Ladies and gentlemen, good day, and welcome to the Q3 FY 2024 earnings conference call of APL Apollo Tubes Limited, hosted by Nomura Wealth Management. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Neha Talreja from Nomura Wealth Management Limited. Thank you, and over to you. Thank you, Yashashi. Welcome to the 3Q FY 2024 conference call for APL Apollo Tubes. From the management, we have Mr. Sanjay Gupta-ji, who is the Chairman and MD. Mr. Deepak Goyal-ji, Director, Operations, and the CFO. And Mr. Anubhav Gupta, who is the Chief Strategy Officer. To start off, I will hand over the call to the management for opening remarks, post which we will have a detailed Q and A. Over to you, sir. Thanks, Nomura and Neha, for having us here. This is Anubhav here, and I thank all the participants who have joined on this call to listen to our quarter three FY 2024 earnings call. So if we look at the performance in the last nine months and specifically in the Q3 FY 2024, a few observations, few highlights we'd like to make. Number one is that if we look at our nine months sales volume, it's up by 20% YoY. The EBITDA is up 30% YoY, and net profit is also up 30% YoY. Now, the sales volume of 1.94 million tons, if we annualize it, it comes out to be 2.6 million tons for the full year, which is, of course, lower than our initial guidance of 3 million tons. When we had started the year, we had guided for 3 million tons. Now, there are multiple reasons why the actual performance in the first nine months is lower than the initial guidance, and that will also give you clarity on why our Q3 was so soft. So, a few reasons I'd like to highlight are: number one, that our Raipur plant, which is our greenfield, highly innovative plant. We had thought that we will start the production of this plant in month of June, July, at the in this calendar year. But ultimately, we ended up commissioning it fully in the month of December, and the last line just got commissioned in early January. So obviously, there is, like, 4-5 months of delay in the commissioning of Raipur plant. Second, also our Dubai plant, we had thought that we'll start the production in month of September, but ultimately, we started, we could start the plant in December. Then the third reason is, the steel price inflation in the domestic market which persisted throughout the year. Although we had thought, with the commissioning of new steel mills by new players and existing players increasing their capacity, the domestic steel price inflation will soften up, which will open up the market for our general segment, which gets a competition from the scrap steel tubes. But there also, the steel price inflation didn't come down until the month of December. So first eight months were pretty tough. And fourth factor I would say is because of weak retail sales in India, in the construction industry. If you look at the commentary of other building material companies like tiles and electrical fittings and batteries, et cetera, there is this trend that the retail sales in second quarter, third quarter were pretty soft because of multiple reasons: high inflation, high interest costs, and also, we believe that demonetization, I would say partial demonetization, also led to weak retail sales, which impacted the money supply in the system. Now, coming to the third quarter in specific, the months of October and November were pretty bad, because the regional steel prices were coming down sharply, but the domestic steel prices remained high, which led to very heavy destocking by our channel partners and the sales kind of really collapsed in the month of November. But the good part was that with the commissioning of new steel mills, the prices came down, the prices came down, and it opened up the market, and we could recover a lot of ground in the month of December. And the trends continue in January as well as we speak. The other highlight is a slight increase in our working capital to nine days in December quarter. This is because of a lot of volume in the Q3, so there was some inventory pile up, which is now getting normalized. So, we shall be going back to, like, mid-single digit working capital, as we close our March quarter, and because we still did CapEx of around INR 500 crore for the nine months, which was mainly funded from internal cash flows, the debt increased slightly because of elevated working capital to INR 400 crore versus INR 200 crore. Now looking at the outlook, right? Looking at the outlook for the Q4 and next year, like I said, that the restocking has started and we are very positive on the structural shift now, which is going to take place in the upstream steel sector, with the emergence of new mills getting commissioned and the increasing of capacity of the existing steel mills. So, the unfair competition, which we get from low grade, low quality scrap steel tubes, that will slowly go away, and it will open up the market for HR coil-based primary steel tubes in a big way. Given that, the distribution network, the product portfolio we have, we are more than confident that we will maintain our market share of 55%, as the HR coil-based steel tube market improves or takes market share from scrap Steel-based Tubes. Now, one highlight I'd like to make here is that, see, I mean, in nine months, our company has grown its volume by 20%, earnings by 30%. This is despite the fact that last year we showed or we registered a very solid growth, right? Our last year volume was up by 30%, and this year we are up by 20%. So, yes, and as a management, we take the responsibility that this is lower than the guidance. But as a business, it grew stronger, right? With back-to-back 30% and 20% YoY growth. So we expect the momentum to continue. And I'm glad to share that we maintained our 5 million tons of sales target sales volume target by FY 2026, right? We are sitting on 4 million ton capacity right now, and in next one year we'll be ready with 1 million ton incremental capacity. So we'll be ready with the 5 million ton capacity, right? Everything is in line. It's just that to grow more than 20-25% as an organization, we also need some external factors to favor us, right? Which could be this unfair steel price inflation, right? And some macro