Ladies and gentlemen, good day, and welcome to Hindalco Industries FY 2024 Q1 E arnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during 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 call over to Mr. Subhrajit Roy, Head of Investor Relations at Hindalco. Thank you, and over to you. Thank you. A very good afternoon or morning, morning, everyone. On behalf of Hindalco Industries, I welcome you all to the earnings for the Q1 of financial year 2024. In this call, we will refer to the Q1 FY 2024 industry presentation available on 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 2 of the next presentation. In this presentation, we have covered the key highlights of our consolidated performance for the Q1 of the financial year 2024 versus the corresponding period in the previous year. A segment-wise comparative analysis of India aluminum and copper businesses is also provided. This presentation covers our Indian operations, aluminum upstream and downstream financials, and their operational performances separately to reflect their individual business segment performances in Quarter One versus the corresponding period of the previous year. The corresponding segment information of the prior period has also been restated accordingly for a comparative analysis. Today we have with us on this call from Hindalco's management, Mr. Satish Pai, Managing Director; Mr. Praveen Kumar Machiraju, Chief Financial Officer. From Novelis's management, we have Mr. Steve Fisher, President and CEO, Sujay Raut, Chief Financial Officer. Following this presentation, this forum will be open for any questions you may have. Both this call and audio replay of this conference call will also be available on our company's website. Let me turn this call to Mr. Pai to take you through our company's performance in this quarter. Thank you, Subhrajit. A very good afternoon and morning, everyone. Thank you for joining today's earnings conference call of Hindalco's performance for the Q1 of FY 2024. On Slides 5 and 6 of this presentation, you can see our progress across the metrics we achieved for this year versus prior year. In our continuous efforts towards increasing green cover and biodiversity, we have successfully completed an all-season study under our biodiversity management plan for 12 of our mine sites and 6 units in Hindalco. We are also pursuing plantation drives across all our buffer zones. Hindalco continues to increase its share of recycling and reuse of waste. In this quarter, 90% of total waste was recycled and reused versus 88% in the previous year. We have achieved recycling of 127% of waste site residue and 105% of ash in this quarter, which is a significant achievement over the last year. In addition, we are now single-use plastic free certified at 14 of our plant sites this quarter and progressing well to become 100% single-use plastic free certified company in India soon. In terms of our progress in renewables, we have already reached 50% of our target of 300 megawatts by 2025 this quarter and completed 160 megawatts of renewables. Further, 140 megawatts of renewable hydro, wind, and solar projects are under execution and expected to be completed over the next few years. At the end of this quarter, our aluminum specific greenhouse gas emission was recorded at 19.45 tons of CO2 per ton of aluminum, which was a bit higher than last year on account of higher power consumption at some of our smelters. This is expected to settle down with better efficiency across our plants in the coming quarters. On safety, the LTIFR in India was recorded at 0.22 this quarter, reflecting an improvement over FY 2023 levels and remains amongst the best in the industry. We have taken several initiatives to inculcate a safety culture, not only in our employees, but also in their families. In addition to this, we have taken digitalization initiatives to develop the contractor safety management and comprehensive safety audit and assurance software to further strengthen our systems to monitor safety with a target implementation date of October 2023. There were no fatalities recorded in our Indian operations this quarter. We are on our way of achieving net water positivity by 2050. We stay committed to our zero liquid discharge at all our sites and a 20% reduction in fresh water consumption by 2025 from the base year of FY 2019. On the water positivity front, 2 of our mines, that is Samri and Bagru, have achieved water positivity this quarter. All these initiatives are in line with our target of achieving water positivity across all mines by 2025. In addition to this, our Silvassa and Taloda facilities have completed zero liquid discharge erection and installation, while its commissioning is underway. We're not only implementing water audits for assessing rainwater harvesting and recycling capabilities at our plant locations, but have also initiated various desalination and other projects to achieve this goal. Our Dahej plant successfully commissioned its tertiary water recycling unit, leading to 700 kilometers per day freshwater savings this quarter. Let me now give you a glimpse of our quarterly consolidated performance in quarter four versus the previous quarter on slide eight. This quarter's performance on a consolidated basis was driven by recovery in the Novelis and India, Aluminum India downstream businesses, backed by a steady performance by the copper business. Our consolidated revenue was INR 52,991 crore this quarter, which was down 5% sequentially. Consolidated EBITDA was up 5% QoQ at INR 6,109 crore, whereas the consolidated CAC was up 2% on a sequential basis at INR 2,254 crore this quarter. Hindalco, the consolidated level, maintains its strong balance sheet, with the net debt to EBITDA well below 2 x at 1.73 at the end of June 2023. On the balance sheet, our consolidated net debt stands at INR 38,463 crore. The India operations net debt was INR 1,903 crore, and Novelis was at INR 36,569 crore at the end of June 2023. In India aluminum business, we are currently hedged at around 11% at a price of $2,755 per