Ladies and gentlemen, good day and welcome to Hindalco Industries FY 2023 first quarter earnings conference call. As a reminder, all participants are in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note this conference is being recorded. I would now like to 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 the earnings call for the first quarter of financial year 2023. In this call, we'll refer to the Q1 FY 2023 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 the said presentation. In this presentation, we have covered the key highlights of all the businesses for the first quarter of financial year 2023 and a segment-wise comparative financial analysis of aluminium and Copper businesses in India and our overseas subsidiary, Novelis. Please note in this quarter results, we have presented our Aluminium Upstream and Downstream financial and operational performances separately to fully reflect the individual business segment performances. The corresponding segment information of the prior periods have been restated accordingly for a comparative analysis. We have with us on this call from Hindalco's management, Mr. Satish Pai, Managing Director, and Mr. Praveen Maheshwari, Chief Financial Officer. From Novelis' management we have Mr. Steve Fisher, President and CEO, and Mr. Dev Ahuja, Chief Financial Officer. Following this presentation, this call will be open to any questions you may have. Both this call and audio replay of this call will be available on our company's website. Now let me turn this call to Satish. Thank you, Subir. A very good afternoon and morning, everyone. Thank you for joining today's conference call of Hindalco's earnings for the first quarter of FY 2023. Let me now start with our progress in this quarter across various sustainability metrics on slide five and six. On the environment front, with our continuous focus on wastewater emissions and greenbelt biodiversity, we have achieved 96% of total recycling and reusing of waste. 136% bauxite residue utilization at three out of our four alumina refineries this quarter. Utkal Alumina Refinery is conducting two pilot pits to reuse bauxite residue backfilling of mines and construction of roads, of which pit one is ready and pit two is under construction. On fly ash recycling, I'm very happy to inform you that we have now attained 116% of fly ash recycling at the end of the first quarter of FY 2023, which means that we are now recycling beyond what we generated and are sending to cement and other industries. We have now received the single-use plastic-free certification for eight of our sites and are continuously working to attain this for the rest of our locations. On water management, we are committed to zero liquid discharge at all our sites and 20% reduction in specific water consumption by 2025 from the base year of FY 2019. We are working on several fronts, such as increasing rainwater harvesting through our CSR activities, reducing the consumption of fresh water, and ensuring zero liquid discharge at all our facilities. In Q1 of FY 2023, we have developed an innovative modular STP, sewage treatment plant at our Taloja and Alupuram downstream facilities. Our recycling of water across facilities was up 5% this quarter on a year-on-year basis. We are on our way to achieving net water positivity by 2050. On green cover and biodiversity in line with the IUCN guidelines, we are implementing biodiversity management plans at all our plants and mines. We'll be further implementing green belt at all our sites. We have cultivated Miyawaki patches at our Renusagar, Renukoot, Mahan, and Aditya facilities. Utkal Alumina is now piloting the charging of biomass to substitute coal in our power plants. This biomass charging is also being implemented at Hirakud, Mahan, and Renusagar facilities. Coming to the renewable energy and safety update on slide six. We are targeting to reach a total of 300 MW of renewables with 200 MW being without storage, that's solar and wind, and another 100 MW with storage by the end of FY 2025. Of this, we have already achieved 100 MW at the end of FY 2022. This year in FY 2023, a total of 109 MW of renewable projects are planned of wind, renewable hybrids, biomass, etc. Another approximately 57 MW of renewable projects are under execution and finalization in hybrid and solar that are to be executed over the next three years. We are also working on large-scale renewable hybrid project with a third party on pumped hydro, which can provide up to 100 MW-300 MW to our Aditya plant with connectivity to a 400 kV grid. This is expected to be completed by December 2023. The aluminium specific GHG emissions were recorded at 78.4% in Q1 FY 2023 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 for each of our employees and contract workers across all our locations. LTIFR was recorded at 0.43 in Q1 FY 2023. There was one fatality of a contract worker recorded at our Indian operations this quarter. Coming to slide eight on the key highlights of our performance in Q1 FY 2023. Starting with our consolidated performance, we delivered a record quarterly performance supported by thrust on operational efficiencies and a robust performance of copper and Downstream businesses despite rising input costs and inflationary pressures. EBITDA stood at a record INR 8,640 crore, up 27% year-on-year. Quarterly consolidated PAT for continuing operations was at a record INR 4,119 crore, up 27% year-on-year, compared to INR 3,254 crore in the corresponding period last year. Hindalco continued to maintain a strong treasury balance of around $1.4 billion in Novelis and INR 13,580 crore in India at the end of June 2022. Net debt to EBITDA continues to remain well below 2x at the end of June 2022 at 1.4x versus 2.36x at the end of June 2021. As for our business performance this quarter, starting with Novelis, EBITDA stood at a record $561 million, up 1% on account of higher product pricing, favorable product mix, and higher recycling benefits. EBITDA per ton this quarter was at a record $583 per ton versus $570 in Q1 FY 2022, up 2% year-on-year. Net income from continuing operations was recorded at $307 million this quarter versus $303 million in the corresponding period last year. Novelis quarterly shipments in Q1 FY 2023 stood at 962 kt in Q1 FY 2023 versus 973 kt in the corresponding quarter of last year, lower by 1% year-on-year due to impact of supply chain disruptions this quarter. Moving to slide nine, Hindalco's India Aluminium business performance. This time we have segregated our Aluminium Upstream and Downstream businesses to give you a more clear picture of our