SG Mart Limited ($512329)

Good evening. Ladies and gentlemen, good day and welcome to SG Mart Limited Q4 FY '26 Earnings Conference Call hosted by Ambit Capital Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. [ Kumar Soni ] from Ambit Capital. Thank you, and over to Mr. [ Soni ].

Thank you, Nilam. Good evening, everyone. Welcome to the 4Q and FY '26 Post Results Conference Call of SG Mart. From the management, we have with us Mr. Amit Thakur, Director, B2B Metal Trading; Mr. Suraj Kumar, Chief Financial Officer; Mr. Naman Rastogi, General Manager, Strategy; Mr. Archit Arora, Vice President, Service Center and Distribution Business; Ms. Anamika Gulati, Senior General Manager, Renewable Business; and Mr. Anubhav Gupta, Group Chief Strategy Officer. I now hand over the call to management for an opening remarks, post which we'll open the floor for a Q&A. Over to you, sir. Thank you.

Thanks, Kumar, and thanks to Ambit for hosting SG Mart for its quarter 4 FY '26 Earnings Call. Good evening, everyone. I welcome all of you on our earnings call. Despite a very challenging 9 months for SG Mart, we closed the financial year with very solid performance with quarter 4 being the best quarter in terms of revenue, upwards of INR 1,800 crores, and EBITDA of INR 56 crores. This performance comes in the backdrop of very challenging month of March because of the onset of Middle East crisis. And despite that, we could pull off these numbers. So if you look at the full year performance, with EBITDA growth of 35% to INR 137 crores for FY '26, with 15% ROC on reported numbers. And if we analyze quarter 4 performance and ROC will be around 25%, this is a true reflection of our business model. We brought down the working capital days to 20 with the inventory and debtor rationalization. This resulted in operating cash flow generation of INR 300 crores for the full year, which funded the large CapEx of INR 250 crores, and there was a small free cash flow generation as well on a full year basis. And we closed our balance sheet with net cash of INR 750 crores. Now the reason for this performance was that SG Mart has now 4 running verticals, which have completely streamlined, and we are ramping up these verticals pretty well. Obviously, there will be short-term challenges coming in because of Middle East crisis, but the quarterly performance should be better than the previous quarter as new businesses, new verticals keep on ramping up. So vertical #1 is B2B Sales, which saw like, if you look at the quarter 4 results, the B2B volume is lower than quarter 3 because of shortage of steel supply, which got resolved in the month of January and then, the time war started, it further elevated. And the situation remains slow in terms of B2B business. But because it doesn't contribute too much to our earnings, so it's not hurting our overall performance too much. Service centers, which you see, our volume was 190,000 tons for the quarter 4 versus 150,000 tons. So this 10% increase, more than 10% increase, is because of the addition of new service centers. And we continue to invest heavily in new service centers, which we keep on pushing the volumes of [indiscernible]. Our Renewable Structures saw a slight dip in the volume. The reason being because we have to buy specialized coated steel, which was in shortage due to gas issues from the steel mills. So that's why the volume was a bit lower. At the same time, in the quarter 4, we started selling new profiles, which we have talked about multiple products being used for construction, warehousing, multiple applications. So we started that business and did volume of around 7,000 tons with good margins as it has been sold in APL Apollo brand and [ in the group distribution ] network. So all put together, these 4 verticals produced around INR 50 crores of business EBITDA and INR 6 crores was inventory gain for the quarter, because there was steel price upward movement throughout the quarter. So the total reported EBITDA was INR 56 crores, out of which business EBITDA was INR 50 crores and INR 6 crores is the inventory gain. Now why this INR 50 crore business EBITDA is important, because I mean, throughout the FY '26 financial year, we were hoping that we will touch this INR 50 crore business EBITDA, maybe second, third quarter, but obviously because of these multiple reasons, we couldn't see that. So finally, we did that in quarter 4. And whatever business ramp-up is taking place, we are confident that INR 50 crores quarter 4 EBITDA, I mean, if we keep on rising throughout FY '27, despite the challenges which we are facing in our B2B business due to short supply of steel, and obviously service centers in India are running pretty well, except that in Dubai, which contributes around 10% of the volume, that operations are bit disrupted. But whenever the war stops, Dubai service centers will also start contributing significantly. I mean as of now, it becomes very difficult to give any guidance on a monthly or quarterly basis. But in our last earnings call, we did guide for INR 300 crores to INR 350 crores for annualized EBITDA for FY '27. We are confident that we should be near to that number, unless there is like more loss of business due to war in our B2B business or in our Middle East operations. But the India business, the Renewable Structures and the Steel Profiling business, these 2 verticals are operationalized and showing a good profitability, volume ramp-up and a good return profile as well. So with this, I will be happy to take questions. Thanks so much.

