Good evening, ladies and gentlemen. Thank you for standing by. This is Steven, the moderator for your call today. Welcome to the post-results conference call of AIA Engineering Limited. We have with us today the management team of AIA Engineering Limited. At this moment, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, please press star and one. I would now like to turn the conference over to AIA Engineering management team. Thank you, and over to you, sir. A very good evening to all of you. Thank you for joining the call. I have Sanjay Bhai here with me. This is Kunal. I hope you all got a chance to look at our numbers, but nevertheless, we'll give you a quick summary on numbers, share a bit of update on the market, and we'll get on to Q&A. We are happy that we've crossed INR 1,000 crore mark in a quarter first time in history, and we are very happy about it. We've done INR 1,080 crore of revenue in the quarter, and that came from about 73,000 tons of sales and 70,000 tons of production, you know, in this quarter. We ended the full year with 265,000 tons. That's down from 266,000 tons that we did full year last year. But this volume figure is in light of 40,000 tons that we have approximately lost on account of our reduction in sales in Canada and South Africa. Optically, while it looks like a small reduction, in real sense, you know, we've added more customers, you know, to the tune of about 30,000 tons, for the full year. This in a year where shipping costs continue to be a headwind and raw materials have been, you know, and all other items have gone through a serious inflationary trend, as you all know from most of the company's commentary. In that, you know, in that backdrop, we are happy to report that we've seen, we've done new customer addition and increased, you know, market share with our existing customers. The full year from a revenue standpoint, we are at INR 3,500 crores, INR 3,514 crores, and that's up from, you know, about INR 2,800 crores that we've done full year last year. Of course, a lot of that is, you know, accounted by the increase in the selling price. The average realization for the full year stands at $134, and which is up from $105 full year last year. The realization for the last quarter is at $148. Over the last four, five quarters, you've actually seen the whole pass-through come along, and that was a concern that many people had in terms of how will we be able to pass on our different costs, especially raw material and shipping. You will see that our numbers now are our realization reflects a lot of that pass-through, you know, come along. Moving forward, you know, our EBITDA is at INR 264 crore. That's up from INR 192 crore the fourth quarter last year and INR 203 crore in the third quarter this year. That's about 24.20% and profit after tax of INR 194 crore. Overall, we had a decent quarter in terms of financials. Some housekeeping numbers. Our export benefits, you know, are restricted to what we earn on our non-grinding media exports, and duty drawback for the grinding media and non-grinding media. Total is at INR 13 crore. At least INR 10 crore is what we've lost on account of, you know, RoDTEP and, you know, the removal of RoDTEP on grinding media and the reduced rate on non-grinding media. At least INR 15 crore, I would imagine. There's a full year impact of about INR 60 crore on account of, you know, the RoDTEP changes that came along. Our other income in terms of treasury is at INR 17.24 crore. Full year is at about 97, and that mostly compares to about 100 crore we earned full year last year. Full year last year, we also had gains in terms of some of these bond investments we had. The INR 100 crore also includes fair value gains on some items. Foreign exchange is at INR 21 crore. Full year is at INR 58 crore, and that compares to about INR 71 crore last year. A big point is about our increase in working capital. You know, we've added about INR 600 crore of working capital for the full year. And the total working capital days have moved from 170 to about 124. So as sales have increased from, you know, INR 2,800 crore to INR 3,500 crore, you know, INR 700 crore at 120 days, you know, that itself would be about 300, 250 crores, 200-250 crores. The rest has just come with the one-time addition of stock that we've done for various customers, transit stock, raw material stock, you know, and our debtor days, you know. In the quarter we see an increase in sales, a disproportionate increase in that quarter and debtor days, and that gets adjusted for the rest when you look at it on a full year basis. That's why our net cash is at INR 1,850 crores, and that's down from, you know, end of last year. We're about 100 crores lower than, 200 crores lower than what we were end of last year. We've deployed, you know, money in working capital. We've done about INR 130 crores of CapEx this year, mostly on the mill lining plant. We've done about INR 30 crore on, you know, some windmill investments, you know, and other CapEx that we have done. Total is at INR 130 crore full year, plus the dividend we paid out and, We request all the participants to please stay connected while we reconnect the management team. Ladies and gentlemen, the line for the management is reconnected. Thank you, and over to you, sir. Yes. Hi. Sorry about that interruption. I was saying that we've moved from about INR 1,200 crore, you know, 1,300 crore or 1,229 crore of working capital to about INR 1,834 crore. There's a marginal increase in the number of days from 117 to 124. The rest just reflects, you know, the larger revenue and the downstream investments in stocks, raw material stores, et cetera, finished goods, debtors. And so the combination of that has led to a cash balance reducing from INR 2,200 crore to 218 to INR 1,890 crore end of this March. I'm comparing March last year to March of this year. From a volume standpoint, we've done about 171,000 tonnes in mines and about 90,000 tonnes, you know, in non-mining application. The mining bit obviously reflects the reduction of volume that we had from Canada and South Africa. From a you know basic update for the business standpoint, the Board today you know announced a dividend of INR 9 a share, and that'll lead to an outgo of about INR 84 crores for the year. We're very happy to you know also report there's been concerns around growth, around tonnages you know and the guidance for the period coming up. Our concerns around high shipping costs continue. You know, about our inability to, you know, when you're moving from a forged solution to a chrome solution, there is a large conversation on costs and the extra shipping cost is, you know, creating a headwind in terms of growth. Like we added 30,000 tonnes of customers last year, you know, we have our sales team has projected a growth of 30,000-40,000 tonnes, you know, this year and next. That is the guidance. You know, as far as our teams are going out and, you know, approaching customers, looking at conversions, looking at bigger wallet share and this includes grinding media and mill linings both. We are happy