performance. Our upstream aluminium EBITDA stood at INR 3,272 crore, up 45% year-on-year on account of favorable macros, higher volumes, and better operational efficiency despite rising input costs. In this quarter, EBITDA per ton was up 22% year-on-year at $1,274 per ton versus $966 per ton in the corresponding period of last year. EBITDA margin was at 38% and continues to be one of the best in the industry. The overall shipments of primary aluminium were up 2% at 333 kt in Q1 of FY 2023 versus 325 kt last year. Of this, third-party shipments was 245 kt, and 88 kt was transferred to the Downstream business. An additional Utkal Alumina 350 kt expansion via debottlenecking is progressing and expected to be commissioned by next year. Our Downstream aluminium EBITDA stood at INR 158 crore, up 305% year-on-year on account of better pricing this quarter versus the comparative quarter last year. EBITDA per ton was up 306% year-on-year at $261 per ton versus $64 per ton in the corresponding period of last year. The overall sales of downstream value-added products that include FRP, foil, and extrusion this quarter was 5% lower year-on-year at 78 kt versus 82 kt last year, which was mainly due to supply chain logistics constraints in this quarter. I'm happy to announce that Hindalco has signed an MoU with Phinergy, a leading Israel-based pioneer in metal air battery technology, and IOC Phinergy Private Limited to develop aluminium air batteries for electric vehicles. This is a significant step towards decarbonizing mobility while reducing dependence on battery imports in the country and boosting Atmanirbhar Bharat by enhancing energy security. Turning to the quarterly performance of the Copper business. Our cathode production this quarter was at 92 kt, up 47% year-on-year, while the CC Rod production was at 79 kt, up 80% year-on-year. Total copper metal sales were at 101 kt, up 26% year-on-year, while copper rod sales were at a record 80 kt, up 73% year-on-year, in line with market demand. Copper EBITDA was at a record INR 565 crore this quarter, up 116% year-on-year on the back of higher volumes, better operational efficiency, and improved by-product realization. Coming to the broader economic environment on slide 11. Global economic growth momentum is currently slowing down due to aggressive monetary tightening and spillovers from the Russia-Ukraine war. IMF expects global growth to moderate to 3.2% year-on-year in calendar year 2022 from a post-pandemic rebound of 6.1% in calendar year 2021, highlighting risk to the downside. Latest PMI readings are at a two-year low, indicating considerable slowdown in developed markets, that is U.S., Eurozone, U.K., Japan, and slow pace of expansion in China, amplifying recession fears. Global inflation is expected to stay elevated for longer, owing to high food prices and energy prices and lingering supply-demand imbalances. With 2/3 of the world suffering from an inflation of over 7%, aggressive monetary policy tightening is expected to continue in the second half of this year as well. IMF expects inflation to be an average of 6.6% in advanced economies and 9.5% in emerging and developing economies in calendar year 2022. However, high frequency data also suggests easing inflation rates on an average across the globe as cost pressures and sticky price inflation ease owing to some improvement in supply side constraints and a weaker demand. Resilient emerging market performance and a recovering service sector performance remain as a silver lining amidst an uncertain outlook. Despite global headwinds, Indian economy is showing resilience, while high frequency economic indicators have been mixed. Latest PMI and GST data on the back of a solid core sector output growth point towards robust economic momentum. Strong rebound in services, pickup in manufacturing activity, uptick in government CapEx, stabilization of inflation pressures, buffers in the form of adequate international reserves, and a sound financial system has kept the Indian economy on a firm footing. The RBI projects India's FY 2023 GDP growth at 7.2% year-on-year. Inflation continues to be above RBI's upper tolerance level of 6% for six consecutive months. Though elevated inflation seems to be on the backfoot for now, with headline CPI easing for the second month in a row on the back of moderation in commodity prices and some easing of supply side pressures. In the backdrop of elevated inflation levels and tighter global financial conditions, RBI has hiked rates at 50 basis points in August, taking the cumulative hike to 140 basis points in FY 2023. The central bank projects inflation of 6.7% in FY 2022, above its upper tolerance level of 6%. Let me now take you through the aluminium industry overview on slides 12 and 13. In the first half of calendar year 2022, the global aluminium production grew 1% year-on-year to around 34.1 million tons, while global consumption growth was flattish year-on-year at 34.3 million tons. Hence, the global market balance was in a marginal deficit of 0.2 million tons. Talking specifically on regions, the Chinese production increased in Yunnan, Inner Mongolia and Henan. However, the overall production in China increased by 1% year-on-year to 19.7 million tons. The consumption faced headwinds due to the zero-COVID policy relating to the lockdowns in China, which impacted consumption of aluminium across all sectors. Consequently, consumption in China declined by 2% year-on-year to 19.5 million tons, leading to a slight surplus of 0.2 million tons in Chinese metal balance in the first half. In the rest of the world, production of aluminium in the first half of calendar year 2022 grew in the Middle East, but production declined sharply in the European region due to energy prices. The overall production in the rest of the world increased 1% year-on-year to around 14.4 million tons. In this period, the consumption growth for the rest of the world was supported by a strong demand in the packaging segment, which led to a growth of 4% year-on-year at 14.9 million tons in the first half of calendar year 2022. As a result, the rest of the world reported a deficit of around 0.4 million tons in the metal balance in H1 calendar year 2022. On a quarterly basis, in Q2, the global aluminium production increased by 2% to around 17.3 million tons, while the consumption declined by 2% to around 17.3 million tons, resulting in a balanced market in this quarter. In the same period, Chinese aluminium production grew sharply by 4% to around 10.1 million tons, led by a significant increase in production at the Yunnan Province. In Q2 calendar