Venus Pipes and Tubes Limited (VENUSPIPES) Earnings Call Transcript & Summary

Ladies and gentlemen, we welcome you all to the Q4 and FY '25 Earnings Conference Call of Venus Pipes and Tubes Limited hosted by Ambit Capital. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from AMBIT Capital. Thank you, and over to you, sir.

Thank you. Good evening, everyone. On behalf of AMBIT Capital, I welcome you all to the Fourth Quarter and FY '25 earnings call of Venus Pipes and Tubes Limited. Today, we have with us from the management side, Mr. Arun Kothari, Managing Director; Mr. Dhruv Patel, Whole Time Director; and Mr. Kunal Bubna, CFO of the company. We will have the opening remarks from the management initially. And after that, we'll have a Q&A session. Thank you, and over to you, Arun, sir.

Good evening, and warm welcome to everyone on the Q4 and FY '25 earnings call for Venus Pipes and Tubes Limited. I have been joined by Mr. Kunal Bubna, CFO, and our IR team and our investor relation advisers. We have uploaded our Q4 FY '25 investor presentation on stock exchange and company's website. And I hope you had an opportunity to go through the same. Before we begin, I would like to point out on 2 important development in the company recently. We are proud to share that we have recently secured a major order worth INR 190 crores from India's leading integrated power plant equipment manufacturer. The order is for extend seamless boiler tubes to use in the series of supercritical and subcritical thermal power projects. The project is expected to be executed progressively over the next 12 to 15 months. This is a landmark order for the company, not only because of its size, but also because it reflects our growing technical capabilities. We are confident that with our capabilities and a strong execution recourse, we will be able to secure similar large-scale orders more frequently in the near future. Secondly, we have also achieved a significant milestone with the commencement of operation for 3,600 metric tonnes per annum of value-added welded tubes. This marks our official entry into the value-added product segment aligned with our long-term strategy to diversify our offering and move up the value chain. Now I would like to throw some light on the economic front. The global macro environment continues to navigate a period of uncertainty marked by geopolitical tensions, inflationary pressure and shifting trade dynamics. Conflicts in Eastern Europe, coupled with the strategic realignment of supply chain and deep globalization is picking up pace led by the United States have contributed to a fragmented global care environment. While GDP growth in advanced economy has moderated, there are sign of stabilization as inflation eases and monetary policy gradually normalize. India too witnessed a slowdown particularly in the first half of the year due to election and muted private sector investment. However, sign of recovery are emerging with leading indicators suggesting a gradual pickup in the insecurity and infrastructure spending. The government's continued focus on manufacturing through the PLI scheme and FTA is expected to support domestic growth in the long term. As we look ahead in FY '26, the outlook remains cautionally optimistic, dependent on geopolitical stability, consumer confidence and sustained policy support. On the company front, FY '25 has been a strong year for us. Our total revenue grew by 19.5%, reaching to INR 958.5 crores compared to INR 802.2 crores in the FY '24. The growth was mainly driven by a steady flow of new orders supported by our efforts to enter into new geographies and expand our customer base. We focus on growing our reach across geography, which help us tap into fresh demand and strengthen our position. A key highlight for the year has been the sharp rise in our export business. Export revenues grew more than 3x from INR 98.7 crores in FY '24 to INR 338 crores in FY '25. Out of this, INR 112.5 crores came in the fourth quarter alone. Exports made up about 35% of our total revenue for the year. This strong performance despite global uncertainties shows the growing demand for our products overseas, wider acceptance of our quality and the benefits of expanding our product range. We continue to engage with dealers and build relationships along with increasing brand visibility with initiatives such as participation in trade fairs and other events. Domestic sales continued to face some pressure during the year due to subdued capital expenditure from both the private and government sectors. However, with several new orders win in the domestic market, we remain optimistic about growth in FY '26 and beyond. Our confidence is further strengthened by our growing market share, particularly as we continue