Ladies and gentlemen, good day, and welcome to Hindalco Industries FY 2024 second quarter earnings 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 a touchtone phone. Please note that this call is being recorded. I now hand the conference call over to Mr. Subir Sen, Head of Investor Relations at 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 second quarter of financial year 2024. In this call, we will refer to the Q2 FY24 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 our consolidated performance for the second quarter of the financial year 2024, versus the corresponding period of the previous year. A business-wide comparative financial analysis of Novelis, Hindalco, and India Aluminum Copper business is also provided. This presentation covers our Indian operations, aluminum upstream and downstream financials, and operation performances separately to reflect the individual business segment performances in quarter two versus the corresponding period of the previous year. The corresponding segment information of the prior period have 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 Maheshwari, Chief Financial Officer. From Novelis' management, we have Mr. Steve Fisher, President and CEO, and Mr. Devinder Ahuja, our 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. Now, let me turn this call to Mr. Pai to take you through the company's performance in this quarter. Thank you, Subir. Good afternoon and morning, everyone, and thank you for joining today's earnings call of Hindalco's performance for the second quarter of FY 2024. At the beginning, let me wish all of you and your families a very happy Diwali. On slides five and six of this presentation, you can see our progress across various ESG metrics for this year versus the prior years. In our continuous efforts towards increasing green cover and biodiversity, we have successfully completed an all-season study under our biodiversity management plan for twelve of our mine sites and four units in Hindalco. In addition to this study at two sites and one mine cluster are also progressing well. CII's biodiversity index and carbon sequestration ground assessment was completed in six of our units in the first half of this year. I'm also happy to share with you that Hindalco has won the UNDP Mahatma Award for Excellence in Biodiversity Management in 2023. Hindalco continues to increase its share of recycling and reusing of waste. In the first half of FY 2024, 80% of total wastes were recycled and reused in line with the same period of the previous year. We achieved recycling of 108% of bauxite residue and 103% of ash in H1 of this year. On the emissions, Hindalco is now pursuing ozone-depleting substances, ODS, phase-out programs at all our sites and targeting to be ODS-free by FY 2026. Our flue gas desulfurization projects at Mahan and Aditya power plants are now commissioned. At the end of the first half, our aluminum-specific GHG emissions were recorded at 19.58 tons of CO2 per ton of aluminum, which is 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 efficiencies across our plants in the coming quarters. In terms of our progress in renewables, we have already reached 50% of our target of 300 MW by 2025 this quarter and completed 150 MW of renewables. Further 50 MW of solar and wind are under execution and expected to be completed by Q1 of FY 2025. On the 100 MW of hybrid power project, the contract is executed with a target COD beginning in December 2024. On safety, the LTIFR in India was 0.18 in the first half, reflecting an improvement over H1 of last year's level and remains among 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 a comprehensive safety audit and assurance software to further strengthen our systems to monitor safety with a target implementation date of March 2024. There were no fatalities recorded at our Indian operations in the first half of this year. We are on our way to achieve net water positivity by 2050. We stay committed to our zero liquid discharge at all our sites and a 20% reduction in specific water consumption by 2025 from the base year of FY 2019. On the water positivity front, an additional three of our mine clusters have achieved water positivity in this quarter, taking the total to five as of September 2023. All these initiatives are in line with our target of achieving water positivity across all the mines by 2025. The civil work on the 5,000 kiloliters per day project at Renukoot is underway. We are not only implementing water audits for assessing rainwater harvesting and recycling capabilities at our Mahan plant locations, but have also initiated various desalination and other projects to achieve this goal. As a result, our desalination project and tertiary water recycling units at Dahej enabled a significant drop in freshwater consumption from 18.5 cu m per ton of metal in H1 FY 2023 to 10.4 in H1 FY 2024. I'm happy to share Hindalco's recognition as the world's most sustainable aluminum company for the fourth year in a row in the S&P Dow Jones Sustainability Indices, Corporate Sustainability Assessment, CSA ranking of 2023. This reflects our holistic approach to long-term ESG performance. Let me now give you a glimpse of our quarterly consolidated performance in quarter two versus the previous quarter of this year on slide eight. This quarter's performance on a consolidated basis was driven by strong recovery in Novelis and Aluminum India downstream businesses, backed by a record performance by the copper business. Our quarterly consolidated revenue was INR 54,169 crore this quarter, up by 2% sequentially. Our consolidated business segment EBITDA was up 14% QOQ at INR 6,896 crore, whereas our overall reported EBITDA was flat sequentially at INR 6,096 crore this quarter. The consolidated PAT was down 11% on sequential basis at INR 2,196 crore