Ladies and gentlemen, good day, and welcome to HEG Limited Q2 FY 2024 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 presentation concludes. Should you need assistance during this 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. Navin Agarwal, Head, Institutional Equities at SKP Securities Limited. Thank you, and over to you, sir. Good afternoon, ladies and gentlemen. It is 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, and Mr. Riju Jhunjhunwala, Vice Chairman, along with their colleagues, Mr. Manish Gulati, Executive Director, Mr. Om Prakash Ajmera, Group CFO, and Mr. Gulshan Kumar Sakhuja, CFO. We'll have the opening remarks from Mr. Jhunjhunwala, followed by a Q&A session. Thank you, and over to you, Ravi Thank you, Navin. Friends, good afternoon, and welcome to our Financial Results Conference Call for the Second Quarter, 2023, 2024. As for World Steel Association's data, the steel production in the world outside China went down by 3.7% from- Sir, sorry to interrupt you, but the audio is not coming clear. Is it possible to call Navin? Navin, are you there? Go ahead, sir. You're audible. Yes. Yes, Gulshan. Navin, it is better to call Ravi Jhunjhunwala's mobile number. Okay, fine. That will be better. Friends, apologies for this interruption. We'll just get Ravi on the line. Participants, please stay connected. Ladies and gentlemen, thank you for your patience. We have line for the management reconnected. Thank you very much. Friends, good afternoon, and sorry for this interruption, and welcome to our Financial Results Conference Call for the Second Quarter, 2023-2024. As per World Steel Association's data, the steel production in the world outside of China went down by about 3.7% between the second and third quarters of this calendar year, and by about 2% in the first nine months of 2023 compared to 2022. The global economic uncertainty continues to limit steel demand for and consequently steel production. However, India has registered a significant surge of about 11.6% in steel production in the first nine months of current year. Simultaneously, the Middle East and Africa have also witnessed a modest upswing of 1.2%, whereas North American steel production reduced by about 3.3%, Europe and Turkey by about 8.8% and a whopping 10.1%. Persistent low domestic demand within China has resulted in increased Chinese steel exports outside. This trend is expected to exert ongoing downward pressure on production, particularly in Europe and US, and obviously a little bit elsewhere also. The World Steel Association has revised their earlier projections downward for steel demand in 2023 and 2024, in EU by 5% and in US by 4%. In our last call, we talked about steel industry alone accounting for about 7% of the total global carbon emission in the world, and around 23% of total industrial carbon emissions. The Western world, especially the U.S. and Western Europe, are making serious efforts to decarbonize the steel industry in the near future, while some other countries have also started announcing establishing new Electric Arc Furnaces. As we mentioned last time, the steel produced through Blast Furnace emits about four times more carbon than the same steel produced through the Electric Arc Furnaces, and this is giving rise to more and more new greenfield Electric Arc Furnaces plants being set up all over the world, mainly in the U.S. and Europe, and more recently in Turkey and in the Gulf countries, where a large majority of steel is even currently produced through Electric Arc Furnaces.... We have seen announcement of over 85 million tons of such new Electric Arc Furnace capacities in just the last 12-15 months time, which has never been seen in the past. We continue to track and see more and more such announcements practically every month. The World Steel production through Electric Arc Furnace, minus China, which used to be around 44% in 2015, has now reached 50% in 2022, going up by about 78 million tons from 357 million tons to about 435 million tons currently. This is expected to further increase by the new announcements and the new plants which are being established, most of which are projected to go into production by 2030, of which 85 million tons is already announced. Taking the Electric Arc Furnace production from its current level of 435 million tons to around 535 million tons by 2030. This would mean a substantial increase in the demand of our products all over the world, and since we have been exporting about 2/3 of our production to some 30 plus countries for a long time, we are well set to meet this demand from HEG. You would have seen by now our announcement with regards to expansion of our plant capacity to 100,000 tons being fully completed and implemented under one roof. All the production facilities are fully and satisfactorily operating now. We have taken care to buy some of the latest and most modern equipment and technologies available to graphite industry, making us the, not only the single largest plant under one roof, but having most of the latest equipment and technologies at one place. Special focus has been given this time to choose environmentally friendly equipment, keeping our sustainability goals in focus. While we remain solidly and firmly