Good day, ladies and gentlemen. Welcome to the HEG Limited Q4 and FY 22 earnings conference call organized by SKP Securities Limited. 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 management's opening remarks. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Agrawal, Head Institutional Equities at SKP Securities Limited. Thank you and over to you, sir. Good afternoon, ladies and gentlemen. It's my pleasure to welcome you on behalf of HEG Limited and SKP Securities to this financial results conference call with the leadership team at HEG Limited. We have with us Mr. Ravi Jhunjhunwala, Chairman, Managing Director, and CEO, along with his colleagues Mr. Manish Gulati, Executive Director, and Mr. Gulshan Kumar Sakuja, CFO. We'll have the opening remarks from Mr. Jhunjhunwala followed by a Q&A session. Thank you, and over to you, Mr. Jhunjhunwala. Thank you, Naveen, and good afternoon, friends, and welcome to our quarter four and full year 2021, 2022 conference. This quarter's performance was in line with the previous three quarters, showing a consistent improvement. 2021, 2022 results are significantly better than the previous year, driven by strong sales volumes and electrode prices. In terms of volumes, this year has seen a record production as well as sales. A rapid increase in industrial activity all over the world contributed to higher than expected demand for steel and steel products all over the world. Consequently, demand for our products also increased. In calendar year 2021, excluding China, the top ten steel producing countries increased their steel production by a whopping 13% over previous year 2020. Large steel producing countries like U.S., Japan, Germany increased their steel production by as high as 18.3, 14.9, and 12.3%. These kinds of increase we've not seen in a long time. In order to control carbon emissions, you would remember China had gone on a spree of closing down around 125-150 million tons of its highly polluting blast furnace-based steel capacities between 2015 and 2017. Which led to their steel exports declining from whopping levels of over 115 million tons per annum in 2016 and 2017 to about 55 million tons in 2020. It's close to half of what they used to export earlier. This reduced trend of steel exports out of China continues in 2021 and also in the first four months of 2022. As you know, any reduction in export of steel from China enables all other countries of the world to produce more steel, where about 47%-60% of steel is produced through the electric arc furnaces, which is where our products find its use. However, global steel output has recently started to moderate a bit due to the escalation of the Russia-Ukraine crisis, coupled with supply chain interruptions and inflated input costs impacting their margins despite near record level of steel prices. The margins of steel industry still continue to be healthy, although a bit lower than in the past three quarters. Friends, as we shared with you in our last con call, after a very, very long time, we've seen a flurry of announcements by some of the large steel companies of the world, especially in Europe and Western Europe, for establishing new electric arc furnace-based steel capacities. These new greenfield announcements total up to between 30-35 million tons of additional capacities. About 15-20 million tons of these are likely to be on the ground between today and 2025, while balance would also be on the ground between 2025 and 2030. This is in line with world's desire to control carbon emissions seriously and take effective steps in that direction. It's not out of place here to mention that every ton of steel produced by blast furnaces emits about four times more carbon in the atmosphere as compared to the same ton of steel produced through the electric arc furnace, and hence the sudden focus on electric arc furnaces. Therefore, as the world keeps adding more and more electric arc furnaces in the immediate and foreseeable future, the demand for electrodes is likely to keep increasing. Most of these would be large size furnaces using what we call ultra-high power electrodes, which we are fully equipped to cater to. As you are aware, after a very long time, we've been maintaining a level of about two-thirds of our production going for exports to more than 40+ countries of the world, including U.S., Europe, Asia, Middle East, etc. In this backdrop, our expansion of 20,000 tons, which is likely to be ready by the end of this year, has been very timely, and we are confident of being able to find markets for this additional production as soon as we go into stream. Indian crude steel production has been increasing continuously in the past few quarters. Calendar year 2021 versus calendar year 2020 increase was a whopping close to 18%. In January-March 2022, it further grew by about 4.6% compared to the preceding quarter of October-December 2021. The steel industry in India has been in good shape, supported by strong demand from domestic consumption and also exports to various countries. The demand and consequently the price of electrodes improved quarter-on-quarter since the beginning