Ladies and gentlemen, good day, and welcome to Hindalco Industries fourth quarter FY 2022 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 then zero on your touchtone phone. Please note that this conference call is being recorded. I now hand the conference over to Mr. Subir Sen, Head of Investor Relations of Hindalco. Thank you, and over to you, sir. Thank you, and a very good afternoon or morning, everyone. On behalf of Hindalco Industries, I welcome you all to this earnings call for the fourth quarter of financial year 2022. In this call, we will refer to the Q4 FY 2022 investor presentation available on our company's website. Some of the information on this call may be forward-looking in nature and is covered by the safe harbor language on slide number two of this presentation. In this presentation, we have covered the key highlights of all the businesses for the fourth quarter of the financial year 2022 and a segment-wise comparative financial analysis of India business and our subsidiary, Novelis. Please note that the unallocable corporate SG&A expenses, which has been used to apportion to individual business segments, is now clubbed under unallocable expense to our income to truly reflect individual business segment debit in the Indian operations. The corresponding segment information for the prior periods have also been restated accordingly for a comparative analysis. We have with us on the call from Hindalco's management, Mr. Satish Pai, Managing Director, Mr. Praveen Maheshwari, Chief Financial Officer. From Novelis's management, we have Mr. Dev Ahuja, Chief Financial Officer. Following this presentation, this call will be open to any questions you may have. An audio replay of this call will be available on our company's website. Now, let me turn this call to Satish. Thank you, Subir. Hello, everyone, and thank you for joining today's conference call on Hindalco's earnings for the fourth quarter of FY 2022. Let me now start with our progress for the financial year 2022 across the various sustainability metrics on slides five and six. On the environment front, with our continued focus on water waste, air emissions, and biodiversity, we have achieved 86% of total recycling and reuse of waste, 102% of bauxite residue utilization at three out of our four alumina refineries. Utkal Alumina Refinery is conducting two pilot pits for the reuse of bauxite residue by backfilling of mines and construction of roads, of which pit one is ready, and pit two is under construction. We have already applied to the Indian Roads Congress for accreditation of bauxite residue as a replacement for natural material for road upgrade and embankment construction. On the fly ash recycling, I'm very happy to inform you that we have now attained 114% of fly ash recycling this year, which means in this year we have recycled beyond what we generated and sent to cement and other users. On water in FY 2022, we have achieved 9% and 25% reduction in specific water, fresh water consumption in terms of liters per cubic meter per ton in aluminum and copper, respectively, which is well in line with our target of 20% reduction by FY 2025 from the base year of FY 2019. We are also adding one site each year to achieve zero liquid discharge by the year 2025. We are working on several fronts, like increasing the rainwater harvesting, reducing the consumption of fresh water, and ensuring zero liquid discharge at all our facilities. To date, we have created 3.14 million cubic meters of rainwater harvesting capacity through our CSR activities. Overall, we have achieved a water recycling of 16.1 million cubic meters in FY 2022. We are on our way of reaching net water positivity by 2050. On green cover and biodiversity, in line with the International Union for Conservation of Nature guidelines, we have implemented the BMP at two of our plants and mines. We are also implementing this at four of the other mine sites and further be implementing green belt at all our sites. This is now spread over 5,100 acres, of which 3,300 were developed in this fiscal year. Coming to the renewable energy and safety updates on slide six, I'm happy to announce that we have reached our FY 2022 targets of 100 MW of renewable capacity, of which 50 MW solar was installed at Renukoot, Renusagar, Mahan, Mauda, and Taloja facilities. Currently, 33 MW of renewable projects are under execution and another 45 MW is under finalization, which includes floating solar, wind power, renewable hybrid, etc. We're targeting to reach 200 MW of solar and wind without storage and another 100 MW with storage by the end of 2025. We are also working on a large-scale renewable hybrid project with a third party on pumped hydro, which can provide up to 100-300 MW for the Aditya plant with connectivity to the 400 kV national grid targeted by December 2023. The aluminum- specific GHG emissions were recorded at 81.5% in FY 2022 from the base year of FY 2012. On safety, we are committed to zero harm and have been continuously upgrading our safety programs and systems to meet international standards to provide a safe environment. The LTIFR was recorded at 0.28. However, unfortunately, there were two casualties for contract workmen recorded at Indian operations in this fiscal. Coming to slide 8 with the key highlights of our performance in Q4 FY 2022. Novelis recorded quarterly shipments of 987 KT in Q4 FY 2022, which was up from 983 KT in the corresponding quarter of last year. EBITDA stood at $431 million, down 15% year-on-year, primarily due to cost inflation, semiconductor chip shortage in automotive, and short- term operational challenges. EBITDA per ton was at $437 per ton versus $514 in Q4 FY 2021. Net income from continuing operations recorded at $217 million, up 21% year-on-year this quarter versus $180 million in the corresponding period last year. Novelis recently announced its $2.5 billion greenfield fully integrated rolling and recycling plant in the U.S. that will support strong demand for aluminum beverage packaging and automotive solutions in this region. Moving on to Hindalco's India Aluminum business performance in quarter four. Our business EBITDA for India Aluminum was at a record high of INR 4,050 crores, up 123% year-on-year. EBITDA margin was at 41% and continues to be one of the best in the industry. Aluminum metal sales were up 2% at 336 KT, while our value-added product quarterly sales were at a record 93 KT this quarter, up 1% year-on-year. During the quarter, Hindalco won the Meenakshi captive coal mine with an annual capacity of around 12 million tons to enhance our coal security. Turning to the quarterly performance of the copper business on slide 9. Our cathode production in this quarter was 94 KT, while CC rod production was at 59. Metal sales were at 105 