Shera Energy Limited (SHERA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the H1 FY'26 Earnings Conference Call for Shera Energy Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Samiksha. Thank you and over to you.

Thank you. On behalf of Kirin Advisors, I welcome you all to the conference call of Shera Energy Limited. From management team, we have Mr. Sheikh Naseem,– Chairman and Managing Director; and Ms. Jyoti Goyal, Company Secretary and Compliance Officer. Now, I hand over the call to Ms. Jyoti Goyal. Over to you, ma'am.

Good afternoon, everyone. I hope you all are doing well. It gives me great pleasure to welcome you to Shera Energy Limited's Earnings Conference Call for the first half of Financial Year 2026. I, Jyoti Goyal, Company Secretary and Compliance Officer, will share an update on our performance, key developments and our strategic outlook for the business. The first half of this year has been a period of strong execution and steady progress for Shera Energy. We have continued to build on the foundation that we have laid over the past few years and have moved ahead with clear focus on growth, integration and operational excellence. At Shera Energy, we are engaged in the manufacturing and processing of nonferrous metals such as copper, aluminum and brass. Our products are widely used across sectors like transformers, motors and electrical cables. Over the years, we have developed an integrated model that covers the complete production process, including melting, casting, extrusion, drawing and finishing. This approach gives us control over quality and cost and allows us to serve our customers efficiently. Our growth strategy has always been driven by integration. Through backward integration, we are establishing our own copper cathode facility in Zambia, which will strengthen our control over raw materials and reduce dependence on imports. The project has now reached the final stage and commercial production is scheduled to commence shortly with the first phase targeting an annual capacity of 1,200 metric tonnes and a revenue potential of around USD 12 million. This development marks a key step for Shera Energy as it will enable us to produce copper cathodes in-house, improve cost efficiency and enhance margins across our operations. Through forward integration, we are expanding into electrical conductors, superfine wires and solar labels, allowing us to move closer to end-use applications and participate actively in the growing renewable and power infrastructure sectors. Together, these initiatives complete our value stream and position Shera Energy as a fully integrated, globally competitive nonferrous player. During the first half, we continue to make steady progress across our strategic priorities. We incorporated a new overseas subsidiary in Ethiopia, further strengthening our global footprint and creating a broader geographical base for future growth. This expansion aligns with our vision to build a diversified and globally connected business that can serve customers across multiple regions with greater efficiency and reliability. We also continue to advance our plans in the solar segment, where the development of solar ribbons and solar cables is moving forward as scheduled. In addition, our subsidiary, Rajputana Industries Limited has enhanced its capacity for electrical conductors and superfine wires, reinforcing our forward integration and widening our product mix. During the first half of financial year '26, we delivered strong financial performance, reflecting steady growth across all key metrics. On a consolidated basis, total income increased by 30% to INR 783 crores compared to INR 602 crores in the same period last year. EBITDA rose by 42% to INR 41 crores, while profit before tax grew by 62% to INR 21 crores. Net profit stood at INR 15 crores, registering an increase of 57% year-on-year; and earnings per share improved by 48% to INR 4.92 from INR 3.32 in H1 financial year '25. On a stand-alone basis, total income was INR 508 crores, up 21%; with EBITDA at INR 18 crores, up 29%; PBT at INR 8 crores, up 31%; and net profit at INR 6 crores, up 32%. The growth in profitability reflects higher operating efficiency, a better product mix and an increased contribution from value-added segments. Looking ahead, we are entering a very exciting phase of our journey. Our immediate focus is on scaling up the Zambia operations from 100 metric tonnes at the trial stage to 5,000 metric tonnes annually over the next few years. We have planned a capital investment of INR 300 crores to INR 500 crores for this expansion. We expect the backward integration through copper cathode production to improve our margins by 15% to 20%, while our forward-linked businesses such as conductors and solar cables are expected to add another 7% to 10%. We are also preparing for our migration to the NSE main board after February 2026, which we believe will enhance our market visibility and attract a wider investor base. Alongside, we are continuing to invest in technology upgradation, product innovation and operational efficiency to ensure sustainable growth in the years ahead. Thank you all for your time and continued support.

