Ladies and gentlemen, good day and welcome to the Rajratan Global Wire's Q2 FY25 Post-Result Earning Conference Call hosted by Batlivala & Karani Securities India Pvt. Ltd. As a reminder, all participants' lines will be in 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 STAR, then ZERO on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to. Thank you, and over to you, sir. Yeah, thanks, Nikhil sir. Good evening all, and thank you for joining us for Rajratan Global Wire's 24th of April 2024 earnings conference call. During this call, from the management team, we'll be hearing from Mr. Sunil Chordia, Chairman and Managing Director, Mr. Yashovardhan Chordia, Executive Director of the company, and Mr. Pranay Jain, CFO from Rajratan Global, and Mr. Hitesh Jain, CFO of Rajratan India. I would now like to turn the call to Mr. Sunil Chordia for the opening remarks, followed by Q&A. Sir, you may begin. Yeah, thank you, Sunil Chordia, and good afternoon, all dear shareholders, for your interest in Rajratan and taking your time for this call today. I'm happy to be here with all of you and very happy to share that your company is continuously growing, as indicated earlier. Our focus this year is on maintaining the market share, or rather growing the market share, and we have demonstrated that in the numbers. So we have done an impressive volume growth in India of 23% of the entire, and the total wire sales have grown by 10%. We have done a very big growth in Thailand, 32% volume growth in Thailand in the first half of this year, and that shows there's a strong growth in both the regions in volume terms, as well as the positive growth trajectory, thereby ensuring that we have continued to maintain a higher market share. Our strong volume growth has led to operating leverage benefits for our India operations. This coupled with restriction on imports from China, and again, has led to improvement in the EBITDA margin in India also, which is close to 18%. Even our Thailand business has reported a healthy EBITDA margin of 11 to 12%, led by volume growth and running our operations very efficiently. And let me also remind you that Thailand, we are having a tough competition from China, and in spite of Chinese dumping, we have been able to grow the volume business and also maintain EBITDA margin. So overall, we'll continue to maintain our consolidated annual volume growth guidance. We have been talking about 20%, and I'm confident of achieving that and also maintaining EBITDA at 15% to 16% for the year. On the numbers, happy to announce that Chennai has started production, and as told you in the earlier call, it will be in phase beta, so we have done around 1,000 tons of sales from Chennai this quarter, which is going to grow in the coming months, and apart from that, our North facility has been audited for TPM certification, and the final certification audit will be in November, and we are hopeful of getting TPM certificate for the facility by the end of this financial year, and we have started a TPM project in Chennai and Thailand as well, and as you know, quality and the certifications are very important when we talk about selling to multinational companies who focus more on quality than the price. There are some positive green shoots in terms of getting approvals for exporting to multinational companies in North America and also in Europe. So Europe, where we had approvals from some customers, the business is continuing, and we are getting more business from Europe. And also now, a very, very robust plan to work on increasing exports. So there is a separate team which will be continuously working on connecting with customers, approaching them, offering them value-added offers in terms of green bead wire or reducing the carbon footprint or applying a better quality material at lower price. All these propositions, we have made a very robust plan to approach customers continuously. With this, I'm open to take the questions from here. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and 1 on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press STAR and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a minute while the question queue assembles. The first question is from Parth Bhavsar from Investec. Please go ahead. Hi, sir. So thank you for the opportunity, and it's very good to see how our operations are ramping up in Indore in standalone entity as well as Thailand. Sir, I have a few questions, first related to Chennai. Sir, you indicated that we made sales of around 1,000 tons from this unit, and I think our yearly guidance is of around 14,000 tons. So are we on track? Do you think that it will ramp up that fast, or are we cutting numbers over here or guidance over here for the Chennai facility? It is the question of getting approval and start supplying from Chennai. Currently, whatever 1,000 tons we have supplied, only some 20% volumes have gone to nearby factories. The rest of the material we had to ship to a long distance, where the company incurred a huge freight cost. That was a force majeure. There was no choice. We are getting very close to major approvals in Chennai, and then we will divert the volume to Chennai. That is the