Ladies and gentlemen, good day and welcome to the Godawari Power & Ispat Limited Q1 FY26 Conference Call hosted by Emkay Global Financial Services. 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 and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Lahoti. Thank you, and over to you, sir. Thanks, Nidhi. Good afternoon, everyone. Welcome to Q1 FY26 earnings call of Godawari Power. We have with us today Mr. Abhishek Agrawal, Mr. Dinesh Gandhi, and Mr. Sanjay Bothra. I thank the management for giving us the opportunity to host this call. I shall now hand over to the management for opening remarks. Over to you, Mr. Gandhi. Thank you very much, Amit. Good day, ladies and gentlemen. I welcome you all to the conference call to discuss Q1 FY26 earnings results of Godawari Power & Ispat Limited. Our financial results, press release, and earnings presentation are available on our website as well as those uploaded on stock exchanges. I believe you had a chance to review the same. I'll quickly take you through the results, after which we'll have a question-and-answer session. We have had a steady start to the year with a strong EBITDA and PAT margin of 24% and 15%, respectively. Our operational performance detail is already achieved on an average 20%-25% of FY26 volume guidance. We are confident that the volume guidance given by us at the beginning of the year will be achieved on a full-year basis. Production volume of pellets and value-added products largely in line with demand, flat quarter-on-quarter. Overall production and sales volume increased by about 15% and 13% YoY and QoQ. Realization of almost all products were flat, except galvanized products. And therefore, you can see the profitability and sales turnover more or less on the flat side. Now coming to the financial results, on QoQ basis, consolidated revenue, EBITDA, and PAT remained largely stable despite falling iron ore mining production due to delay in mining plan approval for Boria Tibu mines. On YoY basis, performance was lower primarily due to decline in sales realization. The EBITDA and PAT margin stood at 24% and 16%, respectively. The performance of Hira Ferro Alloys, the recycling unit of GPIL, was stable during the quarter. JPL achieved a consolidated revenue from operations at INR 230 crore and EBITDA of INR 20 crore. I would like to now give you a few strategic updates and operational developments. I'm pleased to announce that in line with our growth strategy and diversification strategy, the board has approved a total CapEx of INR 1,600 crore for two new projects. The first being a INR 900 crore investment in setting up a 0.7 million ton cold rolling mill complex, which will enable the company to convert HRC into CRC and manufacture the other value-added products like color-coated steel, zinc, aluminum, magnesium steel that is called ZAM, galvalume products. These are all value-added margin-accretive products which will get added to our portfolio. The project cost includes the pre-operative expenditure, margin for working capital. The project will be funded through a debt of INR 600 crore and equity of INR 300 crore through the internal accruals. The estimated timeline for commissioning of this project is Q1 FY28. That is March 20, sorry, March 27. Not Q1 FY28, March 27. Additionally, a 10-gigawatt battery energy storage system project is proposed at a cost of INR 700 crore to manufacture battery pack and container manufacturing line. The project will be set up in Maharashtra at Bidkin, near Chhatrapati Sambhaji Nagar, in a 100% subsidiary called Godawari New Energy Private Limited. The company has applied to the government of Maharashtra for allotment of land for the said project under the package scheme of incentive policy 2019, which will entitle the company for various incentives like state GST capital investment subsidy, power subsidy at a concessional rate, and subject to compliance of certain terms and conditions. The technology for manufacture of container and pack with lithium-ion cells required for the project will be imported from China. The company is in discussion with a few Chinese manufacturers for supply of technology and cell for the project. Part of raw material required for manufacture of container will be supplied from our proposed CRM project, which will supply the raw material required for the container that is still required for the container. The project will be funded by an equity investment of 40% from GPIL, and balance will be raised by the debt in the SPV. The expected timeline for commissioning this project is also March 27. Further, to update you on ongoing CapEx plan, we expect to receive all necessary approval for Ari Dongri mining capacity expansion from 2.35 million- 6 million ton by Q3 FY26 and start operation in Q4. Pellet expansion of 2 million ton is going on schedule, and we expect to commission the same in the month of October. The operations at Boria Tibu mines have resumed after getting the approval for updated mining plan for the Indian Bureau of Mines. I would also like to mention that GPIL has received an approval from PGCIL to supply steel billet to the manufacturers of galvanized steel structure for transmission projects. This is a significant milestone that reflects the superior quality of our product comparable to those of India's leading steel producers. Previously, dependence on the high-cost market source product that is steel billet and roll product restricted our offering in the segment. With integrated steel production now in place, GPIL can deliver a comprehensive and cost-effective product portfolio, driving both volume and margin expansion. Notably, GPIL is the only company in India producing galvanized steel structures end-to-end from iron ore. GPIL has also received approval of MOEF during the quarter for setting up a two million ton greenfield integrated steel project. Coming on the market outlook on the international front, global iron ore prices have remained within a range of $95-$105 per ton so far this year, currently hovering at around $100. The first half of the year was supported by weather-related production losses. The second half will see increased supply and might put some pressure on the iron ore prices. The recent geopolitical tension continues to weigh on the global demand and supply dynamics. In response, China has been providing stimulus to boost household consumption and for the first time resorted to direct transfer of cash to promote population growth. This argues well for supporting demand. On the domestic front, iron ore prices and NMDC have largely been remained range-bound between INR 4,500-INR 5,500, rising domestic steel prices and stubborn demand, supported by implementation of safeguard duties, continues to support prices. Iron ore pellet prices have followed the same trend and have traded in a narrow band of INR 8,500-INR 10,000 a ton during the quarter, with the current level at around INR 9,500-INR 10,000 a ton. India's steel output rose 9.2% YoY in January to June 2025, making it stand out in a big global environment. Amid sluggish demand steel landscape, India stands out as a rare bright spot driven by robust growth in infrastructure and construction, and this growth momentum is expected to continue in the coming quarters. With this, I rest my opening remarks. We can now open the floor for question and answers. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Vikash Singh from ICICI Securities. Please go ahead. I can't hear anything. As there is no. Am I audible? Yes. Yes, yes, please. Hi, sir. Good afternoon, sir. So my first question pertains to your BESS business. Basically, I was surprised. In the past, we have entered into solar thermal business as well and later on exited. So what actually prompted this and what kind of returns this business can generate us over a longer period of time? Okay, so good morning to all of you. So the idea to diversify into this BESS project is, so just to give you a history, I don't know how much you know about the BESS project. So the idea is all the solar generating states in India, especially states like Maharashtra, Gujarat, Rajasthan, where the solar capacity is quite high. During the daytime, there is peak generation, and by the evening, 5:00 P.M., the generation becomes zero. So what is happening is the grid is getting very, very unstable for these states, and it's becoming a challenge at the national level in terms of maintaining the grid. So if you see all the tenders which are coming out in the market now by the SECI or even the state DISCOMs of these states, all tenders are now with so much megawatt capacity of solar. For example, 100 MWs of solar and 200 MWh of battery storage, which basically means for two hours, 200 MW of solar power can be generated from the battery stored, right? And that the government DISCOMs will use to inject in the grid during the peak hour, which is from 6:00 P.M. to, say, 10 or 11, as per their convenience and requirement. So the way this entire field is coming up in India at such a rapid pace because this is something which is necessary now. All DISCOMs need to go ahead with all these qualifications to generate solar power. In the month of August, only 8 GW of tenders are going to be out by SECI and state DISCOMs. So what is happening right now is the entire container, which basically is a 5 MW container, is being imported into India from China at a 10%-11% duty. The tenders, the people who are being within the tenders, these people are importing and supplying and fulfilling the norms. The idea is to generate the domestic capacity. We want to enter into this. First phase is we won't be getting into cells, which basically requires 70% of the CapEx of the entire industry. We will import cells, which is a 5% duty, and we will do battery packs and then fit the battery packs into containers with all automation then and deliver to the consumer. This is the whole idea. To tap this market, we definitely feel to give a number, today the market rate for import is about INR 3.2 crores for a 5 MW container. So if you consider minimum, even a 5% EBITDA level for our operations, which is about INR 15 lakh-INR 20 lakh rupees per MW, and when you apply with the capacity, we are installing 10 GWs. So the ROI is very handsome. The ROI is hardly 18-24 months. So we do feel new energy is the way to go ahead in India, and that is where we want to enter this project. Steel will remain the core part of Godawari, and we will expand into steel as we have been discussing on the same platform earlier as well. This is the whole idea to enter into this. You are very right. We did enter into the solar thing 10-15 years back. Unfortunately, that didn't pay a lot of dividends. We do realize that, but this is a very well-thought, well-explored decision we have taken because I think it's time where Godawari does enter into next year's approvals. It's been three years. Our volumes have been very constant. Finally, approvals are getting in place. We found this opportunity. We know we will be the first movers. If you don't do it now, then probably if you think of doing it five years later, four years later, we might be late. The whole idea is to keep the balance sheet healthy and diversify when this opportunity develops. That's the whole idea behind this. You know the rationale. I'll note it, sir. Solar thermal also, we were the first mover. But fine. Sir, in terms of our steel and CapEx, basically, we got the environmental clearance, I believe. So if you could just give us some insight that if the composition or the total tonnage which we are looking has been changed with respect to the CapEx plan, if you could give us some more insight how that is panning out? See, we have received the EC for two million, but as discussed earlier, also shared with all of you, we will be going with the one million steam plant at the moment. That's the whole plan is. We are still working on the final optics, and hopefully, we should be able to go for the approval in the next board meeting. The idea, to be honest, is we want to announce the steel CapEx along with capacity is when we get the mining EC, which we hope we will get by the end of October, early November. So the whole idea is entire Godawari's profit is now hinges on the new mining capacity. The pellet plant will also get commissioned. So we want to make sure once we have the mining EC, then only we move ahead with any kind of investment in steel because the CapEx will be on the higher side because it's a one million steel. So the idea is to wait for the mining EC and then probably go ahead investing into steel further. Noted, sir. Sir, just lastly, one small question. We have been waiting for Public Hearing for our mining expansion for quite some time, so what is actually delaying this? No, so just to update you. No? No, so just to update you, nothing is being delayed. So this week, we will get the IBM approval for the revised mining plan. It takes about six-to-eight weeks. So this week, we'll get the IBM approval plan, which the state government now will take our notice for public hearing. It's a 30-day notice. So public hearing should happen in the month of September, post 15 September. So when public hearing happens in September, public hearing record will be submitted to the State Pollution Board, and a final generation happens. So if everything goes well, we are confident post Diwali, early November, we should get the EC. So there is no delay. It's just that the process is so long, it takes time. Mining plan has been approved by the IBM. It will be approved this week. Revised mining plan for 6 million. So it is on track. I do understand there has been a lot of delays, but sometimes things are not under control. The process is such. Noted, sir. Thank you, and all the best for the future. Thank you. Thank you. The next question is from the line of Vivek Ramakrishnan from DSP Mutual Fund. Please go ahead. Sir, good afternoon. Thanks for the call. I had three questions. One, in terms of peak leverage, as you do your CapEx plans, you've been a debt-free company lately, so what would be the peak leverage? Two, when you set up the CRM complex, you'll be buying, I imagine, the hot rolled coils from the market. Isn't that a very low-margin business, or is it linked to your integrated steel plant plans? And three, on the battery storage, which the prior questions also came, is the technology flat, or are you going to have any technological collaboration? These are my three questions, sir. Okay, just to answer you the first question. Hello, can you hear me? Yeah, I know. Hello? Very well. Yeah, very well. See, for the current