Ladies and gentlemen, good day, and welcome to National Mineral Development Corporation Limited Q1 FY25 earnings conference call, hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch tone phone. Please note that this conference is being recorded. Now I'll hand the conference over to Mr. Mohit Lohia from ICICI Securities Limited. Thank you, and over to you, sir. Yeah. Hi. Thank you, Deepika, and good afternoon, everyone, and thank you for joining us for today's call. At the outset, I would like to thank management for giving us an opportunity to hold this call. From the management, we have Mr. Amitava Mukherjee, Chairman and Managing Director, Additional Charge, and Director of Finance. Without much ado, I would invite Mr. Mukherjee for opening remarks, for which we'll have the floor for an interactive Q&A session. Over to you, sir. Good afternoon. Thanks for joining. This quarter, in terms of financial performance, has been rather satisfactory, because as you see that our PBT and PAT have gone up by 19%-20%. And considering the fact that our production actually came down by around 4%-14%, or almost by about 1.5 million tons, that almost by 1 million tons. So, riding on the financial results to that extent are very satisfactory. As of now, the Supreme Court judgment regarding retrospective tax, we are assessing our impact. But because we are a mining company, we are a, we are basically a merchant miner, so it will be mostly we will be able to recover it from our customers, because our customers are basically almost the same, except for a few, a few who might have closed down business in all these years. Most of our current customers are also customers of that period, and over the years have been dealing with us. So the net effect would be rather negligible. So that is something that is a positive for a company like NMDC. And regarding NSL, of course, we are proud to announce that in it's been exactly one year and one year since we the hot metal came out. It came out last sixteenth of August, sixteenth of August. Today is the sixteenth of August, and in this one year, we have produced more than 1.5 million tons of hot metal. And we were the fastest to reach 1 million tons of hot metal in August itself in about six months back. So that is was really encouraging. Financially, we've been able to cut down our losses to half, and once the 5-kilometer electrification is done by the end of next month, we will be able to dispatch 2 rakes daily against the 1 rake currently. And we will able hopefully by the end of this current quarter, the Q2, on a monthly basis, we'll be able to break even. Quarterly break even will come, of course, in Q3, and annual break even will come in this financial year. That is our target. The performance parameters otherwise has also been in terms of coke rate and others, have also been rather satisfactory. So all in all, even NSL performance has been in the last one year of its operations. We will expect that by the time we reach 24th of August, which is, which will be about exactly one year, we'll be able to produce 1 million ton of hot rolled coil. I think we are some 20,000 tons short as of today. I think we should be able to 20,000 or 30,000 tons. Yesterday was a record day. We've been, we did 40 heats and more than 6,800 tons of HRC. So going by our recent performance, I think we should be able to reach 1 million ton mark exactly within a year of its operations. So thank you. Now I would invite questions as of now. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pramod Dangi, Unifi Investment Management. Please go ahead. Yeah, thanks. See, my question on, you commented that any royalty which will be payable as per the Supreme Court order, just wanted to have some clarification on that. First, can, is there any demand on us as of today, or was there any demand in the past by any of the state where we operate, which has not been paid till date and which can come? And second-... You said that we will be able to recover this money from the customers because these are all existing customers, from the last so many years. But I believe, our earlier, the pricing was all inclusive of the taxes, so how the recovery part will work, if you can throw some light on that? Thanks. Yeah. First of all, out of the 81 cases that were clubbed together by the Honorable Supreme Court, one case, case number 381, was ours. That was for the MP Rural Infrastructure and Road Development Act for our diamond mine in Panna, for which from 2008-09 till date, our liability would be around INR 21 crore. So this will be a straight liability. I think, the recovery from customers would be very, very difficult because these were from, sold mostly in auctions, et cetera. We'll try and recover this INR 21 crore, but, frankly, I am, not very hopeful of recovering the entire amount. The rest, so far as Karnataka FDT is concerned and so far as Chhattisgarh, FDT is concerned, so that's Forest Development Tax, these were not included in this 81 cases. But subsequently, when once the principle has been decided, sooner or later we might have a liability for these as well. So far as Chhattisgarh is concerned, we are already recovering it from our customers and paying it. So there will be hardly any retrospective effect. There was some about INR 144 crore old demand, which we have paid in cash, but under... If such a demand now certified in a related