Ladies and gentlemen, good day and welcome to the Q4 FY 2021 earnings conference call of JSW Steel Limited, hosted by JM Financial. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashutosh Somani from JM Financial. Thank you, and over to you, Mr. Somani. Thank you, Rutuja. Good evening, everyone. Thanks for joining in for JSW Steel's Q4 FY 2021 earnings call. I hope you and your loved ones are keeping safe and in good health. Firstly, I would like to thank the management for giving JM Financial an opportunity to host the call. I would now hand over the call to Ashwin Bajaj, Group Head, Investor Relations, to introduce the management and take the call forward. Over to you, Ashwin. Thanks, Ashutosh, and thank you for hosting the call today for us. Good evening, ladies and gentlemen. This is Ashwin Bajaj, and it's my pleasure to welcome you to JSW Steel's earnings call for Q4 and FY 2021. We have with us today the management team, represented by Mr. Seshagiri Rao, Joint MD and Group CFO, Dr. Vinod Nowal, Deputy Managing Director, Mr. Jayant Acharya, Director, Commercial and Marketing, and Mr. Rajeev Pai, CFO of the company. We will start with opening remarks by Mr. Rao and then open the floor to Q&A. With that, over to you, Mr. Rao. Good evening. Good evening to all of you. I welcome you all to the briefing of our financial performance for the Q4 FY 2021. We are in the midst of the second wave of COVID-19. This time that has a serious impact on the lives of several people in India. The company has been playing a major role in supporting the communities and the nation, and is one of the largest contributors of oxygen supply. We are supplying almost 1,200 tons of oxygen, medical oxygen, per day. We have also set up oxygenated hospital beds in a record time, with 1,000-bed Jumbo hospital at Vijayanagar and a 100-bed hospital at Dolvi to be scaled up to 500 beds. In that way, we are trying our best to ensure that whatever we can do to get out of this problem in supplying medical oxygen to the needy people, we are giving major focus. As we have seen in the last year, the way we have commenced the financial year under tremendous constraints following the first COVID-19 pandemic, we have seen the worst contraction in the known history, dislocated supply chains, major slide in demand, complete uncertainty. Within a short span of time, because of the charge by China, where they have recovered early, and they have announced a series of measures to resurrect their economy, their 14th five-year plan, they put a growth rate of 5.5% and $750 billion each year growth and $550 billion of stimulus. So they recovered very, very well. In support of Chinese initiatives, there are a series of measures that have been taken by various countries that all led to a V-shaped, very faster recovery in steel demand and economic growth all over the world, including India. As far as India is concerned, where we have seen a drop of almost 57%-60% demand in the quarter one, where the demand was only 12 million tons. By the Q4, the demand went up to 28.9 million tons. That itself shows the recovery was much, much faster than everybody anticipated. Coming to the Q4 2021 is concerned, JSW Steel has delivered good results. We have shown 4.1 million tons of total crude steel production, showing a growth of 6% year- on- year. For the year as a whole, it was 15.08 million tons. It is 99% of our revised guidance of production of 15.2 million tons. If you recall, in the last call, we mentioned that we will not be able to make up what we have lost in Q1. 16 million tons of production guidance, we have reduced it to 95% of that, which is approximately 15.2 million tons. If I compare with 15.2 million tons, we have achieved 15.08 million tons of production, which is almost 99%. Our consolidated sales were 4.06 million tons, which is 11% growth year- on- year. For a financial year, it is 14.95 million tons, which is again 99% of our guidance of 15 million tons. In terms of volume of production and sales, we are, as per the guidance in terms of sales and in terms of revised guidance, in terms of production. What has contributed in the last year to achieve this guidance is that exports in one quarter, it went up as high as over 30%. In the following quarters, we brought it down as low as 12%-13%. In the last quarter, again, we increased to 25%. If you look at January and February in the beginning, there was some slackness in the demand, particularly Chinese holidays. During that time, we increased our exports. Whenever we are seeing some domestic demand slackness, the export markets are doing extremely well. We have supplemented the exports with the domestic uptake. The last quarter, our exports were 1 million tons, which is constituting 25% of the total consolidated sales. Over and above that, value-added steel products, that is also one of the very, very important elements in achieving these volumes. It increased by 37% year- on- year and around 5% on a quarter-on-quarter basis, which constituted 59% of the total sales in the last quarter. NSR has gone up by 39% year- on- year basis and 19% on the quarter-on-quarter basis. Costs also have gone up. If you look at iron ore, April 2020 versus March 2021, it has more than doubled. That got reflected in terms of overall increase in cost, notwithstanding the lower coking coal prices during the year. The cost of production went up by 12% year- on- year and 10% on a quarter-on-quarter. The EBITDA per ton on a standalone basis is INR 19,756 per ton, which is 32.9%. On a consolidated basis, this EBITDA per ton went up to INR 20,792 per ton. There is a substantial increase in the EBITDA per ton or absolute EBITDA from standalone to consolidated. The EBITDA standalone number is INR 8,021 crore, and there is an exceptional item of INR 386 crore in the standalone numbers and INR 83 crore in the consolidated numbers, which is on account of impairment towards loans given and also the interest receivable from overseas subsidiaries. With that, the profit after tax for the standalone company was INR 3,931 crore. As I was mentioning, the domestic subsidiaries