[Operator Instructions] The first question is from the of Rahul Kumar from Vaikarya.

These 2 line items, can you explain your interest cost and other income? Both have a sort of decline in this quarter versus [indiscernible]. Can you explain that?

So see, I mean, the interest cost is declining because of the working capital rationalization. We closed the year with 20 days of working capital cycle. So our overall [ capital input ] in the business reduced significantly for the -- like towards the end of the year. And this resulted in like surplus cash being like -- which is on the books and lower interest costs.

Okay. How much of this trade payables is the acceptances?

Zero. They're all nonacceptance payments.

Okay. Okay. Okay. But in case we generated more cash than -- why is other income has also declined?

Because like the operating cash flow generation was around INR 300 crores. At the same time, we did a CapEx of INR 250 crores. So net cash generation was like very minimal.

Okay. Sir, because cash balance has actually also increased, I think, versus quarter 3, it's increased, I think, almost INR 100 crores. So I'm just wondering, I mean, what like [indiscernible] the decline in the income.

Net cash flow was around INR 740 crores and quarter 4 is INR 750 crores, only INR 10 crore increase.

Okay. And this CapEx which you have done, which particular area which we have done the CapEx? And for FY '27, what is the CapEx plans and which areas which you're planning to do the CapEx?

So if you look at like in FY '26 full year, we did around INR 525 crores, okay? This includes capital work in progress and advances to suppliers and contractors, right? In 9 months, this figure was INR 400 crore. So in quarter 4, we did around INR 125 crore additional. Now CapEx -- multiple CapEx, I mean, most of the CapEx went towards Service Centers, okay, and acquisition of new land parcels because now that this business has like -- is running very smooth, so we have become aggressive like we were before to acquire new land parcels and set up new service centers. Going forward, I think we already have taken approval of around INR 600 crores of CapEx for 2 years. So this is what we will be incurring CapEx over the next few years.

Okay. So for FY '27 and 28, you're planning to do INR 600 crores?

That's minimum. If we need to add more lines for Renewable Structures and Profile Structures, then it could increase.

Okay. Okay. And this INR 600 crores is distributed in Service Center and -- can you just take up -- can you just break up...

Yes, break up. I mean we must acquire at least 4, 5 new land parcels, okay, incrementally. We must do CapEx to set up new service centers of 3, 4 numbers, okay? Then setting up profile machines, right? So you can assume like 1/3 will go for building of service centers, 1/2 could be for acquisition of new land parcels, and balance, 15%, 20% would be for Profile machines.

Okay. Just last question. This is on the ESOP plan, which you sort of announced. So what is the price at which the ESOP will be granted? I mean it's not very clear from the announcement which you have, since [ September ] discount?

This ESOP site was [indiscernible] 1.5 years ago, okay? At that point of time, the current price, which was around INR 367, this is what will be the [indiscernible].

Okay. Just for the ESOP approval which you're sort of planning to take from the -- in the AGM. This was the future ESOP plans, right?