case, remember, this is not one of these 81 cases, then if there is a judgment which is akin to this one, then about INR 144 crore for Chhattisgarh is there. For Karnataka, it will be substantially more. The net liability I think should come to around more than 20, around 24,500 crore. But the good thing is that in Karnataka, most of our customer base is the same. Nothing much has changed over the last 20 years in terms of customer bases. So, most of this amount are substantial, a very, very substantial amount, but leave a few, maybe a couple of INR crore aside of that, I think we will be in a position to recover it. Remember, this is payable if this liability comes in, and this is not in this one of the 81 cases. It is a separate case, and we are presuming that the order would be in line with this case. In such a case, yes, there is more than adequate chances of recovery for the customers in Karnataka, I think. That liability has not been calculated in very great detail, but the ballpark estimate would be around INR 2,500-INR 2,600 crore. So can you give some background on this, you know, this 24, 2,500, how we calculated, what was the demand when it came? So can you give some background on- The demand is not there. The demand was for the period of 8, 9 till I think 2011. So that period, we had gone to court in a separate case. We had paid about one third. We have collected around INR 254 crores from our customers already. Another 5,000 crores subsequently was collected and given by the Monitoring Committee. So there are details which we are working out, but since it is not really a part of this 81 cases, we have some time to... But we have seen the customer base, and we have seen that all those 99% of the sales made during that period are our existing customers as well. So I don't think it is a major challenge to recover the amount. Okay. And then when we just a follow-up on this, that when we are, you know, saying that we will be able to recover, our terms with the customer was excluding any additional- Yeah, yeah, yeah. It is excluding all the taxes and duties. Okay. So any tax comes, it will go to the customer? Even now, when we have the consolidated pricing, it is inclusive of royalty, DMF, NMET, and additional royalty. Any new taxes and duties are always in addition to that. Okay. So I assume that that was historically the case. Yeah, our pricing terms are very, very clear on that. There's absolutely no, absolutely no doubt about that. Okay. Thanks. Thank you very much. The next question is from the line of Kirtan Mehta, BOB Capital Markets. Please go ahead. Thank you, sir, for the opportunity. In terms of the Karnataka, just one follow-up. You mentioned that your initial estimate is around INR 2,500-INR 2,600 crore, and you have collected already INR 1,500 crore. That is after those, after those INR 254 crore and INR 1,500 crore. Gross would be much more. Gross would be around 44 or something like that, of which a lot has been collected and already paid during a particular period. So that's all that. Understood. Thank you. And the second question was about the NMDC Steel Limited. Where would you be able to highlight what was the monthly average run rate that we actually achieved during the last quarter? We were talking about 120 KT per monthly run rate. So were we able to deliver on the same during the last quarter? Yeah, yeah. Production has been in April, about 1,06,000, in May, 1,20,000, and in June, 1,20,000. It is only in July that actually, it fell down because we had a scheduled maintenance, and now we have a problem with the R1, and there's some damage on one of the EOT machine. But, up to June, about 1,20,000, we need to go up to 1,50,000 to break even. We will be able to reach up to 150 KT by end of this quarter. That is what our current expectation? We are exactly hoping so. Thank you. The main problem is dispatch. Even yesterday, we did 40 heats and some 6,800 tons of coil yesterday. So that's, if you multiply it by 30, we should be able to reach about 180. But the, our only problem is evacuation. We need to evacuate 2 rakes, so we are currently doing 1 rake a day, that is because of some electrification work that's going on. Once that is done, our turnaround time will drastically reduce, and, we are, we will be able to do it. When we are able to sort of move to the two rake operation, how long would it take? I think middle of next month. Middle of next month. Thank you, sir. I'll go back in the queue. If there are any more questions, I'll come back. Thank you very much. The next question is from the line of Shweta Dikshit, Systematix Group. Please go ahead. Hello. Yes, please. Good evening, sir. Thank you for the opportunity. My one question would be, what kind of, like, you highlighted the ballpark number of INR 2,500 crore, if it is imposed retro, effectively. But going ahead, what kind of levies do you expect, that can be added to the existing royalty or tax structure? Beg your pardon, I didn't understand the question. Can you repeat the question, please? Is there any kind of, like from going forward from here, can there be additional, levies that can be imposed, like, which can be incorporated in the royalty, current royalty, structure, which adds to the prices? And is there a different- I have absolutely no idea about what the individual state governments will be doing. That depends on the various state governments, and