Shyam Metalics and Energy Limited ($SHYAMMETL)

Ladies and gentlemen, good day, and welcome to the Q4 and FY '26 Earnings Conference Call of Shyam Metalics and Energy Limited, hosted by MUFG and time. [Operator Instructions] I now hand the conference over to Mr. Pankaj Harlalka from Shyam Metalics. Thank you, and over to you, sir.

Thank you. Good evening, ladies and gentlemen. I'm Pankaj Harlalka, Head of Investor Relations at Shyam Metalics. Welcome you all to the earnings conference call to discuss Q4 and full year FY '26 results. I hope you all had an opportunity to review our press release and the investor presentation, read along with the safe harbor statement which are available under the Investors section of our website, and the same are accessible on the BSE and NSE website. To discuss the results today, I am joined by Mr. Brij Bhushan Agarwal, Chairman and Managing Director; Mr. Deepak Agarwal, Director of Finance and CFO; and Mr. Sumeet Ketan from MUFG Intime, our Investor Relations partner. Now, I would like to invite Brij Bhushan ji to provide his perspective on the performance of the fourth quarter and FY '26. Thank you, and over to you, sir.

Thank you, Pankaj. Good afternoon, everyone. Welcome to Shyam Metalics Energy Q4 FY Earning Conference Call. I will begin with a brief overview of the industry, plan fee and operating environment, both of which continue to evolve global and domestic development. Globally, the steel industry has remained influenced by trade-related actions across key markets, while the ongoing Middle East conflict has moderated demand in certain regions. These factors have contributed to a redirection of steel flow into the alternate market, resulting in the price pressure across geographic and heightened volatile in global steel prices. Turning to India. The global steel demand environment remain robust and encouraging. Demand continues to support by a broad base strength across major steel consuming sector, including infrastructure-led, construction activity, manufacturing activity, urbanization with spending on intra projects such as road, railways, power. Now coming to Shyam Metalics. FY '26 has been a very significant year for us, marked by a strong project execution, strategic expansion operational stabilization. During the year, we achieved a meaningful milestone across our manufacturing facility with key highlights, including the computation of CRM complex at Jamuria and the successful commissioning of the blast furnace at our [indiscernible] . For FY '26, our sales volume stood at 4.94 million tonnes, reflecting a strong year-on-year growth of 26%. In Q4, to sales, sales volume registered a growth of 22% over the smart period of last year. Importantly, we maintained sales mix across product categories, while continuing to optimize realization through a sharper focus on the high value-added products. The strong volume expansion translated into healthy growth in both revenue and profitability. For the full year, FY '26, the revenue grew by 22%, while the profitability increased by 17%. On revenue rose by 27% year-on-year, while profitability growing about 42%. First, Performance underplanned by our integrated operation, diversified portfolio, sustained original discipline, continuous focus on cost efficiency. We also made substantial progress on strategic growth initiatives during the quarter. 2 operation of the CRM complex at Jamuria was successfully commissioned. In addition, we expanded our aluminum operation at Kapuria to the commissioning of downstream treatment process. This development has significantly and meaningfully enhanced our value addition in the downstream capabilities and further strengthening our integrated manufacturing platform and supporting the long-term growth aspiration. Reaffirming our commitment to a long-term growth. The Board has additionally get for a new CapEx investment of INR 2,700 crores. This strategic investment is aimed at a decent our presence into the value-added and specialty steel segment, downstream sales capability and accelerating with the transition towards higher value-added products with better margins. The proposed CapEx will be primarily funded through internal accruals, reflecting our die and capital efficient approach towards value expansion. This investment remains fully aligned with our product strategy of driving profitable growth through premiumization, downstream integration and prudent capital areas. We welcome that changing democratic and policy environment in the state of Western North and remain extremely optimistic about the next phase of industrialization and growth. As a company, we do in this state of resting model, we expect a more growth-oriented ecosystem to support faster development in the forms of infrastructure, making new investment inflow and will add more value to the organization. With our continued expansion across various metals, specialty alloy, stainless steel, aluminum, railway infrastructure, value-added products, we believe, put the state and the company are well positioned for a stronger long term commitment. In closing, we remain firmly focused on the substantial growth, improving profitability, creating long-term value for our shareholders. We sincerely thank you for your continued support thus and we'll look forward to engaging with you in the quarters ahead. With this, now I conclude my speech, and I would request Mr. Deepak Agarwal to take up to the financial performance. Thank you.

