Ladies and gentlemen, good day, and welcome to the RHI Magnesita India Limited conference call hosted by Batlivala & Karani Securities India Private Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. 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 Mr. Aryan Sharma from Batlivala & Karani Securities India Private Limited. Thank you, and over to you, sir. Thank you, Shiva. Good evening, everyone. On behalf of B&K Securities, we welcome you all to Q1 FY 2025 earnings conference call of RHI Magnesita India Limited. We have with us today Mr. Parmod Sagar, Managing Director and CEO, and Mr. Azim Syed, CFO and Chief Investor Relations Officer. I request Mr. Parmod Sagar to take us through the overview of the quarterly results, and then we can begin the Q&A session. Over to you, Parmod, sir. Thank you very much. Good evening, and thank you for joining us today. I hope you have had the chance to view our financial results for the first quarter and the accompanying presentation, which has been published in advance. I'm happy to share that we have reported the highest quarterly operating margin since the acquisition of Hi-Tech and Dalmia, reflecting the successful execution of our strategic plan to date. Our strategic levels in the area of ironmaking and flow control are also delivering results, leading to an increase in our market share. About market updates, end-user industries such as steel, cement, and industrial interests are subdued customer activity due to signal slowdown, further exacerbated by cheap imports coming from Southeast Asia and China and tipped demand in export market. Additionally, rising freight costs stemming from Singapore blockade has significantly increased the cost of imports and increased the raw material cost of alumina-based raw materials. We expect this situation will persist in the coming quarters as well. Despite these challenges, we are optimistic about the upcoming quarters. We anticipate steel and cement production to ramp up, especially with the support of Union Budget Viksit Bharat initiative, which has allocated 3.4% of our Indian GDP for infrastructure development. Looking ahead, as a market leader, we are well-positioned to seize on the growth opportunities in sync with the end-user industries. Our focus on penetrating into ironmaking, including DRI, pellets, and other critical applications, resulted in growth in this segment. I'm glad to share that we are witnessing strong order momentum in the blast furnace cast house, with three new contracts secured and two additional opportunities in discussions. Furthermore, we have onboarded five new customers in taphole clay and are working on two common projects, which will enhance utilization in our silica plant at Rajgangpur in the very near future. Integration efforts are progressing, including the roll-out of our global operational excellence program across all our manufacturing facilities, which aims to harmonize operations across acquired entities with best-in-class safety and efficiency standards. We remain committed towards delivering sustainable and profitable growth and long-term shareholder value creation. We continue to lead in recycling of raw materials and remain committed to reduction of CO2 footprint. In conclusion, our performance this quarter aligns with our expectations, especially given the temporary weak market conditions. We remain committed to delivering sustainable and profitable growth. I now would request Azim Syed, our CFO and CIRO, to take you through our quarterly financial performance. Azim? Thank you, Parmod Ji. Good evening, and good evening, everyone, and thank you for joining us. Our consolidated revenue from operations in Q1 FY 2025 was maintained at INR 878 crore, while the EBITDA increased by 3 percentage points to INR 157 crore. The increase of profitability was driven by better product mix and one-time high-margin customer orders. The weakness in the top line was well elaborated by Parmod Ji. Our PAT for the quarter was INR 70 crore. The improvement was contributed by better margins and negligible use of our short-term working capital financing. Our net debt to EBITDA ratio improved from 0.6x- 0.3x. This is contributed by strong cash generation from operation and improved working capital by efficient management of our inventories. We are optimistic about leveraging our strengths in ironmaking, DRI, and the pellet business. Our focus remains on capturing attractive growth prospects in our customer sectors. Going forward, we continue to focus on sustainable growth and delivering better return ratio for our shareholders. We are well positioned to support the growth of our customers.... Let me take this opportunity to inform two announcements. Based on the recommendation of Nomination and Remuneration Committee, they have appointed Mr. Kamal Sharda as an additional independent director of the company for a period of 5 years, with effect from 14th August, 2024, subject to approval of shareholders in the ensuing AGM. Further, Mr. Sharda is a chartered accountant and also a law graduate. He has 35 years of professional experience in senior level positions, primarily in manufacturing industry. Currently, he serves as CEO of Alumina Industrial Company, LLC, and has 26 rich experience in refractory industry and was chairman of IRMA twice. It gives me an immense pleasure also to inform that based on the recommendation of Nomination and Remuneration Committee, they have appointed Mr. Parmod Sagar, Managing Director and CEO of the company, and also as Chairman of the company, post-completion of tenure of Dr. Vijay Sharma as Independent Director and Chairman of the company, with effective from twelfth November, 2024. The designation of Mr. Parmod Sagar would be Chairman, Managing Director, and CEO of the company. Congrats, Parmod Ji, and all the best for your new additional role. Thank you. Now we can open up for questionnaire. 