like Coated, ACCIL, Vallabh Industries, VTPL, Industrial Gases, all have done exceedingly well. In the quarter, they have contributed INR 822 crore vis-à-vis INR 227 crore in the Q4 of last year. There is a huge amount of turnaround in the domestic subsidiaries. Just to complete domestic subsidiaries' performance for the year, it was INR 2,132 crore, as it was INR 1,038 crore in the previous year. It has doubled as far as domestic subsidiaries' contribution is concerned. Overseas subsidiaries in this quarter, excluding one-off items, it was INR 164 crore. If I add the one-off items, the loss was INR 322 crore. Overseas subsidiaries remained a drag even in this quarter. What is encouraging is that in the month of March, when we restarted Ohio and Baytown, it is the first month where it was a positive EBITDA. It started only in March quarter as a whole, still there was a negative EBITDA in the overseas subsidiaries. Taking into account the domestic subsidiaries' good performance and certain losses in the overseas subsidiaries, net-net, including the consolidated adjustments, for the Q4, the contribution in consolidation is INR 419 crore plus in the EBITDA number. With that, if I look at consolidated EBITDA, it was INR 8,440 crore, showing a growth of 184% year-on-year basis. Profit after tax was INR 4,104 crore on the consolidated quarterly profit. Year-on-year yearly number for FY 2021, the total profit was INR 7,786 crore. These are our financial numbers. We have completed, as you know, acquisitions of Bhushan Power & Steel, Asian Colour Coated, Welspun plates and pipes mill in the last year. BPSL, the turnaround is going on. After we took over on 26th of March 2021, we have focused majorly on two areas: how to reduce the cost of production, which appears to be 15%, 20% higher than what it should have, for which there should be some CapEx to be committed. We have committed that CapEx to the extent of around INR 850 crore. That is being spent. In the next 12 months' time, we will be able to reduce the cost of production in Bhushan Power & Steel through various measures there. The second area is that the overall capacity of Bhushan Power & Steel is currently working around 2.7 million tons. We have to increase the capacity with a limited amount of CapEx, which is approximately INR 700 crore to INR 750 crore. This, again, we have committed there. This will take the capacity to 3.5 million tons. With INR 1,550 crore of CapEx, we'll be able to reduce the cost of production, and we'll be able to increase the capacity to 3.5 million tons. It will get completed between 12 to 18 months' time. Another thing is whatever cash that was available in the company, out of that INR 1,800 crore prepayment, we are doing it against the loan that is raised in the target. INR 10,800 crore of debt is being reduced to INR 9,000 crore. Asian Colour Coated, again, is a turnaround story. It has done exceedingly well. It has shown INR 130 crore EBITDA in the last quarter. Welspun, we are just completing the transaction. Even though the agreements are signed, the payments are going in this month and last month. Once the payments go there, then we will work on how to turn around as far as Welspun plates and pipes mill is concerned. The total debt of the company as of 31st March 2021 was INR 52,615 crore, which was lower by INR 858 crore compared to the debt as on 31st March 2020. What is interesting here is the debt of INR 52,615 crore after a cash outflow of INR 15,000 crore. The INR 15,000 crore consists of INR 8,233 crore on the CapEx and INR 1,550 crore on acquisition of Asian Colour Coated, INR 5,212 crore on acquisition of Bhushan Power & Steel. After spending this INR 15,000 crore, our debt has come down by INR 858 crore. There is a good degree of deleverage as regards to debt. The average debt cost has come down to 5.83%, almost 41 basis points over last year. Debt-to- equity is 1.14. Debt- to- EBITDA is 2.61. Our acceptances on revenue account is INR 987. Acceptances on CapEx account is INR 558. Coming to ongoing projects at Vijayanagar, we have commissioned PP-3, we have commissioned wire rod mill, we have commissioned CGL-2, we have commissioned PLTCM. These are the projects which we have already completed and are working now. The coke oven plant, the CGL-3, these are the two units which will get commissioned during this financial year. Coming to Dolvi, the pellet plant has already been commissioned. Coke oven plant expansion one battery has already been commissioned and working. HSM, we have already commissioned, and the slabs have been rolled up to plates. So balance work is going on in the HSM, Hot Strip Mill. Only two major units where there is work for 45 days to 60 days on the blast furnace and the melt shop. If the second COVID wave is not there, we would have completed, and this should be up and running by this time. Unfortunately, the second COVID wave has made many of the workers again leaving the site. There were 18,000 workers in March who were working there. Now it has come down to 7,000 people as far as the strength of people working there. At the same time, the foreign supervisors, equipment suppliers who were present at the site, all of them have left. Now they are giving online assistance and support to us, but we have to get back the people who left. We expect that they will come back in a month's time once the number of cases are coming down, vaccination increases. We expect a positive outcome here. They will come back and restart the work. Once they come back, we expect within two months' time, we will be able to commission the entire integrated operation. Instead of commissioning on 1st of July, it is getting postponed by a quarter. It will be 1st of October. We'll be able to commission the Dolvi expansion fully. Downstream, all the units have been commissioned, except in Tin, CAL, and CGL line. Balance all have been commissioned and working in the downstream. If I look at the capital expenditure that is pending on all these projects together, it is around INR 22,350 crore, which also includes some new projects which we have taken up as a part of