Thank you, sir. Good afternoon, everyone. Thank you for joining us today for Shyam Metalics and Energy Limited's earnings call for the fourth quarter and full year ended 31st March 2026. I am the Chief Financial Officer of the company, and I am delighted to present our financial result on behalf of the Board of Directors and the entire Shyam Metalics family. I will take you through our key financial highlights for the fourth quarter and the full year that is '25 '26, followed by a discussion on our capital allocation strategy, balance sheet strength and the strategic investments we are making for our next phase of growth. Our Chairman and Managing Director; Brij Bhushan Agarwal has already shared his vision. I will now add the financial dimension to that history. But we will discuss about the quarter 4 of the current last financial year. Ladies and gentlemen, I'm proud to report that quarter 4 of the last financial rate has been 1 of our strongest quarter on record across every critical financial metric. Let me walk you through the highlights. The revenue from operations INR 5,240 crores, 27% growth year-on-year, a 19% growth on quarter-on-quarter. When we talk about the EBITDA, the company has achieved INR 756 crores as a growth of 33% on a year-on-year basis and a growth of 40% on a quarter-on-quarter basis. When we talk about the EBITDA margin 15.4% expanded from 13.8% from the quarter 4 of the last financial year and 12.2% in quarter 3 of the last financial year. When you talk about the operating EBITDA, the company has achieved INR 727 crore, a growth of 41% on a year-on basis and 49% on a quarter-on-quarter basis. As you all aware here, very substantially some [indiscernible] is there. Therefore, our total EBITDA is INR 756 crores. The operating EBITDA margin is 13.9% versus 12.4% in quarter 4 of the last financial year. When we talk about the profit after tax INR 312 crores 1% growth on arbs and 58% growth on quarter-on-quarter base. The PAT margin is 6% against 5.3% in quarter 4 of the last financial year. What makes this number particularly gratifying is not just the magnitude of the growth, but the quality of it. Our margin expansion has been achieved through disciplined cost management improvement in realization across most product categories and a favorable shift in our product mix towards higher value add segment. Now I will discuss the full year performance that is '25,'26. Therefore, the annual turnover for the whole year is INR 18,552 crores, that is 22% growth on year-on-year full year EBITDA is INR 2,557 crore by the group of 21%. Full year EBITDA margin is 13.7% against 13.8% relining input cost pressure. Full year operating margin INR 2,353 crores, 25% on year-on-year sea. The full year operating EBITDA margin is 12.6% against 12.3% in the last financial year. full year PAT of INR 1,061 crores, 17% growth on year-end this year. The full year basic EPS is INR 38.1 per sale against the INR 32.7 per sale last financial year, crossing the INR 8,000 crores of revenue threshold and delivering over INR 1,000 crores of PAT for the full financial year, underscore the scale and earnings power that Shyam has built over recent years. This is a business firing on all cylinders. Now we will discuss about the volume growth and per tonne realization. The revenue growth is always most meaningful when it is accompanied by genuine volume expansion, and that is precisely the story here. Overall, the volume grew by 22% on year-on basis and quarter 4 '26, validating both our capacity expansion investments and our strengthened market position. Let me highlight some of the most significant volume growth volume achieved during the quarter 4 of the current financial year. The [indiscernible] volumes surged by approximately 200% on a year-on-year basis, reaching 50,344 tonnes, a testament to the ramp-up of our CRM complex at Jamuria. The PRM volume grew by 200% on a year-on basis that is 23,499 tonnes, reflecting the strongest domestic demand and our expanded product capability. Iron pellet volume grew by 40% on a year basis as [indiscernible] driven by operational efficiency and improved realize the stainer steel volume grew by 13% year-on-year basis to 27,087 continuing our remediation journey. On total realization, we saw healthy improvement across most product lines. [indiscernible] improved by 16% year-on-year basis, that is [indiscernible] despite steel realization improved nearly 17% year on this year. Coal CRC rose approximately 15% on year on pace, that is 78,512 per ton. This improvement reflects both firm underlying demand and our deliberate push towards value-added and specialty products with a superior margin profile. Let me now walk through some key observations on our consolidated profit and loss account. First, revenue mix. Our steel products segment continues to incur the buses contributing approximately 75% of our total revenue improved quarter 4 and the full financial year. Within this, Page Steel remains our single largest contributor at approximately 39% of revenue followed by [indiscernible] specialty alloy and stainless steel. The growing contribution of Shyam seed stainless alone is delivered strategic fit, one that is enhancing our branded margin profile. As far as cash generation, I am particularly pleased to report that our business continues to be a robust cash generation the net cash generated from operating activity for the financial year 25 city, which is approximately INR 2,000 crores on a consolidated basis, an improvement over the prior year, reflecting the strong earning working capital discipline, this cash investment capacity is what gives us the confidence to commit our next phase of capital investment. The Shyam Metalics and Energy Limited continues to maintain a strong balance sheet and a healthy retail profile in the financial year 256 despite being a peak CapEx cycle. The company reported ROC 16% at ROE, 13% in the financial year 25, reflecting a disciplined capital allocation, operational efficiency [indiscernible] leverage management that resulted into a reflection of our working capital days from 22 days to 9 days. Our financial architecture is designed to support growth without compromising financial resize. We run a fundamental conservative balance sheet, low leverage, strong operating cash flow of edited liquidity buffer. Now we move into the dividend. And you all aware that the Board of Directors has recommended a final dividend of INR 2.7 per equity share, representing a 27% of the face value of for the financial year '25 [indiscernible] this recommendation is subject to the approval of shareholders at the [indiscernible] This dividend declaration reflects our confidence in the company's financial and our commitment to consistently reward our shareholders while Signet investing in long-term growth. We believe this drives the right balance between capital return and value creation. Now will the strategic CapEx. Now let me speak about the most exciting announcement in our region. The Board has approved is INR 2,700 crores for our next stage of growth. This investment comprises 2 major projects. One is the normal facility wire, [indiscernible] we will setting up a long speciality while we with the furnace at correct booth a capacity of [indiscernible] tons at an estimated capital on place INR 900 crore. This project is targeting to commission by 31st March 2029. Second one is the stainless steel expansion and downstream facility at Sabalo. We are spending our standing capacity to 0.6 millimeters of [indiscernible] food come complemented by world-class downstream capability, including coal rolling in, assessing coloring, hoteling and pickling line and a bright ailing line, this estimated investment is INR 1,800 crores with a targeting commission rate in March 2029. This project will be funded majorly from our internal accrual and which is also a mix of if any data is required, then it can take other cities, it will be such in terms of equal. Given our strong operating cash flow generation demonstrated by over INR 2,000 crores in operating cash flow in the financial year '25,'26 alone. We are well positioned to fund this CapEx program while maintaining balance sheet pressure. -- by involving democrat and economic environment in rising positive outlook for industrial growth and in long-term development as a company with a significant manufacturing proven in the state Same remains encouraged by the potential for stronger infrastructure creation, higher investments, improved industrial activity and employment canton. We believe this environment can further support the one expansion downstream integration initiatives and value-added product strategy while also contributing meaningfully to the broader economic progress of the trade. We now look forward to taking your question answer. Thank you.