[Operator Instructions] The first question is from the line of [ Paras Chheda ].

Congratulations for a very, very solid set of results. Sir, just a couple of queries from my end. One, sir, our commercial sales from Zambian operations, when do we expect that to commence now? That's question number one. The EBITDA margins, it seems to have already improved to about 5 percentage points right now. Is there room for further growth? And when do we expect, sir, this Zambian operations capacity to scale up to 5,000 metric tonnes per annum and that the CapEx required, INR 300 crores to INR 500 crores, how do we intend to fund it? So these are the couple of queries that have for now, sir? Hello, am I audible, sir?

Yes, sir, you are audible.

Is Naseem bhai there on the call?

Yes, sir, management is on the line.

Yes. Can you hear me?

Yes, sir. Yes. I can hear you.

So my greetings to all my investors and shareholders. So first of all, I would like to congratulate team Shera to put up good results. So this has happened with our team effort and continuous support through our customers and our suppliers. Now moving forward to your question, [ Mr. Chheda ], our investment is on the final stages for the first phase, and we are on the trial run. The date of commencing the commercial production shall be intimated to exchange shortly as we are done with our trial production. And once we are into commercial production, then it will take another roughly 1 month to 45 days for our first sale to happen. And the process of producing copper cathode is by electrode deposition. So deposition will start as we are into commercial production and deposition period is roughly 30 to 45 days depending on the grade of copper. So that I expect to happen soon and very soon, this will be declared into the exchange. And the date of commercial production, I will intimate on the exchange very soon. But we are on the final stages of that operation. Coming down to your second question of when we will be in position to reach to 5,000 metric tonnes per annum of our capacities in producing the copper cathodes? The investment for first phase is done for 1,200 metric tonnes. And second, after the successful operation of this investment for a couple of months, then that is the time that the company will be intending to scale it to 2,400. That will be our first challenge. And once we are done with that investment after 5 to 6 months from there, we will be intending to invest our capacity to 500 tonnes a month, reaching approximately 5,000 tonnes per annum. So I expect the time line for this will be in the financial year '26, '27. And by '27 end, we will be in position hopefully to take up our scales to 5,000 tonnes per annum capacity. And now coming down to the investment that is required will be around INR 300 crores to INR 400 crores as of now, looking to the currency. And it may slightly vary up and down depending on the currency fluctuation. But this will be done by 2 ways. One, we are planning to raise some equity in our company as well as we will be in a position to take some debt in terms -- from the foreign banks. So those things will start coming after the balance sheet of this financial year is done and the results of the operations of our first phase of investments are in place and the people will have a clear view of the returns on our investment by end of March. So the initial picture for first quarter of operation will be there, and that is the time we will be coming up in discussions with investors as well as our bankers. I hope I have replied your queries, sir.

Yes, sir. If I can just slip in one more question, sir. So our Zambian operation seems to be on track so far as per our expectation. The EBITDA margins expected out of that would be, sir, about what...

The EBITDA margin definitely is going to grow. And as we reach 5,000 tonnes, there will be exponential growth into EBITDA margin. But 1,200 metric tonnes definitely will have some impact on our total balance sheet EBITDA margins, and that will further help us to increase around 2% to 3% of EBITDA margins. But the actual growth in double digits of EBITDA margin, this you will be in position to see by the end of '26, '27.

[Operator Instructions] The next question comes from the line of [ Divya Agarwal from Family Office ].

I'm fairly new to the company. So my apologies if there are some basic questions. So sir, firstly, I wanted to know what will be your operating and business model for the Zambia facility? And what's the current update on the Zambia facility?

So we have opened a subsidiary in the name of Shera Zambia Limited there, which is a 99.5% holding company of Shera Energy Limited. 0.5% is held by me and my son. So this company, you can call it wholly owned subsidiary of Shera Energy. And this company is investing into the local companies there operating into Zambia. And we are buying out some shares with the existing companies, and we will be doing our investment directly as well. So this is the model of investment that we are aiming to do into Zambia.