CapEx which we announced, it's a 40/60 ratio, and with the current balance sheet and the cash reserves, the leverage will be very minimum, hardly below 0.5 at the moment. With the current CapEx plan announced, once going forward, once we get the mining EC and if we go ahead with the steel project announced that, then probably that might change depending on the situation. So at the moment, with the current CapEx announced, we will be taking a small debt of, say, INR 700 crore-INR 800 crore. So it's well within the 1/1 ratio. Second question was on the BESS project side. Can you come again with the question? I just missed it. Sorry, it was on the cold rolling mill. Whether the factory is in. Yeah, yeah, yeah. See, if you do understand, we worked back and forth for the last three years where we wanted to put a 2 million hot strip mill, basically preparing HR coils, right? But the new model in India, which has become a standard by the bigger players, is a 5 million single mill with a 6 million integrated capacity. So with so much of HR coil coming into India, plus imports also happening, right, in spite of the safeguard duty, we feel the premium which sellers were getting for HR coil earlier is not the same anymore. HR coil has become more of a commodity. So the idea is to further integrate by buying HR coil from the market, do value addition in the form of the CRM complex, where we'll be doing the color-coated lines, the printing lines, and also the ZAM. ZAM is basically a combination of zinc, aluminum, and magnesium, right? This is quite hot, like a hot cake in China. In India, it has just started coming in. So the idea is to make value-added steel. And in a worst-case scenario, even if we're being very conservative with all our product portfolio, I think a delta of INR 4-5 a ton is what we're looking at in the longer-term basis for a 0.7 million capacity. So the idea is to get into value-added steel and tap that market. And the third question is regarding the BESS. So the idea is we are right now open for collaboration in terms of technology. We are open for collaboration in terms of supply. And we're also open in terms of where in the first phase, we pick and choose the best suppliers, start with the first phase. And as technology because see, this is a very technology-driven industry. Technology will keep evolving, keep changing. So we have to move with everyone. So going forward, we're also open. If the technology changes, if there's a collaboration happening with a good reputation technology supplier, we can always go ahead. Nothing is fixed at the moment, but we are very much open in terms of any kind of collaboration going forward. Got it, sir. Thank you very much and wish you good luck. Thank you. Thank you. The next question is from the line of Siddharth Gadekar from Equirus. Please go ahead. Hi, sir. Good morning. First, on the cold rolling mill, can you help us understand the configuration that we are looking at and what kind of CRC that we would be producing from this asset? See, so basically, we'll be buying the full 1250 mm width. We're going to be doing pickling. Then the cold rolling mill, there are two, three different products. One is the color-coated, one is the printing line, and one is the color-coated with ZAM line, which gives you better strength and more life. So basically, the entire 0.7 million of input will be distributed into three different products of different thicknesses. So we are targeting from a 0.15 mm thickness to as high as 3.5 mm thickness, 3.5 mm thickness. So we want to cater all different segments so that our volume is not concentrated in only one product. We want to distribute into different products. So color-coated, color-coated lines, ZAM, galvanium, then also HRPO, which is pickled and oiled HR coil. So that's the whole idea. Plus, the container, the box, basically, which is made out of steel, that particular container steel will also be produced in the CRM complex. So it's an indirect backward integration of one of our important suppliers. And in terms of. So the container raw material is HR coil only, HR coil, pickle, and then cold roll. Sir, now in terms of sourcing the HR coil, where are we targeting to source the HR coil from? One. And secondly, in terms of selling the cold CRC, what are the markets we are targeting? See, for sourcing, right, being the location we are sitting in right now, Raipur, so there is Bhushan. So basically, there's JSW, Jharsuguda, then there is Tata Angul, JSPL Angul. So we have multiple options, Tata, Jamshedpur, Kalinganagar. So in terms of sourcing, there are a lot of options. It all depends. And NBC is there in such a way that they started making HR coils. So we have a lot of, plus, of course, imports. So sourcing is not an issue. Everybody is a seller of HR coils because the volume they've created for themselves is so huge, and they haven't put up lines to convert everything, every HR into CR. So there will always be a seller of HR coil in the market. So that's the sourcing part. In terms of finished product, see, we are not very restricted to we want to sell in this only area, depending on demand and supply because we are not the only producers in this market. There are other players, established players from before on. So it all depends how you brand it in terms of quality and which market you want to target. So once we start making it, that can depend on demand and supply. So the idea is to focus the entire area. We're not thinking about focusing on XYZ and then not do that. So. The technology for the CRC mill, will this be a brand new plant? So, technology, it's from. So the main mill is from John Cockerill, which is a Belgian-based company, then SMS, which is again a German company. So it's a mismatch. So depending on the critical side of the operations, we have gone with the best supplier. So some are European, some are domestically supplying some things from China as well. So it's a mismatch, but we ensure there is no compromise in the quality so that best things are procured from the best suppliers. We have ensured that. Lastly, when would we be doing the ordering for this equipment? See, now we've got the board approval. So now we will move ahead with the fine-tuning of the entire proposal. And probably, I think when it is quarter, we should be in a position to place the orders. And post Diwali, once monsoon gets over, the idea is to start the civil work in November for both the projects. And so where will we be putting up this plant? It will be the same location where the steel plant was supposed to come up. Yes. So CR complex is already the part of EC for the new which we have received for 2 million. So it will be in the new location along with the steel complex. So secondly, on the battery storage, there also, we have done any ordering or we will be looking to do the ordering? No. No, no. We haven't because we had to take the board approval, which we received yesterday only. Now, since we have a go ahead from the board, so now we have done our working. We have done our homework. Now we need to finalize things with the suppliers and fine-tune things. So as I said, that might take a couple of months. And the idea is to eventually start the groundwork in November for that project as well, the battery project. So, last question. On the steel