this quarter. In India Aluminum Business, we are currently hedged at around 11% at the price of $2,755 per ton for the remaining half of 2024. On the balance sheet side, our consolidated net debt stands at INR 37,613 crore. The India operations net debt was INR 1,174 crore, and Novelis was at INR 36,439 crore at the end of September 2023. During this quarter, we prepaid a long-term debt of INR 2,120 crore in Hindalco India operation. Hindalco, at the consolidated level, continues to maintain a strong balance sheet with a net debt to EBITDA well below 2x at 1.66 at the end of September 2023. Hindalco has recently signed an MOU with Odisha Mining Corporation for a long-term supply of bauxite ore for its 2 million ton alumina refinery and a 150 MW captive power plant at Kansariguda in the Rayagada district of Odisha. Hindalco will invest around INR 8,000 crore in this project in two phases. Our strategic CapEx in India, as well as in Novelis, are mapped to cash flow generations in the business, and are in line with our capital allocation policy. Coming to our business-wide performance this quarter, Novelis shipments were at 933 KT, up 6% quarter-on-quarter, primarily on account of higher beverage can shipments, which was up 12% sequentially, as destocking activity is largely behind us. Novelis delivered a quarterly EBITDA of $484 million, up 15% year-on-year on account of higher volumes and benefit on operating leverage, along with better scrap utilization this quarter. The resulting EBITDA per ton stood at $519 per ton versus $479 in the previous quarter, up 8% sequentially. On Hindalco's India aluminum business performance, upstream aluminum performance this quarter was impacted by unfavorable macros. Total upstream shipments were lower by 2% Q1Q at 334 KT, whereas revenues were down 2% sequentially at INR 7,878 crore. Upstream EBITDA was up 7% sequentially at INR 2,074 crore, supported by lower costs. The resulting EBITDA per ton was at $751 per ton, higher by 9% sequentially. EBITDA margins were also higher at 26.3% compared to last quarter and continued to be one of the best in the global industry in the current challenging business environment. Total third-party shipments were at 338 KT, of which upstream was 245 KT and downstream was 94 KT this quarter. The downstream aluminum business shipments were up 15% quarter-on-quarter at 94 KT, while revenues were up 8% sequentially at INR 2,629 crore this quarter. However, aluminum downstream delivered an EBITDA of INR 171 crore, up 16% quarter-on-quarter on account of higher volumes. Our copper business continues to deliver consistent performance this quarter as well. The overall metal shipments were at a record high of 134 KT, up 13% Q-on-Q, of which CCR volumes were 100 KT, up 2% sequentially this quarter. Revenues were up 8% Q-on-Q at INR 12,441 crore this quarter on account of higher sales volumes. The quarterly copper EBITDA was at an all-time high of INR 653 crore, up 23% Q-on-Q on account of higher shipments and normalization of production of cathodes post the maintenance shutdown in the last quarter. Now, let me give you a glimpse of the current broader economic environment on slide 10. Global economic recovery remains resilient despite multiple challenges. IMF projects global GDP growth to moderate from 3.5% in 2022 to 3% in 2023, and to 2.9% in 2024. Advanced economic growth is expected to moderate from 2.6% in 2022 to an estimated 1.5% in 2023, and 1.4% in 2024, amid strong U.S. but disappointing European Union performance. Emerging market economies have remained buoyant, with growth projected to moderately decline from 4.1% in 2022 to 4% in both 2023 and 2024. In China, encouraging economic activity data from August 2023 and a strong GDP report in Q3 indicate economic recovery is gaining pace despite challenges in the housing sector. While downside risks remain, moderating inflation without a major downturn in global activity and buoyant labor markets are consistent with a soft landing scenario. As per IMF, global inflation is expected to decline steadily from 8.7% in 2022 to 6.9% in 2023, and 5.8% in 2024. However, core inflation is expected to decline more gradually. On the domestic front, despite the challenging global environment, India's growth momentum is holding up, driven by strong domestic fundamentals, robust consumption demand, infrastructure spending, and service sector activity, which continue to drive growth. However, weakening global demand, rising geopolitical tension, and tighter credit conditions pose downside risks. RBI projects real GDP growth to moderate to 6.5% in FY 2024 from 7.2 in FY 2023, with evenly balanced risks. RBI's forward-looking surveys indicate better demand conditions, employment opportunities, and industrial output going forward. Inflationary pressures have also eased, with CPI inflation expected to moderate to 5.4% from FY 2024, for FY 2024, from 6.7 last year in FY 2023 on softer commodity prices and lower core inflation. The evolving geopolitical situation and its impact on crude oil and India's inflation trajectory is being closely watched by RBI, which has kept the rates on hold since February 2023. Moving on to the aluminum industry outlook in slides 11 and 12. First, let me talk about China. In Q1 calendar year 2023, production in China declined in certain provinces like Yunnan, Guizhou, and Shandong due to tight power supply. In Q2, with improving hydropower situation, the government released power to the smelters, resulting in increased aluminum production, especially in provinces of Yunnan and Guizhou. In Q3, production continued to grow by 4% at 10.7 million tons. Therefore, year-on-year basis, the overall production in China grew by 3% year-on-year at 30.7 million tons., On the consumption side, Q1 faced headwinds due to weak construction demand that led to