that, you know, with the travel that has opened up, the conversations that we are having with our customers lead us to and what we have done last year in a very difficult year, you know, the customers that we've added gives us this confidence that we should now get back onto our growth trajectory. With that, we are very happy to inform that we've got back the brownfield expansion for grinding media from the cold storage. We had paused it after the COVID linked slowdown that was there in calendar 2020, you know. We are now looking to add 80,000 tonnes of capacity and doing it with an outlay of around INR 200 crore, between INR 200 crore and INR 220 crore of outlay. It's lower than our normal CapEx for this type of addition is because it's a brownfield expansion. We should be able to commission that in calendar 2024, you know, basically between 18 and 24 months from now. That's a good development in terms of, you know, giving that visibility in terms of capacity. Also happy to report that our mill lining plant is nearly ready to commission. We are in the trial phase right now. Sometime in June we should be announcing our, you know, the start of that plant. With that, you know, we are at 390,000 tons. With the mill lining, we'll be at 340,000-440,000. With the 80,000 tons of grinding media, you know, we'll be at 520,000 tons, you know, 500,000 tons of capacity for high chrome products. That's a great number and milestone that we look forward to, you know, putting in place and working towards that. The CapEx plan, the outlay for the coming year is at INR 3,300 crores for FY 2022-23. That includes, you know, 130 crores towards, you know, the balancing part of mill linings and grinding media plant. About 90 crores for captive solar renewable wind power generation, captive power generation, that's hybrid and wind. Looking at about 90 crores towards that. And about 60 crores of other CapEx. Total of INR 300 crore is the guidance for our CapEx in FY 2022-2023. Another INR 100-INR 120 crore in 2023-2024, which will be the balancing for the grinding media plant. I think those are the key updates for this quarter. From a business standpoint, I think raw material continues to be at an elevated level. Shipping, with what happened with China and the interruption that came in because of the ports that and the third and the fourth order effects of, you know, interruption with shipping because of China still haunts us. There is uncertainty around containers, the cost of the container, et cetera. I think as a business, we are moving on saying, if it reduces great, but this looks to be, you know, the near-term reality and how do we adapt and work towards that. Our ability to travel allows us to continue having more conversations and hopefully getting back to growth from this year onwards. I'll request Sanjay bhai to, you know, share his brief from the board meeting today, and then we'll get on to. Yeah. Thank you very much. Thanks, Kunal, for a detailed briefing. I think while Kunal has covered most of the points, two, three very important key takeaways that we have, even at the cost of being slightly repetitive. One, demonstration of the ability to pass on almost on 100% basis all the cost increases, that has been further continued and strongly established by the fact that there is a significant improvement in the realization. Both the cost of raw materials plus the cost of freight has been nearly 100% passed on, and that process of passing on continues. Which is a good sign, and therefore there is a significant reflection in reasonably strong profit numbers that the company has posted in the quarter and the year ending March 2022. That's point number one. Resumption of the CapEx plan at a slightly elevated capacity of about 80,000 tons. Brownfield expansion for the grinding media as announced in the board, and therefore as discussed by Kunal. At an outlay of close to INR 200 crore to be completed over next couple of years, that is 2022/2023 and 2023/2024. Reasonable surety given by the sales teams and therefore based on which Kunal has declared and we have discussed at the board and it has been declared that we should be able to do conservatively anywhere between 30-40K this year as well as going forward even in next year. As we progress, as we actually start achieving the numbers, we will talk more about it. I think I have. With this, I request the moderator to throw the house open for Q&A. Thank you very much, sir. We will now begin the question and answer session. If you have a question, please press star and one on your touchtone telephone and wait for your turn to ask a question when guided by the facilitator. If your question has been answered before your turn and you wish to withdraw your request, you may do so by pressing star and two. You are requested to use handsets while asking a question. The first question is from the line, Ravi Swaminathan from Spark Capital. Please go ahead. Good afternoon, Kunal sir and Sanjay sir. Congrats on a good set of numbers. My first question is with respect to overall activity in mining with the commodity prices, especially copper, et cetera, continuing to remain on a higher side. How is the activity across the globe? If you can touch upon whether there is an increase in plans in terms of output across the miners and is there more mines being opened? If you can give your thought process on it'll be great, sir. Yeah, sure. I think nothing more to add than what you read in the newspapers. I don't think a very specific insight about it, but clearly they're all doing well. When ore prices are good, I'm not saying high. When they're good, everyone wants as much tonnage to be produced and sold, right? Everybody's operating at a high utilization levels right now for sure. They want to take fewer downtimes as much as possible. Anything that helps with them is clearly on the table for discussion. New plants, a lot of people are announcing, you know, that they're setting up capacity, but it takes time. It's not gonna be new capacity for it to come up which would have been announced recently. That's all, a longer lead time, right? Overall, it's a good place where our customers are doing well generally, right? Mm-hmm. Nothing specific that applies, you know, that will change our fortune dramatically. Clearly, customers are keen for a good vendor having the quality of the product that we have. I think we have a great place to produce these products. Mm-hmm. you know, we've got power, we've got skilled labor, you know, all of that. Mm-hmm. We're not seeing new players coming in, you know, in large numbers to participate in this industry, so. The warehouses- Right. You know, they're not getting people for even simple things like delivery. Forget Mm-hmm. Finding people for working on the shop floor. You know, this, everything that's happened last two years only makes our model even more stronger, you know. Mm-hmm. to stand the test of time. Got it, sir. My second question, how much amount of volumes related to Canada, South Africa, and Brazil might be still sitting in our volumes of 260,000 tonnes, in the sense that you told- This year we did about 10,000 tons in Brazil. Brazil, okay. Versus what we've done about 6,000 tons the previous year. Previous year. Actually it has climbed, you are saying. Basically in spite of the duties. Yeah. We've added 4,000 tons in Brazil. Mm-hmm. For Canada and South Africa, we would have lost about between 35,000-40,000 tonnes. Okay. You would have lost that much. What kind of volumes we are still doing in those two geographies? Any sense on- Canada, we would have done about very small cement quantity in, Canada. Okay. No, nothing with the mining side. Okay, South Africa also it will be very small quantities as of now? Yeah, yeah. Very small. 