expansion here. The two important projects which are here as a part of this INR 22,350 crore is INR 380 crore of CapEx at Vijayanagar to increase the hot metal capacity. In the COREX- 1, COREX-2, BF-1, and BF-2, which are operating, we wanted to increase the hot metal capacity. There is additional CapEx we are incurring there and also in the melt shop. Basically, BF-3 shutdown, which we have planned, is not being taken in this year. To supplement the loss of hot metal, which could have come from completion of BF-3, that small amount we are spending to increase the hot metal capacity, thereby the commissioned facilities of wire rod and pellet plant we will be able to use at Vijayanagar. Over and above that, the coke oven plant, which is there at Vijayanagar, 1.5 million ton, by spending another INR 800 crore, we will be able to expand to 3 million ton. That will meet even incremental requirement for another 5 million ton of capacity. That is why we took a call to include another INR 800 crore and increase the capacity of the coke oven plant from 1.5 to 3 million ton at Vijayanagar. Including these items, the outstanding capital expenditure on existing projects is INR 22,350 crore. Over and above that, the way we are working is that whatever cash generation that comes in the operations, out of that, we have given a policy of 15%-20% of our consolidated profit we distribute as a dividend. The balance amount, the main focus is on growth. If you see the track record of JSW Steel, we have been spending on CapEx as a countercyclical investment. When there is a downturn, we start investing. That is why our capacity expansion at Dolvi is coming at the right time when markets are looking up. Similarly, if you look at next three, four years' time, we expect there will be a mismatch in the growth in demand versus the supply that is coming into the market. It is the right time to commit further investment, particularly Brownfield expansions. In Vijayanagar, with the improvement in the iron ore supply, we feel that we should immediately commit in the Brownfield expansion by another 5 million ton at Vijayanagar. We can quickly do that. Even though we have given three years' time, we should be able to do much faster. There is an additional CapEx of INR 15,000 crore for 5-million-ton expansion at Vijayanagar. Over and above that, what we have observed as far as Odisha mines are concerned, even though all the four mines have been commissioned and also nine mines at Vijayanagar, what we have seen during the operations is that there is an inefficient MDO operation, number one. We can replace it if we can make investment on the mining equipment. Then we can reduce the cost to improve operations. That is one. Number two is that the quality, if we can reduce the bit of alumina and increase Fe, then the productivity at the plants will go up substantially. Therefore, we have to create washing facilities and some grinding facilities at mines. If we do that, then there is a significant improvement in quality with the resultant benefits at the plants. With that, we wanted to commit that capital expenditure at the plants. Over and above that, digitization plus other infrastructure facilities, altogether, we are committing INR 3,450 crore for the Odisha mines. Similarly, in Jammu and Kashmir, there is a state where a lot of incentives are being given, and we are also supplying our downstream products in that state. We are committing INR 100 crore to set up a color coating line there. In the last year, we have not committed any normal CapEx or any special projects. We are committing INR 6,565 crore towards normal CapEx and special projects and roles during the year. All this together is approximately coming to another INR 25,200 crore. The total CapEx is INR 47,500 crore. Out of this INR 47,500 crore, in this year, we will be spending INR 18,240 crore as the CapEx. Here I would like to guide is that our debt- to- EBITDA, we have been saying that we would like to maintain at 3.75:1. However, considering the kind of cash generation that is coming from existing operations and the new capacities that are getting commissioned in this year, we will be able to internally have a target of bringing it down to 2.75:1. That is how we are working as far as debt- to- EBITDA is concerned, in spite of the additional CapEx commitments that have been made. I'm also happy to share with you that today our board has approved the objective role of shareholders, a dividend of 650%, INR 6.50 per share, which is working out to 20% of the consolidated net profits. Coming to the next year, what is that we would like to give the guidance for production and sales. For the production, we will be achieving 19.5 million tons for JSW Steel and its subsidiaries. The way we break out this 19.5, the 17 million ton from the existing installed capacity of 18 million ton. If we commission our Dolvi expansion by 1st of October, we expect at least 1.5 million ton from our Dolvi expansion and 1 million ton from our integrated operation from Mingo. All these three together, we will be able to deliver 19.5-million-ton total production, crude steel production, against 15.2 million ton of last year, so a 28% growth. There are two more companies which are significant. They are under joint control of the company. Even though they are technically not consolidated with the company, but to give you an idea that if these two companies' production and sales numbers are included as JSW Steel Group, what would be our total production and sales guidance for the year? It will be 22.94 million ton will be the production guidance, crude steel production guidance, including Monnet and Bhushan Power & Steel. Similarly, sales numbers, if I can spend a little more time here, our sales guidance for JSW Steel and subsidiaries is 18.4 million ton. The breakup is 16 million ton from JSW Steel, 1.4 million ton from Dolvi expansion, and 1 million ton from Mingo. All three together is 18.4 million ton. Other two joint control companies, if we add, then the total will come to 21.63 million ton. The production guidance for JSW Steel Group is