Ladies and gentlemen, good day and welcome to Hindalco Industries' FY24 third 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 call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference 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 third quarter of the financial year 2024. In this call, we'll refer to the Q3 FY24 investor presentation available on the 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 2 of the set presentation. In this call, we have covered the key highlights of our consolidated performance for the third quarter of the financial year 2024 versus the corresponding period of the previous year. A segment-wise comparative financial analysis of Novelis, India Aluminium and Copper business is also provided. The corresponding segment information of the prior periods 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. Mr. Devinder Ahuja, Chief Financial Officer. Following this presentation, this forum will be open for any questions you may have. Post this call, an 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. Yeah, thank you, Subir. Good afternoon and morning, everyone, and thank you for joining today's earnings call for Hindalco. Let me start with some good news. Hindalco is among the top 1% in the aluminium industry in the recent S&P Global DJSI Sustainability Yearbook 2024. A total of 66 companies are in the top 1% out of the total 9,400 companies that were assessed, and only two Indian companies are in the top 1% based on their ESG score, in which Hindalco is one of them. This recognition emphasizes our unwavering commitment and a comprehensive strategy that we have towards our long-term ESG excellence. On slides 6 and 7 of this presentation, you can see our achievements and progress across metrics of ESG for this year versus the prior period. I'll now take you through some key highlights in this quarter. We have successfully completed an all-season study under our biodiversity management plan for 4 more sites, taking the total number up to 20 sites now. The CII Biodiversity Index and Carbon Sequestration Ground Assessment was completed in 5 additional units, taking the total number to 11 till date. In the first 9 months of FY2024, 84% of the total waste generated was recycled and reused. We have achieved recycling of 107% of bauxite residue, excluding red mud, and 106% of the fly ash in this period. Our aluminium-specific GHG emissions were recorded at 9.46 tons of carbon dioxide per ton of aluminium, which is a bit higher than last year in the same period on account of higher power consumption at some of our smelters. This is expected to settle down with better efficiencies across the plants in the coming months. In terms of our progress in renewables, we have already achieved more than 50% of our target of 300 megawatts by 2025 and have completed 152 megawatts of renewables till date. Further 50 megawatts of solar and wind renewable projects are under execution and will be completed by Q1 of FY25. A 100-megawatt hybrid power project is on course to be commissioned in Q4 calendar year 2024. 2 battery storage projects at 2 of our mining locations have also been commissioned during this quarter. On LTIFR in India, we recorded 0.21 in the first nine months of FY24, showing an improvement against last year's performance while remaining among the best in the industry. We continue to take digitalization initiatives and comprehensive safety audits to further strengthen our systems to monitor safety across our plant locations. There were no fatalities recorded at our Indian operations during the first nine months of FY 2024. We are on our way to achieve net water positivity by 2050. We have recently collaborated with CII's Triveni Water Institute for certification at five of Hindalco's plants in line with our target of achieving water positivity across all mines by 2025. We have also initiated various desalination and other projects to achieve this goal. As a result of our desalination project and tertiary water recycling at Dahej, this enabled us to significantly drop the freshwater consumption from 17.74 cubic meters per ton of metal in the first nine months of FY 2023 to 9.4 in the current period. On research and development, we have started projects like removal of aluminum chloride from effluents generated from our smelting operations, and post-trials will now go for upscaling. Let me now give you a glimpse of the last quarterly consolidated performance in quarter three versus the same quarter of last year on slide eight. This quarter's performance on a consolidated basis was driven by strong recovery at Novelis and cost control in the aluminium India business, backed by a continuing record performance by the copper business. Our consolidated business EBITDA was up 36% year-on-year at INR 6,985 crore, whereas our overall reported EBITDA was up 61% at INR 6,322 crore this quarter. The consolidated net profit after tax was up by 71% on a year-on-year basis at INR 2,331 crore. In India Aluminium business, we are currently hedged around 22% of the commodity at a price of $2,636 per ton for the last quarter of the financial year 2024, and around 5% of the commodity for FY25 at a zero collar with a bottom at $2,200 and a ceiling at $2,500 per ton. On the balance sheet side, our consolidated net debt stands at INR 34,835 crores. In the Indian operations, we have net cash of INR 3,632 crores, while Novelis' net debt stands at INR 38,467 crores at the end of December 2023. During the period, we prepaid a long-term debt of INR 4,370 crores in the Hindalco India operations. Hindalco, at the consolidated level, continues to maintain a strong balance sheet with a net debt to EBITDA well below 2x at 1.43 at the end of December 2023, which is lower than last quarter as well as the same period of last year. All our strategic CapEx in India is mapped with the cash flow generation in the business and is in line with our capital allocation policy. Coming to our business-wise performance this quarter, Novelis shipments were at 910 KT versus 908 in the prior period due to softer market demand and impacted by seasonality, but more than offset by recovery in the beverage packaging and automotive demand. Novelis delivered a quarterly EBITDA of $454 million, up 33% year-on-year on account of favorable metal benefit from recycling, higher pricing, and lower operating costs this quarter. The resultant EBITDA per ton stood at $499 versus $376 in the previous quarter, up 33%. On Hindalco's India upstream aluminium performance this quarter, shipments and revenue both were lower by 1% year-on-year. EBITDA was up 54% year-on-year at INR 2,443 crores, primarily supported by lower input costs. The resultant EBITDA per ton was at $880, higher by 53% year-on-year. EBITDA margins were also higher at 30.7% this quarter and continue to be one of the best in the global industry. This quarter, the India downstream aluminium business was majorly impacted by unfavorable product mix and lower realization, which led to a 34% year-on-year decline in the quarterly EBITDA at INR 103 crores