buying from China also certain restrictions are there. Even Australia also interested, but they are not coming forward. So that's the reason some prices are going up. It is a market condition. And we see even it impacts even the dollar price also. When dollar goes up also, prices goes up. So this year, what we have seen, nickel has come down, moly, chromium, little bit in increased. Titanium sponge, also because of the restrictions titanium sponge also increased. So other prices is normal only. But majorly because MIDHANI is consuming more nickel, the other items are there. This year, we have an advantage. Last year, we have a disadvantage. We have to see in the future also. But indigenously developing these materials are difficult, except titanium sponge, some cobalt recovery also we planned. But otherwise, mostly we have to depend on the foreign sources only.

Okay. And sir, in terms of the order book, is it safe to say that we'll be having a healthy order book going forward from now? Because you're close to INR 2,000 crores, do we expect a jump in order book from now going onward?

Already, we have -- earlier years, it is only INR 1,000 crores, like this, order book. Now we have INR 2,000 crores. We have a very good order book. Now going forward, same will be maintained. In MIDHANI also, we will try to achieve the order book, whatever is there to execute. Once I execute, I'll get further orders also. And then another important thing, because of present situation, even foreign customers are also approaching MIDHANI. And foreign customers are approaching MIDHANI. Foreign customers do not place the entire requirement at one go. They place in small parcels. Suppose once I execute those parcels at their satisfaction, they will continue to give some more orders. Like that also, if we see this year, we have already touched today INR 60 crores export. Ever in the history of MIDHANI, this much of export, we have not done. And going forward, exports also will go up because we have already started working with the high-level customers like Boeing, Pratt & Whitney, Airbus, GE. These customers are also approaching MIDHANI now. So only thing, they should get a confidence on MIDHANI. That confidence will come over a period based on my supplies without any delays and quality. Once I do, there will be -- a good portion will be there, better feel. Let us see. Now INR 2,000 crores order book is a healthy book, healthy only, INR 1,906 crores I have today.

Next question is from Anil Bagadia from Equicorp.

Just to carry on that you're supplying to most of the large aerospace companies and you've also got a lot of contracts from them, sir, are those supplies related to critical aero engine components or noncritical aero engine components, sir, if you could elaborate? And the way MRO is also being developed in -- the MRO ecosystem is being developed in India, so how do you see that space going forward?

Yes. My DPM will explain.

Components for aero application, so we are the major suppliers of whatever raw material it is selected for the aero components to HAL, okay? Recently, as has been discussed in the earlier conference also that one of the major orders we have assessed for making super engine to HAL, okay? So that [indiscernible] which was being imported, and now we are in the way to make components and which we'll be supplying to HAL, okay? That is one part. And this is starting. Once we are successful in that, that is supposed to be the most critical one, and we are supposed to get many of such orders. As on today, now we -- our major core component, whatever we are supplying, major component is going to aero. So some of them are going for a critical application for the aero. Some of them are slightly noncritical. But however, whatever we make, since it is going for aero, we have to say all are for critical component only, and it is all very stringent quality requirement that we are able to meet today, definitely. And this is -- whatever component or product we are doing, this is connecting to components, right? It is being used in various parts of the aircraft, okay? All right, from engine up to shaft, every part, it is being used. So this is one. Coming to space, space, as you know, that we have only developed the material for space, and we continue to support for space, and that will continue. So as we've been deliberating, we are going to get a major order we expect to reach in 1 month by March. And this, we will be continuing because whatever the space, they have a program, right, and MIDHANI will continue to support with respect to that. So that's all the update, and there, we'll continue.

Actually, I actually meant on the MRO side, how do you see the MRO industry? And are supplies for such critical -- I mean both critical and noncritical aerospace engine components to, I mean, Boeing, Pratt & Whitney, Rolls-Royce, Safran, et cetera. So I actually was -- I meant that entire industry as such. How do you see that panning out?

I would say, [indiscernible] now however, whatever -- since we have started developing the supply thing and other things there, now already we started developing some of the components for HAL, okay? That's one. Coming to export, now Pratt & Whitney and other company like that, we already initiated, as [ DS ] has told. These are all export orders, not -- they will not go for the bulk one. Now GE engines, Pratt & Whitney and all, we started getting orders, and we started executing that. And that's why compared to last year, '23 to '24, '24 to '25, our export orders have gone up. These are all mostly for the regular demand as well as for the replacement of the existing. Once it is established, we are very sure some of the parties like Pratt & Whitney or GE, Safran, all those things, we will be able to supply in future.

And lastly -- sir, lastly, are we making any material or components or anything got to do with the outer body metal alloy for the upcoming fighter jet programs?

Fighter jet.

Outer body, we don't make. Outer body, we don't make at all.

It is the engine...

Okay. We just do the engine parts. We don't do the outer body. Got it.

