Ladies and gentlemen, good day. Welcome to the HEG Limited Q4 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen- only mode. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajesh Majumdar from 360 ONE. Please go ahead. Yeah, good afternoon, everyone, welcome to the Q4 FY 2026 HEG Limited earnings conference call. We have with us today the management team represented by Mr. Ravi Jhunjhunwala, Chairman, Managing Director, and CEO, and Mr. Riju Jhunjhunwala, Vice Chairman, Mr. Manish Gulati, Executive Director, Mr. Om Prakash Ajmera, Group CFO, Mr. Ravi Tripathi, CFO, HEG Limited, Mr. Puneet Anand, Group CSO, Mr. Salil Bawa, Group Head, Investor Relations. Apart from this, we have HEG Greentech team as well for any queries on that. With much ado about on this, I hand over the call to Mr. Ravi Jhunjhunwala, Chairman, Managing Director, and CEO. Over to you, sir. Thank you, Rajesh. Good afternoon, everyone, and welcome to our financial results conference call for the fourth quarter and full year 2025, 2026. Let me begin this discussion with some broader industry context. According to World Steel Association, global crude steel production in Q1, January-March 2026, stood at around 459 million tons, marking a decline of roughly 2% year-on-year, while registering a sequential recovery of about 8% versus Q4 of last year. This is mainly China driven. We have seen this phenomena of higher production in the last quarter of the year by China, a lot of times in the past, and this normally tapers down to more reasonable levels as we come to H2. China typically follow the cyclical production pattern with output moderating in Q3 and Q4 to align with environmental and policy targets, which is close to about 1 billion tons of steel production, followed by a strong restart in Q1 practically every year. Excluding China, global steel production stood at approximately 212 million tons in Q1 2026, which is a decline of about 1.3% over Q4 2025. Among some key steel producing regions, India continues to be a standout performer, recording around 5% quarter-on-quarter growth, supported by strong infrastructure and construction activities. The U.S. too saw a modest growth driven by steady industrial demand, while Europe remained relatively muted. Japan, Brazil, and several other large steel producing countries were broadly flat to slightly negative, reflecting ongoing softness. China continues to face domestic demand pressure, resulting in elevated export levels. Chinese steel exports are now running at over about 100 million tons on an annual basis, which continues to impact global pricing and drive increased trade protection measures worldwide. At the same time, current geopolitical tensions amidst conflicts in the Middle East are contributing to volatility in the energy markets and supply chains. We are clearly witnessing an acceleration in the regionalization of steel trade driven by rising protectionist measures globally in response to structural overcapacity, particularly in China. Measures such as Section 232 in U.S. anti-dumping, safeguard actions in Canada, Mexico, India, Brazil, and similar steps across other regions are reshaping trade flows. In Europe, Carbon Border Adjustment Mechanism, generally called CBAM, is a key structural change. By imposing a carbon tax on imports of steel, it incentivizes lower emission steel production or exports, which is only possible through electric arc furnace. In parallel, the EU's upcoming tariff-rate quota regimes coming as early as 1st of July, 2026, is expected to further restrict steel imports into EU and thus increase its own steel production, which has seen a decline constantly quarter after quarter. This is particularly significant for electric arc furnace steel making. Excluding China, about 50% of steel is already produced through electric arc furnace, which is, the share is expected to rise further given its significantly lower carbon intensity compared to blast furnace slash basic oxygen furnace routes. Under CBAM, reduced exports of steel to Europe are expected to increase favored electric arc furnace based steel due to its carbon footprint advantage. As a result, we expect a structural and positive change in electric arc furnace steel production with a strong pipeline of new capacity additions of electric arc furnaces globally. This directly supports long-term demand growth of graphite electrodes. To the best of our knowledge, about 20 million tons of new greenfield electric arc furnaces have already been commissioned in the last 12 to 18 months all over the world. We believe an additional 60 million tons are at different stages of implementation, which should be in production by 2028 and another about 30 million tons by 2030. The total new installations of electric arc furnaces all over the world, except China, would thus be a little over 100 million tons. This kind of a growth in electric arc furnace based industry is unprecedented in the history of the steel industry and is expected to translate into incremental electrode demand of around 200,000 tons by 2030, excluding China. We are very well placed to meet some of this new demand with our recent expansion from 80,000 to 100,000 tons. As you are aware, we've already announced our next expansion to 115,000 tons, which is likely to be operational by early 2028. In this backdrop, our focus on operational efficiency, cost discipline, and customer diversification has enabled us to deliver a resilient performance during this quarter. We continue to operate at healthy utilization levels, which is probably the highest all over the world, averaging more than 90% for the whole year as well as the past three, four immediate quarters. This is based on our expanded capacity of 100,000 tons, reflecting strong operational efficiency, low cost, and disciplined planning. At our plant near Bhopal, our plant near Bhopal remains the largest single site location of electrode plants anywhere in the world, with a capacity of 100,000 tons, which makes us one of the most competitive cost companies due to its size and location in India. Looking ahead, we remain confident of the long-term