to gain ground over unorganized players. Looking at our product segment, seamless pipes contributed INR 543 crores, growing by 18% and welded pipe business contributed INR 350 crores in revenues, growing by 12% on a year-on-year basis. On the volume side, we achieved 17% growth with welded pipes growing by 10% and seamless pipes 25% with overall capacity utilization at approximately 70% on FY '25 basis. This indicates healthy demand and leaves room for further growth. With continued focus on expanding markets, improving efficiency and offering some more value-added products, we are optimistic about maintaining this momentum in FY '26. Our industry-wide mix continues to remain strong, with a steady supply to key customer across sector such as chemical, engineering, pharmaceuticals, food processing and oil and gas. In addition, we are seeing growing interest from investors that require a high-performance material for critical applications, including nuclear, renewable energy, semiconductors, power and others. These sectors offer an exciting opportunity for long-term growth. Currently, our order book stands strong at approximately INR 575 crores, reflecting a healthy pipeline and concludes customer service confidence. Now I would like to highlight some key business initiatives undertaken by the company this year. During the year, we placed strong emphasis on 2 key areas, bringing in experienced talent from the industry and expanding our product portfolio. The recruitment of key manpower is our strategic initiative and strengthening our market position. Over the past few years, we have consistently invested in building a strong team, which is reflected in the increase in our manpower force. These investments are intentional and strategic. We firmly believe that the talent we have brought will significantly enhance our capabilities, helping us gain market share and drive profitable growth over the long term. On the product portfolio front, we announced a CapEx plan in February 2024 to support our next phase of growth. During the year, we began the groundwork for this expansion and currently in the process of completing it. We expect to commence commercial production of our value-added product portfolio in FY '26. A key part of this expansion includes the additional fitting, which will position us among the select few players in the industry offering comprehensive piping solution. This strategic move will not only strengthen our product offering, but also deepen our value proposition for customers across industries. Now moving forward, as part of our long-term growth strategy, we are on -- focusing on 3 key areas to build up our market position and build a more resilient business. We are working to establish a deeper relationship with strategic customers in Europe, Middle East, Africa and U.S. market, while also exploring new regions for growth. At the same time, our well-established domestic players ensure that we are well positioned to mitigate any global uncertainty. This balanced effort between domestic and international markets provide us with a strong platform to manage risk and capture growth opportunities globally. We are gearing up to launch a range of value-added products, including fitting and high-grade pipes, tubes in FY '26. This will be an important milestone in our product strategy, and give us a competitive in an industry where differentiation and quality are increasing important. We are making focused efforts to expand our business in critical industries such as nuclear energy, renewables, power and semiconductor. These sectors have stringent quality and approved standards, making it challenging for most players to enter. However, thanks to our strong customer relationship, proven track record and commitment to quality, we are confident in our ability to secure orders and build long-term partnerships with companies operating in these high-value segments. As you reflect on FY '25, the year marked a key point in our growth journey, driven by strategic investment in product diversification, talent acquisition and market expansion. Despite global and domestic challenges, we delivered robust performance, entered high potential sector and laid the foundation for our net phase of growth. With a sharp focus on value-added products, deeper penetration into critical industries and expanding presence across global markets, we are well positioned to build on this momentum. The recent order wins and our growing capability give us a strong confidence as we look ahead. As we enter FY '26, we do show with cautious optimism, a clear strategic direction and the commitment to delivering long term sustainable value for all stakeholders. With this, I hand over to Mr. Kunal Bubna, our CFO, for financial highlights for FY '25.