trends, some macro factors also more conducive for the construction sector in India. Now coming to, like, you know, some of the micro factors for our organization, like, there are like two things which we have spoken about a lot in last two years. One is our new product launches and the market creation for those products. And second is our export international sales, right? Where we are pretty confident to ramp up the volume. So I'll give some data points which will give you confidence that, our new product launches, have been pretty successful, and the market adoption, is also, pretty encouraging. So for example, let's start with, Raipur plant, right? Where there are, like, four segments in which, Apollo, kind of, came as the, as the, as the, first manufacturer in the country. So talking about the heavy structural tubes, right? Now, if you look at the ramp up, when we started the mill in month of March and till December, the utilization levels have reached 50%, okay, in the heavy structural segment. Now, this was one segment which was where we needed a different channel. We had to educate market, right? And we have been pretty successful. That's why we could reach 50% utilization levels within first year of operations. Now, the second segment in Raipur was Super Light Tubes, right? That also we started like two, three months ago, and now the mills are already running at 30% utilization levels. Now, that's also pretty encouraging because we could launch products with thickness of up to 0.18 millimeters, right? And as narrow as 8 millimeters by 8 millimeters. So it's a very broad portfolio of Super Light Tubes, which we launched and the results are pretty encouraging. Then, the third product, which we launched in Raipur was roofing sheets, which is our adjacent product, right? There also, I'm glad to share that that mill has reached utilization levels about 70% already, right? So this also shows strength of APL Apollo brand that that we could ramp up these volumes so quickly, pushing this product in our channel. And along with our tubes, the fabricators, the contractors, the end home owner, everyone is keen to use Apollo products. Then, thicker coated sheet, which is super innovation, first time in the world, that mill eventually got started in, like, late December and early January. So there also we could produce 8,000 tons in the last quarter, which gives, like, 12% utilization levels. Now, these utilization levels will go up very solid in the coming months. So all in all, the Raipur plant is now running at more than 50% utilization levels, right? So this gives answers to your questions, which each one of you had in mind that whether Apollo will be able to make these products successful in the market. But I'm glad to share that the data points clearly give clarity that we are able to create markets for these products. Now, the next big segment for us is the international markets. If you look at the global steel tube industry, which is like 80-90 million tons in size, now, if you remove India and China, the U.S., Canada, the African markets and the European markets and the Middle East markets, they are dependent on imports, right, from low cost manufacturers. So, what we have mapped is that the industry is around 30-40 million tons of annual sales, which trade over the borders. Now, if you look at Apollo's export international volume in FY 2023, that was as low as, like, 50,000 tons. Now, Apollo being world's third largest steel tube producer and number one, if we remove the top 2 Chinese, our contribution to international trade market was very, very small, right? So we fixed that by starting a plant in Dubai and setting up a full-fledged team in Dubai. And again, like, we started the plant in month of December, and the results are encouraging. Overall, if you look at Apollo, the export sales have grown by 60% on YoY basis in the first nine months. And with Raipur plant commissioning, sorry, the Dubai plant commissioning, this will improve further. Just to give you perspective, the Raipur plant, the capacity, is 300,000 tons, but in December we started first two mills and 100,000 tons is what is ready in Dubai, and the balance 200,000 tons will be ready in next two quarters. So lastly, I would like to again reiterate that we are ready with our infrastructure to be able to produce and sell 5 million tons in next two years. The what we look forward is having some tailwinds from the sector, from the steel sector with increasing supply, which seems very, very visible. The macro trends, hopefully, after elections next year, this year, the things towards the construction, towards the infrastructure sector will be much more bright, and we are ready to serve that growth in the construction sector with our 3,000 steel base and 800 distributor network. With all the core competencies which Apollo has developed over the last 35 years of its existence. And whatever growth comes, we will maintain our 55% market share in the HR coil-based steel tube segment. That's all from our side, and we are happy to take questions now. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of, s o, I'm sorry. We have our first question from the line of Bharat Shah from ASK Investment Managers. Please go ahead. Yeah. Good morning to everybody. Very clearly, the results of third quarter in terms of volume growth, I'm sure have been below expectations of everybody, including you. Good part to note is that we still are confident that where the journey ahead is lying. But the main question I want to ask is: In this journey of reaching 5 million tons and more, how much of our destiny is dependent upon the fact that the industry itself has to grow and rise? econdly, how much of it is dependent upon our innovation success, our ability to read the market well, our ability to introduce, the right products and create market ahead of the competition and superior, customer solution, service? So, that is the second factor. And the third, how much of the destiny will get, as we are moving more and more into value added, how much of that will still be colored, by the movement of the steel prices up and down? In short, while this particular quarter clearly has been, in terms of the sales outlook, below what everybody