6,000-7,000 tons. Okay, sir. Got it. How is our traction in newer geographies like Chile and Peru, et cetera? Any sense on that, sir? Quite nice, but like you said, you know, travel's begun now and that's our highest focus as far as grinding media is concerned. We're making all efforts. Yeah. We hope we have good news to share in next 2, 3 quarters there on that account. Got it, sir. My final question is with respect to the mill liner. Basically, have we already started engaging with our customers for sale of mill liners, given that the plant is going to start in the next 2-3 months? What kind of volumes we can expect? No, no. No, no. The plant is starting this one in the next 30 days. Okay. We started work now. Now, I mean, now that the plant has clear path to commissioning. Mm-hmm. You know, travel has started. Mm-hmm. You know, we're not gonna let the plant sit idle. Mm-hmm. We are hoping that, you know, we get a decent traction from this year itself. Okay. What kind of volumes we can expect, say, this year or probably next year? Any steady state volume numbers that you have in mind, sir? It will not help that overall. I mean, overall, we are doing 30,000-40,000 tonnes, which is both put together. Additional. Additional. Oh, I, I mean- Yeah. You're talking about additional mill liner volume from this plant to be 30,000-40,000 tonnes in the next two months. Ultimately, the plant can produce 40, you know, at 90% utilization, 80-90%, between 40,000-45,000 tonnes. Okay. Which we hope to fully utilize in the next 3-4 years. Next 3-4 years. Okay. Got it, sir. What kind of realization, sir? Basically, with all the price increases that has happened, will it be ballpark around INR 200 to the kg? That kind of realization is possible? Hello? Like you, like we already explained, there's a grinding media and a non-grinding media portion in our current sales. Mm-hmm. With what we're trying to do in mining liner, it'll, that mix will continue to prevail. It will not be skewed towards, on the lower side. I don't think you should project an upside with the realization on mining liner. Got it, sir. Yeah. Thanks a lot, sir. Thanks, Ravi. Thank you. The next question is from the line of Ashutosh Tiwari from Equirus Securities. Please go ahead. Yeah. Hi, Kunal Shah. Personally, on this guidance of 30,000-40,000 tons extra volume, so generally in our business, we would have probably done the trials and also you are fairly confident of these volumes from new mines, right? Yeah. Yeah, yeah. I mean, that's the effort that we have done. We did this in last year, right? Unfortunately, that duty stuff came up and we had to lose volumes, or this would have been a growth year for us. We are, the concern was shipping, and we were hesitating to say we can grow despite high shipping, but we spent a year with a high shipping rate, more than a year, right? The change in mindset is that Mm-hmm. We can't live hoping that freight goes down and we'll grow thereafter. That's the mindset change that has happened over the last quarter or two. Saying assume that this prevails, what does life look like? You know, what can we achieve, you know, keeping that in mind? That's where we are saying, okay, it looks like we should be able to continue to grow despite, you know, those challenges in high freight cost. Generally, these new volumes will come from which minerals? Any color? Is it more gold or copper or any color we can provide over there? Gold, iron, all three. I mean, I don't think fair to segment this at this stage. This is more a directional. Exactly. You know, for last 2 years, 2.5 years, right? 2 years, I mean, we've been discussing all sorts of problems. I think here's where we are turning that leaf, turning the page and saying, we are looking to grow now. You know, there is travel was a problem, COVID-related travel restrictions were a problem, high shipping rate, cost. You know, plenty things went wrong last 3-4 years. Yeah. It looks like that now all that is behind us. You know, the teams are in place. All efforts we've done in last two years are ready. This is a directional conversation saying it looks like that we should be able to grow. I mean, it will not be fair to go into further dicing on how and where. All that is done. You know, I think allow us to deliver on it at this time, and we'll keep sharing what we've done, you know? On the Brazil side, where we had done 10,000 you mentioned was last year, and this will attract the duty of, I think, 10%-12%, which is there on the product over there. Yeah. Is it like the earlier I know customers coming back to us or there's something else? No. It's a combination of things, Ashutosh. Is it the same customer basically which was I think in that market? We've added a customer also over there, but it is also the other customer that we had before. Yeah. I don't think we'll be able to share too much because it's information related to the customer. Yes, and whether this year 10 is gonna become 20, we don't know. I think maybe steady state for Brazil for this year. Okay. There was a mine just closed, I think. I don't recall the name. Samarco something, which was supposed to come up. No, no. The volume is expected to, you know, materialize as an opportunity. Not yet. I don't think that's continued, converted, or it's in the process of discussions. Okay. Lastly, whatever increase which happened at the customer level in terms of stocks, that is now done. Beyond this, there won't be any further addition, unless you add a new customer in terms of inventory at the warehouses. That's a tough one. See, we always explain that a high shipping cost is a cost issue, but it's also reflective of the turbulence in the shipping, in the ocean freight market, right? If I'm a customer, and if I'm waiting on a critical product, right, that can stop my plant, and if I'm buying that overseas, then I'm depending on that supply chain that I have no control on, right? If the shipping rates are higher by three times or four times, it's just symbolic of the stress and the problem that is there in that supply chain. So that's where it comes from, you know, whether what happens, you know, whether customers. The easiest way to tell the customer is that I'll put more stock on the ground, I'll put more stock in transit, so that even if there is a problem, you will not be left. Your plant will not get shut, and that's on us, right? No, I get that. I think