KT, while CC rod sales were at 74 KT, up 2% year-on-year in line with market demand. Copper EBITDA was at INR 387 crore this year, up 20% year-on-year on the back of higher volumes, better operational efficiencies, and improved by-product realization. Coming to our quarterly consolidated performance. Hindalco EBITDA stood at INR 7,597 crore, up 30% year-on-year. Quarterly consolidated PAT for continuing operations was at INR 3,860 crore, up 98% year-on-year compared to INR 1,945 crore in the corresponding period last year. Hindalco continues to maintain its strong treasury balance of around $1.1 billion in Novelis and INR 16,000 crore in India at the end of March 2022. Net debt to EBITDA continues to remain well below two times at the end of March 2022 at 1.36 versus 2.59 times at the end of March 2021. On rewards and recognitions, I'm pleased to share with you that Hindalco retains its position as the world's most sustainable aluminum company in the DJSI 2021 ranking and the only aluminum company in the prestigious DJSI World Index 2021. Hindalco has also retained its prestigious gold class distinction in the S&P Global Sustainability Yearbook of 2022. Please refer to the next slide of this presentation on slide 33 for our other awards and recognitions. Turning to the broader economic environment on slide 11. Global economic growth is expected to moderate to 3.6% year-on-year in calendar year 2022 after a post-pandemic rebound of 6.1% in calendar year 2021. The Russia-Ukraine war, lockdowns in China and an aggressive tightening in monetary policy by advanced economies pose downside risks to the near term growth outlook. These concerns, however, are being tempered by the resilience in economic activity outside China, visible in the global PMI numbers and U.S. economic activity data. Rising global inflation continues to remain a concern as broadening price pressures and firm commodity prices are expected to keep inflation elevated for a longer period. China's Zero Covid policy is further exacerbating global supply chain pressures and inflation concerns. IMF has projected a global inflation of around 7.4% in calendar year 2022. Volatility in the commodity and financial markets as well as supply chain disruptions are expected to continue in the near term until geopolitical tensions deescalate. On the domestic front, despite global challenges, economic activity has shown resilience due to solid fundamentals and a favorable policy mix. Recovery in the contact intensive service sector, increasing vaccination and gradual improvement in domestic demand is expected to support the ongoing pace of growth. The government's focus on CapEx, improving capacity utilization of the manufacturing sector, strong corporate balance sheet and comfortable forex reserves can shield the economy through external shocks. Merchandise exports have recorded double-digit growth for 14 consecutive months, and the growth in imports has also signaled firm domestic demand. On the other hand, any worsening of the external environment, persistent supply bottlenecks and spillovers from monetary policy normalization in advanced economies shall pose a downside risk to the growth projection. The RBI has projected FY 2023 GDP growth of around 7.2% year-on-year. Global inflation dynamics are the driving force of inflation in India, with both headline and core inflationary pressures rising in the last four months. Persistent global supply chain disruptions may keep prices higher for longer, with some easing expected in the second half of FY 2023. The RBI has projected an inflation rate of 5.7% in FY 2023. Let me now take you through the aluminum industry overview on slides 12 and 13. In calendar year 2021, the global production of aluminum grew 4% to around 67.4 million tons, while global consumption rebounded sharply by 10% to around 69 million tons due to the base effect. Hence, the global markets were in a deficit of 1.6 million tons in calendar year 2021. On a region-wide spread, Chinese production increased by 5% year-on-year to 38.5 million tons. Chinese consumption was primarily driven by sharp increase in demand for electric vehicles. This offset the subdued Chinese construction market and lower ICE vehicle production on account of the semiconductor chip shortage. Therefore, the overall Chinese consumption grew by 6% to 40 million tons in calendar year 2021, resulting in a market deficit of 1.6 million tons. The rest of the world production grew by 3% year-on-year to around 29 million tons, whereas consumption grew by 14% year-on-year to around 29 million tons due to the low base effect, resulting in a balanced market in calendar year 2021. In Q1 calendar year 2022, the overall world production was flattish while consumption grew marginally, leading to a small deficit of 0.1 million tons. Talking about the region-wide split of Q1 2022, Chinese production fell by 1% year-on-year to 9.6 million tons, whereas consumption grew by 2% year-on-year to 9.3 million tons, leading to a surplus of 0.3 million tons in China. In the rest of the world, there was some disruption in production due to rising gas prices. Despite production cuts, the overall production grew by 2% year-on-year to 7.2 million tons. Consumption grew by 3%, reaching 7.6 million tons. This resulted in a deficit of 0.4 million tons in the rest of the world's metal balance. As the global markets remain in deficit, inventory levels continue to decline. Consequently, the global aluminum prices continued to grow at $3,280 per ton in Q1 of calendar year 2022 from an average of $2,762 per ton in Q4 of calendar year 2021. The rally in aluminum prices in the Q1 calendar year 2022 was driven by the Russia-Ukraine geopolitical situation and depleting global inventories. Global aluminum prices average for the current quarter is at $3,100 per ton, factoring in the impact of COVID-related restrictions in China. Coming to slide thirteen, the domestic demand for aluminum in Q4 FY 2022 is likely to reach 1,038 KT, reflecting a degrowth of 3% year-on-year and a 1% growth sequentially. The demand for aluminum packaging demand continues to rise in line with the rising demand for aluminum, mainly from the pharmaceutical sector. Sentiments in the real estate sector were optimistic, owing to the robust residential and commercial deals and government infrastructure public projects like AIIMS, IITs, airports, railway stations, metro stations, etc. Growing e-commerce penetration is also benefiting the consumer durable sector. The automotive sector continues to face headwinds due to the semiconductor chip shortage. With a record vaccination of 192 crore doses and supportive government policies, the economic sentiments are likely to improve, driving a broad-based recovery in demand across all sectors. Moving