versus INR 157 crores in the prior period. The resultant EBITDA per ton was recorded at $137 per ton, lower by 35% year-on-year. This is transitory and is expected to recover in the coming quarter, with domestic demand for aluminum growing at a CAGR of 6%-7% across product segments. Our Aluminium Downstream continues to be an exciting space as we explore new solutions, particularly for new-age mobility. Our copper business continued to deliver consistent performance this quarter as well. The overall metal shipments were at a record high of 119 KT, up 9% year-over-year, of which the CCR volumes were at 93 KT, up 6% year-over-year. The quarterly copper EBITDA was at an all-time high of INR 656 crore, up 20% year-over-year on account of higher shipments and robust operations this quarter. Now let me give you a glimpse of the current broader economic environment on slide 11. As per the IMF, global growth is forecast to remain steady at 3.1% in calendar year 2024, maintaining its 2023 pace. Advanced economies' growth is forecast to remain steady at 1.5% in 2024 from an estimated 1.6% in 2023, led by resilient growth in the US and a mild recovery in the euro area region. Growth in emerging market economies is projected at 4.1% in 2024, mirroring the growth recorded in 2023. In China, growth is set to moderate from 5.2% in 2023 to 4.6% in 2024 due to deflationary pressures, a continued slowdown in consumption, and strains on the housing sector, thereby constraining investments. Risk to the outlook are balanced as steady growth and moderating inflation pave the way for a soft landing scenario. The upside risks to global growth projections are from faster-than-expected disinflation, leading to monetary policy normalization by major central banks. Geopolitical tensions and political uncertainty due to the busy electoral calendar present key downside risks to the global growth outlook. As per IMF, global inflation is expected to continue its ongoing decline into the current year from 6.8% in 2023 to 5.8% in 2024. However, core inflation may prove to be stickier and is expected to decline more gradually. On the domestic front, despite several external headwinds, economic activity in India is expected to remain resilient. Going forward, the RBI projects GDP growth to remain robust at 7% in FY25, driven by private CapEx and consumption demand compared to 7.3% in FY24. Downside risks from a deteriorating external environment, as geopolitical tensions may lead to commodity price fluctuations and external demand remains weak. Assuming a normal monsoon and barring further shocks, inflation is projected by RBI to decline to 4.5% in FY25 from 5.4% in FY24. The Interim Union Budget FY25 held good on fiscal consolidation. The budget announcements were focused on growth-enabling sectors like infrastructure, affordable housing, green energy, and bode well for the private sector. Headline inflation, impacted by fluctuating oil and food prices, will be closely watched by the RBI, which has kept rates on hold at 6.5% since February of 2023. Moving on to the aluminum industry outlook on slides 12-14. Let me first talk about China. In Q1 calendar year 2023, production in China declined marginally due to tight power supply in Yunnan, Guizhou, but in subsequent quarters, this production improved due to the government releasing power to the smelters and the improved hydropower situation in these provinces. However, in Q4 calendar year 2023, due to power-related shortages in Yunnan, production declined marginally. The resultant overall production in China stood at 41.5 million tons at the end of calendar year 2023, reflecting a growth of 4%. On the consumption side, Chinese demand spurred by 5% year-on-year in calendar year 2023 at 42.8 million tons, led by strong solar and EV productions that were offset by the weak construction demand. As a result, Chinese market ended up in a deficit of 1.3 million tons in calendar year 2023. In the world excluding China, production was flattish year-on-year in Q1, whereas production improved in the subsequent quarters. In Q4, production continued to remain flat, hence overall production in calendar year 2023 stood at 29.1 million tons, reflecting a growth of 1% year-on-year. On the consumption side, except for automotive, all other segments like building and construction, industrial machinery, and consumer durables faced headwinds due to rising interest rates. Hence, in calendar year 2023, the overall consumption declined by 4% year-on-year to 27.3 million tons, resulting in a surplus of 1.9 million tons at the end of calendar year 2023. So the overall global production stood at 70.6 million, whereas consumption was 70.1 million, resulting in a surplus of 0.6 million tons in calendar year 2023. The global aluminum prices in this quarter improved marginally to $2,190 a ton as against $2,154 a ton in Q3 of calendar year 2023. On a quarter-to-date basis, the global price of aluminum is around $2,200 a ton. In Q3 financial year 2024, the Indian aluminum demand is likely to reach 1.3 million tons, reflecting a growth of 9% on a year-on-year basis. This sharp increase is supported by very strong demand from the electrical sector and good demand from building and construction and auto sectors. However, the packaging segment faced some headwinds due to weakness in the export-led demand, whereas consumer durables showed weakness in the cookware and the cooker segments. The global FRP demand is expected to grow by 4% in calendar year 2024 versus a 4% decline in the last calendar year, with demand recovery across all major segments of beverage packaging, automotive, specialty, and aerospace, giving a CAGR of 4%-7% over the next three to four years. The Indian FRP demand is expected to be flattish on a year-on-year basis, as estimated growth in the automotive, building and construction, and consumer durables segments will be offset by ongoing weakness in the packaging segment. Turning to the copper industry on slides 15 and 16. In calendar year 2023, the overall global copper production grew by approximately 3.7% at 25.6 million tons. In contrast, consumption also grew by 2.4% year-over-year at 25.4 million tons, resulting in a surplus of 0.2 million tons. In calendar year 2023, Chinese production increased by approximately 8.7% at 11.5 million tons, whereas consumption grew by almost 6.5% at 14.5 million tons, resulting in a deficit of 2.9 million tons of copper. The world excluding China production declined marginally by 0.1%, whereas consumption declined by 2.7% year-over-year, resulting in a surplus of 3.1 million tons in calendar year 2023. In the fourth quarter of calendar year 2023, the overall global production of copper increased by 0.4% while consumption declined by 0.6% compared to the corresponding period of last year, leading to a deficit of 0.3 million tons. On the domestic side, in Q3 FY24, market demand increased by approximately 4% year-over-year at 198 KT versus 190 KT in Q3 of FY23. On a sequential basis, market demand declined marginally by 1% with domestic production