Good evening, everyone. We are pleased to say that our company has delivered a steady and resilient performance in Q4 and FY '25, achieving growth across all key financial metrics, revenue, EBITDA and PAT despite a challenging external environment. On the revenue performance side, revenue from operation for Q4 FY '25 stood at INR 258.1 crores compared to INR 224.1 crores in Q4 FY '24, reflecting a 15% year-on-year growth. For FY '25, revenue growth was stronger 19%, reaching INR 958.5 crores supported by a blended volume growth of 17% across both welded and seamless pipes. Q4 revenue mix, 35% from welded pipe, 59% from seamless pipes and 6% from others. And FY '25 revenue mix was 36% from welded pipes, 57% from seamless and 7% from others. Segment-wise growth year-on-year seamless segment revenue growth -- grew by 22% in Q4 FY '25 and 18% for FY '25. Welded segment revenue rose 1% in Q4 FY '25, and 12% for FY '25. On the EBITDA front, EBITDA for Q4 FY '25 stood at INR 41.6 crores compared to INR 45 in Q4 FY '24. EBITDA margin for the quarter was 16.1%. And also EBITDA for Q3 FY '25 was INR 37.13 crores. For FY '25, EBITDA grew 14.6%, reaching INR 167.6 crores with a margin of 17.5%. On the tax front, tax for Q4 FY '25 was INR 23.7 crores compared to INR 25 crores in Q4 FY '24 with a margin of 9.2%. For the full year, PAT growth 8.1% year-on-year to INR 92.9 crores with a margin of 9.7%. In closing, we are optimistic about the journey ahead and we remain fully committed to sustainable profitable growth with a clear strategy in place, ongoing investment in product expansion, and sharp focus on operational excellence, we are excited to elevate the Venus set new benchmark in the stainless steel pipe industry. With this, I would like to open the floor for Q&A.

[Operator Instructions] The first question comes from the line of Amit Kumar, an individual investor.

Congratulations on a great set of numbers. So I have a question that first question is that our top line is increased by 20% year-on-year, but our other expenses are increased by 95% and finance cost increased by 56% and the employee cost increased by 70% Y-on-Y. So could you please throw some light on these.

Yes. So primarily, if you see as we have backward integrated ourself on the side of seamless, so primarily the entire 1,200 tonnes, substantial portion of that is fully backward integration. In an earlier year we are not fully backward integrated. Apart from that, we have also started manufacturing [indiscernible]. So if you see even in the last quarter also, it was in the range of more than 60% other expenses which will be taken together and we have been telling that we will invest a substantial portion of resources towards manpower because these costs will definitely increase going forward. But if you see on a blended basis, welded and seamless taken together, other expenses plus implied cost should be in the range of 16% to 18%.

Okay. And what is the volume produced in FY '25 for both seamless and welded and what is the EBITDA pattern for both of these?

We don't give EBITDA on the individual basis, but on the blended basis, it was near to INR 65, sort of INR 64, INR 65 per kg. And as I said for the last year, the volume growth was on a blended basis was 17% and for individual product it was 25% on the side of seamless and 10% on the side of welded.

So is it possible to provide the volume produced in ...

On a total basis, it was around 26,000 tonnes on a total basis.

26,000 tonnes. And if you provide the bifurcation between seamless and welded?

It's not -- we don't provide exact bifurcation, but we are providing you the increase in percentage, that 25% and 10%, seamless 25% and welded 10%.

Okay. And what is the guidance for next 2, 3 financial years in top line and EBITDA, both topline and EBITDA?

See on the side of top line, the expansion for the value-added welded tubes had already been done in the month of May. And the other projects are underway, and we believe before the end of this March '26, all the projects will start. But we are targeting internally and with all this capacity coming into play, we believe for each year FY '26 and '27, it should be a growth of on a top line basis around 20% -- more than 20% sort of number. And on the side of EBITDA, on a margin basis just an indicative number, you can take between 16% to 18%.

[Operator Instructions] The next question comes from the line of Dhruv Jain from AMBIT Capital.

So first question was on the domestic business. So while you have done exceptionally well on the export side, I think FY '25 in general has been impacted on the domestic side. So just wanted to get your thoughts as to how that turns out in FY '26, right? Are you seeing any green shoots? And if you could also provide us with the order book of the same of the entire next 2, 3 months, whatever.