plants, when are we looking to target the one million steel plant, or that is some time away as of now? No, it's not away. To be honest, we are very close to finalizing our CapEx, last bit of remaining things. But the idea is because the steel plant CapEx will be on a substantially higher side compared to these two ones. So we want to move ahead only when we get the approval of mining EC. Because today, Godawari's entire profit going forward, which is to be deployed, depends on the mining EC because our new pellet plant will also be commissioned in a couple of months. So we are waiting for the mining EC to be received. Once that is received, we will take appropriate approval from the board and then make a release to the exchange. That's the whole idea. Lastly, we will be targeting long steel in this or flat steel now? No, we are not looking into flat. Basically, we are looking into long steel. Basically, we are looking into value-added steel, which is structures primarily that we're working on. So basically, we want to produce if you see, right now, we just got approval from PGCIL supply. So the idea is to have an entire basket of products where they can cater from transmission lines, railways, infrastructure. We want to produce higher category beams, 600, 800, 1,000-size beams, which are primarily used for infrastructure projects. So the idea is to enter into value-added steel now and move away from commercial steel. Okay. Got it. Thank you so much. Thank you. Thank you. The next question is from the line of Manav Gogia from Yes Securities Limited. Please go ahead. Yeah, hi. Good afternoon, and thank you for the opportunity. So one question I had, we are probably also nearing the greenfield steel plant coming up. And along with the INR 1,600 crores of CapEx that you have announced, can you give me the CapEx outline for the next couple of years? And how do you see the debt part going up, especially if the steel plant kicks in? Do we intend to take on more debt for the greenfield steel plant? See, the idea is for this year, for 2023, which is running, we have certain ongoing projects which will be completed in this year as well. For the next year, which we've already announced, we need to do a CapEx of INR 1,600 crores, out of which about 900 will be taken on the books and the remaining will be invested. So we are doing about INR 100 crores of free cash every year. So you can assume whatever we generate next year, that will be utilized in the two projects which we already declared to all of you. For the steel CapEx, as I mentioned again, it will be only moving ahead after the mining approval. So if you see once the mining approval is received, and when our pellet plant getting commissioned, so our free cash drastically goes up from FY27 because of additional volumes coming in from a pellet and as well as. So if you take that into consideration for FY27 and FY28, we should do about a free cash of minimum INR 3,000 crores basis the mining approval. So if we're able to do that and assuming a steel plant CapEx of, say, INR 4,500 crores-INR 5,000 crores, so we will be much below 1/1 debt-equity ratio. So the numbers are very well worked out. We have defined a timeline of which CapEx, how the money has to be deployed. And basically, with that, we will be going ahead. Sure. So, and for the steel CapEx, do I assume that it should be peaking out more during FY28 rather than FY27? Is that the logic to use? So if you see, if you want to break it up, so probably you can say 20% in FY27 and probably say 60% in FY28. And then probably last remains with 20% in FY29 because ordering requires only 10% advance. But then as the project progresses, right, supply starts, that is where the major deployment of cash will happen. So FY27 will be 15%-20%. Maximum will happen in FY28. Sure. Got it. Got it. When the supply starts. Yeah. Got it. And my other question is on the company's diversification policy, which we are currently into with the battery storage plant. How do we basically study these projects going ahead? And do we see more such projects on the diversification side from steel coming up in the next couple of years apart from the battery storage? No. See, to be honest, if you talk about the diversification strategy, so we have the option today with all this Make in India concept, right? So we have been looking for different business opportunities from the last two years where either a lot of imports are happening to India, so you can create a domestic capacity, which the government also wants, or you enter into a new energy because energy is something which is here to stay, be it on the solar side, on the renewable side. And now, of course, the best is the latest addition to that basket, I would say. So the idea is we feel energy is going to be a cash cow for all the Indian businesses because the way India's demand is going up, accordingly, challenges are also creeping up in the market, right? For example, grid stability is happening. A few states are running short of power. So we always wanted to focus on the energy side. We found this very lucrative. We have done our homework from the last six months, and that is why we are going ahead with it. So we do not say we want to keep diversifying, but if there's an opportunity present going forward also, we won't mind taking that route. Got it. But we will ensure. Somebody also mentioned in the first call what we have done earlier. We do understand that, and we have realized that. And accordingly, we will make sure we are never over-leveraged, and we don't run tight on when the market turns around. So we are not running tight on cash. We will ensure that. That is the whole idea. Got it. Got it. And just an add-on with the subsidiary that we have for new energy now, do we intend to remain only an assembler or probably evolve into a full-stack energy storage company down the line, five, six years, if that is a focal point going forward as well? Since the whole idea, how we picked up this was, if you see the solar industry in India, right? 10 years back, it was hardly peanuts. There were hardly a few players. But post COVID, there has been, I would say, a rat race when it comes to investment into solar modules capacity, right? India is adding about 30 gigawatts of renewable every year with the target to go up to 50, 70, 100 MW every year, right? 