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 phone. 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. The first question is from the line of Chetan Doshi, an individual investor. Please go ahead. Congratulations, Parmod, for the promotion and the new designation, which has been given to you. Much more responsibilities, and congratulations for the excellent set of numbers. Now, coming to the specific question is, that you have got 3 new contracts for blast furnace cast house and 5 new customers in taphole clay. So what is the market size for this, and by what time duration you will be completing this contract? And this technological transfer from Brazil, which is going to take place, so what further addition will be done in the Indian market? And second question is that regarding pellet, you have increased your market share by backing 3 new projects. So what is the market size for this? Okay. So first of all, thank you very much for your congratulatory message and your best wishes. I can assure you and all investors, the shareholders, that I will try my best to fulfill your aspiration and justify the faith embedded on me by the management and you people. Thank you very much. About this three blast furnace taphole mass contracts and five taphole clay new customers, we already got the orders, and the execution should start by beginning of October of this order, and maybe it will take 3-5 months to complete these contracts. So it will start in last quarter of this year and end up in the first quarter of next calendar year. About the pellet plant, yes, we got a big order, probably more than 5 million, 5.5 million or so. Mm-hmm. We are also in talks with two, three more customers. This is again, we are going to build up a team for this project, and probably it will start mid-October. The size of this blast furnace ironmaking, I would say, including the taphole clay and coke oven, et cetera, is about EUR 220 million, and it is about INR 2,000 crore. And about pellets, it is about EUR 25 million or so, total market price. Okay. Regarding this iron making OEM projects, so it is written that you are in long-term discussions with the OEMs for coke oven and blast furnace stoves. So, you have already cracked some OEM or it is still in initial discussions are there and you plan to do it? I would not say initial discussion. Nothing is cracked, but we are, in some cases, in a very advanced stage of discussion, and there are quite a bit of projects are coming up in next 2-3 years' time. And we already have good business in the pipeline for this stove, et cetera, coke oven stoves. And but it is not through OEM. We are in talk with OEM. It will take some time, but it is in advanced stage. Yeah, but if you tie up with OEM, then it is a... I would say it's a cakewalk at the end user end, because once OEM says that you have to use RHI, then nobody can stop you from getting orders from the customer. Absolutely. Actually, we got order through SMS Paul Wurth for this ArcelorMittal itself, and we are executing that order already. We are manufacturing and supply has started. In the past also we did, but now we are going on a bigger scale for other OEMs, global OEMs, apart from SMS Paul Wurth, India. And you are rightly saying, if we have this agreement or relationship with the OEM, and they will require, yes, yeah, definitely it will have an edge over our competition. Correct. And, I would congratulate your team members, because the investor speaks for a lot of things. And, they answer a lot of questions also, which normally I would be, you know, inclined to ask, but most of the things are getting cleared by the investors' presentation. But this time also, Parmod, I would say it was just before the con call, maybe 10-15 minutes, it got uploaded on the site. So next time, at least we need a couple of hours to, you know, go through the presentation, but this time it is quite in detail. I would appreciate that. And one last question, are we- First of all, first of all, apologies about this time lapse. Azim want to say apology from his side. Yes, it was apology from our side. We intend to have this meeting on Friday, but we said, you know, it's a long weekend, a lot of people will be on holiday. So we said, "Okay, we'll try to do this today," so that people who are having a long holidays, we do this. So we thought we'd do this from the investor convenience, but we take the feedback. And we also take the compliment of presentation as improving, Chetan. Thank you very much. Yeah, yeah, yeah. Thank you. Last question, Parmod, are we supplying anything back to our principals? Supplying means material? Finished product. Finished product, yeah. Can you repeat the question? It was not clear for us. Are we exporting any product from India, manufactured in India to our principals, and they are- Yes. selling to any other, Yes, yes, we are, we are selling through our other BUs or other companies outside our BU, like Europe and East Asia, through our parent company. Exactly. So our export points are close to about 9%, just to kind of, you know, give you some number around that. Okay. Thank you very much. I'll join the queue later on because I have all your... I've asked more questions, so I will again join in the queue. Thank