Good evening, ladies and gentlemen. Thank you for standing by. This is Liza nne, 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 the star and one. I would now like to turn the conference over to the AIA Engineering Management Team. Please go ahead, sir. Yes, hello. A very warm, good evening to everyone, and thank you for joining the call. I have Sanjay Bhai. This is Kunal, and we have Sanjay Bhai also here with me on the call. As usual, we'll start with a quick update on the highlights of this quarter, and we will get into Q&A thereafter. Headline numbers are revenue or sales tonnages are at 65,780, approximately 66,000 tons, up from 60,000 tons in the sequential second quarter and down from about 74,000 tons in the third quarter last year. So for the nine months to date, our total tonnage stands at about 187,000 tons. The revenue for the quarter is at INR 1,050 crores. Our EBITDA is at INR 354.57 crores, and our profit after tax is at INR 259.22 crores. So for the total profit, and that compares to INR 256 crores in the sequential second quarter, and it's a little lower from INR 280 crores approximate in the third quarter last year. So with that, our full year volume, which is 187,000 tons for the nine months, looks to be between 250 and 260, depending on invoicing, etc., is the guidance for the full year. And there is some amount, some strategy announcements that we've done through the quarter. We would love to expand a little more on that. As far as a few other numbers are concerned, our other operating income is at INR 16 crores, mostly from export benefits and a few other operating other income. Our non-operating income includes our treasury income of INR 58 crores and forex gain of about INR 8 crores for a total other income of INR 67.32 crores. I think the rest of the other numbers remain at par with our working capital, our cash on the books after the buyback proceeds were paid out. I think everything else is in sync. I think I'll head on to the important numbers, the important announcement. Sorry, before that, our realization for the quarter is at about INR 160 per kilo. And again, in line with what we have done for the last few quarters, I think raw material continues to be a little stable for the last two quarters. So our raw material cost as a% of sales adjusted for inventory, I think, is broadly in line with the sequential second quarter. So I think that volatility looks to have eased out. Also, on the freight, the shipping side of things, it looks a little better. Some corridors still continue to have elevated freight rates, but it is starting to reduce or ease up in many sectors. So that is also a positive. Moving on, the big important announcement was around our change in mindset for carrying out production outside of India. And we had plenty of questions on the context and where does this lead to. So I'll share a little bit of insight into that, and I'll have then Sanjay Bhai expand a bit after that. We are now staying put with our current capacity in India, which stands at 460,000 tons. We had earlier announced a plant in India for 80,000, which we scaled down to 36. But now, with our intent to set up production outside of India, we are now staying put and pausing any work on any further capacity addition in India. 460,000 tons of current capacity in India now looks to be the number. The two facilities that we have announced for grinding media production are in China and one in Ghana. Both have their own respective strategies. The change in mindset comes from five years of facing volatile freight environment where freight rates have gone up as high as five times, corrected back, and then went up again. I think it's an acknowledgment that we live in a very, very fragile environment where there were two wars in recent history. One still continues on, and there are volatile regions in the world. Anything that escalates affects freight rates, and that affects our whole conversion narrative or the strategy that we have. Some of the markets that we are targeting, like South America, have a very long or have a reasonable lead time. The plant in China feeds into the ability to ship with less than half the time from India to important corridors that we are looking at, while the plant in Ghana caters to the West Asian opportunity mainly for gold customers. With that having said, we are looking to set up modular plants, not scale up at one. The idea is to go up to 50,000 tons, and the total CapEx for both plants is currently established at and estimated at $50 million. Now, we are using the latest manufacturing technology, which allows us to reduce capital investment or do it in a modular fashion while being capital efficient and utilizing the best automation methods currently available in our space. That is where we've been able to reduce the spend, the CapEx, and the ability to not do very large plants. These will be modular plants. And depending on how the markets and how that picks up, we can decide on further investment. So at this time, the board has approved these two plants. We have started work on both the plants. Given that there are new geographies and given that we want to start in a modular fashion, we will be short on details right now to share. You'll have to. We'll need a quarter or two to get a little better handle on what are the timelines, how are we looking at on the early stage. But think of these as our attempt to get production closer to markets, which improves our access to certain markets, reduces freight cost, and the shipping transit time. And once we create that beachhead, we can still utilize the capacities from India to fulfill the growth in those markets. So I think there's quite a bit of strategy linked to it, but it will play out over the next two years, and we'll keep sharing updates as things mature. So beyond the point, we may not have much to share on the specifics of