ton for the financial year 2024. All our strategic assets in India as well as in Novelis are matched with cash flow generation in our business and are in line with our capital allocation policy. Coming to our business-wide performance this quarter, Novelis shipments were at 879 KT, down 6% Q1Q, largely on account of lower average can shipments and specialties, especially the building and construction segment. This was partially offset by record automotive shipments this quarter. Novelis delivered an EBITDA of $421 million, up 4% year-on-year, on account of better cost control and favorable product mix. EBITDA per ton was $479 versus $431 in the previous quarter, up 11% sequentially. On Hindalco's India aluminum business performance, upstream aluminum performance this quarter was impacted by unfavorable macros. Total upstream shipments were up 5% Q1Q at 341 KT, whereas revenue was flat sequentially at INR 6,064 crore. Upstream EBITDA was 12% lower sequentially at INR 1,935 crore. EBITDA per ton was at $691 per ton, and EBITDA margins were at 24% and continues to be one of the best in the global industry in the current challenging business environment. Total third-party shipments were 336 KT, of which upstream was 255 KT and downstream was 81 KT this quarter. Downstream aluminum business shipments were down 9% Q1Q at 81 KT this quarter, while revenues were down 11% sequentially at INR 2,235 crore this quarter. Aluminum downstream delivered an EBITDA of INR 137 crore, up 31% Q1Q, on account of better product mix this quarter. Our copper business continues to deliver consistent performance despite the impact of the planned shutdown we had this quarter. The overall metal shipments were at a record high of 118 KT, up 1% Q1Q, of which CCR volumes were at 98 KT, up 4% sequentially this quarter. Revenue was up 3% Q1Q at INR 11,502 crore on account of higher sales volumes. The quarterly EBITDA was at INR 531 crore, down 11% Q1Q, due to lower capacity production on account of the maintenance shutdown this quarter. Let me give you a glimpse of the current broader economic environment. After a resilient Q1 calendar 2023, global economic recovery is losing steam amidst wide divergences across sectors and economies. High-frequency indicators for the Q2 point to a broader slowdown in activity. As per IMF, global GDP growth is projected to moderate from 3.5% in 2022 to 3% in both 2023 and 2024. Slowdown is concentrated in advanced economies, where growth is expected to decline from 2.7% in 2022 to 1.5% in 2023, while emerging market economies are expected to grow at a steady pace of 4% in 2023. Restrictive monetary policy, slow recovery in China, and sluggishness in manufacturing and trade activity are weighing on growth. On the upside, services sector expansion continues to drive growth. The battle against inflation is not yet over, with central banks focused on achieving sustained disinflation, especially with respect to core inflation. Food and energy prices have come down considerably from the war-induced peak levels. Global headline inflation is expected to fall from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024. Core inflation is projected to decline more gradually. On the domestic front, economic momentum is holding up despite a challenging global environment. Economic activity remains resilient, albeit with some sequential moderation in the June economic data. Strong domestic demand, robust service sector activity, and healthy public CapEx momentum will drive growth in FY 2024. The impact of tighter monetary policy and slowdown in global growth may weigh on domestic growth going forward. RBI projects real GDP growth for FY 2024 at 6.5%, moderating from 7.2% in FY 2023, with risks being evenly balanced. Headline inflation has remained below 5% since April 2023, driven by both core and non-core inflation. However, going forward, food price dynamics are likely to shape the headline inflation trajectory. RBI projects CPI inflation to moderate to 5.1% for FY 2024, from 6.7% in FY 2022, on softer commodity prices and core inflation. RBI kept the policy rates unchanged in the last two meetings at 6.5%, stating durable disinflation in core inflation would be a, stating that durable disinflation in core inflation would be essential for a sustained path. Talking about the aluminium industry outlook. In the first half of calendar year 2023, global aluminium production grew at 2% year-on-year, while global consumption de-grew by 2%, resulting in a surplus of 0.7 million tons. In Q1, calendar year 2023, Chinese production declined in certain provinces like Yunnan and Guizhou and Shandong, due to tight power supply. In Q2 of calendar year 2023, with improved hydro power situation, the government has released power to the smelters, resulting in an increase in aluminium production, especially in the provinces of Yunnan and Guizhou. Overall production in China grew by 3% year-on-year in the first half of calendar year 2023 to 20.1 million tons. The Chinese consumption in H1, calendar year 2023, faced headwinds due to weak construction demand and led to a decline in consumption by 2% year-on-year to 20 million tons, resulting in a surplus of 0.1 million tons. In the world, excluding China, production increased in South America, whereas it declined sharply in Europe. Production was flattish at 2.3 million tons in the first half of calendar year 2023. Aluminium consumption faced headwinds across all sectors, except the automotive segment. Consumption de-grew by 7% to 13.7 million tons, leading to a surplus of 0.6 million tons. On a quarterly basis in Q2, global aluminium production increased by 1% to 17.3 million tons, whereas consumption increased by 2% to 17.7 million tons, resulting in a deficit of 0.2 million tons. During this period, Chinese production grew by 1% to over 10 million tons. Consumption improved to 10.8 million tons, up 6% year-on-year, due to the base effect of the zero-COVID policy in the last year. Increased solar capacities and electrical vehicle production partially offset the demand