you. Thank you. Wish you good luck. Thanks. Thank you. We would like to remind all the participants that you may press star and one to ask your questions. The next question is from the line of Pratim Roy from B&K Securities. Please go ahead. Yeah. Hi, sir. Congratulations for the good set of numbers. Firstly, I just need to know that, sir, right now, as the presentation says, that the net debt to EBITDA has come down, from 0.6 to 0.3x. So can we expect any further new CapEx plan or inorganic acquisition to enhance the margin share further, sir? Acquisition, you know, we are open for anything if it fits into our scheme of things, but nothing is on the table as of now. We don't see any big opportunity for a large-scale acquisition in near future. About CapEx, yes, we are ramping up, and next year we will have a CapEx of about INR 80 crore or so. Yeah. So, it will be like INR 80 crore-100 crore per next three years. Exactly. Every year. Okay, sir, thank you. And another thing is that, sir, can you please the data on the capacity utilization side for Dalmia OCL and Hi-Tech for this quarter and the last quarter? Means, how much improvement is there any improvement happened or not? So just if you can give some data on that basis. Happy, happy to provide that information. So on a consolidated level, our capacity utilization remains flat. So last quarter, we did 61%, and we have similar set of numbers this time as well. Including Jamshedpur and India, we were at about 72%-71%. And for excluding Jamshedpur, we were at about 70% last quarter. Now we operate at 75%. I'm sure you are also expecting Jamshedpur numbers, so we had a remarkable improvement from 54%- 58%. And in anticipation of your next question, the capacity utilization, the Dalmia plant has dropped, primarily because our South Indian customers, see, cement customers had lesser cement production. So this kind of gonna ensure that our capacity, especially in our Vizag plant and Dalmia plant, had a lower utilization comparing to the last quarter. That's the color behind the reduced utilization in the Dalmia plant. Okay, sir, and just you mentioned that the EBITDA margin, that it improved due to the better product mix and one-time higher-margin customer orders. So how often we can expect this kind of order to come in future also? So, this basically, the way it happens is that it's most of it is performance bonus related, which is a factor of multiple things. So it's not just only the product mix, we also had an impact of the product mix as well. So let me give us some color about this one-time performance order. So this comes when the performance or when we get a new product of, for example, let's say like a converter order. So these are very non-cyclic and unpredictable in nature, so we'll not be able to say when next this big bump will come. It comes when the customer there is a requirement at the moment, so that's the, we, that's, that's how you can model it at the moment. If we just subside that part, so what will be the original EBITDA margin reported for the quarter? Or if you can quantify the number, what is the impact on EBITDA on that particular one time? You know, I would reply in other way. The sustainable EBITDA in coming days should be 15%+. Exactly. I'm upgrading my statement. I keep on saying 14%-15%, but now with the efficiency which we are bringing to the plants, it will have 15%+ in coming days also. That is our perception. And, you know, we cannot quantify this bonus part because it is cyclic. Sometimes in one quarter it can come, in next quarter it cannot come. It depends upon when the converter is down. So we cannot predict it, you know, whether every quarter we will have this or not. So we should take the number with a pinch of salt, that it can vary a little bit quarter to quarter, but on yearly basis, I would say 15%+ is a sustainable number. In addition to what Parmod ji said, as you are aware that we also cater to multi-segment sector. So one time we also can get some sales event from some of the bigger projects from industrial business, example, NFM and Glass, that also can be there. And again, it's very cyclical, very seasonal in nature. But what we confirm to our investor right now is that we are upgrading our margin forecast to be 15%+ in the upcoming quarters. Sir, lastly, just try to say that as JSW Steel is our, one of the prime customers, so, right, JSW Steel in the call, they've mentioned that they are going to take a maintenance shutdown of the plant. So anyhow, we can expect, lower volume on that side? Yes, that's one of the material effect you also see in our Q1 top line performance. Of course, we are waiting for them to kind of, you know, come back on, and our volumes also will increase proportionately. That will impact months likely on that performance, right? Can you repeat it? Sorry, your voice, your question was not clear. Voice is not clear. That is, that will impact marginally in our performance if they took shutdown the cement plant. Which plant are you referring to? JSW, sorry. JSW Steel. JSW Steel. I'm talking about the JSW Steel. Yes. Yes, they already had the very subdued Q1, volume production or steel production. So yes, we would see the impact on it already in the top line numbers in Q1. I hope that was clear. Okay, sir, thank you for your answer and the opportunity, and best of luck for the next quarter. Thank you very much. Hmm, thank you. Thank you. As a reminder, participants who wish to ask questions may please press star and one on their touchtone phone. The next question is from the line of Lakshmin arayanan from