to slide 14, the global FRP demand is expected to grow about 6% in calendar year 2022 versus 10% in calendar year 2021. The market demand for beverage can sheet is expected to grow by around 5%, driven by consumer preference for sustainable packaging options and a package mix shift towards infinitely recyclable aluminum. The automotive segment is estimated to grow at 10% in calendar year 2022. The mid to long term outlook remains robust, supported by growing consumer demand for vehicles that use a higher share of aluminum, like SUVs, trucks and electric vehicles. However, in the near term, continued semiconductor shortages are impacting the automotive industry, combined with supply chain challenges on account of China's zero COVID lockdowns and the ongoing conflict in Ukraine. These headwinds may impact the automotive builds in the current year. The demand in specialty segment is expected to grow by around 4% in calendar year 2022, with strong customer demand across markets, including building and construction, consumer electronics, container foil packaging and EV battery enclosures. The aerospace segment is expected to grow by 30% in calendar year 2022, as order bookings are now improving with the resumption of air travel, and is expected to be back to pre-pandemic levels by fiscal year-end. Domestic FRP demand is expected to grow by 7% year-on-year this quarter, while it's expected to grow 9% sequentially. Demand remains strong in the packaging and consumer durables sector. Building and construction demand improved due to government projects. However, automotive sector continues to face some headwinds. Demand is likely to grow in Q1 FY 2023 due to stable demand in packaging, consumer durables and B&C demand. Turning to the global copper industry on slide 15. In calendar year 2021, global production increased by around 4% year-on-year, while consumption increased by 6%. In calendar year 2021, production in China increased by 9% year-on-year and consumption by 5%. In the rest of the world, excluding China, production remained at similar levels on a year-on-year basis, while consumption grew by 7% year-on-year. In Q1 calendar year 2021, global copper production increased by around 3.2%, and consumption grew by 0.9% on a year-on-year basis. During this same period, Chinese production grew by 3.8% year-on-year, while consumption increased by 0.2% on a year-on-year basis. In the rest of the world, excluding China, production grew by 2.9%, whereas consumption increased by around 1.4% on a year-on-year basis. The spot TCRC was higher at $0.171 per pound during Q4 FY 2022, as compared to $0.157 per pound in Q3 FY 2022. This increase was as on account of multiple disruptions in smelters, mainly driven by the temporary closure of the Chinese smelter Jiangxi of around 400 KT capacity. It is likely that this smelter shall restart in June 2022, and is likely to coincide with multiple Chinese smelters restarting their facilities post their plant maintenance. The higher demand from all these smelters could have a negative impact on the spot TCRC during the latter part of FY 2023. However, with new mines being commissioned during the second half of FY 2023, the spot TCRCs are expected to improve during this period. Coming to slide 16. On the domestic side, in Q4 FY 2022, the overall market demand increased by around 6.8% year-on-year to 172 KT in Q4 of FY 2021. Imports declined by around 21% year-on-year to 33 KT in Q4 FY 2022. On a quarter-on-quarter basis, the market demand increased by 6%, while imports declined by 13% sequentially. The trend of operational and financial performance for each of our business segments this quarter and that of the corresponding period of last year is covered in further slides and annexures to this presentation. Let me now conclude today's presentation with our key focus areas on slide 13. Our focus on cost optimization, integration, and ESG has helped the company deliver consistent overall performance quarter-on-quarter in fiscal FY 2022, despite rising input costs and inflationary challenges. Our focus on stakeholder value enhancement is at the core, with our emphasis on value-enhancing growth through organic expansion across our business in India and Novelis. Our recent acquisitions in copper and aluminum in the value-added sectors during FY 2022 in India, as well as our growth CapEx plan, are helping us reach our long-term goals. Hindalco's product portfolio enrichment continues to help increase the share of high-end value-added products in the overall product mix to strengthen its position as the world's largest aluminum downstream company. Hindalco also continues to move strongly towards its ESG 2050 commitment and is striving towards its integral way to become the industry leader in sustainability. Lastly and most importantly, Hindalco, based on its strong balance sheet, is ready to fuel the next phase of organic growth across its businesses. All our growth CapEx's planned for the next five years shall be funded in line with our overall CapEx allocation framework by keeping the overall leverage at a consolidated basis well below 2.5. Thank you very much for your attention, and the forum is now open for any questions you may have. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone wishing to ask a question may please press star and one on your 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 is assembled. The first question is from Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah. Good evening. Good evening, everyone, and thanks for the opportunity. Great congratulations on a very strong quarter, yet another time. First question is to Mr. Pai. This is a very topical one, given we've seen last week, government has imposed duty on steel. Is there any talk, any fear or any risk of any similar action by government on aluminum as well? Sumangal, our situation in aluminum is a little bit different because we export because the domestic market is oversupplied, largely due to scrap coming in. As you know, 40% of India's aluminum is met through scrap imports. I think if the government wants to do anything, they should increase the duty on scrap. Because when we export aluminum, as you very well know, the realizations are lower than in the domestic market. Which is why I think that, you know, it doesn't make any sense to put export duty on aluminum exports. Yes, sir. Lately we've got a lot of questions from investors on this. Given that they've also on stainless steel, looks like government is looking more from a top-down rather than a bottom-up industry participation. Yeah. Got it. Second question is on the cost inflation. If you can just share how are we seeing costs on the carbon front, on the coal front, in the coming quarters? What is Q4? What will be our