Ladies and gentlemen, good day and welcome to the Ratnamani Metals & Tubes Limited Q2 FY 2025 earnings conference call hosted by Monarch Networth Capital. 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 this conference, please signal an operator by pressing star and then zero on your touch-tone phone. Please 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, Dorvin. Good evening to everyone. On behalf of Monarch Networth Capital, we welcome you all for the Q2 and first half FY 2025 earnings call of the Ratnamani Metals & Tubes. We are delighted to host the management of Ratnamani and from their side, we have Mr. Manoj Sanghvi, Chief Executive Officer, and Mr. Vimal Katta, Chief Financial Officer. So without taking much time, I'll hand over the call to Mr. Manoj Sanghvi for their opening remarks. Thank you, and over to you, Manoj, sir. Yeah, thank you, Sahil. Good evening, everyone. I welcome you all to this call and hope everyone is doing good. Let me first take this opportunity to wish you all a very happy New Year and season's greetings from Ratnamani. Our results for Q2 and H1 have been uploaded on the exchanges, and I believe all had the opportunity to go through the same. On standalone basis, in Q2, our company has clocked the revenue of INR 917 crores and EBITDA of INR 168 crores for the half year. The revenues were INR 2,039 crores with EBITDA of INR 335 crores. The EBITDA margin expanded in Q2, but for the first half, it was broadly in line with our target range, a bit higher side of the band due to the better export product mix and lower input prices. We are confident of maintaining our EBITDA margins as guided earlier on an annualized basis. However, on the revenue front, some dip may be witnessed. The dip is basically because of the soft metal prices and delay in some projects and offtake at the end customers' end. As you all know, past few months, demand in oil and gas remained subdued in India but has been good in the MENA region. In the last quarter, we witnessed some slowdown for dispatch clearance from customers due to seasonal factors and their project delays. But things are looking better now and expected to improve in the future. Due to soft and stable steel prices, our industry has seen good demand in two water segments, industrial and exports. However, the domestic oil and gas projects and CGD business is expected to remain muted for the near future and yet to show signs of any pickup. But the business traction in the other segments like waterline pipes, industrial supplies, and SS pipes and tubes continue to remain quite encouraging. Presently, all our plants are operating at 50%-60% utilization except the ERW pipes where the demand load is quite low. Our orders on hand as of 1st November was approximately INR 2,900+ crores. In line with our strategy to invest further into specialized and high-value-added products with improving efficiency and utilization, we have decided for setting up a cold finishing project out of India. When we meet for the next call, we shall share more details about this project. At this stage, we can only reveal that the broader project cost is estimated around $40 million. We have commissioned our project for manufacturing of heavy-thickness pipes. This will further enhance our product basket for specialized application and has started getting good response from the market for this segment. As we move forward, we are seeing more sustainable growth with product bouquets and approvals we have. Best in segment facilities with benchmark qualities operating and financial leverage we enjoy. Now, regarding our subsidiaries, Ravi Technoforge has clocked total revenue of approximately INR 138 crores with operationalized EBITDA margin of approximately 10+%. On the year-on-year basis, the revenues increased by 11% despite soft steel prices. EBITDA grew marginally by 4%, but profit declined due to higher depreciation and interest cost because of CapEx. As informed to the exchanges, we have completed the acquisition of another 27% at INR 81 per share, which was based on the financial metrics and customary adjustment as per our agreement. As informed earlier, we are putting up some more automation and value addition facilities. We are also setting up an eight-megawatt captive solar power plant and expect the same to be commissioned in the next four to five months. Our few developed products could not be commercialized due to geographical disturbances at the target customer side. Domestic demand seems to be stable and expecting demand from Europe and the U.S. to start showing signs of recovery in quarters to come. For our spooling business, we have started commercial supplies for basic hangers and support systems. We expect our pipe spool business to commence within this quarter. The order booking and expansion program is largely on track, and presently, the complete focus is on executing jobs and developing capabilities. That's all from our side. Now, I would like to invite questions from the participants. Thanks. 