that was logical, but I'm just saying that now that process is largely done. Explaining that it can go up. It can go up, but it can go by, you know, INR a few hundred crores plus and minus. It's not like we're putting INR 2,000 crores more into working capital, right? It'll be stock against orders. My only simple point is that it'll be even if it increases a little, it'll be against a confirmed order that the customers are to pick up. It's just where he wants us to be, deploying on, you know, on the ground. Ashutosh, in terms of number of days, if you say, the probability of number of days reducing is not there. But we should be able to maintain the same or similar levels in terms of, say, 75-80 days of WIP and finished goods, about 20-30 days of raw materials and about 75 odd days of debt. The point is that we want to grow, and if we know. As the sales grow, obviously the absolute terms, the holding can go up because we will have to stock, we will have to maintain finished goods, mainly finished goods at various warehouses. This is proportionate to the increase in sales. That way, in terms of number of days, absolute term, I think it should be more or less, it may not be able to reduce, it will not increase also dramatically in terms of number of days sales. Got it. Lastly, on the realization of U.S. dollar, INR, what are the rate that you realized in the quarter, and what should be going ahead? Average, just hang on 1 second. Ashutosh, the yearly was about 74.50. For the quarter should be about 75 and 76. I don't have the number on top of our heads, but between 75 and 76. It should improve going ahead. Okay. Yeah. Yeah, yeah. Okay. Thank you. Thanks, and all the best. Yeah, sure. Thank you. The next question is from the line of Ritesh Chheda from Lucky Investment Managers. Please go ahead. Sir, I have two questions. One on your mill lining plant. This facility and the sales cycle for this, what would be the strategy and how easy is it considering the fact that, you know, in this, we are seeing customer adoption towards the rubber plus metal-based mill lining? You know, some comments there. If we were a gainer on ferro to high chrome, here, are we slightly at a tougher situation? The mill linings that we are selling to is an application which is mutually, generally mutually exclusive to rubber, because rubber exists on the secondary and the tertiary side. Metal exists on the larger mills called the SAG mills or the primary mills. Generally, that's occupied by rubber, by metal, which is where we, our products exist. Where rubber is concerned, they're moving rubber to rubber and metal. Okay? I don't think in those high larger mills with high impact, there is a migration from metal to rubber. Generally, I mean, we've not come across such instances. We are talking of a market where we are competing with other metal linings producers. Mm-hmm. Right? The strategy is to convert them into our design versus what is the incumbent design. That's the whole play in the market. There are three or four players. All of them are developed except one. Everyone else is a developed country producer with a different cost structure. Right. First we are competing with an efficient structure. The second is more importantly, we are in the business because we can dramatically change operating parameters for a customer using our design linings, right? That's where we exist. We are not. When we were introducing alloys, it was a wear cost advantage, right? A person moving from hypothetically a rubber to rubber metal is a wear cost and the life of the lining conversation. Here, in our case, the whole conversation is to improve throughput by 15%-20%, reduce power consumption by that extent, right? The benefits are several times of the cost of our parts. The benefit that one would achieve with changing the alloy or improving wear rates are far smaller than, you know, the realm of what we are discussing right now in our mill lining strategy. What is the market size of this and those four players? 300,000-350,000 tons annual consumption. Okay. The size of those four players, and is it the same customer to whom you have to sell or you have to develop a completely new customer? No, the same customer. Okay. They're all similar consumers. You will also go through, because the plant is coming now, you'll go through your own sales cycle in this product because you. We're selling 20,000 of these parts to the mining customers from our existing plant, right? It's not a new product for us. Okay. We do, you know, equivalent size or little less size in we're already doing mill linings for cement business for last 30 years. It's not a new business for us. It's just a mining application, which is the grinding at the mining end, is something that is a catch-up for us as far as the process is concerned or the mining application is concerned. That's where we are, we've invested that time over last 3-4 years. Because we were setting up the plant, that is something that we would spend time on, and we believe now we are ready to, you know, take advantage of that. Okay. My second question is, sir, on your GP and the freight cost. What we see your gross profit per kg has continuously increased, you know, which has to an entire extent, you know, taken care of the freight cost increase. Yet we are a net gainer, when we look at your EBITDA per kg, since the last 3-4 quarters that we are seeing, despite, you know, your raw material price rise and freight cost rise. Should we, assume, you know, this absolute EBITDA per kg to sustain or, you know, there has been a fair bit of volatility in your business. We were at INR 30+ per kg some years back, then we are at about 25, 26. We started the year at INR 25, we are ending the year at INR 31. What would be your best guess, in terms of the profitability per kgs? Sanjay here. First, at the outset, I want to clarify that internally the yardstick of measurability is not per kg. We have been clarifying this on a few earlier occasions as well for the very simple reason that we work with a very diverse product mix comprising of casting and within casting family, several products like cement, tube mill liners, VSMs, our grinding, sorry, our mining liners and a variety of different products. Then there is a whole vast gamut of different types of grinding media balls ranging and tailored and customized for various type of requirement. There is not a standard product, and therefore EBITDA or realization per kg is generally not the right yardstick. We look at more as a percentage of operating EBITDA. That is point number one. Point number two, the function of increase in realization is not merely the freight cost, but also the capability for passing of the raw material price increase. Therefore, you know, this, the blended effect. Effectively what happens is the sales volume and the realization goes up, fixed overheads remain, and in absolute terms profitability improves. If you look at percentage of operating EBITDA, it actually has gone down a little bit. This is because the freight cost is passed on an actual reimbursement basis, and