a decline of 2% year-on-year to 9.4 million tons. In Q2, the Chinese demand recovered sharply by 7% to 10.9 million tons, and in Q3, this demand improved further to 11.1 million tons. These demands were strongly led by solar and EV markets, partially offsetting the weak construction demand. Hence, on a year-on-year basis, the overall consumption of aluminum was at 31.5 million tons. As a result, the Chinese market was in a deficit of 0.7 million tons at the end of September 2023. This quarter, aluminum, Chinese production was at 10.7 million tons and consumption at 11.1 million tons, leading to a market deficit of 0.4 million tons. In the world, excluding China, in Q1 of this calendar year, production was flattish year-on-year at 7.1 million tons. In the subsequent quarters, that is Q2 and Q3, production improved marginally to 7.2 and 7.4 million tons, respectively. Therefore, on a year-to-date basis, the overall production grew marginally by 1% at 21.7 million tons. Moving on to consumption. With rising interest rates, except for automotive, all other segments faced some headwinds. As a result, consumption declined sharply by 10% year-on-year in Q1 to 6.8 million tons. In the subsequent quarters, consumption grew to 7 million each in Q2 and Q3. This decline was mainly due to headwinds in the building and construction sector, as well as industrial machinery and consumer durables.... Hence, on a year-to-date basis, the overall consumption stood at 20.7, and production was at 21.7 million tons, resulting in a surplus of 1 million. Therefore, on a year-to-date basis, with the overall global production at 52.4 million and consumption at 52.2, the market is in a surplus of around just 0.3 million tons. In this quarter, both global production and consumption were at 17.5 million each, resulting in a balanced market. The global aluminum prices in this quarter were range-bound and averaged $2,154 a ton, against $2,258 a ton in Q2. On a quarter-to-date basis, the global price of aluminum is around $2,200 a ton. In Q2 FY 2024, domestic demand is likely to reach 1.3 million tons, reflecting a growth of 10% year-on-year and 13% sequentially. This sharp increase was supported by strong demand from electrical, building, and construction sectors. However, the packaging segment faces some headwind due to weakness in export-led demand, and consumer durables showed weakness in the cookware segment. The global FRP demand is expected to decline by 3% in calendar year 2023, versus a 3% growth in the last calendar year on account of softer macro. However, the FRP demand is expected to return in calendar year 2024 to low to mid-single digits, with demand recovery across all major sectors. The global demand for resilient beverage can sheets is expected to grow in the long run at a CAGR of 3%, although the customer inventory reduction is largely behind us now. The U.S. market demand is strong, as promotional activities in North America will boost consumption of beverages in the coming months. The South America market is also strengthening as we proceed towards the summer, with demand from beverages starting to pick up. The automotive segment is expecting to grow at a CAGR of 11% over the next five years, driven by vehicle growth rates and lightweighting needs for fuel efficiency, performance, and electric vehicle range. This growth is led by elevated levels of pent-up demand, and EVs are gaining share of the vehicle mix. The settlement of the UAW strike is a positive development for all auto sheet makers. The demand in specialties, especially in building and construction segment, remains cloudy due to seasonality and the current macroeconomic environment. While some optimism is seen in the U.S. building and construction market, with higher share of new home build rates and ongoing demand for repair and remodeling. The aerospace segment demand for premium aerospace plate and sheet remains strong. Aircraft OEMs are forecasting a strong growth in aircraft build rates, supported by multi-year backlogs of aircraft deliveries. In this sector, sustainability is also gaining importance, leading to higher consumption of aluminum. In FY 2024, Indian FRP demand is expected to grow by 7%-8% year-on-year, supported by growth in auto and packaging segments. This demand is likely to remain firm in the following quarters. Turning to the global copper industry on slide 14. On a year-to-date basis, calendar year 2023, overall global copper production grew by approximately 5% to 19.2 million tons. In contrast, consumption also grew by 2.8% year- on- year at 18.9 million tons, resulting in a surplus of 0.3 million tons. On a year-to-date basis, in calendar year 2023, China's production increased by approximately 11% at 8.6 million tons, whereas consumption grew by almost 7% to 10.6 million tons, resulting in a deficit of 2 million tons. The world, excluding China, increased its production by 1.2%, whereas consumption declined by 1.9% year-on-year, resulting in a surplus of 2.3 million tons on a year-to-date basis, calendar year 2023. In the third quarter of calendar year 2023, the overall global production of copper increased by 4.6% year-on-year, while consumption grew by 1.8% compared to the corresponding period last year, resulting in a flattish growth year-on-year. In this quarter, Chinese production increased by 9.7%, while consumption grew by 4.6% year-on-year, resulting in a deficit of 0.8 million tons. In the world, excluding China, production of refined copper increased by 0.8%, and consumption declined by 1.8% year-on-year, resulting in a global surplus of 0.9 million tons this quarter. On the domestic side, in Q2 FY 2024, market demand increased by 7% year-on-year at 201 KT versus 187 KT in Q2 FY 2023. On a sequential basis in Q2, the market demand increased by 3%, while domestic producer share was close to 72%. The copper concentrate market was balanced this quarter, with mine production in line with demand from global smelters. As a result, the spot TCRC remained steady throughout the quarter, closely aligning with the benchmark TCRC for calendar year 2023 at $0.225 per pound. Looking ahead to the next quarter, an upswing in buying activity is anticipated due to the expected ramp- up and resumption of a few smelters, which were under maintenance in China. 