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 touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Muskan from BNK Securities. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, the joint venture with 51% stake that we have with Technoenergy, that is a group based out of Switzerland, what will be the business opportunity from the products under spooling umbrella and domestic and exports? And how easy is it to get the customer approval and their acceptance? And also, are there any other competitors to cater in this space? Okay, so to answer your first question, that is, as we speak, we have close to order backlog of INR 650 crores for the pipe spool business. Customer approval is in place. Executions will start. We will see some dispatches in this quarter and some in the next quarter. However, most of it will be dispatched during the next financial year, so this year, our target for the spooling business is close to INR 150 crores. Okay. All right, sir. And sir, how many competitors are there to get in this space, in the spooling business? And what's the? There are a lot of pipe spooling fabricators in India. However, they are mostly into oil and gas segment, whereas what we have, what orders on hand we have is from the nuclear division. So not much competition at the moment for the nuclear projects. Okay. And, sir, what's the demand scenario in spooling business and domestic and exports? What's the opportunity there? Not only in India, but our partners, along with our partners, we are bidding for projects overseas also. We are quite hopeful that going forward, out of the total spooling business, 75% would still come from the nuclear business and 25% would be from the oil and gas segment two to three years from now. Okay. Okay, sir. Sir, you mentioned in the con call that JV will help to cater oil and gas and thermal business and nuclear plants that you mentioned right now. Can the spooling product contribute to INR 500 crores revenue in the next four or five years? And also, can you please guide us on the EBITDA margins that we get under spooling and auxiliary products? As we speak, we already have orders on hand close to INR 650 crores. INR 150 crores is our dispatch plan for this year. Next year, we will target anywhere between INR 400 crores-INR 500 crores. EBITDA margin would be similar to our blended EBITDA of metals and tubes today. All right. Okay, sir. That's all from me. Thank you. Thank you. Thank you. Ladies and gentlemen, if you wish to ask questions, you may please press star and one. To ask a question, ladies and gentlemen, you may press star and one. We have the next question from the line of Abhishek Ghosh from DSP Mutual Fund. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. Sir, I just wanted to understand in terms of the big pipeline, how is it looking both in the line pipe and the process pipes, both at the carbon and the SS segment of it? Ji, Abhishek ji, thank you. So as indicated in my opening remarks, line pipes, oil and gas, the demand is still quite muted. We are expecting some tenders. However, the timelines at the moment, it is very difficult to say. SS and carbon steel, both process pipes, the demand in India is a little bit on the lower side. However, there is a lot of traction from the Middle East, and we've been receiving a lot of orders from the Middle East for the same. Okay. And sir, in terms of the water projects and the oil and gas in India, anything in terms of traction in the second half or going forward? So far, we had election and the monsoons. How should we look at it from a 12 month-15-month perspective? Anything to demarcate between oil and gas and water segment, sir? Yeah. So, water, see, we had, if you see the order backlog, we had quite a good substantial order backlog from water segment also. However, because of monsoon, the uplifting of pipes in this quarter, in the previous quarter, was less. So in this quarter and the next quarter, normally, all the water pipes, because laying activities are much faster. So in the next two quarters, we are going to see covering up, basically. Okay, and I don't know if you've kind of set out earlier, but broadly, you'll be able to maintain the growth of 8%- 9%, or that kind of a growth, what you'd expect in the current year, given that Techno is going to be stronger, given higher upliftment and other things? Standalone