weakness from other sectors during this period, which resulted in a deficit of 0.6 million tons in China. In the rest of the world, overall aluminium production grew marginally by 1% to 7.2 million tons, while consumption continues to weaken across all sectors except in automotive, which led to a 2% drop in consumption at 6.9 million tons, resulting in an overall surplus of 0.2 million tons this quarter. The global aluminium prices in Q2, calendar year 2023, rose to $2,258 a ton, against $2,395 a ton in the previous quarter. On a quarter-to-date basis, the global price of aluminium is around $2,150 a ton. In Q1 2024, the domestic demand is likely to reach 1.14 million tons at a 15% growth year-on-year. Whereas sequentially, this demand is expected to grow marginally by 1%. This sharp year-on-year growth is supported by strong demand from the electrical, building and construction sectors, and a recovery in consumer durables. However, packaging and auto faced headwinds due to weakness in the export led demand. The global FRP demand is expected to grow at 1% in calendar year 2023, versus a 3% growth in the last calendar year. The global demand resilient, resistant beverage trend sheet is expected to grow in the long run at a CAGR of 6%, although the customer inventory reduction now is largely complete. The return of promotional activities in North America shall boost consumption of beverages in the second half of fiscal 2024. The automotive segment demand is expected to grow at a CAGR of 11% over the next 5 years, driven by vehicle growth rates and light weighting needs for fuel efficiency, performance, and electric vehicle range. EVs are gaining share of the vehicle mix. The demand in Specialty, especially in building and construction segment, showed some softness on account of seasonality of the macroeconomic environment. While some optimism is seen in US building and construction markets, full recovery in Specialty demand is depending on the economic stabilization across regions. The aerospace segment's demand for premium aerospace plate and sheet is positive and is expected to remain strong. Aircraft OEMs are forecasting a strong growth in aircraft build rates over the next decade. In this sector, sustainability is also gaining importance, leading to higher consumption of aluminum. In FY 2024, Indian FRC demand is expected to grow marginally by 8% year-on-year, due to stable building and construction demand and pick up in consumer durable demand. This demand is likely to remain firm in the following, in the coming quarters. With respect to the global copper industry in the first half of calendar year 2023, overall global copper production grew by approximately 2% at 12.5 million tons, whereas consumption grew by 4% year-on-year at 12.4 million tons, resulting in a surplus of 0.1 million tons. On a quarterly basis in calendar year 2023, China's production increased by 5% at 5.2 million tons, whereas consumption grew by almost 7% at 6.6 million tons, resulting in a deficit of 1.2 million tons. The world, excluding China, increased their production by 3%, whereas consumption grew by 1% on a year-on-year basis, resulting in a surplus of 1.3 million tons in H1 calendar year 2023. In the Q2 of calendar year 2023, the overall global production of copper increased by 3.4% year-on-year, while consumption grew by 5.9% compared to the corresponding period last year, resulting in a deficit of 0.5 million tons. In Q2 calendar year 2023, Chinese production increased by 4.5% year-on-year, while consumption grew by 10.8, resulting in a deficit of 1.1 million tons. In the world, excluding China, production increased by 2.5% and consumption was flattish year-on-year, resulting in a global surplus of 0.6 million tons this quarter. In Q1 FY 2024, domestic market demand increased by approximately 10% year-on-year to 190 KT versus 173 KT in Q1 FY 2023. On a sequential basis, in Q1 FY 2024, market demand increased by 5%, while domestic producers' share was close to 33%. During Q1 FY 2024, spot prices of TC/RCs are around 21-22 cents a pound. That remains below the annual benchmark of calendar year 2023, which is 22.5 cents per pound, owing to the supply disruptions due to adverse weather conditions in South America and export license delays in Indonesia. Spot activity remains subdued as smelters are being sufficiently well-stocked. This was coupled with weak spot demand from China, mainly on account of delays in commissioning of committed smelter projects, combined with extended maintenance shutdowns. Easing of supply disruptions in the near term will lead to improvements in spot TC/RCs during the second half of FY 2024. Details of our operational and financial performance in each of the business segments this quarter compared to the corresponding period of last year, as well as the previous quarters, are covered in further slides in the next years to this presentation. Now let me conclude today's presentation by key takeaways. We as a company are working proactively to mitigate the current macroeconomic headwinds and cost pressures. Our Resilient India business is providing solid financial footing with a strong balance sheet for our organic growth strategies. We also continue to focus on resource security in terms of coal and bauxite, thereby reducing our dependency on external sources while expanding our value streams in terms of downstream products. Our copper business continues to deliver a consistent performance despite the impact of a plant shutdown this quarter. We continue to focus on our value-added products that will cater to the niche segments of special alloys and high-purity copper rods and tubes. Novelis continues to show recovery backed by better cost control and a favorable product mix. This is reflected in the sequential improvement in EBITDA and EBITDA per ton this quarter. Our approach to ESG continues to be comprehensive across value chain and in line with our interim as well as long-term targets through 2050. We have already achieved 50% of our target of 300 megawatts in renewables by 2025. Our NPIFR continues to be among the industry best this quarter as well. We continue to moderate and pace our new strategic CapEx, both in India and Novelis, in line with our generated free cash flows. We stay focused with our value enhancing growth strategy, directed towards organic growth and diversifying our portfolio to provide not only products, but solutions while expanding downstream business in both aluminum and copper. Thank you very much for your attention and the forum is now open to any questions you may have. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two... Participants are requested to use only handsets while asking a question. The first question comes from the line of Indrajit Agarwal from CLSA. Please go ahead, sir. Hi, thanks for the opportunity. I have two questions. First, on the gaming cost inflation. In the last quarter's call, we had mentioned that we are expecting some support under the US Inflation Reduction Act. Any update on that, given that we have around $200 million to 300 million of cost inflation, will it be offset by that or it will be fresh out from our side? Yes. Steve, you want to take that? Sure. Not all awards that we have found are under 2. We will not have clarity as to the allocation of awards, either the DMO project or, or after the second project until probably the end of fiscal year, so March of 2024. The new capital investment that is not included in getting $95 billion operating. Actually, the line was not clear. We are expecting any kind of support in the subsequent years or is this still something to watch out for? Something to watch out for. We have put in our application. We will not get an update from as to how much should be allocated to us until late this fiscal year, so March of 2024. The entire 2.2 point range does not include any deficit. Sure. Excellent. My second question is on the India aluminum business. We have seen global coal prices falling much sharply versus our coal costs being largely stable other than the auction coal prices. With that respect and with other cost inflation, what kind of cost reduction we expecting to queue? Does that make us- where does that put us in the global cost curve for aluminum? You know, Q1 to Q4, our costs came down by about 2%, and Q2 to Q1, we expect it to come down by a further 3%. Most of the coal that we have been buying in the last few months, we have started to see quite a good reduction in coal prices. We are quite encouraged now, and we think that, you know, Q2 will be down another 3%. Where we are on the cost front, ALCO is very firmly in the left-hand side of the first quadrant. I mean, if you look at our EBITDA margins of 24% in the aluminum business compared to most of our peers who have already declared, you will see that our EBITDA margins are much better than those. Sure. I have more questions. I'll come back to you. Yeah. Thank you. Thank you. The next question comes from the line of Sumangal Nevatia from Kotak Securities. Please go ahead, sir. Yeah, thank you for the opportunity. My first question is with respect to COVID next. If you could share, what was it in Q, and how do we see it changing in the coming quarters? Also on the cost front, if you see international thermal coal prices at about year lower versus what we are kind of guiding for this quarter and maybe on a normalized basis, still much higher versus what we were, say, 2 years ago, 3 years ago, before the COVID era. What... I mean, what did you change over the last year? Is there a different mix change in coal and change in the cost of linkage to legend? Look, you have got quite a few questions here. Let me first start by your first thing was in Q1, our linkage was 41% and the option was 53%. In Q2, we think that the linkage is going to be more like 57 to 60%, which is why we are guiding that, you know, we'll be cost-wise, down another 3%. Your second point is the international prices of coal. You have to remember, went up much, much more than what domestic prices went up. I mean, international prices have gone up to $240 a ton. They have since moderated down, but it's still quite patchy. The third part of your question is coal prices in India, you're right, are still INR 200 per million kiloCal higher than what they were pre-COVID. Now, I personally believe that it's only after the captive mines that most of us in the steel and aluminum industry have bought. Once our captive mine starts, then only you will see the coal cost going back to those early levels. I think as long as we are participating in auctions, we are going to see the ups and downs. Structurally, this cost will change when our own mines start. I hope that's clear as well, Sumangal. Yeah, sir. Sir, in terms of linkage coal options, is the cost which is getting consumed now is quite different from what it was 2 years back? Because the premiums are elevated, is it? It's not very different, but it is higher. I mean, two, three years ago, what we got in linkage and today, compared to what we have gone through in the last few quarters, is much lower. But if I compare it to three years ago, it is higher. You have to remember that, you know, generally in India, there is at least a 6% inflation in Coal India notified price every year anyway. Okay, okay. Sir, what would be our... So you said 60% linkage from next quarter, is that normalized level, or we will see further increase in linkage proportion in coming quarters? I don't think so. I think that normally 60% is what our linkages are like. Because you have to remember that linkages are a rolling phenomenon. Older ones get finished, new linkages start, so that keeps going. If you go back and look, I think generally the best we have done is about 60, 62. Okay, got that. Sir, any updates you would like to share on our coal mine, Chakla and Meenakshi, where are we? Which approvals are pending and what's the latest timeline we're seeing? No real change. Chakla continues to move ahead as our plan. I think we have a hotspot planned in FY 2025. That is next year, somewhere in October. Meenakshi, we are still