[Operator Instructions] The first question is from the line of Amit Dikshit from Goldman Sachs.

A couple of questions from my side. The first one is on the volume growth. So last year, volume growth was quite expanded, particularly on value-added products driven by CR oil. Now this year, what are the key elements of volume growth. Also, if you could highlight the major capacities that would get commissioned in the course of the year, that would be great. That is the first question.

First of all, as in volume growth, we are expecting 0.5 million tonne of iron making facility from the BRI side is going to be commissioned this year, which will also have an effect on the power generation, [indiscernible] recovery, and we expect the power condition will also go up. On the steel side, there will be a substantial growth in the billet manufacturing facilities, what we have commissioned now. We see a growth in the [indiscernible] and there will be a partial group in our final product structure TMT EBITDA relation and some more feeding of raw material to the steel segment. CRM complex, since we are going to commission the [indiscernible] volume line within this month end or maybe early next month, we'll see -- so there will be a substantial volume growth in the flat product in the gal volume as well as in the color put, we expect that color ported is going to be in the almost the double volume what we saw in this year last year. Apart from that, there will be a substantial value we will see from the cost side also because there will be a lot of new power plants coming up, which is going to be commissioned as well. And so whatever little power we are buying from the tree, we'll see there will be an effect positive effect on the cost side of the power. I think majorly, apart from this aluminum plant also will be commissioned this year. We have set up a new caster with fund stock and for plant. So we'll see this year the plan will get commissioned and strongly so it will be stabilized. So there will be a lot of action this year.