basis, I would say we would still be close to between INR 5,000-INR 5,200 crores. Yes, we still maintain that there would be a growth of 8%-10%. Okay. So that visibility is there. It's just that for FY 2026, you will need to see higher inflows to be able to go from there. We are seeing some visibility, especially from Middle East, Europe, some projects. And if we see the order backlog also, it has started improving. So going forward, next year, maybe in the last quarter, we will be able to give you the exact numbers. However, 8%-10% should not be an issue. Got it. Got it. And sir, just in terms of capital allocation, how should we look at it for the next 12months-15 months? Which are the large CapEx that you will incur? And which are the new capacities which are coming in terms of O&G or any other products? Just can help us with that. We had two expansions which were ongoing. One was our spiral plant in Odisha, which will be commissioned in the next financial year, first quarter of next financial year. Then we had another project of increasing our capacity in stainless steel cold finishing plant. That will be operational in this quarter. Other than these two projects, we have two projects which have been approved in the current board meeting, which is setting up a greenfield plant in the Middle East for cold finishing activities and setting up another plant for manufacturing of auto parts in RTL. These are the two projects. The one in the Middle East, our budget is close to $40 million. And the one in India, where we plan to expand capacities in RTL, is close to INR 240 crores- INR 250 crores. Okay, so overall, INR 550 crores-INR 600 crores of overall capital allocation? Okay. Growth CapEx, the new ones which have been announced? Yes. Got it. And what will be the timeline for these two to come through in terms of commissioning? So 18 months-24 months for both. 18 for, say, start of the production. However, the approvals and everything in place within 24 months. Okay. And that is because you're seeing a lot of strong opportunity as far as your exports of SS pipes are concerned. I'm seeing the greenfield unit which you're putting up in the Middle East. Is there a lot of good option coming through? Yeah. We've been already catering to this market. We have a substantial market share. One is, of course, looking at the market size and what we are supplying from here. Another is these days, with the country being protective and the local content required, that is another reason for us to set up this plant in the Middle East. Got it. Got it. And, sir, just one last question in terms of the RTL expansion. Is it the same product profile of Ravi Technoforge, or is it newer products which you will get into with this expansion? It will be newer products which we will add to the basket. Plus, the existing products can also be made on the same machine. But our aim is to have a diversified product portfolio over there. Okay. Okay, sir. Got that. Thank you so much for answering my questions. I wish you all the best. Thank you. Thank you. Thank you. The next question is from the line of Dhiraj Dave from Samvat Financial Services LLP. Please go ahead. Yes. Yeah. Yeah. Can you hear me? Yes. Okay. The question I have is basically we see a significant increase in inventory of finished goods and work in progress as per results, almost INR 120 crore, which was last quarter INR 60 crore, and the year before it was kind of INR 36 crore. So is it like in previous questions, answer management indicated that water demands or water pipes demand projects delayed? So is it a build-up of that? And how do management see? Does it mean some kind of adversely hitting margin for the September quarter? If you can elaborate, that would be useful. No. So as indicated, most of it was because of the monsoon, which the water pipes especially, we had quite a bit of inventory which was there. So that. If you have to give a broad breakup, approximate breakup, say INR 120 crore increase, so how much would be water pipe or project-related thing and as compared to what is the normal level? About 50% of this would be water pipe and balance would be all other products. Okay. And yeah, so 50% would be water pipe. And when it will be implemented as the sales will be affected, would we see kind of operating leverage giving some kind of better margin in Q3 and Q4? So this quarter, most of it will be liquidated and will come to a normalized level of inventory. Okay. And we do expect kind of extended sales top line of around INR 5,000 crore-INR 5,500 crore, right? Yeah. It will be INR 5,000+ crore, say, about INR 200 crores. Any guidance from EBITDA? Would it be at the same level or it would be