of 2021, and we expect prices to remain strong during the rest of 2022 as well. We continue to work at about 90% capacity utilization since past 3, 4 quarters, and we expect to remain at these levels in the future. Needle coke prices also kept rising since the start of 2021, in line with electrode prices. Besides needle coke, prices of other raw materials and inputs also kept increasing. As electrode prices have kept pace with this trend, we have been able to maintain our margins. We are upbeat about our expansion, which will come on stream by the end of this year at a time when more and more new electric arc furnace capacities are being installed. As no new capacity has been announced by any other graphite company in the Western world, we don't foresee any problems in finding markets for our additional 20,000 tons. Our plant in Madhya Pradesh, with a capacity of about 80,000 tons, has been the single largest plant in the world under one roof. After our expansion to 100,000 tons, this gap between us and other plants will increase further, thereby increasing our competitiveness due to economies of scale. In the current financial year, we expect our sales to be higher versus the previous financial year. Part of this increase would come by some technological innovations achieved by our technical team in existing facilities, and the other part from the newly expanded facility, which will start production from early 2023. As you all know, the electrode process is a fairly long one, involving between two and half-six months. So even if we start our you know expanded capacity, let's say, by end of this year, it will take another two-three months, two-four months to see the products out in the market. In passing, I'm happy to share that 2022 is company's fiftieth year since the incorporation. In all these years, we have grown every few years from a level of 10,000 tons going up to 100,000 tons. We have also gathered a lot of experience and learnings as a company and have been through various kinds of business environments, only to emerge stronger. I'm very proud of our entire team at HEG, whether general management, technical, marketing or finance, who have left no stone unturned to bring HEG to where it is currently standing. We have all worked tirelessly over all these years, and especially the last two COVID years, to make sure that we still attain our targeted commissioning of the expanded capacity more or less in time, more or less in the time period that we had originally announced. With our five decades of experience in international business, we expect to be a supplier of choice to all our global and Indian customers. With this said, I would like to pass on the floor to our CFO, Bhushan, who will walk us through the financial numbers. Then between me, our institutional director Manish, and CFO Bhushan, we'll be very happy to answer all your queries. Thank you. Over to Bhushan. Yeah. Thank you, sir. Good afternoon, friends. I will now briefly take you through the company's operating and financial performance for the year ended thirty-first March 2022. For the year ended March 2022, HEG recorded revenue from operations of INR 2,201 crore as against INR 1,266 crore in the previous year. The revenue for the fourth quarter of FY 2022 was INR 673 crore as against INR 380 crore in the corresponding quarter of the previous FY. Revenue for the year saw an increase of 75% on an annual basis, while it witnessed an increase of 77% on QoQ basis. Since turnover is a factor of both volumes and prices, we are happy to inform you that the company has been able to achieve healthy growth in both aspects. During the year ended 31 March 2022, the company has delivered EBITDA including other income of INR 607 crore as against INR 54 crores in the previous year. The EBITDA for the year ended 31 March 2022 has increased manifold vis-a-vis last year due to an increase in both the sales quantity and the price realization of graphite electrodes. The increase in annual employee benefit expenses over the financial year 2021 is on account of annual increment in salaries and incentive to employees and provisioning for the profit-related commission payable to CMD and ED of the company under contractual terms of their appointment. The increase in expenses pertaining to power and fuel is on account of higher production during FY 2021-22 and the increase in the price of LNG, furnace oil, et cetera. The increase in other expenses is due to higher logistics costs, which is because of the increase in the sales quantity in the current FY as compared to the previous FY, along with an increase in the price of freight and forwarding and increase in consumption of stores and spares on account of higher production. In accordance with the provision laid down in Section 135 of the Companies Act, the company has incurred expenditure on account of corporate social responsibility amounting to INR 19.12 crore during the quarter ended 31 March 2022, INR 5.3 crore during the quarter ended 31 December 2021, and INR 30.65 crore during the financial year ended 31 March 2022, which has been included under the head Other