Ladies and gentlemen, good day and welcome to the Q2 and H1 FY 2025 earnings conference call of Sarda Energy & Minerals Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Anita Pandya. Thank you, and over to you, ma'am. Thank you, Steve. Good afternoon, everyone, and thank you for joining us today. We have with us today the senior management team of Sarda Energy & Minerals Limited, Mr. Manish Sarda, Deputy Managing Director of Sarda Metals & Alloys, Mr. P.K. Jain, Director and CFO, and Mr. Nilesh Joshi, Head Corporate Finance, who will represent Sarda Energy & Minerals on the call. The management will be sharing the key operating and financial highlights for the quarter and half-year ended September 30, 2024, followed by a question-and-answer session. Please note this call may contain some forward-looking statements which are completely based upon the company's beliefs, opinions, and expectations as of today. These statements are not a guarantee of the company's future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statement to reflect developments that occur after a statement is made. I now hand over the conference to Mr. Manish Sarda. Thank you, and over to you, sir. Good afternoon, ladies and gentlemen. Welcome to Sarda Energy's investor phone call on the results of the quarter two. I hope you had a chance to go through the results, press release, and presentation, which has been uploaded on our website and websites of stock exchanges. Economies across the globe continue to face macro headwinds. China announced another policy stimulus to boost the economic growth. However, that also appears to be short-lived. The USA reduced policy rates twice in the last two months after three years. The RBI has also changed its stance to neutral. As such, we may expect reversal of interest rate increase sooner than later, depending upon the inflation data. The intensified conflict in the Middle East remains a concern for energy prices and global trade. The formation of a new government in the USA will also have its impact on the geopolitics and geoeconomics, the effect of which is broadly expected to be positive for India. On 21st August 2024, we successfully completed the acquisition of SKS Power Generation (Chhattisgarh) Limited, shortly called SKS, under IBC route. SKS is having two operating thermal power generating units of 300 MW each in Raigarh district of Chhattisgarh. SKS has been amalgamated with our company with effect from 1st September 2024. The result for the quarter includes the result of the SKS power plant also with effect from 22nd August 2024. One of the two power generating units was under shutdown from 1st September 2024 for overhauling after operation for five years, which has resumed generation from 12th October 2024. As such, the results of the acquisition will truly start reflecting from next quarterly results only. Unsuccessful applicants had challenged the NCLT's approval of our plan before the NCLAT. The NCLAT has dismissed their appeal. Now, they have challenged the approval before the Supreme Court. During the quarter, we reduced the production of steel billets and downstream products to sell power on commercial considerations. One of five ferroalloy furnaces at Raipur was under shutdown from 1st September for modification, which we restarted from 1st November 2024. We recorded the highest-ever quarterly generation of captive thermal power. Hydropower generation recorded 8% growth year-on-year on the back of better but delayed monsoon. Generation in the third quarter so far was also better when we compare year-on-year. Detailed operational data is available on our website and in press releases uploaded on the websites of stock exchanges. We have received consent to operate for an increase in the coal mining capacity of Gare Palma IV/7 from 1.44 million tons to 1.68 million tons. We have also received environmental clearance for an increase in the capacity of coal washing from 0.96 million tons to 5.2 million tons in two phases, initially to 1.8 million tons and then to 5.2 million tons. We have also received stage two forest clearance for Shahapur West Coal Mine. We are taking steps for the execution of the mining lease. Mine opening work will start after the execution of the mining lease. We expect to get the mine opening permission during the current quarter. We expect to start the production of the coal from this mine within two years from the mine opening permission. The work for the 50 MW captive solar power project is progressing as per schedule. The plant is scheduled to be operational by the end of the current financial year. We are in the process of the preparation and approval of the detailed project report and mining plan for Batunga Hill Coal Mine in joint venture. The 25 MW Rehar Hydropower Project has been installed and is ready for trial run. The Chhattisgarh government has announced incentives in its recent industrial policy to promote the hydropower sector in the state. The Rehar Hydropower Project will also be eligible for the