year 2022, the consumption degrew sharply by 7% due to zero-COVID policy of China at 10 million tons, resulting in a balanced market in China. In the rest of the world, there were some disruptions in the production in the European region on account of rising gas prices due to the ongoing war. However, in regions like Middle East, increase in production led to an overall production in the rest of the world that grew by 1% to around 7.3 million tons in Q2 calendar year 2022. Despite headwinds in consumption in the rest of the world, the overall consumption also improved by 3% year-on-year, also reaching 7.3 million tons in Q2 calendar year 2022, leading to a balanced market on a year-on-year basis. The global aluminium prices on an average have declined from $3,280 per ton in Q1 calendar year 2022 to $2,882 per ton in quarter two, and it continues to fall, reaching $2,400 per ton currently. This fall in aluminium prices is led by worries about recession, a weaker Chinese demand and a hawkish monetary policy. On slide 13, domestic demand of aluminium in Q1 of FY 2023 is expected to reach 1,000,006 tons, reflecting 11% year-on-year growth. However, in the corresponding period, the domestic consumption was impacted by the second wave of the pandemic in 2021. On a sequential basis in Q1 FY 2023, there was a marginal degrowth of 3% compared to the previous quarter. As per SIAM, automotive production in Q1 FY 2023 increased by 5% sequentially, which reflects as a positive indicator for this industry segment. Domestic demand in terms of government infrastructure is stable, while packaging demand remains steady. However, some headwinds are seen in the building and construction segment due to the rising interest rates by the RBI. On an overall basis, with record vaccination and supportive government policies like PLI scheme, domestic aluminium demand is expected to remain strong. Moving to slide 14, the global FRP demand is expected to grow by 6% in calendar year 2022 versus 10% growth in calendar year 2021. The market demand for recession-resistant beverage can sheet is expected to grow by around 5% in calendar year 2022, driven by stable and strong demand as consumer preference for sustainable packaging options continues to rise, driven by package mix shift towards more infinitely recyclable aluminium. The automotive segment is estimated to grow at 10% in calendar year 2022. This growth is led by elevated levels of pent-up demand, supported by growing consumer demand for vehicles that use a higher share of aluminium like SUVs, trucks and electric vehicles. However, in the near term, continued semiconductor shortages are impacting the automotive industry, though some easing is currently visible. The demand in specialty segment is expected to grow by 4% in calendar year 2022, with the near-term order book remaining strong, including consumer electronics, container foil packaging, EV battery enclosures, et cetera. The aerospace segment is expected to grow around 30% in calendar year 2022, as order bookings continue to improve with the resumption of air travel and is expected to be back to pre-pandemic levels by fiscal year end. In Q1 of FY 2023, domestic FRP demand is expected to grow in double digits by 14% year-on-year due to the base effect. Demand remains strong in the packaging sector. The B&C demand also improved due to stable government projects. Automotive demand was stable with sharp increase in production and with a greater focus on localization. Demand is likely to grow in quarter two of FY 2023 due to stable demand in packaging, consumer durables and B&C. Turning to the copper industry on slide 15. In H1 calendar year 2022, global production of copper grew by 1.6% year-on-year, and consumption grew by 1.3% on a yearly basis. Chinese production of copper declined marginally by 1.9% year-on-year, while consumption grew marginally by 0.6% year-on-year in the same period. In the world excluding China, copper production increased by 4.3% year-on-year, whereas the consumption grew around 2% year-on-year. On a quarterly basis in Q2 of calendar year 2022, global production of copper declined by 2.5% year-on-year, whereas the consumption grew by 1.6% year-on-year compared to the corresponding period last year. Chinese production of copper decreased by 8% year-on-year, while consumption growth was flattish on a year-on-year basis. In the rest of the world, excluding China, production increased by 2.8% year-on-year, whereas consumption grew by 3.6% on a yearly basis in Q2 of calendar year 2022. During the first part of Q1 FY 2023, April and May 2022, the spot TC/RC was close to $0.20 per pound due to the lower demand of copper concentrate by Chinese smelters on account of the smelter disruptions and maintenance in this period. The mine disruptions from Peru combined with restarting of many of the Chinese smelters led to the tightening of the market during June-July 2022, resulting in a drop in spot TC/RCs to the current level of around $0.18 per pound. The TC/RC is expected to be range bound at current levels through Q4 of calendar year 2022 until the availability of copper concentrate from new mines in Peru and Chile that are being commissioned will help the TC/RC move up again. Coming to slide 14 on the domestic side of copper demand, overall demand increased by nearly 47% year-on-year at 173 kt in Q1 of FY 2023. Imports declined by around 25% year-on-year at 33 kt in Q1 of FY 2023. On a quarter-on-quarter basis, market demand increased marginally by 0.7% year-on-year, while imports remain stable to a marginal increase of 0.5% year-on-year in Q1 FY 2023. The trend of operational and financial performance for each of our business segments this quarter and that of the corresponding period of last year are covered in further slides and annexures to this presentation. Let me now conclude today's presentation with our strategic priorities for this year on slide 13. Cost optimization will be a key focus. We successfully delivered based on this, another consistent overall performance in the first quarter of fiscal 2023. Although rising input costs and inflationary challenges continue to put pressure on us. On this slide, let me share with you our strategic priorities to provide a glimpse of our overall focus for this fiscal year. Our topmost priority is maintaining our robust capital structure with a focus on our capital allocation framework, a strong balance sheet to fuel our next phase of organic growth and our continuous emphasis on shareholder returns. Our next priority will be our value enhancing growth directed towards expanding capacities in various business segments and diversifying our portfolio to provide not only products but solutions, while expanding Downstream businesses in both aluminium and copper organically. Next is our focus of approach on the 2050 ESG commitment by taking sustainability initiatives across the value chain and aiming to become the industry leader in sustainability. Last but not the least, our portfolio enrichment strategy of advancing from a manufacturing company to manufacturing solutions provider with an enriched product mix, with a higher share of high-end value-added products across segments and end markets. Thank you very much for your attention, and the forum is now open to any questions you may have. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question, press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star 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. To ask a question, please press star one now. We have a first question from the line of Indrajit from CLSA. Please go ahead. Hi, thank you for the opportunity. A couple of questions. First on Novelis, we have seen other commentary by Ball Corp last week, where they have, kind of sounded a warning on the demand slide on beverage can. Now, this is one segment which has been very strong over the past few quarters. What has changed suddenly? And do you think by extension we could see more such, demand warnings of capacities being shut? Steve? Yeah. As we said on our call last week, we continue to see a very strong demand for beverage packaging. Our growth projections have been consistently 4%. That's kind of the near-term and long-term growth that we see in this business. If you look at some of the customer or can makers comments in their earnings calls, which you can go back and look at the transcripts. Specifically Ball has stated a 4%-6% growth rate in the near term. I believe the 4%-6% growth rate for Ball was their long-term growth rate previously as well. I think where they saw some more near-term demand for their business that pulled back. We continue to see the growth at the 4%, which is, you know, on the conservative side of, I think all of the can makers projections for North America. We continue to see the long-term trends associated with the conversion of infinitely recyclable aluminum packaging taking share and feel very, very comfortable about the continued growth in this marketplace and the investments that we're making specifically in the North American marketplace as well. All right. Thank you. My second question is on the India Aluminum business. Versus our guidance in last quarter, what kind of cost of production inflation have you seen in this quarter, and what would be the guidance for the following quarters? Yeah. That's a good question. We saw roughly a 17% increase in our cost of production in Q1 versus Q4. I think that, you know, probably Q2 is going to be, in some ways, our worst quarter from a cost of production point of view because the majority of the coal problems and the high cost coal that we had to buy during May and June will get consumed in Q2. We are expecting in Q2 another high-teens increase in the cost of production. After that, just to sort of continue the story because, you know, the coal has been the biggest impact on our cost of production. We have already started to see post-monsoon and the heat going down the coal, linkage coal supply starting to increase. We think that Q3 and Q4 will start to get better. Q2 is going to be the sort of from a cost of production point of view, the highest quarter for us. Sure. Thank you so much. Thank you. We have a next question from the line of Sumangal Nevatia with Kotak Securities. Please go ahead. Yeah, thanks for the opportunity and congratulations on the set of numbers. First question is just an extension of previous question on the cost. Mr. Pai, is it possible to share how is the coal mix in 1Q- 2Q, where we are seeing a lot of inflation and how is it changing in 3Q- 4Q? This 17% increase, for some reason we are not able to reconcile your numbers. Is it just a coal cost increase, and did we see some other cost tailwinds in 1Q? Because the cost increase on our number is much, much lower than the 17% what you said. Yeah. First, let me answer the coal question. What basically happened is that when the government prioritized the IPPs for power sector, they reduced the amount of linkage coal that we will get. They first went to the 75% cap, and at one point went down to 65%, which meant that we had to buy coal on the auction market. Hence the premium in the auction market went up to nearly 500%. If you look at Q1, our linkage coal was only 50%, whereas the auction coal was 31%. Now, the projections for Q2 are still in that same ballpark. Towards, let's say now in August and September, the linkage coal is going up. In Q3 we should get back to more of a 60%-65% linkage coal. Hopefully in Q4 we are back to a higher percentage. That is the progression of coal which is impacting our cost of production. Now, Sumangal, the overall cost of production this quarter, you are not able to reconcile, I understand, because some of it is also because of our inventory positions. We had certain low cost inventories that got transferred over to Q1, so some tailwinds were there from that as well. Understood. The remaining 20% is imports, right? In our mix. No, no. Total cost increase was 17%. Are you talking about coal? Yeah, I'm asking about coal. Linkage e-auction, 50%-30%. Remaining say 20% is imports, right? Own mines and imports. Remember that. Of course, as you know, even the imports cost has gone through the roof. Yes. Own mines and imports is 20%. You're right. Okay, understood. Sir, second question is with respect to the Copper business. I mean, we saw this record EBITDA this quarter. Is it possible to just explain what are the drivers and how much is it sustainable? I mean, should we now build in north of INR 500 crore quarterly EBITDA or is this like a one-off quarter? I wouldn't say it's one-off. I still think that we're going to have sort of INR 400+ crore quarters now. The strong performance was also because sulfuric acid prices were very strong, as well as the gold, you know, as the duty went up, we benefited. As a combination, it had a good operational performance, good CC Rod sales, catalyst sales, combined with high sulfuric acid prices and precious metals, gave us this strong quarter. Understood. Just got it. Just one last question, if I may squeeze in, more of a big picture question. Novelis, as we know, I mean the business, the non-cyclical model of the business still appears a bit underappreciated. Is