Note that this conference is being recorded. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital. Thank you, and over to you, sir. Yeah, thank you, sir. So good evening to everyone. On behalf of Monarch Networth Capital, we welcome you all for the Q4 FY 2024 Earnings Call of Ratnamani Metals & Tubes. We are delighted to host the management of Ratnamani, and from their side, we have Mr. Manoj Sanghvi, who is the business head of the carbon steel segment, and also Mr. Vimal Katta, who is the CFO. Without taking much time, I'll hand over the call to Mr. Manoj Sanghvi for the opening remarks. Thank you, and over to you, Manoj, sir. Yeah, thank you, Sahil. Good afternoon to all the participants. I welcome you all to this call and hope everyone is doing good. Our results for Q4 and full year of FY 2024 have been uploaded on the exchanges, and I believe you all had the opportunity to go through the same. In FY 2024, our company has clocked its best ever performance third time in a row, with top line and profitability at its historic highs. Consolidated revenues crossing INR 5,100 crores and profits approximately INR 600 crores. EBITDA margins were broadly in line with our guidance provided last year. Albeit a bit towards the higher side of the band due to the product mix and stable input prices. As you all know, past few months, projects demand has been good in India and MENA region due to the resurgence of CapEx. Soft and stable steel prices augur well for our industry, resulting into good demand for water segments, industrial and exports. However, the domestic oil and gas transmission line pipe and city gas distribution business is muted and yet to show signs of pickup. But the business traction in other segments like water line pipes, industrial supplies and SS pipes and tubes continues to remain quite encouraging. When we begin the financial year, our orders on hand were approximately INR 2,300 crores. During FY24, we have continued with our strategy to invest in more specialized products and improving efficiency and utilization with focus on technology and infrastructure to remain well ahead of the curve. Our well-calculated and judicious capital allocation in CapEx and investment, resulting in a very sound balance sheet to leap to next level. We are at the fag end to commission our new expansion project of L-SAW pipes for higher diameter and 18 meters in length, having thickness up to 150 millimeters. This will further enhance our product basket for specialized applications. We are quite confident that our growth will be more sustainable with the product bouquets and approvals we have, best-in-segment facilities with benchmark qualities, operating and financial leverage we enjoy. Now, regarding our subsidiary, Ravi Technoforge Private Limited, which has clocked total revenue of INR 258 odd crores, with an approximate EBITDA margin of 11% and a net profit of INR 6.7 crores. The first phase of CapEx for reorganization of two small facilities to the mother facility has been completed. We are also putting up some more automation and value addition facilities. For our spooling business, we have... For our spooling business, we have started commercial supplies for basic hangers and support systems. We expect our pipe spool supplies to commence by August, September of this year. We are expecting a top-line growth of mid-teens for RMTL on standalone and even on consolidated basis. Even the margins are expected to remain in line with the variation of two percentage points. The present macros look conducive for maintaining our long-term growth and margin prospects. That's all from our side. Now, I would like to invite questions from 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 handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Dhananjay Bagrodia from ASK. Please go ahead. Hi, sir. Congratulations on good numbers and tough time. Any volume guidance in terms of how we're looking at for the rest of the year? And, I know it's tough to report on sales mix, but any volume guidance on this? Can you be a little slow? I cannot, Oh, I said, hi, sir. Congratulations on a good set on this, in a tough moment like this environment. I wanted to ask you, any volume guidance going ahead for the year, what we're looking at in terms of numbers? So, as informed in my earlier remarks, we are expecting a consolidated revenue of close to INR 6,000 crore. No, no, in terms of volume breakup, and on how between CS and SS, between 10%-15% growth. Okay, on overall basis. Yes. I mean, basically, basically our product portfolio is such where volumes only in terms of tonnage may not be the right thing to monitor. So we monitor value addition also, and the volumes in terms of tonnage also. The product is such where basically benchmarking is in terms of tonnage, no doubt, but