I cannot speculate about what they would be doing. Okay, thank you, sir. Thank you very much. The next question is from Pallav Agarwal, Antique Stock Broking. Please go ahead. Yeah, good evening, sir. So, one was on, you know, on, the outstanding from NMDC Steel. So now with the improved performance, like, you know, when do we expect this INR 2,200 crore of money coming back to NMDC? This is the pre-demerger expenses are INR 2,500 crore. Last month, INR 100 crore have been paid. So with the improved, as and when we reach breakeven and we'll have enough cash flow processes to pay, hopefully within a 12-month period, we should be able to liquidate that. For the first time since the, since the operation began, last month, about INR 100 crore has been paid, by NSL to NMDC against the INR 2,502 crore of pre-demerger expenses. Sure, sir. So also, you know, I think we had, some amount also receiving, you know, from the Karnataka Monitoring Committee. If I remember, it was close to INR 900,000 crore. So now with this judgment in place, do you think that recovery- That, that is a completely separate thing. You see, about INR 2,900 crore was due from the Monitoring Committee, of which we have already received about INR 1,000 crore, 995 or 993 crore last year, which was there in the year before last time. FY 2023, 2022-23, we received it, and it was reflected in the PAT of year before last, 2022-23. That left about 1,890 crore of still recoverable amount. The Supreme Court's initial judgment declined to refund that. But we have now made a review petition for that, and we've got the higher bids. So let us see. Fourteenth March, it was rejected by the Supreme Court. Now we have again filed a revision petition with the Honorable Supreme Court, and let us see how it goes. In any case, that is not going to affect us our numbers adversely, because already tax has been paid on that and the amount has already been booked. We will not have a windfall gain, but that is it. Okay, sir. Anyway, so you're saying in this current recent ruling is a separate matter that will not affect- Yeah, it is completely different. It, it has absolutely no link with each other. Absolutely none whatsoever. Okay. Also, you know, can you just give us an idea of, you know, so what are the current states in that is, you know, that is, there in the states of Chhattisgarh? So Karnataka, as of now, is this 12% Forest Development Tax still present or it's, it's no longer there, as of now? No, in Chhattisgarh, we have a FDT of a Forest Transit Fees of INR 57 and a cess of INR 22.82, which is in addition to DMF, royalty and and NMET. That is, in Karnataka, I think there is no other cess, etc., except for this one. Then this was at the rate of. Mm-hmm. I, I'll just find out what was the rate of recovery, what was the rate of imposition, but it was in absolute terms, not in. I think it was 5% or something like that. I just don't realize what the, don't recollect what the rate was. In Karnataka, I can come back to you on that one. Sure, sir. Chhattisgarh, 57 + 22.5. So- Yeah. about 78... And this is on the specific point. This is being collected from the customers and being paid... So this is, Yes, sir. So it will not have any impact on our profitability, so is this- As of now, yeah, it will be not. Huh? As in Karnataka, it was 12% back volume. Sure. I will raise it. Okay, sir. Thank you. I'll get back in the queue. Thank you very much. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. To ask a question, please press star and one now. The next question is from the line of Shashikant, State Street. Please go ahead. Hi, firstly, thanks a lot for good introduction. I see the finances are improving. One question that we have is, I know NMDC Steel might be put on sale, right? So I'm sure the raw input is being supplied by NMDC itself. So would like to understand with NMDC Steel being sold in the near future, will it have any impact on your financials? That is my first question. My follow-up question is, Financials of what? Of NMDC? NMDC Steel is being, it might get sold, right? That's what we understand, just two days back, that it is in advanced stages of being sold. You want the financial impact of that on NMDC? No, no, no. I would not be interested in that, but I would be interested, since the steel, NMDC Steel, the output, the raw product is being... I'm sure, the raw products, will be supplied by NMDC iron ore itself, right? So since, it will be sold to a private player or someone else, will it have any impact in the future, once it gets sold, on your sales or anything, you know? I think the raw material sourcing would be from our Bailadila only, because that is only 131 kilometers. The other source are much, much, much more, in Odisha and other places, much, much further away. So I don't think the sourcing of material, irrespective of the ownership, whether it stays with us or it doesn't stay with us, irrespective of the ownership, Bailadila will remain. The Kirandul and Bacheli project will remain the closest source of closest source of iron ore. Yes. But what percentage of sales or what percentage of output is being procured by NMDC Steel in terms of, say, about 10%, 15% of your sales are being sold to NMDC Steel internally? No, it's not an internal, it's an arm's length sale. Last, I think, when it is on peak production for 3 million ton, it will require an iron ore of around 5 