100 gigawatts. So the way solar industry evolved into India was at a very slow pace. So initially, they put a 40% tax on solar modules. That's how a lot of people invested into making solar modules in India. Now, the government has come up with ALMM for solar cells, which is a key component for solar modules. So from 1st July 2026, Indian manufacturers cannot import cells. They have to manufacture into India. So now, all companies are investing heavily into solar cells because solar cells require a huge CapEx, right? Similar way, we feel BESS has just picked up into India. Right now, a lot of imports are happening. Slowly and slowly, the way we are getting into manufacturing, others will also do. So once renewable capacity comes into India, government policy will come such a way where they will put duties, they will restrict imports into India, and make this business more lucrative. So we are taking a cue from the solar module space. And we feel the way it's progressing right now, similar things should happen in this category as well. That's the whole idea. So the idea is to put 10 gigawatts first phase, then ramp up to a few more gigawatts. When we feel there is support of policies, we will also enter into solar cell manufacturing, sorry, battery cell manufacturing. We are also open for collaboration for tech transfer. The idea is it is a long-term idea. It's not a short-term idea. It's a five-year, seven-year down the line idea. Got it. Got it. So just one last question. That the battery storage unit is going to be somewhere in Maharashtra, whereas the. Right. Aurangabad and Sambhajinagar Industrial Area. It's called AURIC. Yeah. Okay. Got it. Got it. So the battery storage unit is going to be in Maharashtra, whereas the CRM unit is going to be in the state of Chhattisgarh and Raipur. Right. Right. How do we look at the logistics of supplying the CRM towards container manufacturing in Maharashtra? So no, no. I don't need to say distance-wise, Aurangabad to Raipur is hardly 5 km-10 km. So by road, by rail, if rail is available, we can sell basically. We'll be selling the raw material, purchase raw material. Eventually, assembly of containers will happen in that Maharashtra factory only. So only the coils in different shapes will be sending from Raipur. So we don't say challenge them so loosely. And we already accounted that in terms of the raw material price for making containers. Got it. Got it. And what would be the captive requirements? I mean, I'm assuming you'll be making around about 2,000 units of these containers, right, if we assume a 5-megawatt capacity per container. See, we'll be doing about six containers every day. So you can easily consider six into 320 days of working. So around about, yeah. So 2,000 containers is right, what we estimated. Perfectly fine. Sure. Sure. Got it. The idea is six containers every day to achieve a capacity of 10 GWs. Sure. Thank you so much. I'll join back to you. Thank you so much. This is no longer being recorded. Thank you. Thank you. The next question is from the line of Sahil Sanghvi from Monarch Networth Capital. Please go ahead. Yeah. Hi. Good afternoon. Thank you for the opportunity. My first question is, roughly, any understanding as to how much of the current demand for this BESS is important? See, right now, if you see, just for information, in August month only, there are 8 GWs of tenders out in the market by the state DISCOMs and in EPC and other respectively. So if you see eight gigawatts, which is 8,000 divided by five, so roughly about 600 containers is required, is up for bidding in the month of August only. And this figure will keep going up every month on month. If you can follow subscriptions like Renewable Watch, you'll find every day there are 10 tenders, 20 tenders being uploaded in the system for bidding. And everything's input. Right now, one facility of one gigawatt is being commissioned in Pune, and two gigawatts has been commissioned near Bombay, right? Other companies, for example, Tata has done a 100 MW battery storage in Chhattisgarh, Rajnandgaon, where they have tied up with a company called Gotion High-Tech, which is again in China. So they have supplied the containers to Tata, and they have won the tender and installed a 100 MWh battery storage. So now, close to more than 99% is being imported into India with a certain duty. Duty on sales is 50% of that. So if you consider everything put zero, whatever we manufacture in the way you sell it, saving 5% of duty itself will give you a margin of INR 15 lakh-INR 20 lakh rupees per MW. That is the whole idea. We are being so conservative. So the demand is going to keep going up month on month. You're saying roughly 80%-90% of the demand has been imported for this product? More than 95%. More than another 98% right now. Now, India people have finally somebody's done a tie-up. Somebody started doing retrofit. Somebody's doing pick and choose. [Foreign Language]. And now they're entering into investment into battery. So probably somebody will do containers. Somebody will do only battery packs. But nobody's entering into sales right now. So sale is where your 70%-80% CapEx is required for the entire supply chain. Right. Right. And roughly, what kind of margins do you expect to make over your margins and ROCEs? So see, today the rough value of one container being imported into India is about INR 3.2 crores-INR 3.25 crores, which is about 3.25 divided by five. It comes to about INR 55 lakh per MWh. So assuming we do a minimum margin of bare minimum margin of 5% only, right, on a INR 3.25 crores, it comes to about INR 15 lakh-INR 20 lakh. So when you multiply that with 10 GWs, which are almost 10,000 MWs, the numbers are as good as INR 350 crores-INR 400 crores at 10 GW capacity. So we're looking at ROI is more than 40%-50% at an investment of INR 700 crores, which includes the one-time land cost, infra cost, also includes the working capital. So the machine investment is only about INR 250 crores. Machine and shed. Remaining is the working capital because cells have to be imported, so working capital is going to be on the higher side, plus one-time cost of the land, which will be given to us, one-time cost of the infra, fulfilling their conditions of land, power connection, and all those other things. When we do a 20 GW, probably say we do another 10, so the CapEx will be less than 50% of what we're doing right now. Right. Right. So I just wanted to, I mean, I understand the whole story and the attraction about the whole demand scenario, but then profitability-wise, we are getting into low-profitable businesses. So don't you think that's something that's not the right? It is low-profitable, but then the volumes can be very high. So for us, the idea is if 10 GW, going up 10 GW, the whole idea is if everything goes well, we want to take it to 40 GW. That's what the plan we have submitted to Maharashtra government for the policy. So the idea is to scale it up. It's more of a volume game. When you do a 5% EBITDA, but the moment you multiply with the volume, you get the numbers against the investment against the investment, and steel, we are very clear we want to go ahead, but then we're not looking at a volume game. If you want to do value-added steel, which requires a certain higher CapEx compared to probably a commercial steel, but then we want to do a volume game. So if there's an opportunity, we felt right, and that's why we have diversified. Got it. Got it. And lastly, whatever tech, you will require a tech collaboration over here, right? And that will entail some royalties or some fees over there. How do you think about that? See, it depends. Is it margins after considering those? Yes, it is. It is. So right now, we are very much open to do pick and choose, best of these machines from the best suppliers. In the long-term basis, when we want to further backward integrate, say we want to do cells. So we have also had discussions with a few companies on tech tie-up. The structure can be in the form of equity or a royalty. It depends on the Chinese and Indian government law as well. So we are very much open. But for the 10 GW, we are also okay doing pick and choose with the best suppliers. But it's a long, long story. It's a very long, long story. So it's not a short-term thing we're thinking