there are other factors also. So usually we prefer giving guidance in terms of amount in growth instead of volume only. Okay, sure. Sure. Thank you. Thank you. Next question is from the line of Radha from BNK Securities. Please go ahead. Hi, sir. Thank you for the opportunity and, congratulations on good performance. Sir, just a bit of clarity, you mentioned INR 6,000 crore revenue target, consolidated, that is for the bearings and the steel, steel pipes for FY 2025. Yes, it includes all our subsidiaries and the parent. All right. So secondly, a bit of clarity on the capacities that we have on the stainless steel. So I understand that we have around 50,000 tons of capacity overall in stainless steel. So the breakup of that is, in cold finish, we have 10,000 tons, 30,000 for hot finish, for which saleable capacity outside is 20,000 tons, and another 20,000 tons on the welded side. So just wanted to understand... Yeah, just wanted to understand whether this data point is correct. And secondly, if you could give a breakup of all the utilizations of all the segments of the carbon steel as well as the stainless steel, for FY 2024. The capacities what you mentioned are correct, for stainless steel. Utilization level on an average is 60%-70%. So this is including stainless steel as well as carbon steel? Yes, yes. Some products in carbon steel are maybe 50%-55%, some are close to 80%. Similarly, in stainless steel also, so it varies from, say, it is between 60%-70%. Segment-wise breakup? Segment-wise breakup will be difficult, you know, because we have ERW, spiral, SAW, coating, induction bend, and in stainless steel we have welded, seamless, cold finish, hot finish, mother rolls. On average, I can tell you. Okay. Sir, also this entire 50,000 tons capacity of stainless steel is operational, or any part of the production line is yet to start operations? Entire thing is operational. We have one expansion or capacity enhancement going on, which is roughly 1,200-1,500 tons. That will be operational by middle of this year. Okay. This is on the stainless steel, welded or seamless side? Seamless. All right, sir. Secondly, you know, in the steel pipes business, with current Gross Block, we can do about INR 6,000 crores-INR 6,200 crores revenue, what I understand. That gives a headroom for another 25% growth from here on. On the basis of this, are there any CapEx plans for us for the next two to three years? There are two, three things in the working. So as and when the time is right, we will, or once they pass the liquid test, we will inform you. So, sir, can we assume INR 200 crore on an average CapEx for next 2 years, per year? That will, that will depend upon which sort of CapEx we are going to finalize. So the bottom making and normal CapEx of roughly INR 100-125, they are being continued. And the larger CapEx may happen based on the call which management may take to continue the growth, which may take another 3-6 months time. Yeah, yeah. Sir, there was an extra plant in Odisha, for which I think we had INR 170 crore CapEx allocated. That will come in this year? Yes. So that will come in this year, but at the back end of this year. Okay. So, lastly, if you could highlight a bit on the demand scenario on both the carbon steel and the stainless steel business. Because I can see in the order book, the exports demand for the stainless steel has shot up in this quarter. So if you could just highlight on the demand scenario. The demand for stainless steel, like, we earlier month-on-month were booking close between INR 120 crore-INR 150 crore. So we have, we have seen in the last quarter or so push from Middle East, Europe, as well as India. So our, our order booking month-on-month has increased, which has, which is now surpassing INR 150 crore every month. So that is order to order or project to project in stainless steel will be difficult to inform because there are various small orders as well as medium-sized orders. Whereas if we see carbon steel, the demand for industrial pipes is quite good, including the heavy wall thickness pipe. However, line pipes, as I informed in my opening remarks, is muted at the moment. Not many domestic tenders we are seeing, but we are seeing a lot of international tenders for oil and gas. If we see city gas distribution, which is normally ERW pipes, there also demand is slow at the moment. But it's a cycle, and we feel that in another 3-4 months, demand should pick up. Okay. So what is causing this good demand in the exports market on the stainless steel side? Well, stainless steel, carbon steel, both, majority of the demand, APC is right now in the Middle East. So, Saudi Aramco, SABIC, which is in the Kingdom of Saudi Arabia, and ADNOC in Abu Dhabi, Qatar, they are all in expansion mode. So that is what is driving the demand