upbeat about the continuous growth of Electric Arc Furnace Steel production in the coming decade, resulting in the continuous rise in electrode demand, we at present are seeing a period of subdued steel production due to several global factors, which are known to everyone, which is likely to continue through the end of 2023, and could be in the first half of 2024, resulting into subdued demand of our products for the next few quarters. We believe Electric Arc Furnace will henceforth grow at a CAGR of about 3% in the next decade, which would directly translate into a substantial increase in electrode demand. All this sounds very exciting for us at HEG, as no new capacities in electrode industry have been announced by any other graphite company. And a word about our new subsidiary, TACC. Due to economies of scale and considering the huge demand expected in the EV sector, the board has recently approved the decision to start with a 20,000-ton graphite anode plant in one go, which initially was being planned to do in two phases of 10,000 tons each. The land is already acquired, and the construction is likely to begin fairly soon, and we intend to complete this plant by about mid-2025. We will obviously keep you informed about the progress every quarter. In conclusion, our second quarter of 2023-2024 has been satisfactorily given the tough market. Our second quarter 2023-2024 is going to be a tough quarter given the market conditions. In the next two to three quarters may see margins coming under some pressure, but we are looking at a bright future for HEG with some of the very large new capacities of Electric Arc Furnaces, which are being implemented currently all over the world. Friends, with this, I'll pass on the floor to our CFO, Gulshan Sakhuja, who will take us through the financial figures. Following that, our Vice Chairman, Riju, and our Executive Director, Manish, along with myself, will be delighted to address any queries and inquiries that you have regarding electrodes and graphite anode businesses. Over to Gulshan. Thank you, sir. Thank you, sir. Good afternoon, friends. I will now briefly take you through the company's operating and financial performance for the quarter ended September 30th, 2023. For the quarter ended September 30th, 2023, HEG recorded revenue from operations of INR 614 crore, as against INR 598 crore in the corresponding quarter of the previous financial year. During the quarter ended September 2023, the company delivered EBITDA of INR 130 crore, as against INR 198 crore in the corresponding quarter of the previous year. The company, on a standalone basis, recorded a net profit after tax of INR 62 crore in Q2 FY 2024, as against INR 130 crore in the corresponding quarter of the previous year. On a consolidated basis, the net profit after tax is INR 96 crore in Q2 FY 2024, as against INR 169 crore in the corresponding quarter of the previous financial year. The company is long-term debt free and had a treasury size of nearly about 110... 1,010 crores as on 30th September 2023. Now to take more questions from the participants, the detailed presentation has been uploaded on the company's website and on its publications. Now we would like to address any question or queries you have in your mind. Thank you. Over to Navin. 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 touchtone 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 will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from line of Vipraw Srivastava from InCred Capital. Please go ahead. Hi, am I audible? Yeah, yeah, you are. Please go ahead. Yeah. So just had a question on the European business of HEG. So, there is a duty, right, on import of graphite electrodes in Europe, but the structure is different for HEG in terms of... So we want to understand, how does the duty affect you? And Europe is also coming up with this carbon border tax thing, obviously, which will result in reduction of Blast Furnaces. But then will the duty handle your business in Europe? How do you see it? So, yeah, just some thought on that. No, this anti-dumping duty in Europe has been around for the last 15, 16 years now. Right. We have not lost the market share. We, we took a very, very, I mean, careful decision long back that we'll, we'll pay the 7% duty. The duty is 7%. So we, we keep paying that duty and, but we have not, we've not lost the market share. Right. So we will continue to sell whatever we are selling now and a little more. So that is as far as Europe is concerned. But the major positive that we have seen in our industry in the last 12-15 months is given this euphoria about carbon emission and control and all that, this has been known to everybody for a very long time, that Blast Furnace emits about four times the carbon compared to Electric Arc Furnace steel. There has been continuous announcements of new Electric Arc Furnace plants by some of the large and some of the best-known names in the steel industry in the world. And, as I just mentioned, I mean, we've seen announcements of about 85-90 million tons already, all in the last 12-18 months. And, we keep seeing a couple of announcements like these every month now. Until three to six months ago, all these were happening within U.S. and Europe, but