incentives. The waste utilization project in Visakhapatnam is progressing as per schedule and is expected to be operational before the end of the current financial year. The order for the replacement of 30 MW T G set has been placed with Bharat Heavy Electricals Limited, and work on the project is progressing as per schedule. The plant will be operational in the middle of the financial year 2026-27. The company achieved consolidated quarterly revenue of INR 1,159 crores in quarter two FY25 as compared to INR 926 crores last quarter and INR 1,001 crores in quarter two of the previous year. Provision for income tax includes the effect of the removal of indexation benefit on land in the current year tax law. The consolidated profit after tax was INR 195 crores as compared to INR 199 crores in the last quarter and INR 141 crores in quarter two of the previous year. The result for the quarter includes the result of the IPP of 600 MW acquired during the quarter. The true effect of the acquisition will start reflecting from quarter three. Acquisition-related costs have been booked as expense in our books as per the Ind AS requirement. On account of the increased import and reduced export of the steel, the prices of steel products remained subdued during the quarter. Post-announcement of the policy stimulus by China, some improvement was recorded in the steel prices, which appears to be short-lived. During the quarter, we spent about INR 1,950 crores on the acquisition of SKS power plants, in addition to the normal CapEx on the ongoing projects. Post-acquisition of SKS, our consolidated debt, including for working capital, stood at around INR 1,300 crores. Long-term loans repayable within the next one year are less than INR 200 crores. The company holds strong liquidity with cash and liquid investments of more than INR 1,500 crores as of 30th September 2024, which is in addition to the loans given as part of treasury investments. The debt to EBITDA is below one, which will go down further as the effect of the 600 MW IPP starts reflecting in the EBITDA. During the nine months of the calendar year 2024, global steel production declined by 1.9% to 1,394 million tons. China recorded a decline of 3.6%. Bucking the global trend, during the same period, India recorded a growth of 5.9%. Due to the slowdown in the domestic economy, Chinese steel exports remained at elevated levels. Aggressive exports from China due to subdued domestic demand weighed on the global steel prices. China exported 84 million tons in nine months, recording a growth of 21%. Many countries have invoked safeguard measures against Chinese imports. In the absence of safeguard measures, steel imports in India recorded a sharp jump of 44.5% quarter-on-quarter and 43.2% year-on-year, whereas the exports fell 14.8% quarter-on-quarter and 29% year-on-year. India was the net importer of steel of about 1.9 million tons in the quarter. The EU imposed additional safeguards to moderate high steel imports. Ferroalloy prices corrected back to previous levels after a sharp jump in June on the fear of a shortage of raw material due to disruption in Australia. Merchant power prices remained subdued due to above-average rainfall during the quarter. Domestic crude steel production in quarter two of the current financial year fell marginally by less than 1% but grew 2.7% year-on-year to 36.23 million tons. Domestic semi-steel consumption grew by about 4.2% quarter-on-quarter and 11.6% year-on-year to 37.09 million tons. Ferroalloy exports have been stable. During the quarter, we exported about 28,200 metric tons of ferroalloys worth INR 251 crores in quarter two of the current financial year as compared to 32,500 metric tons worth INR 273 crores last quarter and about 25,500 metric tons worth INR 189 crores in the corresponding period of the previous year. India is the fastest-growing major economy on the strength of its domestic demand and demography. The reversal of the interest rate cycle will further strengthen the competitiveness of the industry. The government is also taking safeguard measures to check steel imports. China is also pushing its economy through policy initiatives. The fall in fiscal deficit provides legroom for increased government CapEx. All these should augur well for the Indian steel industry. Good credit offtake and a strong capital market, particularly primary issuances, indicate a rise in the private CapEx that should boost CapEx-heavy projects. The real estate sector has also recorded healthy bookings, creating demand for steel. The effect of the 600 MW thermal power plant acquired by us will start reflecting from the current quarter. This plant will give a major boost to the top line and bottom line of the company. That concludes our performance and outlook. We now open the forum for questions and answers. Thank you, all the participants. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of A.M. Lodha from Sanmati Consultancy. Please go ahead. Hello, Mr. Jain. Am I audible, sir? Yeah, you're audible. Sir, congratulations for the good set of numbers as well as congratulations to the entire team of the management for the successful takeover of SKS Power Plant. I have got two questions, sir. One, first, is relating to SKS Power, and second is relating to coal. Now, SKS Power, as you had mentioned in your presentation, that the NCLT appeal has gone in your favor, but the aggrieved party has gone in the Supreme Court. So what is the legal opinion of our legal lawyers for this acquisition and the Supreme Court matter which is being heard? What our lawyers... Sir, when it has been confirmed twice by the NCLT, is there a reasonable assurance on our strength of the case? Does it make any material difference, particularly when you have taken the position of the plant and made the payment, and payment has been made to the banker, and the banker has disposed to the lenders? Will it make any material difference in the Supreme Court? It is up to the Supreme Court. The matter being sub judice, I don't think the Supreme Court will take into consideration each and every sector and all stakes. Ultimately, it is the matter being sub judice. I don't think we can give any specific... It is up to the Supreme Court, but definitely, all these factors will also be considered. Okay, sir. In this acquisition, how much out of 600, how much we are selling under PPA, and how much we are selling in the market, in the grid? PPA, we have long-term PPA... We have long-term PPA... We have long-term PPAs, medium-term PPAs, short-term PPAs, and IEX all. So short-term PPA quantity goes up and down. So we have long-term PPAs, medium-term PPAs, short-term PPAs, and IEX all. So short-term PPA quantity goes up and down. So maybe out of 600, maybe 400 around, because it is a fluctuating figure. Okay. What is the present rate, sir, in the present rate prevailing in the exchange? Exchange also, it also fluctuates again, but generally, we are getting INR 5+ only. INR 5 per... On average. Because it varies hour to hour and day to day. Whether the management has any intent to double the capacity of this plant? They can let the matter first be resolved. Def initely, all infrastructure is available. Appropriate steps will be taken at the appropriate time. My second question is regarding the coal mines, sir. We have got the capacity expanded to 1.68, and we have applied for 5.2 MTPA. When can we expect to get the EC clearance, and when for this expansion of the coal mines, sir? In the first stage, we are increasing it further from 1.68 million to 1.8 million tons. Okay. Which we expect to get maybe by the end of the current financial year or maybe in the beginning of the next financial year. Okay. Then we will go for the second leg of 5.2 million tons. Okay. So that will take some time. Okay, sir. Can I ask one more question, sir, last? Yeah, sure, sure. This question is relating to hydropower, sir. Our Sikkim hydropower, 113 megawatts, the Rongnichu power plant in Sikkim, that we have, I think, commenced the commercial production last year. This is the second year running, I think. This is, I think, third year. Third year, third year. So three years, three years. This is fourth year. Fourth year. Just I wanted to know the status of the loans taken for this power plant and repayment schedule. Yeah. I think that we can provide you offline immediately. It will be very difficult to provide specific figures for repayment schedule. I'll send a mail to you, sir. Thank you very much. Congratulations. The next question is from the line of Aman Madrecha from Augmenta Research. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. So first of all, can you highlight on the total coal mix, given that we are at 1.6 million tons of coal capacity currently? So how much, according to us, will be used towards the power plant, and how much will be used for our internal operations? Could you highlight on that? And what portion? And the second question is that what portion of the SKS coal requirement is made through PPAs signed with Coal India, and what portion is made in-house again? Yeah. Out of 1.68 million tons, 100% will be captively consumed, whether it is in the power plant of SKS or internally for Sponge Iron plant, captive power plant, and all those things, and broadly, maybe about 0.6 million ton might be used in other facilities, and 1 million ton plus will be used in power plant, IPP power plant. Sir, for this 1 million ton of this coal, what percentage of power requirement will be met to, let's say, for example, for the 600 MW to run it fully, let's say, at 85% PLF, how much coal do we require? Can you provide that number? We require more than 3 million tons, maybe 3.2 to 3.2, depending upon the grade of the coal. It will be 3 million ton plus requirement, so given that, out of that 3 million ton, 1 million ton is made through this coal mine, right? Sorry, one million tons is made through this coal mine, and the rest we buy from outside in PPA, right? Yeah, for the time being, yes. Okay, okay, okay. Okay, sir. Can you also highlight on the upcoming two coal mines, let's say the Shahapur West and the other coal mine that is coming up? So where are we on the Shahpur West Coal Mine? Given in our initial address, we have received forest clearance stage two also. Now we are in the process of executing the mining lease. Post that we will get the mine opening permission. Once we get the mine opening permission, which we expect to get before the end of this quarter, then it will take about two years' time to start the production or getting the production from that mine. Okay. Sir, if I believe, according to the previous remarks, previous interaction, this Shahpur West Coal Mine's quality is at par with the imported coal quality, right? Yes, yes. Okay. Thank you. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Digant Haria from Green Edge Wealth. Please go ahead. Yeah. Thank you for taking my question. So my question is again on this SKS power that now it's at least three months that we have the power plant in our hands. So what is the peak PLF that we can reach in these power plants now that you will have some more access to the power plants and how they work? So that is question number one. Question number two is, sir, you said that blended realization right now is around INR 5 a unit. So what would be the EBIT or PBT per unit that we can make? I'm not looking at an exact number, but just a range depending on our coal mine or coal which we are using currently from Coal India. What is the potential h ere? So these are the two questions, sir. In normal course, we should expect 85% of the PLF from the plant. And we have been operating at full capacity. We have been getting plant is generating full capacity generation. So there is no such under capacity. That is not the case. The plant is capable to operate at full capacity of 600 megawatt. That is the first question I think I have. What exactly you wanted? This is what. And PLF is. Yeah, so PLF can be 85%, you are saying, right? Or even more? Yeah, 80%-85%, because if we are selling part of the quantity in IEX, sometimes it happens to you, although you have the capacity, but prices are not remunerative. And so sometimes you may have to cut down the production. So in that case, we may consider on the safe side, if we consider, it may be 80%. Got it. Got it. Because it's a long-term contract. Got it. Sometimes we have to cut down the production. Yeah. Got it, sir. Sir, and my next question was, what is the EBIT per unit or profit before tax, PBT per unit? Because you said revenue is around INR 5 a unit right now. Over the long_ term, where do you see this profit before tax number? It will be INR 1 a unit, INR 2 a unit. What is the economics? If you can just explain us that. EBIT should remain in the range of, say, 1.5- 2.5, somewhere in between, depending upon the prices, because price volatility is there. So... Okay. And sir, this INR 1.5-INR 2.5 EBIT, this will change once we have our own coal mine, this entire two million right now, which we are buying from Coal India. If we get it from our own mine, the Gare Palma, two, three years later, then does this number change or it will remain in the same range, 1.5 to 2.5? It will improve marginally. Definitely, it will improve marginally. Okay, okay, sir. Sir, and last question was, you said that. Sorry, go ahead, sir, please. Please, please continue. Okay. Sir, the last question was on the steel part. You just mentioned that the imports from China have been very high, and everybody is representing to the government. So these imports are very high on which parts? Is it mostly in flat, long, or in the products which we are there? Any color that you can give on this? Manish ji. Majorly imports... Hello? Hello? Can you come again, please? Yeah. So my question was that the imports from China have increased a lot on the steel side. So we just wanted to check, are there specific products where Chinese dumping is very high in India, or is it just mostly affecting our products? Or any such color you can give on the imports from China? And how different are the spreads? Our... In the last few months, we have seen a lot of imports happening from China. And it's basically on the electrical steels and the flat steels that are coming into the country. The government has taken note of that and is working on that to curb the imports also. We are very hopeful that soon we'll see that there will be some import curbs in place. It overall, basically, it overall, what happens when you see such a large sort of imports coming into India from China, the overall sentiment gets a little shaky here in India. Right, right, right. Right, sir. Okay, okay, okay, sir. Thank you so much. Thank you. The next question is from the line of Pradeep Rawat from Yogya Capital. Please go ahead. Yeah. Good evening and thank you for the opportunity. I have some basic questions. Can you just highlight what is the cost of mining of coal and iron ore from our mines? Coal and iron ore, coal pricing depends because we are paying a substantial part towards revenue share. We