there's no profit element there, as you will appreciate. On the raw materials, we don't share our detailed costing, but there are generally yardsticks or benchmarks agreed based on which we keep on discussing quarter-over-quarter the price increases. I think more or less, if I may want to make a statement that at a pure operating EBITDA level of around 20 or 21%, I think we should be able to maintain that going forward with a significant increase in volumes as guided by us. We should be able to improve it also gradually as we move forward. At this point in time, we are not giving any guidance about improvement in EBITDA or operating profit margins. Again, on the GP per kilo, therefore with the same logic, we would rather want to restrict ourselves to the EBITDA percentage to sales as the most reliable yardstick, and that is where I therefore have to request you to kindly look at from that angle. Okay. Thank you very much. Thank you. Thank you. The next question is from the line of Bhumika Nair from DAM Capital. Please go ahead. Good evening, sir, and congratulations on successful. Sir, my first thing that I wanted to clarify, you said 6,000-7,000 tons in FY 2022 from Canada and South Africa. This is in FY 2022 totally, or was it only in fourth quarter? Only totally- Sorry, what is the question? Canada. Whole year. Full year. Yeah. Third quarter would have been very minimal volume, right? I mean, hardly 1,000 or even lower. All right. Wait. Okay. The other thing was Brazil has done around 10,000. I remember historically it used to do something like twenty odd thousand. Are we seeing that kind of scaling up in the next two years from Brazil as well? The Brazil answer was just an indicative. I think, like I said, we cannot keep slicing. At that time we'd lost 16,000 or 18,000 tons, so it was a material event, right? We keep losing and getting customers at times because of different conditions. Yeah, I don't think 10,000 tons in the scheme. If we're adding 60,000-70,000 or 80,000 tons in next two years, if at 320,000, 330,000 tons, our 10,000-ton volume's again becomes non-material, right? We may do more, we may do less, but given that there is one customer that has a higher volume, you know, we would prefer not to keep, you know, specifically talking about a volume over there, right? We may get 5,000 tons more, we may not, right? The materiality is now not there anymore. In our growth plans, we're not counting on it to come back. Got it. Fair point. The other thing was, you know, when we had started with the EEMS solutions, we were talking to 10, 12 customers on trial basis, et cetera. Clearly there was a lot of saving, you know, from a client perspective where we were quite positive on. If you can just give a status on, you know, how things are today, you know, what kind of volumes are coming from the EEMS, part of the business, and where this can possibly scale up to, given now that the mill lining plant will be operational. At the time, you know, we had discussed and talked about EEMS simply because we had signed an agreement with them. Our mill lining strategy is very independent of that, yeah. It is not contingent on, you know, what that collaboration is going to bring to the table. Our strategy is to bring value to the customer in addition to the wear rates and other benefits that we bring, right? There are many moving parts in that strategy. One of that is what, you know, comes to the table from that JV, you know, EEMS collaboration. If you're gonna add 40,000 tons in next three years in the mill lining space, it will be a combination of many other things that we are doing. EEMS will be one part of that. There is a lot of internal competency that exists along with other partners for offering those value-add benefits, right? Redesign of liner is one, metallurgical, you know, solutions is another, so on and so forth. Got it. Fair point, sir. This I'll come back in the Q&A. Thank you so much. Thank you. Thank you. The next question is from the line of Amit Dixit from Edelweiss. Please go ahead. Yeah, thanks for the opportunity and congratulations for a good set of numbers. I have two questions. The first one is on essentially order book, where if I see order book, it is on lower side, seems to be on lower side. Is it a function of, price or volume? That is the first question. Because now we are moved to rate contracts with a large number of customers and they place monthly orders, quarterly orders for deliveries in the near future, right? As a practice, we are not adding contract orders under the order book. That's why this figure looks, you know, I don't think that's a material figure now. Okay. The second question is essentially on your growth plan. If I look at the global major miners, I mean, likes of Vale, Glencore, and I won't go into specifics because we won't go into specifics. Their guidance is rather stale on mining sector. It's very static guidance. I mean, we talk of any metal player for FY23. I mean, just wanted to get that what gives you the confidence of, you know, achieving these kind of numbers when the guidance from miners itself is very plateaued. The number that you have are targeting 30,000-40,000 tons is quite material. A targeted conversion from forged to high chrome use. We're talking of the huge headroom that exists today between the level of penetration that we have done in the three core ores on which we are concentrated upon. That is gold, copper and iron ore, where we believe that the combined market of conversion from the present conventional forged to our high chrome use is most conservatively anywhere between just around 1.5-2 million tons per year between these three ores, main ores, okay. As again said, the penetration is about 15% between us and our competitor, which means we are focused on converting those who are existing and already operating with some other alternate product that is forged media or some different types of liners into our high chrome specific grinding media or liners. Therefore, we are agnostic. Let us assume the industry doesn't grow for next five years. Doesn't matter. We want to increase our market share or volume share by conversion, therefore, we are not dependent upon the growth. That is why our confidence, you see, because there's a tremendous effort that goes on in our sales and our project development teams. When they start interacting with the mine, they demonstrate, they give, we give them trials. Then there are, you know, mutual interactions. We go back and forth. The process goes on for one or one and a half years. It is this process which, as Kunal explained in the initial part of the call, was disrupted due to COVID, but which has now over last six months really gained traction, which makes our sales teams give us the confidence that now we are in a position to commit that, yes, there is a lot of developmental effort which is now gaining traction. Therefore, based on that, we should see this much volume, additional volume coming incrementally at least year-over-year. And this is all from conversion and not dependent upon the growth cycle