So if you see Dhruvji, definitely in the domestic that's why -- but it was also a strategy on the part of the company to export what we are maintaining since starting because you want to diversify across geographies, to keep ourself restricted to India, so that was our strategy and we succeeded in driving our export. But again, want to mention that there was also subdued domestic demand. But recently, you must have seen that we've received a substantial amount of domestic order which also shows the -- and there is a good amount of under demand from power and other sector in the going forward quarter -- so those demands from those sectors are -- seem to be coming up and a lot of demand -- there can be demand from generation and STP type of plants and all where we are also in demand going forward. And if you see from the mix perspective, definitely, we have on the side of export and balance on the side of domestic, but we -- these ratios should be maintained in the coming year to come, the intent is above 30% on the side of export and all depend on the orders and fly orders can increase further, but depends on the margins and other factors. And on the side of order book, it's roughly INR 570 crores of order book currently, which is more or less split between 40% roughly on the side of export and balance on the side of domestic.

So that INR 200 crores worth of order that's basically INR 370 crores for the next 3 or 4 months, right, if I'm...

Absolutely. Yes. It will take more than 4 months sort of.

And sir, just second question was on the CapEx, right? So obviously, FY '26, we are going to see a lot of CapEx coming in from Venus Pipes. Just wanted to understand blended utilization basis, what is the number that we expect to end at the end of FY '26? Across both categories?

Yes, definitely, on the side of -- it should be blended basically it should be around 80%, sort number what we believe we should be able to achieve and primarily more than 85%, 90% on the side of seamless.

So this you're talking so if I'm not wrong about 42,600 capacity, right?

Yes. But those capacity will come in paces over a period of time. So that need to be factored into because the entire capacity will not be available on the very start of April 2025. So I'm taking those under concentration while mentioning my figure.

[Operator Instructions] The next question comes from the line of Radha from B&K Securities.

Sir, my first question was with respect to the boiler tubes order of INR 190 crores. So this is for the supply to thermal power plant. So can there also be an opportunity in the future for supplying similar tubes for nuclear and solar power plants and if yes, then will we need further customer approvals for separate quality approvals for these products?

You see, we have been supplying to this sector, which you are mentioning. But again, see there are individual clients who some time send their own quality norms apart from your current approval, to be approved by us, we keep on doing that and we are qualifying for many of the project what we have mentioned, but there are some time specific requirement that need to be approved also. And again, on the side of this boiler tubing and all, there are a few further tenders to be placed by those bodies in the recent future, where we will again be participate in and we also -- we can also be on that front, there is a possibility also.

Sir, would you, by any chance have the bid book for these boiler tubes?

No, we don't have. Because see, it's not -- so they are spending across quarters and [indiscernible] basis. But we think it's a good amount of substantial of the seamless demand of [indiscernible] in the coming 3 years, it will be quite a significant what we believe.

And margins would be in the similar range, 16% to 18% or higher?

If you take stand-alone in seamless pipes, the margins are higher, but what is the margin what we are currently is in the similar margin what we are .

Sir, just for this product sir margin?

Definitely, what we earn for seamless in the same range.

Okay. And the third is, is it mandatory to have mother hollow to be able to qualify for supplying these boiler tubes? And in terms of technology, piercing versus extrusion, is there any customer -- is there any preference by the customer for being able to supply boiler tubes?

If you see the preference can be there by the end customer, but the base order itself prove that for supplying that series of super critical or critical piercing technology accepted, that give us for the amount of confidence should be a good amount for everyone that we are seeing is widely accepted in many of the areas. But again, sometimes there are a few customers who specifically went on saying that we should not be from piercing, it should not be from extrusion, that can be there.

And is it mandatory to have other mother hollow, sir?

Primarily not as a specifically cut but we believe there are many who prefer those people who have mother hollow, because the entire vendor chain can be inspected at that facility.

Is there any player who is not having mother hollow and have won the order of boiler tubes?

No, somewhat...

Yes. I'm just saying that, is there any player...

Just a minute. In the current order what we have heard is they've order not having mother hollow.

Okay. Currently, if no mother hollow, then they are not getting approval.

Yes, generally what we have heard until now.