thought or you might have thought too, but if you have to focus on the long-term journey, how much of our own destiny is under our control, and how much of it will depend upon—Hello? Yeah, one moment, sir. Mm-hmm. I'm sorry, sir, your line got disconnected. We'll take the next question from the line of Rahul Agarwal from InCred Equities. Please go ahead. Yeah, hi, good afternoon, and thank you for the opportunity, and thanks for sharing the segment-wise capacity information in the presentation. That really helps us. So two questions, Sanjay, firstly on demand side and then the, on the supply side. On the demand, you know, bit more shorter term, you know, how's the situation currently with, with the channel? Like, let's say, the sales from the company to the distributor, which is primary, and then from the distributor to end customers. I just wanted to know that, you know, how, what's your experience into Jan, Feb, March? What do you expect? Similarly, you can, you know, explain if, you know, what's the pricing difference between primary and secondary steel pricing today, which might, you know, play an impact on how fourth quarter will behave. That's the first question. Rahul, first of all, good morning to everybody. Today, the difference between the secondary and the primary, almost close to INR 12/kg. Almost Secondary or primary. The number two, the how is it going up to the Q4? Like in Q3, we are barely hitting the month of October and November due to the international prices are also going down. In India, many channels destocking. But in the month of December, we again, again, came back very sharply and January also looking good. I don't think there is an issue for a normal growth, like, I can say the 700,000 tons in quarter Q4 is not a tough challenge for us. Like, we are thinking for this year, 3 million tons, and next year, 4 million tons. Again, the 2025, 2025, 2026, we are targeting 5 million tons. Usually, no doubt, this type of growth, 40%-50% of growth in a year, we need some tailwind also with us. Usually, the positive point is the two new steel plants are already started in India. One in NMDC Steel and one is JSPL. Also, I'm listening to the on call of Tata Steel also, that they are coming 1.5 million ton capacity this year, and next year, 3-4 million ton capacity. So, we, like, in, JSW also going to start their, fifth HSM in Bellary in the month of March, and international marketing is also in the softer side. So maybe the, for short term, this is a pain for us because there is in the channel, there is a destocking, and we have also to take care of our inventory, losses. But for the future terms, just as a secondary or primary way, the gap, this is very, very good for us. Correct, sir. Sir, bara kilo difference, you know, general structures become a little tough. What is your view on that? Yeah, now we do a lot of work on our brand. Like you see, in branding exercise, treatment kar diya hai. So I'm glad to share you that our general sections hai. Usually now we are getting good demand and good response from the market. Wapas margins bhi increase ho rahe hai, so I'm very sure ki Q4 mein wapas margin impact bhi achcha nazar aayega. Got it, sir. Sir, secondly, on the supply side, just one question. You know, what our understanding is that between the EBITDA of, you know, INR 2,000-INR 5,000 a ton, supply has increased. We see a lot of listed companies talking about similar goals, what, you know, Apollo had five years back. How is it changing the supply dynamics in the structural tube industry for India market, please? Oh, right now, if you really, secondary mein toh, just, market se kuch maloom padta hai ki some companies are aggressive or some companies are doing some work in the secondary market, but in the primary steel, I don't think, mereko lagta hai ki jo aaj hum 55 or 60% market share ke baare mein baat karta hai, but technically, the last month me, me pura apne visit karta pure all around the India. Like I go to the Bangalore, Kerala-... Ye Salem, Tamil Nadu, Pune, Ahmedabad jahan par bhi visit kiya, mere ko kahin par bhi itna margin 80% se nahi aaya yaar. Main poora India mein laakhon mein visit karke aaya hoon and I am finding my market se almost close to 80% structural to be. Thoda sa isko define agar main karun aur bhi details se, India ka total market jo is time market hai, jo lagbhag meri reading ke hisab se 11 lakh tons per month ke aaspaas hai. Ye 11 lakh tons mein 6 lakh tons from primary hai and 5 lakh tons this time from secondary hai. Aur 6 lakh tons mein agar aap dekhoge to 2.2, 2.3 lakh tons per month hamara Apollo hai. The second player in the tubes lines mein jo hai, se like Maharashtra Seamless is almost close to 50,000 tons per month, Jindal Hisar is close to 40,000 tons per month and number three Surya Roshni close to 60,000 tons per month. To I put and one company in eastern India new zone, he is close to 40,000 tons per month. To in structural no, no, no. I took the pipe and tubes and water line transportation and structural tubes are. To kitna hogi? 2.3 is Apollo. 2.3 is Apollo. 2.3 on 4.1. Total kitna hoga 600,000 tons mein. 2.3 tumhara Apollo ho gaya. Haan ji. 0.6 is Maharashtra Seamless right! And 0.4 is Jindal Hisar, 0.4 is tumhara NMDC, 0.6 is Surya and one company more Tata Steel is 0.5, 60,000 tons. Kitna ho gaya total? Mota moti 500,000 tons ho gaya na. Around to 500,000 tons to ye organized player hain aur chhote chhote player like Hi-Tech, Rama aur aise chhote chhote player milkar sab milkar 100,000 tons ke aaspaas honge. To 600,000, 600,000 tons jo tubes mein hai, primary mein aur 500,000 tons ye tumhare chhote chhote player hain. Usmein like jo Sambhav Steel type koi company hai, Hariom Steel, JTL Infra, it's a lot of companies in the secondary steel, may be uska thoda bahut primary bhi hota hoga. I am not itna define data nahi hai mere paas. To 600,000 tons mein almost close to 300,000 tons jo water transportation, 300,000 tons is structural tube. Secondary hai, usmein lagbhag 500,000 tons mein se 400,000 tons ye structure mein hoga. 100,000 tons water aur transportation mein hoga. To aap total agar structure tube ki market dekhoge to India ki 300,000 tons plus 400,000 tons, 700,000 tons ke aaspaas structure tube