Tunga Investments. Please go ahead. Yeah, thank you. So if I just look at our business and look at the old RHI business, and then you look at the two acquisitions which we did, how the Dalmia business and the Hi-Tech business have actually ramped up, and how much they would actually contribute in the growth for this year? Okay. So, I would say ramp up is a bit slow because, Dalmia primarily, as you know, was more dominating in industrial business than steel. And industrial business, as in the beginning, Azim was also saying, cement was not doing well, particularly in southern part of India. You know, the Dalmia Cement, on UltraTech, it is almost 13%-14% low production than, usual. Mm-hmm. So this has impacted the growth, volume growth of these plants of Dalmia. But at the same time, we have increased the efficiency of the plant, we have reduced the rejection levels, we are working on circular economy, and the margins from when we took over less than 7% to now a sustainable margin of about 12%. So it is more of, you know, looking into increasing the margin than only increasing the volume. And when it comes to Hi-Tech, we have not delivered the business plan as we wanted to because of various reasons, particularly exports subdued, CIS countries, this war in Ukraine and Russia, Europe is 35% low in steel production. So these has impacted our plans. But at the same time, now from last two months, I think, we have ramped up some production, and the margin are fantastic. It is, more than, 21% in there. So that is also encouraging. So, all in all, I would say, for profitability front, we are on track, rather, we are better than what we were assuming. When it comes to volumes, we are still lagging behind, and we need to, look into it and, see whether we can add some volumes from other businesses than the usual business we had in our business plan. ... Okay, so in the approximate INR 878 crore of revenue from operations for this quarter, how much is actually exports now for us? About 9%. 9%, yes. 9%. And, if I look at the business coming from, you know, steel production, the where we cater to the likes of the integrated steel manufacturers, how much that would be, sir? So overall, we don't give the integrated steel separately. Overall, our steel revenue is close to about 75- 80 percentage mark, let's call it like that. Okay. We don't give a specific, but just so model you can do between 75-80. Okay. I can tell you in other terms, if steel in India is producing about, say, 11, 11.5 million tons of steel, 7.5 million tons is from bigger integrated plants put together, SAIL and private sector, right? Mm-hmm. That steel is from mini steel plant and induction furnace. Induction furnace. Got it. So like for like, if you look at that, steel thing which you talked about, that number, when compared to the same time last year? Just the steel refractories. In the absolute value, the growth has been subdued, as we mentioned earlier, because of the lower performance, lower output that we have kind of now garnered. The second part basically also is that there's also material weakness coming from the export part of the steel business as well. We have a 26% drop, year-on-year of, comparison there as well. So I'm just looking at... See, if you look at export as an external, it's, it's an issue which is outside our control. I'm just looking at the domestic steel. Yeah. If you just look at 878 growth, so how much would be domestic, domestically made and domestically sold? And how much was that number last year, and how it has actually performed? I can give you this number separately, but we don't give that on the investor call, just to be honest with you back. Yes. But let me put it differently, that, we have. So from a manufacturing perspective, we do 60% from our in-house, 40% we do trading. On top of it, we try to. So it's, it's very bit difficult for you to bifurcate that number as well. Got it. So yeah, so that's why we don't want to give that specific, because it, it becomes quite detailed, information which kind of- No, I think the point I was trying to understand is, have we, you know, gained market share in the domestic steel refractory market? I would say, I would say we have gained market share in the under-represented markets, like ironmaking, pellet, DRI. Mm. Definitely, we have increased our market share. When it comes to a stable business or our stronghold, cement or steel, we lost somewhere because of the commodity competition from Chinese suppliers, like ladle business or some mixes. We don't want to, you know, have a rat race and competing with them and reducing our profitability unnecessarily. Yeah. Got it. Just to explain of color on it, as well, we are very careful in choosing our order. We genuinely believe what we are telling always is that it's all about sustainable growth and better returns for our shareholders. So that is why we would be on this path as much as possible, which doesn't discount that we say no to all orders. The question is, are we able to internally align our product portfolio, which can deliver sustainable profitability? That's the way we internally look at order by order. So yes, definitely, in the last quarter, as Parmod mentioned, we lost in the area where we have quite a significant competition from the imported refractories, especially from China. Got it. Good. It would be helpful if you can actually, perhaps, if, if it's appropriate, give some kind of granular information on the PPT, in terms of the industry you represent, what is the, you know, what is trading, what is not, you know, if you can