growth opportunity for our company. Construction of the additional 15,000 tons expansion is progressing as planned. We continue to target completion by early 2028. This will further strengthen our ability to serve incremental global demand at a competitive cost. To summarize, while near-term conditions remain mixed, the structural shift toward electric arc furnace steel making, supported by decarbonization policies and trade realignments in the world, continues to strengthen the long-term demand outlook for electrodes. With our scale, cost leadership, and high utilization levels, we believe HEG is very well positioned to benefit from this transition. I would like to clarify a point on our investment in GrafTech. I would like to reaffirm that our position remains unchanged. This was undertaken as a deliberate long-term investment, our conviction continues to be anchored in the structural foundations fundamentals of this business rather than near-term market movements. Cyclical volatility is intrinsic to this industry, interim fluctuations in no way alter our outlook or our resolve. We remain fully committed to this investment, and we are confident in the long-term value it will create for our stakeholders. We are pleased to inform that the composite scheme of arrangement is progressing well. The NCLT convened meetings of the equity shareholders, secured creditors, and unsecured creditors of HEG are scheduled for this Tuesday, 5th May, to seek their approval of the same. Subject to shareholder, creditor, and other regulatory approvals, we anticipate that the scheme could be approved by the NCLT sometime in the second quarter of this financial year. With that, I would now like to hand over to our CFO, Ravi Tripathi, to take you through the financial performance for the quarter, after which we will open the floor to the question and- Thank you, sir. Good afternoon, everyone. Thank you for joining us. I will briefly explain our performance for the quarter end and for the full year ended 31st March 2026. Compared to last year, we have shown strong growth in volume as well as in revenue. Our sales volume increased by 20%, which helped our revenue grow from INR 2,153 crore to INR 2,569 crores. Total income also increased to INR 2,660 crore from INR 2,279 crores. Our EBITDA increased from INR 388 crores to INR 497 crores, with margins increasing from 17% to 19%. Our operating margins remained stable in the range of 15%-20% during the year, with more than 90% capacity utilization during the year. PBT has increased from INR 148 crores to INR 246 crores, which is a growth of 66%. Net profit also increased from INR 101 crores to INR 181 crores. This improvement came from higher volumes, better control on input costs, and focused monitoring on all fixed costs. The company remains financially strong with no long-term debt as of 31st March 2026. It had a treasury of around INR 792 crores. Coming to the quarterly performance, we reported a loss of INR 189 crores, which is mainly attributable to unrealized losses arising from fair valuation impact on foreign investments and rapid depreciation of rupee, which led to 5% within this quarter. These are entirely unrealized losses, and we have taken impact of them in the books as per the applicable Indian accounting standards. Excluding the unrealized losses, our operating margins for the quarter is intact and is reasonably comparable with the previous quarters. The board of directors has recommended a final dividend of INR 3.4 per equity share, face value of INR 2, subject to shareholder approval at the upcoming annual general meeting. For more details, the full presentation is available on the company's website and the stock exchange. We are now happy to take your questions. Thank you. Over to you, Rajesh. Thank you very much. Thank you. We will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. 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. Our first question comes from the line of Amit Lahoti from Aditya Birla Capital. Please go ahead. Good afternoon. Thanks for the opportunity. My first question is on pricing. During the quarter, GrafTech announced a price hike, and we are getting a sense that there is a growing customer acceptance around the price hike, given that the electrode cost is now less than 1% of the steel prices. If you could quantify how much price hike we are looking to take starting from this financial year, and then is there a similar cost increase for needle coke as well? Manish, will you take this question? Yeah. Yes, sir. Amit, as you know, we book orders let's say 3- 6 months. As we speak, we are about booked almost up until September. For the unbooked orders, we are definitely looking at price increase. Now, it depends from region to region how much price we can get. Also, I would say that we already have some increase in cost due to these energy freights, the price increase is very necessary to be done. How much will be the quantum? Whether it will be INR 300, INR 400, INR 500, it's very difficult to say at this stage how much every region steel companies are able to absorb and also what our competitors are doing at this stage. Definitely, towards H2, there has to be, our aim is to have price increase, not only to protect our margins, but to help improve further. Okay. Does it implicitly mean that we are going to have some cost impact in the first half of the year, even before the price hike rolls in? It'll be there, but not to that extent because you see some of these energy prices and because of our longer product cycle. Let's say for example, if gas prices are going today or furnace oil are going today, but when they will actually use products are made in 2 months and get shipped. There'll be a lag in that. Yes, certainly there'll be some price increase. I mean some cost increase, sorry. Yeah. Noted. My second question is on Greentech. Particularly for TACC, where are we in terms of customer qualification process and how fast can we ramp up once it gets commissioned? Basically, my question is, are there any technology or qualification bottlenecks that are left to be resolved over the next 6-12 