concerned, 22.94 million ton for production and 21.63 million ton as sales. We are seeing some impact on account of the second COVID wave. The demand was lower in the month of April with 6.5 million ton or 6.8 million ton. This was much lower than March. This is continuing even in the month of May. In order to supplement whatever slackness in the domestic demand, we have increased our exports. That way, overall, we are doing reasonably okay. What we expect going forward is this massive pent-up positive savings which are ready to be spent, rapid deployment of vaccines, containment of the virus, expanding stimulus, low interest rates, dollar weakness, accommodative monetary policy, government-led infrastructure spend, which is commodity- intensive, China Plus One, and Chinese policies announced at different points of time. These are all very positive for both global growth and also positive for the commodities and the steel. This is how we see. In India, we expect the steel demand to pick up the way we have seen in the last year. Once second COVID wave is subsided and vaccination drive increases, the demand, which was 94 million ton in the last year, in this year, we expect to be around 110 million tons. World Steel Association is talking about 106 million ton. We are a little optimistic. Then World Steel Association, it will be in the range of 110 million ton. The incremental demand over previous year will be in the range of 16 million tons. With this, I invite you to ask any questions or clarifications. Thank you. 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 touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question, sorry, the first question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, good evening and congratulations on a great set of numbers. First question is with respect to BPSL acquisition. Given the substantial acquisition, if you could just share some more details as far as what would be the accumulated cash flow at the time of acquisition, recent profitability rendered, maybe EBITDA or something. In a few years, how do we plan to, I mean, do we have plans to fully acquire the partner stake? What would be the structure in that case? As far as BPSL is concerned, 26th of March 2021, the acquisition was complete. We hold 49%. Another group company of JSW Group holds a balance of 51%. As we have been guiding the market, consolidation will not happen, it is only equity consolidation. The way our track record is, as and when we acquired financially stressed companies, we keep it as a separate SPV, and then we turn around and then bring it to the fold of JSW Steel. The story is similar even in the case of Bhushan Power & Steel. The second point is, as regards to the operations of Bhushan Power & Steel is concerned, we have given the guidance of Bhushan Power & Steel and Monnet together. To be more specific on BPSL, out of this guidance, the production number of Bhushan Power & Steel for the year is 2.8 million ton for FY 2022, and the sales number is 2.6 million ton. That means we will be operating the Bhushan Power & Steel at 100% capacity. Its capacity is 2.7, so we'll be operating fully. This will positively contribute, definitely. Number two, as far as cash balances are concerned, as I mentioned to you, those cash balances are being used for CapEx, which is INR 1,550 crore. Also, we have committed INR 1,800 crore of prepayment, which is done today. With that, the debt in Bhushan Power & Steel is coming down from INR 10,800 crore to INR 9,000 crore. Understood. That's helpful. The second question is with respect to our CapEx plan. This INR 3,500-odd crore spent towards mining and efficiency. I mean, it's quite a substantial one. Is it possible to share what kind of cost improvement or returns are we expecting once we complete this CapEx? I mean, maybe in terms of iron ore cost improvement or steel overall cost reduction. INR 3,450 crore, which we are committing in Odisha, the payback period is in the range of four years. That is the kind of upside that would be available. On a conservative estimate, the payback is four years. This will make a huge change in terms of productivity improvement, alumina improvement, and the Fe improvement, plus the overall production improvement. Let's say this is a game changer as far as the overall mining is concerned in these four mines. Does this include slurry pipelines as well? No, it doesn't include slurry pipelines. It is only at the mines we are spending this money to improve the quality, digitization, and also to do the mining on our own by buying the mining equipment to replace the MDOs for a period of time. Understood. I have more questions, but I'll get back in the queue. Thank you and all the best. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Pinakin from JPMorgan. Please go ahead. Thank you very much, sir. Two questions. My first question is on the Vijayanagar expansion of 5 million tons. Historically, there was supposedly a Supreme Court cap on the iron ore which can be mined in that particular state. Previously, there were some regulatory issues in terms of getting approvals to expand by 5 million tons. Where do we stand at this point of time on the potential cap of iron ore mining in Karnataka and the various regulatory issues were there? Total iron ore cap, as you know, is already increased to 35 million tons. Plus, over and above these 35 million tons, that will come out of the auctioned iron ore mines is in excess of that. That means Category- C mines, which have been auctioned, whatever production that comes out of that is in excess of 35. That is approximately another 10 million tons. So 35 plus 10, it is 45 million tons of total available iron ore. Considering this availability of iron ore, over and above that, there are some more auctions of either Category- C or some regional mines are expected. In the meantime, applications have been made which are pending in the Supreme Court to remove this cap and also to take out the auctions. These auctions have been introduced in the year 2012, where there was no automated infrastructure or internet facilities. That is