Expenses. Please refer note number eight of our company results. RBI has also extended the interest equalization scheme on pre and post-shipment rupee export credit during quarter four of FY 2022. The extension takes effect from first of October 2021, and the interest equalization rate has been revised from 3% to 2% with effect from first of October 2021. The impact of the same related to the period first of October 2021 to 31 December 2021 amounting to INR 1.6 crore has been considered in the quarter ended 31 March 2022. Please refer point number nine. The company recorded a net profit after tax of INR 391 crore in FY 2022 as against a loss of INR 25 crore in the previous FY. The company is long-term debt free and has a trading size of approximately INR 1,400 crore as on 31 March 2022, yielding an average return of approximately 6% per annum. The Board of Directors has recommended a 400% of final dividend, that is INR 40 per share, which is subject to the shareholders' approval at the ensuing EGM. We would now like to address any questions or queries you have in your mind. Thank you. Over to Naveen. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, you press star and one on the 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 when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Sonali Salgaonkar from Jefferies India. Please go ahead. Sir, thank you for the opportunity. My first question is regarding the price hikes. Could you help us with the broader quantum of price hikes between Q3 and Q4 that's sequential, as well as any further price hikes from first of April till now? Can I answer that? Yeah, please. Sonali, good afternoon. Between Q3 and Q4 it is of the order of 12%. Your question about what we foresee in the future, we are expecting to add at least 4%-5% quarter-on-quarter. This would be throughout FY 23 for the next three, four quarters at least. I hope for that. Because two quarters are visible to us, the April to June and July to September. That is for sure. Beyond that, as we are booking quarter by quarter, which you know about, so I cannot really say that what will happen in the balance two. Demand continues to be there, so I think it will go on. Right. Just continuing on that, your initial comments did mention that, you know, the global steel output has moderated post the Russia-Ukraine crisis as well as supply chain issues. Could you dwell a little more deeper into this? Because all throughout last year we saw very good demand, which was supporting our 90% plus capacity utilizations. And as the demand is moderating, do you foresee the capacity utilizations to stay at elevated levels? See the issues which are arising out of this Russia-Ukraine thing are the steep hike in energy and electricity prices in Europe. As electric arc furnaces need a lot of electricity, we have seen the electricity prices go up by three times. This is a dampener for the European electric arc furnaces. That is one issue. The supply chain, which you know very well, the way freight costs are going up, it is hindering the global trade, whether it is of steel or other commodities. The way, I don't know, prices are also shooting up. You know, all put together, they're posing some challenges for steel industry. Got it. Sir, what are the current inventory levels? I mean, in the light of Russia-Ukraine war, are we still looking at optimal or near normal inventory levels in the channel? Or do you think that they are now more at an elevated level? Are you talking about steel inventories with steel companies or electrode people? Electrodes, sir. Electrodes. We are working at very low inventory levels still. Normal would be, let's say a month, and we are working less than that. There are no excess inventories either with customers or with electrode suppliers. Understand, sir. Sir, and also one more thing about the Chinese supply chains. You know, the entire downturn about two-three years back, majority of that was because of excess Chinese exports. How are we foreseeing the situation right now? I mean, have the supply really moderated especially of the electrodes I'm saying, not about steel. Do we still foresee some price disruption going forward because of any possibility of China coming back to export more? No, I should clarify here. I'm sure you've heard this so many times from us. There is no dearth of capacity of electrode making in China. What type of electrode they are making and exporting to rest of the world is mostly the high power variety, the lower grade electrodes, which are mostly used in ladle furnaces. We are yet to see the big customers actually qualifying them for UHP grade and giving them, let's say, 20, 30% business. That is where we don't compete globally also, India also, we don't compete with them on the UHP part. Our production is mostly UHP and not non-UHP. We do make about 25% or some 30% of non-HP grade electrodes, but that is to service our customers who want electrode as a package. They want us to be supplying the UHP also and the HP also. Right. One point I can add to this is that recently Europe has put a stiff anti-dumping duty on Chinese electrodes of