So this approval is for the balance ESOPs, okay, which were not utilized, and which we have to give those ESOPS to new employees, then we can use from the previous pool. It's not to issue any new ESOPs.

Okay. Okay. And on this, also the strike price exercise price is the INR 367.

Yes, it will remain same, because the pool is like previous one only.

Okay. Because in the announcement, it has been mentioned that it will be at a discount to market price, but it is not clearly specified at what price actually.

Yes. So it is INR 367, which we had taken approval for the last ESOP plan.

Next question is from the line of Vishal Mehta from Oaklane Capital Management.

Yes. I just wanted to check that, in your opening remarks, you mentioned that the 15-odd percent quarter-on-quarter volume growth in the Service Center business has come from increment in service centers. The presentation shows that we still have 7 service centers. So is there something we're missing?

So Vishal, I mean that volume from new service centers came up, basically.

Got it. And for -- so basically, what you're saying is that the new service centers which we have opened, all of them have given better volumes.

That's right.

Okay. And also, if you could just give some clarity on what is your expectation for the Profile business and the Renewable business for FY '27 and '28. I mean in terms of volume, how do you see that panning out?

Sure. So Vishal, I mean if you look at our quarter 4, we did around 5,000 tons monthly average in Renewable Structures, okay? Full year, it gives around 60,000 tons of -- the run rate. For like -- as of now, there is a shortage of coated steel in the industry because of gas issues, okay, which we believe will improve in the next 1 to 2 months. So we will come to 8,000, 9,000 tons of monthly volume, okay? So we may remain at 5,000, 6,000 tons for 2 months, and then it will ramp up to 8,000, 9,000, say, for 7, 8 months. So put together, we should be around 130,000, 150,000 tons for the full year, okay, in terms of Renewable Structures. As far as the other Profile structures, that business is ramping up pretty well. In Q4, the number looks very small, which is like 7,000 tons. But 18 months has gone pretty good, which is like 5,000, 6,000 ton run rate we have already achieved, and more and more products and machines are getting started in the next 1 to 2 months. So this, also with 5,000, 6,000 tons of monthly volume for next 2, 3 months, this will ramp up to 8,000 to 10,000 tons for 8 to 9 months for the full year. So here also, we can expect like 100,000 tons plus annual volume, Vishal.

Got it. And that 15% CapEx which you mentioned about Profile, that includes RE business or it's just for Profiles?

Yes, joined. For the RE business, we have submission capacity as of now, okay? We can do volume of 150,000 tons for the full year. This is mainly for Profile, it is from Profiles.

Next question is from the line of Nikhil Porwal from Perpetual Capital.

My first question is on, so the subsidiary revenue more or less sequentially is flat at around INR 230 crores, INR 240-odd crores. But the profitability has taken a big hit despite prices moving up for steel. So any color on this?

For which business?

For the Dubai operation.

So the profitability has -- yes, go ahead. So see, I mean, Dubai, we -- I mean, in month of March, there was hardly any business, okay, because of like what happened there. So that fixed cost, et cetera, led to a profitability hit. But things are becoming better, okay? Teams have started traveling there, okay? So you will see this getting recovered in a month or so.

I meant about the gross margin. If I just look at the consolidated minus stand-alone, the gross margin has come down significantly. But I understand the volume dropped because of the conflict in Middle East.

Okay. We'll revert to this later. My team is working on. It, maybe in 10, 15 minutes, we'll answer this question.

Okay. And next is on, are you investing further for capacity at the Dubai Center as well? Because the net block -- again, the decrease between [indiscernible] has moved up.

No, there is no -- I mean, there will be some new machinery, which would have come like [indiscernible] machinery in Dubai service center. [indiscernible] how much increase is there in net block from December to March in Dubai? I think it's -- how much increase you are looking, INR 5 crores, INR 10 crores, right?

It's a bigger number. If I take a look at the year-end stand-alone and consolidated [indiscernible] the difference is INR 108 crores.