months? Amitji- I can take- -with our CEO. Yeah, if Pankaj is there, Pankaj you can answer this directly then. No, he doesn't seem to be there. You go ahead. Okay. In terms of the customer acquisition, I mean you are aware that we had set up a pilot plant for sampling, et cetera, more than 18 months back. You'll be very happy to know that we've made a very, very good progress with all the leading OEMs across the world because Indian cell capacity is all delayed as it seems. But we are actively working with all the Indian ones as well as the companies like LG, Panasonic, CATL, et cetera, where we are in different stages of sampling. You know, those sampling works are going extremely well as well as the plant commissioning. There is no change in the plant commissioning date from April. We hope that, you know, in the first year itself we'll be able to have a decent 40%-60% kind of capacity utilization because of the customer listing acquisitions that are going on right now. There are no issues on technology that we are facing currently. Okay, noted. Thank you so much. Thank you. Thank you. The next question comes from the line of Rajesh Majumdar from 360 ONE. Please go ahead. Yeah. Good afternoon again, sir. I wanted to know the sales volume for the quarter and why the revenue is lower. Is it because of lower realizations or lower sales volume? Yeah, Rajesh, about this Q4, there's a slightly less volume to the tune of, I guess about 1,000 tons and some depression in price, that is only because of our regional sales mix. We are shipping to 40 countries, which lots, which customer, where they're going, there's no depression in price per se because in the market it's just because of our size mix and order mix, which goes quarter-on- quarter. This quarter we had some low price orders going, which dragged down our price a little bit. That's in April to June, you will see it quickly coming back up. It's very temporary. And- cause some dent in the operating profits. Just a related question. Is there any disruption because of the Middle East and what proportion of sales are we selling there? See, annually we do about 20% sales in Middle East and MENA region, Middle East North Africa. Yes, absolutely there's a disruption. The orders which we had from all these customers like Kuwait and Saudis and they all have to be postponed. Instead, we had our orders from other customers, they are being given precedence. They are going now and as soon as the Strait of Hormuz opens and business normalizes, the pending orders which we are holding for Middle East, they will also quickly be shipped. Sir, one more question from my side is that we've seen a huge rally in crude oil, so that will impact the needle coke prices. As your, you're covered till September you said on your contractual side. Are you covered for the needle coke side as well? How much are you covered for and how much will that cost increase percolate to us from which half and will the price increase happen simultaneously with that? You see, we are covered for needle coke purchases. I mean, needle coke shipments starting from the origin till end of June. By the time they arrive, they take 45 days to arrive and our electrode product processing is another 45 days. It safely covers our costs until September from the needle coke side. However, it doesn't protect us from the other materials which we get from India or doesn't protect us from energy. Purely on needle coke side, we remain protected until September. Okay. Sir, one strategic question, one last question from my side is that, do you see the rise in gas and energy prices as an impediment to the electric arc furnace and the CBAM team? Because, as I understand that the energy requirement in electric arc furnace is almost nearly 3x more than that of a blast furnace. Yeah. You see these energy prices, they actually depends in Europe, et cetera, how much. Their power is a major cost for a electric arc furnace steel plant. That energy and the mix of power generation which they have in Europe and U.S., I don't think it'll cause any direct hit to electric arc furnace steel making economics because they are the. It depends on power, at what price they can get the power in their country. There may be some indirect connection, but see there, there are gas-based power plants, but they're more in Middle East rather than in U.S. or Europe. Maybe there's some marginal impact, but that doesn't change anything actually. CBAM is on track. There is no derailment of that, right? CBAM, CBAM is applied already actually. They will see a reduction in steel imports in EU which will encourage the local steel plants to run at a higher utilization and high demand of refined electrode from Europe. Okay. Thank you, sir. Back in- No, just to, just to add, these European steel companies basically have no option. I mean, as you all know, electric arc furnace emits about 25%-30% of carbon as compared to the same steel produced through blast furnace. With the CBAM and, ex-Euro per ton, demand, I mean, in duties and everything that Europe is applying now from first of July, whether the cost is X or X plus something, they will have no option. I mean, there's no way that they can pay that kind of a CBAM duty and still be able to export their steel. They'll have to shift from blast furnaces to electric arc furnaces already. I mean, Europe is already 50%-55%, and Europe is adding at least 25 million-30 million tons of new electric arc furnaces. Some of them have already come in, some of them are under construction. So by 2030, according to our information, and we believe this figure is more or less accurate, because we are exporting 70% of our products to all parts of the world. People are always on the road meeting this customer here and that customer there. Close to 100 million tons of new electric arc furnaces are scheduled to come in, out of which 20 million, 22 million are already in operation. We believe about 30 million tons is going to be operational within 2026, 2027, and 2028. Another 30 million-35 million tons in 2028 and 2030. That adds up to about 100 million tons. Thank you, sir. That requires