of. Okay. Okay. Thank you. Thank you. I'll come back in the queue and all the best. Sure, Sahil. Thank you. Thank you. Before we take the next question, a reminder for the participants and anyone who wishes to ask a question may press star and 1 on their touchscreen telephone. The next question is from the line of Aditya Welekar from Axis Securities. Please go ahead. Yeah. Thanks for the opportunity, sir. Again, on the battery energy storage front, so I just wanted to understand, we will be just in the EPC part of it, right? We will not be operating? We are on the EPC part of it. Basically, we'll be suppliers of the containers. So people who are bidding for tenders, and they won the tenders. So people who are right now importing from China. So instead of importing from China, we can be one of the potential suppliers. So the containers they are importing from China for five megawatts, Godawari New Energy will be one of the suppliers for the five-megawatt containers for the end use. Understood. So see, the context is we have seen the capacity fees for battery electric storage coming down from INR 10 lakh per MW per month in August 2022 to currently it is almost INR 4 lakh per MW per month. Very correct. There is a steep fall because of the fall in the lithium battery prices. There might be some pressure on the utility generators that they want to bid. Currently, also the bids are very competitive. In that context, our margins will be secured, right? Because we are just supplying parts. Exactly. We are not entering into where we want to bid tenders. Basically, at whatever price, somebody is winning the tender bid. Eventually, either he'll import from China or he'll buy from India or he'll make his own containers. So we'll be one of the suppliers of containers. I mean, nothing to do with what price the tenders are going at. Nothing to do with that. Understood. Understood. Then from that perspective, is there any possibility that we have seen for solar modules? That the government has put that approved list of solar modules? Exactly. It's called ALMM. Yeah. Yeah. Yeah. So there is a DCR, basically Domestic Content Requirement. Exactly. Very correct. Very correct. Yes. So is there any possibility that for battery storage also that the imports will be restricted from China and we have to manufacture the cells domestically? See, as I said earlier, we have picked up this from the solar space as well. We also have this in mind. The moment India is able to manufacture the desired capacity, where the demand is coming from all these tenders, I'm sure government policies will be framed in such a way that they will protect the domestic industry. The way they are turning in case of solar cells, like solar modules in themselves. We are hoping government will take a cue from this policy, and the same kind of policy will be implemented. Of course, provided enough capacity expansion happens in India in terms of manufacturing of these containers, then only government will come with its first policies. We feel we are one of the first movers, and in the longer run, we will be one of the beneficiaries of such policies. Right. Right. So what I understand is that our margin will be protected irrespective of. 100%. 100%. 100%. And then from unit economics perspective, you said that definitely that the sales will be the major cost. So Balance of Plant, what will be the if you can just throw some light on CapEx and how much will be you will require for in terms of working capital, how much will be battery and then how much will be the steel? So apart from the. Exactly. I'll tell you. So cell is roughly so if you do a breakup of the entire container, so consider cost of $65. So out of which $65, $35 is about the cells, which will be imported. $20 is about the battery, the BMS, which is basically the battery management system, which is like the USP of technological suppliers. And the remaining $10 includes everything else: your containers, steel, your fire protection, and other necessities. So the breakup is $35, $20 for the BMS, and then the remaining $10 is for your other necessities to make the entire container. This is a rough breakup. Understood. And our ballpark margin means per container or in percentage? See, worst-case scenario today, price of container is at INR 3.25 crore. So if you even consider a minimum margin of 5%, it gives you about INR 17 lakh-INR 18 lakh rupees. So when you multiply that with 10 GWs, it comes to close to INR 350 crore-INR 370 crore. So the investment of what we're doing right now, so we can see an ROI of more than 40%-50%. Understood. Understood. And this margin will be mostly fixed, right? If the raw material prices change, we will be able to pass on that. Of course. Yeah. Of course. So whatever we import, if that goes up, say, domestic price can also go up. Demand is much more than the supply. So the selling price will also go up. So it will keep happening. It's part of the business. Perfect. Thanks a lot. Thanks for answering the question. Thank you. Thank you. The next question is from the line of Vinit Thakur from Plus91 AMC. Please go ahead. Hi, sir. Thank you for the opportunity. I would like to know why is there a jump in the galvanized color-coated product on a year-on-year basis? As we see last year, we did around 13,000 tons, and this year we're doing around 24,000 tons. What would be the guidance regarding this? See, as you are aware, Mr. Gandhi also mentioned, we have received the part approval to supply into PGCIL almost three months back, and now we have received the second part. So now GP part, the galvanized product, we have complete approval to supply into PGCIL, because of which the volumes will further go on. You're comparing 13 to 23. I think from this quarter and next quarter onwards, you can see the volumes crossing 30,000 tons every quarter and quarter. Because since we have received the approval, so now we are eligible to supply to all the big EPC companies like Kalpataru, KEC, Tata, Adani. So because of that, and the demand keeps going up because the way the transmission lines have been laid into the country. So the volumes will keep going up, and you can also see more healthy margins coming out of the galvanized product business now after the approval we have received. So are we looking to increase the capacity for galvanized fabrication products because right now we're doing around? To be honest, last month only we received the final approval. So once we get established in the market, we are able to run the entire plan and full operation for six months, eight months, and then only probably we'll think of investing in the new CapEx. The idea is to first get the money back, whatever we invested last two, three years, and then probably think of investing into further. Okay, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Vedant Sarda from Nirmal Bang PMS. Please go ahead. Thank you for the opportunity. I want to know the CRM complex project. We are targeting the capacity of 100 million tons. So what kind of margin we can expect from that? We'll be looking at a margin of, say, INR 4-INR 4.5, INR 4-INR 5 per ton of the finished product. So we will not be restricted to one single product out of the CRM complex. We will be making three, four different products. So one is the color-coated line, one is