million ton, 1.6. So 5 million ton, Bailadila is, NMDC, as you know, is around going to be 50 million ton. So it'll be, about 10% of the entire- Okay. sale. But from Bailadila, which is around 32, and it will go up to 35 million tons, it will be slightly more than, it will be around 13... NSL will account for 13% of consumption, when both, the Bailadila's production increases to 35 million tons this year, and approximately, NMDC Steel Limited can ramp up to about 100% capacity utilization at that point. Okay. My other question is, I know some of the private players have also made some provision due to this recent Supreme Court judgment that we have, right? So did NMDC also do some provision because it was declared privately, publicly by Tata Steel, if I have to take one of your counterparties, private, I know. They have declared privately that they have also provisioned some amount because of this unexpected event. So, I would be interested in knowing... I know you have also mentioned that it will be recovered at more from your customers, but would be interested in knowing any provision that is being made already. No, not as yet, because as I have said, the most of my two big cases at Chhattisgarh and Karnataka are not in one of these, those 81 cases. They are related cases. Mm-hmm. Provided the judgment come from similar lines, only then the liability of payment arises. Even if the liability of payment arises, very substantial amount, except for a meager amount, which might not be recoverable because of the customer not being there anymore. A very, very big substantial amount would be from existing customer, and since it is to be done in 12 installments, I don't think the recovery would be, since the payment is to be done in 12 installments, so I don't think it is going to be a major problem in the recovery year. Okay. Sure. My other question is, I know we were looking at some news where it is mentioned that. We please request you to come back in the queue for the follow-up question, as we have other participants on the line. I will have my last question, if I know it will benefit all of us, if I may ask the final question. I'm an individual small shareholder, okay? I've been your shareholder for a very long time now. So, my final question, if you don't mind. Sir, I'm very sorry to interrupt you, but maybe please request you to come back in the queue because we have a lot of participants waiting for their turn for the questions. Okay, sure. No worries, yeah. Sorry about that. The next question is from the line of Kamlesh Jain, Lotus Asset Managers. Please go ahead. Yeah, thanks for the opportunity, sir. So, one question on the part, like, say you have quantified all the, like, say, how much could be the liability going forward, but just one, fundamental question. Like, say, we shifted from royalty price to gross price since June, July 2023. So had- I've not understood your question. Can you reframe your question? So I am saying that we had opted for the gross pricing, like say, including royalty and various other sales and levies, right from July 2023. So doesn't it make sense in this environment where the states are imposing their own duties and sales, doesn't it make sense that we should shift to that particular old regime? Because like- It doesn't make a difference. It doesn't make a difference, because our prices very clearly state that it is only inclusive of royalty, DMF and NMET. Any other thing is recovered to be levied, is recovered and paid extra, like we do in Chhattisgarh, about FTF, that Forest Transit Fees of INR 57 and the sales of INR 22, they are simply not inclusive. We still levy them separately, recover them separately, and remit them separately. So it is not going to make any difference about the, whether it be revert to the old pricing structure or we are in the new pricing structure. There's absolutely no effect. But, if you see any of the raw material price or mineral price, all are quoted in terms of, like, say, exclusive of duty. Be it like 15%- No, we are wrong with the industry. We were the last person to come into an all-inclusive prices. Odisha and all iron ore miners quote all-inclusive basis. We were the last company to join an all-inclusive price in India. But I believe, sir, it may be a personal judgment, but our old structure was far more better and it was much more transparent. And given the fact that the way the states are imposing duties and, like, say, the anonymity and all other effects which are coming through, it unnecessarily implicates us in with extra burden or additional burden. No, I think your understanding of the situation is completely wrong. It does not matter about any extra levies that come, whether we follow the current regime or we revert to the old regime, there is absolutely nil, zero effect. Okay. Thanks a lot. Thank you very much. The next question is from the line of Kartik Gada, Multiple Wealth. Please go ahead. Yeah, thank you for the opportunity. So when you mentioned that our case was not part of this of the 81 cases, I'm a little confused. And the judgment is applicable to everybody, right? So how are we not affected by this? No, no. You did not get me right. One of the cases, that is, for Madhya Pradesh, for our Panna mine, is included in this one of. It is one of the 81 cases. I think the case number is some 351 or something in the case number. From the bottom, I think it