it possible to share, I mean, what are your thoughts on a separate listing of Novelis in U.S.? Just some broad level thoughts and how should we see strength in the coming years? Sumangal, we always look for opportunities to increase shareholder value. Okay. Sir, do you view separate listing as an opportunity to unlock some value? We always consider all possible avenues to increase shareholder value. I think that's all I can say. Got it. Thank you, sir, and all the best. Yeah. Thank you. Thank you. We have next question from the line of Pinakin Parekh with JPMorgan. Please go ahead. Thank you very much, sir. Now, when the CapEx plan was announced back in March, there were a few projects which were under appraisal. At this point of time, sir, can you give us the status of those under appraisal projects? Have they progressed? What is the visibility of the consolidated CapEx for this year and next year? Let me start with the CapEx number. We had guided that this year our CapEx plans were around INR 3,000 crore. We have no change to this year's CapEx plans. Though I think because of the rate at which we'll be able to spend, because most of the suppliers are all tied up, the actual cash out may be more like INR 2,500 crore. This year's CapEx plans, you know, mostly, which were heavily weighted towards the downstream expansion in Aditya, finishing off Silvassa extrusion, doing the 350 kt expansion brownfield of Utkal Alumina, all those are progressing quite well. Now, the under appraisal projects that you talk about, the downstream ones actually are progressing quite fast. The two upstream ones, one was alumina and one was the aluminium pot expansion. The Alumina ones, we are still waiting for the bauxite mine options to come, and we think that will come first. The aluminium metal expansion continues to remain under appraisal. Understood, sir. Sir, the quarter-on-quarter increase in debt, is it all translation or has there been any other issue as well? Pinakin, the first quarter typically is a quarter where working capital block is generally higher. In case of Novelis, it's been higher LME as well, which has contributed to this. In case of copper, it is also because at the end of March we had the smelter shutdown, so there was some kind of a refilling there. Yes. In case of aluminium India, it's because the higher input cost, which actually goes largely into our working capital, that has contributed there. We would see some of this coming off again in Q2, and that pressure will get released. Is it fair to say that broadly, the company believes this to be ±10% as the steady-state net debt, or would you expect this to even structurally come down more over the next few quarters? Yeah. You're talking about the working capital blockage or overall debt? Overall net debt, sir. Overall net debt will always continue to come down. If you know it's not the same, it will not go up. That is for sure, because we are very focused on the leverage both in Novelis and in India. There's a very strong focus. Net debt will not go up definitely. There may be fluctuations between quarter-to-quarter based on working capital fluctuations. Long-term debt we are not planning to increase at all. In the next few quarters, as the LME has come down, we'll see some working capital releases as well. That will help. Since you talked about debt, well it'll be good to mention here that in India we had INR 6,000 crore of bonds, which were the most expensive bonds so far, at a cost of 9.55% and 9.6%. Those have been fully repaid between Q1 and Q2, that gross debt will definitely come down. In March 31st, we had a INR 2,500 crore borrowing in Hindalco of a long-term nature, which was in lieu of a INR 2,500 crore repayment that we are making in Q2 of the current quarter. These are the changes in the long-term loans. Effectively, between February to now, we are bringing down the gross debt, gross long-term debt, by INR 6,000 crore, which is the most expensive debt also in Hindalco. That should actually help us in reducing our interest burden significantly going forward. Understood. This is very helpful, sir. Thank you very much. Thank you. We have next question from the line of Satyadeep Jain with Ambit Capital. Please go ahead. Hi. Thank you for the opportunity. Thank you management team for providing all the details on India Downstream business. A couple of questions on that one only. Pretty impressive performance on margins in that business compared to what we saw historically for that business. Is it possible to provide more details on what is the recycling mix in India and what is the product mix and what actually led to, was it an annual pricing reset, or maybe some of these contracts expiring, and are you getting higher pricing for these contracts in domestic business, or was it also more of export opportunities for this business? That's the first question on that business. Yeah, I think that, you know, this is a result of the last few years. You know, we have been always talking to you, but we have not actually come and split it out. Over the last three or four years we have exited the bottom end. We have improved the quality, focused on segments that are more profitable. This has been combined with a big market price increase that has been achieved over the last year. As a combination of all of that and, you know, the focus on operations, quality, et cetera, we are now in good market segments that have got good EBITDA per ton. I actually believe this is $260 will head more towards $275 and $300 in the coming quarters. What's the recycling mix for you in India? Oh, very little. In fact, that's why it's running at this $275, because the recycling portion is very, very little. We are only doing what we call run around scrap and no sort of pre- and post-consumer scrap yet. We are starting to work on those projects now. Very little scrap benefits in the India EBITDA per ton. Okay. Second question. I was tied to the downstream expansion you're looking in India at Hirakud. Is there. I think, I believe you already have excess hot mill capacity there, and you're looking at only adding cold mill. Is that also largely tied to export markets? Are you looking at any particular split between autos, cans, foils, any other product mix you're looking there? We have a product mix. You are right, we have excess hot mill in Hirakud, so it's a cold mill and finishing line. The mix is going to be can, foil stock, what we call hard alloy, et cetera. Okay. Thank you. Thank you so much. Thank you. Thank you. We have next question from the line of Amit from Edelweiss. Please go ahead. Yeah. Thanks