coal position in terms of inventory, in terms of sourcing mix? Yeah. I was expecting the first opening ball at a high speed. Yeah. Our situation on the cost inflation and coal. Look, I think we had guided Q4 cost inflation, and we have come in at 9.5%. Q4 to Q3, the cost increase was 9.5%. The current situation I think is that it's the rest of the costs have sort of they remain high, but the majority of our problems today are related to coal. Let's talk a little bit about the coal. What has happened is that with the power demand going up, the government has diverted majority of the coal to power plants. Hence, the non-regulated sector, which is where aluminum and all come in, the domestic coal situation has become extremely tight and the e-auction premiums have shot up. Which is why our situation is quite tight right now. Normally, we would have been at about 20 days inventory. Currently, we are at 10 days inventory. I have to say that it has been steady, so it's quite tight. You know, we are able to lift by road and we are, you know, this is where I think a lot of the management time is going on coal right now. As far as guidance on the cost for Q1 is, you know, before we had quite a tight handle, so it's a little bit difficult. My expectation is it's going to be in the mid-teens. You're gonna have another mid-teens increase over Q4 is what I can say at this stage. Just to follow up, I mean, what will be our mix? I mean, are we restricting to a lot of imports now given domestic supply is limited? With mid-teen kind of cost inflation, I mean, are you also anticipating carbon cost inflation? That also is increasing with a lag. I'm all costs included there, Sumangal. 15% is not just coal. Everything put together. Okay. The mix of Yeah, the mix, you know, we have for the first time put in a few parcels of the import in Q1. We did not in Q4, but in Q1 we have. Both for Sahaj, a part of Utkal. We have unfortunately started to import a little bit of coal. We are, of course, trying to ramp up our own mines as much as possible. The linkage percentages, which used to be running at around 60% of the total coal, are today running sort of 52%-55% because even linkage they have capped it of what they give to the non-regulated sector. Got it. Thank you so much and all the best, sir. Thank you. Thank you. The next question is from the line of Pinakin Parekh from JP Morgan. Please go ahead. Thank you very much, sir. I have two questions on Novelis. My first question is, there has been some media talk about, the current U.S. administration removing all, the extra tariffs that were put between 2016 and 2020, including Section 232. If that were to happen, how will it impact, the North American market for Novelis? Midwest aluminum should come off, very cheap. Margins potentially at Novelis in North America? Dev, can you take it? I think you covered it in your call, but maybe you can repeat it. Yes. We are also reading the same thing that you are reading in the recent days about the president talking about, you know, reviewing the duties that were imposed, mainly the anti-dumping duties that were imposed on China. Now, Sorry to interrupt, sir. We're not able to hear you clearly. Oh, really? It was coming across clearly to us. Pinakin, can you hear Dev? I can hear him initially. Okay, Dev, go ahead. Okay. Here's the situation, Pinakin. I think that we don't expect anything happening on this too quickly, number one. Number two, that we are contracted for the whole of this year for sure, both on price and volume. Third, if you quickly look at the supply chain situation, you know, the cost of importing materials from China. I mean, you can be paying as much as $500 a ton today to be importing materials. It's not like none of the economics are anyway very favorable. You know very well that the direction in which China is going, it's no longer going to be like the past where, you know, it's going to be an export-based, subsidized export-based strategy. For a number of these reasons, we don't expect this to be a major impact. In any case, you know, if at all, hypothetically, if something like this happens, there will be enough safeguards because nobody here, no administration here wants to impact local manufacturing, you know, based upon lot of this insight. I honestly think that regardless of any scenario, we see a major impact that is happening on that. I hope that you, it answers your question. Sure. Now, following it up, Satish Pai, from the call in November, we have got some investor confusion regarding the $2.5 billion facility and return. Now, when we look at post-tax internal rate of return, it works out to around $1,000 per ton, from that facility of the Midstream. Is that assumption that when that facility gets commissioned, the EBITDA per ton will be $1,000, or are we misunderstanding the return profile from the project? I would not comment on specific EBITDA per ton numbers from the project. What I can tell you is that, and what we have been saying consistently is that the pricing on these contracts is going to be significantly better. We are going to be seeing an exponential increase in the margin, as compared to what it is today. It is not just on the output that is generated from the INR 2.5 billion greenfield. We are going to get the higher pricing on all the volumes, which is not what we accounted. What we accounted in the Midstream's IRR is only the pricing and the volume from the new plant. The other benefit that we are getting is that we will get a higher pricing on all the planned volumes. All I can tell you is that we have complete confidence in the economics of the project, and nobody should doubt, you know, that this project is going to be extremely attractive. Understood. Thank you very much. Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi, good evening. Thank you for the opportunity. I have just one question actually. On the new smelter in India, any progress on the power supply arrangements? Any kind of timeline that you can indicate right now? No, I think that, you know, quite honestly, if you heard on the prepared remarks, we talked about the Pumped Hydro, which is the only stable power source that you can trust with the smelter. We actually, by December of this year, try to get that power and see how it works before committing to anything. What we will do, if you remember the investor call, is that, some additional pots that we can add in both Aditya and Mahan we are going to go ahead, which will probably give us about 50-80 more metal. Any large smelter expansion will wait till we get the power sorted out. Sure. One house view question. Approximately how much alumina sales we have done, external sales from this quarter? What would be our outlook for FY 2023 in terms of alumina sales