or increased CapEx requirements, et cetera, of miners. Okay, wonderful. Great. Thanks and all the best. Thanks. Thank you. The next question is from the line of Bhavin Vithlani from SBI Mutual Fund. Please go ahead. Sir, thank you for the opportunity, and congratulations for good numbers. You mentioned that while you lost some 40,000-odd tons because of Canada and South Africa, you gained about 30,000-odd tons from new customers. Could you give us some flavor of who these new customers are and where we're getting these new customer wins? Difficult. In fact, we are not actually sharing the names of the customers as a matter of policy. Just to give a little flavor, the key geographies where we are very bullish and we see a lot of traction is the Central America, the Latin America part, that is the entire South Africa, Latin America, then South Africa. I'm sorry, the entire African region, Australia, CIS. These are the regions where lot of traction we are seeing, lot of additional incremental customers we have gained in the core three ores that we are talking about, that is gold, copper and iron. Fair enough. The second question is, I mean, on your upping of the guidance on the capital expenditures side from 50,000 tons to 80,000 tons. Could you just help us understand why it is going to take two years? Because this facility was actually under the expansion mode for some time and a few machines only were being held on. Why is it going to take two years because this expansion was- I think 18-24 months, right? Because equipment lead time is there, it will be at least 12 months lead time. Today a car takes 8-10 months. We are waiting, right? I mean, the equipment that we are ordering, you know, is at least 12 months of delivery time. I think 18 months we'll have to create balancing infrastructure also. You were there at the plant. You know, there is this, the expansion still needs the civil work to be done, but within the plant. What do we save? We don't have to make land acquisition. We don't have to apply for pollution, environmental clearance. Power is there. The captive substation is there with the capacity to enhance. Those things take away now today in India, anywhere between 12 and 15 months, that portion is eliminated. From the day we start to get going, you know, groundbreaking for that brownfield, you know, it is minimum 18 months just because of the delivery time, the installation, the commissioning, all that put together. 18-24 months is, I don't think it can be lower than that. Sure. It's just that the equipment lead time has gone up. Exactly. Exactly. Understand that. Lastly, if you could give us just flavor, I mean, you've talked about it extensively, but on the new mill liner expansion that we are cross targeting, do we have any case studies or, I mean, that where we have customers and we have already installed some of the trial units and then we are confident of scaling that up on a 3-4 year basis? Absolutely. No, no. More than a few now. Absolutely. Okay. We've done that. See, this is not new for us, right? In the cement side, that's a day job. Every single non-grinding media part that we install, which is vertical mill parts and tube mill parts, every single casting goes through every single solution we offer has gone through that, right? In that sense, it's not a new thing that we're doing. It's just that the knowledge for the mining application is the variable that's new for us. Everything else is something that we've done, right? The DNA is still the same. In mining we are anyway doing. Yeah, yeah. The solutions, more than a few case studies now. We are doing 20,000 tons a year, you know, already. This is adding another 40-45,000 from 20 is not even a very ambitious figure, right? It's easily doable in the scheme of things now. Sure. Last question. From the non-mining volumes, what would be cement? Because we have seen some growth in the non-mining side. Is it largely driven by cement or- All of that growth is cement. Most of that growth is cement. Okay. Of the nine non-mining, what percentage would be cement, roughly? 90%. Okay. Almost. 85%-90%. Sure. Thank you so much for taking my question. Thanks. Thank you. The next question is from the line of Amar Mourya from AlfAccurate Advisors. Please go ahead. Thanks a lot, sir. My question has been answered. Thank you. Thank you. Thank you. The next question is from the line of Priyankar Biswas from Nomura Securities. Please go ahead. Good evening, gentlemen. My first question is, like if, let's say hypothetically, if there were not much of freight disruptions, let's say, on the container availability and those. How much potentially extra volumes you could have done in FY 2022, rough guesstimate? Typically answering your question, you see when at the beginning of COVID, you know, we were all geared up for similar kind of volumes coming from FY 2021. At that point in time, we were talking of 25,000-30,000 tons per annum. I think, as a hypothetical answer, you can take it as 25,000-30,000 tons a year, which we have now clearly said and we were, you know, we were very conservative in even not giving any guidance till we saw it happening with confidence coming from our sales teams. that is why this time, while we had already indicated earlier, we are talking of anywhere between 30-40 thousand should come based on the developments that are ongoing, number of mines that are under development, the response that we are receiving from the customers, the timelines that we are anticipating, and all those things factored into as a part of the careful budgeting exercise, which is elaborately carried out by our business development and sales teams. Sir, similarly on these lines, now you are saying that probably you would do 30-40 KT over FY 2023 and FY 2024 each year. Now, I would guess that, since you are speaking of mill liners included in these volumes, and as Kunal was saying, like in 4 years, maybe you will have 80% utilization. Is it fair to assume that, within this, 30-40, at least 10-20 at the minimum level would be mill liners, or could it be even higher? Out of this 40, you can say that every year, maybe around 8,000-10,000 tons incremental could be mill liners. Okay. The rest will be your grinding media. Broadly like 25-30 KT grinding media each year, broadly. Right. Sir, one more question. There were trade actions, like in Canada and South Africa, where especially Magotteaux was the local manufacturer. Now, what I observed is that among significant geographies, only in USA, Magotteaux has local manufacturing presence. What do you think about any possibility of trade actions in USA? Is there already some kind of import duty that we face in USA? Like, what is your take on that? Any possibility about disruptions in USA? That will involve some amount of speculation on our part to say what are the odds and the likelihood. I think first of all, speaking about Magotteaux, I think it's also not appropriate for us to specifically talk about their, you know, plans and what they're working on. As a philosophy, freight was a problem last four quarters. We are