plan. And yes, it is a challenge to reach 14,000 tons this year, but we have to reach, and we will all work towards achieving that number. Yeah, because that is a commitment we have made to PLI. Yeah, that is the commitment we have made to the government, and then only we'll get the PLI benefit. Okay. So if we are not able to achieve that, PLI benefit would be like it will start from next year onwards? Yeah, yeah. So we will lose the PLI benefit. I think we have to achieve 80% of our commitment. Yeah, so I think 80% of 14,000 has to be achieved. Yeah. Okay. I wanted to know this Chennai facility, at what point does it break even? No, I think with current expenses and a major saving in the transportation cost, it should break even at 18-20,000 tons volume. Yeah. When we are supplying to prime customers, because again, currently we are supplying to customers in the market in Ludhiana, so there is no profit. Once we start supplying to major customers who are around our factory, the break even will come down. Okay. And sir, now regarding the macro environment, you mentioned how companies from Ludhiana are doing. So how is the competition in the domestic market and the Thailand market, and what sort of market share are we working with in the domestic as well as Thailand market? Yeah, so last quarter, our market share was 42%. We also do collect information about our competition and how much is the total sales of the wire happened in that particular month. So our calculation indicates that we were at 42% of market share in India, and we were a little higher than 30% in Thailand. Okay. And in Thailand, we have competition from Chinese. Okay. In spite of that, we were able to make a decent EBITDA margin in China and Thailand also. And in India, yes, our competition has also increased capacity. Tata Steel is sitting with higher capacity. One more company has announced major investments. Yeah. So yes, those challenges will be there. Okay. Okay. So competition will be stiff. Yeah, yeah. We have lived in competition for the entire 30 years of this business. Okay. Yeah. And Sir, at Chennai or any other facility, even in Thailand, are we awaiting any approval from a big customer? And what is the timeline that we're expecting to get this approval, if there's any? No, in India, we are approved with everyone. It is a question of new approval for Chennai facility. This is happening. So I cannot name, but one major company has been able to supply 100% from Chennai facility, which will start this month. Okay. We are starting now. And more, I can say every 15, 20 days or a month, we'll add on one more customer to the list. Yeah. Well, frankly speaking, the quality of material is perfect. There is no problem, but they have a very rigid system of approval, which they will follow, and you cannot press customer beyond a point. Yeah. Fair enough. So those are my questions. Thank you so much, Rajratan. Thank you, sir. Thank you, sir. Participant who wished to ask a question may press STAR, one at this time. The next question is from the line of Easwaran Arumugam from InCred Equities. Please go ahead, sir. Thank you for the opportunity. Sir, once our Chennai capacity ramps up, how much can we expect our freight cost to decrease? And are we already supplying to direct facilities in Chennai? Who will come to the Indore plant? Who will look to switch to the Chennai plant? So that is my question. Yeah. So currently, we are doing cross-country transportation. Okay. So in India, typically 65% of tires are made in South India. Okay. And we are in the western part of the country or in the central part of the country. So we are paying an extra cost of rate of around INR 3,000 per ton, which should be saved when we supply from Chennai to those locations. And yes, we will shift. Our long-term plan is to supply to customers in West and North from our mother facility, which is Pithampur, and to our customers in South from Chennai facility. Yeah. Sir, capacity utilization in India as well as Thailand together? It's almost 80-85% utilization we are running. Okay. Both in Thailand and India. So do we have any plans to ramp up the capacity medium to long-term? Yeah. So right now, the plan is to ramp up in Chennai, which is the priority. And also, you will see a higher volume in Thailand this year. As I told you in the beginning, we have grown in the first half by 32% in volume in Thailand. And so you will see overall 20% volume growth. Okay. Okay. That's all the questions. Thank you. Yeah. Thank you, sir. Thank you, sir. Before we take the next question, we would like to remind participants that you may press STAR and 1 to ask a question. The question is from the line of Sanjay Shah from KSA Shares & Securities. Please go ahead, sir. Yeah. Good evening, sir. Good evening, Yashaji. My question was regarding it is really a point of appreciation that it is competitive and volatile world market. We have still grown on volume side. So now what my question was regarding, we have now established our Chennai facility. So with this new facility, we will be having a good manufacturing base. And so now, a lot of competition is also coming in our bead wire business. So has management thought to use