ki market is both combined. Ye aapko primary and secondary aur 400,000 tons ki water transportation, gas transportation alala alala mein karke 400,000 tons ki market hai total. To out of 300,000 tons, my my 230,000 tons, 2.3 into 100 divide by 300,000, almost close to 75% aur abhi jaise se ye December mein kaafi gap kam hua. Now steel plant have reduce price by INR 2,500/ton in December and INR 1,500/ton in January almost close to INR 4,000 ka price gap kam hua hai aur in future this is also in the soften side aur secondary market jo bhi main poora study karke aaya hoon, this is totally in the at par system. Main logon ke paas their no margin to go down. To hum to apne sabse tough time se nikal gaye hain. Humne 15-15 INR/kg ke gap par bhi apne aap ko sustain kiya aur ka margin 200-400 upar neeche mein humne cover karke apne apne aap ko survive kara liya. To jaise jaise time ye gap, itna gap chalna asambhav hai. This is impossible to run this type of gap in the industry. To ye gap dheere dheere karke kam hokar 4-5 INR/kg par aa jayega, jo trend pehle hi tha. So I then the tail wind come with the Apollo, jo hamara abhi already we are sitting on the 4 million capacity aur within 2-3 months hamara poora part 4.5 ka capacity create ho jayega, April end December tak hamara poora 5 million ka capacity create ho jayega. To I don't think ki humko thoda sa bhi tail wind ka saath mil gaya to bahut sa aur bahut tez hum wapas aaenge. Right sir, I will come back in the que. Anubhav, if you just give a small answer ASP and EBITDA for third quarter and nine months, that will be helpful. Thank you so much! So, so if you will, if you see the volume was around 15,000 tons and we did 4,500%. I missed the volume. What did you say? 150,000 tons. 150,000 of our Q3 volume in APL and EBITDA is INR 4,500 per ton. Okay, Sanjay ji, got it! Thank you so much. I will come back in the que. All the best. Thank you. And just for the participants, what Sanjay ji highlighted about the breakup for structure tubes between primary secondary. There is a slide number 12 on our earnings presentation, which clearly depicts this industry scenario. Thank you. We have a next question from the line of Bharat Shah from ASK Investment Managers. Please go ahead! Yes, namaskar, Sanjay ji. I raised the question early and I am not sure whether that was heard or it got lost. Bhaiya, jo main thoda samjha, you want to ask us ki jo 5 million ton ka capacity we want to reach by 2026, usmein kitna hamare upar depend karega, kitna outside factor par depend karega. Am I right? Haan, main mota mota wahi keh raha tha ki mahatva ki factors hum dekhen to hamari innovation, market creation and success, the customer centricity and service and solution providing. हमम। Favorable external environment, which is supporting demand for the structural steel tubes and third factor, which is affecting profitability and in some sense demand also is being volatility in the steel price. Hmm, with the much tighter inventory control and other we still have managed to deal with it much better, but it remains factor like this third quarter is also showing. If you take into account all of this, ye jo journey hai, 5 million ki jo first padav hai hamara, how much of it is dependent on our own internal strength and capability and our ability to anticipate and build that business and how much of it is that journey is likely to depend upon tailwind aur favorable factors. Bhaiya, 20-25 tak ka to growth nikalna hamare upar apne without any condition we are very comfortable, innovations and branding aur distribution ko phailaya hai. 20 se 25, 20-25% growth is not a big challenge for us. This is we can do easily. But when I am talking, like you know, I am the aggressive person. I am not satisfied. Like this year, we do not do 3 million tons hum nahi kar pa rahe jo clear visibility hai mere ko. So we are very dissatisfied on the organization level, we are not satisfied with our numbers. So 40, but 40-50% type ka number nikalna, still we need the tailwind factors. Ye 25% ke aaspaas ka number nikalna, jitna hum kaam kar rahe hain apne innovations pe, branding pe, ye market ke creation pe, to ye to koi bada challenge nahi hai, for us this is a cake walk. But like my vision is 3 million tons for 2024 and next year 4 million and then the next year 5 million tons. This is no doubt we need some external factor ka humko support chahiye hoga. Agar bhai 25% ke aaspaas to maan ke chalo ki agar koi bhi support mil bhi jayega, we can do it. And that 25% growth would definitely imply most of it would come from the superior products and superior solutions, therefore relatively better margin. Therefore, in this journey, whether the growth will be 25% or higher, but our margin trajectory should maintain a sustained improvement over a period of time. Margin to no doubt bhaiya hamara increase hoga hi hoga, because aapko main thoda sa jo mere ko bahut accha factor nazar aa raha hai, abhi if you thoda sa bhi channel partners ko jakar apna market ko aap log regain karne ka koshish karoge, aap all India across the country channel partners se baat karoge market mein, to like hamara pehle Apollo ka pipe jo hai, dusre brand se jo hamare competitive brands hote the, usse 1,000 INR per ton ke aaspaas extra bikta tha. Now this gap is create 2-3 thousand INR per ton. Like agar aap market mein koi normal pipe dekhoge to wo this time 59 ka unka selling price hai. Hamara selling price, I am talking about the retail sell price, 62 ke aaspaas hai. Jo ye gap pehle 61, 62 rehta tha. To jaise kyunki hamara kuch coated product mein hamara margin kam hua hai, to hamne apne margin ko increase karne ke liye hamne jo apna bada bucket tha, wahan par apna margin increase karne ka koshish kiya tha and we have successfully done in last 2 months. Ham ne apne margins ko kaafi upar rakh, rakhe hain and we are able to sell our material. Maybe this is the reason of our services, this is the reason of our quality of branding, I don't know, but this is acceptable in the market. Agar hamara main market chal gaya, with the brand hamne apna isi margin ko create karke maal bech diya hai to Bharat bhai, this is a big game changer for our company. Yes, and Sanjay ji on export, Anubhav was narrating the large opportunity. What