the order of 25%-27%. U.S. has also imposed a duty. That duty was imposed about maybe almost foue years back, five years back, and it still continues. There are steep duties against their electrodes, Chinese electrodes. Sonali, notwithstanding the duties and everything that Manish explained, let me again explain more clearly that more than two-thirds of our production is what you call ultra high power. China doesn't have the technology to produce the ultra high power. What we are competing with China is for the lower 25-30% category, which is the non-UHP. As most of the steel companies who need ultra high power, they also need one-fourth of that quantity about that in that region, because they also have a small ladle furnace. We produce that one-fourth of our total production in non-ultra high power, because all these companies don't want to go to too many suppliers to find electrodes. Generally everybody will be buying in that ratio of 20-80 to 25-75 kind of a ratio of UHP and non-UHP. Right. What percentage of our overall exports is towards Europe? I'm asking because you did mention that the electricity cost in Europe has spiked, which is leading to some disruption in the demand from EAF. What exactly is the percentage of our exports to Europe? It is without going into the specific numbers, it's very low. It's not a very significant number. Okay. Sir, which are our key export geographies? See, Americas is one, followed by Middle East, followed by Southeast Asia, then followed by Europe and little bit two African countries. We are pretty much in all the continents and all the major steel producing countries of the world. About 40 countries, I would say. Got it. Sir, this 30-35 million new EAF steel production, which you talked about in your opening remarks, where is it exactly coming? About 15%-20% in Americas, and the rest is in Europe. Okay. This is a new trend. I mean, I have been in this business for last 40-45 years, and except addition of couple of million tons every two, three, five years, we haven't seen. I haven't ever seen these kinds of numbers. These kinds of numbers are all serious numbers. 20-20 million, 15-20 million tons each in America and 15-20 million in Europe, these are significant numbers in terms of steelmaking. As I explained, the major reason is that, the focus that the world has now seen in the last five-seven years on environment and carbon emissions and green energy and everything, that has led to this kind of a shift. I'm not sure how many million tons of blast furnaces are getting closed to replace this by electric arc furnaces, but a fairly large chunk of this is a replacement. They are being replaced by electric arc furnaces because, as I said, you produce the same ton of steel through the two processes, and the carbon emission is about four times higher in the blast furnaces. Right. You are saying that majority of this 30-35 million is via replacement by EAF versus the earlier blast furnaces due to decarbonization. Is that correct? Not exactly. I would not say all of it, but yeah, a part of that is replacement, a part of that is addition. Sonali, the ones which are coming in America are the new electric arc furnaces. While in Europe, the trend is more towards decarbonization. See, America was anyway predominantly electric arc furnaces. These are the new furnaces which are coming up in U.S. of 15-20 million metric tons. In Europe, they want to actually close down the blast furnaces. In Europe, it's still 47-48% EAF. The existing steel companies, what they are doing is they are going to phase out the blast furnaces and put the new electric arc furnaces there. Just to put that figure, America produces 70% of its steel through electric arc furnace. Obviously there is a bigger focus on electric arc furnaces in America to start with. Europe is about 50%. Is that correct? Well, the world is in that region of 45%-50%. I mean, there is no published data. I mean, we are just giving you this number based on experience. Sure. Just last question from my side. You did mention that the CapEx will likely commission towards the end of this year. What proportion of our outlay is already spent out of this INR 12 billion, and how much are we left to invest this year? See, INR 800 crore has already been spent till date, and INR 400 crore remains to be spent until December. Got it, sir. Very helpful. Thank you. Thank you. Ladies and gentlemen, if you would like to ask a question, then please press star and one on your telephone keypad. Our next question is from the line of Rajesh Agarwal from Moneycontrol. Please go ahead. Ladies and gentlemen, if you'd like to ask a question, then please press star and one on your telephone keypad. A reminder to participants, if you would like to ask a question, then please press star and one on your telephone keypad. Our next question is from the line of Abhijeet Jain from Sequent Wealth Advisors. Please go ahead. Yes, sir. Good afternoon. Just one question. In terms of needle coke, of course, last year we saw, you know, prices rising. Going forward, let's say over the next two quarters, what is the kind of, you know, price