hoping for Meenakshi allotment, but we just want maybe as the time to tell you that last week we participated in Meenakshi West, which is just sort of west of the existing Meenakshi mine, and we won that as well at 33.75% premium. We are still hoping to get the Meenakshi mine allocated, but we have a plan B, which is Meenakshi West that we won last week. This is another 6-7 million tons per year mine. At least, you know, we are adequately covered, and hopefully we can start Meenakshi West if Meenakshi does not get allocated. Okay, sir, just one last question, sorry. What is the reason for this delay in allocation? Because we are seeing this across many companies. If you could just share what, what is happening here? There is a fundamental regulatory issue related to what they call land acquired under the Coal Bearing Act. To allocate a mine to a private industry, besides the subsurface rights, you will have to allocate the land as well to a private company. The law did not really allow the CBA land to be transferred from a public sector unit to a private. The government has had to deal with that regulatory aspect. That's why many mines are stuck on this, but I think it's getting resolved now. Okay. Okay. Thank you so much, sir, and all the best. Yeah, thanks, Suman. Thank you. The next question comes from the line of Pinakin Parekh from JP Morgan. Please go ahead. Yeah, thank you very much, sir. I have only one question, which is on LME aluminum prices. Essentially, this year was supposed to be a story of Yunnan production cuts, China deficit and sharply higher aluminum prices, there has been a complete reversal of that situation. The market worry is that without drought, Chinese aluminum production surges further from here, which could push aluminum well below the cost curve. At this point of time, how is the company looking at aluminum prices for the next 2-3 quarters? Is there any recalibration of the near-term CapEx plans with your open aluminum prices? Let me handle the second part first. There is no recalibration of CapEx plans because most of our CapEx is towards the downstream side of aluminum. We already have sufficient cash reserves to fund our CapEx, so we are not changing any CapEx plan, both in Novelis or Hindalco. Now, to go back to your outlook on LME, well, it's, it's fair to say that every month or every week is a new story when it comes to China. It's, you know, couple of weeks back, everyone was very optimistic that stimulus in China and every LME price is jumped up by $100 to 150. Today, they are pessimistic. I think, Pinakin, we can all, you know, speculate what China is going to do, but our feeling is that LME will be between $2,100 and $2,300. The good news is the cost curves are moderating, so we should be able to go through even if it's a tougher second half of the year. I think that largely outperformance of Hindalco will rest on its downstream businesses, whether it's Novelis, whether it's India Aluminum or it's copper. I think on the upstream side, we will be, compared to our competitors, in much better shape, which is all the best we can do. I think from an LME side, it's going to be tough until the situation in China gets clarified. Either way, the new story comes out every week. Understood. Just to continue with that, are you, given the view of aluminum prices of $2,100 to $2,200, as a company, are you locking in more volumes for a forward sell, hedges at this price point, or, you have reduced your volume hedges, for the next 12 months? We have not hedged. I mean, if you look in my remarks I made, there is no change from the previous analyst call. We said 11% hedged at $2,755. No, we don't think that current levels are worth hedging. Understood. That is very clear. Yeah. Thank you very much, sir. Yeah, thanks so much. Thank you. Participants are requested to restrict two questions per participant. The next question comes from the line of Amit Dixit of ICICI Securities. Please go ahead. Yeah. Hello, good evening, everyone, and thanks for the opportunity. I have a couple of questions. The first one is on downstream aluminum. India business, if I look at, downstream aluminum, EBITDA is only above $200 per ton. While you indicated in the prepared remarks that it was due to the better product mix, and last few quarters, we have been highlighting that consumer durables and all the things come down. What is the change in product mix that we have witnessed in this quarter? Do we expect this level to be sustained, sir? We have, our, calculation is $220 a ton. What had happened is the consumer durables, which is the, cookware and things like that, also went through a bit of a rough patch. actually, April was still little bit tough, but May, June, the volumes have bounced back. The product mix is that the consumer durables sector has come back, which is quite profitable to us. What we are seeing in the July and even August is that the demand is quite strong. We are fairly comfortable that this 81 KT volume, which is slightly on the lower side, will cross 90 in Q2, and the EBITDA per ton will actually be remain well above $200. We are quite confident about Q2, in the downstream aluminum side. Thank you. The next question comes from the line of Anwar Agarwal of ANJ Talk. Please go ahead, sir. Yeah, you have me, sir. I have a couple of questions. First of all, you know, if I look at the slide on the India India business, the revenues over there, let's-- if I take Q1 or let's say INR 20,000-30,000 crore, they are higher than the standalone revenues. Is this due to, mostly due to the Utkal Alumina external sales? No, no. You're asking whether the standalone revenue is higher than the consolidated India operation? No. Yeah, the reverse, actually. I'm asking if the India consolidated revenues are higher than- Obviously. It can get added. Utkal has a third-party element, you know. Copy is there in the standalone also. Utkal, yes, Utkal get added to the third-party sale. Primarily, Utkal Alumina external sales are higher over there. Yes. In Q1, we had 95 KT of third-party sales