is seventh or eighth. So that case is our case that is included in that. The Karnataka case and the Chhattisgarh case are parallel cases, having the same sort of things. So once the principle has been decided, what we expect is that those two cases will the ruling would also be in the lines of the ruling of this case. But that separate judgment has to come, because that's a separate case which was not clubbed with this 81 cases. Okay. Okay, so then these two cases, the number which you mentioned for Chhattisgarh, INR 144 crore, and Karnataka, gross number of INR 4,400-INR 4,500 crore, and net number of INR 2,400-INR 2,500 crore. So these numbers pertain to these two parallel cases. Is that right? Yes, yes, yes. Okay. So, I said this earlier also. Once the principle has been set, maybe, I cannot preempt what the Supreme Court will decide. But likelihood, if it were to come in the same lines as this judgment, then this will be our liability, approximate liability. Okay. This is the final point on this. Out of, for Karnataka, out of 4,400, 4,000, 4,500 of gross number, we have paid already INR 1,800 crore. Is that understanding also right? INR 1,750 crore has already been collected and paid. Okay. Okay. Thank you so much. That's it for my side. Thank you so much, sir. Thank you very much. Participants who wish to ask question, may please press star and one at this time. To ask a question, please press star and one now. The next question is from the line of Saket Kapoor, from Kapoor & Company. Please go ahead. Yeah. Namaskar, sir, and thank you for the opportunity. So, so taking this story into account, sir, prospectively, how is this additional shares going to impact our customer and the sale of the ore? Then how competitive or non-competitive will this decision take that into account? And we do not have any number which will affect our current liability or current liability to the customers. We have not zeroed any number as of now. How can we zero in on a number when no taxes have been imposed as yet by the state government? Correct, sir. But taking into account, this is going to be now the reality, and whatever, extra- If something is important, we will collect it from the customer and remit it, and naturally, the cost to the customer will go up. But it will be a universal. It is not that in Karnataka, what I levy in Donimalai and Kumaraswamy would be any different from any private miner or any other miner. So I guess it will be across the board. So I don't think that it is going to affect our demand in any way because that same effect will be to all the miners in that vicinity. Right, sir. And, sir, we revised our prices first on July upward, and I think so then, on August first, August eighth, downwards. So what kind of, first of all, variations are we expecting in our realization for this quarter, although we are 45 days into the quarter? And secondly, our volume guidance of 50 million that stands there for this year? Yeah. But our prices, we have taken two price cuts in the last two times. That's about 500 and 500, about INR 1,000 we have taken a price cut. And, that is why our average sale realization, which was Q1, it was around INR 5,304. Now it should come down to around INR 4,304. But that has been the general trend of the market. As you know, the HRC and the other steel prices have also been coming down in this period. So our pricing is in tune with the market trends. That's number one. Number two, of course, we still keep a guidance of around 50 million ton. I know we are running about 1 million ton plus on shortfall as compared to last year, because of two reasons: because of some go slow in month of May, and then very heavy monsoons this year. As you know, there has been some flooding, and there had been some flooding in one of our mines in Bacheli, Kirandul, et cetera, because we received 254 millimeters of rain in three hours itself. So, given all those problems, we know that we are running about 1 million plus ton shortfall as compared to last year. But, thankfully, we have more than enough time to make this up, and we are confident that not only we'll make this up by October 10th or 15th, and we'll reach the last year figures. Thereafter, in the last two quarters, we will comfortably outpace all the previous year's performance, and we should be able to reach around 50 this year. Okay. Our last year, net number for the year was, the same number was? Beg your pardon? Last year sales, in tonnage, what was our tonnage for the last year? 45 million tons was the production, and 44.6 million tons was our sales. Right. And last point on the said coal mining aspect and the update from our investment in the subsidiary, what's the outlook for the current year in terms of dividend receivable or I think to some aspect in terms of the Australian investment, there was some money to be received there also. Coal mining first, for Section 7 notification is due. Section 4 was over. We are acquiring land on the CBA, as you know, the Coal Bearing Areas Act. I believe the Ministry of Coal has given us the approval last year that we can go under the CBA Act, and we did not acquire land in the other act, so that is a big advantage. Section 4 is already complete. Section 7, notification for Rohne has already come, and for Tokisud, we expect it, hopefully within the next few days. Of course, that aspect is on track. Australia, of course, we have