increases you expect in needle coke? Yes, sir. It is just like Yeah. Which is practically we have five-six companies in the world. It's more or less the same story in needle coke. There are only two-three of them. This kind of a needle coke that we use in graphite business, this is typically only for graphite. Obviously, if there is a higher demand for graphite electrode, automatically there is a higher demand for needle coke. Mm-hmm. Both of these go hand in hand. It cannot happen. There could be a lag of one quarter here and there, but normally we tag each other as wheels. Whatever happens to graphite business, the needle coke follows. Right. You don't see something like what we have seen, you know, three or four years back, that you know, the movement in graphite electrode prices basically leads needle coke prices. I mean, the spreads improve. That scenario, do you expect to see this year or next? No. Well, I didn't get your question. What scenario? As I said, this needle coke, if graphite prices will go up, needle coke prices will certainly follow. It's a matter of one or two quarter lag. Okay. Now I was asking the spreads, I mean, the price of graphite electrode minus the price of, you know, needle coke. You don't see that going up materially? No, I'm not saying that. I mean, obviously there is a correlation between the two, but it is never an exact correlation. A couple of quarters here and there, it will catch up. Okay. Obviously, I mean, what we are basically saying is that demand for electrodes is very strong. As we have been saying that for a very, very long time, we have been somehow concentrating on exports. Every year our export is about between 65%-70% of our production. Although we don't see too many new electric arc furnaces being established in India. Look, we already spoke about this number of 30-35 million tons, which is on the anvil in the whole world. We have been there for last 30-40 years in all these 30-40 countries. Most of these new investments are coming at our customers who are already buying from us. It's just a matter of adding a little bit of market share with existing customers. Okay. You know, on the Russian-Ukraine conflict, is there any disruption as far as Russia is concerned on the supply of electrodes? I mean, Russia is an exporter of electrodes, I understand to both Europe as well as the U.S. May not be the largest, but they have some market share. So have you seen any kind of disruption over the last two or three months in terms of supply from Russia? Russia is a very small producer of electrodes, and Russia is a fairly large steel producer. A majority, a very large majority of their electrodes are self-consumed within the country. To the extent that they must be exporting a little bit to Europe, but it's not worth it. I mean, it's not a quantity which can be disruptive to anything. It's a very small quantity. It has always been a very small quantity. And again, if I- Again, in the low category, the non-UHP. Okay. Yeah. Okay. Yeah, if I could add to what Chairman said. See, Russia, this Russian supplier of electrodes was exporting some quantity, and at the same time Russia was importing some. With this- Right. Both have stopped. They were like exporting some low quality electrodes and importing, their steel companies were importing some high quality electrodes. Net-net now they have to make do. They can neither export nor import. They have to make do with whatever is available locally, in whatever quality they can get. They have to manage with that. Okay. Thank you very much. All the best. Thank you. Our next question is from the line of Pranav Jain from HDFC Securities. Please go ahead. Good afternoon, sir. Thanks for the opportunity. Sir, can you help me with the production and sales volume for Q4 FY 2022 and also the whole financial year 2022? Yeah, we are at 90% capacity utilization. That's the figure you can take. Okay. You won't provide the numbers in terms of production and sales? No, no, not at all. I mean, this is completely out of order. In fact, against the guidelines also when we appear for these earnings. Exact same figures are not supposed to be given out. Okay, sir. Okay, thank you so much. Pranav Jain, I'd just like to clarify here that, if you have been tracking graphite business over a long time. Mm-hmm. As I said, it's a very long drawn process. I mean, the easiest product takes about two months to produce, and the most difficult one takes between five-six months to produce. Okay. In our kind of industry, which takes so long to convert the needle coke into electrodes and then go out in the market, there are four-five very, very distinctly different processes in this period of two-six months that I'm talking about. Practically, we've never seen anybody consistently being able to achieve capacity utilization of let's say more than 90%-92%. I'm very generally saying that in our kind of an industry which is the process one-five are very, very distinctly different and very, very long. Even if there is a very small breakdown in any of these five processes, the whole thing suffers. The whole supply chain suffers. Okay, sure. Thank