in the last four, five months, six months, we have seen many, many announcements on similar lines in Turkey, Iran, and the Gulf countries. And, with no one, nobody else having put any additional capacity. On the contrary, because of the COVID, a couple of western plants have closed down in the last two years or so, and while at the same time we have expanded. As soon as some of these Electric Arc Furnace capacities, the new ones, start operations, and some of them have already started operations in the last about 12 months-18 months, that will be about 8 million-10 million tons already. In 2023 and 2024, we expect another 10 million-15 million tons of these new capacities starting to operate. Right. So, and we, as I said, we have been exporting about 2/3 of our production to more than 30 countries. We are fairly, fairly well entrenched in these 30 countries-35 countries, wherever there is a consumption of electrodes. And so we are looking forward to this sudden spurt of demand, which is likely to happen not too far away. Right. Right. right. So, just a follow-up on this. So, your peer in the U.S., that's GrafTech. So they disclose their, selling, realization prices every quarter. So what I've realized is that the price at which they sell the electrodes, it's very high compared to at what HEG and other Indian players sell. So due to this price difference, are we gaining market share in the U.S. or Europe? How is it shaping up? Or do they offer something incremental, that's why they're charging a higher price? Just want some thoughts on that. Two things. You are, you are right, but if you, if you go back to the history about five years ago, GrafTech was... GrafTech is in a very unique position that they have about 135,000-140,000 tons, which is about 60%-65% of their graphite capacity. They, they are the only ones in the graphite industry to have their own needle coke plant. Right. They have a- Yeah, that's right. They have a captive needle coke capacity of about 60%-65% of their requirement. Right. With that in their hand, they had done something very smart five-seven years ago. They had booked their forward, booked their raw material for a fairly long time at a very attractive price. I'm basically talking about the oil. Right. So with that background, they went out and they sold about 65% of their next five years electrode production at a fixed price. ... Right. So having your own captive needle coke and that too hedged for the next five years, it's a pretty unique situation. And obviously, they took advantage of that by having a long-term agreement for five years. A very large majority of that has already been implemented by now. I don't remember the number, but still some of the maybe 10, 15% of that is still in the pipeline. It is still going on. So except that, I don't think we are selling cheaper electrodes anywhere else. I mean, we are not selling anything cheaper than most of our competitors. So the only difference is this, nothing else. Yeah. Yeah. Noted. Noted. Yeah, but yeah, just because they told that market in U.S. and Europe- Hello, sorry to interrupt you, but we are losing your audio. Can you come in a better reception area, please? Am I audible? Yeah, yeah, you are. Yeah. Yeah. Okay. Yeah. Just one final question. So, with this ban on the export of anodes, graphite anodes by China, for lithium-ion batteries, so obviously our facility is coming up in 2025, FY 2025. So that's a positive development, right? I mean, if China controls the supply chain and we can set up our own facility, we can create domestic demand also. So you will take it as a positive, right? Yeah, absolutely. Absolutely. Did you... If you want to add anything? No, I think absolutely. ... But we are losing your audio. One second. Yeah. Audible now? Yes, sir. Better. As it is, the world was looking at bringing more graphite from outside China. Today, China controls more than 92% of the world's graphite. With this happening, obviously, it's added to our confidence of going in for the largest project. Right. Thank you. Thank you. Thanks a lot. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Gaurav Paul from Excellence Financial Service. Please go ahead. Thank you for the opportunity. Am I audible? Yeah, you are. Okay. So I'm really excited about your anode plant and the project that's going on. My first question is, or the questions around it are, what percentage of processes are common between your normal electrode versus your anode plant? I mean, are there any synergies over there? Not much. I think in terms of similarities, it's a totally different product, it's a totally different plant. Except that, in one of our processes of the electrode, we are handling a temperature of about 2,800 degrees centigrade. Right. Which is more or less similar to one of the processes involved in the powder business. Except that, there is nothing in common. Okay. A follow-up question just to that is: How much energy is needed to graphitize, like, one ton of such material to, In terms of what? In terms of cost, in terms of megawatts. Megawatt, megawatt would be good. It would be the same as the graphite electrode. Exactly the same. And, I mean, do you... have you also started with the environment clearances for