No, no. I think there could be -- we are checking on this [indiscernible].

Okay. And sir, next is on the capacity for the current service centers or the 7 that you have operational. The annualized utilization is already above 90%. So will you need more capacity at the existing centers going forward?

We're going to add 3 more during this year, okay? I mean as in like the exit service center -- number of service centers, that should be around 11% to 12% for FY '27.

Okay. And within the existing 7 centers, would there be further capacity additions?

So we are going to add new products there, okay? Right now, we are [selling ] HR-related products. We will also start selling coated products through these service centers. More value-added and carry better margin?

Okay. So this would be in the Profiling business?

No. In Service Center business.

Okay. And is it possible to provide a split of volumes between India and Dubai?

Yes. Fourth quarter? For quarter 4, right?

Yes. Yes.

So in Service Centers, we did around 191,000 tons, right, for the full quarter from Service Centers. Dubai was 37,000 tons.

Okay. And one last question from me. So you are also setting up capacity for [indiscernible]. And in presentation, you've mentioned the market you believe at around 150,000 tons, and you are [indiscernible] capacity for 80,000 tons. So that's literally almost more than half of the market. So what gives you the confidence for this?

For Renewable, right?

For Profiling.

For panels, I mean it's a highly segmented industry as of now. And as more and more -- what we are seeing trend is that there is a very strong demand which is going to come up over the next 5 years. All the new factories, warehouses, which are getting built up, okay, they are all moving from standard sheets to top panels, okay? Because it provides better insulation application. So it is not very expensive compared to standard sheets. All the developers who are building factories or who are building warehouses, they do prefer [ top ] panels now. So the size may look smaller today for the industry. But in the next 3, 4 years, it can actually double, triple from here.

So basically, you're expecting a shift in the market from [indiscernible] sheets to probably top panel?

Yes.

Okay. And the margins, would it be similar or would it be slightly higher in top panels?

As of now, we do expect like 5% to 8% margins.

Next question is from the line of Vikas Mistry from Moonshot Ventures.

A couple of questions here. So in solar structures, we have roughly 50 to 60 gigawatts of installation that is happening. And from that perspective, our market TAM should be pretty high on our capacity is 150,000. So are we ready for further expansion as this supply-side scenarios normalized? And how much we are targeting for the next couple of years?

So definitely, Vikas, I mean, this 150,000 ton capacity, which we built, it took us like, what, 6 to 8 months, okay, to build this capacity and operationalize it. So once we hit like 10,000 ton per month for 4, 5 months, then we will order more capacity. And that since we already have a space, right, at our service centers, so it's the only lead time is the plant and machinery, which is like 3 to 4 months procedure.

But in Service Center business, we see that land acquisition is [indiscernible] some of the service centers. So can't we be preparing slightly ahead of the [indiscernible] for the lead time?

Now we are -- in terms of in terms of Renewable capacity?

Yes.

Like I said, we already have land, right? Infrastructure is already there. So ordering machines and installing machines is only 3 to 4 months [indiscernible].

Okay. Fine. So my last question is on tech side. So we have good relationship with B2B customers. But what is the progress on that where we can tackle smaller [indiscernible] assemblies and so that we can also take that part of the pie that the platforms are enjoying like [indiscernible] business?

For which business? B2B?

Yes. So let me rephrase the question. So we have good market share, at least in terms of in B2B side because we are taking large customers. But at least to smaller SME side, the other platforms like JSW or business [indiscernible] market has slightly better market share. So what is your strategy in order to tackle that? And what is the technological progress in terms of application building in terms of retention of new smaller [indiscernible]?

So see, right now, I mean, B2B business is a bit soft because of a shortage of steel, okay? I mean once the steel supply streamlines, once the steel supply streamlines, then we will become more aggressive in terms of reaching out to small MSME customers. Right now, whatever supply we get, it gets absorbed within our larger customers.