a lot of electrodes. That will require a lot of electrodes. Except our expansion, there's nobody who has even announced anything as yet. It takes two to three years to even make a small brownfield expansion, as you know, in our case. Thank you. Thank you. The next question comes from the line of Ahmed Madar from Unifi Capital. Please go ahead. Yeah. Thank you for the opportunity. Just picking up from the questions you answered before my turn. For Q4, if you can quantify what was the sales volume? You have quoted 94% capacity utilization. In terms of sales volume compared to last quarter, can you quantify how many 1,000 tons have been impacted because of logistics or any other reason? Yeah. Did I say 1,000 tons almost? Between Q3 and Q4, hardly 1,000 tons got impacted because these orders had to be postponed. Okay. But were- any postponed. You divert it. You will divert it here and there. See, most of it, most of the postponements got diverted, and there's an impact of only $1,000 less in Q4 compared to Q3. Okay. Got it. As Manish, as you were telling me, I mean, because the situation is so desperate. You see, the steel companies in the Middle East are desperately placed as far as the raw material and everything is concerned. They don't want to close their plant. They are prepared to pay $200-$300 extra for electrode to be sent by road. Instead of $20-$30 cost that we were incurring to take the electrodes to any Middle Eastern countries, I believe, there is a way that you can take the electrode to some Middle Eastern port by ocean. It takes as much as $200-$300 to truck it down to the location of the plant, and they are prepared to pay for that. I mean, obviously, $300 per ton of electrode means nothing to them, rather than closing the steel plant. Correct. Sure. Got it. In terms of pricing, as you said, you are already booked till September, but I'm assuming post-September contracts you will be probably doing now or maybe a few months down the line. In that renewed, committed volumes, do you see any significant price increase, or are you already into those conversation of increasing the price? If you can probably give some qualitative and quantitative commentary on the same. For all the new inquiries we are receiving, now we are pricing it accordingly. We are taking into account how much our costs have increased, some price increase was anyway necessary. All inquiries don't come in one go. They keep coming every 2- days, 3- days, 1- week, 10- days. Every customer has their own buying ways. We are offering increased prices in the market, we are quite hopeful that some amount of the price increase should get absorbed, the steel industry should be willing to do that. It also depends on what our peers group is doing, how much seriously they are pursuing the price increase. We will see, we have started offering increased prices for the uncommitted volumes. Sure. In terms of needle coke. Sorry to interrupt. Sorry to interrupt, Sorry to interrupt, Ahmed, sir. May we request you to return to the queue for following questions? Several other participants are waiting. Thank you. Our next question comes from the line of Kartikeya Kumar Pandey. Please go ahead. Hi. Am I audible, sir? Yeah, yeah. You are. Yeah, Kartikay. Yeah. Thanks for the opportunity, sir. Sir, although I understand the whole investment rationale and the, you know, tailwinds, multi-year tailwinds that we have, there's some nuances that I wanted to understand from you. Needle coke capacity supply is a constraint that we have in our industry. That capacity, the demand for that is from our industry as well as from the anode industry. When we are saying that we are adding 120,000 tones of, you know, incremental demand. Again, there are reports of around 100,000 tons of addition of demand from anode side. Somewhere down the line, the whole math is not adding up to the existing needle coke capacity. There are no recent capacity addition also happening in the needle coke industry. I just wanted to understand how are we going to fulfill the 120,000 tons of demand, given the fact that we are also not backward integrated like West players. Some lights on that from your side. I'll tell you a little bit. It is motivating me to tell you something which somebody asked, and we didn't answer that question very clearly. The only reason that we decided to invest whatever we invested to buy GrafTech shares was primarily because that is the only graphite company in the world who is 75% to 80% backward integrated. I'm talking of GrafTech. That's the only graphite company who has a needle coke plant of its own to the extent of about 75% of their own capacity. If you go back to 5- years ago, 6- years ago, when the electrode prices went up by 3x, 4x, 5x, over a period of time, the same thing happened with needle coke. The needle coke prices went up from about $1,000 to about $4,000 in a matter of 5, 6, 7 quarters. GrafTech was the only company which had about 80% of their captive requirement was being met by their own coke plant. While they made a lot of money like all the other graphite companies made because of price increase on electrodes, they were in a unique position that they made an additional $2,000-$3,000 on the needle coke. While people like us or the Japanese or Graphite India or anybody else except GrafTech had to buy needle coke at about $3,000-$4,000 higher than what it used to be in a matter of less than a year. So our logic of buying these shares about two years ago, one and a half year ago, was simply this, that, if and when we see the same time and the same days as we saw five, six years ago, when electrode prices will go up and backed up by needle coke, while all of us, all others except GrafTech will make a lot of money in electrodes, but this is the only company in a unique situation that they will not only make money on electrodes, they'll also make a lot of money on needle coke. This was a very simple logic, for which we invested. Of course, I mean, in the stock market, you can never be 100% right or you can never be 100% wrong. At the price, when we started buying, it looked like a steal, and it