Outer body.

Next question is from Rakesh Roy from Boring Asset Management.

Yes, sir. Sir, can you light on the -- your recent tie-up with Pratt & Whitney that will supply components for the engine?

Please repeat.

Sir, can you light on the -- sir, your recent tie-up with Pratt & Whitney to supply engine components?

Yes. Pratt & Whitney, as I already told you that we have already taken some orders, okay, that we have executed and we have got the repeat order, which we have been executing. And we are having a regular meeting with them. Once we execute the present order, okay, which I don't want to give you that -- what sort of component, which will be executed by this financial year, there is the assurance from Pratt & Whitney that we'll get double the numbers what we are executing now. So this will continue to be there. So this is in the form of rods, this ring. So we are getting this thing.

These are all raw materials, which will be made components by the suppliers.

So this way, we are continuing to support them, and we are very sure that we will be one of the partners for Pratt & Whitney in future because they have done a lot of audit on us and that with our quality position, they are very much satisfied, and they are going ahead with the placing of orders.

Sir, my -- trying to understand, sir, how much order we are looking every year from this one for Pratt & Whitney?

Order value.

Order value, it goes to -- Pratt & Whitney, they're not only -- order value with respect to Pratt & Whitney is going to be very crucial, as I told you. This is the first year -- I tell you, what are the steps that have been taken? Firstly, they had come -- they had audited our plant. And in subsequent audit, they have placed an order worth of INR 10 crores that we have executed there. Subsequently, they have placed the orders that we are executing there. On executing this, they may do one more trial order, then that we have executed it. Subsequently, we'll bring a partner to that. Order value can go to the tune of maybe INR 200 crores to INR 300 crores because Pratt & Whitney is a big company, and they want all sort of super [ ROIs ], which already we have established and proved to Pratt & Whitney that we are capable of making whatever forms they want. So it is a question of winning their confidence over the period, which they are establishing by doing different trial orders. That is the [ insight ] that we get.

As I told earlier, they don't place their entire requirement at one go. They will place in small parcels. Once we establish over a period, then they may go for a rate contract. A lot of conditions will be there. We also have to see whether we can go for a rate contract present, price volatile and all. All these are there. Maybe some price escalation they give. Still, we are establishing with them, all these foreign suppliers. It is an opportunity came to MIDHANI because of the present global situation, which we are able to encash to the extent possible MIDHANI's capability, and we are trying to establish ourselves with the foreign buyers. We are doing that. So if you want to quantify, I mean we may not be able to quantify that much, but definitely, it is a -- positive growth will be there.

The next question is from Amit Dixit from ICICI Securities.

Sir, I have a few questions. The first one is on the margin, EBITDA margin. Very encouraging to see that we have returned back to 20-plus, end this quarter was 22% EBITDA margin. Now I just wanted to ask in the light of the orders that we have and the raw material cost, of course, nickel doesn't seem to go up now, so is 22% the kind of sustainable margin that we can build in for the next couple of quarters at least?

Yes. We can -- see, 22% this quarter, the average we got there, definitely, we can maintain. It may a little bit be hard to say that this time, it will happen. It all depends on 3 factors. One is raw material prices. Another one is my composition of consumption of virgin materials or scrap. If I'm able to utilize my plant, I don't say scrap -- also it is the plant returns. Scrap means -- gives a wrong meaning. In plant returns, it is having a very high-value material. If I am able to use in some of the applications where I will get the desired yield, definitely it is encouraging. You might be seeing earlier there are the days where we got more EBITDA also, 25%, 30% also. So we wanted to see that also. That is also possible once we improve on yield. Definitely, 22%, we can maintain.

[indiscernible]

Your voice is not audible.

Am I audible now?

Yes.

Yes. So I was asking more in the context of the fact that now we are going to get possibly ISRO order again, which generally improves margins we have seen in the past. So definitely, we can kind of see that margins might go up further from here.

No, I should not say because of ISRO that I'm getting more margins. If my performance improves, definitely I will get margin. That performance improves because when I'm establishing new, new grades, initially, I may be getting lesser yield. Over a period, once the grade is established, I will get more yield. Definitely, my margins will go up. And it depends on the market condition also. Based on that, improvement will be there. I don't conclude or I don't say that because of ISRO order, I got very good margins.

See, as you see that if you compare year-wise that with almost same level of our sales, we could be able to make more profit compared to last year. One reason, as it has been stated, this price of raw material, but the other reason, also because of our increased efficiency with respect to usage of more resources and also our operating efficiency. That is the reason we're able to see [ 22% ]. So this year, we have established some of the grades, and this -- whatever EBITDA we have made, it will continue. Going to the level of 30%, 35%, again, our main motto is that you will see last year, our inventory was to the worth of the same period. It was INR 194 crores. Now it is only INR 73 crores. So our main thing is we don't want to build any further inventory. So by controlling the inventory at the same time by operating efficiency, we want to increase the EBITDA. So EBITDA will be definitely at the same level and we'll try to improve upon. This, again, depends upon the product [ tender ] and our usage of resources. So definitely, it will be -- there will be improvement in coming quarters.