actually give it in one shot, it becomes easier. Another question, sir, from my side, if you look at the steel refractory business, domestic, what is your outlook, for the next, in fact, for this upcoming financial year or the ongoing financial year, FY 2025? How you think this business can deliver? I'm just looking at India-made, India-sold steel refractory, because the other one you, of course, you mentioned in industrials, et cetera, they have been subdued in cement. Just looking to the steel, which is a major contributor, what's your outlook and how you think it will pan out? You know, if we talk about long term, it is irreversible. Steel will grow, for sure. Government of India is pushing a lot of infrastructure projects, right? They are going to take some corrective action about, you know, imports from various countries, Southeast countries. So, long term, I don't have any issue. It will be, you know, at the projections, what we gave about, say, six months back, that India will keep on growing at around 7%, 6%-7% in steel minimum. That is still there. Short term, yes, it was, you know, some steel plants were producing less because of very low selling price of steel and imports are much cheaper. But historically, if you see-... October, November, December are always a good month for steel, because of festival season, the stainless steel market goes up because a lot of people buy stainless steel utensils and all those things. So I still believe the last quarter will be a good quarter. Only hiccup is not for us, but total refractory industry is supply chain challenges. Because of the Red Sea issues, because of bottleneck at Singapore, you know, port, because of Colombo port. The raw material which used to come from China within 30-35 days, is taking 50-70 days. So supply chain will remain a challenge. If we can bring the material on time, all refractory industry, it's going to be a good quarter, last quarter, I would say. And long term, I said, it will be good in any case. Got it. Because I thought Chinese imports will not suffer the Red Sea crisis, is what I always believed in. But nevertheless, if you look at it, the main raw material for refractory making is actually you get from Hindalco, right? No, no, no. No, sir, it is just a refractory. It is just alumina, all raw material. 90% of world's raw material is coming from China, I would say. Okay. Not for us, for everybody. We are still better placed. We have backward integration, and if need be, we can bring material from our other mines from Turkey or Europe or Brazil or North America, but others don't have that backward integration also. If something goes wrong with China, we are doomed. We cannot produce steel, almost anything. Got it. Got it. And is this issue you find it more pronounced in the large steel or the mid-tier steel? Because as a company, our stronghold is actually in the mid-tier steel companies, relatively when compared to the large steel companies. So where do you see demand issues? So you're seeing more of a raw material supply issue and less of a demand issue. Is that what I can decipher? No, no, sir. I think you are still thinking about this as Orient Refractories Limited, which was having a very strong presence in mid-size or small scale. After this integration of these plants of RHI India, RHI Clasil and now Dalmia Hi-Tech, we are the strongest player in bigger steel plants. Mm-hmm. Mm-hmm. Okay. We have much more bigger sales than Tata Krosaki, Vesuvius, we have, we have Calderys, right? So our challenge is there also. Mm-hmm, mm-hmm, mm-hmm. Okay, okay. Okay, so is it right to assume that there are supply chain issues in terms of raw materials, but the local demand remains strong? Yes, that's what I'm saying. After this monsoon time, October onwards, we think that steel will go back to normal level. Now it is subdued because of, you know, when the monsoon comes, the construction work eventually is on standstill. So there's a less demand locally for construction steel also, which October onwards will go back to normal level. And supply chain issue, I've been talking about timing. The container, you know, freight has gone up from, say, $1,200 per container from China to almost $5,000+ per container. So this is. And timing is from 30 days to 60 days. So timing is more, transportation cost is more. That challenge, I'm just giving a heads up to you, all investors, that these are the challenges which we are facing, as well as other refractory industry will be facing. Got it. Got it. Thank you for detailed answer. I'll come back in queue. Thank you very much, sir. Thank you. The next question is from the line of Smit Shah, from Monarch Networth Capital Limited. Please go ahead. Sahil. Yeah. Hi, this is Sahil Sanghvi from Monarch. First of all, congratulations, Parmod sir, for the added responsibilities, and also congratulations for good growth on profitability and margins. First of all, I- Thank you. Yes. First of all, I wanted to understand this utilization numbers, Azim sir, you said 61% on a whole, right? And roughly, Hi-Tech is at what utilization? 58% last quarter. That's Q1. 58. And, what, RHI standalone, I mean the previous entity, 75? Yes. Dalmia plant, Dalmia entity? 