producers' share at 67%. For the calendar year 2024, the annual benchmark TC/RC settled at $0.205 per pound. This settlement reflects a decrease of 9% compared to calendar year 2023's benchmark of $0.226 per pound. During Q3 FY24, the supply side faced challenges due to lower guidance from Anglo American for the year 2024. This combined with the closure of Cobre Panamá led to the tightening of market conditions. The spot TC/RC this quarter was around $0.19 per pound. The ongoing strong demand from Chinese smelters, coupled with tight supply, may influence the spot TC/RC further. Now, because of operational and financial performance in each of the business segments this quarter, compared to the corresponding period of last year as well as previous quarters within the combined is providing color. Sorry to interrupt you, sir, but your voice is breaking. We can't hear you. Oh. Sorry. You're saying that my voice is breaking? It's fine now. Please go ahead. I guess there was a slight disturbance, so I guess the mic was moving or. Okay. The mic was not, but anyway. All right. So let me conclude today's presentation through some key takeaways and our way forward. Our resilient India business, with its strong balance sheet, is providing solid financial prudence to 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. Once again, our copper business delivered its best-ever performance as we continue to focus on value-added products in copper. Hindalco acquired land and began to work on India's first-of-its-kind copper and e-waste recycling project in Dahej, Gujarat. Meanwhile, our Inner Grooved Tubes project, which is under execution, is expected to be commissioned by end of calendar year 2024. Novelis delivered $499 per ton EBITDA this quarter despite the seasonal impact. Our Q4 guidance of delivering a sustainable $525 EBITDA per ton remains intact as the market continues to recover in beverage packaging and other markets show resilience. While the capital expenditure for the Bay Minette project has escalated, primarily due to higher civil and construction costs than initially estimated, I have to repeat that this strategic rationale remains firmly in place. This investment provides a first-mover advantage with a highly efficient facility that is being built as a long-term investment. Once established, this capacity can be doubled in a cost-and-time-efficient manner, as experienced in various other brownfield projects done by Novelis over the last few years. Our approach to ESG continues to be comprehensive across value chains and in line with our 2050 ESG targets. Our first-of-its-kind energy transition initiative is on course to begin ramp-up of 100 megawatts of round-the-clock carbon-free power for our Odisha smelter by Q4 of calendar year 2024. Our recent global recognitions are testimony to our ESG efforts as Hindalco continues to be among the top 1% in the aluminum industry in the S&P Global DJSI Sustainability Yearbook of 2024. Hindalco also recently won the Energy Transition Changemaker Award at COP28 for setting up one of the first round-the-clock renewable energy projects backed by pumped hydro in the aluminum sector. We stay focused with our value-enhancing growth strategy directed towards organic growth while expanding downstream businesses in both aluminum and copper. We also 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 will now open up the forum for questions and answers. 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 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Yeah. Good evening, everyone, and thanks for the opportunity. I have two questions. The first one is, again, on the Bay Minette project. So while you indicated that the cost escalation has been primarily due to civil and civil construction, so just wanted to understand if the scope of work has been increased or was there something we found during soil testing phase that we had to buttress it, and whether we expect more escalation due to equipment ordering or I mean, where are we on that? I mean, I just wanted to understand if there are any more contingencies that we could expect going ahead in Bay Minette. Go ahead. Yeah. So as we said, the escalation of cost is primarily civil and structural. 80% of all the cost is coming in that. It is to do with the civil a lot to do with the soil conditions where the location is, something that, as we did more engineering, understood requirements of quantities of concrete, quantities of steel, quantities of pilings. These are all things that have driven the cost up. As we talk about where we're at today at $4.1 billion, we are confident that we've included appropriate levels of contingencies for a project at this stage. As I spoke yesterday, we have a P85 confidence level of bringing the project in at the $4.1 billion. As it relates to equipment, something that we're honestly better at because of the brownfield expansions in the past, we are very close to our original estimates on equipment. We have ordered all the equipment, and quite frankly, the equipment's going to come in ahead of the building completion, causing a little bit of overrun with finding warehouse to store the equipment. So we have contracted and are finishing some of the equipment as we speak, and everything is well on schedule as it relates to equipment. And I would not expect any further escalation on the equipment side itself. Amit? I'm sorry to interrupt, Uncle. My second question is essentially on domestic aluminium upstream business. What was the cost? How did the cost change quarter on quarter in Q3 and the guidance for Q4? Yes. Sorry, sir. I can't hear you. You're breaking up again. Oh, I'm breaking up. Can you hear me clearly now? Yeah. I can, sir. Yeah. So I was just saying that if you saw that this quarter, our EBITDA margins expanded, and largely, that's because I had thought that the costs will be flat, but the costs were down 3.3% Q3 to Q2. And a large part of that was coal costs coming down as well as carbon, CPC, which is why, with a flattish LME, our margins expanded. Now, in Q4, I'm expecting the costs to remain flat with Q3. Sir, just a follow-up on this. When I saw Coal India's numbers yesterday, their e-auction price now, your coal cost has gone down possibly because of the inventory effect. Now, going forward in Q4, since e-auction prices, we know that at the entry of Q4 itself, they are down. So won't you expect some relief on coal costs in this quarter? So really, Amit, how it works is that if we procure end of January, February, the consumption will happen in April, May, June. So when I give you the cost, I give you on a consumption basis and not on a receipt basis. And currently, right now, normally, another question gets asked. Our linkage coal percentage has been steadily going up, and it's now nearly 60%. And the e-auction is 36%. So I have a feeling that the coal costs I hope they go down a bit more, but I'm conservatively estimating Q4 to be flat. We'll have to see what Q1 does. Very clear, sir. Thank you and all the best. Yeah. Thank you, Amit. Thank you. The next question