in the Utkal. Okay. It has come down with, you know, I think probably in earlier quarters we have, around about 150-200 KT of external sales. Yeah, it is lower because every sort of second half of March and half of April, we have the annual shutdown of the calciners in Utkal for maintenance. Yes, that's why Q1 was a bit lower. Oh, sure. Also, you know, on, in the annual reporting, the suppliers credit figure, has been, was at a level of about INR 5,600 crore. Is this primarily on account of, you know, concentrate, this is a credit that we avail, or it's also on account of some other, you know, suppliers credit? Sorry, INR 5,600 crore of what? Supplier credit in the annual report. Yeah, yeah, yeah. Obviously. That's a kind of a trade payable supported by financing arrangements. It's a supplier credit. Of, of copper. Copper. Yes. Copper concentrate. I'm assuming the, the, the, the discounting rate would be lower than the normal rates of interest that we would pay on other borrowings? I just said that different for different kinds of borrowings. On project loans today, that is the more successful one. Earlier, you remember we had the bonds, which are the highest ones, which we paid off last year, now project loans are. Supply credit interest rates are- It's lower than the project loans. We have basically two types of loans only now. Sure, sir. There are also just asking, you know, we had mentioned that India was net debt free in our last call. But if I look at the annual report, you know, there is still some amount of net debt there. You know, is this because Utkal is net debt free or the whole India operations are net debt free? When we talk about India operations, we, we combine Utkal into that. That was, there was a small net debt which was still there. We had, I think, INR 0.03 or something as a net debt, there was small net debt, some PM it was. Right. Yeah. Thank you so much. Thank you. The next question is from the line of Amit Dixit of ICICI Securities. Please go ahead, sir. Yeah, I got problem. Yeah, go ahead, Amit. Amit, your line is still not very clear. Okay. We'll move to the next question, and we'll wait for Amit to come back in the queue. Yeah. The next question comes from the line of Ritesh Shah of Edelweiss. Please go ahead. Hi, sir, a couple of questions. First is on Meenakshi, you used the word backup. Sir, why do you use the word backup? Specifically, I think the recent amendment, it takes into consideration the issues you highlighted on the sub-surface rights. If the allotment comes through, what is the timeline that will look like? That's my first question. Yeah, I think, you know, Meenakshi, the strip ratio is very low, so I think we should be able to get all that in about two years. The reason I use the word backup is that until I have the paper in the hand, there was a mine next to it came up for auction, so we decided to participate and win that. Okay, just, just careful. My second question is on Novelis. I think the human call to Novelis, what it was indicated is a good run rate and second half still at $500. Earlier during the capital markets day, we had indicated a number of $525. Just, just wanted to get a sense, was there any change in communication or the communication is not right from my end? Yeah. Dev, you want to take that one? Yeah, no, I think, I think our communication, first of all, is not inconsistent at all with this. We continue to say that as we move this fiscal year, which means in the Jan-March quarter, our confidence has gone up even more as compared to what was more than the capital markets day, that we will be getting to 525 for some. Until then, we have said that we should be prepared for 400-450. As you, as you have heard at other earnings call, we are now saying that we will be confidently in the range of 450-500. In fact, the journey has become a lot better as compared to what we indicated at the capital markets day. There is no inconsistency whatsoever. In fact, looking at the latest, business environment and everything that is happening, we have actually come back to say that we will be better than what we said at the capital markets day. I, I think there should be no confusion. Okay, that helps. Last question for Mr. Pai. You always emphasize a lot on operating leverage rate and Novelis. Just reported very different set of numbers despite management setting leverage. Product mix was a mixture different and the results were also favorable. If one had to balance each of these three variables and, better appreciate the earnings, if you could point to color that will be very useful. You want me to go? Yeah, go ahead. I was just saying that he pointed out himself all the positives of the Novelis. Go ahead, Dev. Ritesh, again, I don't think there should be a much of, much of any kind of ambiguity on why we are saying that there's a lot of dry powder when it comes to operating leverage. We are at a level of volume which is concentrated on the low side of this acquisition. The point we are making is that this quarter was like Q3 last year was a low point on EBITDA. We are telling you this quarter is a low point on volumes, and from here onwards we are pretty much seeing a big mountain behind us. That itself is a positive trigger when it comes to volume. Basically, incremental volume will come in can in particular, because this situation is also good. What would, what will happen is that all the incremental volume from here onwards to bounce back to a normal handle on volume is going to bring in, you know, a very high operating leverage. That should not be very difficult to, you know, acknowledge, you know, because also can come with a relatively higher recycling content. We have a double, we have, we have a double positive here. One is the volume, incremental volume, and the other is, you know, the recycling benefit, which is disproportionate with plan, even if the metal prices are not great at this point in time. That is really what is going to happen, in the coming quarters. Sure. The last question for Mr. Pai, sir, would you be keen on an