you. That was very helpful. Going beyond 90%-92%, we haven't seen any company consistently going beyond 90%-92%. Okay, sir. Thank you so much. That was very helpful. Thank you. Thank you. Our next question is from the line of Rajesh Agarwal from Moneycontrol. Please go ahead. Sir, my question is, did we have a volume growth in Q4? When will the capacity come online and when can we see volume growth? See, the volume growth of Q4 was, I mean, the same as Q3, because the last three quarters have been quite hot in demand. For the new volume to come in, we would rather say first quarter calendar year March 2023, that's when we should start seeing the volumes. Okay. How much volume growth can happen that time? See, we are from this year to next, considering the electrode demand, we should be doing 7%-8% more than what we have done last year, 2021-2022. 7%-8% more than that. Sir, the price hike which we will be taking a quarter-on-quarter of 4%-5%, will there be a commensurate increase in expenses also? No? See, the needle coke price also is quarterly, so that is also increasing quarter by quarter. The good part is that electrode prices are able to absorb that increase and some other inputs, key inputs also. Okay. Net to net, benefit will be much more than the price hike? At least, similar margins would be there. That's what we can safely say. Is there a possibility of a spread increasing? Depends on the market actually. If the demand scenario is very robust, yeah, because 20, 30, 35 million it will get added in U.S., yeah. There are a lot of local steel players who wants to increase the capacity by EAF technology. Is there a possibility of spread increasing? That is the question. What was the last question? It happened maybe a what? Huh? Spread increasing, he said. Increasing spread, he said. Increasing spread, sir. I mean, more than needle coke, our selling price increases. Very difficult to answer this question actually considering the global environment today. Suppose this call this had not happened, I mean, we would have said this with more confidence. Even if we are able to say we have healthy margins, and even if we are able to say today that we are in a position to maintain that despite all kinds of problems, I think that is good. Is it not? No, it's good. HEG is a commodity company. It has to come from both the spread and volume growth also. Volume growth will be 10%. If it would have been 20%, it's okay with this margin also. That is what I'm trying to We are going to get additional volumes. Additional volumes. Right. There's no demand. I don't think there's any demand destruction in the graphite. It will not happen. No, we don't see that. The past part, you see, I mean, you've been tracking the logistics disruptions and all. In some cases, and since we are exporting more than two-thirds of our products. Okay. In some countries the freight has gone up by as high as five times. Okay. Double is very normal. two times to three times is very normal. In some cases it is.(crosstalk) Are you taking a freight sir or the customer is taking that? We deliver CIF. Okay. We are the client CIF for door delivered. All the five times increase or three times increase. Understood. We have been able to pass on all the increases, basically. Okay. Well, sir, you feel there can be any disruption in the capacity being added through EAF technology? No. No. In fact, on the contrary, the clamor towards EAF is only increasing by the day. Increasing. Okay. How is the worldwide graphite demand and supply? It is a shortage or it is. Right now, all the global companies, all the Western companies are running to this order of 90%. Any little demand increase will help in. Okay. Further hardening of prices. Further hardening of prices. Understood. Thanks a lot, sir. Thank you. Ladies and gentlemen, if you would like to ask a question, then please press star and one on your telephone keypad. Our next question is from the line of Dewang Sanghavi from ICICI Securities. Please go ahead. Good afternoon, sir, and thank you for the opportunity. My question is regarding the European market. European market is currently 45%-50% EAF based, and we expect another 15-20 million tons of EAF capacity coming online. This 45-50% share can go to 60%+ in next 3-4 years? Yes. Obviously, when this gets added, it will increase the share of EAF. They are doing this government- If you look at the total world production of steel, it's like somewhere in the region of 900 million-950 million, something like that. Right. If you calculate mathematically between 45%-60% in electric arc furnace, and then you add another 30 million tons. It's a substantial change, substantial number. Basically the other way to look at it is with 30 million tons, whenever it gets added, obviously it will happen over the next two, three, four years. Some of this is going to happen within this year. I mean, I can't. I don't want to publicly give the numbers on the table. Out of this 30 million tons, some of it is coming within this year, within the next nine months. Some of it is coming in 2023. Then in the next five-six years, all that is going