why the problems came in. Now they have been set up. There is a presentation that has been made to the Supreme Court. Hopefully, something would happen, even assuming that will take some more time. There is a 45-million-ton total availability of iron ore, including the Donim alai mine, which recently started. Understood, sir. My second question relates to the P&L going forward. There is a line item known as mining premium and royalties, and that broadly is flat on the standalone basis of roughly INR 3,100 crore. Now, benchmark iron ore prices in India have surged over the last two months or so. Is it fair to assume that this cost will increase materially for JSW Steel over the coming months? Are the steel price increases that have been taken by the company enough to offset this cost? Essentially, trying to understand that should spreads move higher in the June quarter versus March quarter, or will the cost eat up the price increases? First, let us focus on iron ore. Iron ore prices go up? Yes, you're right, absolutely, that this cost goes up, whether it is a captive or a non-captive. Whether this cost can be passed on by way of increase in the steel price depends upon the market dynamics, the demand robustness in India, and also global steel prices. In this particular quarter, whether it is possible or not, Jayant will clarify. Yeah. The global growth story continues to be strong. International prices, as you're aware, are quite much higher. India currently is operating at a discount of 15%-20% to the import prices. 15% in case of duty paid and 20% in case of Chinese duty. The other way around, 15% without duty and 20% with duty. That is the discounted rate in India as of now. We have a potential to increase the prices going forward, but we'll look at the market and take a view accordingly. Understood. Thank you very much, sir. Thank you. The next question is from the line of Amit Dixit from Edelweiss. Please go ahead. Hi, it's Amit Dixit. There are two questions that I have. The first one is essentially on CapEx intensity. If I look at it, I mean, almost INR 47,000 crore of CapEx is being planned over the next three years with reduced net debt-to-EBITDA threshold. I mean, just a little bit intrigued to understand what kind of margin assumptions we are building in for the next couple of years maybe. Because as we look at it, the steel prices, particularly with what is happening in China, look to have taken a pause. Any color on the drivers for this kind of high CapEx intensity would be very helpful. The way I think this INR 47,000 crore CapEx one has to analyze is that INR 22,400 crore, INR 350 crore, which is there as of 31st March 2021, an ongoing project that also includes creditors, that also includes acceptances. If I exclude the acceptances and the creditors, the actual amount of capital expenditure, cash outflow on the existing ongoing projects is only around INR 13,000 crore. That shows that we are in a very, very advanced stage of commissioning all the projects which we have taken up as a part of earlier CapEx program of INR 48,000 crore. Here the important point which one has to note is that the downstream, the EBITDA has doubled in the year FY 20 21. Similarly, the kind of cost reduction which will come from power plants, coke oven plants, and pellet plants is also quite substantial which can come into the company. The 5-million-ton expansion at Dolvi, where the costs are much lower than the earlier 5 million ton. If we take this into account, even assuming that there is a correction in the steel prices, whether we will see the margin that JSW Steel has posted in the past in the downturn, is it the same? It will be higher or not. Structurally, it will be better than last downturn. Considering that into account, we are saying we'll be able to increase capital expenditure, new capital expenditure program, and try to keep the debt- to- EBITDA as an internal target of 2.75: 1, even though we are riding at 3.75. That is how we are planning. We are taking into account the correction in steel prices that may happen. That is normal for any cyclical industry. Taking into account the structural changes that have happened in the company, that is very important to notice and factor them while projecting the company's future. Okay, that's helpful, sir. The second question is essentially on your field guidance or production guidance that you have given. I mean, given what we have seen in FY 2021, even if I take your original guidance of 3 million tons, I mean, the current guidance is quite high. Particularly with the demand being disrupted in this quarter because of COVID, possibly the domestic demand, do you see any threat to the sales guidance for production guidance, and what will be the proportion of exports that you would expect in Q1 and for the whole year? Production I will cover. Sales, Jayant will cover. Production is concerned. One important change from last year to this year is that this quarter one, in terms of overall drop in sales or production, it's as severe as that of last Q1. Therefore, we are better than last quarter, the previous quarter. The second point is the PP-3, that is Pellet Plant 3 of 8-million-ton capacity has been commissioned at Vijayanagar. By using pellets replacing the lumps, productivity goes up. There is an additional benefit which will come in this year over last year. 1 million ton or 1.26 million ton of production, 1 million ton of production loss, which has happened in the Q1 of 2021, FY 2021, will not be there in this year to that extent. Number two is the productivity gain on account of PP-3, that benefit will come. With that, we will be able to achieve this guidance of 17 million ton, which we are giving here. The 17 million ton production, sales number of 16 million ton is achievable relative to almost close to 15 million which we did in FY 2021. Jayant, do you want to add? Yeah. On the global side, just to step back a bit, if you look back at the year 2020, China imported 23 million tons of steel more than what they did in 2019, and they exported 10 million ton less. So 33 million tons of trade was vacated