The second question I had was on actually in aluminum. Now we have seen aluminum prices remaining very robust worldwide. For us, we are actually converters. So how do you see margins? Is it like a pass-through for us or we get some incrementally higher margins on the elevated aluminum price?

I think we should see as a pass-through maybe because of a little bit more advantage we get because the working capital involvement and the kind of integration, what we are doing from the backward to the forward, we'll see a lot of value coming up -- because in the now we are buying the full stock once we make our own full stuff, we'll see the margin also in 3D. But related to your aluminum price, we should not be very much worried. Whether we are going with the backward integration, where we will have a better margin and also with the prices of the aluminum is concerned, it is going to be almost past.

Okay. Great to know. Just one last question, if I may. I just wanted to get an idea on the CapEx for this year and next one, if you can.

So we have declared a CapEx like in absolutely commissioned a blast furnace. Now we are planning to set up a SMA shop and the steel plant, which is going to be a little less than 1 million-ton to be more prescribed 800,000 tonnes. The plant is expected to be commissioned by end of next year. And this will have a substantial CapEx stepping up the plant. But since it is now [indiscernible] project and we will be very efficient, we'll be able do this CapEx like we have announced INR 2,700 crores CapEx in the tender downstream activity as well. When we are seeing comprising of [indiscernible] still announce all this CapEx is going to be spread in next 2, 2.5 years. So apart from that, we are setting up a flat product HR plant. Generally, we set up a 2 million tonne of HR plan it generally costs close to INR 6,000 crores to INR 8,000 crores. But in our case, only from the HR side, we are almost we have declared because we have all the brown field facilities. And we are all forward in that an integration is already integrated. So there's nothing to worry. We have a substantial treasury. We are doing the good EBITDA. And [indiscernible] you are seeing that there has been a substantial increase on the numbers and also as only is looking very comfortable in case we find there is some kind of a shortfall in also we are almost a debt-free company, so buying some kind of a short term, that is not going to be an issue. But as on date, I don't see that will be a problem until we take some more projects ahead can.

Sir, the one more question I had was on the stainless see. If I look at the EBITDA per tonne of stainless steel, I know it's not great to look at it from a quarter-to-quarter basis. But one of your peers had reported and their EBITDA per ton actually grew quarter-on-quarter. Now in our case, we have seen a slight contraction in EBITDA button. So just wanted to understand whether a tie EBITDA but contraction associated with some costs during the ramp-up phase or something? Or how do we see margins going ahead? Because time steel prices have risen and your -- one of your peers have given a very optimistic guidance for FY '27.

First of all, they are into the flat products, we are into a long product. And this is -- this was a very old plant which was chicken [indiscernible] the through NCLT 2 years before. So we are here, we are almost making all the stainless steel from the scrap and right now, our new facility of stainless steel, which is coming up in our Orissa plant. We have a complete integration like 80% of the raw material is what we are going to feed from our existing plants. And we are getting into a very high value-added product. So we will have a blend of long products and flat for us. But yes, it's the time to come with our power cost of less than INR 2 where we are in indoor, we are paying more than INR 6 or INR 7. We are buying scrap. It's not that big, bigger size project and also definitely, it will have a very positive impactful differences when we commission our [indiscernible] enlisting plant.

The next question is from Shaieen Kumar from UBS India.

So a bunch of questions. New CapEx, which you have announced on the asset side both.So what is the end industry are we covering in both cases?

Stainless steel yes, yes, it's we are targeting the pipe market, decorative market of piece use. There is a specialty pipe market also, which is for the precision pipe and all. Then there is some portion is on the definitive side of aluminum, stainless steel, what is used in the elevators and all these other definitive parts. And apart from that, some special category will be taken to the tensions market also and some in the export different side also.