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 sequential quarters, are covered in further slides and annexures to this presentation. Now, let me conclude today's presentation with some key takeaways. We, as a company, are working proactively to mitigate the current macroeconomic headwinds and cost pressures. Our resilient India business with a strong balance sheet is providing solid financial prudence to our organic growth strategy. 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 again delivered its best ever performance this quarter. We continue to focus on value-added products that will cater to the niche segments of special alloys and high purity copper rods and tubes. Novelis continues on a strong recovery path with higher can shipments, resulting in benefits of operating leverage due to higher volumes and also highest utilization of scrap this quarter. This is reflected in the strong sequential improvements in both EBITDA and EBITDA per ton. Our approach in ESG continues to be comprehensive across value chains and in line with our interim as well as long-term targets for 20-50. We have already achieved 50% of our target of 3,300 MW in renewables by 2025. Our LTIFR continues to be among the industry's 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, while expanding downstream businesses in both aluminum and copper. We stay committed to maintain a strong balance sheet position and focus on shareholder value creation in the long run. Thank you very much for your attention, and we now open the forum up for your questions. 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 the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, good evening. Thank you for the opportunity. My first question is, sir, with respect to the copper division, so if you can just elaborate, what are the drivers for such a strong performance? Is it value addition, by-product credits, or better TCRCs? And, should we extrapolate, this sort of run rate, both volumes and profitability in the future? So I think that, you know, it's a combination of all. It's certainly not higher TCRCs, because TCRCs were not that high, because we bought concentrate, which were more richer in gold. So I think that the higher thing is because of higher volumes. So we took the opportunity of a higher market demand, and besides our cathodes, Sumangal, we also imported cathodes and converted to rods. So if you look at the sales volumes that we achieved, these contributed to this very strong quarter, besides the other value streams that we have, which is gold, silver, sulfuric acid, et cetera. Now, on the run rate going forward, you know, I think that we would stick to a guidance of 500-550 growth quarter. I would not extrapolate from the 650. Got it. So second, with respect to the aluminum division, is it possible to share how are we looking at the coal costs in coming quarters and overall other costs shaping up, in the aluminum division in the next one or two quarters? Yeah, I think that, you know, first, the coal cost Q1 to Q2 was, you know, 15% down sequentially. So, our cost of production was down 6% Q2 to Q1. Now, you know, in the months of October, what, September, October, with power demand again going up, we have started to see spot auction rates coming up again. So we have looked at the mix of coal and the other input costs. I think coal is going to be slightly up in Q3, but some of the other input costs are continuing to trend down, like caustic, furnace oil, CP coke. So what we are guiding now is that in Q3, you should see a flattish cost of production versus Q2. Understood. Understood. And just one last question. Last quarter, sir, you shared your outlook on aluminum prices, and you said a range of $2,100-$2,300, and looks like the prices are stuck in this range. Incrementally, are you turning more cautious or bullish given the recent developments of maybe Chinese weak demand and but offsetting by some production cuts in Yunnan? Any incremental update on your thoughts on medium-term price outlook? So, look, what is clear to me after the London Metal Exchange week is that demand for aluminum in China remains quite steady. So any down in the demand due to B&C seems to have been more than made up with solar and electric vehicle aluminum demand. So I think that if you look at the supply-demand that I had in my prepared remarks, China is in quite a big deficit for the metal, and in fact, is being made up by the Rusal metal coming into China. So I personally believe, and now, you know, Yunnan, again, the water has got less, so they have had to announce production cuts. So I think that, you know, personally, the market seems to be very sensitive to any remarks coming out on either the Chinese economy or interest rates. I think that till things settle down, I stick with our guidance of $2,100-$2,300. I still believe that supply and demand remains very tight, and that any clearing up of the macroeconomic environment, you should start to see a positive trend in the prices. Got it, sir. I'll join back the queue. Thank you very much, and all the best. Thank you, Sumangal. Thank you. Our next question is from the line of Indrajit from CLSA. Please go ahead. Sir, hi. Two questions from my side. Following on from the earlier question, given that you are still positive on aluminum price outlook, any change in thought process of what is