in the oil and gas segment. Okay. Sir, I think last year we got an approval on the L-SAW from Saudi Aramco. So does this include the order book? It includes the orders from those approvals that we have got? No, not yet. All right. Okay, sir. Thanks, and all the best. Thank you. Thank you. Next question is from the line of Vikash Singh from PhillipCapital. Please go ahead. Good afternoon, sir, and thank you for the opportunity. My question pertains to the sharp increase in the SS segment, and especially on the export side. Just wanted to understand, which are the geographies where we have managed to make inroads, sir? And is it just a temporary up, or do you expect that this kind of the inflows or the strong orders to continue on the export side? So, there was a capacity increase in stainless steel division. The new extrusion, which came up in 2021, 2022. So the capacity utilization is better, and we are able to reach... For other products, of course, we were already present, but we've been supplying now to Europe, U.S., Middle East, and the utilization of extrusion has started getting better. That is the reason we see good revenues in stainless steel division. Understood. This is supposed to be continuous because we have the new capacities in place. Is that correct assumption? Yes, as the utilization gets better, of course, the revenues will be better. Overall utilization levels for the new mill would have been, right now, how much%? Yeah, 35%-40%. Understood, sir. So my second question pertains to carbon steel segment division. We are seeing the kind of, the order booking, having, you know, diluted or slowed down. So just wanted to understand, this is more related to the election and that's why new orders are not coming, or there are some structural, softness you are seeing in terms of granting new orders? Yes, one of the reasons we can say election, but that is not the only reason. Normally, we see, it is a little cyclical business. So sometimes, there are huge projects, and projects come together, whereas sometimes, you have a situation where... But a few projects are under planning, so in another 6-8 months, we should see some projects. Okay, sir. In our order mix, oil versus water, how that mix is right now? Of the total order book? Yes, sir, of the total order book. Of the total order book, I think, 20%, I think. 20, close to 20%. Understood, sir. So in terms of the Technoforge, I believe that this year we need to buy one more tranche of the equity at a particular valuation. So just wanted to understand, have we came to that valuation? Or if you could disclose us the price at which you would be buying the remaining share? So we have just concluded the board meetings for the subsidiary and RMTL. Based on the audited numbers and the agreement we have, the second tranche will be bought. Number and all is still under working. So because still if there are any adjustments to be done, so those are the-- That will happen by thirtieth June. Okay, sir. And so just lastly, we were also doing the downstream or the value addition in the SS segment. So what percentage of the value addition facilities have already come and what is pending? So first phase of investments for the steel division is already done. We have received some orders also. As we start the supply, which is from August, September, and the value addition of 15%-20%. Okay. Currently it's 15%-20% of the value addition, which is already being done for the incremental capacity which we have committed last year? No, it is not for the incremental capacity. Both existing as well as incremental. Okay. Till what percentage we can take it up to? See, there'll be for spools and hangers, there'll be some products which will be bought from outside. Some, the parent will supply to the subsidiary, and there'll be further value addition of 15%-20%, and it will be supplied to the end customer. Understood, sir. That's all from my side, and all the best for future. Thank you. Thank you. Before we move to the next question, a reminder to the participants. Anyone who wishes to ask a question, may press star then one. Next question is from the line of Aditya Welekar from Axis Securities. Please go ahead. Sir, what is the quantum of the order book? I've joined slightly late. I have missed that. As on end, as on first May, it's close to INR 2,400 crore. Okay. And you have spoken about oil and gas, demand outlooks. Any color on water, related, end product outlook? Water, there are a few projects in the western part of the country. There are a few in the central part, which is in MP. There are some in North UP. So, water, yes, still there is demand. Okay. And what is the split of this order book in terms of, oil and gas, water, and in terms of carbon and stainless steel? Roughly 70/30, I would say. 70% is carbon