this new plant? So we've the land we have acquired already, and we've got all the state state environment clearances ready. And now we are just doing the central environment study, which will be complete by November or December. But that doesn't stop you. By you, once, once you get a license to operate, you can start the more some part of the construction activity already, which we already have over there, of leveling, et cetera, and all of that. Okay. Finally, just light on this one. What would be the difference in cost between, say, a natural graphite versus an artificial graphite that you're producing? Any light on that? You know, these are two very, very different products. I mean, it's like talking- Graphite. Graphite, and over there, you don't need to graphitize that particular product. In this particular, additional cost from graphitization is there. But, I think, I mean, more or less, our focus is on the synthetic graphite. Although, I mean, if there is some part of natural graphite also to be done, we can probably do that. But costs are more or less the same because the costs of natural graphite, purchasing natural graphite, come along for that additional cost of graphitization. Okay. Thank you so much. I think most of my questions are- Yeah. Thank you. Best of luck. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Amol Rao from Kitara Capital. Please go ahead. Thanks, sir. Sir, usually you always shed light on, on our operating rates, so and, Your voice is coming muffled. Can you please speak with a handset? Yeah. Is it, is it better or is it, am I still muffled? Still the same, sir. One moment, sir. ... Sir, am I audible now? Yes, sir. Thank you. Yeah. Sir, usually you always shed light on what's the utilization rate for the quarter and how we are faring on inventory. Sir, any color on that, sir, for this quarter, please? Manish, would you take that? Yes, sir, I'll take this question. See, for the Q1, it was close to 90%. For Q2, it's close to 85%. And these two quarters, which are expected to be probably the toughest quarters, we should be around 75% of capacity utilization. Perfect. And, sir, just, just for the sake of clarification, because we have commissioned our additional 20,000 tons also, Yes. This is the 75% on the including the 20,000 tons that have come in, right? So our 100,000 tons roughly should be. Yeah. Yeah. So let me, let me explain this point once. See, we have started the green shop, which is the, where the electrode starts from. Yeah. We have commissioned that. It came into commercial production first November. That's the date we mentioned in our release also. So and then, it takes, of course, five months to make the nipples and two months to make the electrodes. So effectively, if it's something is starting on first November, we would consider arrival of this 100,000-ton capacity in Q4. The plant has started, everything is fine. So the 75% is on that basis of for Q3 as well as Q4. In the Q4, we count it as a 100,000-ton capacity. Oh, that is very helpful, sir. And, sir, just I mean, you all mentioned that there is, there is some bit of tightness in the market regarding, demand. So, this demand, I mean, if you see the World Steel data that is, coming out on a monthly basis, sir- Yeah. Production seems to be picking up quite a bit in our target markets. So I mean, the U.S. has shown an improvement. I think if I remember correctly, some 3%-4%. Turkey showed an improvement of almost, I think, 8% or 10%. Korea was around 18%. So I mean, still you expect some amount of tightness in the second half of the year? No, no, I mean, I can offline, of course, send you the World Steel data, but we don't think that there's an improvement. From nine months to nine months, it's also a decline. There's a decline quarter- to- quarter. I mean, I can, of course, send my sheet to you, in which you have details of all these countries. Done. Let me read the figure for you. Other than China and, let's say, Iran, which is under sanctions, also Russia, where we do not do much, actually it's a decline of 2.7%. So I will send you my figures. Done, sir. Done, done. Thank you, sir. This is more helpful. Sir, last one question, sir. We, we, we were sitting on some amount of inventory of, if I remember correctly, INR 1,400-odd crore six months back. The number says that it's around INR 1,300 crore, so we're not running down this inventory? Or we plan- this is what we plan to sell in the next, next half of the year. See, we have, I mean, run down the needle coke inventory to a very large extent. Today, we are just operating have the normal operating levels. As we have finished goods inventory, we have, let's say, 2.5 months of our production. Normally, this would be 1 month worth of production. It is, let's say, close to 2.5. And we don't want, want to, you know, run it down any further because, passing by these two to three quarters and the good things we are hearing from the market, with electric arc EAF steels coming up, it is only a matter of time. It can take two quarters, it can take three, but it'll turn around. So at that point in time, we are just keeping this extra one and a half months of inventory good for those days, when there's an uptick in demand. Got it, sir. So, after