are really given the size of opportunity in international market, which is hardly exploited by APL Apollo as yet, what are our competitive strengths in that market and what are impediments and challenge in attaining our growth in that market? Like in this January month our export is high by almost 50%. And from Dubai plant, we are doing 8,000 tons this month, in the month of January. February, we are targeting to take to 8,000-10,000 tons, in spite of the three days less in the month. And March target is about 12,000 tons. So put together, Dubai plant we are targeting for this quarter 28-30,000 tons. And two more lines are coming in the Dubai plant in the month of March. One is 150 square, and the second one is 300 square. This will all the four line put together, the capacity of Dubai plant is close to then about 25,000 tons per month, which we are clearly seeing can be achieved this volume growth in month of June. June तक हम पच्चीस हजार टन का दुबई प्लांट पर पहुंच जाएंगे। First stage, when we reach the 25,000 in Dubai, in Dubai plant in month of June, then we have next step, next phase plan in Dubai also, for another capacity, creating a capacity of 0.2 million tons. So then our Dubai plant is close to half a million tons. Kuch India se bhi humne apna export department ko kaafi strong kiya hai, and bahar ke bhi countries mein bhi hum like in Europe and USA and Melbourne, three places apna warehouse bhi kholne ja rahe hain. One in Liverpool, one in Houston and one in Melbourne. With the four cities, we are going to create our own warehousing. I think so ki next one or two years mein hamara ye export market mein jab hum, hamara apna presence bahut kam hai, I mean the 30 million ton of market, we are just 0.4 or 0.3 million ton capacity hai, ya hamara abhi tak hai, usko hum 1 million ton tak le jane ki koshish karenge. कब तक? In next 2 years. Next 2 years. Matlab 2026 mein almost 1 million- 5 mein, jab 5 million mein jayenge, to wahan se humko, 5 million mein hamara jo target hai ki 0.5 million tons humko Dubai plant se aur 0.5 million tons hum India se export kar sakenge. अच्छा! And, Sanjay जी, वहां हमारी competitive strength कौन-कौन सी है? Which are the issues which makes us strong global competitors? Yeah, by the nature of costing, हम लोग costing में all over the world बहुत less prices पे, cost पे हैं। Number two, हमारा marketing structure तो पूरे world में सबसे best है। And number three, our capacity of purchase of raw material is also excellent against the globally market. Like, I mean, जो दुबई में देख रहे हैं, what their local player buying today, HR coil at $620 or $625 per ton. We are selling the material Dubai plant about $590-$600. तो 2%-3% हमारा अपना उनके मुकाबले हमारा cost कम है। 2-3% हमारा purchase cost is less, and हमारा no doubt हमारा variety का भी benefit है। And, yeah- I request you to join back the queue, please, as we have other participants waiting. One minute, no problem. Sir, no problem, one minute, बोलो भाई। अमर भाई बोलो ना। Yes, so, these advantages we would say, prevails compared to any competitor, including the ones which are larger than us? Yeah. Because this is an advantage due to the India X factor. हमारा इंडिया के कारण Dubai across the world बहुत अच्छा है, और हमारे relationship all the other suppliers बहुत अच्छे हैं, भी इसका एक बहुत बड़ा reason है। Okay, just to add to this, whereby, like this Dubai plant, which we put up a small capacity, 300,000 tons annual, right? But if you look at our SKU range, we are going to produce, pipes starting 15 mm by 15 mm, up to 300 mm by 300 mm. Now, that's the SKU which we are able to offer even in the like 25,000 tons of monthly capacity, right? So the factors which made us win in India, the same factors, the same competitive strengths, will help us win in international markets also. Any major challenges do we believe that can scuttle this? We are coming from the challenge that in India we were buying expensive steel, and we were not able to offer competitive price for our product. Now, with having access to cheap steel, we have overcome that challenge by putting a Dubai plant. Now we see mainly opportunities whereby, not challenges. Okay. Thank you. Thank you. Thank you. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, please restrict your questions to two at a time. You may join back the queue for follow-up questions. We'll take the next question from the line of Abhishek from DSP. Please go ahead. Hi, sir. Thanks for the opportunity. Sanjay जी, just दो चीज समझना था, जब when you do that 5 million ton of overall volume, which is the aspiration, new product contribution कितना होगा, sir, in that? So, Abhishek, just to answer this question, see, I mean, last year, if you look at FY 2023, right, our volume was 2.3 million tons. Out of 2.3 million ton, the general segment was 1 million ton, and value added, super value add, which is like, Which also includes the new products right, that was 2 point, that was 1.3 million tons. Now when we are talking about 5 million tons sales volume Abhishek, our general segment will not be more than 1.5 million tons and 3.5 million tons will be value add super value add. So my value add super value add is going to increase by almost three times from 1.3 million tons to 3.5 million tons right by 2026. So, so, so mainly the product like Raipur 1 million tons, mainly is like all innovative product value, ye baat to right hai ki kitna naya product hoga. So I think it is like 7 million tons totally new hoga. So 10% every year the new product contributing volume 10%. Okay, so in that 5 million ton almost 65-70% will be new product from that perspective. Value-added value-added super value-added value-added product target is ours close to 70%. सेवेंटी परसेंट। New product mein I think jo aaj hum nahi kar pa rahe hain aur jo karenge, 5-6 lakh tons ke aaspaas totally new product hoga. Okay, okay, got that aur sir ek aur cheez samajhna tha. In terms of export aur Raipur will be your key contributor of volume growth from here on. To margins kaise dekhna chahiye? Kyunki agar last 5-6 saal mein dekhen sir, general structures ke margins, largely woh INR 1,700-INR 2,000 EBITDA per ton per hi move kar rahe hain. Yeh jab scrap ke saath agar price kam hote hain to kya usmein bhi margin