this facility for any related products or any growth trajectory from here on in different products? No, honestly, this facility cannot be used majorly for making any other product. We will exploit the culture. We will exploit the quality culture. We do small volume of black wire in Pithampur facility. So maybe when the volume in Pithampur goes down, we can add one more product to utilize the CapEx we have already incurred here. Okay. But I see that for temporary three, four years, we'll have to do. But Chennai, we will not disturb. It is a state-of-the-art facility for making bead wire, and we will continue to focus on that. Okay. And Chennai, we are working hard on getting some international approval. So we will also use that capacity for exporting to the global market. I appreciate, and we recognize that the competition is catching up, and major investments are also announced in wire business. But definitely, it will take time to get approvals. If Rajratan is taking so long, then the competition will also take longer time, and I was looking at numbers. The tire production in India has grown almost 7%-8%. Okay, and recently, more companies have announced investment, so longer run, the India story still is very strong. Yeah. Thank you. It's really helpful to understand, and good luck to you, sir. Thank you. Yeah. Thank you, sir. Thank you, sir. Before we take the next question, we would like to remind participants that you may press STAR, 1, to ask a question. The next question is from Darshini Kumar from S I Investments. Please go ahead, ma'am. Good afternoon, sir. Thank you for this opportunity. I wanted to ask what impact do Chinese imports still have on our margins? Yashovardhan, would you like to reply to this for especially China? Yeah. So sure, sure. Yeah. So China has huge capacity available for bead wire manufacturing. And in today's scenario, the domestic consumption of bead wire there is very low. So from what we understand, tire companies in China are operating at 60%, 70% ratio. So that's the reason there's a lot of dumping of material happening in the Southeast Asian region from China. Definitely, that's the only factor where we are losing on margins. There are a lot of places where there are no margins. But to keep our fixed costs in control, we need to keep certain volumes up and running. So we've also been aggressive in taking the volume. But yes, it has a big impact on margins. Okay, and are we planning to apply or are we pursuing to apply for some anti-dumping duty on Chinese imports? Not really. Long back, we had done that exercise. Somewhere, we also don't want to do something which does not make our customers happy or which irritates our customers. So I don't think that would be the way. But definitely, we are talking to the Thai government to have some relaxation on the duty applied on wire rod. So if that happens, maybe it will make the things slightly easier for us in Thailand. Okay. Thank you. I have another question. You also mentioned that you received some approval from customers in Europe and North America. I wanted to know what is the quantity, the volume expected from these customers going forward? Yes. I think we've been sharing clearly our strategy to be a global supplier to companies. There are companies like Bridgestone, Michelin, Continental, and Goodyear that are the ones that we are in discussion with. We are already suppliers to their factories in Southeast Asia and India. But because we are an approved supplier since many years, they are also keen to look at starting supplies in America and Europe. In terms of volumes, definitely, it's a very, very big potential because America is one of the largest markets for us. But growing volumes will take time. So I really can't give you any figure in the coming quarter or coming year because approval at these factories takes a long time. But I'm happy to share that at most of the places, we are approved in terms of sample approval. At a few places, initial trial lots have started going, and they have started considering us for limited allocation for next year. Now that limited allocation will be low, but definitely, it will be a good volume to start with. Okay. Thank you so much. Yeah. Thank you. The next question is from the line of Somin from Kotak Mutual Fund. Please go ahead, sir. Yeah. Hi, Surya. Second question from my side was to mention that other than Kiswire, there is another one large capacity which is being set up. Broadly, what would be the capacity which is coming up other than Kiswire? Kiswire has already increased capacity last year. So they are up and running. Okay. And new capacity will come from, I think, Aarti Steels. They are setting up a bigger capacity. They are shutting down their old plant and shifting their plant. And obviously, the new factory will have higher capacity. I think they are going for, instead of 15,000 tons they were doing earlier, they will be now going to 30,000 tons. This is what I hear. I don't have the exact information. And Bansal Wire, who has recently gone public and has announced bead wire capacity also. But he is going in for tire cord also, for bead wire also, and very, very big announcements for other products