our current hedging in for FY 2025? It's a good question. So what we did is, we don't believe that this is a time to take a forward position. So what we did for FY 2025, is that we actually hedged around 5%, taking a zero collar, with a bottom at $2,200 and a ceiling of $2,517. So it's a... You know, we hedge for insurance, not to take a forward look. So for next year, we started at that 5%, taking this collar. So at one hand we are protecting the downside at $2,200, and of course we are accepting a ceiling at $2,517. So that's what we have done for next year, Indrajit. Sure, sir. Thank you. My second question is on, again, on cost of production. While you have given a very good, you know, outlook on how it is going to shape up in Q3, if you can help us understand what is your actual cost of production for aluminum at maintenance level, the current variable one, the on the, only for upstream, all right? Yeah, we don't give that out, Indrajit. I'm quite sure with your model you can back calculate, but I, we don't give out the exact cost of production. Okay, then I'll put it differently. At current level, so is it either at 2Q or at spot basis, where are we on the global cost curve? So look, we are firmly in the first quartile, and Aditya, Mahan, Renukoot are fully in the first quartile, and Hirakud is the only one which is sort of on the right-hand side. So as a consolidated Hindalco, we are firmly in the first quartile and well to the left. Sure. One last housekeeping question, if you can give the quantum of alumina sales? Yeah, I, this year quarter, we sold 138 KT of alumina. I just wanted to remind you that our brownfield expansion of 350 KT is now on stream, so I think you will start to see third-party sales in Q3 and Q4 being at a higher level. We are not looking to take some shutdowns in our earlier legacy refiners as well? No, we'll evaluate that, because what is happening in Muri is that even though the cost is higher there, we are not using it for smelters. We are actually selling it into the third-party market, where there's a good demand for hydrate. Sure. This is very helpful. Thank you so much. Yeah, thank you. Thank you. Our next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah, hi, good afternoon. So, on alumina, so you have mentioned that, you plan to set up this 2 million ton facility. So could you just provide some more details around that, like, as to when will that come up exactly? And, will that be fully for the market sales, or do you plan to kind of back it up with some smelter capacity as well in the future? So look, this Aditya alumina refinery is actually a very old project, and we had actually put it on hold because, you know, the, we did not have the bauxite mine security. Now, what has happened is that with the Odisha government, we have signed a MOU to get that, bauxite supply, and hence we are putting it up because we think it makes great economical sense. I think that, you know, the first 1 million tons will go in two phases, 1 million plus 1 million. The first million is around, slightly below INR 6,000 crore of CapEx. That will come up in the next 36 months, because we already have the land, we already have the environmental clearance, we have already done the public hearing, so that's us. Now, our current plan is to sell it in the third-party market. As you remember, I have frequently reminded that until we try out the 100 MW of round-the-clock power in Aditya from next year, we will only expand aluminum capacity when we have more renewable power in the mix. It will not be coal-based. ... Sure, sure. Got it. Also, for regarding the Chakla coal mine, I believe you had said that this will start operating in October 2024. So those timelines are still holding or there is issue? Yes, October 24, Box Cut, we are still holding that timeline. Okay. Okay, and any update on Meenakshi? Okay, the good news is we won Meenakshi West, which we have got notified and we'll start work. On Meenakshi itself, we are still awaiting the CBA land issue. We are optimistic about it, but we do not know when that will come. But it's the next door mine, Meenakshi West, we bid on it, and we have, you know, got the order and things like that. So we'll take a call. If we get both mines, we will take a call on the, you know, probably to keep Meenakshi, but at this stage, we are working with Meenakshi West. Sure, sure. Thanks a lot. Yeah. Thank you. Our next question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Yeah, hi. Good evening, everyone, and thanks for taking my questions. The first question is if you can detail about the coal sourcing mix in this quarter? Yeah, sure. So the coal mix, in fact, we had very good materialization of the linkage. So linkage coal was 53%, e-auction was 40%, own mines were 5%, and import and others were 2%. So I think that, you know, this was the mix that we had, and as I said, our coal cost was sequentially on a consumption basis, down by 15%. Now, so sir, going ahead, since the coal production is continuously increasing and they are also satisfying power demand fully, you expect a further materialization of, further higher materialization of linkage or 33% is something that we are looking at, at the optimum level? No, you see, 53% was of our mix. Our nuclear materialization of the linkages were nearly 90% this quarter. That's why we could get the coal costs down. So they are giving whatever linkages we have, they're giving they in Q2, they gave us a good materialization. As I said, towards the end of September and in the month of October, the temperatures still were very high. The power demand in India was high. Then they again started to divert coals to IPP, which is why the spot auctions in October, again, premium jumped up. So that's why we are a bit cautious, and we are saying that in Q3, coal price could be