The next question comes from the line of Parth Bhavsar from Investec India.

Sir, I have a few questions related to exports. So sir, we have done quite well in the last 2 quarters. So can you highlight where are we exporting to? And what sort of efforts have we put to like have a crack on exports?

So primarily the reason has been we used to be near only European country on a predominant basis for the last [indiscernible] Europe and Middle East and African countries. So if we mix that, which is coming from definitely the predominant area is Europe and U.S. and balance are Middle East and African countries. The efforts have been wide open, we have been participating in all the fairs. We have senior people working in many of these geographies where we had been supplying and see as we have all the -- many of the SPs to be offered to their customers and the quality is up to the standard that they require, this all speak in a mix and help us to grow our export in all the geographies.

Okay. Got it. Sir, in terms of margins for these products, would it be similar to the domestic business? Or would it be like lower or higher?

Sort of similar and sometimes there are a few orders where you had the higher margin also, but if you see overall it is similar.

Okay. And sir, basically, I wanted to understand like when we do make this like the sale. So do we do it to directly the end consumer? Or do we direct it through a dealer distributor? And so basically, what sort of channel do we use for the exports market?

So primarily in Europe and U.S. dealer and distributor only. They in turn supply to the end industry.

Okay. So in Middle East and African countries, you directly supply to the end consumer?

Yes in Middle East and all, the approvals are received from the end customer, but the supplies are made to -- the orders are placed by the EPC contractors. And there are few cases where it differ also.

[Operator Instructions] The next question comes from the line of Sneha Talreja from Nuvama Wealth Management.

Just a couple of questions from my end. One is on your margin guidance. I am sorry I joined a bit later, but what I understand is it stands at 16% to 18%. Just wanted to understand a couple of things here. This year, we probably will have increase in value-added products also, which you've recently launched. Plus, if I look at the current margins or for the entire year, the whole OCI margin stood at about 17.5-odd-percent. Then what is the reason for margins to about 16% to 18-odd-percent in case we can get some parity here.

You're correct from the perspective, the few more value-added products and then started in a few more started coming quarter to come. But again, we need to also see the portion of welded would also be increasing, which is generally a low margin as compared to seamless. So keeping all the factors in mind we see those margins would be achieved by us in coming forward years.

Understood. And anything that you can talk about the weakness in the welded side, where is it coming from?

It's a mixed bag plus the link that we have not been supplying welded in the overseas market, which we started over the past few quarters so a little bit for penetrating those reasons we have been -- our margins have been affected a bit of competition intensity also there, which is also affected. But going forward for years to come because of the value added and more approvals under certain considerations, we believe those margins will improve further.

Understood. And anything on the -- I mean, anything on the growth focus front, I don't know if you've actually mentioned it, that what could be the welded as well as seamless volume growth for the coming year. Some visibility here?

On a blended basis, we see a growth of around 20% for the coming year.

[Operator Instructions] The next question comes from the line of Pallav Agarwal from Antique Stockbroking.

So just a question on the domestic competitive intensity. So there were some talks of competitors also planning to go into seamless pipes by a couple of companies. So are we seeing any progress on that or mostly will take some time for them to get approvals and start manufacturing seamless pipes.

Yes, definitely few of the competition will be coming and a few are under process. But again, as we always say it's an approval-driven business, so we should -- everybody should be requiring the requisite approval for getting supply to the end customer or nonkey customers. And further we as a company are working towards -- you can see a value-added products, which will help us to grow with that. So we are trying and also working on many of the geographies in many of the sectors so that those intensity can be reduced to the maximum, this is what we as a company can do.

Sure. And also in terms of the tariff scenario that is playing out, so is there any advantage for some Indian companies or with respect to exports compared to some of the other countries, like, say, China or any other exporting countries?

Definitely, it can be because what we are seeing in case of U.S.A., already a good amount of duties are there on China when they export to U.S. as compared to India. But then if it is further increased, definitely we believe it should help. But again, those scenarios are not very clear because they are changing every day or every week so it's very tough to predict those things currently.