steel, 30% is stainless steel. And of that 70%, you can say 20 to 25% is water. Okay. And if we, if we want to take a slightly longer term view, say by, by 2026, 2027, how do you think that this oil and gas demand in Middle East will pan out? Any, if you have any indication on that? Right now, with the kind of projects going on, the demand for... And we see there'll be good demand until minimum 2030, because a lot of projects have been announced simultaneously in Saudi, in Abu Dhabi, UAE, which is, then you have Qatar. So, and India being quite close to these nations, so our chance will always be better. Okay. And any inorganic acquisition plans you have? Nothing is on the chart. Okay. Thank you, sir. That's it from my side. Thank you. Next question is from the line of Dayal from Nivesha Investment Advisors. Please go ahead. Sir, would it be possible to give a rough estimate about the EBITDA contribution from the stainless steel or alloy steel segment? No. Overall, we have the number then. Correct. Okay. Steel, alloy steel, all put together, it is this. Correct. Also, sir, I wanted to understand, related to the specialized tubes that we make. So, so there are, there were some reports that the hydrogen CapEx has started in the USA, and the demand for such tubes is, there is a significant demand for such tubes. So, would there be any guidance, EBITDA guidance, revenue guidance, or any order book guidance for that segment? Hydrogen pipes, yes, some few projects have been announced in the U.S., in the Europe, but still those are on trial basis. No major pipeline or anything is announced yet. So how the trial goes on... Of course, the pipes what they are buying for oil or gas should be hydrogen compliant. That's what some European nations have started. But pipeline per se for hydrogen, still it will take some time. Correct, sir. Sir, talking about tubes, which are used in applications like heat exchangers, Duplex, Super Duplex, models. So, what, what would be an approximate per ton revenue or EBITDA that we might be earning? If, if it is possible for the management. What size, what quantity? So many parameters, so many factors will govern the price per ton. Correct, sir. Correct. It's not a commodity, right? So difficult to say. Okay. No problem, sir. Thanks a lot. All the best for the future. Thank you. Thank you. Next question is from the line of Mr. Sahil Sanghvi from Monarch Networth Capital. Please go ahead. Yeah, I said, am I audible? Yes, you are audible, sir. Okay. Okay. Yeah. Okay. Congratulations, sir, for meeting your guidance also and maintaining your margins also. My first question is on Ravi Technoforge. Sir, I mean, the revenue growth has been poor on back end... So can you just highlight the factors which were responsible for the poor performance in the RE, and also the margins didn't really pan out as we expected. So one on the factors, and how are we looking on this business in FY 25? What is the plan? What are we working on? So, two reasons, I would say. See, there has been a volume growth of roughly 10%. However, the steel prices were a little soft, one, which, actually the revenue growth what we were projecting or thinking, could not be achieved. Second, because of disturbances in Europe, our domestic share has increased, however, export has gone down a little bit, which, again, in this year, we feel that, it shall pick up. So the, and going forward for this year, we, we have a, sales target of roughly between INR 310 crore-INR 330 crore. And on the margin, of course, with the revenues being where it was, with no such growth, margins were, just above the double-digit figure. I mean, just close to 11%. But going forward as the revenues increase, plus with the automation, reduction in manpower, things what we are doing, we feel that 13%-14% in this year should be possible. Right, sir. Right. Thank you. And my second question is regarding the steel business. What kind of CapEx have we done? Have we spent anything on this business? If you can give me that number. Yeah. So till date, phase one, INR 16 crore of CapEx is done. Okay. And what kind of optimum revenue can we generate on this, this CapEx? Sorry, from the CapEx will be there. The overall first stage should be closer to 16. Sixteen. That should give an end turnover visibility of closer to- 100, 100%. Okay. Okay, okay. But then margin, margin, profile will be similar? The margin should be in that range, 99%-20% maybe. But not immediately, because this year maybe we will be manufacturing mold and hangers for the oil and gas industry. Our eventual aim would be, of course, oil and gas to get the volumes, but some part of it to go to nuclear industry also. So when you have that approval in place, maybe 1 year, 1.5 years down the line, then those margins shift, you will see. Right. I