little bit higher, but we'll balance it off with the lower input cost from the other side, and we are guiding for a flat cost of goods production. Okay, that's very helpful, sir. The second question is on the note number nine of the consolidated financial statement, wherein you have mentioned that in October 2023, you have decided to close the cold roll and finishing line in the US. So I just wanted to understand the typical products for which segment, you know, they are being closed down? And when you have mentioned that the total expense could be $25 million-$35 million, some of it is accelerated depreciation. So just wanted to understand the cash outgo out of this $25 million-$35 million. Sure. Steve, Dave, you want to take this, this, Clayton, I suppose, closure? Yeah, Dave, do you want to take it? I didn't understand the question exactly. Oh, he's talking about the, you know, the shutdown that we have announced of our plant in Clayton, and the Oh, yeah. Yeah. And the guidance that the cost of shutting down could be $20 million-$25 million. It's in one of the notes, so if you can just give an update on that. Yeah. So, yeah. Yeah. So I was not able to hear the question earlier, but, but basically, just as a full background, so this is a plant which, economically simply does not make sense because of the kind of products we are making there. We don't see any, we don't see any future. It's an old plant with high fixed costs, and so most of this, most of this, impairment or write-off is going to be basically book value of assets. And, it's, it's going to be $2 million of severance costs. So, it is simply, you know, good economics, and, and just makes sense to, get, get this facility to close it. As we announce the next quarter, we will give some more details, but the headline is that these products don't have much of a future. They are in a highly competitive segment. Fixed cost savings is going to be extremely good in order to, you know, sort of really quickly pay back on the one-time cost that we are going to incur to close the plant. That's really what it is. Are there any other sites that might be in your radar at this point in time, that are having high fixed costs and uneconomical products that you might decide to close later on? Well, we keep looking at it, you know. I know. I mean, there is, we always keep looking at rationalization opportunities, and so it's like, never say no. But this is a continuous evaluation that we keep doing based upon market, based upon, you know, sort of really what makes sense, in the overall strategy. So at this moment, this is what we have, but, it's a continuous process of review. Okay, thanks, and all the best. ... Thank you. Thank you. Our next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi, thank you. Just a follow-up on the alumina question, Mr. Pai. It seems like the company is increasingly going long alumina. What's the strategy or thought behind that? Do you see a shortage of alumina globally? Do you think the mines, the facilities you're looking at could be maybe lower cost compared to some of the other refineries? What's the thought process behind that? Because you're already long alumina, and you're going further now. That's the first question. Yeah, good question. I think that, you know, what we look at is, fairly a regional market, largely taking the Middle East smelters into view. So, if you look at the whole spectrum from EGA to Sohar to Alba, I mean, for us to sell about 1 million-2 million tons of alumina in this market, and we found that, you know, the pricing, we get it linked to, index to LME. And, as you rightfully said, the cost of production of alumina that we can achieve, where there is a very healthy return on these investments. So which is why we are doing it. On this new facility you're looking at in the new OMC, just right to that could be there is no further potential to expand Utkal. And also the Baphlimali mine that you have is one of the cost- competitive advantages you have in producing alumina at Utkal. Would you not have capability to use that mine? And if not, would OMC mine also have similar characteristics to be able to give you that kind of advantage? No, see, the issue with Utkal is we started, I think, with 1.5 million, when we originally set up Utkal. Today, its capacity is already 2.5 million. So 2.5 into three, so what is getting clear is that if you keep expanding in Utkal, the Baphlimali mine will run out very fast. So we wanted to preserve at least a certain mine life in Baphlimali and open up a new source of bauxite. This is really looking into the next 10, 15 years for the company. So this is why we did as much brownfield expansion, which is, you know, nearly 1 million tons we added to the Utkal capacity. And we think the time is right now. And by the way, as I said, it's not a new project. This was always in our plans ever since I joined Hindalco, but we didn't have that, bauxite security, which is why we waited till we got that to do this project. And alumina certainly seems to be a pretty safe, investment and a good return right now. Okay. Just one quick question on the linkage coal. I think a couple of quarters ago, you mentioned that 3 million tons of Tranche two and three had expired, and you were in the process of auction, and maybe they will get settled by 1Q. What's the update on those auctions? Have you got those 3 million tons back? Yeah, yeah. We got Tranche two and Tranche three, but now we are focused on Tranche four, which is gonna expire in January of next year. The upcoming auctions and all is to secure that. So Tranche two and Tranche three we got, and we got it at reasonably good prices. I mean, it's slightly higher than what we had, but not much. How much is Tranche four? Tranche four is another 3 million that will come up in January, largely in the NCL