are paying 67% revenue share in our Gare Palma IV/7, and we are also paying royalties. So the whole cost depends upon the market price of the coal, which fluctuates in a wider range. And in case of iron ore, it is somewhere in the range of 2,500-2,700, depending upon the output. There are multiple variables, lumps, and fines. Again, because a major component of the output is government taxes, which varies, depend upon the grade and the size of the material taken out. So defining a specific pricing key, what is the cost, will be very difficult. In case of coal, also, we have four different grades of the coal from the same mine. So the cost varies in a much wider range for the grade to grade. Yeah. Yes, sir. I was just asking more about the cost of operations in mining, excluding that revenue sharing model that we do. Yeah. That is not a material in overall cost of structure. Okay, okay. Okay. And we have Kalyani mines, which could... So when can we expect these Kalyani mines to operationalize? And are we planning to use some kind of advanced mining techniques like underground continuous miners, or are we going to do it with existing blasting technologies? No. So far as the use of the technology is concerned, in case of underground mines, generally, continuous miners only will be used. Take the case of Shahapur. The best coal mine will be using the continuous miners only for extraction of the coal from the mine. So far as the Gare Palma IV/7 present operations are concerned, that is an open-cast mine where continuous miner is not required. So adequate water is appropriate technology depending upon the mine that is applied. And can you also comment on when could we expect Kalyani mines to be operationalized? In the last con call, we had stated that there was a dispute on the boundary. There was overlapping boundary of the two different mines allocated to different parties. So that matter was taken up with the CMPDI, and that boundary dispute has been sorted out. But now we are in the process of evaluating post-rejig design of the boundary. We are carrying out the DPR and viability survey. And final outcome will come only once that is approved by the South Eastern Coalfields Limited. So as of now, the position is standstill. Yeah. Understood. Just last one basic question. We have purchased Surjagarh Iron Ore Block for 126% revenue share model. So I was just wondering how can we be profitable when we are giving away more than 100% of revenue share to the government? So that was one basic question from my side. Yeah. If you see, all the iron ore mines have gone only in this range, and I think within this Surjagarh Iron Ore Block s also. Ours was, I think, lowest or maybe among the lowest of the premium, which was bid by us. Others have given their bids much higher than our bid in the same geology and same area. There were multiple blocks in the Surajgad. Ours was the block number one. And we have got a better quality of the iron ore. There are multiple variables, again, in the form of the pricing of the iron ore, iron ore fines, iron ore lumps. There are multiple variables there. What price is? Their revenue share is payable on the notified price of the state. It is not on your selling price because it will be bringing in case of iron ore, the royalty and revenue share is payable on the notified price for the state. So there are multiple variables in cost structure. Okay, okay. That was helpful. Thank you. Thank you and wish you all the best, sir. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Bala Subramaniam from Arihant Capital. Please go ahead. Good evening, sir. Congratulations for good Q4 numbers. Sir, I just want to understand the pricing point of view. Last quarter, some price corrections around 6%-8% for billets, wire rod, and HB wires. Manganese ore also has been corrected 10%-27% based on high grade to low grade in that range. In this quarter, how is the prices? What's the scenario right now? Manishji. This quarter also, we think that the prices will be a little subdued because December holidays are approaching. Typically, we see that December is a little lull month. Overall, I think the government spending will also start happening in the next three to four months. Because if you look at the last six months, government spending has been not as much as we had expected it to be on infrastructure. Going forward, I think the demand will pick up. In the next two to three months, I think it will be a little subdued as well. Got it, sir. Thank you. Thank you. The next question is from the line of Pradeep Rawat from Yogya Capital. Please go ahead. Yeah. For the follow-up, so I just wanted to understand more on the ferroalloy market. So how is it faring right now, and what can we expect going forward? So the ferroalloy market, as you know, that it has gone up immensely because of the ore crisis which happened in Australia, where there was severe flooding, etc., that happened in the South 32 mines. Right now, the alloy market is quite slow, and the demand globally is not very high right now because you've seen major regional disturbances like the Ukraine-Russia war happening, the Gaza attacks, the Middle Eastern regions. Also, the credit crunch has been felt across regions. So we're not hoping that the next two, three months, there will be an uptick on the ferroalloy side or the ferroalloy's pricing. But maybe after January end, February onwards, typically the demand picks up. Okay. Understood. Thank you. Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead. Good afternoon, sir. [Foreign language] [Foreign language] Meaning by December and January, it is expected. After January only it will happen, sir. December is full holiday. You know that December season is always a little low season, and January people start coming back to office by the 10th of January. So after January, only the pickup will start in terms of, you know, demand. But globally, the demand looks to be a little slow, because if you know that Japan has got an installed capacity of 105 million tons, and they are not going to produce more than 90 million tons. So we are seeing a shortfall in terms of steel production in Japan as well. We are seeing a shortfall in terms of production in European Union as well. So steel production, or in terms of steel production. This year looks to be a little low in terms of, you know, demand because of the war situation going on everywhere. Yes, yes, ji, ji. We are also waiting and watching very quietly as to what will happen, you know, when Trump’s policy comes into place. Yes, yes, yes, correct. Yes, yes. What are the impacts? What are the impacts that are going to be put in place for China? You know, we have to see what are the policies that is bringing out for trade. And only then we can expect some, you know, demand pickup. If in China, suppose restriction will be, then will the demand pick up from India? Ferro alloy in China to already restrictions is there. But let us see that what is the policy that comes in to play. Yes, yes. [Foreign language], but from January some price stability and improvement is expected. Price stability to now also is there. You know, it is holding around $860-$880. So price stability is already there in terms of dollar terms. [Foreign language]. No, I I couldn't get it, sir. $860-$880, what is that? $860-$880. Okay, okay, okay. [Foreign language] which is profitable for us? And not too much, but it's okay. It's not that bad. [Foreign language], sir. All the best for SKS Power. Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of A.M. Lodha from Sanmati Consultancy. Please go ahead. There is one follow- up question which I skipped and regarding SKS Power, sir. [Foreign language] 600 MW [Foreign language], sir? 80-85% PLF [Foreign language] number of units 400 crore [Foreign language], unit, unit, unit 400 crore [Foreign language]? Yes, 400 crore units I'm talking. I'm telling in units. Yes, okay, okay, sir. Second this was, sir, your this 25 MW hydro which is now ready, meaning so taking this I somewhere in your presentation was seeing a chart, where I found that the total capacity after this 25 hydropower, you are one you will be having 1000 MW power in total. No, not hydro, not hydro. No, not hydro. All, all, all 761. One place you have mentioned 761, another place 166 hydel, another 50 solar and this hybrid and the 25, which is going to come the production. So, so I am making the total of the total comes to 1200 MW. No, I I don't think 1200. It should be somewhere in the range of 1000. Somewhere nothing, not 1200, 1200 only. 1000, yes, 1000. Yes, 1000. It will be 1000. Okay [Foreign language]? Okay, fine, sir. Oh, okay. Okay, this hydro power and this year there was heavy rain. So, I presume that hydro power also generate some units in the month of October, November. Yes, October, November [Foreign language] October, November [Foreign language] generation is better as compare to the previous year. Okay, sir. Thank you very much. Thank you. That's from my side, sir. That's all. Thank you. A reminder to all participants that you may press star and one to ask a question. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one at this time. As there are no further questions from the participants, I would now like to hand the conference over to the management for their closing comments. Yes, thank you. We thank all the participants for attending this phone call. To summarize what we stated, the long awaited acquisition of SKS 600 MW power plant is completed, and this will be a major growth driver in our journey. Number of projects are under execution for consistent growth. Out of this 25 MW hydro power project and 50 MW solar power project will be commission in the current financial year. Our diversification is resulted in better performance during volatile times. So, we are poised for exciting times. Thank you. Please feel free to reach out to us and to our IR team with any further queries. Thank you all. Thank you. On behalf of Sarda Energy and Minerals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.