affected? Yeah. Our yearly guidance will remain same, 16%-18% in between that. Fair enough. Wish you all the best. Thank you. Thank you. Thank you. The next question is from the line of Ashutosh Tiwari from Equirus Securities. Please go ahead. Yeah, I'm Ajay. So firstly, on this spooling JV, for top line guidance of INR 450 crores-INR500 crores, what kind of investment we need to make in this year and next year? Yeah. So this spooling JV, whatever we have targeted, say, for next year, which is INR 400 crores-INR500 crores, investments are in place or happening at the moment. Phase II of investments for Fino has been approved. So there, our total investment outlay is close to INR 240 crores. INR 240 crores. And this will be spent in which year? This will be spent mostly next year. Part of it will be spent maybe 25%, 30% in this year and balance in next year. How much is Phase I within this? Sorry, can you repeat the question? What is the Phase I CapEx? Phase I CapEx, Katta ji, can we have the Phase I? Phase I will be hardly around 50-60 CR at the most. Okay. So in total, around INR 300 crore CapEx? Yes. Yeah. Yeah. Okay. And this will be because JV is 50 and 49, so it will be half by us and half by the partner Techno? Yes. Yes. Okay. Okay, and you mentioned right now the line pipe is a bit weak in oil and gas, but exports are doing better and the process pipes generally are better off. Yes. So that means that, I mean, those are generally better margin products for us, exports and the process pipes. Yeah. Exports, process pipe. Then stainless steel, we have welded also. We have seamless also. So all put together, yes, some margins are better, some are average. Okay. And so this is, I think, second half will be very strong. And on the export side, I think with this cold finishing line getting completed in this quarter, you think that there is further addition to out of book for SS seamless side because that's an area where we have been also expanding our portfolio? Yes. We will see utilization from this or the next quarter on the added capacity of cold finishing facilities. So, SS out of book slightly improved from year or next three, four quarters? Yes. Yes. Okay. So between the two, I mean, can you guide, say, between SS and CS, where you think the growth will be higher over, say, next two, three years for us? Stainless steel, definitely with this cold finishing facilities and another cold finishing facility which we plan to set up in the Middle East, there will be growth from there. However, asset turnover ratio being less in stainless steel, maybe in terms of number, however, the margins will be quite different. At the same time, carbon steel revenue growth will be quite strong after the Odisha comes in, plus our heavy thickness plant once the utilization goes up. Okay. And how has been the progress in the European market? I mean, that's one market that we're focusing a lot. Europe is overall globally, if you see, the prices are soft, but demand uptake is still there. Okay, so we are seeing improvement in our market share slowly in that market. Yes. Yes. Okay. That would be all from my side. Thank you. Thank you. Ladies and gentlemen, if you wish to ask questions, you may please press star and one. We have the next question from the line of Dhananjay Bagrodia from ASK. Please go ahead. Hi, sir, thank you for the opportunity to take questions. Any? Sorry to interrupt, but your line is not very clear. Hello? Yes. Yes. Please change the mode, sir, the handset mode. Yeah. I'm on handset mode now. Thank you. I just wanted to ask you, sir, regarding could you give us any color on volumes with revenue degrowth? How much would be from volumes and how much would be from steel price decrease? Can you please repeat? I missed in between. For revenue, how much would have been volumes decrease and how much would have been realization decrease? For the first two quarters? No, for the second quarter, for standalone. Any color on how much would have been realization decrease and how much would have been volume decrease? Realization decrease would be anywhere close to 15% approximately. Okay. And so for us, which segment would have done better in terms of carbon steel or sustainable steel? No. So basically, if we see the second quarter, other than line pipes, all of them are what we had budgeted for. So, line pipes is a little slow, as indicated earlier. Okay. Fine, and so now, one of our competitors has been speaking about a lot of strong growth in stainless steel. Are we also seeing the same traction globally? And And how can we be able to ramp up volumes and get ready for strong volumes going ahead also? Would we see similar numbers in our stainless steel? I