around two quarters, you should see these levels coming down when the production from the EF side starts picking up. Yeah, yeah, yeah, absolutely. You see, when you will look at the World Steel figures, you will yourself find out when the steel production starts to go grow up, and then EF will be the major beneficiary of that. Got it, sir. Got it. Thank you, sir. Thank you, sir. Thank you. Thank you. Participants, you may press star and one to ask the question. Next question is on line of Ajit from Nirzar Securities. Please go ahead. Hi, sir, good afternoon, and congratulations on commissioning of the new expanded capacity. Sir, I just have two questions. The first one is, sir, recently, Government of India... There is news that Government of India is to invite bids for 20 critical minerals, including lithium and graphite. So, sir, are we planning to bid for those mines, sir? See, we are a artificial graphite company. We make graphite starting from petroleum coke and process it. What we are talking about, minerals, et cetera, that is purely for mining. So that's mining of natural graphite. I believe there are few places in India where we have natural graphite, so it is for that purpose, not for synthetic graphite, which we make. Okay. Our anode will be synthetic graphite anode, not a mined product. Okay, understood. Thank you. The second question is, a sir, one of our competitors has entered into synthetic anode, who also claimed that it is more effective than the graphite one. So, wanted to have, understand your thoughts on this. Tell you, that is, they took over the Australian company, which is into silicon anode. So that is still, I mean, I mean, largely an untested technology. Today, more than 90% of all lithium-ion batteries are made out of graphite. And now what has started happening is we are starting to mix 5% or 10% silicon in it. But according to all data, everything is free. At least till 2050, there is no chance that graphite as an anode product for lithium batteries can be 100% replaced. You'll have certain variety. Hello, sir. I guess I missed you then. You can hear me back? Okay. Okay, sir. Thanks. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Gaurav Paul from Excellence Financial. Please, go ahead. Gaurav, may I request you to unmute your line and go with the question, please? Sorry. Sorry, am I audible now? Yes. Okay. Yeah, yeah, you are audible. Thank you, sir. So my second question was, regarding the uptick of, graphite, I mean, uptick of battery production, lithium-ion battery production in India. Are you seeing any, interest from the people who are putting up the package or companies like Ola, Reliance and others, and Tata? Are they taking some portion of your, powder to kind of test it out and, and make their own batteries? That's- So of course, we are in touch with all these companies, whether you talk about Tata, Exide, Amara Raja, Ola, Reliance, we are in touch with all these companies. Also, because we already have a pilot plant for this anode production, which is 100% ready. So, and all these companies will have their battery production by anywhere middle to end of 2025, and they are oblig- by also... Sir, sorry, but we are losing your audio once again. Hello? Yep, yes. Now it's clear. Yeah. So because of that, we are in touch with these companies, and that, it's over the next period of two years, we'll be working even more closely through our pilot plant to try and do the perfect permutation combination, because the idea is to sell as much to the Indian market as possible, and then export whatever is left over. Okay. And do you see any advantage of PLI coming through your way? Because what I understood was the government also wants to kind of, help or support the EV producers, sort of, in the manufacturing sense. So we were trying very hard this year to get our product also in the whole, this thing, the PLI scheme. So although cell production is covered under PLI, but raw materials for cells have not now. But, next year onwards, we are quite confident that this will start happening. I mean, we are trying very hard with the government to convince them for extending the PLI scheme to the raw materials also. Okay, then. Thank you so much. Thank you. Participants, you may press star and one to ask a question. Next follow-up question is from the line of Vipraw Srivastava from InCred Capital. Please go ahead. Yeah, hi. Just had a follow-up regarding the anode part for lithium-ion batteries. So, can you tell me what is roughly the realization in this space per kg? So difficult to say what is, because there are different ranges, ranging from $5,000 per ton to going up to $15,000 per ton. Different grades of anode that you make for different applications. The lower grade ones, which are used for, you know, your things like battery, stationary batteries, calculators, et cetera, they are $5,000-$7,000. But the very high-end thing, like producing for companies like the auto companies, like Mercedes, Tesla, et cetera, the batteries that they use, that is closer to between $10,000-$15,000 as of today. You're talking about anode realization, right? This number? Yeah. Yeah, yeah, yeah. The anode realization, the graphite realization per ton. Sure, sure. Okay. This