is from Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah. Thank you. Firstly, congratulations, Mr. Pai, on your reappointment and extension of term. And second, sir, a couple of questions. Firstly, just want to understand I mean, I'm not able to clearly understand what is this 85% probability of no further increase in cost. I mean, can you explain how do we arrive at this number, number one? And second, since there is I'm talking about Bay Minette. And second, since there is such a significant deviation, is it possible, just for some more comfort, to give some breakdown of this $4.1 billion? What is the civil structure cost, equipment cost, some breakdown to kind of better appreciate this change? Yeah. So to be clear, on the P85 confidence level, we've had both our EPCM, another engineering firm, and a third firm take a look at the rebaselining that we've been doing over the past three months as it relates to completing the detailed engineering at a high level now. As that's completed, we are confident with where we're at from unit to quantity and what we've ordered so far. From there, we would attach confidence levels as it relates to the stage of the project, the level of engineering done, to be able to say, "Are we able to complete this project for $4.1 billion that we disclose on schedule in the second half of calendar 2026?" And this shows you, with those analyses done three different separate ways and analyzed by the management team, that we are 85% confident that we can deliver at $4.1 billion. On the second, as we said, 80% of this is associated with civil and structural. I won't get out specifics, but it's larger needed quantities, whether it be pilings, whether it be concrete, whether it be steel, whether it be electricals throughout the plant. These are some of the categories of which we've seen significant increases in as we finish the engineering design work on it. Of course, what comes with that is the inflation and labor costs on top of that too. So again, where we have a lot more experience associated with projects like this on the equipment side, where we have not seen the equipment increase except for where we've had small amounts of increase in the type of equipment that we want to put into the plant to make sure that it is highly efficient. So Mangal, just to clarify, the EPC firms use this terminology of jargon like P85. So where we are, P85 is a fairly good probability number, is what I just wanted to add. Okay. And during what phase of this next 3 years of construction do we move closer to 100%? I mean, 95%, how is this timeline? It's linear. Obviously, as we get larger parts of the construction completed, that contingency will continue to come down. And as we talked about yesterday, we will continue to update on a quarterly basis where we are as it relates to the construction. Okay. And is it possible to get some sense out of this 4.1? What is the percentage of equipment cost and other cost? I mean, just some breakup. Yeah. So when you start to think about the other 20%, there is some small amounts of additional equipment that we put into the plant. This is not huge amounts. It's additional piping and electrical for the equipment layout as we finalize the equipment layout in the plant. It's control systems. It's, as I said before, the need for additional warehouses because the equipment is actually well on schedule and is going to come ahead of the plant construction itself because the civil and structural engineering was behind. And so we've had some costs associated with storing equipment as well. And then, of course, as we linked in the schedule, owner's cost as well. Got it. Got it. That's clear. One question I have for Mr. Pai, and this is more a common question we're getting from various investors during the day. I mean, given this substantial rise in CapEx, structurally lower returns that we expect now, at least from phase one, I mean, was there a discussion, consideration of scrapping this entire project, writing off, given that, I mean, it's such a huge commitment into some bit of uncharted territory? So, any consideration on these fronts happened? I just want to understand. Yeah. I mean, it's fair to say we had a lot of discussions on this project. So, Sumangal, our view is the following. So, Novelis is the market leader. It's by far the largest rolling company in the world. North America is the one market in the world that is undersupplied and is actually importing can-body sheet into the U.S. coming from Asia, China. All our customers wanted this. Based on this project, we managed to get the can pricing to substantially move higher, which benefits not just Bay Minette but our whole can portfolio going forward, which is why I think yesterday, you must have heard Dave and Steve talk about a $600/ton EBITDA target going forward. So I think that for us, the other, let's put it very purely financial metric, is that a double-digit on a dollar return is still much better than the cost of capital that Novelis has. And then the next point, which you have seen what has happened with Novelis over the last two or three years, this project, we can go from 680 to double with the CapEx of $1,500-$2,500 depending on the mix and the finishing equipment we put in. So you will see that the sort of double-digit can go as we go forward to much higher returns. And it puts a platform in the largest rolling market in the world, which is the U.S. So I think that for us, we are quite committed to getting this project forward. It's fair to say that the onus is on us to now execute and deliver this as we said. I know that we will not get any more margin for error that I accept. Understood. Just one last question, and thanks for the detailed explanation, sir. On the copper EBITDA, we've consistently been doing more than INR 600-odd crore on a quarterly basis. So is there any structural tailwind, and one should expect this kind of a run rate going forward, or is it something cyclical here? No, I don't know. I would say it's cyclical. I think that the copper business is going through some very good demand. The electrification sector is quite going strong. So I think that structurally, the copper is going to be good going forward. I do expect when the competition of some other people come in, we may see some pressures on the copper prices. But I think that that's why we have diversified our strategy and going into the copper inner grooved tubes. We're going into copper recycling. So I think that we will continue to go more downstream in copper to make sure that we can maintain our leadership. Understood. Thank you. Thank you, sir, and all the best to the team. Yeah. Thank you, Mangal. Thank you. Next question is from Ashish Jain from Macquarie. Please go ahead. Hi, sir. Good evening. Sir, I had two questions pertaining to Novelis. Now, Steve highlighted that large part of the cost increase was driven by commodity like steel, electrical, tiling, those kind of stuff. So is it like is it like more volume or a better structure is what we have shifted to, or is it that the quality