Okay. So I mean, the ore -- you'll be producing the ore or you'll be buying it from outside -- from third party or your own mines?

I would like to clarify to all the investors. We are not stepping into the mining operations. We are processors of mined material. So whosoever has the mines, they are bringing us the material. We are buying it, testing it, and we have certain payables on that. And then we are processing the mined material and making copper cathodes. This is the model of our operation into Zambia.

Right. And will it be sourced from Congo because Congo, I believe, has the highest copper mines, right?

Actually, you cannot differentiate between 2 countries. That belt is called copper belt, and that is distributed within Congo as well as in Zambia. So northwest part of Zambia, the border area of Congo is also -- very high deposits of copper is there. Congo also has a high deposit of copper. So in this copper belt -- that belt, if you see, major chunk is with -- under the Congolese territory. And some chunk is there also into the Zambian territory. Since our operations are confined to the border line of Zambia, we will be in a position to secure material not only from Zambia, but also from Congo as well.

Right. So just wanted to know why do you not want to like open your own mine or do you want to acquire your own mine? Can you share the pros and cons of it?

Every business has its own benefits and losses and the risk appetite. Owning a mine is a big consignment, big ticket size job. So if you start first with the processing, then you'll end up -- start making the cathodes and we are sharing the profits in terms of raw material to the existing miners. Doing so, I have a liberty of securing the material from different source in different mines. Once I get into mining operation, then my focus will be confined to mining our own bases, where the raw material cost will be practically 0. Only my excavation will be my cost. So that is going to be a next level of investment, and that's a substantial size business. And that business, definitely, we will -- we are eyeing on that as well. But it will take a couple of years to venture into that thing. That is in our mind, but not in our planning right now.

Right. Got it. Secondly, sir, I wanted to know, in case you ever consider backward integrating into copper mines. So what -- so just wanted to know, I mean, it would be in the Zambia facility or it would be in the Congo facility because the Q2 presentation also mentions that you have applied for a lease -- mining lease? So I just wanted to know on that.

Mining, we are trying to collaborate with the existing miners. That mining lease has not come to our company directly. We are in dialogue with a few miners where we are supposed to put some money into their mines, and we will be collaborating on profit sharing basis. Mining operations will be done by our company, but the leasehold will remain into the original mine holder. You're getting me? So the mining operations -- actual mining in our name is a sizable product. There are 2 kind of mines available into Zambia as well as in Congo. There is -- one is small-scale mining and one is large-scale mining. So initially, since we are investing at a very smaller footing, we are putting -- although for Shera Energy, it's a big footprint. But when I place myself as compared to big players like SQM, KCM, all those players, our size and scale of operation is practically very small as compared to these big players. So once the company raises to those levels, even we reach to 20%, 30% of their scale of operations, that is the time when we will be venturing into mining ourselves.

Sir, in case you ever do want to enter the mining operation, so what would be the broad economics for owning such a mine operation as I believe the many mines are on sale from time to time in that particular region or other regions as well. So due to lack of profitability, of course. So what would be the economics for that? And how can one think about the margins of owning mines versus...

Mining process and mining excavation is not a big chunk. It is always a process of exploration. Exploration needs a lot of time, patience and money. And that needs sufficient cash reserves for the company to incur those costs because that is a gamble you are taking on exploration. You are doing -- you are searching something that you never know how it will come up. So that scale will come once we have sufficient cash flows, sufficient reserves with us to invest into that operation. Exploration is our next thing that definitely will be into our scope of operations, but not in recent months or in coming few years. It may come after 3 to 4 years down the line.

Right. So have you worked out any rough, like the economics of the mines that you may own in the future? If you have any, you can share it, sir?

No, no, no. It will not be wise to share these things on public domain because the authenticity of these figures are yet to be determined, but I know the basics of this. So it will not be fair to quote any of the economics, which I have just seen on papers, not done it practically.