improvement ka scope hai in general? No, Abhishek, that's what I told you earlier. I am very very hopeful that in this quarter our margin which was running at INR 1,500-INR 1,700, may be increase to INR 2,500-INR 3,000 per ton. ओके, ओके। Yahan par hamara bahut achcha improvement aa raha hai. But it's too early to say something. Agar aap pura channel, discovery karoge, pura market mein to aaj hamare price mein dusre ke price mein almost INR 3,000 ka gap hai. करेक्ट। But seller itna tough hai ki abhi hum kuch nahi bol pa rahe hain. Mehnat to bahut kar rahe hain, but kahin na kahin humko plus minus point bhi milta hai jitna plus karte hain, like hamara margin chhuta hai. ओके। Bahut saara extra additional capacity aane se pre-galvanized sab mein kyunki har product ne apna pendulum hota hai. Like just ab tak corona ye India mein capacity less tha. Coated product mein kaafi margins aa gaya tha. Ab dekhoge to hamara pre-galvanized mein that time 10,000 mein humne margin quote kiya tha. But wahan se capacity increase ho gaya. Ye country mein pre-coated ka margin toota hai. Is mein to we are able to jo hamara main core business hai, jo structural sections usmein humne bahut kaam kiya. Abhi abhi problem, problem time mein the aur I am very very glad to see ki aap kahin par bhi koi channel mein check karo. Today other price is INR 1,959, hamara price INR 62 hai aur secondary ka price INR 50,000 hai. Is gap par we are able to maintain our volume. This is very very hopeful and hum kehte hain ki humko bahut achha way nazar aa raha hai aur mera ye sector apna duty brand chala gaya to company kehte hain no limit time par hum aa jayenge. Great. Got that. Sir, just one last question. Today because of a lot of infra activities, many new demand sectors are emerging. Like railway, warehouse, solar. So, is there any such sector visible to you, which can also help you and you are also launching new products and higher diameter. So, any one or two sectors due to which you think it will help you in reaching 5 million tons. In solar, we have done a lot of new innovative products. In solar, we are getting quite good orders. From our solar's big big companies, in that our day-to-day daily meetings are also going on. In that our good good agreements are also happening. In railway, we have a lot of already orders for railway stations so railway and airport and solar three sectors we are getting very good response if you see in big sector and super big sectors then we are our growth very very high. Okay, got that. Thank you so much and wish you all the best. Thank you so much. Thank you. Thank you. Thank you. We have a next question from the line of Aman Agarwal from Equirus Securities. Please go ahead. Yes sir, thank you for the opportunity. Sir, just clarification upfront, this is the Q3 volume that we have seen for multiple year steel tube company. We have seen case where few company has, grown bit better than APL Apollo. Is there by any chance, a case where some company has, benefiting at the expense of APL, any kind of market share shift that we have seen and is this mainly because of demand shift from primary market to secondary market. Yeah, thank you Aman, very good, good question. Aman, I earlier also tell that there is two type of market, one is secondary and one is primary. If you see that today, the primary gap in the Q3 is almost close to 50 INR/kg, which today 12 INR/kg around is. So no doubt about it you jo 15 INR ka gap hota hai to thoda bahut demand shifting hota hi hota hai. But the most important thing that us fifteen INR ke gap par bhi we have survive, we maintain our thoda volume toota, but we maintain our market share and like now this gap fifteen se ghatke 12 INR/kg aa gaya hai. Now 12 INR/kg ke gap par bhi hum apna wapas market share wapas le liya humne and jaise jaise ye gap neeche aata jayega, hamara market share evam badhta jayega.... So, it could be now that everybody wants good, good quality material products. So I'm not worried about the secondary market. Because the market slowly dying, if you look at the whole secondary market channel, so today approximately sponge which is, yeah, it's 27 kg around where the secondary starts. And on top of that, the minimum cost of making pipe is INR 22-INR 23 per kg. From sponge to ingot, ingot to patla, patla to pipe. So almost they are close to INR 50 per kg, so they are running their plant on a low margin basis. So INR 50 per kg of pipe, they are not saving anything. So I don't think that they have the gap and HR coil capacity is building up in India. HR Coil's EBITDA margin of Tata Steel and other companies is quite high, so they are no doubt, if there is a problem in the market, they can adjust their price. Because they have a gap, so this is very, very, let's say, for us it's a positive thing. As the us it's a positive thing. As the HR Coil capacity increases in India, this secondary market will eventually end. I'm not bullish on the secondary market. You see that I'm talking about 5 million tons, yet I'm not talking about going into secondary anywhere. So this is not a good quality material, and I'm not thinking this is a longer vision for those. This has some long vision, because this market itself does not have any, how to say, strength. say, strength. This is totally dependent on the HR Coil pricing. If the HR coil price goes down, then this entire market will be wiped out. If the out. If the HR coil price is high, then they will be able to play. So I'm it does not have any strength in this market. So I'm not thinking that secondary will have any big impact on us. I'm not worried. If I were so worried, then no doubt we would also take some of our segments to secondary, but we are not thinking, we are not even discussing in our internal meetings. I'm not worried about the secondary market. This is a matter of time, maybe two months, maybe one month, maybe one year. Understood, Sandeep ji. Another question, you know, while I understand the dip in the volume of general products, any particular reason why light structure volumes have shown such kind of a degrowth in 3Q? Yeah, yeah, the, this is due to the retail sale. Number one, in retail sale, the down slip, plus mainly structure which is secondary impacts. This, this, what