volume? Yeah. For Q4 FY 2022, we sold 216 KT. The whole of FY 2022 was 359. I think we'll be in that 400 KT type of sales for FY 2023. Sure. Thank you so much. That's all from my side. Thank you. Thank you. The next question is from the line of Amit Dixit from Edelweiss. Please go ahead. Yeah. Thanks for the opportunity and congratulations for a good set of numbers. I have two questions again. The first one is especially on the working capital build-up, which is like approximately INR 8,000 crores this year. Now since we are seeing the aluminum prices at least, you know, going down, compared to Q1. How much normalization, how much working capital blocking we can expect here in FY 2023? FY 2023, we don't expect working capital build-up to a large extent. You see, I don't know if you're referring to the consolidated numbers or the standalone numbers. No, consolidated. The consolidated, yes. Consolidated we had in Novelis because LME has shot up in this period. The copper also in Indian business, if you're comparing year-on-year, did shoot up significantly. That is the reason why you're seeing the working capital blockage between these two businesses largely. In aluminum business, you know, we are more impacted by the cost of the input, which to some extent impacted us, but it is not such a large amount in the last year. Moving forward in FY 2023, if the LME remains where it is for both copper and aluminum on a consolidated basis, you will not see much impact there. To some extent, small impact will maybe there in aluminum because of the higher cost of inputs, depending upon where they are. When is the working capital release will happen? In Novelis, if the LME, you know, it depends on where the LME is. If it is at today's level, for example, it has come down slightly with the March level and they will reduce. Okay. The second question is essentially on CapEx. If you can give guidance, consolidated CapEx as well as standalone CapEx for FY 2023 and FY 2024. Dev Ahuja, do you just want to give the Novelis CapEx first, then I'll just give the Hindalco India one? Yes. Just to repeat the guidance that we have given at our recent call, $1.3 billion-$1.6 billion would be our total CapEx for fiscal year 2023. That's the number we have guided to. In India we are going to be spending this year about INR 3,000 crores of CapEx. In the capital markets day call we did in March, the projects that we had announced, on the basis of that, these are the numbers for FY 2023. Okay, great, sir. Thanks. Yeah, thanks. Thank you. Thank you. Next question is on the line of Ritesh Shah from Investec. Please go ahead. Hi, sir. Thanks for the opportunity. Couple of questions. Sir, first one on hedges. How has it moved? How do you look at for the next year? Nothing much. I mean, you know, the hedge position has not really moved much. For FY 2023, the total position is 30% at an average of 2,500, and 14% of the rupee at 81.4. No real movement on the hedge position. It has only marginally increased, right? 30% you said at 23 Yeah. I think the last hedge we did when we got about 3,300 or 3,400, we got a last hedge which sort of made it to around 30% with the average going to 2,500 now. Sure, sir. That's useful. Sir, given you have indicated hedges, how should one understand the realization into next quarter? What we're trying to understand is LME plus premiums. How has the premiums, Dev Ahuja, trended lately? Can you possibly next three months? I didn't get the question. Do you want to answer this? No, no. See, hedging, as far as hedging is concerned, it is only for the LME. Premiums are not hedged. Premiums, if they move up or down, go directly into our bottom line. The question is, how has the premiums moved? We understand LME has corrected. I just wanted to get. Oh, okay. on premiums. I think, the Midwest has remained, Dev Ahuja correct me if I'm wrong, more or less at the same level, and so has the MJP. There's not been much movement on the premiums. No, not much movement. It is still well into the 800s. The premiums are continuing to be strong, and we don't expect that to change at any time in the near future, just given all the global situations around supply chain, lack of supply and, you know, discussing material movements and all of that. So yeah. Sure. The last question. Sir, if at all government had to tame inflation, if there is scope for government potentially reducing import duty on aluminum as well as scrap and added displays, how should one look at the impact on the company? Look, I don't think it realized, but the aluminum that is sold in India is not sold at import parity because the domestic market is oversupplied and hence there is a discount to what we sell. Frankly speaking, like playing with the duty of the aluminum, there's nothing to do with inflation. Majority of the aluminum cost is based on LME plus premium. Unlike the steel market, which does not have a worldwide benchmark for pricing, aluminum has. Sure. Thank you so much for the answers. Yeah. Yeah. Thank you. We move on to the next question. This one is on the line of Prashanth Kumar Kota from Dolat Capital. Please go ahead. Good evening, thanks for the opportunity. My questions are two, sir. First one, broadly if you look at the business as a whole, 1 is aluminum, 2 alumina, 3 aluminum downstream, 4 copper, 5 Novelis. On one end of the carbon spectrum is aluminum. Also, over there, we are doing a lot of green, etc., And climate change green, etc. On the other end is Novelis, wherein we are the poster child of reducing carbon footprint for the world in terms of cans and etc. Different ends of the spectrum. Alumina is different. Over there, we have a very good strategy on red mud disposal, etc. On the downstream side. In the past months, you had also alluded that, you know, generally downstream businesses get a good valuation multiples. Copper is a downstream business. These are five different businesses, sir. Just as a bit from the carbon footprint and, you know, otherwise on the business dynamic side, somewhere is the competitive position lost. Is there any merits in trying to, let's say, do something like a demerger and list separately? I just want to know your thoughts, specifically broad thoughts. I think it's very difficult on a call to give you broad strategic calls. I'll give you a broad answer to say that we are constantly evaluating all options to increase shareholder value. Understood. Thanks. Sir, what about this, once the Meenakshi block is up and running, by when do we expect that to start producing and, by then, what will our mix, sir? Look, once we, I told you Chakla will start by December of next year. Meenakshi will take at least another year more. Let's say about 36 months from today. When both those mines are running, and we also have a mine