54 also. 54, sorry. Fifty-four percent? Yes. Okay. Okay, okay. Secondly, can I also know the sales numbers? Would that be roughly same as the utilization numbers, or is there a drastic difference? Sorry, can you repeat the question, Sanghi? The sales, sales number, the sales, sales volumes. Yes. So sales volume- On a split basis. On a split basis, just give me a second. I'm just pulling the information. Yeah, so on the split basis, you can basically say that we are at about the consolidated level, the RHI India is at about 69, IR is at 18, and 7 is at 25. Sorry, sorry, sorry, sorry. Can you repeat, please? Sorry. I can send that to you, Sai, if that's okay with you, okay? I can repeat it as well, okay? No worries. So, the second thing is, like, you guys have, you know, discussed that, there is still a lot of subdued demand from the cement side. So how is that right now? How do you look, what is the outlook for this year when it comes to the cement side of demand? We have a very strong order book for cement for the upcoming three months. In fact, a couple of our Dalmia plants, lines are sold out for the next two and a half months. So we see a strong uptick, which is a normal seasonality in the cement, side. Okay? Got it. And, lastly, also wanted to confirm, so the pellet order size that you said is EUR 5.5 million? 5.5. INR 5.5 million, but normally we don't give out a specific size. As you know, that's too detailed information. But- Definitely, what you can, what you can assume is that quarter-on-quarter, we have a 7% growth. You can assume that as a very good stuff for modeling purposes. Got it. Got it, got it. Fine. Fine. Congratulations, and all the best. Thank you. Thank you. Thank you. The next question is from the line of Harsh, from Marcellus Investment Managers. Please go ahead. Yeah, hello, sir. Can you give an update on how the ironmaking is trending for the last three, six months? Sorry, which one? Can you repeat the question? Can you tell us how the iron prices are trending over the last three months? So iron prices- Yeah, so raw material prices for magnesia is not moving so fast. There's an upside of about 3%-5% of various grades, but when it comes to alumina raw material, it has gone up by 30% almost. For example, bauxite alumina was being sold at about INR 60,000-61,000 a ton, and now it is at INR 82,000-84,000 a ton. Just to understand this right, when Magnesia prices go up, we are a beneficiary of it, right? At the moment, as Parmod basically mentioned that, as you know, that our end customers are also facing quite a bit of pricing pressure. If you look at cement or from a steel perspective, so definitely, normally it's an opportunity for us to ask for pricing increases, but looking at our end customers' pricing, it, it looks a bit challenging. So it definitely puts some pressure on our margins for sure. But let me repeat myself, what Parmod said already, that we are still going with the outlook of 50%+. Okay, thank you. Thank you. Hello? Yeah. Does that answer your question right, Mr. Harsh? Yeah, yeah. Thank you. The next question is from the line of Rakesh Vyas from Quest Investment Advisors. Please go ahead. Hey, Mr. Rakesh- Mr. Rakesh? Yeah, my question is answered. Thank you. Your question is answered. Yeah. Thank you. The next question is from the line of Mayank Bhandari from Asian Markets Securities. Please go ahead. Mr. Mayank, your line is on unmute. Please go ahead and ask your question. Mr. Mayank? The current participant seems to have disconnected. We'll take the next question. We remind all the participants to join the question queue. Please press star and one to ask your questions. The next question is from the line of Arijit Dutta from Kotak Mutual Fund. Please go ahead. Hi, sir. Thank you for the opportunity. I have three questions. Starting from your assessment of raw material prices, which have moved up significantly, the freight container availability is a problem, the freight prices have doubled or tripled. At the same point of time, you are struggling to pass on the cost price to the customer for various reasons. How do you get the confidence of increasing your margin in this scenario? What would be the trigger that we can, if you can share some bit? That's why we are not saying we will further increase the margin. Rather, I'm just saying that we should take the 17.9% with a pinch of salt, because of these headwinds and challenges we are facing. There can be a little bit of correction in the numbers, and still we will deliver more than 15% margins. But, there's no chance of increasing further profitability under this present scenario. Yeah, and the reason why we are confident about the 15%+ is three things. One is the investments we have done, post-integration in terms of operational excellence, productivity improvement, and improvement of scrap rate. The second part basically is that we are constantly, our technical marketing team is investing into better our recipes and plans. So this is also giving us quite a bit of, improvement. Third, as you also mentioned by Parmod earlier, is that one of the side effect of improving our circular economy through improve our recycling. So we are further ensuring that our raw material, in other words, our recipes and also our product mix, we are suiting to the needs of the customer, what we are doing. Hence, what we can control, we can control, and we, we believe that we have a sustained mechanism in place to ensure that we are able to continue at that level, despite the external market impact. Sir, thank you for the elaborate answer. Sir, on the recycling part, how much you have recycled in Q4, Q1? And what is the expectation in Q2 and Q3? We don't give any outlooks on that, and we don't give any specificity, but let me tell you that we are the market leader even in India and also in our group also, we see we are the leading recycled percentage. You can always assume that we are doing consistently 13% and above