Sure. And also just on how -- when do you expect the domestic markets to start recovering maybe in a couple of quarters or how long any thing that take to recover?

If you see this current order book, what we have seen from a domestic it will only improve, that only show any improvement from a company perspective, we see those improvement then further few more conditions or et cetera, we are seeing from the [indiscernible]. We see those pick up it started and few more other demand in those sectors in coming forward quarters. So we see there should be -- coming year should be good from the domestic perspective.

Sir, lastly, I know you mentioned what is the CapEx guidance for FY '26 -- '26, '27, if you could just give us.

For the -- current FY '26 it should be around INR 120-odd crores.

Okay. And FY '27 will be only maintenance CapEx or any growth CapEx also?

There will be some but predominantly maintenance, but again, we are working on that something more, we will come and update you all.

[Operator Instructions] The next question comes from the line of Mihir Damania from Fident Asset Management.

So my one question is considering that we are very close to a new CapEx coming on board or on the newer products, the value-added pipes and the fittings. Do we have a time line of how we are looking to execute the newer products? Have we started dealing the newer product to clients? And you go a bit more better on how far are we in terms of doing newer orders and utilizing this CapEx?

On the side of the current value-added product that we have started currently, we are definitely working with a number of clients, so those inspections, those product approvals are already in place. So we as a company are working on that. And we will -- sooner or later those -- selling of that will also start. And for the newer CapEx, definitely, not any asset approval because on the side of seamless tubing, we's already -- we are currently also supplying to many of them. But again, when you add capacity to try to absorb those high-value added product more in the system with those approvals for on the side of seamless already we faced, and further fittings and all those approvals would be required, not much for fitting we have not as such started any approval, as and when we come up near to our start of the project, we will start those things.

Okay. Got it. So but would you assume that this would take like a couple of 2 to 3 years to kind of fully utilize this plant?

No, on the side of seamless, we are quite confident that we would be able to achieve a greater amount of utilization in the next year. On the side of welded also the substantial portion would be utilized in the coming years 1 or 2 years. On the side of fitting definitely, those will start -- it will take some time. But again, 1, 2 years, will be post start of that, we will be able to utilize a substantial portion of that.

Got it. And just one more update. So currently, the U.S.A. tariffs, we are not being impacted by the U.S.A. tariffs because I think we were earlier also -- so the earlier tariff for our product [indiscernible]. We do not have any incremental duty charge as such.

No, you're right. The tariff remain the same for India as compared to what it was earlier so we as a company or as a country are not affected on our product side.

[Operator Instructions] The next question comes from the line of Ritesh Shah from Investec India.

Sir, just one question. Are there any specific approvals for our global supplies that you are counting over the next 6 to 12 months?

Definitely, yes. In few of the countries, South East Asia and others, where we are working, there are a few specific approvals which are quite working for all of them. And it seem we will keep on adding those in each quarter to come. And the few of the cases, we can directly supply because we have been supplying there.

All right. Sir, would it be possible for you to basically mention what all specific approvals we are looking for? And are there any product process changes that we're already doing or where are we on the process on the approvals with a few names.

Giving a specific name is a -- I think it's not a currently would be right because those are competitive information but change of process and all are not because process, what we currently follow the processing in the industry. There can be some testing methodology, there can be approval methodology or inspection methodology which can change but not the process which changes with that. It can be changed on grades, change of some other things but not on the process in the industry.

Sure. And sir, last question, the guidance that you have indicated, is it contingent to any of these approvals, I would presume no.

And definitely not as such, we work on many of other approvals, and we are also -- it is not contingent on that.

[Operator Instructions] The next question comes from the line of Hena Vora from DAM Capital.

Sir, my question was around the welded piece basically. Just a clarification, you mentioned that the weakness this year was because of, of course, domestic being weak, domestic demand, competition coming up and also some kind of delay in approval.

Can you repeat. I'm unable to get you.