did go up by 30%-40%, and we decided not to sell, and it went down by 30%-40%. It has recovered a lot in the last 2-3 months. Again, it's just a matter of time. I mean, as soon as we see some uptake and some of these 100 million tons of electric arc furnaces starting operations, which some of this has already started. As soon as we see that, we see a shortage of electrodes. We are seeing if there is a shortage of electrode, there will be a shortage of needle coke for sure. That was the simple reason that we were looking at, we went ahead and invested that money. Fair enough, sir. Understood. I get your point. Sir, according to GrafTech, like the 120,00 tons of extra demand that we have seen, if I'm not wrong, they have mentioned that currently of around 650,000 tons, one third has already been supplied by Chinese players. This is not what I am saying. I guess this is what GrafTech is saying, and this is in the UHP market. I mean, all the quality issues are there, but what do you read from this? Incrementally, like can we get market share in this 120,000 tons or like Chinese players are also increasing its share, like increasing the supply What is this 120,000 tons supply that you're talking about? No, sir. If you go to GrafTech's commentary in their annual report, they are mentioning that around one thirs of existing 650,00 tons of demand that is there in the graphite electrode market currently is met by Chinese players. That is bringing down the overall capacity utilization of the industry to 60%-65%. My question is that what's stopping them from doing the same in the incremental 120,000 tons of capacity that's required? See, sir, can I answer this question? Go ahead. Go ahead. It's very what you are saying, what in their commentary, we can't say what. I mean, they have their own reasons and logic to say that 120,000 tons of UHP is being supplied from the Chinese, which is fine. You see, in China is exporting a lot of electrodes, predominantly they are all the high power grade. Yes, we will not deny that they do not export UHP electrodes. They do export UHP electrodes of almost the same order. We believe it's probably 100,000 tons out of the 404,000 tons they export. For in the low power furnaces and sizes, let's say up to mostly up to 24 inches, they're definitely doing that. GrafTech, of course, in their con call, talks about China. They're talking about impact on them. They talk about China, they also talk about India, which is fine. The capacity utilization they are running, whatever, so whatever is written there, 65% or something in the last quarter. Please remember, HEG is running at 90%+. They have to explain for themselves and we have to talk about ourselves. They're explaining. They have to explain to their stakeholders why they are at this. They are giving this reason, which is fine. Which is totally fine. You are saying what is stopping them. If you're talking about HEG, we are a very, I would say a very cost competitive plant because of our size and our location being in India. Our structural costs are lower. When in our calls we don't mention that because of Chinese so many UHP exports, we are being dented. Thank you. Right. For the tier West Bengal. We have the next question coming from the line of Mr. Manan Poladia from MKP Securities. Please go ahead. Hi, sir. Thanks for the opportunity. First question on, again, the quarterly number that's come out. You said there are unrealized losses in the investments and that's been the reason driving the loss. If you could quantitatively tell us if we pull out the graphite loss and the loss on the Forex instruments, is there a shipping cost hit also that is large in the other expenses, jump that has happened this quarter? Secondly, if you could tell me from your contracts when you have a fixed price contract, say six months ahead, is there a force majeure clause within it, above a certain level of oil price or shipping prices per day? I'll answer the last question first. You see, in particularly in Middle East where freight costs shot up from $20, $30 to more than $300, of course, we had to tell our customers, and we did send letters of force majeure wherever we are impacted. See some little bit cost increase it is expected that supplier will bear. Anything out of the ordinary, of course we have the right to go to our customers and tell them, and we did that for Middle East and they're taking material FOB Mumbai and they're paying for the extra freight. We, the freights have also increased for U.S. and Europe, but they are not yet of the order that we go back and breach our contract or request them because it is still absorbable. Once you book a 6-month contract, there's some costs which will go up and down throughout the execution of the order. It can go up 5%. It is expected. It sometimes gets lower because for us, needle coke pitches, energy, I mean electrical power, they are all, they're our major costs. During a course of 6 months when we commit to a certain price, unless something goes really wrong, we don't usually approach our customers and, you know, ask them for a price increase because they can do it likewise. Suppose they keep track of our essential raw materials and if the price goes down a shade, they don't come back to us for a renegotiation of the contract. We try to do as much visibility we have. If we have a 3-month, 3 month our needle coke is tied up and electrical power is tied up, then we take a safe call as to how much. During the course of time some increase, decrease does happen. Right, sir. On the first question, with the other expenses. That Ravi Tripathi, our CFO will answer. Yes, in other expenses, if you see, if you compare with the previous quarter, then you can see that we have added, whatever the fair valuation losses we have added in the other expenses. That's why the other expenses is looking higher as compared to the previous quarter. That's, that's in your note. I'm just apart from that, there is a still large jump that has not been disclosed in the note. If you could just quantify some of that for us. The another, sir, the some impact of the exchange gain loss during