called Kanda that Essel should bring on by next year, then, as I said, the amount that we will require from non-captive sources will be about 5%. Because the rest you will still have to bring because it's on the jetty, it's far away from these mines. Utkal, you will have to take a little bit. We'll be at about 5% from the outside. We'll be completely self-sufficient. Oh, that's it. Understood. That is from myself. Thank you, and wish you all the best. Yeah, thank you. Thank you. The next question is from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead. Good evening, sir. If you could just explain a little bit on this cash flow hedges. You know, I think this consolidated, we have a loss of about INR 4,867 crores and at the standalone level. You know, does this pertain to a normal hedging activity, and, you know, how will this flow through in the P&L and balance sheet in FY 2023? If you're referring maybe to the OCI numbers. Yes. Yes. Yeah, you are right. OCI is a mechanism which is more notional, and it is basically based on the current level of hedges and current forecast of the prices. They calculate what could be the potential loss. That loss could turn into profit depending on how it actually turns out. OCI is purely a notional number. If tomorrow, let's say, the LME turns around and this could turn into profits as well. We should. It's only for reference, and I don't think we can say for sure that this will be the loss or profit going forward. Sure. To understand this, so if the LME comes down, then some of these losses can reverse. Yes. Would that be a correct understanding? Yes. Absolutely. Okay. You may have a corresponding negative impact on the P&L. If the LME turns around, then on hedges, you will not lose as much or you might gain. The unhedged portion then we suffer a lot because, I mean, that is not hedged, and the LME goes down. Hedging is a defensive strategy for us. It ensures a certain level of realization. When you look at losses or profits, we are looking at the market opportunity in comparison to that. Let me, the simple way is that, you know, as I said, we have 30% hedged at 2,500. This 30% is hedged over April to March of, this year. Every month as it gets unwound, the difference between the current LMEs and the 2,500 is that negative that you're seeing which will get coming into the P&L. Okay. I mean, we are like, as a matter of policy, we are, you know, do we go above 30% or, you know, is that something that you stay at? Is that a number that's fixed? No. The 25%-30% is our defensive position that we take for the following year. Like, for example, by October of this year to December, we would want to take the defensive hedge position for FY 2024. Now, during the current year, if we see the opportunity of getting any spikes or anything, we can increase beyond 30. Generally, the defensive position that we have communicated and we stick by is the 25%-30%. As I just told you, it went from 25 to 30 because we got the last 5% in Q4 at a very high LME, that which is what we grabbed. Sure, sir. Yeah. Thank you, sir. Thank you. The next question is on the line of Vikas Singh from PhillipCapital. Please go ahead. Good evening, sir. Yeah, good evening. Sir, in the past you have given us a matrix that every $100 LME coming down release roughly about $16 million-$20 million in Novelis. Do we have similar matrix that every $100 Midwest Premium coming down, how does it impact EBITDA? Dev? These are not numbers that we give out publicly. But what I can tell you is that the way premium impacts us is that we have hedges on LME, but the premiums are really primarily export. We don't have any hedging mechanism on the premium. What you see in our results is a big double-size lag impact last year. Yes. If metal prices come down, we will see the other way. We will see metal price lag becoming a negative factor. Really, it is not an EBITDA anticipating largely. The largest part it has is really the metal price lag impact because of the unhedged premiums that we have. Now, on the other side, to be completely, you know, sort of open that when prices come down or when premiums come down, it also impacts a little bit on the spread side. And there's overall reduction in the price of metal. Basically it gets bigger impacted. Now, these are not numbers that we disclose publicly. What I can tell you is that we will watch for the metal price lag. For the time being, we don't see anything, in fact. The premiums are going to be steady and strong. At some point, there will be some correction, and we have to be ready for that. Understood, sir. Sir, in terms of our total growth CapEx, which we have planned, roughly over INR 8 billion, how much of this is for committed, basically what I want to know is even if global growth slows down, how much of this CapEx, what percentage, you will still go ahead in terms of commitment? Look, let me first give you a little broad answer on that. We have run a five-year scenario using very, what I would call conservative assumptions to satisfy ourselves that this CapEx can be done with internal accruals. That is point number one. Point number two on what is committed in the Novelis site, the $2.5 billion just got committed as we announced it. On the India side, we have got about INR 3,500 crore. INR 3,000 crore is actually committed. Our assumptions for the five-year have been done with what I call historically conservative numbers, because they have done what you may call a stress test just to convince ourselves about the question you ask. Even if we go through a little bit of a downturn, especially on the commodity prices that can happen, we wanted to ensure that we can do our CapEx plans with our internal accruals. Of course, many of the projects that have not been approved can always be shifted out a little bit. Understood, sir. Can I just one last question? Sorry. Please go ahead, please. Yeah. Economic downturn question, because if your concern is what happens in case of an economic downturn, I think that the clarity that we need to give you is that we are today under capacity when it comes to beverage cans. Now, our customers expect the markets to be growing much more than what we are expecting. I mean, our baseline growth is more like, you know, 2%-4% from the rates that our customers are expecting it to be much stronger. Can is a countercyclical business, you know. Even if you take worst-case scenario, the growth may be like 2%. We are having mostly looking at that scenario. But even if it is that, we don't have any capacity. You can see that this type of investment we are making is catering to the growing can market where anyway we don't have capacity. Downstream or no downturn, you know, we will need more capacity regardless. You just need to kind of keep