region, and we are working on securing that now. Thank you so much, and wish you all a happy new year. Yeah, thank you. Thank you. Our next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead. Thank you for this opportunity, sir. Going back on alumina, do you plan to enter into any long-term offtake agreement with the Middle East smelters that you're talking about, or would you largely follow the spot model? No, no. We will do. We have already been with the expansion that we did in Utkal. We are signing annual to biannual contracts, which are indexed prices to LME. You get a percentage of LME price, so we will be doing a reasonable amount of longer term contracts. No, we will not be doing. Trying to sell, you know, 1.5 million tons on the spot market. Right. Another related question was, we have seen sort of the alumina capacity expansion in China, and effectively China turning into sort of an exporter rather than importer. So looking forward to over, say, five, seven years, do we expect alumina market to still remain in deficit globally with...? See, it's a little bit, as I was trying to explain, of a regional play. I don't think that China will become a big exporter of alumina per se. I do know that they are sending a lot to Russia now, to Russia. But for us, the market that we are looking at is really the Middle East. And the Middle East, we will be tied up with longer term contracts, which we are quite happy to do. Right, sir. Understood. One more question was about the, your accounts under the entry under the comprehensive income, where we are indicating the effective portion of cash flow has a loss of INR 2,272 crore. Could you explain what does that pertain to? So these are just MTM gains and losses on the cash flow hedges, which is the hedging that we take. And this basically reflects the movement of LME or the currency, depending upon where the hedge lies. So this just goes to the other comprehensive income, and it does not have a direct impact on our P&L, because it can change next quarter again. This is the 5% hedge that we have taken for 2025, or the 25% hedge that we had for 2024. Corresponding entries are here, mark to market. It is for all the existing hedges that exist on the date of the balance sheet, or let's say the quarter end. Apart from the aluminum price hedges, do we hedge any other component as well? So, basically it is LME, then we have currency hedges in certain cases, then we have sometimes the furnace oil. So those are the hedges that we typically take. Commodity hedges, basically. Is it primarily for the India operations, or is it for Novelis as well? It includes Novelis as well, because Novelis also takes hedges. These are offset hedges typically for their operations, because they deal with aluminum. Sure, sir. Thank you. Yeah. Thank you. Our next question is from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead. Yeah, good evening and good morning, sir. So, you know, the first question was on the Novelis term loan that, you know, we've taken. So, given that interest rates are going up, so is it that, you know, the newer borrowings are at a higher rate of interest than the earlier ones? So, you know, so what exactly is the rationale for, you know, for this new borrowing? Yeah, so actually, we look at a more favorable spread. It's floating rate, so you are right that right now, so far, and in general, interest rates are at elevated level. But as far as the spread goes, we have refinanced our $750 million at a more favorable spread on SOFR. Now, we also believe that, you know, sometime starting middle of next year, interest rates will start coming down. But to your precise question, this has been refinanced on slightly more favorable terms. And the rationale is basically that, you know, this term loan would have matured in early 2025, and so, you know, we just wanted to refinance it well in time. So that's really what it is. The existing loan was also on a SOFR plus X basis point. Yes. Yes. Exactly. So it, it's at a more favorable spread on SOFR, basically. Sure. Given that, you know, our credit metrics have improved substantially, so I guess that would also help get a more favorable rate of interest? Yes, you can say that. Sure, sir. So the other question was on, you know, on the alumina expansion. Now, you know, if I look at, probably the Chinese cost of production of alumina is probably north of $300. So whereas, you know, we have very competitive cost of production at the Indian facilities. So is that something that of an arbitrage that can sustain going ahead as well? Yeah, I think, you know, the Chinese alumina, the existing alumina they have is bauxite, so it's not, the high cost will remain, and then they have to bring in bauxite from Australia and out. So... But you see, it, it's not a market that we export to, so the difference in alumina cost will remain, but it's not something that was a part of our decision making. I repeat again, we looked at the market in the Middle East, and which we are already selling to now based on the excess long alumina position we have. Yeah, yeah, because of the, you know, that sets, that probably helps support global alumina prices as well, right? So the Chinese- Yes. Cost of production. So, the way our contracts are built is as a percentage of the LME aluminum price, so normally running at roughly 14% or 15%. So it is also linked to how aluminum moves. Sure, sir. So also, you know, if you could just, you know, throw some more color on the aluminum pricing, you know, because crude oil has come off significantly from the recent highs. So even though it's winter and probably natural gas prices could go up, but how do you see the energy cost push, you know, playing out in the short term with respect to aluminum prices? I'm sorry, I didn't get your question. Energy costs in India? Uh, sir. Or