for our, based on the raw materials that we use. Of course, the numbers fluctuate based on what product mix that we do, but we do far, far ahead, more than 13%+. Sir, my question was more on the data that we are getting on this recycling. Yeah. I understand that you don't give the recycling percentage, but on the basis point basis, if you can throw some light at how much it is improving? So- and in one year. Yes, sir. I give you this answer. Actually, we are primarily not using this recycled material or secondary raw material to increase our profitability. Yes. It is more of sustainability. We want to use less prime material so that we emit less CO2 emission, right? So it is first our responsibility toward our planet, toward our environment, toward our society. So this is the primary driver to use this recycled material. Secondly, we are technology leader, so we are not picking up used bricks, crushing it, and adding it into our products. We are doing this proper- Yes ... processing of this, technological, you know, way of using it. So it will not give us a quantum jump in our profitability, but it will reduce our reliability of imports of our raw material. Raw material. Now, if the freight has gone up, if we will use the recycled material, local recycled material, it will help us to mitigate that, you know, dilution of margins. So that way, indirectly, it will help. But if we talk about, you know, in percentage, what is the profitability go up, I am constrained to give this answer because it will not have a, you know, real material number, which we can give you. Right. Hope you understand the situation. Yes, sir. Well clarified. The third question is about China imports. Sir, I'm talking about the raw materials part. How much do you see that our versus our nearest big competitors in terms of import? Are we import on the same quantity or our import is bit on the higher side because of our mix? You know, it depends upon how much we are producing. So in RHI Magnesita India, we produce about 330,000 tons of refractory, and our nearest competition is producing only, say, 80,000 tons. So their import will be proportionately lower than us. Sir, I'm talking about- It will be same, right? I'm talking about the percentage of the total materials. Do you see that our dependence on China at a percentage basis, not on the absolute basis, is more versus competitor? Is the understanding right? No, it will be, it will be more or less on equal levels in percentage-wise, but in absolute value, we will be importing much more than that. Right. At the same time, as I said earlier, we have a comfort if need be, we can bring raw material from our own mines also. Mm-hmm. Group mines. Yeah, group mines. Basically, I was looking for that, that, if our own mines is giving us some advantage till now or it is not there. You know, we have three mines also in India, two quartz mine, one bauxite mine, and we are getting that, you know, advantage from that mines also. Where though it is not high value mining, right? The quartz is the lowest value product, I would say. But still, we have a comfort that we can extract those, you know, mineral from those mines. But when it comes to our group mines, we have only the comfort that if something goes wrong with China, we can bring that material and keep on running Indian economy, the steel, the cement and other plants. Whereas the competition doesn't have that luxury. But if we bring the material from, say, Brazil, where we have biggest mine, because of transportation cost, et cetera, it will be a bit costlier. But still, when it comes to the percentage of cost in a steel manufacturing, we are at about 2.5%-3% of the total cost. So if it goes by 10% instead of 2.5, it will be 2.75%. It will not have a material impact on their cost, but they can rely on us. I can just share with you, during this COVID time, all big players were talking to us that, "Can we bring material from Brazil or from Europe?" And Tata Steel gave us order for converter from Brazil. And but two days back, I got information that Brazilian converter behave much better than Chinese converter from our plants only. Yes. So we have that comfort and that the bigger plants want to have some backup, so that supply chain remain intact. We have more in those plants outside China. We have a supply chain, yeah, you know, logistics, and all those things in place, and if need be, we can convert it, the order from China to our other locations. Yes. Thank you, sir, for being so elaborative. My last question is on the flow control materials. Our... The feedback that we are getting that, the competition has even intensified more versus, what we have seen. I understand in Ironmaking we are in a very comfortable stage right now. But in Steelmaking per se, because of the capacity, the competition is, you know, detrimental to the entire industry that is, shaping up. Is my understanding correct? Absolutely, your understanding is correct. What we did globally as well as in India and our global CEO, CEO, Stefan Borgas, is very vocal about this. Refractory industry should not add capacity, we should do the consolidation. So what we did, we acquired Dalmia, we acquired Hi-Tech. We have not added the capacity. The same capacity is there in India, so we have consolidated that. But our competition is putting up new plants, which is adding the capacity. And when we will have overcapacity, then we will kill this market. So we should not be doing this, we should not be doing the overcapacity. Everybody is running now, you know, following us that, okay, RHI Magnesita did