Right. I understand, sir. Next, sir, just wanted to know, so how are the demand and pricing for copper recently? And which are the key areas that copper is being exported to presently?

Copper has been in shortfall since inception of industries. Copper is never -- its supply in abundance is not there. Few continents are having reserves like South America has the reserves, Africa has the reserves. Some part in India, we have the reserves, but that is not sufficient enough to cater our country's need. So every country -- copper is required by every country, wherever you see the growth in any country, you cannot dream of any electrical growth or any power growth without putting in copper in place. So copper is in demand world over, but the production of copper is limited in few countries, which has abundant supply, but still a lot of work is to be done. So there is always a shortfall of copper supply against the demand.

Right. So how has the cost changed over the last 3 years versus the final selling price right now?

If you track the LME structure, the prices are controlled by London Metal Exchange. Those metal exchange where all the sellers and buyers are linked at that exchange. So you see there has been a constant upside over -- if you see that graph of copper, I am working in copper line when the LME was roughly $1,300, $1,400 per tonne. And now in my working experience, I have seen it grown to -- it is working in the range of $10,600 to $11,000 now. So there has been a substantial growth into copper. And every year, if I see, there -- you can see a 5% to 10% to 12% growth in prices are happening on a year-to-year basis.

Right. And does most of the copper goes -- from Africa goes to China?

There is no doubt in this. China is the biggest importer of copper, and the Chinese have put a lot of investment, not only into Zambia as well as into Congo, they are into South America as well. So China is the biggest buyer of the copper ores and concentrates world.

Right. And what kind of risk do you face today as a copper refiner? So in terms of medium term and near term?

The scale of operations that I'm targeting, I don't see any threat or any restrictions on the scale of operations in terms of salability of material. That is not a challenge. But the only risk and you are operating at a different country with a different constitution with different mindset of people, that is the only challenge that we have to do and that the company is in position to handle as of now, and we are very hopeful that we will be taking care of all these issues in future as well.

Right. Sir, lastly, I just wanted to know, so regarding the copper cathode facility, so can you share the realization cost structure, EBITDA per tonne, CapEx per tonne of the facility?

My gentlemen, these figures until unless we put up our balance sheet, it is not correct to tell you.

Right. I got your point. And do large Chinese corporations who are present in Africa try to dominate the market and exert their influence against smaller companies?

I don't think so. No, no, no. They are not dominating in terms of manufacturing. I don't think so.

So the control over there is less by Chinese companies, you mean?

Pardon?

The control by the Chinese companies over there is less. You mean to say that?

No, no, no. You don't see in terms of controls or their dictatorship, no, no. This is an open field. Whosoever is the investor is working there. There is no competition or no threat there.

Right. Got it. Lastly, sir, just one question. So there are a lot of byproducts as well that we get. So what kind of byproducts that are we anticipating in our mind? And do we plan to commercialize them as well?

That is in our planning also. The byproduct that will be coming will be gold, will be silver, will be other minerals attached to that. But initial thought is to recover only copper. And once we are done with the copper, then we will be doing some investment to recover other minerals as well.

The next question comes from the line of [ Raveen Ahuja ], an individual investor.

Sir, a couple of questions. I'll start with the first one. I just wanted to know like what percent would be the commissioning time line for the Zambia copper plant?

First phase of investment is almost done, sir. And I expect by the end of this quarter, we shall be into production.

By this end of the quarter. And when can we expect the realization of? This quarter or the next? Like...

It will start happening this quarter end, I expect so. Since the plant is into trial run. So the exact date, I am not able to declare. But since we are running November, so if we finish our trial runs in 5, 10 days or 15 days, then definitely, we are selling our products in December. And if we delay by another 10, 15 days, maybe first week of Jan.

Okay. So when can we expect our commercial shipments, you can say?

Pardon?

Commercial shipments?

To India?

Yes.