for the opportunity and congratulations. Mr. Amit, I'm sorry to interrupt. Please use the handset. We're not able to hear you very clearly. Thank you. Are you able to hear me now? Yes, better. Please go ahead. My question is that there are two questions that I have. The first one is essentially on macro. We are seeing that Chinese aluminium exports have been at phenomenal level, in fact enough to cover 20% of global ex-China demand. Do you see further headwinds to LME aluminium prices, due to this? While other regions might, you know, like Europe and all might face aluminium cuts. But unless certainly something happens in China, we are going to see LME prices are getting under pressure. Just wanted to get your thoughts on that. I don't know whether I would agree with that it's 20% of the rest of the world demand, because that's a pretty large number. I think that, yes, their exports have gone up. If you saw recently, Europe, in spite of their problems, has introduced ADD on Chinese aluminium. I think that, you know, the post-COVID type of lockdown to Chinese demand should come back internally a little bit. I think that their ability to export will still remain fairly restricted to the U.S. I don't necessarily think that a huge Chinese export of aluminium will bring the aluminium prices down further. I don't think so. That's helpful, sir. The second question is essentially you indicated that because of supply chain issues, you know, downstream aluminium sales volume was lower in this quarter. If these supply chain issues had not existed, you know, how much incremental sales volume would have been there? Whether the sales volume is pushed to Q2. Are you talking about the India business? India business, yes. Yes. Yes. I think roughly about- 10 kt. ... 7 kt-10 kt got blocked. That will be pushed to Q2. Okay. That's helpful. Thanks, and all the best. Yeah, thank you. Thank you. We have next question from the line of Vishal Chandak with Motilal Oswal. Please go ahead. Yeah. Thank you for the opportunity, sir. My question was with regard to your smelter expansion, where you had mentioned that the pumped hydro project would be under observation for some time. Just wanted to understand where are we on that stage? Have we started the pumped hydro operations? And what kind of expectation do you have right now on that? Look, I think you'll probably see an announcement tomorrow. The pumped hydro will come online December of 2023. I think that any smelter expansion we are talking about is a 2024- 2025 type of thing. It remains under appraisal. Right now we are focused on trying to get the pumped hydro off, the downstream projects, and the Alumina. If I understand correctly, the pumped hydro gets installed in December 2023, another year of at least observation. If it goes through, then we put up the plans for CapEx and then we place orders. 2024 onwards, we place orders. No. We actually do the proper appraisal, looking at the LME and all, and see whether it still makes sense. Okay. Okay. Got it, sir. I just want to repeat, I know I get asked this, the pot expansion is the last project on my priority list. I have a lot more projects to do before that. Got it, sir. That's very useful, sir. Yes. Second question was with regards to the hedging, sir. If you could just help us on the LME hedging, where are we and what is the plan going forward? Quite boring answer. Nothing has changed. We remain at 30% of $2,500 for this year, 30% hedged at $2,500. The currency we are 14% hedged at INR 81.4 per dollar. In FY 2024, we have about 60 kt hedged at $3,000. We have not done anything in the last few months. Got it, sir. Thank you very much, sir. Thank you. Thank you. We have next question from the line of Ritesh Shah with Investec. Please go ahead. Hi, sir. Thanks for the opportunity. My first question is you emphasized on the word solutions and solutions provider. Would like to have your thoughts over here. Yeah, I think that because as we get into this Downstream business and we move out of just providing what we call common alloy, which was 3,000 series, we are now providing foil stock, we are providing household foil, we are providing can body stock, we are providing ACP sheets, we are providing extrusions, doors and windows. We are getting more and more closer to the end product and hence, you know, we are getting into more of machining and doing fabrication. The sort of margins go up and the valuation also goes up. That's what we mean. Sure. That helps. My second question is, when you do give a guidance on cost of production. How should one understand that? Like, is it something on a consumption cost basis that we guide for on a sequential basis? Yeah. The cost of production is based on consumption. It's our actual cost of production. It's not based on what we have in inventory. When I tell you it went up 17%, that was the actual cost of production went up in Q1, 17% versus Q4, and I'm saying high teens again for Q2. Is it possible for you to share EBITDA for upstream and downstream for Q4 FY 2023? No. You have given for Q1. Not possible? No. Okay. Let me put it the other way. If the number for the cost, what you are saying, if we build that from here, what essentially implies is, the premium has moved up very sharply. Is that inference right? If you can throw some color over there, that would be useful. Sorry, what has gone up sharply? Premium. Realization less LME. This MJP has not gone up sharply. The MJP actually has gone down a little bit. Okay. What I'm trying to tie up is on the EBITDA per ton movement on a sequential basis, the cost of production what you have indicated is higher. Based on our implied math, that number hasn't moved up very sharply. The premium should have moved up. That is looking like. Just trying to comprehend the operational picture. No, no. Just to answer your question. See one reason as we explained in one of the earlier answers as well, why it doesn't tie up. When we talk of cost of production, it is the current cost of production. Let's say when we started the quarter, there is a certain amount of metal inventory which is sitting with us. That is based on the cost of production of the previous quarter, which is lower than the current quarter. The benefit of that low-cost inventory at the beginning flows through in this quarter. That is the reason why you see some kind of a difference between the cost of production as we are talking about and the EBITDA that you're trying to calculate. I don't know if I'm clear to you. Yes. That helps. Just last question on the standalone. Before you ask the next question, let me also