that in the back of your mind. Understood, sir. Just one last question. Have we already reached our bottom debt or, since we have the CapEx plan going ahead or there is a potential for the debt to come down further? No, I think that, again, we covered that in March. For us, in Novelis there is a small 300-odd million of term loan left that will get paid back. In India we had said that, you know, the INR 6,000 crore bond debt is coming due, we will pay back and about INR 2,500 of long-term loans. The last remaining debt reduction will be largely in India of INR 8,500 crores this year. On the Novelis side, we are more or less done. Our net debt to EBITDA commitments remain firm there, and we are going to put the cash generated into organic growth CapEx. Thank you, sir. Thank you for answering my question. Thank you. Thank you. Next question is on the line of Kamlesh Bagmar from Prabhudas Lilladher. Please go ahead.. Yeah. Thanks for the opportunity, sir. One question on the part of Novelis, like you're highlighting that there will be a big supply-demand gap. But if we see in some other field, it doesn't look like a lot of suppliers are going to come up there. And apart from that, like I wanted to know, like how much of our contracts are going to get reset or repriced and, like these EBITDA rates which we are guiding, like say $500 odd dollar plus levels. How that would pan out over the coming years now we have guided, let's say, between IRR on the new project. Like, say, if the situations improve for some project from these levels or back to pre-COVID levels, like say, are we in the position to just make an EBITDA per ton of $600? Because, like, over the last couple of years, things have been volatile. But as things improve, what funding we are looking at? Because that is the guidance really required from you, sir. I think I'll let Dev Ahuja answer. Look, I don't think we can give you a EBITDA guidance over the next five years. I'll let Dev Ahuja answer your overall question on supply demand. Yeah. A couple of things. One, that for all the new expansion, particularly the 2.5 that we have just announced, we have it all backed up by contracts, and these are volume and price contracts. The market is very, very constrained. I mean, we are in a situation where anything that we produce today, you know, like, the customers want it. The market is already constrained and will continue to be constrained for the next many years. Actually, there is not enough capacity even despite this expansion, right? Really speaking, we don't expect any kind of an uncertainty around the ability to sell this capacity. You made a mention that you expect a lot of supply to come in 2023. I don't know where that information is coming from. Well, there are not going to be many new sources of supply in FY 2023. Really to keep it short, the market is constrained, will continue to be constrained when you think about future EBITDA. I mean, we'll not talk about long-term guidance. All that I can tell you is that there is a lot of earnings potential coming ahead of us, and for the time being, let's just say at about INR 500, but there's a lot of earnings potential that would come as some of our expansions get commissioned. Sir, when we are so confident about making CapEx on new projects which is going to come up, say, roughly around. It will be fully operational five years from now. Can't we have the visibility, like, say, for one year from the, one year down the line? Look, we are, I think from a guidance point of view, we are confidently maintain that we will have a $500+, which is what Novelis has said. The reason why we stick with this and not give exact numbers is because the market environment can be quite volatile. You have geopolitical issues going on, you have supply chain issues going on, you have semiconductor chip shortages coming on. To give a guidance like that, then I'm going to ask, you know, can I conclude that, you know, there's no more semiconductor chip shortage, et cetera. Which is why we give you a guidance saying that we are quite confident in the mid to short term, and we are quite confident that we will make that $500+. I think we cannot go beyond that to give an exact number. Sir, lastly, like, in India, like, in aluminum value-added has roughly around 28% mix. How do we see this mix going forward over next three years? What? 28% mix? Yeah, yeah. That, like value-added in or downstream in aluminum India. Aluminum India, you know, out of 336 KT we sold, 93 was value-added. Okay? It's now running at roughly 100 KT a quarter. Our production on the primary is about 330 KT a quarter. We are at about 33% capacity. The expansions that we have announced, Silvassa extrusion, which is another 30 KT, will come online by sometime early next year. The FRP expansion actually will take two more years, which will add another 170 KT. These are already publicly announced projects. When will be planned to break up between downstream and upstream EBITDA and those figures, sir? Very soon. Thank you, sir. Thanks a lot. Yeah. Thank you. The next question is from the line of Ashish Kejriwal from Centrum Broking. Please go ahead. Yeah. Hi, good evening, everyone. Thanks for the opportunity. Sir, my question is on world cost curve. We have seen that world cost curve has increased and beyond the first quartile of the world. Even after this increase of ET, where the cost will land with the continuous consistency? Sorry, you're breaking up. I got up to first curve. You want me to quantify what? What's the first quarter of the world cost curve right now? If you take the CRU, you will probably get that number, what the first quartile is. We know we are in that, but I think we'll give you the CRU cost curve. Okay. On the coal cost. Sorry to interrupt, Mr. Ashish Kejriwal. Sir, your audio is not clear. Yeah. Can you use the handset mode while speaking? Or if you can get into an area of connection. Is it clear now? Much better. Thank you. Yes. Much better. I was looking at coal cost because, you know, you mentioned that our 15% increase in cost of production in FY 2023 fourth quarter mainly is because of the coal cost. Yes. I think we lost him. Sir, he's still connected. Mr. Ashish Kejriwal, we are not able to hear you. As there's no response from the current participant, we'll move on to the next. Also a reminder to the participants to restrict their questions to two per participant only. We'll move on to the next question. That is on the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Good morning. Two questions. One on Novelis. Two, on earlier participant's response, they suggested that, you know, procurement volumes are contracted for the year and so are the prices. Did I hear it correctly? Yes. Yes. If you put it in the context of the midstream question, I was questioning about the yearly volumes, which would be the impacted part, you know, under anti-dumping duties are essentially, you know, relevant for the specialty business, you know. Yes, what I said is that for the specialty business, you know, we have annual contracts, and so the volumes and the prices are contracted. It was in that context. For other businesses, of course, there are longer term contracts to be clear. Got it. The second question is, the TCRC charges for the year that went by and for the upcoming year. The TCRC in the year that went by was 15.5. Just let me give you the number. 