this much expansion. It is not expansion, it's consolidation. But they are doing expansion, and eventually they will harm the refractory industry as a whole. Sir, somebody gave a rough estimate... Can I finish this? It's an addition to that. Yeah, please, finish it quickly. Yeah. The last one is like, the feedback that I got that, the way the capacity has been added by the competition, it's like it can cater to another 50 million ton of steel that is coming. I mean, is that statement you also concur? We cannot comment on our competition. It's their perspective. You need to ask them. On the industry, I'm saying industry. In that case- You know, can cater to- Yeah, I can give you this answer. If the competition is start making in India with greenfield project and replacing export, then it's a good sign. Yes. But if imports keep on coming, import keeps on coming from there, and we are cannibalizing only the local production, then it is detrimental for the industry. We should look at it. You know, what we are doing intentionally, we brought the technology from Brazil to India to make taphole clay, to [dart bar]. We brought the purging plug from European plant, made in Bhiwadi plant. We brought, bring this isostatic products from, Radenthein, from Europe plant to Bhiwadi plant. So we are shifting products from, our other locations to India, so that we have the, this initiative of Government of India, of Make in India. We are supporting that. If they will do the same thing, then they will do justice to the, investment what they are doing. But if the imports keep on coming and then they have started, you know, taking a pile of other suppliers who are Indian manufacturers, then we are killing the industry. Well explained, sir. Thank you for your time. That's all from my side. Thanks. Welcome. Thank you. The next question is from the line of Mayank Bhandari from Asian Markets Securities. Please go ahead. Yeah. Thanks for the opportunity. So my first question is on the volume number you have given in the presentation for Q1 FY25. It's 114 million tonnes, right? Shipment. 114 kilotons. Kilotons, sorry. Yeah, so 114 kilotons, and you indicated like your capacity utilization for Dalmia is 54%, which gives me almost 41 kilotons number for Dalmia. Which leaves me that the rest of the business is almost at 74 kilotons, which is a decline of 6% YOY in terms of volume. Is my understanding or is this number correct? We have mentioned 6.8% decline in volumes. Again, in Dalmia we already said earlier that it- Your understanding is absolutely right. Right. So it's a volume decline in both Dalmia as well as this controlled business? Yes, sir. Okay, okay. And last quarter conference call, you mentioned 12,000 tons will be back, which we had lost in some contract. What is the update on that? We got it. We got it, but it is a phasing out, and it is, you know, as I said, because, to be very upfront, I, I told that 11,200 ton, the order we got from Dalmia, which were lost last year. But at the same time, we are saying that Dalmia plant has produced 40% lower production in their cement plant. So their consumption of refractory is a bit slow, which will ramp up probably, as we've had it, a seasonality in cement plant. So probably next quarter onwards, we will ramp up the production and we will deliver our promise. Okay, so this will still, this is still to be materialized? Yes. Okay. And, sir, you mentioned the number for these new contracts you have won in the iron making. What exactly is that? Number means what? The order you got. I don't have number in my hand. We don't give the industry-specific number, unfortunately, but- No, the orders that you received for the ironmaking and pellet plus ironmaking, you had initially mentioned a number. Yes, yes. We, we got three blast furnace trough order, and five new order from Taphole Clay. But, if we talk about the numbers, we don't have ready numbers, okay, order by order. This was EUR 1 million, this was EUR 500,000 and this... But, it, it is quite substantial, I would say. Maybe in Indian currency, INR 40-INR 50 crore or so, but I don't have an exact number, and as Azim said, we don't want to go into specifics. Okay. So in terms of the scope of the order that you will execute, I mean, it's written that you are more like a project order, iron making OEM and project order. So it also involves, I mean, it is kind of OEM plus projects, which could be a different margin structure? No, when we are talking about these orders, these are not projects, these are not OEM through orders. These are regular order, which is like a consumables, maintenance order. It is not project, new project. Okay, it is purely consumables only. Yeah. So in Taphole Clay, like, what kind of market share we would be having as of now? Any number? We probably have about 16%-17% market share. How big would be the market in India for Taphole Clay? I think it should be about INR 600-700 crore Taphole Clay market. Okay, INR 600-INR 700 crore market. Sir, thank you. That's it from my side. You are welcome. Thank you very much. In the interest of time, this was the last question for today's conference call. I now hand the conference over to Mr. Parmod Sagar for closing remarks. Thank you. Thank you very much, analysts and shareholders for your time, your support as usual. We from RHI Magnesita family wishing you all a very Happy Independence Day. God bless you all. Have a nice day. Thank you. Thank you. Happy Independence Day to all as well. Thank you, sir. On behalf of Batlivala & Karani Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.