clarify. When we move from Q1 to Q2, there is no low-cost inventory sitting in our books at the end of Q1, because by the time Q1 end came, the cost of production had already moved up significantly. That's quite clear. Thank you so much. Last question, how should one read into effective portion of cash flow hedges of INR 3,050 crore, which is there on this paper? Yeah. You're referring to the OCI sheet, right? Correct. It basically means that whenever the LME goes down, the cash flow hedges become positive because, you know, effectively your benefit from the hedges goes up or the losses on the hedges goes down. T he vice versa happens on the other way as well. That's how you should read it. Right. What that number would be at this point in time? We don't calculate this on a day-to-day basis. It is calculated at the end of the quarter or end of the month. Really speaking, that number is more notional because that does not really tell you, what would you finally realize or not realize because, you know, that's a notional number at the end of the period. Sure. Thank you so much. Appreciate it. Yeah. Thanks. Thanks. Thank you. We have next question from the line of Abhijit Mitra with ICICI Securities. Please go ahead. Yeah, thanks for taking my question. Just to sort of clarify one thing. You know, since we are calculating as an outsider and, you know, you are suggesting that, the inventory has helped the cost this quarter or at least with the print. Next quarter, you know, from where we will be looking, we'll be seeing what, 25%-30% kind of a cost increase, right? If I understand you correctly, because there's an accumulated cost increase of Q1 plus some exchange cost increase of Q2 which will come through. No, no. Reported number from an external observation point of view, it'll look like a 25%-30% increase in cost. I'm saying a high-teen increase from the cost level of Q1, not cumulative. I think from where we will be observing it would be, you know, cumulative, right? Because this quarter we're not being able to see any cost increase because of the inventory impact which you are suggesting. No. Look at it in two parts. One is the cost of production, and the second is the benefit of the low-cost inventory at the beginning of the quarter. Right. In Q1 you will see that there is a certain cost of production that we talked about, which is what we said 17% higher than the previous quarter. That gives you a certain cost of production. Now in the EBITDA tally or EBITDA reconciliation, you would factor in the benefit of certain inventory that is lying in the beginning of the year. Not so much of the raw material, but more of the metal inventory where the cost of production of the previous quarter has gone into it. That benefit will not be available in the coming quarter. But on the cost of production, excluding that benefit, you will see a high-teen increase is what our expectation. You can map in different ways and you can compare, but this is the essence of what is happening. Got it. The second question is on downstream volume value. I think you mentioned something about the valuation. Did I heard it right? You said that over a point of time it will sort of lead to improvement in margins and valuation. Are you looking at it as separate business now or, I mean, what are the thoughts there? No, let's go one step at a time. We have just first quarter, we just split out and reporting. What I meant by valuation point of view is that our pricing and all that we can command is also going up. That's what I meant. Okay. Got it. That's all from my side. Thanks. Thank you. Thank you. We have next question from the line of Kamlesh Bagmar with Prabhudas Lilladher. Please go ahead. Yes, thanks for the opportunity and congrats on the performance and the classification of the news. One question on the part of your downstream. If you look at your CapEx plans, like, you are increasing your downstream capacity at a cost of roughly around $2,500-$2,600. Against that, like say we would be making an EBITDA per ton of like around $300. It's almost a recovery of around eight to 8.5 years. Do we see these margins to elevate to higher levels? Or because honestly on a medium-term basis, these are not yielding that great returns what we are doing in the upstream expansions or capacity. No, I think that, look, any of our new projects and I've discussed it before. This what you're seeing today is the basis of investments done long before that we have just cleaned up for better quality than that. The new projects are all in mid-teens IRR. They are all coming at a higher EBITDA pattern. Because I was looking at your CapEx announcements, which were done in March. Around $400 million for a capacity of 170 kt, which translates to around $2,400. Based on that, and that also for just the cold rolling. This investment is still underway. This has not resulted. I mean, it will take some. No, no, that's what he's saying, that he's using the current EBITDA per ton, but for those products, the EBITDA per ton will be higher. You're forgetting that, you know, we already have the hot mill, which is a large part of the investment. Additionally, we'll get the benefit of that hot mill available in our system. That project has been approved on the basis of an IRR, which is mid-teens. Sir, lastly, I may be drilling again on that cost part. We can't have, w e have an inventory of max 15 days. Not beyond that, because in aluminium, nobody carries such a high inventory. If you see the dollars on a dollar cost basis, last quarter it was $2,180. Based on the data which has been provided separately for the upstream. It was $2,180, and in this quarter it is $2,109. Effectively, cost has come down in dollar terms. On rupee terms, it also has come down. Honestly, it's very difficult to gauge the fact that because we have the inventory, so our cost has not gone up. Inventory can't be more than 15 days or 20 days. Look, I think that I'm going to ask you to do a little bit of reconciliation with Subir offline. Our costs from our basis have gone up by 17%, is what we have. What numbers you're using, we will have to. I'll get Subir to sit with you and reconcile, okay? Thanks. Thanks a lot. I cannot do it on the call here. Thank you. We have next question from the line of Ashish Kejriwal with Centrum Broking. Please go ahead. Yeah, hi. Thanks for taking my question. Again, this is again on the cost side only. You mentioned about 17% increase in cost. I think it's better if you can provide something like on a per ton basis. If not this quarter, maybe next quarter onwards. The kind of numbers which we get from