invested. Our gold mining operations is going on there. Right now, we are talking about dividend is too premature, because even if we were to make that into a profitable venture, there are huge cash flow demands there for accelerated explorations. In Australia, we have a lot of requirement for accelerated exploration, and we need to invest in that. And the Mount Bevan, the biggest iron ore, the magnetite, more than 1.8 billion tons of magnetite. They are very high quality, very good quality magnetite. The PFS has been completed, and we are looking a way forward for making further investments in the magnetite project. Thank you, sir. Last point for the CapEx update, domestically, how much have we spent in this quarter, first quarter, and what is outlined for the remaining part of the year? I think so the slurry pipeline and a lot of aspects are in the annual, and I request, sir, that in our investor presentation, if you could just give outline to us, how much have we spent, at what stages of our CapEx are and when they will be on stream, that will give us a current understanding of how things are going to improve. Yes. Up to August end, we have spent around 384 or almost 400 crore INR in NMDC for against annual target of around 2,200 crore INR. So our CapEx is going on full stream, and the two major projects that were basically we were asked to we, in fact, we decided to keep on hold and redraw the entire thing to our pellet plant and our beneficiation plant. We wanted to make common facilities so that 6 million tons is done in future with common facilities. So now that part is complete. We have given the change orders, and as for the new drawings, the work will start coming very shortly, immediately within a month or month and a half, and CapEx will sort of pick up then. We are also sort of we hope that by the end of the year, we'll be able to exceed very by a substantial margin, our CapEx program of INR 3,200 crore. Right, sir. And lastly, on the losses on the pellet and other minerals category, I think for this quarter, the number is closer at INR 57 crore. It may be- Yeah, so we lost some money in Panna. Paloncha is a non-working unit, as we know, that we have some fixed costs there, which we basically Watch and Ward functions and other fixed costs. We lost some money in the pellet plant as well, but pellet plant, we are trying to give an EoI on that. So we lost around INR 12 crore in pellet plant, on Panna we lost about INR 21 crore, and in the sponge iron, the non-operational sponge iron unit, we lost about INR 3 crore there. So we are taking steps so that we can run it full-fledged then, and these difficulties do not arise. Right. Well, I'll join the queue. Thank you so much. Yeah. The next question is from the line of Abhishek Poddar, HDFC Mutual Fund. Please go ahead. So thanks for taking my question. Just one question regarding the SC judgment. Let's say tomorrow, the MMDR Act is amended by the central government, which kind of limits the, you know, state's ability to do it. So will that be a prospective impact, or it could be a retrospective impact, which would mean that even the previous liabilities will not have to be paid? Well, I don't know what sort of we can think about crossing the bridge when we get to the river. Unless we have something in black and white, how can we comment on something that's completely hypothetical at this stage? Right. Because, sir, a lot of companies are kind of, you know, reading this fact that central government- Well, I, I don't think it is proper for me to speculate on what will happen in, Okay. What-if scenarios are difficult to comment on. Understood. The second question is, you know, while you said that, even if the prospective levy is there, then it will be an equal playing field for all the companies. But there is some import which can happen and, you know, including your mine head cost, plus the cost of logistics, at times, you know, the import costs kind of compete. Will that put you at disadvantage for some of the steel mills, you know, far, you know, the steel- You know, it's very hypothetical at this stage, whether such a levy will make us non-competitive from imports. You know, it's very difficult to speculate on such what-if scenarios at this stage. Only when something is coming, then we will be able to know. Okay. Understood, sir. Thank you. Thank you very much. The next question is from the line of Kirtan Mehta, BOB Capital Markets. Please go ahead. Thank you, sir, for giving me one more opportunity. Could you update on the status of the slurry pipeline, as well as the timeline for delivery? And same thing for the pellet plant, for timeline for delivery, you already updated on the status. Hmm. Number one, the pipeline has three major packages, as you know, apart from other smaller packages. One is the beneficiation plant, the other is the pipeline package itself. The third is the pellet plant. Now, out of 131 km, 73 km has already been laid. The rest of it, most of it, the site is now clear except for one or two villages. Some tree removals are being made, and et cetera, and pipelines have arrived. A lot more pipeline is being laid now, and after monsoon, I think it that work is progressing reasonably well. The pellet plant and the beneficiation plant, we have put it on hold. Pellet plant especially because we wanted a dual fuel arrangement. It was only on LDO, now we wanted a cheaper