exactly what capacity, when will it come along, etc. So having said that, we'll have Sanjay Bhai share his update, and then we can go on to Q&A. Thank you, Kunal. Just one, so Kunal explained the logic. Now, going back to the basics about our core business from India, while we explained in the earlier calls that, yes, this year we do clearly see a degrowth, which is evident. The fact of the matter is that it is nothing structural or permanent to read about. The opportunity, the business prospects, and all our endeavors for conversion continue to remain completely focused on several mills. We do expect some good conversions to happen within a reasonable period of time, say, hopefully next one or two quarters, the way we are working on some several very, very important mills. And therefore, from that perspective, while China and Ghana obviously will add to a medium to long-term strategic repositioning of companies' initiatives and endeavors and abilities to convert the maximum number of mills into our high-chrome solutions. Going forward, till this happens, our business and our growth targets remain more or less the same, so we do expect on a rollover basis, at least 30,000-40,000 tons of incremental annual volume growth from conversion from new mines, and these new endeavors that Kunal talked about and what we have announced will help us from a two- to five-year perspective to become a very, very solid player in this field with massive opportunities that can be converted after effectively facing the challenges that Kunal has elaborated more on the supply side and the supply chain-related issues as a permanent repositioning strategy, so with this, I would request the moderator to open the floor for Q&A. Thank you, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. If you have a question, please press star and one on your touch-tone telephone and await your turn to ask a question when guided by the facilitator. If your questions have been answered before your turn and you wish to withdraw your request, you may do so by pressing the star and two key. You're requested to use handsets while asking a question. The first question is from the line of Bhumika from DAM Capital. Please go ahead. Yes, sir. Good evening, sir. Good evening. Yes, sir. Sir, in terms of you mentioned that shipping freight rates are starting to come down. So while obviously the China and Ghana plant will come in, but it'll take some time for those plants to be operational. I don't know what the timelines are. If you can elaborate on that. And in the meanwhile, with the shipping freight rates coming down, does that really help us in terms of scaling back the volumes? And by when do you expect that we come back to our 300-plus? And you spoke about an incremental 30,000-40,000 tons. Bhumika, like I said, the environment is improving. We have a few other challenges, as we've been explaining in the whole conversion journey that we are undertaking. We are still not ready for sharing a guidance on volume. But over the next two, three quarters, it looks like that we should be back on a 25,000-30,000-ton annual addition on a rolling basis. So I think not yet ready to give a. I mean, at a place where we're ready to give a guidance. And as soon as we see some green shoots, we'll be at a better place to give a better guidance. But from where it appears now, in a few quarters, we should be. In a few quarters, the visibility seems to be opening up for us to be growing at a 25,000, 30,000, 35,000 tons a year. I think we should be back on track soon. In terms of timelines, Bhumika, I think, of course, we will be making announcements, but China should start contributing something in the second half of next year. That is what the target is. But let's see. We are working very hard. Our teams are already there. Ghana should happen over the next 18 months. That is how it looks like. But this is just broad indications. We will go and make specific. Also, it is modular. We'll have specific guidance come out as the progress is a little more clearer. That should then definitely help because we at least get a trajectory that towards the end of 2026 or sometime in 2027, these plants will get operational. So that definitely helps. I understand that timelines might not be exact, but at least it gives us some direction. Sir, on that incremental, sorry to harp about this incremental volumes a little bit more. While I understand the challenges continue, conversion rates are slow, and shipping is just of late, starting to ease off, etc. But this year, we've seen a very steep decline when we're talking about 250, 260. So do we take that as a base and then look at the incremental volumes? Do we take it come back to 300,000 and then take the volume increase? Listen, whatever is reduced is not structural, but it's just a little more complex to say this is from what we did last year. I mean, consider 250 and getting us some growth from here, right? There is volume in Canada that we're expecting to come back, but that was from two years or three years ago. So all I'm saying is that when do we get back to a little more predictable growth path? I think we should be there in the next few quarters, and we'll share what those volumes look like, and the starting point has to be this year. Got it. Got it. Okay. So the other aspect is in terms of our international foray when we decided to go to China, Ghana. Why are we not looking at Chile? Because that's a much larger market for us in terms of our potential conversion. So is there a reason why we're not going directly to Chile? Is there some challenges out there that you foresee, which is where you're looking to better service? We are spoiled for choice in terms of where to go, right? So I think today marks the day where our mindset is changing. Our approach to growth is changing. I think just take it with that, right? There will be more plants. There