inorganic case, something like a copper, if at all? I know we have a capital allocation framework in place. What will be our thought process if everything copper is up and down the right valuation? Hypothetically, we will continue to look for any opportunity that makes sense for Hindalco and share over. Oh, this is helpful. Thank you so much. Really appreciate it. Thank you. Thank you. The next question comes from the line of Anupam Gupta of IIFL Securities. Please go ahead. Good evening, sir. A couple of questions. Firstly, India, that is the reason for Q4 Go ahead, take it. I think India debt has increased. Actually, India debt has not increased. I think there's been a little bit of working capital blocked under corporate tax. Quarter one typically is a quarter where, you know, we see some buildup of inventory, et cetera. Working capital debt does go up in the Q1, that's about it. No increase in the long-term loans. Okay, thank you. Secondly, The volumes, it's not that there'll be a much upside in volumes, but what we have to tell you is that a large part of the volumes this time, we had actually imported the cathodes and then converted and sold, so the margins were not as good. In Q2, it will be more, more with our own cathodes, which we get from our concentrate. Hence, the performance in Q2 will be better than Q1. Okay, volume wise it should be stable? The volume should not be that different. This volume will now be the same. Production volume Okay. Thanks. Yeah. Thank you. The next question comes from the line of Satyadeep Jain of Ambit Capital. Please go ahead, sir. Hi. Thank you for the opportunity. My first question is on the business update that you have given the press release on collaboration with Tata Motors to build aluminum cargo body for Tata ACE EV. Just wanted to know what kind of aluminum would go into maybe one car and what additional demand could we see from that question? Look, the amount of aluminum is roughly about 55 to 60 kg to make that box at the back. The second part you have to know is that when we get into these downstream businesses, it's not just the weight of the aluminum, because we are actually doing some machining, welding to make that box. We are getting more and more, you know, doing extra machining and things like that. We have up to date, a year to date, in the last 6 months, delivered 1,000, and now the run rate is more like 200-300 per month. Next thing is that those last mile vehicles, everybody's electrifying it and hence need to lighten it. We are in talks with another 2 or 3 clients who want to build more of these aluminum boxes on their last mile vehicles. Okay. Thank you. My second question is on the capacity expansion. We had a 120 PP continuous casting plus cold rolling facility coming around aluminum. Any update on its commission timeline? We just reviewed the project last week, so it's going as per plan. I think the first coil should come out somewhere in end of FY 24, 25. Yeah, sorry. Yes. 2044. 25? 25. Next year. Okay. Okay. Thank you so much, ma'am. Thank you. Thank you. The next question is from the line of Gaurav Singhal of Aspex Management Hong Kong Limited. Please go ahead. Yeah, hi. Thanks. Thanks for taking my question. You mentioned that aluminum 60 millimeter be roughly around, let's say, $2,100 to 2,300, which is only slightly lower than in the average discussion. For the India upstream business, should we expect like $615 a ton to be like a normalized EBITDA level for this kind of aluminum price? Also once our mines come online, how much can the cost reduction benefit on a $ per ton basis to the India upstream? I think that, yeah, I mean, your cost, I would say, is roughly in the right ballpark. It is in that range, the number that you had is more or less right. I think how much you can get once the mines will come, better we wait till the mines get commissioned, and then we'll give you a more accurate number, because the cost can come down by another 5% or 8% more in our own mines. Got it. Got it. Then the second question, more on the Novelis side. For the green net facility where I understand we have, we have contracts with the customers. Are these just pay contracts? Because if macro reasons and for whatever reason, the situation is very bad, how firm are these contracts? Like, does the customer like all of those, then do they have to pay, is it up to the customer or there is that, not. Steve, you want to take that? Yeah. As we came out last week, we are working with some contracts and very good other contracts for 2/3 of the next facility that will be pulled up strategy. Coming along 2 lines, we'll have our contract on the auto side. As it relates to the contracts are multi-year contracts, with PPI capture clauses on contracts, and with pay solutions inside them. Got them. Got it. Got it. If I may ask, like, when we, when we sign these contracts, these are with the can companies or, or, or is it like a tripartite arrangement with the ultimate land owner as well? Or do we just sign with the can company and then the can would sign such a contract with the land owner? Yes, it's a combination in North America directly to some land owners. We announced that just a couple of months ago, a long-term contract relationship with one company, and then also some contracts that are obviously directly with the can group, so the mix. Got it, sir. Okay, that's it. Thank you. Thanks. Yeah. The next question is from the line of Kiran Keith Mehta from Global Capital Markets. Please go ahead. Thank you for giving this opportunity. You mentioned we are firmly on the left side of the cost curve on the global engineering market. Could you indicate the advantage that we have on aluminum and coal versus the midpoint of the cost of some sort of quantitative indication on the numbers? No, I can't give you much more to say that probably our biggest part of the advantage is our alumina cost, because we have wood pulp. The alumina cost is certainly one of the big ones, besides other benefits that we may have. A large part of the differentiation comes