now saying we'll still grow. Let freight do whatever it has to do, right? Our business cannot be contingent on a duty, on a freight structure, on price increase, on different things, right? So a duty comes or duty does not come. We're back at 10,000 tons in Brazil. We're at peak, we were at 16, right? Does that demonstrate that there is a business model and strategy in place that is far above, you know, incidental, you know, events that can come across, right? I, you know, it may come, it may not come. The point is that that's not gonna stop us from growing, Priyanka. Right now there are no duties, or is there some duties? There's a 2% or a 3% import duty from India into U.S. Customs duty. Sir, the last question from my side. Recently you had put out on the exchange regarding some fraudulent activity by some employee regarding like say on the technology front or something. Correct. What exactly happened? I mean, is there any risk that our- No, I think it's again sub judice. You know, there are things going on and it is what we have reported. I don't think we'll be able to speak more. Nothing that you know has that material implication that I can speak about right now. But it was important for us because you know it can have material consequences. It's a sub judice matter if other you know if we are not alert about it, right? Mm-hmm. Just to add. There is no financial impact. There are no financial implications as of now. Okay, sir, that was all from my side. Yeah. Thanks. Mm-hmm. Thank you. The next question is from the line of Sandeep from JM Financial. Please go ahead. Yeah. Good evening. First question is pertaining to if you can share the metal-wise split, broadly, for last year between the three major ores, just to get some sense of what contributes how much, on historical basis, not forward-looking. All three represent growth opportunity for us. We are agnostic to gold and copper, we're able to add down process benefits, which is increase in recovery, etc. Which is, that's our, those are ores of interest to us. Iron ore also is one very large market, and that continues to be our, you know, an important end application for us. No, I mean, in terms of% contribution to total volumes, how much would be each? Or It's a little bit difficult. Like, it's not something that we track because it does not, financials don't change based on that, right? We are agnostic to what ore type. So it's not something that we would, you know, really like to share, at this time, that level of detail. Okay. Second, question is on the price pass-through. You did mention that, for raw material price increase is entirely taken care of with the price hikes. But on logistics costs, to what quantum has been passed through and, you know, what still remains with us? Sorry, your voice broke. Can you repeat? In terms of price pass-through, we have passed through the entire, raw material price hike, but in terms of logistics cost increase, you mentioned it's largely passed through, but we still are bearing some of that increases, in our costs. What would that quantum be? Again, a directional answer. I don't think you should look into, you know, detail beyond that. Concept is that we are passing through, right? We thought that's gonna be a challenge, but we are passing through. That depends, you know. By the time you pass through, costs go down, then we have to, you know, refrain from holding it. I don't think we'll have an exact number saying we passed through 60% and 40% we are in the process of. There is some portion that has to still come along. There are many variables linked to it, you know. Okay. All right. One question is on the mill liners business. You did highlight that in terms of, say, 40,000 additional volume, 8,000-10,000 tons can come from mill liners, which would be nearly one-fourth of the new volumes. In terms of proportion, because we are doing only 20,000 tons in liners as of now. Wouldn't that lead to higher realization? No, we already have in our current 260 also a non-grinding media and a grinding media bit, right? When we go from 260 to 300,000 tons, that additional 10,000 is also not going to move the needle significantly, right? It will just keep the current mix going. Okay. Understood. Lastly, if on the succession plan, would you want to make any comments over there? What is the board thinking about it? Yeah, I think, Sanjay bhai. Yeah. You know, we have been very consciously over the last couple of years, the board and as well as the top management has been taking action. First, the search is actually on for a global CEO, and that is going on in very serious earnest. Second, personally speaking, Mr. Bhadresh Shah, in his individual capacity, is now practically not involved in most of the key operations. He hardly ever visits any plant, doesn't take any direct sales calls. Everything is done independently by professional teams across the globe. Business development, then marketing, that part also is practically on a hands-off sort of a position. Obviously finance or procurement, et cetera, is absolutely not being taken care. The only function he plays is more on a very wider strategic role. I think going forward, we should be able to, you know, ensure that there is a very seamless, succession plan which has been put in place. We are already working. In all seriousness, we are working on that. Okay. Instead of a family member, we'll have a professional global CEO who will be leading the company going forward. Exactly. Exactly. Sure. All right. Thank you so much, Sanjay bhai, Kunal bhai, for taking the time. Thank you. Thank you. Thank you. The next question is from the line of Aditya from SMIFS. Please go ahead. Yeah, sir. Hi there. Thanks for the opportunity. Just wanting to understand, recently India and Australia signed a free trade agreement, and since Australia is a key market for us, is there any benefit which will accrue to AIA because of this agreement? Well, actually, this free trade agreement is an additional feature. We are in the process of examining it, but the development that we do with a client is actually agnostic to any further benefit that we may get out of an FTA. Very honestly, we haven't really considered weighing those benefits, but there will be some incremental benefit. The point I'm trying to make is that we are agnostic to FTAs. Whether there is an FTA or not, that benefit itself can be translated on a one-to-one bilateral basis. I think- Like if Australia, for example, it goes, the duties are 4, it goes to zero in 4 years. There is some benefit at least for the Australia FTA. For others, I mean, it's a work in progress. My next question is, our power costs are earlier used to be around 10%-11% of sales. They have come down to 9% this year. Just wanted to understand, is this a one-off, and should we not look more into it, or are we seeing some benefits from the windmills that we have developed over the years? Wind. Renewables. It, it's- Yeah. Basically what is happening, you are looking at the net power cost. We have been progressively installing more and more windmills. You can consider 