of these commodities we have reassessed given the nature of the structure? Because these commodities driving such a steep increase in CapEx cost, honestly, as an outsider, is difficult to completely triangulate. And secondly, one of your peers I know this question was asked to Steve yesterday also, but their CapEx with a similar capacity is nearly half of us. So any comment on that will be very helpful to understand how we are different versus our peer. Yeah, Steve. Yeah. So on inflation versus quantities, it is much more on the quantity side than it is on the inflationary side. I would say on the inflationary side, we had some views on cost savings that maybe were a bit ambitious, and that's coming back in now into the baseline here. But much more of it was the quantities as we started with a very low level of engineering and have built that engineering up on the same design but on a very lack of understanding of, I think, the civil part, the soil conditions based on where we were at that have driven significant increases in quantities, as I said before, in civil work, piling, concrete, and then ultimately steel. And so you should think about this much more on the quantity side. It's not that we've increased scope of the plant. It's unfortunate we had a low level of engineering design done on the original estimate, and now we're at a high level of engineering design. On the second question as it relates to the competition, again, as I said, yes, I won't really say much more. We can't speak to their estimates. We don't know their project specifically. All we can do is reconfirm the diligence we put into our project and what we need for a large-scale project of this type. We have been in the aluminum industry for a long time, and we are just very comfortable at the levels we are at now and can't really speak to theirs. So Steve, out of this $4.1 billion, can you just highlight how much is civil and construction now? I think earlier, you gave the breakup of the escalation in terms of 80% and 20%. But of the total number of 4.1, how much will be civil and construction? Any ballpark number you can share? You want to? Yeah. Give me a minute, and we'll come back to that. We'll come back and answer that one. Sure. Sure. I'll come back and make sure. Thank you so much. Yeah. Thank you. Thank you. The next question is from Ritesh Shah from Investec. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity, sir. A couple of questions. Sir, first, I just wanted to understand what do we make of Inflation Reduction Act. I think there are multiple schemes over here, 48C, 45X. So I think yesterday on the call did indicate that we could potentially qualify, and we will answer about this in March. I'm just trying to get our thoughts, basically, where do we stand over here, what sort of delta it can have, and if at all there was this CapEx bump which is there, which is a little unfortunate. But will this IRA be on, say, 4.1 and not 2.5, and hence, there will be some positive rebound on, basically, the revenue ratio profile? Yeah. So on the first one, we have applied for the 48C under the IRA Act. We think we have a very strong case for getting funds under this, but the decision will not be made ultimately on our application till, we believe, near the end of March. As we said yesterday, we've included nothing in this 4.1 associated with any 48C that would be granted to Novelis. Again, we're positive but really can't tell you any directional even what that could look like. Again, I will just repeat, we've done a lot of diligence around the 4.1. No, no. The question is, will the IRA amount change because is it from 4.1 versus? No. The application's already associated with what was applied to, and it's only the subset of the overall number anyway. So that's much more on the equipment piece and some other things, so it will not necessarily change the calculation of what we can get. Okay. So fair enough. So basically, if I understood it right, the IRA benefit on the equipment part, it is not on the civil and construction part. So whatever benefit, if at all, we get, that doesn't change because of this $2.5 billion-$4.1 billion. Is that right? That is correct. Perfect. And the second question over here is, what is the extent of benefit, hypothetically, we can actually derive out of IRA? If I go through the fine print on the regulation, it says 30% ITC available on A, B, C, there are several variables over here. So should one assume 30% of, say, $2.5 billion or, say, if $2 billion is the equipment cost, then should one assume 30% on, say, $2 billion? You're reading the IRA correctly, but the last time this was done in the US, there were caps put in. So it's not easy to say that it will be 30%. It can easily be capped down. It can be any number between 0 and 30, and that's why we just can't give you a number right now. We should know here in the next month and a half. Between 0%-30%, that's useful. And I just want to cross-check a data point. I think from the Alabama government, what we have got is around $135 million. Is that number correct of what we pick up from the print media, or is it something different? We'll come back and confirm that number with you. I don't have it right at my hands right now. Okay. This helps. So my second question was specifically on the coal part when it comes to India. Can you highlight, sir, what is the status on Chakla as well as Meenakshi? I think Chakla, earlier timeline, what we had indicated was December 2023, if my notes are correct. I just wanted to get an update on both the blocks and how do we see. December 2024, not December 2023. Okay. I'll correct myself. And sir, on Meenakshi, and I think there were two Meenakshis, right? So any update over there? So Meenakshi West has been allocated to us, and it's sort of an exploration cum mining block. So we have already started the regulatory clearances, etc., on Meenakshi West. On Meenakshi, we are still waiting for the allotment, so that has not yet come through yet. And sir, what is the EC for Meenakshi West and, if possible, timelines? So Meenakshi West will take about 2.5-3 years, and it's about 5 million tons. 5 million tons. Perfect. And sir, lastly, just with respect to ESG, when it comes to Novelis, the carbon intensity has increased because of change in accounting over there. Any comments specifically over here? And given you also alluded that we have the optionality to go from 680 to 1.2, how do we look at the UBC demand-supply equation specifically in North America or in U.S.? And are we looking at any specific change in regulations which will ensure that there is adequate supply for UBC in the markets? Yeah. So our carbon intensity is decreasing. So I just want to be clear, with all the efforts we put in, and we'll continue to decrease as we commission the Guthrie recycling facility and other overall million tons of carbon out of the system with that. We will continue to increase the overall recycle content of our products, including pushes in beverage packaging, auto, and other specialty products as well. So we continue