you as an external guy, we are unable to calculate the cost. As you know, earlier participants are also questioning the same. That on our calculation, even if we exclude the Downstream businesses and just derive cost by reducing our revenue minus EBITDA and on a per ton basis seems to be lower on a quarter-on-quarter basis. It's- Yes, we will look at it. We'll see how we can make it clearer for you guys. Point taken. Yeah. Thank you, sir. Thank you so much. Thank you. We have next question from the line of Satyan Wadhwa with Profusion Investment Advisors. Please go ahead. Hi. Can you just provide some clarity on the Downstream business and why we've got such a big jump in EBITDA per ton? What sort of number is sustainable going forward in terms of a per ton basis? Yeah, I don't think sequentially it's such a big jump. I mean, the Q1 of last year is a little bit misleading because that was the second phase of COVID. Most numbers, when you look at it in Q1 of last year to comparison, look a little bit, you know. If you look at my historical discussions we were having, we were already always saying that the existing business is around $100-$120 EBITDA per ton. So now I think that, you know, over last year we got, to be fair, like we have seen in the Novelis business, very good price increases. We got a lot of price increase, and then we exited some of the common alloy, low end of the market and went heavily into foilstock, foil, and all those have paid off and given us a good EBITDA per ton. I think, you will see in the next few quarters that we are going to do little bit better than the $260, and be nearly $275-$300 is my guidance. Okay. Great. Thank you. Thank you. We have next question from the line of Indrajit with CLSA. Please go ahead. Macro question. We have seen some of the downstream companies talking about FMC and earmarking maybe 10% of input materials to be taken from only companies which have committed to some net zero. How does that impact us given our carbon-driven or coal-driven production? How is the medium-term plan? I understand that the new capacities will be renewable based, but what happens to the existing capacity? Sorry, I didn't get your question. What happens to the existing capacities in what way? That would be difficult to have net- zero carbon emission, right? It is all coal-based power generation. Yeah, but- Are you seeing that over there? Yeah, we have made a plan out to 2050, and that is dependent on a number of things happening. By the way, India has made a plan to 2070. The power source in India also has to change with time. I think that, you know, we have got certain things that we are doing in the short term, certain assumptions in the medium term where some hydrogen and some other gas, natural gas and all will come in. And that's how we have built a model which will take us to 2050. I mean, it's an issue that is facing all aluminium and all power users in India to transition out of coal. But this is a long term. I think I want to emphasize that it's more of a 2050 than the 2030, yeah. Sure. My second question again is on the hedging side. How do you see prices move up? In the sense that, do you not see merit in hedging more for 2024 yet or do you see prices to have an upside risk from here and that is why we are not hedging more for 2024? A very good question. We are expecting to see what happens when the current uncertainty goes away. Because fundamentals of supply and demand say that the LME should be higher. Right now there is a fear about recession, Chinese, the war that's keeping it down. The forward contango is very small. We are waiting for the macro environment to get a little bit more clearer before taking longer term positions. Sure. Thank you so much. Thank you. Thank you. We have next question from the line of Pallav Agarwal with Antique Stock Broking. Please go ahead. Good evening sir. Could you give us a quantity of external Utkal Alumina sales? Yeah, actually this current quarter, the sales was a little bit on the lower side. We sold only about 67 kt. Some of the ships were actually could not sail. Next Q2, we'll be selling about 150 kt. Sure, sir. In very broadly, if I were to try and, you know, get Utkal EBITDA or derive, you know, from the segmental EBITDA. You know, do I use the, you know, the upstream numbers that you reported and remove them from the standalone to get some sense of Utkal EBITDA? You know, how is that a right way to approach it? I think you should not try to get Utkal EBITDA besides the third party sales. The stuff that goes directly into our aluminium is in our cost of production which we tell you. I think that the separate EBITDA which is the real EBITDA that contributes to our bottom line is the third party sales, which I just gave you the numbers. Okay. Which is not very significant at, I mean, at least in this quarter. Well, this quarter it was not, but I gave you the number for next quarter is 150 kt, so it will become sizable in Q2. This year, our target sales is roughly 450 kt of third party sales. Sure, sir. Also a question, you know, MJP has been pretty, you know, subdued, but probably the premiums in other regions of the world still remain very strong. What's the sort of disconnect? Is there more supply in Asia compared to the rest of the world? Well, I think the MJP is down because of the Chinese demand being weak. A large part of the MJP is because the Japanese premium is Japan exports a lot of cars and aluminium things into China. I think that is driven a little bit by the weakness in China. In the Asian market, regional premiums tend to be driven by freight costs and admin costs on a local basis. I think right now the European premium is very high and the U.S. is moderated. Steve, do you have any comments on the European, Midwest? No, it is. It's moderated a bit and it is just flow of metal and some level of tariffs and duties that drive some of the different premiums in Midwest and ECDP. Yeah. Sure, sir. Yeah, thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the call back over to Mr. Satish Pai for closing comments. Over to you, sir. Yeah, thank you for the comments. Look, I think that our broadly diversified business model between Novelis, Copper, India Upstream, Downstream plays off to get these good results. It'd be fair to say going ahead, the cost pressures are going to impact the Aluminium Upstream business, whereas we expect the other three businesses to do well. With that said, thank you for your attention. Thank you. Thank you very much, sir. Ladies and gentlemen, on behalf of Hindalco Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.