the quarter due to the rapid rupee depreciation. As I said in my initial opening remarks that approx 5% rupee depreciated within quarter. That impact is also is there, that's why the other expenses is higher as compared to the previous quarter. All right, sir. Understood. Thank you. Thank you so much. Thank you. The next question comes from the line of Mr. Raj Kiran Gandhi from SBI Mutual Fund. Please go ahead. Hi. Thanks for the opportunity. Is it possible to quantify this FX loss, which is being reflected in other expenses? Yeah. This is, Raj, see, this FX loss is completely the unrealized loss that we. Sure. identify in the range of INR 35 crores-INR 40 crores within the quarter. Okay. Okay. Got it. Given that rupee has depreciated further, from the quarter end, so, we should expect something next quarter as well? By when will this reverse? Because as you mentioned, this is unrealized. Yes, in case the rupee suppose it depreciate then definitely this will reverse. You can see some reversal in the next quarter. Okay. Got it. Any particular reason, let's say even if, on the gross margin side itself, if I were to look on a per ton basis, there has been some contraction, Q-on- Q. Any particular reason for that? Or it's Yeah, Rajeev, yeah. Rajeev explained that, see, when this war happened, all these orders needed to be shuffled up and down. You know? Okay. There were some Middle East orders which didn't go, and some other orders which went. Quarter-on-quarter there's always a slight movement up and down. Got it. Because of this war thing, the Middle East orders had to be, you know, postponed till the situation normalizes, and some other orders. It depends which orders are going in which particular quarter. It's not a cause of concern, and you will see that coming up in April to June. We're very hopeful that by the time these issues will get resolved, because Middle East is next door, and we'll start pushing material as soon as the situation is clear. Got it. Got it. Mix turned adverse in the sense that when Middle East type revenue is a better margin geography, mix changes resulted in a bit of. Yeah. Yeah, logistic costs are much lower for Middle East. Mm-hmm. Okay. No, but the prices can be different. I mean, we can't talk about, which area. Sure. Sure, sure. Just in terms of your OpEx, how much of it is rupee denominated or, and, how much is FX denominated? I'm just trying to presume because of the sharp depreciation in rupee, maybe over time, how much of realization benefit can come to EBITDA? No, our. We gain by rupee depreciation for sure. I mean. Uh-huh ... foreign exchange outgo is only on account of needle coke, which is. Right which is the smaller part compared to the total realization. obviously we are a net exporter, so we- Okay. Right. Okay. Right. ... we gain more by rupee depreciation. Right. Just trying to understand what is the like X of RM, how much of our cost is dollar denominated, which will also then go up along with depreciation. I'm just trying to understand net-net how much benefit you will retain of the rupee depreciation. We don't want to talk about. Over time, maybe near term. Sure, sure. No, we don't want to talk about specific numbers. Sure, sure. Perfect. Perfect. Thanks. Thank you. The next question comes from the line of Aejas Lakhani from Unifi AMC. Please go ahead. Yeah. Hi, am I audible? Yeah, yeah, you are. Okay. Thanks for the chance. I wanted to understand that given that needle coke is also being used in batteries, and this is again premium or super premium, you know, battery grade material, I want to understand a little bit more about the raw material, you know, sourcing and availability and capacities globally. One is could you talk about where do you procure your needle coke from? What is that manufacturer's capacity? Are they adding capacity? Globally, is needle coke capacity additions taking place? Only to understand broadly that if the demand for needle coke gets repivoted more towards, you know, towards the battery side, what kind of, you know, scarcity that could do for decarbonization in the air? That's broadly what I'm trying to understand. Thanks. I'll take this question. You see, about 4, 5 years ago when the graphite electrodes suddenly went into a serious shortage and the prices went up by 3x, 4x, and so did the needle coke, I mean, obviously. At that time obviously we talked to all our 3, 4 suppliers of needle coke. Firstly, needle coke is also a very technology based product. I don't think there has been any new greenfield needle coke plant put anywhere in the world in the last 70, 80 years. There has not been any new entrant in this last 70, 80 years. There are only three, four suppliers in the world from Japan and U.S. What we realized at that time, 5 years ago, when the needle coke prices went up by 3x, 4x, so did the electrode price. At that time we realized that what the price that we can pay for needle coke, the battery guys cannot pay. Because I believe in the battery, needle coke is one of the maybe seven, eight, nine things which goes as part of their raw material. Needle coke can be replaced by one of these six, seven other raw materials that you can mix. For graphite electrode, there is nothing that you can do. You have to only use this particular needle coke, which is produced by these three, four companies. At that time also, while we could pay whatever sharp increase happened in the needle coke price, the battery guys could not pay that kind of a price. They had an option to replace needle coke by something else, and that something else probably is three, four, five, six different raw materials. If they were using, let's say, 10%, 12%, 15% of needle coke, they replaced this 10%, 15% of needle coke by other four, five products that they were mixing in any case. Needle coke capacities have not gone up. I mean, just like graphite electrodes, if you see the last 40, 50 years of graphite industry in the world, except HEG, there has not been any new expansion anywhere else in the world, whether in India or in Europe or America or Japan. On the contrary, The capacities have shrunk in the last