on that journey. We're in line with meeting our more near-term targets of 30% reduction off the baseline in 2026. As it relates to legislation, we're working actively with associations, with consortiums, with governments directly to find ways to increase the amount of used beverage cans coming back in. The U.S. has low recycling rates at less than 48% over the last several years, and it's very clear when you look where there are some deposit schemes in place, the return schemes in place in those states, those recycling rates are north of 70%, and it's the remaining states that are dragging it down. So we will continue that. That will take time, but certainly, we'll be very active on that. All right. Sir, sorry, just I'll push one more. If I go through the last annual report, the carbon intensity for Novelis has increased actually from 4.44 to 5.34 to 6.19. And to my basic understanding, what I got to understand, the quality of scrap which we had processed was not of the right or optimal quality, and that was one of the reasons why the carbon intensity had increased. That's the reason I specifically wanted to check on the scrap availability, demand, and supply. Are we comfortable over there? No. It's probably more of a product mix than it is anything as we went through a shift in mix. But I can tell you that the intensity is coming down, and we can follow up on the specific questions that you might have with Megan. Just to clarify, as the auto percentage goes up, the recycling rates are going down, and I think that's what you're talking about because the auto percentage has now gone to 22% when it was much lower than that. So the can is very highly recycled, but the autos, we still are under various initiatives to increase the recycling rates there. Okay. Sir, our follow-ups probably are joined back to the queue. Thank you so much for the answers. Thank you. Yeah. Thank you. Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi, sir. I have a couple of questions. First, do projects that we do any greenfield, is it given out on a turnkey basis, or do we operate it ourselves? Yeah. So in the U.S., with all the active construction, there is no turnkey at this point in time. We, as owners, would take on the risk associated with that, and we evaluated that at the beginning. We do have an EPCM firm in place, have been from the beginning, and are still with us, aligned with other experts as well, but it is owner's risk. By the way, today's industry, there is no big construction firm that will take a turnkey EPC contract. Sure. That's helpful. Thank you. A couple of questions on the India business, housekeeping effectively. What was the external alumina sales this quarter? The external alumina sales this last quarter was 167 KT, and in Q4, we are expecting more like 180-190 KT of sales. And that should be the run rate going higher, right, given that we have? Yeah. We have got more capacity. If you remember, we did the brownfield expansion. So yes, that should be more or less 180 should be the average per quarter going forward. Sure. That helps. And in Chakla, any guidance as to how much we can end up mining in FY26? Can we? That's a good question. I think we will do the box cut this year. So next year, we'll have to see how we can ramp it up, but I think at least in the first year, we should get past at least 1 million-1.5 million in the first year. Sure. And lastly, with the elevated CapEx in Novelis, does the $100 million upstreaming of cash that we had earlier guided for still hold, or that can be pushed back? So I think that we have kept the capital allocation framework as it is. I think $100 million doesn't move anything one way or the other. Thank you. That's all. Yeah. Thank you. The next question is from Satyadeep Jain from Ambit Capital. Please go ahead. Hi. Thank you. Just a clarification first. The engineering design, as I understood, was done by some other firm, and you got it done by some new firm recently. Can you maybe name the engineering design firm that you hired initially for the planning, and which is the new firm you got it done with, and what is the EPCM firm that you employ for this? Yeah. No. We've had Fluor from the beginning all the way through, and they are still with us. My reference was that as we saw cost escalation, we wanted to have that audited by another firm, and so we brought another firm in to ensure that we're in the right ballpark here. So Fluor is still with us as our EPCM. So basically saying the engineering design, the planning initially designed done by Fluor, they underestimated all the civil and construction costs by massively. Was it Fluor's initial planning that way? No, no. It was a combination of us as owners and Fluor. We announced the project because of what Satyadeep should have highlighted, a customer pull for new contracts. We moved quickly as a first mover into the marketplace, and we collectively, as owners with Fluor, went with a very low-engineered design at that point in time. In hindsight, we could have waited and done a much more detailed and then given a CapEx number, you can say. Okay. Just a question on the return profile you mentioned for this capacity. I just want to maybe see if you can possibly quantify one of your peers. Obviously, the one we keep talking about is talking about $650 million-$700 million EBITDA without recycling for a similar capacity range. Can we assume that, or given you have recycling also inbuilt into this, would $700 million dollars for is it possible to quantify that EBITDA you're building in for the return expectation? And secondly, the bridge between the EBITDA for the new capacity and the existing capacity, you did talk about higher can pricing. Now, when we look at that $600 million per ton EBITDA, what is the trajectory of pricing reset in the next 2 years so that we get closer to that 600 and the gap between the new capacity and the existing one closes? Yeah. Indrajit, so can you hear him clearly? Yes, sir. Go ahead. So Indrajit, let me just try and elaborate on all the questions that you asked. The return profile of the project remains attractive. Just as a reminder, we have said that this is a mid-teens IRR project. We are saying that it has dropped a couple of points, but it is in double digits, and our confidence level of delivering double digits against a single-digit cost of capital is very high, number one. Number two, that when it comes to sort of talking versus what a competitor has declared, we will not get into that. What we can tell you is that we have got significantly higher pricing on this on top of a much lower operating cost as compared to conventional plans. This is a super-efficient plan compared to any cost benchmark of existing technology and existing plans. I am telling you, therefore, two things. One is a superior pricing. The other is a lower cost. And these two together make the return profile justifiable and attractive. On top of that, as Satish and Steve both said, that if you think about it in the longer term and our track record, even today shows it every time, that