is all data from China. Today, China is controlling 90% of the world's trade, so, I mean, this is all the, their selling rates today. Sure, sure. Noted, noted. I just had one final question. So, GrafTech, the US parent, the concall, told that they're also looking towards carbon neutral graphite electrodes, which won't leave any carbon footprint aspect. So, I mean, maybe not now, but in the future, will HEG look towards that? Because obviously, we know graphite anode is polluting as far as manufacturing is concerned. So in future, any thoughts on that, are you looking exploring that field? So yeah. I can answer for the graphite anode plant, since it's going to be a greenfield plant from the beginning. All our kind of environment approvals, et cetera, also cover a lot of this thing to try and be carbon neutral, which includes buying the green electricity, green belts, et cetera, et cetera. So will be our idea from day one is possible in this- Sorry, we are gonna lose your audio. Exactly. Oh, good. Shall I take this question? Yeah, Manish. Hello? Yeah, Manish, go ahead. Yeah, yeah, yeah. See, what they are doing, they are saying, because I was in Europe and, I spoke to them also, I mean, so they, they put just a green-colored electrode. So what initially what they are trying to do is to take all renewable energy, wherever possible. You see, they have plants in Europe, they have plants in U.S. So that is the, that's step number one. And of course, for the other carbon reduction initiatives, just like we are doing, they'll also be doing the same. I mean, I can also, the, the, the electrodes which are made in HEG. HEG also has a hydroelectric power plant, we use at Tawan agar, and also we have solar plants. So I see every company is trying these initiatives, these sustainability goals. Everybody is taking it seriously, and HEG is also taking it very seriously. So I, I have seen what you are saying, is that they're saying that maybe they'll make a zero carbon this thing. So first they will start with renewable energy, and then they'll do take some other initiatives. But of course, there has to be energy which is consumed to make graphite electrodes, and in turn, graphite electrodes is actually helping the world save on carbon emissions. So I don't know how they'll put it, put this all together, but eventually that benefit should also come to graphite people. Because it is because of electrode that carbon emissions drop by one-fourth from maybe Gas-Fired and Electric Arc Furnaces. Right. Right. Right. Okay. Thanks. Thanks. That's very clear. Thank you. Thank you. Thank you. Next question is from Deep Mehta from Bank of India Mutual Fund. Please go ahead. Hello, sir. Thank you for the opportunity. I had one question regarding our upcoming anode facility. What is the updated total capital CapEx requirement which we are planning for this newer capacity? And have we done some work on determining what, how competitive will with this plant vis-à-vis our Chinese competitors in terms of cost of production? Yeah. So, on the CapEx of our plant, we had assumed around INR 1,000 crore for a 10,000-ton plant. So obviously, when we are looking at doubling the entire plant, we are not going to incur exactly double the cost. We'll be saving on a lot of things like our power line, some processes, et cetera. So the CapEx would be between... Right now, we are still in the final phases of calculating it, but it'll definitely be at least 10% lower than INR 2,000 crore, if you see proportionately. And on the operational front, it'll be more or less similar to as competitive to the Chinese prices, because a lot of this price depends on the power price. And power price-wise, we are quite competitive in Madhya Pradesh. We are hopeful to get electricity between INR 5.5-INR 6 for a period of 20 years. With that, you become reasonably competitive, because the cost of raw material, which is needle coke, is the same. Manpower cost is more or less the same. So all other costs mainly become quite similar in our 20,000-ton plant. Thank you, sir. That is very helpful. Just one follow-up. What kind of margins or ROC which we are targeting for this capacity? So we currently are targeting kind of a 30% EBITDA margin. And so based on that, I mean, one can do the calculations, because we have a kind of CapEx to the turnover ratio will be more or less 1:1 or 1:1.2. And based on that, selling prices, whatever we have prevailing in 2025, depending on that, you'll have your EBITDA margin safely between 25%-35%. So ROC, the, should actually not be more than five to six years. Thank you, sir. That's all from me. Thank you. Next question is from the line of Chetan Phalke from Alpha Invesco. Please go ahead. Good afternoon, and thank you for the opportunity. So recently this Epsilon Advanced Materials, they have done a MOU with Government of Karnataka, and I think they're going to invest some INR 9,000 crore for this graphite anodes plant only. So the, what is our understanding, sir? They are also going to make the same graphite anode that we are going to make, and we are going to compete with them heads on? Yeah, it will be more or less similar, because we have been seeing what they are doing. But now I think their plans have changed