also. Yeah. Sure. Sure. So my second question is on the cash flows. Now, I believe, obviously, there will be some inventory and startup costs because of the Chennai plant taking commission. But when I look at the first month of this financial year, the operating cash flow profile has decreased significantly because inventory and trade receivables have gone up very, very sharply. How should we look at the second half of the year? And structurally, with Chennai plant now, do you believe it will take up to on a steady state basis? Do you think that the requirement will be the same, lower, higher, any other way? So I agree with you that it has gone up because of the Chennai startup. I'll say Chennai startup has not reached the desired level of volumes. Okay. To start tightening the screws on outstandings and inventories and all of that. Okay. We have to give some buffer before we start doing all that exercise. Okay. Starting a new facility has its own challenges. And we have to push material. When you push material, obviously, the credit cycle gets spoiled. So that is temporary. I feel that is temporary, and we should be correcting all those parameters in the next six months' time. So this year will be a year of some variation in all these numbers. Yeah. In all these parameters. Okay, so I mean, fair to assume that while the trade speaker's inventory valuation hopefully by the end of this year or the exit quarter for this financial year, maybe we should. Expected number for sales from Chennai, I'm looking at 2,000 tons per month from Chennai. Okay. And accordingly, next year, we hopefully want to do 30,000 tons from Chennai. Yeah. From Chennai. Sure. And so my last question in terms of Thailand, obviously, the margins have recovered over the last couple of quarters. But also, when we compare that to maybe FY21 or FY22, we are significantly lower. So you believe there is still some room from current levels to go up, or you believe the Chinese competition will have extended meaningfully? That's my last question. Somin, comparing with 2022, financials will not be normal because that was a post-COVID period when China was stuck. Supply chains were disturbed. Containers were not available. And nobody wants to go back to that situation because before this, there was a COVID, okay, which was worse. And we don't project going back to that high number of EBITDA in Thailand because, frankly, we are exposed to global competition. But at the same time, we are very happy that we are making good margins here. If we look at our competitors' balance sheets internationally, whether it is Bekaert or Kiswire or a Chinese company, nobody is reaching a double-digit number in EBITDA. Okay. While your company is able to do that, that demonstrates our competitiveness and capability to continue to grow. Yeah. Sure. Sure. And in business, as a management, every time we can't focus only on profitability. Okay. At the cost of profitability, we can't lose the market share because in the long term, it is the market share which will be useful. Yeah. And whenever tide turns, that big volume will give a very big return also. Yeah. Sure. Thank you on all the parts. Appreciate it. Thank you. Thank you, sir. The next question is from the line of Mayur Milak from Asian Markets Securities. Please go ahead, sir. Hi. Good afternoon, Sunilji. Yeah. Yeah. Mayur bhai. So two things, question here. One, that I'm just trying to understand that we used to look at this as a very big entry barrier for people who really did not have much money to make up of the whole industry. So correct me in my numbers if I'm wrong someplace. One, if the tire industry was supposed to be an INR 90,000 crore industry, the entire bead wire industry in India would be about INR 1,500-odd crore? 2,000. 2,000 crore. And you're already sitting on INR 600-700 crore of money, I mean, revenues. So what I'm trying to understand is why would somebody like Tata Steel or Aarti Steel or Bansal would want to invest? Because at the end of the day, top line is limited here. So where is it making commercial sense for these people to invest new money and make money out of this business? This is a question you should ask them, not me. What are you saying? Why would somebody have to do this field unless what I'm trying to understand is Bansal only invests and they are getting this? Yes. Specifically for bead wire industry? Yeah. But I'm sorry, I won't be able to answer this. Because it is their strategy. Okay. One thing I can tell you for sure that it is a complex business. It is a tough business. Because if Rajratan is taking time in getting approval in a new facility, okay, we know this business for 25, 30 years. Absolutely. Absolutely. I remember he was. In spite of that, in spite of that, I'm open to say that we are still learning. Okay. That's quite harmful of you. Actually. Yeah. But what happens is balance sheet gated CapEx is attractive over there. Right. Picture me bead. Picture me bead जा रही है तो आप ticket to खरीद लेते हो. अंदर जाके मालूम पड़ता है, यार, इतना मजा नहीं आया. So you invested, I mean, we keep this CapEx, but you invested about INR 10 crore was the plan for 60,000 metric ton your greenfield in