in Europe? Globally, globally. I'm talking about crude oil prices have, you know, declined, you know, pretty sharply of late. So, so would that, you know, offset some of the cost push from, you know, higher natural gas prices? Not really. I mean, See, crude oil comes down. The linkage for crude oil to us is a little bit of a linkage to the furnace oil, and furnace oil prices are also coming down, which is why I said in our Q3 cost mix, even if coal goes up a bit, CP coke, furnace oil, caustic prices are down. So, and the natural gas prices, the only effect for us is Novelis in Europe, because now no real linkage to crude oil prices. That's going to depend on how severe the winter is there. Sure, yeah. Thank you so much. Yeah. Thank you. Thank you. Our next question is from the line of Rajesh Majumdar from B&K Securities. Please go ahead. ... Yes, sir, thanks for the opportunity. So I had couple of questions. One is on the working capital side. We have seen a release of working capital in this quarter, which is aided in our capital expenditure. So what is the outlook for that, and whether we can see the same kind of runway to complete our expansion project on time? You're talking about, Indian operations or Novelis? Novelis, Novelis, Novelis. So Novelis, Dev, you want to talk about that? Working capital. Dev? I'm sorry, I was on mute. Okay. Yeah, so, you know, we have a pattern where in the first six months of the year, we build inventory, and we basically have use of cash when it comes to working capital. And in the second part of the year, most pronouncedly in the fourth quarter, we have a big relief of working capital, primarily because of inventory going down. So we build up using capacity in the earlier part of the year, while shipments are more weighted towards the end of the year. And so we have a relief of working capital. So basically, what has happened this year is that there is a use of cash, and the use of cash is related to build-up of inventory, number one. Number two, it is reduction of payables, because we have purchased metal and we are now processing that metal, and we are not replacing that metal, and so therefore, we don't build new payables. So, so that is really the dynamic. So it's basically a seasonal dynamic that happens, in short, that's really what it is. Right, sir. And sir, at the company level, what guidance for CapEx for the next two years? So look, I'll let Dev, yeah, go ahead and give the Novelis, and I'll give the India. Go ahead. Yeah. So, so basically, at the Novelis level, we expect the CapEx now to be much lower than our earlier guidance. We expect the CapEx to be in the $1.5-$1.8 billion range, $1.6-$1.8 billion range. And, most likely it will be at the lower end of the range. So, so basically, that is what we are at right now. Yeah, and I, I think for India this year, we will be between INR 4,000 crore to INR 4,500 crore. I think that for the coming year, we'll give you that guidance probably in the February call, once we firm up our plans. Okay, sir. And so my last question was: What is our cost of production of alumina and the current realization you've made, for this quarter? Alumina. We don't... Both for aluminum and alumina, we don't give you, our cost of production. That's a little bit of a competitive information. But alumina also you're in the first quartile? I'm just talking specifically to merchant alumina business in terms of COP. I think in alumina it's not just the first quartile, but the number one rated lowest cost in the world. For the third party market we sell from Utkal. Could you share the realizations for 2Q for aluminum and alumina, that you can share, in $ per ton? Yeah, I mean, the NR realization for, I think for alumina, it was in Q2 was about $337 per ton, was the Metal Bulletin price in Q2. And the aluminum NR for the quarter, do you have, guys, have it handy? It's INR 199 per kg, the net realization of aluminum. Thank you so much. Thank you. Thank you. Our next question is from the line of Aditya Welekar from Axis Securities. Please go ahead. Yeah, sir, thanks for the opportunity. On the aluminum downstream side, sir, do we expect higher shipments next year as our Sambalpur FRP will come online and also correspondingly our EBITDA per ton will improve? Because, in this quarter, it was almost flat sequentially, despite the shipments rising by 15%. Yeah, we are running at about $220 per ton. So what will happen is that the Silvassa expansion, which is a 30 KT expansion we did and is ramping up, you will see all 30 KT of that coming next year. The Sambalpur 170 KT of FRP will start sometime end of next year, so you will only see that the year after. Understood. One, and the last one is, if you can just confirm on the commissioning date of Bay Minette facility, and will it ramp up to the full 600 KT once it gets commissioned, or it will have some ramp-up time? And, do we have all the downstream facility to consume that 600 KT? Steve? Yes. So, the commissioning timeframe is late calendar year 2025. That is what we get it guided to last quarter as well. The 600 KT, we have all finishing equipment to be able to supply primarily the beverage packaging and the automotive markets. Thank you. Thank you. Ladies and gentlemen, that is the last question of our question and answer session. I would now hand the conference over to Mr. Pai for closing remarks. I just wanted to again reiterate that, you know, we had another steady quarter with great performance coming from Novelis, the copper business in India. And based on, you know, a good cost of production performance, the upstream aluminum business, even though aluminum was down 5%, we improved the EBITDA margins Q1 to Q2. So with that, I thank you for your attention and wish you all a very happy Diwali. 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.