you say, this above, around 1.6 thickness to 2.5 thickness. So because of that also there is an impact, and due to retail sale being down, there is an impact because of that. But in this now we are in very aggressive mode, this sector to get our volume back. So here, like, we are launching a lot of schemes in the market. Like, this is very, very funny to say, but yesterday we are launching scheme in NCR market, that if you just sell 200-ton material in two months, we, we offer a foreign tour. So we are going to revive our presence in retail by doing such schemes. Thank you. We'll take our next question from the line of Madhav from Fidelity. Please go ahead. Mr. Madhav, your line is unmuted. Please go ahead with your question. Hello, am I audible now? Can you use your handset mode, please? Yeah. Can you hear me now? Uh, yes. Yeah, Madhav, go ahead. Yeah. My question basically was that, in the export market, basically, if I understand right, of the 5 million tons which we are guiding for, for FY 2026, 1 million ton comes from the export market, which is basically outside India. So the domestic business ramp up is we need to go from 2.8 to 4. So to that extent, the expansion that we need in the domestic market is not very high. Like, we don't need to go from 2.8 to 5, we need to go from 2.8 to 4. Is that the right understanding to have for the company? Yeah. Yes, Madhav. So, one million ton international market, Dubai should be like 300,000 tons that will be ramped up and incremental also we are putting up new capacities. Plus from Indian mills, we will, we are increasing export sales, international sales. So yes, it's not like fully 4 million, maybe 4.1, 4.2 should be coming from India. Right. Some confusion. Little confusion. And right now also, like, export markets is like 0.2 already, right? So, so that also you deduct, for the current volume. Got it. Got it. And in the export market, how is the product mix? Is it like a good product mix? And EBITDA margin at, is it at the current company level, or is it higher or lower versus current company average? So right now it's higher than the industrial than the company blended EBITDA per ton, Madhav. Okay. Okay. Just lastly, any specific countries which you are targeting to start off with? Because it's a very large market. Yes. So any specific countries where we want to focus on? Madhav, it's across mainly in Europe, Canada, U.S. and Australia. U.S., and Australia. Got it. Okay. Yeah. Thank you so much. Thank you. Thank you. We have our next question from the line of Anupam Gupta from IIFL Securities. Please go ahead. Morning, sir. Just a couple of bookkeeping questions. What is the CapEx, which is outlined for FY, total of FY 2024 to FY 2026? Right now we have no exact data, but I think it's close to INR 300-400 crore, INR 300-350 crore. Right. So just to add to this, Anupam, for clarity, that the residual CapEx at the start of the year was around INR 600 crore, right? To go from 3.5-5 million tons. So far, we have spent like INR 500 crore in the first nine months. Another 150 should be in quarter four. And then, next year, whatever is the residual CapEx plus the- Good. Any CapEx, what we do, shouldn't be more than like INR 200 crore. Maximum totally now outflow is from month of January to, for financial, I think not more than INR 350 crore outflow. Thank you. We have our next question from the line of Anupam Gupta from IIFL Securities. Please go ahead. No. So, hello? Yeah. Yeah, so just continuing there, you said that you want to expand Dubai by another 0.2 million tons. So, what incremental CapEx you're looking at for? Because that was not the plan. 0.2 million tons, hardly capital INR 50-60 crore because we have already made the infrastructure. Sure. Okay. One question on what was the inventory loss which you took in third quarter? Because obviously, steel prices went down and you were- No, no, no. We never count inventory loss. We just now change our policies, whatever we buy and whatever we sell, we just see the gap. Okay. No major number? No, no, no, no, there's no major number. Okay. Okay, fine. Thank you. Thank you. We have our next question from the line of Mahesh Talati from Yellow Jersey Investment Advisors. Please go ahead. Yeah, hello, am I audible? Yeah, yeah. Yeah. Thank you for the opportunity. So we have been mentioning that we want to focus more on the value-added portfolio and not on the commodity, but if we see the new capacity additions, we are adding our capacity in the general segments too. So can you please explain some of the rationale behind that? So this is the natural growth for the industry, right? 10% we are assuming the industry should grow. So to cater to that, we are ramping up the capacity because one of our core USP is to be able to supply all the SKU to our customers, right? So to maintain. Value to volume. To maintain the SKU range, we have to increase the capacity as per the industry natural growth. Of course, we should, we should try to increase the value, yeah. Okay. My next question was, so we are saying that the new capacities of HR are coming, which will help us for further supply. Are we currently facing any problems in terms of raw material sourcing, or it's going smoothly? Yeah, this is totally smoothly. No problem at all. Okay. Next question was, given many players in the industry are increasing the capacity and- Mm-hmm. Adding new products, what gives us the confidence that we will continue to grow at a 20%-25% range, given the industry itself is expected to grow at 12%-13%? So there are two factors. One is that our new products from Raipur, right? They are completely like first time ever, launched products in the country. So those products are ramping up, right? So that's new product, new, new market creation, new applications. And secondly is new geography, like in export market and in East India, where the sales were very, very low for Apollo, and now we are focusing on each of those geographies very, very aggressively. So those will give the volume. And third, there will be shift from inferior, scrap steel, to market to the HR coil, to market. And given our market share, we will, we will, maintain those levels. Okay, and last question, you mentioned that you are getting