India, we will be selling after next year. We have already started making contracts to sell it to the local nearby countries. Like we are entering into the contract of our sales. We are into dialogue with some of the big buyers in that area. So they are interested to buy our products.

And let's say, the Zambia facility is fully operational. So I just wanted to know what portion of Shera's -- like your company's annual power requirement will be met through this backward integration, you can say?

That will happen into '26, '27. There, we will be in a position to start doing 500 tonnes roughly. So 20% to 30% of our requirement will be supplied through Zambia.

[Operator Instructions] The next question comes from the line of [ Priya Jain from Green Capital ].

I have 2 questions. So first one is financial only. Our EBITDA grew by around 42% year-on-year, we did around INR 41 crores of EBITDA, while raw material costs also increased proportionally. So could you please elaborate on the key operational levers that supported this margin improvement, whether through efficiency gain or product mix or some process optimization? What would you say?

Definitely, there is a substantial growth into EBITDA margins. And there is a growth into our production line as well. So the company has increased its -- enhanced its production line of all products in together by around 12%. So that has been a quantity growth in the company. And there definitely is a price growth as well. So price growth contributing with the EBITDA margins. So that is amounting to roughly 15% to 18%.

Go it. Also regarding Zambia facility, like initially capacity of around 1,200 metric tonnes per annum, if I'm not wrong, scaling up to like 5,000 million tonnes. So could you share the current status of commissioning and the progress achieved so far?

Madam, I wish you have been -- I have been answering the similar questions with the previous things, but still, I will repeat it. Our first phase of investment is for 1,200 metric tonnes. And as this becomes operational and after 2 to 3 months of its successful operation, company is planning to invest immediately to scale it to 2,400 metric tonnes. So after achieving 2,400 metric tonnes, that is the time we are planning to go for 5,000 metric tonne per annum.

Okay. Very strategically, you are scaling up. Good. All the best.

[Operator Instructions] The next question comes from the line of [ Mahesh Seth ], an individual investor.

Hello.

Very good afternoon, Mahesh ji.

Your voice is very low, Mr. Mahesh.

Yes. is it clear now?

Okay, good to go.

So my first question is that the company has indicated a planning capital investment of around INR 300 crores to INR 500 crores for Zambia expansion. So could you share whether investment towards this phase have already begun or how they are being funded?

This investment has begun in first phase where the company is putting up roughly INR 30-odd crores directly into the first phase of investment. Once this happens, then we will plan to invest further INR 50-odd crores. Then once we are done with this, then we are going to hit that INR 300 crores, INR 400 crores mark. And the funds are going to have -- raised through equity investment, some from our cash reserves and some through the debt.

Okay. So it may be a mix. Okay, sir. And also can you elaborate...

Sorry to interrupt, Mr. Mahesh. Sorry to interrupt. Your voice is very, very low.

Yes. So I was asking like can you also elaborate on logistical framework, which is being planned for Zambia operations, like particularly whether cathode transformation will be managed by in-house or through third-party logistic partners?

No, it will happen through third-party logistics partners. Company is not interested to do the logistics itself. Yes. We will be having channel partners control logistics.

Okay. Got it. And like the investor presentation also mentions that the solar ribbon line has entered the trial phase. So can you elaborate on the current progress on this project like -- and the technical or quality benchmark, which are being assessed before full-scale commercialization?

For the solar ribbon, the machine has been procured from China, the inspection and all, everything is done. We are expecting the machine to land very soon by the end of December, and it will be into commercial production by January, hopefully.

Okay. So by January and we can expect the commercialization, right?

Yes, yes.

[Operator Instructions] The next question comes from the line of [ Vinod Shah ], an individual investor.

Sir, our Q2 FY '26 utilization was around 80% across all segments. So could you please comment on whether this level is optimal or if this remains an additional headroom within existing facility?

Definitely, we will be growing and utilizing these capacities. And once we reach to 90%, 95% plus, then we will be doing a small CapEx to increase our production capacities.

Okay, sir. Approximately, how much CapEx we are talking about?