I'm totally buying your point. But for that -- whatever the tech intervention we need to push in, so that has to [indiscernible] itself?

Yes. So we do have everything on our SAP systems, right? We do have visibility of what our customers buy from us, what steel they buy. So we try to rationalize all the inventory back-end. But honestly, I mean, till the time we have confidence on the steel supply and availability, we don't want to invest too much into tech stack. Because again, that's like 3 to 4 months process. Whenever we want to push for it, we can do it.

Okay. Okay. So I was coming from the fact that we are building fab that is from the perspective of our side. Are we solving smaller SME customers' problem from their perspective, from their vantage point to give them better services like the tech [indiscernible]?

Currently, like I said, because of shortage of steel, I mean, if there is no material, how can you service, right? Tech requires material to move from my go-down to my customer go-down. If I don't have steel, right, what will tech do?

That's totally understood. But I think [indiscernible] building [indiscernible] take its own time. And if some x client is already doing business with another platform, why would they switch to you in a short span of 2, 3 months? So that is the point I'm trying to make.

Also because now our focus is on more value-added business verticals, okay, which are service centers and renewable structures and these new set of profiles, what we have launched, okay? So in B2B business is more of like higher revenue generation and low profit margin. So as a company, the strategy is to focus more on value-added products.

Next question is from the line of [ Dirshal Saveri ] from Crown Capital.

Firstly, congratulations on a great set of results. Sir, just wanted to harp a bit about margin. So is the lower [indiscernible] gross margins in Q4 [indiscernible] do we see like a temporary dip in Q1? How do we see the margin profile right now? Because some of our segments will get impacted because of the war. So how do we see that, sir?

So see, in margins, if you look at the EBITDA part for all the verticals, it will mirror what we did in quarter 4. We don't see any deterioration in EBITDA spreads in quarter 1.

Okay. So we don't see any kind of [indiscernible]. And so just wondered [indiscernible] given like in the [indiscernible] you mentioned business growth visibility of 50% CAGR over the next 3 years. So that's going to be [indiscernible] right? Every year we can expect kind of level of growth? Or how do you see that, sir? Like will it be back-ended? Or how would [indiscernible] sir?

I think it wouldn't be back ended. You will see performance getting better and better every quarter, okay, from here on.

Okay. So basically, every quarter-on-quarter, we'll have some level of [indiscernible] I was asking that in terms of revenue [indiscernible] has been kind of flattish to FY '25, right? So I just wanted to ask with regards to that. We can see a much higher level of [indiscernible].

So revenue was flat, right, but EBITDA grew by 30% plus. Okay. Because in FY '25, more volume came from our B2B business. In FY '26, we scaled down B2B business and focused more on value-added verticals. Again, I'm meaning those 3 verticals: Service Centers, Renewable Structures and Steel Profile business, okay? So even if there is no 50% growth in revenue, my EBITDA can still grow more than 50%. Because whatever new business vertical I'm adding, it is more positive.

[indiscernible] overall, we should see 50% growth in [indiscernible] bottom line [indiscernible] that will be the main point.

I mean we have [indiscernible] 3 years of our existence that we need to focus heavily on bottom line. We just don't want to do businesses for revenue generation.

Next question is from the line of Aejas Lakhani from Unifi [ EMC ].

I wanted to understand that is there any inventory loss or gain in the EBITDA number that you reported for the quarter?

I did mention that there was inventory gain of INR 6 crore in quarter 4 FY '26.

Understood. And for full year '26, the margins that we had, because steel prices have gone through a challenging year, how much has been the -- in the total EBITDA that you've reported of about INR 137 crores, how much has been the variation due to inventory? Could you just give that number for '26?

So in first half, there was no cost swings in steel prices. In quarter 3, there was an inventory of around INR 15 crores, INR 20 crores, if I remember correctly. And in quarter 4, there is a gain of INR 6 crores. So I guess the full year EBITDA could have been more than INR 150 crores if we adjust the steel price swings.