So then the 2 question arrives here. What kind of profitability or return ratios on those CapEx you are seeing, it seems like it is a value-added product. Second, reasonably a little different from our current channel sales. Is that the right assumption? So how are you planning to do to the sales here or how you want to target the customers here.

This is a B2B market, [indiscernible] all the tube manufacturers in country and outside the country. This is a big market for the sales pie we'll be serving to these kind of a customer in the tan 5 segment because we are not thinking to get into a stainless steel went because it is a very small business and not a very scalable or the big volume where we need to track ourselves. And apart from that, it's a very open market, India is growing, and there's a full demand. And we are seeing that more and more definitive and being one of a very cheap product, it's not really expensive on the decorative segment. And we are seeing in interiors and everywhere around the payment penetration is in. So we'll be able to build up more and more penetration in this category.

Any sense on what kind of EBITDA per tonne or return ratios you're looking for this kind of investments?

EBITDA, generally, this is a very interesting business. So I would say, generally, it sounds from around INR 15,000 to INR 20,000 a tonne. But our overall calculation is in the range of INR 12,000 to INR 15,000. But it's fishing more in this segment because if you are making everything from the iron ore to the finance team. The EBITDA should be more than 18,000. It's going to be interesting product. And apart from that, 80% of the ingredients using from your existing product, the steel, the specialty era power is our the brownfield. So it's something where you are building up a raw mat inventory within your capital cycle. So the yield of the capital is going to be definitely better. And it's also going to create more sustainability with this kind of a business is the enter and there's going to be a lot of potential in the near time to expand and to invest more precious money in the value-added and more sustainable.

Understand. Got it. Fair enough, sir. Would you -- one more thing in this quarter, we can see there's a clear uptick in the realization for most of our segments. I just want to pick your view here because we have a lot of quite some time there's a softness in the realization. So to think there is still room for this utilization to move up from here for most of your products? Do you think that they will be stable or you see that there's a risk for the global scenario?

I think there is no chance to go above from this level because now we are entering into a monsoon session and apart from that, I think the market is pretty good, like if you see we have EBITDA is close to 14% on the overall -- so I think it's a very decent might be 1% here or there, it doesn't matter. And for us, if you really ask me, market is in [indiscernible] control, we are more focused on our efficiency and cost. But to be more optimistic and realistic, I would say, the business will remain stronger because today still we are sense by the geopolitical issue is not of restrictions on the logistics side, export market. There a lot of spending is going to come globally. Like earlier, none of the continues to spend on the development side and with the new revolution and new age, what I see with this multiple more prices and all. I see India is going to have a could see in the international participation, and the metal company in India will grow domestically with the internal demand and also will have an edge and the opportunity to participate internationally also in a very big way.

Sir, definitely. I think there's a change in polisher investment call as well. I hope that, that also favors us. One more bit. Like if I look at the quarter EBITDA, it's very good. And if I annualize it, we will be -- it's like we are crossing more than INR 20 crores, 800 crores. So how should we think about it? So 1 leg is this where we have already achieved this number. And then there are incremental things which are happy, for example, when I look -- I was looking at your presentation. The second phase of CRM has only started in April. So I think it was not a contributor. It's my action was not a contributor in the fourth quarter. So the benefit should come in at 27%. Then again, as per your presentation, you should be finishing your Phase II aluminium, right, within FY '27. So some benefit of that should come -- so then if I put all these things together, can we look or expect EBITDA of more than INR 3,000 crores for FY '17?

Shaleen, when I told you last time, I remember, I was always speaking close to INR 800 or to INR 2,000 crores EBITDA for this year all buying. Yes. And fortunately we ended into '24, '25, including other income. And on this realistic terms, it was on the operation was close to 200 plus, correct? I would be a little bit more conservative. Like I don't want to say because for us, I've been always very, very conservative and prudent on my [indiscernible] my project and on my targets and on

But sir, what's wrong in my assumption?

Here because I simply say that I understand the you're not on -- you're not wrong, but maybe nearby, maybe plus or maybe 5% here and there, I expect -- you're not wrong. You're right.