Chennai, right? Yeah. Yeah. Assuming that even if you make a 15%-18% return at your level after so much expense, it will generate about 200 crore profit for you at 80% inflation. I'm still wondering why would somebody else really figure. I mean, your mathematics is coming in here. Because it is spoiling the whole market for everybody, right? Because once you have the capacity, everybody will want to do more volumes. So what is the how are we really planning to face this for a longer run? I mean, there has to be a permanent solution to this, right? No, no. There can't be a permanent solution. Market has played like this in the past. When we started this business, we were eighth in the queue. Okay. And we have been continuously demonstrating profitable business, continuously growing business. And yeah. So focus on quality has given us rewards. And fortunately, we are not leveraging our balance sheet. We are not diluting. So other parameters also, we are very rigid on all of them. And in longer run, this should be successful. Okay. And of course, we have to have a strategy. We can't say that competition can't do anything. Competition, we have to have a strategy to emerge as a winner end of the day. Okay. I remember we incurred losses in Thailand for many, many years, and we fought with international players like Kiswire and Hyosung, whose balance sheets are very strong. We have fought with Chinese. But today, Thailand is doing very well in the international market. Yeah. Sure. So, coming to your Thailand facilities, Yash, please come in if so need be. So. Yeah. Sure. I believe this competition in Thailand is more from Chinese, right? Or Kiswire has also started introducing a price cut. We were at a relevant discount to Kiswire's in the Thailand market or the European market. Does that still hold the weight, or even Kiswire has become more competitive? No, definitely, Kiswire also has become more competitive because since last two years, we have also encountered a challenge to them. We have entered into customers that they were sole suppliers or they were prominent suppliers. So somewhere where we are getting that volume is putting a back pressure on them to sell to other companies. But still, I would say they are very good competition to have. They generally don't dump the material. So I would attribute more to the Chinese companies. They are really aggressive, and China really dumps material at times. But definitely, there are indications that the domestic market also is reviving. There is some production increase that is happening in China. I think that should ease out the situation in the coming months. Okay. And just one last question? Kiswire is literally competitive. He goes to a customer, dumps the price because he wants to sell in that quarter, and again goes back, and next quarter he will evolve from there. Okay, but major MNCs, they have larger market share at a very good price, and that is our target. We are knocking doors to increase volumes in those counters. So Mayur, to your previous question of capacity and the total market size, let me also tell you that we are only at about 10% or less than 10% of the world demand. Our main focus today is to reach global customers in the West and also increase our footprints in Southeast Asia. We are still confident of selling this volume in the coming years. And that's why we are not very aggressively structurally changing the product mix or not adding another product and getting confused with it. Definitely, next two years might be a challenge. But in the longer run, we are still confident of selling 180,000 tons from these three locations. All right. That's nice to hear. Just one thing from the financial. We had made inroads with the smallest plant with Bridgestone, if I remember well. Are we on track to get the other plants from Bridgestone as well? Yeah. So we were approved with the smallest plant with Bridgestone in Thailand. But unfortunately, they stopped operation in that plant because it was right in the middle of the city. It was a 50-year-old plant. That resulted in a break of three months of supplies. But fortunately, we have got approval for the biggest factory in Thailand, which is another factory. And there is a final audit that is going to happen in December. Team is coming from Japan for the audit. And we are already discussing a 20% allocation from that factory starting from the first quarter, the calendar year first quarter, so January and March. So definitely. So you continue to supply them some quantity even now? Yeah, so we are doing limited allocation right now. But I meant to say regular business would start from Q4. All right. This is very encouraging. All right. All right. All the best to you guys. Thank you. Thanks. Thanks. Thank you. The next question is from the line of Nikunj Mehta from Magma Ventures. Please go ahead, sir. Yeah. Hi. Thanks for the opportunity. Hi, Sunilji. Hi. Hi, Nikunj. Hi. I have a couple of questions. The first question is, in this particular quarter, what would be the sales and the absolute in terms of cost from the Chennai plant? As I told you, we are ramping up here. Okay. So if we have to achieve 12-14 thousand in this year, remaining six months, we