Understood. And just that I understand your business model, your -- the upswings or downswings in steel prices that may happen could happen because of the lead and lag that is there as products come in and go out. And barring that, you are not intending to take any inventory risk on books? Is that broadly correct?

That is right. Just to add to it, that as our EBITDA spreads will improve because of more value-added products. So that impact will also keep on reducing [indiscernible] okay? And I'm doing INR 60 crores, INR 70 crores, INR 80 crores, INR 90 crores of quarterly EBITDA, which is coming from more value-added products. So then that [indiscernible] will also -- the impact will also [indiscernible] dilution.

Understood. And broadly, Anubhav, I recall many calls back, you had broadly given a broad range of EBITDA margins across each of these. So just could you give us, again, broad understanding? So Service Centers on between 3% to 5% EBITDA, I think the trading business was 1% to 2%. Is that understanding correct? And can you [indiscernible] for Renewable and Profiling?

Sure. So see, I mean, letters decodes then into EBITDA per ton basis, other than percentage margin basis. So B2B business is between INR 700 to INR 1,000 per ton, depending on the steel environment -- the steel price environment in the country at that point of time. B2B business is pretty stable from INR 1,800 to INR 2,100 per ton. The Renewable Structure business is around INR 3,000 to INR 4,000, INR 5,000 per ton. And the steel profile is INR 5,000 to INR 8,000 per ton.

Understood. Okay. And is it fair to assume that the volume that you have done of broadly 400,000 tons in Metal Trading was also because you had the offtake agreements with your suppliers? And the entire intent even next year would be to again maybe keep this volume or probably reduce it? I don't know how you determine that. But the entire thing is to build the Profiling products business, Renewable Structures business more and more, right? So effectively, Trading is just -- is it done with a very opportunistic sort of lens? Or is it just like because you need to pick up a certain raw material that you have committed to your supplier, that is how you construct the business [indiscernible]?

So see, Trading for SG Mart can be infinite, okay? So as much steel we get, we can sell that much steel, earning INR 700 crore, INR 1,000 per ton. We did get 410,000 tons of steel in FY '26. If we get more steel in FY '27, the Trading -- the B2B sales will be higher accordingly. But as of now, it is difficult to say because the month of April and the commitments for May so far are slow. And it is also because even the steel mills, the volumes are -- the production levels are low because of overall prices for energy, gas, et cetera.

Understood. And finally, just my last question is, Anubhav, even JSW, for example, is creating a platform, of course, the broad [indiscernible] where they may concentrate would be different to yours. So how would you comment about this? Because you're buying from JSW and then creating this entire value-added [indiscernible] JSW is doing something akin? So how would you comment on this?

Now the products are very different, Aejas, okay, what we are doing in SG Mart and what other platforms are doing, the businesses are very, very separate or different now.

Next question is from the line of Garvit Goyal from Serene Alpha.

My question is on our bottom line. Many quarters we are speaking about EBITDA and PAT will go hand in hand. But I'm not seeing that in numbers, right? You laid around INR 137 crores EBITDA this year, which is more than [ 30 growth. But if you look at the bottom line, it is hardly 10%, 11% kind of growth we are delivering. So why this is not happening, sir?

So see, I mean, if you look at like the conversion of net profit from EBITDA, there are 2 factors, okay, which are impacting the PAT growth. One is the [indiscernible] and the second is the interest cost. So over the last 1 year, what we have done is that we have started investing heavily into creation of network of new service centers, plus we are also going heavily on building capacities for Renewable Structures and steel and other Steel Profiles, right? So it does require investment into fixed block, fixed lot block. That's why the depreciation levels are high. And all the cash flow, what we are generating internally, that is also being used for these CapEx commitments. So that's why the EBITDA growth is not matching PAT growth. When we had mentioned [indiscernible] that time, the business was more asset-light, okay, it was dependent more on Trading, okay? But like I said, Trading business, we realize that it is not showing too much value addition, the dependency on [indiscernible] is pretty high, okay, then the steel price fluctuation also hurts the earning. So I mean, over the last 1 year, the whole business model has moved towards more value addition. And as we are investing into building that value-added business, there will be higher depreciation cost upfront, and all the internal capital generation will be used to meet the CapEx commitments.