printing line, then there is ZAM, which is basically a part of improved version of galvanized coating. So again, thickness from 0.15- 3.5. So we want to enter into all kinds of products of value addition where the application is different. Some is in automotive, some is in household. So depending on the demand and supply, we can always change the configuration of the output in steel. The input remains 0.7 million ton, and we are targeting the EBITDA of, say, INR 4-INR 5 a ton. Okay. Thank you. Thank you. Thank you. The next question is from the line of Kunal Sukhwani from Indvest Group. Please go ahead. Hi sir. Thank you for the opportunity. My question was regarding the Boria Tibu mine. Basically, what is the current efficiency with what we are getting from that mine? And what is the beneficiation need? And what will be the cost of beneficiation? Okay. Boria, the current mining capacity we have is 0.7 million ton. The average grade in Boria is right now about 40-50. It's again a part of magnetite family. And so right now, since we don't have a plant in Boria mines, we're getting the entire ore in the plant and beneficiating. So here, the yield is about 50%-55% because the efficiency is on the lower side to maintain the quality of concentrate and pellet. And the cost is hardly INR 250. Beneficiation cost is not very high. It's very, very, very minimal. And so from Boria mines, we are further increasing the capacity. We have started working on filing the revised EC to the state government. So from 0.7 million, we'll be taking it to 3 million ton. And also putting up a plant inside the mines to beneficiate so that we do not pay extra transportation costs, which we are currently doing. So the idea is to beneficiate in the mine, make a high-grade concentrate, and directly bring it for use in the steel making. But that will take about three years. So the idea is to club the commissioning of Boria beneficiation along with the new steel plant, which is about three years from now on. Yeah. Sir, similar for BMQ, BMQ, what will be the yield and what will be the beneficiation cost? See, the overall cost remains the same. There's a key in BMQ because the efficiency is on the lower side, say 30-35. So the yield goes down to 40%. So if you factor in imports, basically the Boria mines, you can say a cost difference of about 20% because there the yield is 50%, here the yield is 40%. So 20% yield loss will increase your operating cost by 20%. That's it. Not a major difference. Okay. Sure. Thank you, sir. Thank you. Thank you. Thank you. Ladies and gentlemen, please limit to one question for participants and rejoin the queue for the follow-up question. The next question is from the line of Divyanshu Kumar from Creating Alpha Wealth Fund. Please go ahead. Thank you for the opportunity. So my question is related to the EPS, which has been dropped to 3.5 from 4.5 last year Q1. Could you explain what led to the drop in profit? Was it due to lower prices, higher cost, or something else? And also, what will be the estimate for the year? Thank you. Dinesh. Sorry. The drop in profitability, as I had mentioned in my opening remark, is primarily because of the reduction in selling prices, fall in selling prices. Our volumes are more or less consistent, maybe one quarter here and there, but overall, the fall in profitability in Q1 is mainly because of the fall in sales realization. Hello. Thank you, sir. Thank you, sir. What's the estimate for the year? Estimate for the year is very difficult to guide in the sense that since we are giving the volume guidance, it all depends on how the selling prices rule. But we believe that we are expected to enter into the busy season and prices have already started moving up. So this is what we believe that it should be the benchmark. It should be better from here on. This is how our understanding is, but it's very difficult to predict on the pricing side. Okay. Thank you for the answer, sir. Yeah. Thank you. The next question is from the line of Ashish Soni from Family Office. Please go ahead. Sir, regarding BESS, the tech products, sir, are you open for is it Japanese or Chinese? Because we have faced. No. To be honest, no, no, no. I think no one beats China in terms of technology for what is best. We have visited a lot of companies, and our tech transfer, of course, we will ensure whatever the Indian laws permit, how the tech transfer can happen, we will explore that, but whatever is going to come at the moment for best is going to come from China. According to us, nobody can be cheaper than China in terms of this technology. We are very sure of that. But we have seen challenges with existing players where they're tied up with Chinese and all. They are not able to scale up. So will there be some learning? Or are you hopeful that it will go through smoothly? See, because what we have understood as an industry is that the major tech goes into the cell making, which is probably you can say the heart of the entire business, right? So right now, we will be importing cells from regular suppliers for which we'll be doing some kind of tie-up. Once that is sorted, remaining battery packs and containers is more than the assembly. It's not a very tech-heavy, I would say, supply chain where things can go wrong if the tech transfer company is not performing as per the commitment. So the challenge is probably making cell for which we have to do a tech transfer or tech tie-up. But when it comes to assembly, we don't see it's a very technical, tech-heavy thing to do. But this cell manufacturing, when do you plan to start and how much investment per megawatt or per gigawatt to require from your perspective? See, to be honest, we haven't worked out because cell can only happen once the policy by the Indian government restricts import of cells into India. Because today, even if you want to make cells, you will never be able to make money because the prices from Chinese are way lower because of the volumes. For example, I saw a single location of Chinese manufacturing where they were doing 20 GWs of cell manufacturing only for the battery, 20 GWs single location. So when you compare to that scale, it doesn't make sense at all to enter into making cells right now. Better to import cells at a 5% duty and then do the remaining part. We have the idea. We want to provide it. We have to keep making money. The way it happened in solar. So earlier, 40% duty on solar modules. Then government came, no duty. You can't import. It's banned now. So that people start manufacturing in India. Now they have come up with PLI for cells now. Today, cells are being imported from China. But from July 26, you can't even import cells for solar modules. So now people have started investing into solar cells. So as industry progresses, technology keeps changing, we will also evolve so that we don't get left behind in the race. Is it safe to assume like three, four years out, we'll be more away from the cell manufacturing approximately? 