9% only, right? Yeah. Yeah. Yeah. Yeah. It's a benefit of the captive renewable that we have. Yeah. Yeah. That should be the rate going forward, or we can expect some more comment? I consider this for now. Around nine, yeah. Right. Okay. Thank you. Thank you. Thank you. The next question is from the line of Anupam Gupta from IIFL. Please go ahead. Hi, Kunal and Sanjay bhai. Just one question. You have said two things on freight. Firstly, on the existing operations, you have been able to pass it on to customers on a very regular basis, and it is reflecting in margins. Secondly, for new customers, you are saying that this was a hampering factor for conversion. Let's say when you talk about 30-40 KTI of new volumes next year, should we assume that to start off with, you'll have discounts to cover the freight just to ensure conversions, and then later on you'll be able to pass it on to customers and margins will recoup for the new customer specifically? No, I don't think so. See, what has happened, that as you mature, and as your position becomes more and more consolidated, this kind of very fin math- Yeah, it's a very simplistic. I mean, realize there'll be many other variables that may be beyond just the freight cost, right? We are saying that freak-high freight is a reality for the medium term, near to medium term. We have created a model around it, right? We have been able to pass it on with an ad- As a concept, you know, saying using pricing is not our preferred method, right? Rather, focus on value addition and then demonstrate that and work harder on it. Product mix, many factors, yeah. Sure. Okay. That's it from my side. Thank you. Thank you. The next question is from the line of Sujit Jain from ASK Investment Managers. Please go ahead. Sanjay and Kunal, congratulations. Very good set of numbers. Just on to the previous question, when eventually shipping issues get resolved in the medium term, then this 25,000-30,000 tons that could have happened, that could be additional. Is that the correct understanding? It comes with that asterisk, right? This is again a directional answer, right, Sujit Jain. We are finally going from saying we are worried this, that, COVID, to saying it looks like we're back to growth. I think allow us a few quarters, we'll have much more direct clarity, you know, as we are going, right? 30, 40 is a good number to start with and target, and we hope we do more. The idea is to keep doing that for a longer period, right? That's what the focus is right now. We do 10,000 tons more or 20 does not change the needle because we wanna become 500,000 tons in next 5 years, for example, right? That's the direction. Now, 10, 20 thousand tons early or later will not change the directional, you know, answer. Okay. The current mill linings sales at 20,000 tons, what is the capacity? 50,000 tons, the new plant. Total is about 70,000 including existing plants. Okay. You said, Australia, the current duty is 4%, and it will go down to nil in four years due to the FTA. Correct. Right. There's one question on the balance sheet. Your other non-current assets are at INR 319 crore. There's a rise there. If you can explain. Okay, I will come to that question. Non-current assets, can I take that offline with you? I don't have the answer immediately with me. Sure. You just said, I just want to confirm, the power cost would now be in the range of about 9% of sales. 9%-10%. Again, you know, we're doing power trading, we're doing renewable, right? Renewable also has a cycle. You know, it's not all 12 months. Wind is concentrated in 2, 3. Again, 9%-10%, and we'll leave it at that. It's not an exact number, it'll be this much. Sure, sure. Thank you so much and all the best. Thank you. Thank you. The next question is from the line of Amit Anwani from Prabhudas Lilladher. Please go ahead. Hello. Hi, sir. My first question is on the mill liner side. As you mentioned, you must be adding 50,000 capacity. Just wanted to understand how big this market is, what is the competitiveness, and who are the leaders now, and where does AIA would be aiming to in three, four years in this space? Hello? Yeah. Hello, can you hear me? Yes. Okay. The total additional capacity that we are creating is about 50,000 tons. The market, as we already explained earlier, of mill liners could be anywhere in the region of about 300 or 1,000 tons. We are already doing about 20,000 tons, so we should find a decent traction going forward based on whatever indications we are getting from the sales. How much would be the current market share or any competitive intensity in this space? There are major global players who are already active in this. They are all key global players with whom we are competing, but we are pitching on a unique design platform based on our technology tie-up with the American company, plus our own research that we are doing. Therefore, you know, that way we believe we are in a competitively better position, so we should be able to get a decent market share. More importantly, there is also an element of cross-selling, which is always there because while we sell mill liners, we also push grinding media and vice versa. That helps us in increasing our wherewithal to approach a customer with a comprehensive solution. Right. Thanks. The next question on the base volume. For this year, the existing base volume of 230,000 tons, how much of this volume where we are immediately competing with Magotteaux as a plant near us or supplying to the similar customer? I don't think that's an answer that we'll be able to share. I mean, we compete with the forged guys, you know, where we convert into chrome. Obviously, we compete with Magotteaux on the chrome side. Whatever is chrome is theoretically, you know, they are in the same market. Basically what we are trying to understand is how much of this volume could again be at risk of, you know, the duties which we have been facing for 12-18 months. No. I think there is a mix-up here. First, let's understand this. The current year's sales is about 260,000 tons. That includes hardly a few thousand tons of 6,000-7,000 tons of sales, which has come from Canada, where there was an anti-dumping. No. Total between 8,000 and 10,000 tons that's come from South Africa and Canada. South Africa. Yes, sir. My question was out of 260, 30,000 is from the new customers, right? Correct. After the loss, we have 230 base volume, right? Yeah. Out of this 230, I just wanted to understand, is there any volume which is at risk of competing with Magotteaux or coming under any such duties in future? No, not really. Not really. Okay. Thank you, sir. Thank you. As there are no further questions, I would now like to end the conference. Over to AIA Engineering management team. All right. Thank you everyone for joining the call. As usual, Sanjay and I remain available for any offline, you know, questions that one may have. Thank you so much, and have a good evening. Thank you. Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using Chorus Call conferencing services. You may now disconnect your line. Thank you. Have a good evening.