15 point 15.3. 15.3. The current year TCRC benchmark is 16.7, which is an increase of 9% over last year. These are calendar year numbers, by the way. Okay. Thank you. Thank you. The next question is on the line of Bhavin Chheda from Enam Holdings. Please go ahead. Yes. India INR 3,000 crore CapEx is including maintenance CapEx or this is a growth CapEx number? Including maintenance. Including maintenance. Okay, thank you. Thank you. The next question is on the line of Vishal Chandak from Motilal Oswal Financial Services Limited. Please go ahead. Thank you very much, sir. My question was with regards to your continuity of CapEx. You have on one end mentioned that most of your CapEx would happen through your internal accruals. On the second end, you've also mentioned that your threshold for your net debt to EBITDA will always be around 2.5x. Yeah. Currently, the net debt to EBITDA stands at about 1.4x. I'm not sure if your net debt also includes working capital. If you may kindly clarify that as well. Yeah. Is it fair to assume that in case your, you know, earnings suffer because of this commodity cycle, you would still continue with your CapEx strategy and raise debt to get to, you know, that is the 2.5 for internal accrual? You just said raise debt. No, we will only be funding our CapEx through internal accruals. Yes, I confirm that. I keep saying that, you know, we have at this stage committed, like in Novelis, the $2.5 billion project, in Hindalco, the FRP, Lapanga and the remaining CapEx projects, we have the flexibility to decide when we start it if we do get into, I don't know, severe trouble with the earnings. Well, that's quite clear. That applies in case commodity cycle goes down below our threshold levels, there is a possibility of deferring the full commitment to these CapEx. Yes. We will not allow the net debt to EBITDA to go above our guidance. At this stage we have no plans with the CapEx that we have announced to add any debt to finance them. Right. Lastly, with this debt numbers you have included in the presentation also includes your working capital or it's only part of the long-term debt? Includes all debt, including working capital. Sure. Thank you very much. Thank you. Thank you. The next question is on the line of Samuel Chen from AllianceBernstein. Please go ahead. Samuel Chen, can you hear me? Yeah. Hi. Good. Thank you. Okay, just one quick question. This is regarding the potential renewable power that you guys are evaluating. I'm not sure if this was mentioned in the previous call. Is there any possibility to reveal the potential size of that power, maybe just a range? That'd be great. Also just assume for the moment the plan is everything goes well. Relative to your existing smelter operations, like where is this potential plant to prosper? Thank you. I think that, you know, the potential of the pumped hydro power, theoretically, the numbers are quite large. What we want to ascertain is the plant load or the loading factor at which we can get it. Because the problem with renewable is people will tell you 70, 75, 80% load factor. You know, that is over a period of one year. There are times when they can go down to 50. Which is why this pumped hydro promises a more than 90% steady. We want to take the first 100 MW at Aditya, the existing plant, to check out the viability. Once that viability works, the price of that power is not going to be much higher than what we have for our thermal cost. It's not a cost-driven issue, it is more from getting a green power which is driving our thought process. Thank you. Thank you very much. Yeah, thanks. Thank you. The next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi. Thank you for the opportunity. Just a follow-up to the questions around CapEx on the investment, the ones that you outlined, brownfield 180 KT. First of all, the capital intensity seems a little high for brownfield standalone smelter, almost $2,000 per tonne if you look at $60 million for 180 KT. What is driving that kind of capital cost indication for a brownfield standalone smelter? And tied to that would be the decision to ultimately go ahead with it. This is still under review as per the presentation at the Capital Markets Day. Now you also have, I believe, finalized the pumped hydro contract. The decision to finally give it a go ahead or not will be predicated on some economics or aluminum price. If aluminum prices don't pan out in a certain range, would you look to just not go ahead with this project? Those are the two questions on my end. Let me say that first, the current priorities are downstream projects that we have already announced. That's where the next two years' CapEx is going. Point number two is that we will get this power hopefully by December of this year, and we're gonna try it out for at least one year to see how the stability, cost, everything goes. I think that, you know, we have at least another two years before we do anything with the smelter. I would not honestly spend too much time worrying about smelter expansion at this stage. Is the capital cost very critical? The capital cost is. I don't think it's a very high intensity. Those are the current pricing. If you actually look at most equipment and pricing now, it is relatively on the higher side compared to the past. This is a sort of a budgetary allocation we are making, but it's not out of whack is all I can say. Okay. Thank you. Thank you. you. Ladies and gentlemen, that's the last question. I now hand the conference over to the management for any closing comments. Thank you. I think that, you know, thanks for the attention. I just wanted to reiterate that, fundamentally, you know, whether it's Novelis or Hindalco, we have a very strong, operational base and a very strong balance sheet now. I think that demand looks very good. We may have, macroeconomic uncertainties, cost inflation, but I think that, we are quite confident that, we will be delivering, steady and good results, going forward. Thank you very much for your attention. Thank you. Ladies and gentlemen, on behalf of Hindalco Industries Limited, I conclude this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.