100%. At least we don't see at least for next two or three years, for sure. At least minimum two to three years. Unless the Indian government really comes up with a very, very probably they come with a policy very soon, which we don't see happening because the industry started going in India. Now people are trying to understand what is best. So I think it's a long way to go, yeah, to be honest. Thanks a lot for it. Thank you. Thank you. The next question is from the line of Aditya Agarwal from Finavenue. Please go ahead. Good afternoon, sir. Am I audible? Yes, you are. Yes. Sir, I just wanted to know about the pellet pricing that we are forecasting for next 12-18 months with the kind of pellet capacity that is coming on in the market. Like Lloyds is also planning a major CapEx over there. We are increasing our capacity. So what pricing do we forecast? Because you know. Yeah, I do understand. Yeah. Yes. Firstly, the price band for a commercial pellet of 62 Fe-63 Fe, I feel it will be hovering, I would say, INR 9,500± 10%. So a range of, say, INR 8,700-INR 8,800- INR 10,000. That has been the trend in the last 18 months as well. So I don't see any change. For example, last month, the pellet prices were as low as INR 8,600-INR 8,700. And with steel prices going up by 10%, today pellet is about INR 9,800-INR 9,900. So the price band remains intact, which is about, say, INR 8,500- INR 10,000 in the longer term. For Lloyds, they have already commissioned the pellet plant for beneficiation. But they haven't started targeting the DRI market. What we understand is they're also a big supplier of iron ore fines into the DRI market with different pellet players. So if they do flood the pellet market with pellets, eventually the pellet prices will take a hit. And that might force them to keep away from the pellet market. So our capacity is being added into the pellet market of 2 million. But you need to understand our capacity is being added with backup of iron ore mines. Today, if you tell me you want to put up a merchant pellet plant where you have to buy fines in the market, I will not make a single penny. Today, pellet, you cannot make money by buying fines in the market. The whole idea is to supply your own iron ore from your own mines and then make money. So I don't see a challenge in terms of pricing because of our supply because Lloyds is still away from this particular market. And we will be the only addition. And right now, there is a shortage of pellets in Raipur because the DRI capacity in Raipur has gone up at least 2x. So everybody who's also into steel making has went into additional capacity of DRI. So right now, today, the pellets are in shortage in Raipur market. Other people are waiting when will a plant get commissioned so that the demand and supply can come to the same level. So for me, a long-term basis, INR 9,000-INR 10,000 ex Raipur is very much achievable. Yes, sir. Sir, and any plans on further blast furnace in our plants or on the new integrated steel plant? Or it will be? We have received the issue. We have plans. We have plans, as I said earlier. But we're still working on fine-tuning the CapEx. But it will be put up to board eventually once we get the mining EC. We're not going ahead with the steel plant unless we receive the mining EC. That is very clear as a management. Yes, sir. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Bharat Pathak, an individual investor. Please go ahead. Hi. Thank you for the opportunity. My question is on the container side of things. So you said there's going to be some kind of technology tie-up. Does the battery typically require cooling? So is there a tie-up on the side? You need to take care of the cooling aspects while designing the container, or it's something else? No, it is. So depending on your container weight, your container design, because the batteries can, the cells can be in series, can be in parallel. So cooling is one of the parts. Fire protection is second part. The heart is, of course, the BMS, which is the entire battery management system for charge and discharge. And the last is the PCS. So basically, it will convert your AC to DC and DC to AC. That's how you generate power in solar, right? You have to convert. So there are other components like PCS, like the cooling system, the fire system, and also the BMS. So apart from containers, these are also one of the critical components to make the entire container work apart from cells. So as I said, right now, we are okay pick and choose model. This company supplies this bit. This supplies this bit. At the same time, we're also exploring a tie-up for different things. For example, PCS. In India, there are three companies that are already into PCS. So we're already starting to talk to them to supply PCS to us on a long-term basis. So we are working with different companies for different supplies. So, subsequent question is, BESS will be our long-term strategy or how is it? It is a long-term strategy. It is a long-term strategy. We're not looking at one year, two years. We're looking at how the solar module industry has evolved in the last 10 years. So we want to keep depending on how the industry evolves. We will have a ramp-up of capacity as well. And if required, going forward, probably we also enter into solar with the cell manufacturing if the policies of government tell us to do that. So we are very open, and it's a long-term strategy. It's not a short-term strategy. Okay. Thank you very much. Thank you. Thank you. The next question is from the line of Manav Gogia from Yes Securities Limited. Please go ahead. Hi. Thank you once again for the opportunity. So my first question is much on the operational front. Can you give me what was the landed cost of imported coal for the particular quarters you want? It's about INR 11,000, INR 11,500. Okay, and how is it shaping up in the next quarter? Do we see some benefits of the pricing falling down? Prices have come down by not much. I would say 5%. But if you see, dollar was 84-85. Dollar is 87-88. So that's 5% down in the incoming prices as they get inspired by the dollar. So I would say INR 11,500 for the Q2 as well as Q3 is a very practical number, INR 11,000-INR 11,500. Sir, how are the realizations shaping up for the long products across the board? Do we see a flattish trend or a little uptick? No. So see, to be honest, last month, the demand was also very low. And the prices were also down. But second half of July, the demand has come back. And we are able to from sponge to probably say, instead, we are still able to do a margin of a healthy margin of INR 78 per ton, depending on the demand. Because the volumes are not big. We already do 0.4 million tons of steel, 0.5 million billets. So the volumes are quite intact as well as the pricing in terms of the retail level. Sure. Sure. Thank you so much, sir. I would say thank you. Yeah. Yeah. All the very best. Thank you. Thank you. Ladies and gentlemen, we'll take this as the last question for today. Thank you. I would now like to hand the conference over to the management for closing comments. Thank you. Yeah. Thank you very much for joining us on this conference call, and I appreciate the same. We are confident that we have adequately addressed all your queries. Should you have any further questions or need additional information, please feel free to reach out to our investor relationship at Go India Advisors. Once again, we sincerely thank you for all active participation and the unwavering support of the investors. Thank you very much. With this, we end this call. Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us, and you may now disconnect your line.