by China for the rest of the world. Additionally, the rest of the world within itself, the regional trades resulted in a supply gap of about 11 million tons to 12 million tons. We are looking at a 40 million to 45 million ton of gap in terms of inventory over the last year by virtue of supply-demand dynamics. If you look at India, last year, the supply-demand, especially the pickup in the second half, the inventory was reduced by 5 million tons. Today, when we are having a slightly slower demand in quarter one, in spite of that, we see the global demand will continue to remain strong. Any disturbances which would come in India because of localized restrictions, lockdowns, we will be able to make up through exports. The export quantum in this quarter may go up. We expect quarter two things to gradually stabilize in the domestic market. It should pick up then strongly thereafter from H2. Sir, any number ballpark percentage you would like to give for export in Q1, FY 2022? I think we would look at it from a perspective of the market at that point and take a view. This quarter, I can give you an indication that the export is going to be, quarter one is going to be more because one, of localized restriction and second, because of export opportunities. I won't be able to give you a percentage number right now. No problem. Thanks and all the best. Thank you. The next question is from the line of Indrajit from CLSA. Please go ahead. Mr. Indrajit, your line is unmuted. Please go ahead with the question. Hello? Yes. Hello? Yes, yes, please. Yes, we can hear you. Okay. After the current expansion at Vijayanagar, where all do we have the opportunities for further expansion, including the Bhushan Power asset? Let's say today we are 12 million ton at Vijayanagar. Now, another million ton is possible by increasing the hot metal production at COREX- 1, COREX-2, BF-1, BF-2, and also SMS- 1, for which we have committed INR 380 crore CapEx. That is being done during the year itself. It becomes 12- 13. After that, there is a 5 million ton which is planned as a part of expansion for INR 15,000 crore. There are two important things here. The pellet plant already commissioned 8 million ton. This 8 million ton, there are surplus pellets after replacing the lumps that are being used today for existing operations. When we set up 5-million-ton expansion at Vijayanagar, we do not need additional sinter plant or additional pellet plant. The second is I also mentioned in my opening remarks that the coke oven plant capacity is getting increased from 1.5 million ton to 3 million ton. When we are increasing, we are spending only INR 800 crore, but this will get commissioned in the next year. This extra coke that is available will feed, in fact, the 5-million-ton expansion that would come in at Vijayanagar. There are part of the projects which are already commissioned, and then 5 million ton, the cost per ton will be much lower relative to any other Brownfield or Greenfield project. With this 5-million-ton expansion which will get commissioned by 2024, this 13 million ton will go up to 18 million ton. After that BF-3, where we have not taken the shutdown, where another 1.5 million ton can go up. It becomes 19.5 million ton. After 19.5 million ton, is there any possibility of further increase or not? It is a single location, largest steel plant that we have to take a call after evaluating the logistics, the availability of iron ore at the relevant time. Today, 19.5-million-ton expansion at Vijayanagar is visible. In Dolvi and BPSL, any further expansion possible? BPSL, as I mentioned to you, the expansion up to 3.5 million ton is already committed. 3.5 million ton to 5 million ton is possible. We will evaluate over a period of time and take a call. This plant can go up to 10 million ton. That is possible. As far as Dolvi is concerned, we will be completing in this year 5 million ton. Dolvi, the major issues relating to Dolvi plant is logistics. We have to augment the logistics capacity. Thereafter, it is possible to increase. At this time, logistics is a constraint. We are working on that. Sure. Thanks. A follow-up question on Vijayanagar. The announcement that they have made is only till the hot metal, or do we have any downstream included in this, the CapEx of INR 15,000 crore? Yeah. It includes melt shop modernization, SMS shop. It is INR 380 crore. It includes melt shop and also in the hot metal. We already have wire rod mill, commissioned already 1.2 million ton. That capacity is available. So rolling is possible. Sure. Thank you so much. That is all from my side. Thank you. The next question is from the line of Vishal Chandak from DAM Capital. Please go ahead. Thank you very much. Congratulations, sir, on a very good set of results. My first question is with respect to the EBITDA per ton sustainability. We've seen that currently INR 20,000 plus EBITDA per ton definitely is not sustainable, and we have done a lot of cost-saving projects plus downstream projects. Would it actually push up our baseline EBITDA from INR 8,500 that we discussed a couple of quarters ago to maybe INR 12,000 or so? Is that a sustainable EBITDA assumption? Is Is that correct? Vishal, we don't give the guidance how much it would be in future. What I have explained already is that in the past downturns, we have seen the lowest EBITDA for JSW Steel. There are structural changes that have happened in the company. One is product mix, a big change in the product mix. The second is lower cost of production, either called pellet, power plants, and coke oven plants which are getting commissioned, replaces the bought-out items, and also the integration of iron ore. All this together, there is a significant reduction in the cost. All this will definitely improve the EBITDA, but we do not want to guide how much it would be over what we have seen in the past. It will be better than what we have seen in the past in the downturn. Got it, sir. The second question was with respect to the logistics arrangement at Odisha iron ore mines. Now, we understand that the long-term plan is to set up a slurry pipeline, have a