we don't create these projects for 10 years or 15 years. We create them with a view that we should be able to expand capacity, and we know that we will need expanded capacity in not too distant a future. This is not going to be the end. It will be, again, a super-efficient expansion at a very low-cost profile per ton. So when you bring all these things together, our confidence and sort of the emphasis on continuing and wanting to do this project remains very high. That is what we can tell you. On the pricing reset trajectory, given this is now going to commission in later half of CY26, and you will have a lot of contracts that will be reset before that, what can be? We will be able to meet all that. We will be able to meet all that because we have interregional flexibility. I mean, even today, North American capacities are out. I mean, we are using interregional flexibility from Asia to be able to meet the demand of North American customers. If we have to do that a bit longer, we can do it. We can flex capacity out of specialties contracts because these are annual contracts. We will create the capacity because the return profile of these projects, their contracts were committed and signed, and we want to honor all the obligations to the customers. We are not going to compromise on that. We have excess capacity in both Brazil and in Korea. And we are really, even today, using Asia as a supply base for North America. So we are confident that we will not let down the customers on the timeline. This is very manageable. My question was basically the pricing reset. You see on the existing capacity, you can see tightness, and this is giving you high pricing. When you look at the trajectory of reset in the next couple of years and the cadence of that $600 per ton EBITDA, what I'm trying to get is, can it be achieved before the new capacity comes online? Yeah. We laid out as we got to the $525 sustainable EBITDA per ton in the fourth quarter as we guided, we also wanted to make sure everyone understood there's still margin accretion from the $525. And we laid out that we still have drivers of price that you're highlighting here, new capacities coming on, increased recycling content in our products, continued operational efficiencies, leadership in the growing automotive market. These are the drivers that drive us upwards of north of $600 that we talked about yesterday. As it relates to specifically the pricing, as Dev said, the pricing of those contracts are already in place. And so as we serve those customers and those contracts kick in over the next couple of years, we will already see that before Bay Minette comes in. Now, the efficiency. Yeah. But you said Bay Minette's commissioning. The prices just keep coming. Correct. The efficiencies that Bay Minette that Dev talked about come with the ramp-up of Bay Minette. Okay. Just one quick question on the India alumina expansion. Given the experience with Aditya, Mahan, obviously, those were remote locations and cost challenges. And now, the initial engineering design here, when we look at alumina expansion, it is right next to Utkal. Can there be confidence that the number you have given about $1 billion for that expansion will be fairly reasonable? And given the concentration in the balance sheet you're looking at, could there be delay in that expansion? So I'll tell you one thing that right now, the way we are learning from our lessons is we are actually doing the full detailed engineering before we even start the project in a big way. So currently, what's going on in Kansariguda is that we are doing the forest clearance, getting stage one, stage two, doing the R&R, and doing the engineering. And I think that as soon as the engineering thing has come because when I give you my annual India CapEx outlook, then I will clarify exactly how much we are spending. Okay. Thank you so much. Yeah. Thank you. The next question is from Pallav Agarwal from Antique Stock Broking. Please go ahead. Yeah. Good evening and good morning. So just on the level of domestic aluminium hedging, so how much have we hedged that and what rates? As I said, in Q4, we have 22% hedged at $2,636 per ton, and we have 50% of the currency at 85.19. Okay. Also, I mean, we have given the guidance for FY2024 Novelis CapEx at, I think, $1.4 billion-$1.6 billion. But given that the costs have escalated, so is there any phasing of the balance outlay out of the $4.1 billion over the next 2-3 years? What levels of CapEx can we look at? Yeah. So good question. Let me just give you some guidance for your modeling. So in the next about 2 years, nothing will happen until the end of fiscal year 2025 in terms of having to depend on any cash raise. But in the next, let's say, 2 years, we will raise some bridge finance. The CapEx will be higher, and we'll come back with guidance. We typically give guidance on CapEx as we announce the full year. So we will come back with guidance. But obviously, the CapEx will be more elevated. But the guidance that I would like to give you is that at the end this year, we will be at a net leverage of below 2.5. Remember, we are at 2.7 now. We will fall below 2.5. And from there, with increasing CapEx needs and some bridge finance needs, we will elevate it up to around 3x. Around 3x. That will come much later after about two, two and a half years. So that's the best guidance I can give to you now, assuming that we will need to go around 3x on our net leverage as the project spending goes up. That's really the way to think and model. Sure. And working capital, given that aluminum prices are range-bound, so we don't really expect apart from any increase in volumes, working capital levels should be broadly similar at this level? I think we can assume that. And remember, if aluminum prices go up, our margins also go up. So basically, it works both ways. So we don't have any big concerns on that for the guidance that we have just given you on the net leverage. Sure, sir. Yeah. Thank you so much. Welcome. Steve, there was one question that people had asked. Off the total 4.1, what is the percentage of civil and what is the percentage of equipment and the rest? Yeah. So approximately 65% of the project costs, approximately, are civil and structural. Then you would have equipment, obviously, that's going to make up about 25%, a little bit more EPCM costs, owners' costs, and other direct costs, warehousing, and other things. Okay. Thank you. We'll move to the next question. The next question is from Vikas Singh from PhillipCapital. Please go ahead. Good evening, sir. Yeah. Hi. Yeah. Go ahead. Yeah. Sir, I just wanted to understand, given that now we haven't inflated CapEx on the Novelis side, does our plans in India, for example, the Aditya, Mahan brownfield expansion of the aluminum plant, would take a backseat? No, I would not say backseat. I think that, see, in India, we have actually quite a lot of strong cash generation. I think that at this stage, over the next couple of years, in fact, in my prepared remarks, I said we will stay within our cash generation for our