don't know which competitor, but we still consider that a growth of 10%-15% on stainless steel is what we can continue at. Plus, if we see a lot of competitors, especially on stainless steel seamless, are increasing, and that too with the piercing technology. Okay. We have recently two or three other manufacturers who have come in and two or three other companies who have announced that they are putting up a stainless steel piercing plant. Okay, and so there was a company in NCLT which was bought by Jindal Stainless. Would we have looked at that because it was a good capacity at a very reasonable price compared to other people's gross block for the same cost for the same capacity? Did we look at that? I am not aware of what company. Was it stainless steel or carbon steel? No, stainless steel. Ratnamani. Which one? Rabirun. I have not heard of this company. So I don't know. Did Jindal Stainless announce this acquisition? Jindal Stainless, they would have taken over something which has to do with maybe ornamental and infrastructure pipes. So we are not into that segment at the moment. Okay. Fine. Sure. And okay. Thank you. Yeah. Thanks. Thank you. The next question is from the line of Sahil Sanghvi from Monarch Networth Capital. Please go ahead. Yes, sir. Can you just give me some more details on the heavy thickness pipes? I mean, where exactly are we aiming to? I mean, which are these pockets where we'll be targeting these pipes? And I mean, what dimensions are they? And what kind of CapEx had we incurred for this? Our CapEx total was close to INR 50 crores-INR60 odd crores. And we would mostly be catering to the offshore industry. It can be offshore oil and gas platform. It can be offshore wind farm. The asset turnover will be roughly 2x? Yeah. 2.5x. Okay. Also, I wanted to understand. I think in the first half, we have spent about INR 160 crores in CapEx, the number I can see from the cash flow. So what is the targeted CapEx spend for this year and next year, if you can give some guidance? Standalone, I think so. We have Odisha which is going on. So only that. And of course, some equipment on stainless steel cold finishing facility. Other than that, most of it for Middle East would come maybe in the next financial year. The Phase II of spooling also will be there, right? Yes. I mean, this year on the consult side, we should be somewhere around INR 200 crores or less than that? For the balance, yes, close to anywhere between INR 150 crores-INR 200 crores. Next year, would you be able to give some number? Next year, all put together, roughly INR 300 crores-INR 350 crores. Okay. Got it. Fine. That's all from my side. Thank you. Thank you. The next question is from the line of Dhiraj Dave from Samvat Financial Services LLP. Please go ahead. Yeah. Can you hear me? Yes. Yeah. Thanks a lot for giving me this second opportunity. Sir, can you please tell me now? It is about export premises to break up and. Sorry, Dheeraj, but your line sounds muffled. Last question. Can you now? Yeah. Yeah. So what is the break-up of export and domestic sales during this quarter, and how do you see in next year or FY 2026? So almost 50/50. What we have orders on hand is almost 50/50. Okay, so almost one-third of turnover came from exports in this quarter. Yeah. On revenue side, it is 30%-70% or 35%-65%. However, orders on hand is almost 50%-50%. Dheeraj, you are not audible if you are speaking. I'm there. So basically, yeah. So there is a 50/50 export and domestic sales, but what we understand is that demand generally, demand environment as well as volume from Middle East and other markets were better with the Indian market, particularly end of day. So the ratio would remain same or it would change end of it? So historically, normally our exports are anywhere between 30%- 40%. But since domestic demand is muted, exports, we see a good demand. So orders on hand also, you can see that visibility that it is 50/50 now. Okay, so we would be getting into that area. That's fine, and generally, export market is more remunerative. Export market is more? Remunerative. Profitability is better or is equal? It depends from product to product, but yes, for some certain products, you can say that. Thanks a lot. Wish you well. Thank you. The next question is from the line of Muskan from BNK Securities. Please go ahead. Hi sir, thanks again. So what is the potential revenue from the joint venture with both the phases of CapEx that we have for these INR 300 crores? So with the CapEx, say for RTL, our revenue potential can go up to INR 700 crores-INR 750 odd crores. And for Fino, with the additional CapEx of Phase II, same again, we can go between INR 600 crores-INR 700 crores. Oh, okay sir. And sir, another question is, what is the current hot extrusion and cold finishing capacity in stainless steel, and how much of cold finishing we are expanding in domestic market? Our total capacity for seamless products is 30,000 tons, which is hot finishing capacity, of which cold finishing is roughly 10,000 tons. We are adding another 1,200 tons. Okay. And the capacity number in spooling with two phases of CapEx in tonnage numbers? For? The capacity number in spooling with two phases that we're doing, the INR 300 crores CapEx, what would be the capacity number in tonnage terms? Capacity number for spooling will be anywhere close to 3,500 tons. All right. Okay sir. Yeah. All right. Thank you. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. We have the next question from the line of Aasim from DAM Capital. Please go ahead. Yeah. Hi, gentlemen. Good evening. So, one clarification I wanted. So, on an earlier question, you said realization is down 15%. Is that for the industry as a whole or for Ratnamani's product mix in particular? No, it must be if you have similar company, it must be for the industry as a whole because steel prices, stainless steel prices, or for that matter, other commodities have gone down by that much percentage. That is the raw material price basically, right? For us, given our product mix, and then line pipes you said was weak, how much would realization, blended realization, be down Q2 or YY? On an average, 10%-15%. Some products. See, Manoj, I am trying to step in. See, in Q2, if you look at stainless steel and carbon steel both blended, I'm not bothering between process pipes and line pipes. So it would be close to 16.6% both in stainless steel and carbon steel for Q2 compared to the corresponding quarter of last financial year. Yeah. How does that compare vis-à-vis Q1? See, if we look at Q1, then movement will be much lower. It might be close to 8%- 10% sort of thing in case of stainless steel. And in carbon steel, it was better than Q1. Okay. So carbon steel, there was a growth Q2. There was a, because see, quarter on quarter, so you cannot compare because Q2, these prices of process pipes were higher. So realization will also be higher. Yeah. Yeah. Okay. So theoretically, line pipes being weak in Q2 versus Q1 helped you in realization Q2. Yeah. Okay. Because Process Pipes is a better margin business. And carbon steel will also be different for Process Pipes. Understood. Understood. And just a theoretical question. When we talk about process pipes and carbon steel, besides the usual coated pipes or painted pipes, what other product categories are there in process pipes for carbon steel? See, it is the same kind of pipes. Maybe the coating is different, the grade is different, the specification is different. But pipes as such will remain same. The input material, the output sizes, various sizes, that's the difference. Okay. It's the coating that may differ, not necessarily thickness. No. It can be coated, it can be bare. Thicknesses, sizes, line pipes is one particular size. It goes on for kilometers. So your utilization of the plant is much better. However, when it is process pipe, you have maybe 100 sizes, 150 sizes. So number of sizes are much more. Diameters will vary. Yeah. Approximately, last question. Approximately in your total volume of carbon steel, how much percentage would process pipes be? Of the carbon steel? Yes. I think roughly 20-odd%, 20%-25%. Okay. Okay. Great. Those were my questions. Thank you. Yeah. Thank you. Participants, you may press star and one to ask a question. We have the next question from the line of Sriram R., an individual investor. Please go ahead. Thank you for the opportunity. Sir, can you give a sectoral breakdown of your order book? How much would be from oil and gas, renewables, steel, cement, etc.? At the moment, I don't have the breakup, but can be sent if required. Perfect. Thank you. Thank you. Participants, who wish to ask questions, may please press star and one at this time. To ask a question, ladies and gentlemen, you may press star and one. Ladies and gentlemen, we have no further questions. I would now like to hand the conference over to Mr. Sahil Sanghvi for closing comments. Over to you, sir. Yeah. We just want to thank the management for very elaborately answering all the questions and also thank all the participants for joining the call. Manoj sir, would you like to give any closing comments, please? Yeah. I would just like to thank everybody for their time and listening to us patiently. And we wish you all a great time. Thank you. Thank you. Yes. Thank you. On behalf of Monarch Networth Capital, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.