[indiscernible]

What I can tell you -- but what can I also tell you is that the benefits from this, okay, are going to be significant, right? We have already seen that how service centers are operating beautifully, the stability these service centers have brought for SG Mart, plus the Renewable Structure business, again, the massive pie, right, not too much of competitive space. And this unique vertical which we are building up, other Steel Profiles, okay, [indiscernible] highly segmented market, and leveraging on our brand and distribution network, it's going to give a massive fruits, okay, to the company. So we are not too much worried about that my PAT growth is not matching my EBITDA growth. It will start happening in a month -- in a year or so. We are not bothered too much.

Perfect. Means we are still like, for the next 2 years or so, we are doing the CapEx. So is it correct to understand that the EBITDA growth will still be higher than the PAT growth, right? Because the value-added depreciation will keep on coming in the P&L statement, right?

Yes. So I think the better way to look is the cash profit, right, because depreciation will remain high, so if you look at the cash profit growth and EBITDA growth, that should not be too much difference.

Okay. And this INR 50 crores EBITDA profit, quarterly EBITDA profit, that we are comfortably, like we'll be doing it despite all the headwinds we are seeing, right?

That's right.

Next question is from the line of Amit, a retail investor.

Sir, my question is on [indiscernible] performance, which basically EBITDA [indiscernible] businesses. Can you maybe share what was the [indiscernible] EBITDA that you made in solar business, Profile business and this [indiscernible] business?

So we will give you the broad range, right? The B2B business is INR 700 to INR 1,000 per ton. The Service Center business is INR 1,700 to INR 2,000 per ton. The solar business is INR 3,000 to INR 5,000 per ton. And the Profile business is 5,000 to INR 8,000 per ton.

And is this expected to remain in this range in the [indiscernible] FY '27?

That is right.

Next question is from the line of Krunal Shah from Enam Asset Management.

My question is regarding the Service Center business. So you said here you already procured land for 7 service centers. So can you elaborate which, apart from the 7 which we have, where there is heavy procured land?

Yes. So Ahmedabad [indiscernible] Kolkata. These are the 3 cities where we have acquired the land.

Okay. Okay. So [indiscernible]. And in Kolkata is the one which is -- you're adding [indiscernible].

A Yes. And then we are actively scouting in Hyderabad, Chennai, in Punjab. So yes, maybe in next 2, 3 months, you will see more land acquisition coming in our books by then.

Okay. Okay. And regarding the Profile business, so what's the current capacity that we have? Because you're doing the numbers combined right now with Renewable. So individually, [indiscernible] the Profile business capacity?

Around 120,000 tons per annum.

Okay. 10,000 tons, perfect, okay. And in the Service Center volume for 6 lakh tons, was the stock and sales volume approximately?

It's around 20%. 20%, 25%. 75% is [indiscernible].

Okay. Got it. Got it. And in terms of this coated steel availability for Renewables, how do you see the situation evolving? When do you see things normalizing?

I think in month of May, it should be better. Then you -- it will further improve. So April was better than March, okay. And we have entered in month of May, things look better, compared to April.

Okay. Okay. So this run rate of INR 5,000, 6,000 tons, that can be maintained with whatever commitments we are getting?

That is right, Krunal.

Next question is from the line of Rahul Kumar from Vaikarya Fund.

In this strategic plan of 50% growth over the next 3 years, can you help us understand the split of the businesses of this among the various segments, let's say, at the end of 3 years.

Can you please repeat?