If we can get from you or DPG, it's not now even later is helpful. What kind of EBITDA contribution you're expecting from the CRM and aluminum plant in '27? That can help us like have some sort of contribution from them. Is it possible to shoulder

Yes, I think EBITDA is going to be close to INR 10,000 to INR 11,000 per tonne this year from the -- and the alumni EBITDA, I think, should remain between INR 35,000 to INR 40,000 this year please. The time line also aluminum because it's still in the core.

Can we expect it to happen in first half of '27?

Out will be starting commissioning and all. So we'll start seeing the effect in the second half more better from because all these high-tech plant, it takes time and it's a green fee take for the new foil plant and all has come. So this will take time, but because definitely, it will have more and more positive impact time to time to be quarter-to-quarter.

Just last and then I'll join back the queue. On the battery foil. So we -- our product is qualified with the customers.

Yes. We are all on.

I'm not sure if you would like to, but would you like to share the name of the customer who the we have done this.

This is a nondisclosure agreement. Because -- but still, we have been qualified long back once we see a battery line coming up middle of this year and on. So we will be penetrating in the battery for

And there will be more than one customer.

Sorry?

There will be more than one customer?

2 to 3 customers are there. customers.

Okay. In addition to this as far as far as future guidance for EBITDA, thesis always being very, very conservative what you can see in our with the commissioning of aluminum with the commissioning of CRM with a commissioning of 0.5 million tonnes point are and with the coming of blasts well in the last financial year, the full year impact will come up in this financial year.

So definitely, we will be achieved whatever we have achieved in last financial year. But one will always say on a very conservative side because we always believe only in the [indiscernible] is delivering more following this publicly. we will be very comfortable with our growth close to 30% over this year. very comfortable, yes, yes. I can like if all your projects execute it the realization wasn't really hurt, then I don't think so any reason that why we should not have a 30% neo. -- profit growth -- operating . Yes. Samad, will always big on the volume growth, it will never depend on the realization side. If you look into our last 4 quarters' financials, you will find will be always giving the sustainable EBITDA sustainable rate volume growth is there over the Fair answer.

[Operator Instructions] We have next question from Ashish Kejriwal from Nama Wealth Management.

And many connotations again for a good set of numbers and delighted to hear about your midterm growth plans.

I hope just to see you happy with all your questions idea?

Yes, good. I have 2 questions. In fact, if I look at our inventory as well as abiding that has increased significantly in this quarter or maybe in this year. So is there any change in the strategy? I understand that maybe we may have booked some higher iron ore or coal to take advantage of lower prices earlier, which would have increased our inventory base. Is it so? And what about the payable days, why it has increased. So any change in the business strategy on this point? That's my first question.

I can take you this question. As far as are increase in the inventory only because of if you look into the last year financials, there were no commissioning of large furnace, there was no commissioning of Sara. The one factor is we are positioning the raw material of CRM as well as the last finite coking coals and something. And in addition to this, also, we are taking the positioning of iron ore, iron making raw materials. But if you look into our financials also, our inventory base in the last quarter was 99 days. Now we are taking the pushing of 123 days of unit day. This is the only reason for increasing our inventory.

So we have taken higher than what is warranted as of now, it will be liquidated in first or second quarter, right?

Correct.

Okay. And what about payable days, sir? Payable days approximately 30 days.

Yes. So it has increased significantly from our normal scenario. So is this a one-off rate or -- no one of credential or credential is there. So whatever we are procuring most of the raw material on grades. If you look into our cash conversion ratio is very, very good.

Okay. So that's great, actually. It's more of a working capital financing and if they are effectively doing it nothing. So this is not a one-off. It can sustain for longer.

Correct.

Okay. Great. Second question is, sir, in terms of cost or cost of steelmaking in fourth quarter what kind of cost increase we have witnessed because if I look at the price hike and EBITDA per tonne, it's almost half, like steel EBITDA per ton increased by roughly around INR 2,600 per tonne and price increase is something like 50. So what kind of price increase we have witnessed in fourth quarter, which led to lower EBITDA pre compared to the price hikes?