four, five years. To that extent, there was no need for the needle coke guys also to expand. I mean, they could not sell whatever they were producing for the last five, seven years. Sorry, sir. If I understand the last bit correctly, you said that the needle coke suppliers were not able to sell their desired quantity for the last four, five years? Yeah, that's why when it, I mean, it's, they were underutilized for a while. If, so it's not, it's not that battery and electrodes are using exactly the same kind of product. There's an low-grade coke which all these companies also make. That, so the needle coke per se, there's lakhs and lakhs of tons of demand in for the battery coke. Had it been true, then needle coke suppliers would be running more than full. We have seen when the capacity utilization of GMG was down in the last one or two years, they had extra capacity to make. There was abundant supply of needle coke, which clearly showed that it was not exactly going to the battery applications. Thank you. The next question comes from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead. Thank you, sir, for this opportunity. Just one follow-up question again on the needle coke. You mentioned that we haven't seen any material increase in graphite electrode. Amit, excuse me. Are you there? Disconnected. Are we disconnected? What happened? Manish? Yes, I am there, sir. Amit was asking some question when he disappeared. Either he's disconnected or you and us are disconnected. No. No, I'm also there. I'm also connected. Sir, sir, all the lines are connected. Okay. Oh, maybe we lost Amit. Yes, sir. Rajesh, we are D.C., yeah? Rajesh? Sir, just give me a minute. Sir, apologies for that. The previous questioner's question has been dropped. We have the next question, which is coming from the line of Mr. Raunak Agarwal from iThought PMS. Please go ahead, sir. Yeah. Hello. Yeah, go ahead, please. Hello. Yeah. Yeah, go ahead. Since GrafTech has taken a price hike, do we expect this, price hike to be, what, get fully priced in by FY 2028 volumes? I'm sorry to interrupt. Raunak sir, your line is not very much clear. If you're using any other mode, may we request to use the handset, please? Yeah, am I audible right now? Sir, you're sounding muffled and slightly distant right now. Hello. Yes, sir. This is much better. Yeah. So, GrafTech has taken a price hike, of around $600-$1,200. By the end of this current financial year, for FY 2028 volumes, can we expect a full price hike to be seen in our volumes also? See, everybody's talking about uncommitted volumes. Sorry. Yeah, I hope by GrafTech or we announcing that we are taking a rise of $600, $1,200, I wish the market behave, the market accepts whatever we are talking about. I mean, it's one thing to say that I want to do this, and there's always the other side who negotiates with you. In this business, as you know very well, it's a very long process-driven industry. Some products take. The minimum time taken to produce electrode is about 2-2.5 months, and the longest time takes as much as 4-5 months. Obviously, in this kind of a business, we have to take orders at least for the next 3-6 months. Otherwise, we can't even meet the delivery schedules. If you are exporting 70% to more than 30 countries. Yes it takes time for the products to reach America. America will take like 40, 45 days to reach. we are committed on a certain price for a certain period of time. Similarly, we are also committed to buy needle coke for a certain period of time at a fixed price. Okay. There's a time lag between when you announce that you are taking a price increase and the time that you start getting it. Yeah. Yeah, sure. That's it from my side. Thanks. Thank you. The next question comes from the line of Rohith Potti from Marshmallow Capital. Please go ahead. Thank you for the opportunity. Your commentary is always very helpful to understand the industry and reports. On needle coke specifically, we mentioned that we have supply through June, which will last us till September given how the manufacturing works. Is there any indication as to with the Middle Eastern crisis going on, how much of an increase we are seeing in needle coke prices right now? I'm guessing some amount of negotiation would have begun for the next shipment, right? So far there is no indication. We've not heard from them. Maybe in the month of June or maybe by 15th June or something when we actually sit down and discuss the next quarter's contracts. I don't know what they will come up with. Understood. With the crude price increase and as the needle coke raw material is a derivative, there should be a price increase. Is that correct? Yeah. It eventually comes from oil. It comes from decant oil. When oil goes up, of course, they are impacted. We'll see how the oil prices are behaving. They might come down. They might stay where they are. Probably the right time when we'll come to actually know of it will be in some time in the middle of June. Thank you. The second question is that, in the opening commentary, Chairman, sir spoke about the regionalization of trade even in our industry, right? I mean, there is a lot of protective measures, including the CBAM measures in Europe, against steel imports. There is talk of countervailing and antidumping duties in U.S., against Indian-Chinese imports, which apparently they expect to see an outcome by September. In this increasing regionalization, that's happening, how do you see our volumes over the next 2, 3 years? Do you think it would affect our volume that we can export, or it won't impact us much because of our cost competitiveness? It all matters. It all It all depends upon how the whole thing goes. Obviously we have taken a very strong law firm from India, and we have taken a very strong law firm in U.S. They've taken all the data and everything from us. We'll know in the next four, five months as to what happens. We don't think that we are doing something seriously wrong, at least in America, where our pricing is amongst the highest. It's a matter of legalities. We'll see what happens. The whole world is becoming very protective, as