good orders from railway station redevelopments. So how many orders are there, and any order pipeline for railway station redevelopment program? Any railway station will require Steel Tubes, right? So far, the Indian Railways has awarded 50 railway stations to the EPC contractors. Right, so every railway station will require steel tube. We have supplied to 4-5 railway stations already. At the same time, we are also trying to increase the steel tube consumption in those railway station designs, right? So where our steel consumption could be more than 50% of the total steel versus 15%-20%, which comes anyways for us. Thank you. We have our next question from the line of Anish Jobalia from Girik Capital. Please go ahead. Yeah. I said, I'm sorry, you're not audible. You're sounding muffled. Yes, sir. No, we can't hear you, Mr. Jobalia. Hello. Hello, hello, are you... Hello? Please go ahead with your question. Yeah, sure. So, thank you for the opportunity to ask the question. So my question is, in our next phase of expansion from 3.6 to 5 million ton, if you see, there are two, two big, players that are looking to- I'm sorry, sir. You're sounding muffled. Hello, hello. Hello? Hello. Sir, are you able to understand his question? No, no, no, we are- Hello? Hello, are you able to hear this? You hear me now? A little better, yes. Yeah, so my question was that, you know, in our next phase of expansion from 3.6 to 5, so if we see there are places where we are looking at, you know, big expansion of the capacities, one is on the light structures, and then the second is on the galvanized tubes, right? So if you see the history of the galvanized tubes, typically, you know, we have been doing around 100,000 odd tons, 90,000, 100,000 tons. But we are looking to go for a significant growth on this side. So just want to understand, you know, how we will be able to sell these big volumes in the next phase of expansion. You know, if you could just help to understand that. In the light structures also, how are you seeing the volume ramp up happening? Because 600,000 tons being added in the next phase, and today we are at a run rate of around 100,000 tons, right? So, so how do you see the growth in these two sides here? Thank you. So first clarification is that this is not next phase, this is ongoing phase of CapEx, right? 5 million ton is part of ongoing phase, not the next phase. Now, coming to the light section, why the capacity is increasing is because of introduction of Super Light Tubes from Raipur plant, right? So that's part of Super Light, and that's forming the bulk of incremental capacity which you see in the sheet, right? Then the second on pre-galv, right? That also part of Color-Coated Tubes which are getting added in Raipur. So that's where the new capacity is coming in, right? So it's the existing product is organic 10-10% capacity expansion, and rest is coming from new products, super light in light and color coated in pre-galv. So, I mean, we are pretty confident that we'll be able to sell these products, and you are saying that it will be largely led by new products, right? So it will be new demand, kind of new markets. Super Light, Super Light segment from Raipur plant, we are already at 33% utilization level as of December 2021. Right. Okay, sir. All the best, and thank you for the opportunity. Thank you. We have our next question from the line of Vikash Singh from Phillip Capital. Please go ahead. Good afternoon, sir. Sir, as you said, that there would be a margin compression in such as galvanized, and similarly, many of the competitors are coming in the, even in the value-added segment, like mild steel DFT. So just wanted to understand, that while you, on one hand, you're talking about a margin expansion in the heavy structural, your largest share would see an onslaught from the competitor. So just your thought process, whether in this mix you would be maintain the margin, or, you expect in the longer run it should come down? Hello? Vikash, good afternoon. Like, if you see our pre-galvanized product we take in the country almost 15 years back, in 2007, 2008, we introduced the pre-galv technology. Now, no doubt there is some other players are coming, but the strength of our branding, we have no problem to maintain our normal margin. The extra already margin, which is close to INR 8,000-9,000 per ton, now we are unable to maintain. But six, almost close to 6,000 margin is not a big task for to maintain, because our quality and the costing, lot of things. And we are doing lot of new work also, innovation for pre-galv tube. Now we are introducing our one plant in Raipur plant. We are cur... Now we're going to slowly and slowly connect it to pre-galv, Galvalume tube. So I think with this, once we came out with this product in maybe month of June, so I think again, later and one to one, no doubt, we are happy and glad with our shareholders, but open form policies display. But we are doing lot of new works to in the next one year, Apollo will come with lot of new products. Understand, sir. Sir, a last question on the cash flow uses, like you said, okay, next year, INR 300 crore or let's say INR 400 crore CapEx, working capital. Mm-hmm. But cash inflow is much higher, and even in future for keeping a 25% growth rate, maintenance of that, we don't need like 50, 50, or 100% of our EBITDA to that. So 50% or more EBITDA every year would be free, so what cash we will do? No, this is a tough question to answer. If you see our balance sheet this quarter, INR 1,600 crore liabilities, and INR 400 crore debt. I am targeting the FY 2025, again, liability free or debt free balance sheet. Mm-hmm. The normal demand, demand first, my aim is for FY 25 March. You see the balance sheet of zero debt and zero liabilities. Then, we talk about our shareholders and we think in-house, here, now, how we can bring the cash. Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand over the call to the management for closing comments. Over to you, sir. Thank you everyone for joining us today. Mm-hmm. Thanks again to Nomura and Neha for having us for this call. Have a nice day, everyone. Thank you. Bye. Thank you. On behalf of Nomura Wealth Management, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.