will be more announcements around that. We have to be careful. We don't want to announce and not do it, right? And there are learnings built into it. So I mean, there is a certain strategy with which we are working, and there will be more plants. A plant in Chile could also be a possibility, but allow us some time, right? This is where we were a little better prepared. Our teams were a little better prepared. There was some work done ahead of others, and that is where we are saying, "Let's start with these two markets. Sure. Sure. Understood. And just on the current business profile, we've seen margins actually hold up quite well for the last couple of years. I remember earlier we used to guide for a more structural 21%-23% kind of a range. But over the last two years, we've kind of worked a lot in terms of our pass-through of the shipping freights, in terms of power and fuel as well as more domestic availability of raw material. So does that structurally change our margin profile more towards the 24%-26% kind of a range? So Bhumika, you're right. We have been consistently giving better margins. Even if you knock off my treasury and other income, we are talking of operating margins in the range of 27%-28%. We do believe that this is helping us through multiple factors, product mix being one of them. Again, why we have been a little more conservative than we should be is because of the fact that we still anticipate that when there is a considerable increase in volumes coming through increased conversions, there could be price challenges. But you're right, a 21% or a 22% looks to be much lower than what we can do. History is with you. Let us not speculate, but yes, we should do. I personally believe we should do definitely better than 21%-22% on a medium to long-term basis. Having said that, strategically, we are not guiding anybody for the margins, and we want to maintain that for at least a few more quarters. Sure, sir. Sure, sir. Understood. Understood. I'll come back in the question queue. Thank you so much and all the best. Thank you. The next question is from the line of Priyankar Biswas from BNP Paribas. Please go ahead. Yeah. Hi, Kunal Shah. Sanjay Majmudar. Yes. Hello, Priyankar. Good evening. So, sir, my first question is, if I recall from your statements in the previous quarter, there were some destocking-related impact at certain large customers that you had highlighted. So, what's the status on that, and when can we see those volumes coming back? So, that's the first question. I think at least for one customer, we expect that to come back from the June quarter. Some in March, but mostly in June quarter. So should it be fair to say that from June quarter and let's say the freight disruptions being largely behind, so we should be back to earlier normal quarterly run rates? So is that the. Yeah. So that is what we explained on the previous question by Bhumika, that consider the current year, let's say 250, 260, whatever we closed as a starting point. There are a few several things that have happened over the last three, four years. I mean, it will be difficult to go reconcile with each customer or each event. I'm saying going forward, and we are saying that in the next two or three quarters, it looks like that we should be back to a 25,000, 30,000 annual predictable growth rate, right? We are not in that huge yet, but we should be getting there in the next two quarters is the current sense. So for now, we are at 250, and no clear guidance for exactly the next four quarters or the FY 2025, 2026. But it looks like that whatever headwinds are settling down a bit, we should have better clarity in the next two quarters. So allow us that time to give you a firmer data point. Okay. That's very clear. The second question from my side is, see, if we are, let's say, putting up, let's say, plants in China, Ghana, and maybe later on Indonesia as how it's planned, so it would be very similar to, let's say, the strategy which our peer Magotteaux was following earlier. What we had observed is that their margins are not that great when we compared versus yours. So how will our business model be different from theirs, and how will we be able to protect our margins? That's my question. You are asking me the nuts and bolts of our strategy on a broader scale. No, just how will it be different from Magotteaux's because they don't fix margins? I mean, we are plenty conscious of margins. We believe the purpose of business is to create value for the customer and so that we also make a reasonable return on the efforts and resources that we invest inside it. Rest assured that we are mindful and will learn from mistakes that we or our competitors have made. We will make sure that what we are doing is margin-accretive rather than negative. This is just one last question here. See, in recent times, we are seeing a lot of talk about U.S. tariffs on various countries. So especially there is the possibility of, let's say, tariff wars between the U.S. and China. In that context, can you throw some light? Do you expect some impact on our volumes or, let's say, on our investments that we may be doing at China? So that's my final question. Not really. I mean, the U.S. may not be the destination country from China. I mean, we're trying to do a few things, and today it is considering that the U.S. may not be the top destination from that plant. Okay. Thank you so much. Thank you. Thank you, Priyankar. Thank you. We'll move on to the next question. That is from the line of Yash Nerurkar from InCred Equities. Please go ahead. Yeah. Hi. Thanks for the opportunity. I hope I'm audible. Yes, you are. So the first question that I had was, so what made you go global in terms of the plants in China and Ghana? So do your customers see this as positive as you being closer to the mines? And is your global competitor making similar moves to tackle the