No, it will not be substantial enough so that it affects our balance sheet, but it will be mitigated with our reserves. We don't need any debt from that.

Okay, sir. And like we have approved the new subsidiary in Ethiopia. So could you just elaborate like what is the initial...

We are planning to do that. We have not yet done this. We are in dialogue and negotiation with the Ethiopian Electric Utility Department. And definitely, that investment is about to happen, but it will take at least 3 to 4 months from now to happen.

The next question comes from the line of [ Pankaj Mittal ], an individual investor.

Sir, actually, most of the questions have been asked from another investor, but let's see if it is repeated again. But working capital intensity has been historically been high due to the inventory and receivable cycles. So could you please elaborate on measures -- what measures being implemented to optimize the working capital to improve cash conversion?

Company is constantly working on these things. As you have seen, our balance sheet is growing not only in terms of quantity, but in terms of value also. So we are increasing our operations. We are scaling up our product lines. And since we are developing different, different alloys for different segments because there are many small alloys for very small segments. All these things we are not declaring on exchange on day-to-day basis. So the inventory pile up and everything is because we are developing and searching our market where the company can fetch more profits and help the company to improve on its EBITDA line. So these things will be into process for coming 2, 3 years. Once we are done with all of our new product line within the company's present setup, that is the time you will see the negative impact on the inventories and these things will start happening.

Okay. And what -- I mean, what will be the improvised working capital cycle, in days particularly?

Company has been very consistent in utilizing its working capital cycle. And whenever there is a need of arranging some short-term debt, we'll do it. And whenever we don't need it, we repay it also. So we are growing at a comparable good speed. If you see the scale of operation from INR 600 crores has gone up to INR 780 crores. So around INR 280 crores (sic) [ INR 180 crores ] growth as compared to last year on a half yearly basis. And if you take in terms of annual growth, it may touch even INR 500 crores. So if the growth is INR 500 crores and company is managing working capital limits of just INR 40 crores, INR 50 crores, that means we are rotating our funds by more than 8 to 10x.

Right, right.

So these operational efficiencies of the company has improved, and it will be improving on a year-to-year basis.

Okay. Okay. Fine. And my next question is about capacity utilization for Q2 FY '26. It was around 80% across all metals. And could you please elaborate on which product segments are currently operating at its peak level where capacity expansion would be required first?

That will happen in next FY, not this FY. This FY, I expect to close our operations with a CapEx level of the similar lines. And we are now operating in the range of 85% to 90%. Another 5% scope of growth is there. And that is the time we will be planning to do some CapEx into our existing machineries.

The next question comes from the line of [ Priya Desai ], an individual investor.

So my question is exports are a growing part of the business with operations in Zambia and Ethiopia, expanding the global footprint. Could you please share the key export markets contributing to growth? And any new geographies are being targeted?

Madam, we are not only focusing in producing copper into Zambia, we are rather interested to export our cable conductor and generate a market into the African subcontinent. So Zambia, we have started exporting our conductors and cables, even in the solar cables. So they have started reaching to our customers. Once they are satisfied with our quality, our terms and everything, definitely, this market is also going to add exponential to our growth line. Not only we are present only for copper efforts, but Shera Energy will get an avenue to export its product into that subcontinent.

Okay. So sir, my next question is, are there any ongoing or planned ESG or renewable initiatives at the Indian facilities such as use of recycled metals for the energy adoption?

Madam, we -- for our Indian subsidiaries, there are 2 CapEx that is already in plan and that's working on -- we are working on that. That is on a very fine gauge aluminum and copper wires, used into fan and solar industries and the gadget industry. And then we are investing into solar ribbons, which are a primary product in manufacturing of solar cells and solar panels. So these 2 CapEx are going on. And I expect by end of this quarter, the investment will be almost done. And the last quarter, we will start seeing some trial orders from those products. But FY '26, '27, we will have a substantial impact on our balance sheet by these products.