we, as we have seen in the last 10, 15 years. Got it. All I can say is that we are the lowest cost producer. To some extent, if they are, if these duties or taxes, whatever you want to call, if that's at a reasonable level, we can probably absorb it. Understood. That was helpful, sir. The price increase you spoke about, I mean, the primary driver of price increase for us in the graphite electrode industry would be driven by the cost increases related to what's happening in Middle East, right? There is no other reason why there is a price increase, or is there something else driving the price increase? Their costs are much higher than ours. It's not just a Middle East problem. I mean, even before the Middle East problem, if you go through the quarterly results of all the main ones that there are only two, three international companies. They have been losing money pretty big time even before the war. I mean, my confusion is more around why now, right? This, what you've been saying has been going on for 3, 4 years probably. Around this time, is the crisis more a coincidence or, I mean, is it the nudge that the market needed to increase prices? Why this year and, will it continue over the next year? Is it difficult to answer these questions given the volatility? What exactly was your question when you said why now? No. What you said about the capacity has been, the supply has been shutting down in the industry over the last 3, 4 years. The losses in GrafTech and the Japanese players has been going on for 2, 3, 4 years. We are seeing finally price increasing increases potentially happening now in the graphite electrode space. What is driving the price increases to happen this year, and will it continue over the next year? Is it too difficult to answer this question? Well, sir, graphite electrode industry was looking for a price rise not from now, for the last almost two years, because this is unsustainable for them. Our peer group incurring losses quarter by quarter was unsustainable. Everybody was hoping for things to turn around and price rises to happen. If you say why now, probably is the last straw on the camel's back that now with this additional Middle East thing, war, it's now totally unsustainable for them. I think now this was the right time. If not now, then when? It's like that. As you said, why about the timing, I should say that all of us, including HEG, were looking for price increase to happen for last quite a few quarters, and it didn't happen. Overall, over and above, now there's a Middle East situation, rise in energy, rise in freight. The last straw on the camel's back. Understood. No, thank you for your answers. It's been very helpful. Thank you so much. Hmm. Thank you. The next question comes from the line of Akhilesh from Emkay Global. Please go ahead. Yeah. Hi. Good afternoon, sir. My first question is on the utilization of graphite electrodes. How much exactly it has been for the fourth quarter? You know, as we say, the volume is only affected by 1,000 tons, but it does not reconcile with the Q3 numbers, because in Q3 we had said that 85% utilization is there. On my numbers, it is coming at around 2,500 tons for the quarter difference. Can you please explain that? The capacity utilization, when you say we are talking about production, how much we produce, and then there's sales wise. If you strictly talk about capacity utilization on production, actually it's 95% for the quarter. Sales wise, it is less than that. Overall, for the year it is more than 90%. Okay. On production wise, 2,500 tons of number, the difference what I'm getting is correct. On the sales volume- It's. We are down 1,000 tons. Down 1,000 tons, absolutely. Okay. Sure. The second question is that, why other income has gone down during the quarter? Does it only constitute the interest income or any other part of income is also included in this? How should we see it going ahead on quarter-on-quarter basis? Yeah, other income in the quarter is lower due to the loss in the the fair valuation loss which we have classified in the other expenses. That's why the income is coming in the quarter is lower side as compared to the previous quarter. Going forward, it will be in the same line as we are in the previous quarter. Okay. Okay. Lastly, sir, from my end, last quarter in Q3 we had guided for the sustenance of EBITDA margin of around 22% for the next couple of quarters. Since we are in Q4, because of all these Middle East crisis, we could not sustain that kind of margin. How should we see it now going ahead for the quarters and for FY 2027, 2028, if you could shed some light on that? We, according to me, in the first two quarters, April to June, July to September, see, we all along these quarters we have been, as Ravi Tripathi said, we've been between 15%-20%, and we have closed this year also at 20%. Now, these two quarters where we have committed volumes should be around, again around, maybe around 17%, 18% or something. I can't hazard a guess. It depends upon what happens in the balance of the quarter. Should be around that number. Tripathi ji, if you want to correct me, please go ahead. No, sir, these are correct, sir. The EBITDA range will be the 20% we can say for the next first quarter and to second quarter, sir. For this full year it will be more than 20%? Is it good to say that? Yes. Should be. Yes. Yes. + 20%. Should be. Okay. Sure. Should be. Okay. Yes. That's it from me. Thanks. Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference away to Mr. Ravi Jhunjhunwala for closing comments. I guess if there is no further question, so let me thank all of you, for taking so much of interest and asking us some very probing queries. This forces us to think about answering all these things which will, a couple of things maybe we would not think about otherwise. Thank you very much, and I hope, you continue to ask us these uncomfortable questions and we are able to satisfy you. Thank you very much, and I look forward to meeting you again in three months' time. Thanks. Thank you, members of the management. On behalf of HEG Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.