I was saying you have given this target of 50% business growth over the next 3 years, right? So if we have to think of the various segments at the end of 3 years, can you help us understand the split between the various segments, how much would be the Service Center, how much would be Renewable?

Sure. So in 3 years, I mean, we may have around 20 service centers, okay? And these service centers doing to 8,000 to 10,000 ton monthly volume. So around 2 million tons of volume is coming from Service Centers, okay, on annualized basis. Then for solar business, Renewable Structure business, in 3 years, we should be doing around 250,000 tons -- okay, 15, 20, so around 300,000 tons of annual volume from Renewable Structures. And similarly, 300,000 tons of volume from the other Steel Profile structures. B2B is difficult to predict, okay? I mean it can be like 1 million tons, 2 million tons, 3 million tons. It's tough to give guidance on B2B business.

Okay. Okay. In terms of shortage of steel also, I think you mentioned earlier, so what is the current status in terms of supply? Is it still constrained or [indiscernible] discussion happening with the suppliers now?

I guess, see, I mean there is overall shortage of steel as a commodity in the country and things will improve as the gas supply to steel improves. I mean everyone says that in a month or so things will get better. We also hope that things will get better in some months also. Yes. I mean it's so unpredictable. I mean war goes on for 30 days, 60 days, 90 days, I mean unless until the fuel supply becomes streamlined, it will remain a challenge.

Okay. And just to clarify, Service Center business, which was, I think, 600,000-odd tons, you're saying that the next 3 years it will go 3x to 2,000 or 2 million tons. Am I correct in hearing that?

What I was saying, the exit run rate will be that after 3 years. [indiscernible].

Next question is from the line of Krunal Shah from Enam Asset Management.

So I have one just broad-level question on capital allocation. So we are doing around INR 200 crores, INR 250 crores kind of cash from operation, and which seems to be sufficient enough to know the fund the CapEx that we have planned of around INR 300 crores for the next 2 years. So we have INR 1,000 crores cash on books. So broadly, what's the plan with this cash that we have?

Right, the cash on book is INR 750 crores, not INR 1,000 crores. That is point number one. Now like whatever cash flow generation will be there, okay, for next 2, 3 years, we're going to deploy that in capacity building. Plus the existing cash on books might get utilized for incremental [indiscernible] capital requirement as well as the business scales up pretty quickly. So I guess, maybe after 2 years, when the [indiscernible] CapEx is completed, right, then we'll have a strong high level of cash on the books. And then we can think of dividend, et cetera. But for next 2 years, we want to focus on growth and focused on capacity building.

Got it. Got it. And also one thought which we had was that in terms of inorganic, are Service Centers or kind of the Profiling and Renewable business available in an inorganic manner which could help us grow faster?

I mean we keep on evaluating the success, okay? But then the quality of success is also -- should match SG Mart's profile. So [indiscernible] come across any such asset where we can go and actually finish the transaction. I mean we are evaluating the day in, day out, but we could have said, okay, yes, I won't acquire this asset.

Got it. Got it. So I mean [indiscernible] quality has been the kind of equipment they deploy, kind of business are doing, that's it?

That's right.

Ladies and gentlemen, that will be the last question. I'll now hand the conference over to the management for closing comments.

I guess, and then just to reply to that earlier question regarding Dubai operation from the gentleman. I think there is some calculation error, what he's doing. I mean as per our calculation, there is no increase in net block at Dubai level. And similarly, there is no deterioration in the gross margin. But still, if that gentleman has I mean further questions, he can reach out to our team. We have given contact details of our CFO and General Manager Strategy in the presentation. He can reach out to them. Moderator, any questions? We can take up -- we have 5 minutes, if there are any further questions.

Sir, let me check. No, sir. Sir, we can conclude.

Sure. Okay. Thanks so much, everyone. I look forward to see you again in our quarter 1 FY '27 earning call. Thank you.

Thank you very much. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect. Thank you.