tar which is available in the, steel plant next door. So dual fuel arrangement and also for common sizing equipments, for 6 million tons, as and when we decide. So the, that engineering, portion has been completed fully, and the change orders have been issued to the respective, vendors. They have now begun work as per the revised, specifications and revised drawings. And, now we have, it'll pick up, and I think it's, it's expected to be completed by mid-2026. But the entire system will get operational, I think the latest time is, I think it is December 25. Just let me have a look or-... I think it is March 20, around March 26th, what we expect that all the 3 packages will be up and running, and the entire system will, will run around somewhere around mid calendar, calendar year 2026. Thank you, sir. Thank you very much. The next question is from the line of Pallav Agarwal, Antique Stock Broking. Please go ahead. Yeah, thank you, sir, for the follow-up. So just to understanding of our lumps mix historically has been about 30%-35% of the overall volume. So, do we expect this to continue going ahead? Strategically, there are reports. We have done some market survey. We expect that in 5-7 years, especially around 2031, 2032 or maybe somewhere around 2035, with the bigger blast furnaces coming in, which has higher capacity of pellets, the lump demand itself might go down to around 20-22 or 25%. And we are in our expansion plan, we have factored that in, so we'll have to keep flexible facilities for producing more fines than lumps. Reducing our lump production and increasing our fine production. And we have taken that into cognizance. If the market were to behave that way, I can assure you that our expansion plans will have factored in such a possibility. Okay, sir. So also just, you know, on the, is there some lag between the price hike or price cut that we announce and the actual, you know, impact in our financials? So for example, if we take a big price cut, let's say in the month of August, so for this, for the second quarter, and it's there for probably only two months or the whole quarter. So, you know, so does that impact how, you know, coming with a lag in the next quarter? Yeah, naturally, yeah, because the price cuts were done in mid-quarter, so we did have the advantage of higher prices in the first part of the quarter. So naturally, to that extent, our results will, our profit will be insulated to that extent. Sure, sir. Yeah. Thank you. Thank you very much. The next question is from the line of Pramod Dangi, Unifi Investment Management. Please go ahead. Yeah, thanks for the opportunity again. So my two questions, if you can, you know, clarify or you can, you know, give the calculation of the royalty, quarter-on-quarter, because this quarter we see the royalty amount is 37% of the gross revenue. Last quarter it was around 47%, before that it was 43%. So how the royalty is calculated, if you can, you know, give the detail on that, I think that will benefit everybody. This is royalty. Basically, because our production came down by 14%, and then, the royalty ultimately what we book, all that is paid based on sales, but the booking is based on production. So that is why the royalty came down by 13%, which is in turn, which is in tune with the reduction in production. Royalty, remember, is paid based on sales, but is accounted for based on production. Okay. Okay. So it's not based on the accrued accounting, based on the volume sold. It is based on the actual production we have done on the... If you see our product, iron ore production this quarter came down from Q1 to Q1. That is year-over-year basis by 14%, 14%. And our royalties have come down by 1%-13%. Okay, got it, sir. And second, is there any seasonality? Just want to understand, is there any seasonality in the cost, for the September month, that's September quarter? Because last two years, we are looking at very high, overall cost, for the September quarter, 2022 and 2023. Sorry, what cost? The total cost when I look at as a percentage of revenue, in the September, it's very high compared to other quarters. You know that, What cost? You have, you know, increase, decrease in the stock and the cost of services in the raw materials. That one will depend on if we sell more than we produce, then obviously- Yes. the stock and the cost would be negative. If we produce more than we sell, then it will be the other way around. If this is to adjust the cost of production, the cost of goods sold. No, because we are not, you know, we, you know, we are not able to reconcile that, in terms of in both the September quarter, it was very high, as a percentage of revenue. It was very high because we sold much more than we produced. No, as a percentage of revenue, I'm saying. Higher negative. If it was the, it will be higher positive, because we sold more than we produced. No, I'm talking about the per ton cost. If I'm looking at the per ton cost also, it is, you know, significantly higher compared to the previous quarter. Yeah, you see, this is a fixed cost industry. So if your production goes down, your per ton cost goes up. Even if your production for a unit goes down by 1 million ton, the per ton cost goes up by about more than INR 150-INR 100, simply because 90% of my cost is fixed cost and only 10% of my cost is variable cost. So that is why there is a disproportionate effect on per ton