understand. I understand. Thank you. That, that's all from my side, and all the best. Thank you. Thank you. Next question is from the line of Nitesh Dutt from Burman Capital. Please go ahead. Hi, sir. Thanks for the opportunity. I have a question on the stainless steel, seamless export side. So just want to understand, how much of revenue for FY 2024 came from exports to Europe, for both, seamless and welded on stainless steel? Breakup, geographical region-wise, I don't have. But I don't know it also. We don't share with geography what we did. See, in case of stainless steel, more than 50% of turnover came from direct physical exports. At blended levels, more than 20% of turnover came from exports, both stainless steel and carbon steel combined together. Export business is... See, in case of stainless steel, it is a regular business, and we have been trying to add more geographies. In case of carbon steel, it is opportunity driven. Wherever opportunities are there, we try to see if those can be capitalized. Got it. Sir, on the stainless steel side in Europe, can there be a bigger opportunity over the coming few months? Because some competitors have been hinting at it, because of the European companies not being competitive, and also potentially the AD getting extended on the Chinese imports. So any perspective on that? See, as indicated earlier, as our utilization and we start making more and more critical grades, definitely the revenues will go up. Not only Europe, but Middle East, US, all the regions. All right. Finally, for FY 2024 or latest quarter, is it possible for you to give revenue breakup in terms of seamless, welded on stainless steel and carbon steel and other segments? No, that revenue breakup is not what we share. What we did in seamless, what was welded, what overall we have achieved, the numbers are already there, what we have achieved. Sure, sure. Now, just one more question, sir, if I can squeeze in. I just wanted to understand, on domestic capacity front, right? At least on the seamless side, some competitors have been coming up with new capacities. You are also expanding capacities slightly. So, do you think there is enough domestic demand at least to absorb the incremental capacities? Yeah, that's the question. Yes. See, capacities in stainless steel is increasing, but by what process is important. We have always and we are. We have put up the capacity with a process called extrusion. Whereas whatever capacity coming in the country, which is low CapEx, is pierced product. So acceptability of where extrusion is required, pierced is not acceptable. So it's a different segment altogether. Got it. So again, But for that particular segment, yes, the capacity is increasing where we supply extruded pipes also. Got it. So for your relevant manufacturing process, extrusion, right, the 30,000 tons of sellable capacity on seamless side, against that, any idea on what kind of demand would be there right now in India? All put together, maybe close to 80,000-100,000 tons. Are you including the hot piercing and extrusion both or only extrusion? Yes. Both combined, 80-100. Yeah. Understood. Thanks a lot, sir. Really helpful. I'll come back again. Thank you. Participants, to ask a question, you may press star and one. Next question is from the line of Mr. Vikas Singh from PhillipCapital. Please go ahead. Thank you for the opportunity again, sir. Sir, I just want to understand, since our mix of in the jump, SS, sorry, SS pipes, basically jumped from 25% in the order book to 34%, can we safely assume that the next 2-3 quarters, our margins should be on an elevated side than the usual guidance which you make? So our guidance still remains same, which is, between 16%-18%, because in longer run, where the demand for oil and gas pipes, in the carbon steel is muted, so more and more order booking will happen in water segment, where margins are, quite competitive. Whereas on the other hand... So we are, that means we are going a little slow in carbon steel. If you see normally, our order booking in carbon steel will be, closer to INR 2,500 crore alone. So, both put together, same 16%-18%, we can, we can, what we can, say. It can be on the higher, side, but, our guidance will, would be 16%-18%. Because, usually, in any reporting quarter, we may see a situation where in, process pipes may contribute higher to the top line, and the profitability may seem to be better. But blended, if we, at the end of the year, that 16%-18% range will be there. Because whatever is going to be the, loss in margins because of water contributing higher, that may get offset with better, utilization of capacities in process pipes. Understood, sir. Sir, my second question pertains to the competition itself. We have heard from some of the competitors that now the time for taking