because of the cost of alumina. Sure, sir. In terms of sort of the, from the perspective of the thermal coal has been sort of weakening in the generation market. What level at this point of time, are the sort of the global thermal coal still in the positive area, or are there any sort of? I just want to understand how much cost support we have at the current price level. Maybe you can give some indication around that? Look, a few of you have asked me, but let me tell you that international prices of coal and domestic prices of coal, while there could be some correlation, largely it's not. Both are not related because the Indian domestic coal market is driven by its own supply, demand. What happened last year is it was a very hot summer, so a lot of coal got diverted to IPP, and hence, the e-auction coal in India went up. Yet coincidentally, the war in Ukraine happened and the international prices of coal went up. It's not a direct one-to-one correlation. We are in India, besides the Dahej, which is on the port which takes imported coal. Large part of our aluminum is run on domestic coal, and we do not normally import coal for our aluminum smelting use. I'm more interested in all India's production, how hot the Indian summer was, which was not so much, availability of coal in India. Hence the auction prices coming down. Thanks for clarifying this. I had a slightly different question in terms of I wanted to understand for the global smelters who are running on the global price, are they currently profitable at the current price levels? There is a specific of the smelters which are sort of in the range at this point of time. You see, what happened in Europe is that most of the smelters shut down when gas prices went above, you know, $15 per MMBTU, and most of them remained shut down. There is quite a lot of Chinese smelters that are closest to India, which run on coal. It depends on the coal prices in China, and some of them are on the right-hand side of the cost curve. Large parts of the Middle East run on natural gas, which is provided by their government, and Hydro and Rio Tinto run on hydropower. The basket of international smelting is quite varied. It's only India and China that are very much coal dependent. Right, sir. Thanks for this color. Thank you. Yeah. Thank you. The next question is from the line of Vikash Singh of PhillipCapital. Please go ahead, sir. Good evening, sir. Thank you for the opportunity. I, I had just one question for you. Sir, like the Novelis, you said that you have taken a price hike to Europe, probably, energy cost up appreciation. Is there any risk to repricing risk to a lower range? Because now the energy costs have come down significantly and you have to pass on certain benefits to the customers. Yeah. Dev, do you want to take that? Dev? You want me to go? Yeah. Here's the thing. First of all, first of all, for the largest part, our contracts are driven by CPI. A lot of the cost pass will happen through CPI clauses, and they remain consistent. Second of all, we have long-term contracts, and so, you know, there is really more pricing volatility. Generally, the direction of pricing on the sand side is upward. So on that front, you know, we don't have any really concerns with any margin dilution. In fact, as inflation is settling down, we will see some expansion in margins. Now, coming to the main point of your question, in the case of specialties, we have annual price negotiations. Just given the overall deflationary environment, which includes energy deflation, when it comes up for price negotiation, we just get some progress. That includes some contracts where we had, you know, a specific indexation of energy. What I will tell you is that net, net, we do not expect any margin dilution because overall inflation, you know, on the second down of total inflation, we will still be able to preserve our margins. All that I want to say is that we don't see any margin dilution, even though there may be some price adjustment as we get into the next round of negotiations, given inflation is coming down. I hope that helps to answer. Thank you, sir. That's all from my side. Thank you. The next question is from the line of Vishnu Kumar from Avendus Spark. Please go ahead. Hi, good evening, sir. Most of my questions have been answered. Just on the CapEx, capital expenditure number for full year for both Novelis and India, if you could just remind us the total number and how much it is spent? This Q4. India this year, we will be at roughly INR 4,000 crore-INR 3,500 crore. In quarter one, we spent INR 800, INR 800 crore plus was spent. Dev, your guidance for this year? Yes. $1.6 billion to 1.9 billion is our annual guidance for CapEx. In the Q1, our CapEx was $333 million. We expect that to ramp up as the project, as the both projects into the next ramp up. The second question from India downstream side, what could be the theoretical number that we can do, assuming if we can run full blast? When the new project kicks in, from next year, I mean, 2025-2026, where this theoretical number can get to? Look, theoretical, I mean- I'm in capacity. Yeah, yeah. The Silvassa 34 KP exclusion commissioning has started in the last few months. We will add 34 KP of exclusion, and then the rolling capacity is 170. We will add another 200. We are roughly at around 400+ now, so in the next two years, we will get to about 600 KP. The ton is running north of $200 already. That's your number. Got it, sir. Thank you very much. Yeah, thank you. Thank you. Due to time constraints, that was the last question. If you have any other question, you can connect with investor relations team for your future queries. Yeah. Thank you. I would like to hand over conference to Mr. Subir Sen for any closing comments. No, I think that, on behalf of Hindalco and Novelis, we thank you all for participating in the call. I hope we have managed to cover all the questions that you had. You know, we look forward to talking to you in another 3 months. Thank you. Thank you. 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.