freight issue and higher lead times? I don't want to comment as much on what the competitor is thinking about it. For us, all we are saying right now is that our model was make in India and then ship to the world. Now, a large part of the world still will operate under that model. But we do recognize that there are merits in having plants where there are some benefits linked to that. And whether we do two plants, we do two full plants, whether we do 10 plants, these are works in progress because we also have to have the learnings from that in terms of what works, what doesn't work. So today, what we have announced are plants where we are going to be modular. We are looking at them being automated. We are looking at them that they don't eat into margin, but they feed into that. Now, there are several things that we need to work upon, which is where over the next two years, we will have clarity on what that means, what is the form and shape of this strategy. But for now, it looks like that for certain markets where there is exposure to high freight rates or volatile freight rates, the plant in China can help us with that. That is one assumption that we are working with while keeping the benefits of efficient production base. And making sure there is market access, right? So there's a three-pronged strategy that we are working with. We are going to make sure that the capital invested is limited. We are not dependent on one or two customers, but there's a little wider approach that we can do from that and making sure that the margins and the cost structures are not haywire. So that's where we have approached this from. Ultimately, it has to translate into higher sales, right? And that's still some time away. Today, I think the focus is going to be to make sure that we are efficient with our investments and the location and things like that, right? So that's the current effort base. We will share more information in the coming year as we get more information. So just to add very quickly, let me expand one point. When we say modular, we mean that there's a huge amount of investments in R&D, knowledge bank, knowledge base, infrastructure support, technical support that is available from India. So for these plants, you don't have to go too much on the CapEx side, and they are very efficient. So that way, things will be much better, and we will be able to control the costs and margins both. Right. So actually, I was about to ask you on the profitability as well because your manufacturing units in India are considered the low-cost unit. So how will the profitability look like for these units in China? So that is what I told the previous participant as well. This is the strategy, the nuts and bolts of strategy. It will be difficult for us to explain on a call this way. Please allow us the credit that we will make sure that there is everything right about it when we go forward with it. Right. Absolutely. We are working accurately. We are accurately aware about that, and we'll make sure we learn from mistakes we've made or others have made when they go venture out in other countries. So these are all which is where modular and being cautious about it, right? So today, again, I'll reemphasize for others who have this question that it is a change in mindset that maybe there are locations and there is a method and approach to setting up sharp, cost-efficient plants which allow us to get market access. That's the direction. Now, there'll be learnings within that. There'll be change in strategy. There'll be other things that will happen. That will happen over the next two years, and we are working actively in that direction. So which is where sharing too much information today would be a little premature. At the same time, our current business, which is dependent on. There is a freight exposure. It looks like that the Red Sea and all of that crisis is abating. And to that extent, at least that headwind is softening. But whether it will mean immediate sales, we don't know. And which is where we will have another. It looks like we'll take two or three quarters before we feel confident enough to say back to 25,000-30,000 predictable growth. We are not there yet. Makes sense. Makes sense. Absolutely. So just another question that I had on this plant is, I mean, it's okay if you can't share too much of detail, but just wanted to know in which region in China is this plant going to be. And see, I mean, most of the countries, they are kind of diversifying the supply chains away from China. So what was the reason for you to get into China in the first place, and which markets is that plant going to serve? Like I said, it's a little bit nuts and bolts of strategy. We would like to. There is a lot of consideration done on why the plant in China. In our business, it makes sense to go there. I may not get the liberty to share much more color on it today or at this time. All right. All right. No worries. Probably in the coming quarters, we will probably get to know about it. Anyway, that's it from my side, and thank you so much. Thank you. Thank you. Thank you. The next question is from the line of Anupam Gupta from IIFL. Please go ahead. Yeah. Hi, Kunal Shah. Hi, from the bank. Yes. Yeah. Hello. Yeah. So a few questions. Firstly, the U.S. tariffs came into being in the third quarter. Any impact we have seen of that so far? Not really. Not really. No. No impact. Okay. Okay. Understood. With the second question is on the volume commentary, which you said that, let's say, two, three quarters down the line, possibly you'll come back to that rate of adding 30,000 incrementally every year. But just to dwell there, what is so let's say if it was a problem of destocking of certain customers, which you said will come back in, let's say, March and June sort of quarters, what is stopping us from recovering the volumes which we lost versus last year? So we were