should be running at a run rate of 2,000 tons, which is difficult in the next month. But we have to start with 1,000 tons, like we are doing 1,000 tons this month. Next month should be 1,200-1,500. And that is how. But giving you exact numbers is difficult. Yeah. No, my question was in this particular quarter, what would be our sales amount from the Chennai plant? No, no. Last quarter, Q2. Q2, yeah. Q2, we have done close to 1,000 tons of sales, which is there in the sales number. Yeah. Okay. And the subsequent cost, the fixed cost, OPEX is not recorded in the P&L. Is my understanding correct? It is still in the CWIP? No. Around 60% of the assets are capitalized. Okay. And balance are in the WIP. And gradually, everything will get capitalized. As we start the more and more machines complete the trial, those machines will be capitalized. Understood. Understood. And once we are at, let's say, 2,000 tons per month kind of a number, then what would be our fixed cost on a quarterly basis? OPEX cost. Just wanted to understand that. I think we will have to collect separately for all that information. Okay. Sure. Sure. Sure. So you can talk to Vinay and take those numbers. Yeah. Absolutely. I'll do that. And the other thing which you mentioned is that we are running for Chennai to reach 1,450,000 to get the P&L benefits. I just wanted to understand that in case if the demand approvals don't come through, is it fair to say that we can the fundability of the capacity from Pithampur and Chennai is fundable as in we can increase Chennai to 1,415,000 just so that the P&L benefit we kind of receive. At the same time, Indore utilization will be a bit lower to that extent. Is that? Yeah. वो तो होने वाला है. वो तो होने वाला है. That is how we are doing it. Right? Okay. Yeah. Yeah. That is how it is going to happen so we are still sending a lot of materials to North India from Chennai, where approval is not required but we wish that that stops. Okay. In the worst scenario, that wish will not be fulfilled and we will continue to supply from there. Yeah. Okay. Understood. Last question from my side is regarding the BIS implication. So as per our last interaction, the imports had reduced significantly to, I think, around 600 tons per month or that number. So just wanted to understand the current situation. Is it still the imports are still kind of at the lowest level possible right now? No. So imports can happen for the tires which are being exported. Okay. And tire companies can still import bead wire, but they have to use that wire only for export of tires. So nobody wants to get into that headache. Yes. But few companies who are 100% exporters or who are into SEZs, they are continued to import from China. But that import is limited quantity. Yeah. Okay. Okay. As far as BIS status is concerned, the first company which lost its BIS license was Rajratan India. We are still far away from getting that license renewed. Okay. Okay. Okay. Understood. So my question to you in that, a follow-up question was that our realization in India when I look at is around INR 88,809 per ton. And it has remained flatish on a QoQ basis and on a YoY basis as well. So my understanding was that if the imports reduce drastically, then ideally, the realization should have improved a bit. So just I'm not able to connect the two points. If you can just help with your input on that. No. So giving you exact calculation may not be possible at this point of time. But in this quarter, we have sold higher quantities to low-cost customers also, and especially from Chennai. Okay. Okay. Which I have been repeatedly telling on this call also. Okay. So customers who are better priced will take longer time to approve. So this is a transition. Okay. And you will see this happening more in the next quarters also. Okay. We can't be targeting only the prime customers from a new facility. Yeah. Sure, sir. Thank you so much. And all the best. Thank you. Thank you. Thank you, sir. The next question is from the line of Pranay Jain from Dealwealth. Please go ahead, sir. Thank you. With the desired volume of 30 tons from Chennai next year, I want to understand what is the kind of export volume we are looking at, particularly towards North America and Europe over the next one to two years? What's the kind of export tonnage and market share if we have any gains on that front? Our projected export from India is 30,000 tons in three years' time. Okay. I cannot draw a straight line to tell you that this is what it will happen and this is how it will happen. But yes, there may be some up and down, but we have to ramp up to 30,000 tons in three years' time. That is our target to achieve full production in Chennai and to achieve overall 180,000 tons of sale. Okay. So there may be some anomalies like Thailand may grow suddenly faster, or sometime you will see that now Chennai volumes have picked up. Everything depends on a lot of variables are there. You have seen in last quarter, trade prices for U.S. had gone up to $5,500, okay, which have now come down to $2,500 again. Okay. So we also have to change our decisions of price calculations and from which location we can supply to customers. So there are a lot of