the approval, especially for the oil and gas, has shrunk. So just wanted your view, that is it still that, the time period is very elongated, or it has actually shrunk, and it has become much easier to take the approvals? It depends from area to area, customer to customer. Maybe we talk about Aramco, the time has taken is much more than it was. But if you take example of EIL in India, yes, the time taken has shrunk. So, to generalize that it has shrunk is not right. Understood, sir. And so just one last question, basically. In terms of exports, more, you know, if given today the elevated cost of export because of the freight, et cetera, is the net margins in export still higher than the domestic or it's the vice versa? At par almost. Okay. Even after the increased cost of the export and insurance, freight and insurance, it's at par? No, it is generally a pass through. Understood, sir. Thank you. That's all from my side. Thank you. Thank you. Next follow-up question is from the line of Radha from B&K Securities. Please go ahead. Sir, hi. Thanks again. Sir, any plans on expanding or converting—I wanted to say—the Hot Finish to the Cold Finish? Because, you know, the margins of Cold Finish are given to understand that they are better than the Hot Finish. And also could you highlight on what would be the average margin difference between the two? So, to answer your first question, yes, there is a small expansion of capacity happening in the cold finishing facility. So once we utilize that, then maybe we will plan another phase of cold finishing expansion. On the second, margin breakup for hot finish and cold finish, we would not be sharing. See, Radha basically, capacities are not changeable. So hot finish will remain hot finish. Cold finish, new capacities need to be added. One thing. Second thing is, cold finishing will have a better margin, because further processing is done on the hot finish material, so it is like that. Sir, the 1200-1500 tons of CapEx you mentioned, that was on the cold finish side? Yeah. Sir, I understand that we cannot comment on the margins on the Hot Finish versus Cold Finish, so just wanted to understand the difference in margins between the two. See, the cold finishing will have a better margin, because this is a further process over the hot finish material. So definitely cold finishing results into margin improvement. But then the volume will be less, right? Because so it is, the process is also more- 4%-5% better margin, sir? It depends upon the product to product and order to order. It can be better than 5.5% also. Yeah. Okay. Okay, sir. Thanks, and all the best. Thank you. Next follow-up question is from the line of Nitesh Dutt from Verment Capital. Please go ahead. Hi, sir. Thanks for the opportunity again. I have a follow-up question on stainless steel welded side. So we have a capacity of roughly 20,000 tons, I guess, sellable capacity. So I want to understand, in terms of capacity, what percentage of market share would we have right now? And also, I was reading recently that the Indian government had initiated an ADD investigation last year. So in case that is favorable, can this be a big opportunity as well in terms of future expansion? Well, the ADD investigation was on carbon, stainless steel seamless pipes, not on the welded pipes. Was it not on welded pipe? I had, I might be wrong, but, I read it somewhere. It was initiated in 2020. Welded pipes, what we manufacture is not for the structural or architectural purpose. So if I remove that market, we would be close to 20% of the demand in India. Basically, 100,000 tons of demand again. What would be the imports out of that 100,000? Not much. Got it. Thanks. Thank you. Participants, to ask a question, you may press star and one. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Ladies and gentlemen, to ask a question, you may press star and one. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital for the closing comments. Yeah. I just would like to thank the management for, you know, patiently answering all the questions. And also thank you to the participants to joining the call. Manoj sir, would you like to give any closing comments? Thank you, Sahil. Yeah. So, with great emphasis, I again would like to highlight that our philosophy has always been to consider any decision on long term, keeping sustainability and value creation in its core. The number of last seven years support the same, wherein we have grown our revenues and profits at the CAGR of 19% and 23% respectively. We thank you all for participating in our earnings call and appreciate the patience in hearing. We wish you all the great time ahead. Thanks. Thank you. On behalf of Monarch Networth Capital, that concludes this call. Thank you all for joining us, and you may now disconnect your lines.