Got it, sir. The second question is on the titanium wire that we actually commissioned last quarter. Just wanted to understand that -- what is the status of that? Have we taken the first [ figure ] out of what is the utilization over there? So if you can comment on that.

Yes, yes. Presently, we are increasing hardware fully. As we have titanium sponge is available, earlier utilization, stabilization is there. Now because of nonavailability of master alloys, some production decrease is there last quarter. But now we have already tied up with master alloys and sponge also, there is no issue of utilization of titanium wire. It will be utilized 100%, no issue.

Sir, is it possible to give a breakup in your order book, sector-wise breakup?

Sector-wise, yes?

Yes, INR 1,916 crores.

One second. There are 30%, 50% -- if you see my order book, aerospace is more. Today, I have INR 1,907 crores. In that, INR 800-odd crores is aero. Naval is INR 500 crores. Army space, INR 150 crores, INR 150 crores, like that. Missile also, even missile also, you can say it is a defense there. Exports, we have a pending order of INR 50 crores. Energy, another INR 30 crores. And others, around INR 40 crores. I guess major is now aerospace.

Okay. And railways, we have something or no?

It is around -- I can say, it is around 45% aerospace. Naval is next level, is around 30%. And army space is only below 10%. As we told, we have already executed ISRO order, and a new order comes again, it will build up. Missile and other things are same. Exports also, we already executed INR 60 crores. Another INR 50 crores order is there. And if this is executed, we are expecting some more orders. Like this, we have -- okay, majority-wise, aero only, aero and naval. Balance are maybe around 20%, 30%.

Our next question is from Viraj Mithani from Jupiter Financial.

Congratulations also on outstanding numbers. Sir, my question is, what will be your guidance for this year in terms of top line growth and the bottom line?

Pardon?

What guidance would you -- what guidance you would give for this year and next year, sales and profit?

It then means we have very good orders. We have to try to execute these orders. One is aerospace, another one naval. If these orders are executed, as you know, government has sanctioned so many LCS phases and all. Once that is happening, we are going to get some more orders in aerospace, either HAL and others. Other side, exports also, exports, if I complete, I'll get some more orders. And another important area is titanium, titanium being used in the aerospace, in naval, also some other area. Now since I have established my -- [ our rep ], I'm planning I will get -- and the material availability is also increased, I may be able to do more titanium. And other facilities whatever is there that -- in what sector, WPM also, we are concentrating how to get more business. As some tenders were there of defense, say, army and aero, if that is successful, we'll get load to the water plant also.

Okay. So it will be 20% growth at least?

Your voice is something not audible. Can you please...

When we look, is it fair to assume it will be 20% growth...

Sorry...

Mr. Mithani, if you're on a hands-free, request you to use the handset and maybe speak a little closer to your mic. Your voice is not very clear.

Yes, one second. Is it clear now?

Yes.

Yes.

Yes. So is it fair to assume that the sales will grow by 20% at least?

By 20%, definitely because I have order book of INR 2,000 crores. Definitely, it will go up. Almost all facilities being established, grades also established, 20% is not a difficult target.

Next question is from Anil Bagadia from Equicorp.

Sir, just a clarification. When you said naval orders are for INR 500 crores, does it pertain to the armor plate contract that we got from Navy...

No, no, no.

For naval vessels?

There is no such -- this one is different, a strategic project. Certain things are there. Confidential products are there. There, MIDHANI's material is going on. We are supplying. Those are...

Do you see the application of armor plate in the most of the -- in a lot of naval vessels?

The armor plates will not be used in the naval. Armor plate will be used in the vehicles, are -- aircraft and all, certain armoring will be done. That is different. In naval application, it's something else.

Next question is from Amit Dixit from ICICI Securities.

Just a couple of more questions. So the order inflow that we had this quarter, I mean your order inflow, if I compare it with other defense companies, it has been relatively better. So I just wanted to understand some of the key programs for which the inflow was there and whether this inflow also included something in exports.

Exports, exports is very nominal to come, but the key major we are expecting from there are programs only and, as I explained, the VSSC ISRO order, but the exports will be -- how much? Very nominal.

Nominal. We are not expecting anything in the fourth quarter.

In the fourth quarter. We have to complete this INR 50 crores order.

We have been discussing here that export, whatever order we got, we are planning to execute and finish by each quarter, then there's further order inflow from the next year on. But as far as for strategic program, we will continue to get the orders, and we'll get in the fourth quarter also from mostly defense and space, that fourth quarter. And from there, we'll see. For this year, it will continue, and once we execute this, then further more orders will come. That is the hope.