to be on the table. The demand increase for electrode could be anywhere in the region of between 40,000-50,000 tons. If you take 1.5, 1.6, 1.7 kilos per ton of steel on 30 million tons, 35 million tons, the demand increase is going to be in that region of 40,000, 45,000, 50,000 tons. No new capacities have been announced, at least up till today. The only increase which is happening in the graphite industry in the world is the 20,000 tons that we are adding by the end of this year. Again, to remind you, we have taken this decision and it's a brownfield expansion. It's not even a greenfield. Yes, sir. We had announced our intent to increase exactly in October of 2019. Yes, sir. A company which has gone through six, seven, eight expansions in its lifetime, we have taken about three and half years, 3.25 years, seven years just to add 20,000 tons. What I'm trying to impress is that even if somebody was to announce an expansion today, it's a matter of anywhere between three-four years. Basically, what I'm trying to imply is new capacities, even in a brownfield case, is a very long drawn process. Right. Demand supply dynamics will be strongly in favor of demand for next three quarters because demand is there and there's no specific new capacity coming on stream also. I mean, I can only put the figures. I mean, I'm hoping what you're saying is right. True, sir. Secondly, this European market, it was seeing some challenging times because of the electricity cost that we were highlighting in the open remarks. Has it seen improvement in the last 15-20 days, or it is the same thing? Last 15, 20 days, I mean, I don't think anything has changed in 15, 20 days. No. Closer to a month, I was just highlighting. If there's a, say, utilization improvement happening in Europe after not a good April and March because of the energy cost or maybe first three-four months because of the energy cost and some improvement happening next, let's say, last a month or so, still the challenging time continues. I just want to take your view on the same. Can we see improvement in Europe happening next three-four months, or it is still difficult to call? Manish, would you like to- No, it's. Yes, sir. Demand. This electricity costs, the prices for them are still at a very high level. Of course, they are not sustainable, and of course, they will come down with time. Right now they continue to face that challenge. We have seen the customers who have placed orders on us push request for a pushback. Anybody who needed electrodes in June now wants in July. The July guy wants it in August. It's a pushback of orders because they're not operating electric arc furnace to the full extent they can. They operate it off-peak hours and peak hours the electricity prices are way too high, for them. All this is going to be temporary. I mean, nobody's going to pay those kind of electricity prices. Mm-hmm. industry or domestic. That is completely unsustainable. They will probably cool off in the next two, three months. The long term trend of electric arc furnace will always be there because they are very cautious about it. I think the best efforts are being put in Europe to decarbonize. They have put carbon tax and things like that. Yeah. My thought is same on the same, that these costs are very high and probably will not sustain and maybe demand can come back. See, the carbon cost has gone up from $28-$30 to almost $90 today. Who's going to pay that carbon cost? It's completely insane. Eventually, it'll be restored. It's only temporary that electricity prices are so high that they are, you know, kind of, operating electric arc furnaces less than capacity. All right. My last question is on the recent export duty on steel exports. What is your take on the same? Is there any demand impact? See, in India, Dewang, India despite producing 120 million tons of steel, no more than 30% is produced on the electric arc furnace route. Yes, it is a damper for these, our steel customers, but government is trying to do whatever it can to control inflation. I believe this is also temporary. Nobody puts export duty like this. I mean, they will also be taken off once the domestic market cools down on prices. We are anyway, as chairman said, two-thirds is we export to 40 countries, so we won't see as much impact. Right. That's all from my side. Thank you very much for all your answers and all the best. Okay, Devang. Thank you. Thank you. Ladies and gentlemen, if you would like to ask a question, then please press star and one on your telephone keypad. Thank you very much. That was the last question in the queue. As there are no further questions, I would now like to hand the conference over to Mr. Ravi Jhunjhunwala for closing remarks. Thank you, friends, for joining us today and asking some very pointed, pertinent questions. I'm very happy to be living in this environment, which looks very good, very optimistic to us, and I look forward to talking to you once again in three months' time. Thank you. Thank you very much. On behalf of SKP Securities Limited, that concludes the conference. Thank you for joining us. You may now disconnect your line.