The next question comes from the line of [ Paras Chheda ] from Purpleone Vertex Ventures.

Sir, just wanted an outlook or guidance or whichever way you look at it, just on the Indian operations for maybe balance of this year and FY '27?

In terms of revenue you are expecting?

Yes, revenue guidance outlook. I mean, of course, revenue guidance will be better, but just if you...

The company has a track record of growing with a scale of roughly 20% to 40% on a yearly basis. This year also, you see this half, we have grown by 30%. And I expect the trend to continue for FY '26, '27 as well.

Right. And medium term, we are generally positive on the outlook for our products overall, I mean 3 to 5 years...

Not only medium. I'm looking positive in terms of long term as well. Because you see the electrification work and upgradation of the system, that is a continuous process for any country to sustain its power lines. So the network and the system, new are coming up. And simultaneously, they are replacing the old and primitive ones. So that -- what is new today is going to go old after 10 years. You're getting me?

Correct. Right, understood, sir.

So as we -- the technology is improving in terms of insulation level, in terms of their resistivity, in terms of their efficiency equipment. Like transformers, 10 years before, there used to be no rating. Unrated transformers were there in the system. Now you see BEE labeling, that is the Bureau of Energy Efficiency, 5-star labeling has come down. You will see 7-star coming out, 11 star coming up very soon. So once all those star-rated transformers are infused into the system, the old unrated ones are going to be obsolete ones. So there is going to be a constant upgradation into the strengthening of the system. And energy, you see in all the electricity utilities, whether it's generation or it's a transmission or it's a distribution network, the biggest challenge with them is because they cannot impose their losses on to the public. So whatever losses they make in terms of their finances in their balance sheet, the majority is coming on the transmission and distribution losses. And that is what is called the efficiency of the system. So as the technology is improving, as the systems are improving, world over researches are going on. And at the point -- at the given point, these transmission losses were accounting to 20% to 25% of the total system. Now they have brought it down to maybe 15% or maybe 14%. So every year, the target of these things has to come down. They are working very strong. Pan-India -- not only in pan-India, world over, it's going on. And this is going to -- it's not going to finish even in our lifespan. Not only short-term, I'm very bullish for the long term as well.

Right. So the electrification sector itself, I mean, broadly, as you said, a lot of upgrades and general demand also. The outlook there is...

[Foreign Language]. You're getting me? It's a continuous process. [Foreign Language], but still they are going at a very strong pace. Look at the size of their balance sheet, look at the size of their budget, still they are maintaining a same growth rate. So that is what is encouraging for any investor or any industrialist to keep on moving. And if you just stop, you will be left out, somebody is going to replace you.

Right. So sir, as you mentioned China infrastructure and upgradation perspective. So Indian infra is not even there at, let's say, basic Chinese infra level. So [Foreign Language] that infra comes in and then you obviously alongside upgrade also. And then now you have probably at some point, African markets also that may show some sort of demand...

What I can say, what was Europe 50 years down the line, now you see China is touching Europe and rather excelling it. After 20 years, India will be excelling China. Further down 20, 30 years, I expect Africa to be replacing India and coming to the level that we are as of now. So the growth story is not limited to a country or in that area. It is across the globe. It's happening world over. So the underdeveloped countries are coming into developing, developing countries are coming to developed and developed countries are further investing into enhancing their technology, upgrading their systems, even if they don't have -- but they are constantly -- that is called a replacement business. They have a duty cycle. So these things are going to continue. Paras ji, it's a continuous process industry [Foreign Language].

Yes, yes. Exceptional and very, very interesting, sir. I think we are poised well. And I think African -- we are slightly ahead of the curve in that sense to start operations in Africa also. It's quite interesting for...

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

Thank you, all the investors. Thank you for your question and giving me an opportunity to put my points.

Thank you for joining the conference call of Shera Energy Limited. If you have any queries, you can write to us at [email protected]. Once again, thank you for joining the conference call. Thank you, sir. Thank you, ma'am. Thank you, everyone.

Thank you, all.

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