Okay. Sir, another one on utilization of wide plate mill and Rohtak plant. What was the revenue contribution from both of these in 9 months of this year?

Wide plate mill, that we have told, that is because of the wide plate mill only, we could be able to execute orders for this space in the shortest possible time. By the way, we've been able to execute whatever pending orders were there about 2 years back. We've been able to execute that, and now we are almost same now. But the further orders for the future program, if anything comes on the plate, that there, we will be executing in quickest possible time. Coming to Rohtak there, Rohtak is a different type of thing. There, we do both the body armory and the vehicle armory. Recently, we executed one big order for [indiscernible], okay, that is worth about INR 42 crores overall. We have executed it. So we have got a lot of confidence in executing that. So now we are expecting that there, body armory orders will come from other people also. So we are also discussing with the Army so that we are going to do some trial jackets, and once it is approved, there is going to be a huge number of jackets that is going to come. So we are working on that. Other sector, which is done in the Rohtak, is the body -- vehicle armory. Vehicle armory, initially, we had [ 62 ] number of vehicles [indiscernible] then subsequently, we got another 20 numbers. In the total number, we almost executed 90% of the order, remaining executed in this quarter. And again, we have got some more orders from the J&K Police. See, the performance, what we have done at the J&K Police. From other police also, they started giving orders like a [ Gujarat ] Police, [ Pune ] Police...

[indiscernible]

[indiscernible] Police. All started giving orders. So this is evolving in various stages. Slowly, it is growing. So once it grows, then definitely after 1 year or 2 years, then this unit will become fully vibrant. We will be getting more and more orders in the sector, especially on body armory and vehicle armory. Apart from that, we are also working with the Air Force for armory in their helicopters. That one order was executed, and we are expecting a repeat order on that.

The Indian Army tender also -- Indian Army is waiting.

That is [indiscernible] Yes, yes. So that also within the discussion stage. So we are discussing. There are some issues in executing that we are discussing on the technical specification. So all this, after 2 years -- I cannot say it definitely will happen this year, maybe after 1 year. Definitely, there will be a lot of improvement as well [indiscernible].

For the armor, Rohtak side, huge potential is there. Even a consultant was appointed. We have studied the requirement of the country. Huge requirement is there. Even the competition also is there. Only Rohtak has to be supplying to the state police level. They have to improve, and automatically, we -- once we go on supplying, we'll get some more orders that we are expecting. WPM also, whatever load -- surplus load is there, we are talking to the people. Either on buying slabs and rolling it and give it or on conversion basis, something may materialize either in this quarter or next year. In the Q1 of FY '26, we'll do something. Otherwise, WPM facility for our internal supplies of plates, wherever required for the strategic projects or for the energy projects, we are using and we are supplying in time. Delay -- suppose it's the same route. If you apply HRM, CRM, it will be -- process will be delayed. In WPM route, it is becoming faster.

Okay. Sir, just a follow-up on this Army jacket. So what is this Army jacket order that we are expecting, which label it is? What material will be there?

Tender is more than 1 lakh number, 1 lakh 35-something. They are to finalize it. Whether they give it to 1 party, 2 party, 3 parties, we have to see. MIDHANI also pursuing that, whatever samples they are asking also, we are discussing and giving. Once the tender is finalized, even we get a number of, say, 25% or 30% also, big huge value.

Due to time constraints, we'll have to take that as the last question. I would now like to hand the conference back to the management team for closing comments.

Thank you. Now I request my DPM to give the closing remarks.

As we have discussed, now MIDHANI is in the correct path, and we have improved compared to whatever we were there in the last year with respect to profit, EBITDA and the reduction in the inventory. Our order position is also very good. And the coming years also, we are expecting fully orders because of this government incentive on utilization, and there is not any better product. And we have also added new facilities like [ new work ], which has come, and we have modernized our hardware for the Army, which is also going to be major useful. And we are planning to invest further INR 100 crores in the next year. So these all will help further augmenting the facilities, which in turn will cater the requirement of all the strategic program. Now if you can see the delayed order, whatever it was there, drastically, it has come down. It used to be -- about 2 years back, it used to be about INR 1,000 crores. Now it has come less than INR 200 crores. So that there shows that we have improved our efficiency in executing the order. So this will further come down. And the next year, if you see, at the end of the next year, there will not be any delayed order. So this all will create a lot of confidence on our customers. And our sales also -- since a lot of this is turnover also, definitely, there will be improvement by 20% because we added new equipment, which recently has been commissioned in the third quarter and coming to our operation from the fourth quarter. So this will come in hand-to-hand in the next year. So we'll have a great future in the next year. That's what I wanted to say. Thank you.

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