I'm not clear, Ashish. Can you just make a

So sir, if I'm comparing fourth quarter EBITDA per tonne of steel versus third quarter, we are seeing that our EBITDA per ton increased by roughly around 2,600, whereas the price increase in the carbon steel is around 5,100. So roughly around 2,500 cost increase could be there. I just trying to get a sense of where this cost increase, we have witnessed a --

We will not be very appropriate in answering your question. But overall, I can say because when you are into such a big ecosystem. You have your booking. We have your readvanced booking for more than 2 months, 3 months in the system. And there are some deliveries which has to happen. There must be a lot of old carryover of a lesser price, which may be affecting an average outing and maybe 1 of the reasons. And there cannot be any other reason because whatever the market is, which is a very open brand. In the Aponte, the price, which has gone up by some cost effect must be there because of cost is increasing because of the vessel rates and all your import prices, the limestone, everything is going up. So there must be some kind of a contusion also. So which maybe also have some kind of a substantial pressure. No, this is -- this is basically the restatement of improve the fluctuation loss, the dollar vs rupee weaken, that will be the impact of this cost side also.

Is it possible to quantify that, sir?

That we can share you I can talk to you later on, on this one.

The next question is from Sateri Jang from Ambit Capital.

So first, just a follow-up to Avi's question earlier, what you put together different moving parts in terms of CapEx. But what exactly can you tie to what kind of CapEx can we look at in FY '27 specifically.

Deepak, would you answer?

Yes, as far as commissioning of CapEx in this financial year, as our fare already shared the 0.5 million tonne of respondents commissions. No, no, they are talking about the value CapEx, not the -- how much money we [indiscernible] Ization but not the yes. Now as far as the total CapEx is required to be incurred around INR 10,000 crores of rupees. And this financial year, we will be incurring around INR 2,900 crores from this financial year and INR 2,000 crores in the next financial year and balance in EBITDA then is 2 financial year.

Okay. On that, sir, just generally, I wanted to understand the thought versus last few years. the intent was to remain net cash as -- depending on different moving parts for earnings, there may be requirement to take on short-term debt, as you mentioned. Is the company now more comfortable with that with this size? What's the thought process on capital sector as you look at all these pictures just I want to understand the forces.

Very comfortable. We have been very, very mature in the last 25 years, all these things we have been handling very prudent. So all this CapEx, what we plan is in our cash flow, the net cash because we don't have any kind of a major debt there's no interest. So whatever net cash if you see last year on this, we must have made close to around INR 80 crores, INR 900 crores net cash in the company because there's hardly any interest cost and I think it's more than INR 2,000 crores. So this year also, we expect that we will have a substantial cash. And when you do a CapEx, you have long-term plans when you buy machines and all you get lot of time credits and all. So I think we are very comfortable as of now, nothing to worry.

In addition to this, also, I would like to add one more thing as far as debt is concerned in our system, we have a debt policy in the system is also there. Our debt will not grow at any point to the total equity on the circumstance. So we will follow this debt policy and if you look into our financials, our softer up cash generator a period time come up around INR 2,000 to INR 2,500 coal, and we can easily meet whatever be our CapEx program in the next 3 to 4 years.

Okay. Sir, secondly, on Westin. So you mentioned there is optimism around improvement in infrastructure and all -- just on your Zamora location after the HSM, the new KPI build. What kind of optionality is there just in terms of land package between [indiscernible] And my understanding was that the land availability might be somewhat limited, but correct me if I'm wrong in what are the plans for expansion [indiscernible]

[indiscernible] investing world capitalize in case you're looking at that optimism and activity Strategy for next 3, 4 years, we don't have to worry. And we are also in the process of procuring more land at joining our plant because I don't see any problem as on date. And for next, we have a clear window for next 3, 4 years like there is no issue of any that. And some parcels and all, we are already in the process of acquiring and that everything good year.

The next question is from Mr. Vikas in from CS Securities.

One question only. On the stainless CapEx. Given the current circumstances, when the government beauty production is more towards this steel expanding into the stainless steel where usually the quality control order had not been there. Just wanted to understand why we have been putting still emphasis on the stainless steel could have been delayed or the ROE or ROCE of stainless steel versus steel, how is it sitting right now?