more to setting up a plant in the USA, and more or less settling for a smaller plant in India, or more or less like this thing, your pilot plant in India. But their main plant that they've announced is now in America, with a play of $650 million over a period of 10 years or something like that. But the product that they'll be making will be very similar to ours. Okay. The raw material could be different, but the end product will be more or less the same. Okay. And, sir, I mean, I mean, what is your take on this? I mean, why they have shifted to U.S.? Is it more cost efficient, or is it due to better raw material availability, closeness to customers? What is your assessment? So it's a mix of everything, because U.S. is giving a very good, this, subsidy, the Inflation Act that they have, in which, they give more or less the same kind of subsidy that, you would have, if you had put the poor plants in China in order to make it more competitive. So I don't know what really led to their decision of, putting the plant over there. But, having said that, I mean, raw material would be same, manpower power cost definitely should be higher in the U.S. And, so but we expect our cost competitiveness to be, I mean, higher than them to start with at least. ... Okay. And do we see, sir? I mean, I just want to understand the demand side more closely. So what is the existing demand of graphite anodes that we are importing into the country? And what kind of opportunity you see opening up over the next seven, eight, 10 years in terms of tonnage, if you can? Today, today it is zero, because there is no cell manufacturing in India. Mm-hmm. Mm-hmm. Let's say when you have in 2025, 25 GWh of electricity, that will be requirement of around 35,000 tons by 2025. And this is expected to grow to around 1.5 lakh tons, 1.2 lakh tons by 2030. So the requirement-wise, really, I mean, you know, which is why we've taken this decision to be of a particular scale. The demand-wise, we don't really see any kind of problem, and technology-wise also, I mean, you don't see much of risk of graphite being replaced by other material, et cetera. So even as early as 2025, we are talking about 35,000 tons per month and going up to 0.2 lakh tons of demand by then in India. What would be the installed graphite anode capacity in China? Any idea, sir? They talk about, today they're talking about 500,000 tons of graphite anode capacity that is already existing. But, within that, everything, the rate of their expansions are in. We are talking about 20,000 tons. They talk about addition of 200,000 tons, 300,000 tons for state. So their rate of expansion will be definitely much higher than that of India. Okay. Okay. And so this Chinese ban of certain grades of graphite, I mean, because China also controls a large part of graphite mining as well, so will it impact the pricing of natural graphite and essentially eventually it will also impact the pricing environment for synthetic graphite? It definitely be a big plus for us. It'll be a big plus for countries like India, because then your other battery manufacturers will not will cannot afford to be dependent only on China for their imports. So what Chinese people want to do is they want to produce the battery themselves. Instead of exporting the graphite, they want to consume all the graphite within China. But across the world, wherever there are battery companies coming up, they will either need to produce their own graphite, which is not possible in every case, or they'll have to import graphite from other countries countries apart from China. So definitely for us, it really suits us well. Because we, in any case, were not planning to import any from China to begin with. Okay. So our imports of the raw materials would be mainly from which geographies, sir? We will be using Indian, the, the raw material, petcoke. We can also use the needle coke, and we can also use, the Chinese pitch coke. So all three raw materials we in final plant, and all three raw materials, give you different types of, final product. Okay, okay. So sir, just last question on this. So apart from HEG, any other player, apart from HEG and Epsilon, any other players who are planning to enter this space? I mean, Himadri, of course, you, they've also announced recently their, their plans to get into anode. I don't know much about how much capacity, et cetera. So as of now, you see these three companies, which are, clearly stated their plans, HEG, Epsilon, and Himadri. Okay, particularly for graphite anode, because I think Himadri is going to— Yeah, oh, specifically for graphite anode. Okay. Okay. All right, sir. Thank you, sir. Thank you very much. Thank you. Thank you. Participants, give a press star and one to ask the question. Thank you very much. That was the last question in queue. As there are no further questions, I would now like to hand the conference over to Mr. Navin Agarwal for closing remarks. Thank you, Shane, and thank you for taking so much interest in communicating with us, and I look forward to talking to you in the next few months. Thank you. Thank you very much. On behalf of SKP Securities, that concludes this conference. Thank you for joining us. 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