Yes. Sorry. Sir, my question was around the welded piece. Sir, just wanted a clarification. Earlier, you mentioned the volume growth that we saw was because of weak domestic demand, rise in competition and also some delay in approval?

Not delay in approval. I said -- we said it was more on the side of penetration than geographies, like we were not there earlier.

Okay. Okay. Sir, just wanted to understand for the year to come, is there an export angle to this in case domestic takes a few more quarters to revise?

See, we currently have around -- if you see the annual, it was around 35% on the export side. And we currently have a order book also near to that or more than that. So we believe we will be able to continue like that. And again, if there are slowdown in the domestic demand further, we will take -- we will try to increase our pace on the side of export. But again, as we said, we already have a good domestic orderbook also keeping this new order in hand, so we should able to maintain the guidance what we are currently saying to you all.

[Operator Instructions] The next question comes from the line of Parth Bhavsar from Investec India.

I had a question more on what future holds, basically, we are making an effort to move towards value-added products and add more and more grades into our kitty. But beyond stainless steel and fittings, like do we have any product in mind that we would want to foray into like post maybe 2 or 3 years down the line, considering that there's a lot of competition as well in the stainless steel segment, both in seamless and welded.

See, primarily as a company, there's a team which keeps on working on other value-added and other products mytho we can add in our kitty. But again, these all workings are along with the current expansion that is going on. But as and when we come up with the specific plans for when you internally finalize those, definitely we'll come and tell. Tell us, but we definitely as a company keep on working on that.

[Operator Instructions] The next question comes from the line of Radha from B&K Securities.

Sir, my question was that the welded value-added products. So are there any other players who are making this product in the Indian office. And what is the margin delta in these products when we compare to the -- compared to the stainless steel welded products.

So there are some -- I think a few other manufacturers in the country -- I think it can be more than 2, 3 manufacturers who are manufacturing that in the country. And the margin delta generally as and when you get those requisite approvals, it vary -- it can vary to a certain extent, can be 2% or higher, 3%. It can be a sort of that range 2% to 5%, you can say. But after we get those requisite approvals, all those datas are available to you.

2% to 5% higher margins.

From the selling price. Yes.

So if you see the whole company you mentioned...

No, no, I'm speaking for that specific product -- for that specific product I am saying.

Yes. So currently, as a company, we are doing 17%, 18%. So just for this specific product, this product alone would have 2% to 5% higher margins, that would be 20% to 23%.

No, no, no. It can't be because it's only 300 tonne capacity what we are coming up with. And the capacity imagine we also get in this current year and next year. So it can't -- for example, a particular example I'm taking to...

Yes, sir. Optimum utilization.

But again, it is 300 tonne out of my total capacity of 2,300 tonnes. So again, it will not increase the total percentage in that way. And again, it all depend when you get those approvals and all when you are qualifying that on those higher delta by [indiscernible].

Sir, who are the 2, 3 other manufacturers?

Ratnamani and other -- Ratnamani is doing that.

Okay. Sir, any plans you have in future to backward integrate into bars?

What?

Is there any plan to backward integrate into stainless steel bars?

No, currently we have any such plan. We want if something is there or if people finalize something, we will definitely let you know.

Ladies and gentlemen, due to time constraints, we'll take the last question from the line of Sudhir, an Individual Investor.

I have only one question. What is the realization of stainless steel per tonne for Venus Pipes? Am I audible?

Can you repeat?

What is the realization of stainless steel per tonne for Venus Pipes?

On a blended basis, it was around INR 340 -- more than INR 340 per kg, excluding other sales.

Sorry, come again.

INR 340 per kg, excluding other items on a blended basis.

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

I take this opportunity to thank everyone for joining the call. We will keep updating the investor community on regular basis for incremental update on your company. I hope we have been able to address all your queries. For any further information, kindly contact Strategic Growth Advisors, the Investor Relations advisor for our company. Thank you once again.

Thank you, sir. Ladies and gentlemen, on behalf of AMBIT Capital Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.