at 290 last year. Has there been a customer loss which has resulted in a reset to 250, 260, or what is it that is resetting it at a lower level versus recovering it faster? So, just hi, this is Sanjay here. Just to elaborate a little more on what your questions are. So as we said in the previous call, there are multiple factors that we feel are attributable. So all our teams have already very aggressively taken up with all the customers. And as Kunal explained, we do expect the order book or the order inflow from the existing customers to start coming at a regular level in the next one or two quarters, primarily because of the fact that things look like stabilizing, even freight rates are normalizing. And more or less, we believe that their own mining and production cycles are also becoming normal. So that destocking doesn't go overnight. It takes one or two quarters. We believe that by end of this year or maybe from the first quarter of next year, things should. So I don't think we have lost any major customers. That is your first answer from our side. Second, more importantly, we also have, therefore, as a matter of strategy, decided that we need to rethink from a medium to long-term perspective. And that is exactly the reason why you have seen our announcements. We are very, very bullish on the prospects, medium to long-term prospects. We also have to change our gears and evaluate the situation as it unfolds. And that is what proactiveness is very critical for long-term growth of the company. And that's what exactly we are doing. As you see, our margins are good. We do expect the business potential to remain the same. I also made an announcement that very soon, you can look at some significantly large incremental orders from new mines which are under development. So everything is more or less as it is, except for this, I would say, temporary disruption and nothing really structural about it. Sure. Understood. And next question would be, sir, generally, we talk about Magotteaux in terms of competition, but we've also seen the large guy in the forged segment entering that high chrome segment as well. Have you started to see competition from them for your existing customers on your targeting? Which large guy you're talking about? Molycop? Yeah. No, I don't think so. I'm sorry. I can't go beyond that, but that really is not, I would say, a threat or a competition for us. Sure. Okay, and just one last question. One last question on the liner business. So you had put up that 50 KT capacity which came up. Then you had also ventured into the rubber liners. So, so far, how has the traction on liners been? Are we on track for that four-year full utilization which you had initially said, or what's the trajectory there? The trajectory, hi, this is Kunal. The trajectory is a little slower than how we had expected. In fact, there were quite a bit of learnings in terms of what customers are looking at, their perception, what is our approach and strategy to go break some of those customers. I think we are delayed with full utilization. I think it will take longer, and given another learning was we were sharing too much information, trying to explain everyone about liners that it also got our competitors' updates on exactly what we're trying to do. So now, as a policy, we are rolling up our volume. We are not sharing separate line item on volume and etc. with the mining liners, but it is slower. I mean, that does not take away from the fact that liners have been slower for mining. But from a strategy standpoint, they remain one of the most important opportunities for us to discuss with customers and bring in all of these suites of solutions and benefits for the customers. So as we look to add more grinding media, mill liners are an important tool to break into the customers. And just to add, these rubber and composite liners have been added very, very strategically to complete our product offering, solution offering capability. Again, we believe there is no direct competition to what we are actually offering. Okay, and this rubber composite has started in terms of deliveries or no? Yeah. We just started small quantities. They'll ramp up over the next one year. Okay. Okay. Understood. That's all from my side, sir. Thank you. Thank you. Thank you. The next question is from the line of Suraj Sonulkar from Asian Market Securities. Please go ahead. Hello. Thank you for the opportunity. Some clarification that now we will not be expanding grinding media expansion of 36,000 tons in India, right? Yeah. Right. Rubber and composite liners capacity of 20,000 tons that we commissioned in January, that included in our total 460,000 tons capacity, right? That's right. Okay, and what will be our CapEx guidance for FY 2026 and 2027? So this year, the next coming year, we'll do about up to 50 crores in renewable power. And I think we'll be done with most of the strategy as far as optimizing power cost is concerned. Up to 50 crores in maintenance CapEx per year. So once you remove that, not more than 35-50 crores of maintenance CapEx, plus our investment in the two plants that we've announced. I think our CapEx will not be more than that in the near future. Okay. So we have planned $50 million for this China and Ghana separate. That's right. Exactly. Thank you. Thank you. Thank you, sir. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. But if I think there are no more questions, we can wrap up. Sure. Thank you, sir. There are no more questions. I would now like to hand the conference over to AIA Engineering Management Team for the closing comments. Thank you so much. And as always, Sanjay and I remain available to take any offline questions. Have a great evening, and we'll connect at the end of the fourth quarter. Thank you. 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 please disconnect your lines now. Thank you and have a great evening.