The carbon steel prices is close to $800 and the stainless steel prices are close to -- on an average, $120, $130. I mean to say at $120 $1,300. So in our case, more than 80% raw material for making stainless see downstream. So we are doing a carbon steel development also. We are putting up an HR oil plant. And we are also developing in the stainless new market because in this seamless team is better than the carbon steel because it is more niche, it is more expensive. And also, we have an advantage that we are doing a forward integration and it also help us to for a proper capital utilization because the working capital load is very bad. For a general people, if they want to stall steel, they have to buy scrap, they have to put an inventory of 3, 4 months, and a lot of issues are there. But in our case, we have an advantage. And we are also developing into a new material, where we see that in the time to come, we should be able to position more stronger. We started with a small acquisition in the industry. Right now, we are doing a run rate of around INR 130 crores, INR 140 crores every month in the last 2.5 years, now we are thinking of being a run rate of close to INR 300 crores in next 3 years, every month. So the business is different, but we have a lot of advantage. We have our own power. We have our own alloy and what we are doing, we are just doing a value addition. For me, it is a new business also, and we are doing a value addition in our existing business. Strategically, we are very different as a stand-alone industry or other integration, if you see in the state it.

So in terms of ROC on return ratios, at current price point how both steel and stainless still set up for you?

Very difficult question. at what hour you were asking me this question, our changes. But anyway, this is always better. It is always a better. I would say, in comparison with the cap will have an edge of around more than 20%, 30% over the carbon steel always -- because it is a limited addition, the challenges are more and it is a niche market. It is not a commodity product. It is a niche product.

The next question is from Mr. Rajesh Majumdar from 361 Capital.

Sir, just one question from my side. What is the status of the ED case on the coal, which you mentioned in the note because this is dated 15th April. So we're in almost mid-May now. Has it been resolved? Or is there any other thing on this matter and will not be...

There is absolutely not to worry because there's nothing they have given some letter. We are replying and it's nothing to be worried of because there's nothing which is of an evidence or something on the statement, they have given a notice that statement will not stand because it has been applied to almost major steel industry in the city. We are one of them being one of the popular steel industries, so we are on the highlight, but we don't have to worry.

And just to follow up, is the political change now established. This will be

I can't answer all these. So your question should be separately and take answers. It's not good.

The next question is from Tanuj Nangalia from SKP Securities.

Congratulations to the management on a strong set of numbers for FY '26. So my first question is on the stainless side. So like is up nearly 20% since December on the Indonesia supply parts. So do we see any challenges in the nickel sourcing going forward? And is the cost to be something we can fully pass through to the customers?

See Mikael is always going to be a challenge. Nickel in the stainless still always going to be a challenge. It is not going to be fair. But in our portfolio of our product, more than 70% or close to 75%, our stainless is majorly without nickel. We are focusing on the grade, which has a minimist or no neo. 20%, 25% to either the country basket. We have to have a nickel. We have to import the nickel from Indonesia. Also, we import, we have to improve the scrap, which has a high content of nickel. But yes, it is generally in most of the time, it is passed on. So whatever the nickel price goes up, the price goes up. But there is always a carryover of your inventory plus and minus, which is a regular transitional process, which everybody has to buy Okay. Sir, got that.

And sir, next question is on the ammonium business side. So is there any decrease in the export order booking to the ongoing geopolitical conflict and are we able to service the oversold

We are over. We are not able to supply to the international market.

That's good. Yes. Okay. And also with the rupee depreciating, do we see there is a margin tailwind given in the aluminum side, the export business?

These are all temporary fasten everybody knows, India is a dominating market, they have a special supplies and all. So whatever is -- where it is all pass on plus or 5 -- maybe periodically 1 or 2 months, it's better. But the consumer, they take up the price, they take up the hit because once people have to use aluminum, there a substitute -- that is like general other industry.

The next question is from Harish Agromania from Unifi Capital Private Limited.

Just one question from my side on the central collision control both what came out in terms of the observations. So can you explain what was the all compliance...

There was some kind of -- there was some kind of the error, which was identified by the Board inspection, which was resumed in 4, 5 days, and we have taken all the actions -- and in the times to come, we will take it seriously and see how best we can deliver.

Yes. So within this 3 months' time period, do you believe you will be able to fully address and compliant and comply with the observations in...

Yes.

The next question is from Fred Chang from Nivesh.

Sir, my question is has been answered. Thanks for the opportunity that it has been already covered.

I have my plane to catch. Can we --

This was the last question, sir.

Yes. Okay.

As there are no further questions from the participants, I now hand the conference over to management for closing comments. Thank you. On behalf of Shyam Metalics and Energy Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.