dynamic things playing out in the market. Okay, and the 20% kind of guidance and volume growth along with the steady 15%-16% kind of margin, do you think that that would be a sustainable trajectory going beyond next year too? Yeah. Because it should be there because by that time, we will get more approval from multinational tire companies where prices are much better than what we are supplying to a lot of customers in Thailand, a lot of customers in Southeast Asia, and some customers in India also. Okay, so overall, if we shift 15%-20% of our sales to those customers, we will be able to maintain this profitability. That is the strategy we are working on. Okay. And lastly, are we seeing any green shoots in the existing large markets like North America, Europe, in terms of not just planned conversation or positive audits, but also some demand forecast from them? And are we seeing some opportunity in newer markets or emerging markets like Middle East and other areas also where we can supply? So, Middle East is not a big market, but yes, so then we'll tell you a little bit about North America and global exports. He's directly involved in that project. Yeah. Yes, sir. America, we've touched a run rate of about 120 tons a month as much to customers. We've already started supplying material to them. Europe, just to give you an update, at one customer, we sold about 1,200 tons last year. And for the next year, we are projecting a 2,000-ton sales, which will add one more factory in that customer. So we have three factories in Europe. So these are broad numbers that we're looking at. And definitely, next year's second half, I think the volume pickup is going to be much faster from what I can understand on how the approval process is going on. Got it. And the price premium would also be at least 15%-20% better than present to such kind of customers? Structurally, the prices are definitely much better, 15%-20% higher than Southeast Asian market. But last two quarters, there had been a lot of volatile situations. One missile coming from one country to the other. And I think before that, only ocean freight started rising in anticipation of rising prices. So ocean freight surcharges, steep increase in the freight cost, somewhere affects the margin. And we entering into the market, don't have that strong relationship with customers where we think, "Okay, you give us the extra cost." We can't put in a lot of conditions. So last two quarters, we had really good numbers for Europe, but profitability on Excel sheet was much higher. And actual profitability turned out to be much lower. Now, for the next two quarters, it's a downward trend. So freight profitability is reducing below the level of what we had considered in the price calculation. Such challenges are also there which need to be incorporated when supplying to Europe and America. Got it. We are living in a complex world, but we are having a good strategy also. So I appreciate it. Thanks for the clarity and all the very best. Thank you. Thank you. Thank you. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Namaskar sir, thank you for the opportunity. Sir, I missed the earlier commentary for the question. When we look at the Chennai unit ramp-up, what are the costs involved in the quarterly performance? I think so they are good at optimum level, but the question. So what are the costs that are absorbed currently by our Pithampur unit? Can you give a ballpark number? Hello. We have given in the notes that we have capitalized around 5% of the trial run cost. Okay. Apart from that, there are fixed costs which cannot be capitalized like depreciation, finance cost. Because after declaring commercial production, all those fixed costs are becoming part of the profit and loss account. Yes, you can do that automatically yourself. Okay. There is an interest cost which is fixed. There is a depreciation which is a fixed cost. And there are some overheads. Okay. Overheads are planned for a big volume, but volume ramp-up is taking time. We had anticipated all this. It is not a surprise for us. Okay. Any new company, new facilities for this kind of product will take some time to become profitable. The balance amount of INR 72 crores that is lying in CWIP is also pertaining to the same unit, or? No. Most of it is Chennai. Maybe some small amount from Thailand or Pithampur. Okay. So when does that capital and then there will be an additional depreciation on the same? Yeah. Yeah. But that will be capitalized as the production ramp-up. So as I told you, 70% is already capitalized. So remaining 30% on a much higher volume. That will be not a big burden. Okay. Like building, land, electrical equipment, all installations other than main modular plant and machinery, everything is capitalized. Yeah. Only the modular machines as and when they get started, they will be capitalized. Going ahead, taking into account the increased volume we have for the first half, H2 looks in similar lines only, or what factors will contribute to the improvement in margins going ahead? We are not anticipating very big improvement in margin, but because our focus will be on achieving the volume growth. Okay. So we are cautiously telling you that