CapEx. But that is more on the value-added side, right? No, no. That's overall. See, we are sitting with about INR 11,000-12,000 crore of treasury. Normal treasury that we should keep is about INR 6,000-7,000 crore. And with the cash generation that we have, we have a capacity to easily do a CapEx of about INR 6,000-7,000 crore a year without having to borrow. Understood, sir. Sir, just one more question on the coal side. Given that some of the competitors are a little bit ahead in terms of reaching the full self-reliance, as per our plans, by when do you think that we would be able to have a full captive coal? Yeah. I think that's a good question. I think that probably it will take us at least two more years to get there. Now, the only thing I will tell you is that overall, as more and more commercial coal comes in, Coal India prices and linkage prices are also going to stay soft. So I think overall, I don't think we'll be at a disadvantage when it comes to coal going forward. The biggest challenge for the aluminum industry is to increase the amount of green aluminum and hence, what percentage of renewable can you get in the mix? Because you have to remember, going forward, you're not going to be able to export aluminum if it's not low-carbon. Yes, sir. That's correct. Sir, just one more on the coal ops side. Once we have Chakla, Meenakshi, all these kicking in, do we have plans to surrender the four coal mines which we have purchased on the first round of auction and that was very costly to us? That's a good question. Thanks for reminding. So IV/4 has been legally returned and accepted by the government already. And Dumri has also been returned and accepted. So out of the four, two have already been returned. So we have Kathautia and 4/4 remaining. The next one will probably return will be Kathautia. Thank you, sir. Thank you for the answer and all the best of future. Yeah. Thank you. Thank you. The next question is from Kirtan Mehta from BOB Capital Markets. Please go ahead. Thank you, sir, for the opportunity. Going back to the Bay Minette, a couple of more clarifications. Would you be able to also give a split of $750 million that we are targeting to spend by FY24? And second question was, we have discussed about sort of a second phase of the expansion being done at $1,500-$2,500 per ton capital intensity versus the phase one which is done at $6,800 per ton capital intensity implied basis. So what are the specific components of infrastructure that has been created in phase one? Could you give a bit more color around it? Land, civil infrastructure, what sort of the things that we are already doing in the phase one which will support lowering the capital intensity for the next phase? Yeah. So I'll answer that question, and then I'll let Dev come back to the 750. So in the 1,500 to 2,500, we've got many projects. You can see them on our slides over the history that we've been able to debottleneck a facility at much, much more efficient capital costs, what we've been traditionally calling brownfield costs. The entire infrastructure layout of this is already in place. Electrical utilities, land is already there. In a hot mill that has more capacity—and that's the most expensive part of all the equipment that we have—and so what we have to do is add either equipment in front of the hot mill or on the back end of the hot mill, depending on what product mix we want to get out, in order to get more capacity out of the hot mill. The biggest equipment piece when we really want to size this up will be an additional cold mill. But when you start to think about 1,500-2,500, as I talked about civil and structural in a percentage, in a brownfield expansion, the equipment will be the majority cost associated with the expansion. That's why you can be so much more efficient in the brownfield debottleneck and that team. Hope that helps, Dev. You want to start? Yeah. And on the $750 million that we expect to close by the end of this fiscal, you can take it that the largest, largest part of this is civil because right now, we are laying the foundation, pile laying. We need the steel. We need the concrete. So for all purposes right now, it is basically a civil construction stage project. And you can take it that almost the entire spend is towards civil and construction. Down payment for equipment and some down payment. Yeah. Some down payment, but that's relatively small. So yeah, civil and construction is the largest. Thank you for this color. One more question on the India side, if I may. In terms of the EBITDA per ton that you clocked around $880 per ton, do you think that this sort of the EBITDA run rate is sustainable over the next couple of years, or is it sort of higher than the sustainable average that we are seeing? Well, I hope it can go higher. We're at $880, and I think we can maintain this. See, right now, the costs are sort of we have got to some lower costs. I think now we need for the EBITDA to go up, the LME to move up. So really, right now, that EBITDA per ton is more dependent on the LME than our cost structure. So I think that over the next few years, all the projections of CRU and all do say that once the economy's geopolitical things get sorted out, both copper and aluminium prices should head up. Or would the cost deflation make the aluminium price also sort of remain at this level? Do you see that as a risk by any chance? Oh, I don't think the cost of aluminium drives the demand for aluminium. I think the aluminium is a traded commodity. It's given by the LME trading, not from a cost-plus basis. So I think it's supply and demand of aluminium that will drive the pricing of aluminium. As you see, supply-demand is very tight. The inventories are less than 10 million tons, which is 50 days of consumption. It used to be 90 before. So supply and demand is quite tight. I think it's negative overhang of geopolitical events, slowdown in Europe. These are sort of holding the commodity price level. Thank you, sir. Thanks for this color. Yeah. Thank you. Thank you very much. We'll take that as the last question. Participants whose questions have not been answered or pending questions may get in touch with the Hindalco IR to have those questions answered. I would now like to hand the conference back to Mr. Pai for any closing comments. Yeah. I said thank you for your attention. I do think that I do think that I want to reiterate that the quarterly performance that we just announced shows a trend of quarter-on-quarter operational performance that we have been putting. And I also do want to reiterate that whereas Bay Minette CapEx has gone up, let's not lose sight of the overall big picture. This is still a very good project. It's giving double-digit IRR, which is better than the cost of capital. It gives us a platform that will cement Novelis's position as the largest aluminium player in the rolled products in North America. With that, I thank you for your attention and wish you the best. Bye. Thank you very much. On behalf of Hindalco Industries Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.