palletization plant at somewhere in Paradip or Vizag, and then from there, through the barges shifted to Dolvi and other locations. Would it be fair to assume that the entire CapEx for the mining expansion would be done within the act of JSW Steel, or it would be through a third party or a group company as well? All the options are available. As far as setting up a slurry pipeline is top of priority. What we are really earmarking, the CapEx, is to improve the quality at the mine. That is the most important. How to reduce the cost of mining, how we can do the mining very efficiently. For that, the cost has been earmarked. Capital cost has been earmarked for that. The second step which we will do is how to transport it more efficiently and reduce the cost that is required. In this year, we are not committing any CapEx on that. Till that point in time, we will continue to engage with the railways and shift ing material through rigs only? Correct. Okay. Thank you very much, sir. I have more questions. I'll join back in the queue. Thank you. The next question is from the line of Abhijit Mitra from ICICI Securities. Please go ahead. Yes. Thanks for taking my question. My question is again on the CapEx side and the volume roadmap that's creating. Just to understand, if I sort of look only at Vijayanagar and Dolvi for the time being, your capacity is moving to 30 million ton over the course of the next five years. Is that the understanding? At Vijayanagar, it will go up to 19.5 million ton from existing 12 million ton. And Dolvi is almost at 10, so it's 29.5. This should be— Yeah. This should be— I mean, this entire 29.5 would be commissioned by what time frame? I mean, by FY 2024, 2025? Yes. Okay. Okay. The CapEx for the same would be close to this INR 50,000 crore that you have mentioned, or it would be—I mean, what would be the ballpark CapEx if I am to sort of look at this capacity from here on? CapEx, everything is committed today. Everything is mentioned here with part of this INR 47,500 crore. Okay. Got it. Got it. We have additional 10 million ton Bhushan, and then what is the sort of up or capacity possible in Monnet, if I may ask? In the Monnet, today, it has a capacity of 0.9. That is why we have guided in this year 0.64 production and 0.63. This capacity can go up to 1.2 million ton. We are working on that. Whereas in the case of Bhushan, I already covered that point. In the case of BPSL, today it is 2.7, expanding to 3.5. That is what is committed as far as CapEx is concerned. Beyond 3.5, again, there are two phases: 3.5- 5, 5- 10. We have not done any work as on date. Thank you. May I request Mr. Mitra to please rejoin the queue? We have participants waiting for the turn. Sure, sure. I'll come back in the queue. Thanks. Thank you. The next question is from the line of Bhavin Chheda from Enam Holdings. Please go ahead. Yeah. Good evening, sir. This INR 47,500 crore CapEx does not include overseas CapEx, which would happen, right? How much would be that? Overseas CapEx, what is left out is only the phase II modernization of the plate mill. That is approximately INR 700-800 crore. We still have not taken the call to commit that expenditure. We will take a call during the course of the year. You said FY 2022, INR 18,240. So that includes maintenance CapEx, or maintenance would be over and above thie run rate? INR 47,500 includes maintenance CapEx. Similarly, INR 18,240 includes maintenance. Okay. My last question on the overseas subsidiaries numbers which have been given in the presentation, what would be the guidance for FY 2022? When will the U.S. and Italy, as well as the plate mill, turn around? What's the current run rate like and guidance for 2022? We have provided the guidance for Mingo integrated operation in a million-ton production and a million-ton sales. We will be able to deliver that. On the EBITDA positive? EBITDA positive, which I mentioned already that U.S. operations, they were positive in the month of March. It will be positive for the entire financial year 2022. Similarly, for plate mill at Italy operations also, right? Italy operation also, we are working on. Even today, still it has to turn around because of the orders which we are waiting for our railways. Right. And sir, Asian Colour Coated EBITDA, which is given in the slide, since it is 100% subsidiary of JSW Coated, that 519 quarterly EBITDA includes 130 or it excludes 130? It excludes. Bhavin Chheda, may I request Mr. Chheda to please rejoin the queue, sir? Sure. Yeah. I am done. Just completing this earlier question. JSW Coated is 519 plus 130. Okay. Okay. Thank you. Okay. Thank you. Thank you. The next question is from the line of Ashish Jain from Macquarie. Please go ahead. Hello. Hi, sir. Good evening. Sir, I have two questions. Firstly, what are the plans for iron ore mines ramp up in Odisha? Does the CapEx you have included, does it include anything towards that as well? Yeah. The INR 3,450 crore once we spend, it automatically facilitates to increase the production. Once we do digitalization of entire operation of mining, that will definitely increase the overall production capacity. Sir, when you say increase production, is it based upon the benchmarking production that the earlier mineholders were doing, or this is beyond that? Because in the past, we have indicated that some of these mines' production can be ramped up to much higher levels in the medium term. It is possible to do it. We have applied for increase in the overall limit, environmental limit. Once that limit comes in, it is possible to increase. As on date, it will be a saturated requirement of 80% of the average production that has been done by earlier mining companies. Right. Correct. Then secondly, these cost-saving initiatives which you indicated, like pellet plant, coke oven, and the cost efficiency tho iron ore, is it possible to quantify what it would mean from an EBITDA per ton point of view, or any other way you can indicate that number? It will be definitely a reduction in the cost and improvement in productivity. That is not possible to quantify how much it would be on each of these initiatives. Okay. Thank you so much, sir. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, I have three questions. One is on macro for Acharya sir. Sir, can you help us understand what are the lead times in the U.S. and Europe? What is it that can go wrong if Section 232 is reversed or if Europe's safeguards are not expanded? What is it that can go wrong from a macro perspective? That is the first question, sir. This is with respect to the current prices in Europe and the U.S.? Yes, sir. With India in context, specifically the exports? Okay. No, from a U.S. perspective, you are aware that India has anti-dumping trade barriers on various products. So U.S. from India is restricted for most of the products. As far as Europe is concerned, Europe quotas are due for revision, and the quota revisions are expected in July. We would be waiting for that to look at the outlook. If you really see the pricing trend in Europe, and if you see the inventory reduction which has taken place, and the manufacturing activity is quite strong, we expect a more positive improvement on the quota going forward, but we need to watch the results. As far as the general world market is concerned, I think I would focus on the Chinese side because the China control on carbon emissions, which has been announced, and consequent production moderation in various regions of China is expected to play out in the second half of this year. While in the first half, because of withdrawal of rebates, people have exported more, we expect a gradual reduction going forward. Their intent has been also indicated by the recent changes by reduction of export duty, putting export taxes on certain products which are less energy efficient, and also trying to import some products where they have relaxed certain duties to basically improve energy efficiency within the system. A much more disciplined approach from China, I think, will be a key factor going forward to stabilize the world price. That's quite helpful. I have two questions for Seshagiri Rao sir. Sir, first is, I think on BPSL, on Bhushan, you indicated INR 10,000 crore of debt reduction. That's a phenomenal number. I just wanted to understand the cash flow behind it, if that's possible. Secondly, sir, you have indicated in part that eventually, subject to the profitability of the acquired assets, we will consolidate it. Would you like to give some number on net debt- to- EBITDA or net gearing, specifically for those assets, when we can say that profitability is good enough, and that is when we look to consolidate into JSW Steel? Those are the two questions. Thank you. No, I never said we have reduced by INR 10,000 crore. What I said in the case of BPSL, the outstanding debt in the company is INR 10,800 crore. We are prepaying INR 1,800 crore. Thereby, the debt comes down to INR 9,000 crore. That is what I said. The second point, which you asked about equity method of consolidation, only this result includes the proportionate net profit of Monnet Ispat and Energy Limited, but not BPSL. BPSL will be just five, six days. Those accounts are not ready on that date. That will be done in the June quarter onwards. The next point which you asked is that what is the profitability of these companies? We already guided about the volumes. This is what we do generally. We do not guide about EBITDA of those companies or EBITDA per ton. Similarly, in the case of BPSL or JSW Specialty Steel products, I do not think we will be able to guide about EBITDA number or any ratios there. Sure. That is very helpful. Thank you so much. I will join back the queue. Thank you very much. Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to the management for closing comments. What we expect going forward is the second wave impact will get diluted this year. More and more vaccinations will be done. The recovery, we are very sure that it will happen very quickly in India. JSW Steel has not only completed good acquisitions in the last year, and the expansion project also will get completed in this half year. The kind of growth that would come in in terms of volumes, production, and sales are quite good from JSW Steel. More and more that a lot of efforts are going on to reduce the cost. There are two major important themes for this financial year. One is ESG, Environment, Safety, and Governance side, Social, and Governance side. On the environment side, we have put a clear roadmap. What is that we need to set a target for all the seven parameters that are required to be done on social and environment side? We are working very, very closely and monitoring them to ensure that these norms are achieved. At the same time, on the governance side, there is a complete automation of all the processes which we have here. That work is going on in a big way in the company. Digitization side was done wave one, wave two last year. Wave three is going on in a big way in this year. There are three important projects which we have taken up. One is entire logistics automation, both inward, outward, and also intra movement within the plant. Complete digitization and automation we are doing in the process. The second project which we identified is the mining. Entire mining operation at Odisha is completely digitized. This is the second area. The third is advanced planning and control systems. This project we have taken up. This may not get completed in this year, but we are on it. In the next 18 months' time, there are three very important projects that give a lot of benefit to the company. This ESG and digitization are the themes which we are trying to take up and work very hard on these two themes. Over and above improving operational efficiency and completing the projects and turning around overseas operations and also the acquired assets and look for more and more growth opportunities in India. That is how we are seeing in this year. As I mentioned to you, we expect a growth of steel demand in India to the extent of around 15% in this year. Thank you. Thank you. On behalf of JM Financial that concludes this conference. Thank you for joining us, and you may now disconnect your lines.