margins will be 15%-16% only. Yeah. Volume will be at this level because we are at optimum level right now? Yeah. Like, we have done volume. As I have told earlier, we are targeting at 20% volume growth for this year. Sir, what are our current requirements for this year? Our current? What is our loan repayment schedule? How much we need to repay this year? Hitesh, you tell how much loan we have to. Hello. Hello? Yeah. Yes. Hello. I think it's INR 15 crores per year. Per year. And half year already is gone. Okay, so we have to. 15 crore हमने repay कर दिया और INR 15 crore और करना है इस साल. Or 15? Yes. Yes. Or 15? Yes. Sir, अभी हमारा cost of funds क्या है? Around 8.8%-8.5%. Okay. Sir, ये line item to other expenses का है, which has been rising steadily. So this is a variable cost line item or what is it? This includes items of Rajratan, Chennai. Okay. So this is all about the ramp-up part only? Yes. Yes. Yes. Correct. Thank you, sir. Thank you, sir. Thank you. Thank you. The next question is from the line of Viral Shah from RTL Investments. Please go ahead. Yeah. Thanks for the opportunity. My question is on your exports. So in Europe and US, when you get new orders, who are the suppliers you are replacing? And I mean, what is the reason for them to keep value offering at much better price, or there is some other reason? And in the same market, the way you are facing competition from Thailand, from China and Thailand, the same competition is not there in Europe and US where you are able to replace other suppliers? Yes, sir. Yeah. So the competition remains the same, but it's not as severe as Southeast Asia because Chinese prices in those markets are also fairly okay. To your question of who we will be replacing, at some countries, we would be replacing China because geopolitically, there are a lot of companies who are strategizing to develop an alternate source. We offer 90% recycled steel, bead wire, which we've been making since many years in Thailand. And our Scope 2, Scope 3, Scope 1 emissions are also quite low for that product. So there are also factors like this where our carbon emission for bead wire per metric ton is much lower than the existing suppliers that they have. So there are many factors. Somewhere we will replace China. Somewhere we will replace a high-cost Kiswire or a Bekaert who's locally producing there. Somewhere strategically, people want to reduce the dependency on China. Okay. Okay. And how do you see, I mean, exports ramping up in terms of age of your total volumes? Let's see, what kind of total volumes will come from exports in India and Thailand? I'm saying, Thailand going to Europe and U.S. So overall, as we mentioned, we'll target at 30,000 tons of export volumes. Excellence with respect to India or that is overall? From India, 30,000 tons and maybe. From India, 30,000 tons. And from Thailand, we do an approximate of 15,000-20,000 tons, which would remain similar. Between the plants, we might switch. So Thailand might start exporting more volumes to Europe and America, whereas India might focus on the Southeast Asian market and vice versa. Got it. Got it. Thank you and all the best. Thank you. The next question is from the line of Parth Bhavsar sir from Investec. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, I have just one question regarding the imports from China. The earlier participant had asked that the BIS norms were implemented. And you mentioned that it's only for these fields. So can you just highlight the number or how it has changed over maybe last six months from 680 to now what it would be? China was lately exporting a bigger quantity to Indian market. They were dumping. The government has made the quality control order very effective. It is not for bead wire. They have done it. They have done it for all the steel items. Okay. Fortunately, bead wire also falls under the same category. It was also hit by the same bullet. Okay. The volumes which had gone up to 3,000 tons a month or 3,500 tons a month in one month have come down to 450-600 tons maximum import numbers we see now. Yeah. Okay. Perfect. Yeah. That answers my question. Thank you so much. Yeah. Thank you. I think we have finished. If there are no more questions, can we request for the closing remark? Yes, sir. Mr. Raja, please go ahead. Sure. Thanks for attending the session. We especially thank the Rajratan team for their time. So sir, would you like to make any closing comment? Yeah. So, keep watching Rajratan. And thank you for your continued interest in Rajratan. We are, on our side as management, working very hard to continue to grow and continue to profitably grow. And also have a strategy in place to compete in local market as well as in international market and in Thailand market. But it has been a good experience to run this company and bringing it here. And I see a lot of possibilities of growth from here for the next couple of years. So stay connected. Keep watching. Thank you very much. Yeah. Thank you, sir. Thank you. Thank you. Thank you so much. Thank you. Thank you so much. Thank you so much, Batlivala & Karani Securities. That concludes this conference. Thank you for joining us, and you may now disconnect your line.