cost, depending. And similarly, if you are selling some product where our productions have gone up, our per ton costs reduced drastically. Okay. Got it, sir. Thanks. Thanks a lot. Thank you very much. The next question is from the line of Ajit Jain, Macquarie Group. Please go ahead. Good evening, sir. I just wanted to know, when I look into your performance sheet, which you display, and very nicely displayed, sir, there is average domestic realization. When I compare that figure with the figures which you give on monthly basis, you know, on lump prices and fines prices, again, there is a little reconciliation difference. My question is, in this average domestic realization, do we take the fines price or the lump price, or it's a combo price? The difference between that is basically because of bonus penalty. So if I say INR 6,000 is my price, let us say, of lump, and then there is a 2% bonus, so it will be another INR 400. So that you won't factor in, that is why the average realization does differ on bonus and penalty clauses that we have in our- So if I get it correctly, sir, average realization has this royalty included in it? Not only royalty, but also bonus and penalty. Okay. Okay, okay. So fair enough. And normally it is a combo of ore and this thing, both taken into lumps and the both the products' prices, fines and the lumps taken together. Yeah, yeah, yeah. Average realization is total, that is, lump price, fines price, everything taken together, the bonus penalty divided by the total quantity. Fair. Fair. Sir, my next question is, you had talked about that parallel, you know, cases which are running. I know it's a very hypothetical, thing, but in case it comes through, then even that will have 12 years' installment payments if it comes through? Or we- We don't know. We cannot speculate on that. I suppose. So we are applying the current principles to our case. True. But whether it will be exactly that, or not, I cannot speculate on the wisdom of the Honorable Supreme Court, what they will decide. I'm just applying the current principles to our cases, and we are doing it accordingly. Sir, thank you. Thank you so much. Thank you. Thank you very much. The next question is from the line of Tushar Chaudhari, PL Capital. Please go ahead. Yeah, thanks a lot for the opportunity, sir. Sir, few of the deposits we had applied for 10% EC extension. So basically, you were saying that we might receive it without a public hearing and with a time frame of around six or seven months. Yes, yes. Any update, any update on those? They are being still processed. So yes, some of them are in the Ministry of MoEF here. Hopefully, we'll be getting it this financial year itself. If we do, then it is good for us. The more the merrier. For FY 26, how much should be our capacity, as per your- As of now, the 63.6 is our capacity. Right. While against which we produced 45 last year. When the capacity was 51, we produced 45, so that was 89% capacity utilization, which is definitely the highest in India. So, my question was 25, we are talking about 50 million ton. So 26, whether we will be able to do full 54 or we will, we might, No, we should be able to do 54. We should be able to. But then you have- ... needs some monitoring, but I think it can be done. No incremental EC extension we'll get in the next, let's say, 12 months? These are our five-star mines. They get an automatic route, which is without local hearing, et cetera. We have applied for that. Three of our mines are five-star mines, as you know. In fact, four of our mines are five-star mines, which was recently given in the... I think last week we got the five-star rating by the IBM- Mm-hmm. -minister. So those things will, we will be getting them. Okay, thanks a lot, sir. Thank you very much. Ladies and gentlemen, due to time constraints, that was the last question. I now hand over the call to the management for the closing comments. Well, thank you for all your time, and thank you for joining us. I think, and from the questions, and quite rightly so, I think the most amount of apprehensions were regarding the recent Supreme Court judgment, and the, and, and its effect on NMDC. As I have, I have, hopefully, I've been able to clarify that as merchant miners, we are in a more comfortable, more reassuring space than maybe those, our counterparts who are also the end consumers of what they mine. So naturally, that puts us in a slightly, not slightly, substantially better position. Also, the fact that our customer base has not changed too much in the last 23 years, last 20 years, is also a matter of great convenience at this point of time, if it comes for recovery from them. But what will happen is now at the realm of, it's a hypothetical question because, as I have said, that two of our major liabilities arise out of parallel cases. What we are doing right now to talk to you is applying the principles of the current judgment to those cases, and actually, the judgment might, for all you know, might slightly differ from this one. We cannot speculate that. But having said so, that because of our pricing structure, we are in a position to more be reasonably confident that it will not affect our numbers very adversely. Thank you so much, and thank you for joining us, and really appreciate your time and Thanks. And your attention. Thank you. Thank you very much. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.