Ladies and gentlemen, good day and welcome to the JSW Steel Q3 FY 23 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there'll 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 and then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashwin Bajaj, Group Head of Investor Relations. Thank you, over to you, sir. Thank you, operator. Very good evening, ladies and gentlemen. It's a pleasure to welcome you to JSW Steel's earnings call for Q3 FY 2023. We have with us today the management team represented by Mr. Seshagiri Rao, Joint MD and Group CFO, Mr. Jayant Acharya, Deputy Managing Director, Mr. Rajeev Pai, CFO, and Mr. G.S. Rathore, Chief Operating Officer. We'll 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, everybody. We welcome you all for the briefing of our Q3 performance for the financial year FY 2023. Global economy, as you know, has been battling with several headwinds, high inflation, high interest rates, and very high government debt to GDP, with limited fiscal space to various governments and worsening financial conditions. The outcome of this is everybody is talking about very slow growth to mild recession across the globe other than certain countries like India. Over and above that, there is one trigger which we have seen recently. China announcing from Zero- COVID to COVID to all policy and the easing restrictions in the property sector is the trigger where we are seeing commodity prices going up and the outlook slightly changing. Over and above that, we also have seen two more restrictive trade-related issues globally. One is by U.S. government. The Inflation Reduction Act which has been passed is restricting in our view is trade, free trade, because they're giving more and more importance for energy transition using the materials within U.S.A. or friendly countries with whom they have FTAs. Across many countries are talking about this restrictive trade related act is being objected upon. In addition to that, we are also seeing a disturbing news from Europe about Carbon Border Adjustment tax. Even this particular initiative is being used to restrict the trade, particularly a developing country like India, where we have our own Nationally Determined Contributions, where we have given as a country that we will reduce our carbon emissions by 2070 to become neutral. Whereas now we will get penalized if we have to export to Europe. At the same time, the European countries allowances are getting continued up to 2032 or even beyond. That is why this appears to be little bit of trade restrictive policies that is being followed by West. This will lead to, in my view, is concentrated trade or another form of globalization, which is regionalization of trade. This is also not a very encouraging news. At this backdrop, if we look at as far as India is concerned, I think very good demand for steel. All the macroeconomic parameters are encouraging in India. Revival in the infra spending, PLI related manufacturing, residential construction activity picking up, pipeline, metro lines, pipelines, freight corridors, renewables. There is a very good revival as far as the overall economic activity is concerned. Over and above that, export tax withdrawing in November 2022 is also very encouraging. Indian steel demand in the first nine months of the year has gone up by 11.5% for the nine months, which is almost 1 million ton more every month. That is very encouraging. Here also the imports have gone up quarter-on-quarter by 40% and quarter-on-quarter by 47% and the year as a whole, nine months it went up by 40%. Imports are increasing into India and at the same time exports have fallen. Exports have fallen by 27% quarter-on-quarter and 59% year-on-year. This is an important issue as regards to imports going up and exports falling and the consumption demand reasonably okay as far as India is concerned. In this background if you see the JSW Steel's performance, it is the highest ever crude steel production. On a standalone basis, it is 5.32 million tons, showing a growth of 7%. We operated the steel plants at 92.5% capacity utilization. Bhushan Power and Steel improved its capacity utilization to 85% as against 72% in the previous quarter. On a consolidated basis, we have posted a crude steel production again highest ever of 6.06 million tons, showing a growth of 9% quarter on quarter, with a capacity utilization of 91%. On the sales side on a standalone company basis, we had 4.95 million ton sales. On a consolidated basis, including Bhushan Power & Steel, it is 5.55 million tons. It appears to be slightly 1% or 2% lower on a consolidated basis, volumes. If I look at the domestic, volumes are concerned, it is a very good growth. We sold over again 5 million tons. Highest ever domestic sales, 5.163 million tons, showing a growth of 2% in volume terms. The overall volumes are lower because exports have fallen. Exports have fallen by 32% year-on-year basis. Our exports as a percentage of sales in this quarter was only 7%, INR 383,000. It has fallen by almost 170,000 tons of fall in the exports. Our net sales realizations quarter-on-quarter have fallen by 5%, but costs also have come down by 14%. As we have been guiding that the coking coal prices will come down by around $80 in consumption terms in the last quarter. In fact, we achieved a $100 per ton. The iron ore prices, there is a slight increase quarter-on-quarter basis. The power costs, ferroalloy costs, fluxes costs, fixed costs, they all came down. That said, overall we got a benefit of 14% on quarter-on-quarter basis, which has translated to close to INR 7,900 of reduction in the cost. Even after offsetting INR 3,200 of fall in the NSR, we could improve our EBITDA margin by INR 4,680 per ton. EBITDA margin was 13%. EBITDA per ton was INR 8,149. Here, the important point is the way last quarters we had suffered due to rupee depreciation and also the inventory losses. This quarter also it has happened in Q3. On a consolidated basis, INR 984 crore is the impact of FX loss and the inventory losses. This will translate to INR 1,750 per ton. If we take INR 8,150 as a margin, if these losses are not there, then the EBITDA margin is close to INR 9,900 per ton in this quarter on a standalone basis. The EBITDA for standalone company is INR 4,030 crore. It is 131%. The net profit was INR 1,234 crore. As regards to subsidiaries, domestic subsidiaries, on a consolidated basis, the coated, JSW Coated, including VTPL, ACCIL and VTP, VIL, there is a positive INR 11 crore EBITDA, which was INR 59 crore negative in the previous quarter. Similarly, in the case of other subsidiaries also they have become positive in this quarter. BPSL posted INR 341 crore EBITDA, as against negative INR 183 crore in the previous quarter. All domestic subsidiaries together, INR 451 crore positively contributed in this quarter. Similarly, overseas, it has a positive contribution of INR 112 crore. Italy has done well. It is EUR 7.8 million as against EUR 1 million in the previous quarter. Baytown has done reasonably well. It has $17.2 million EBITDA, even though slightly lower than in the previous quarter. In Mingo Junction, we were able to reduce our losses from $40 million- $22.8 million. net-net, U.S. has contributed $5.6 million negatively. Italy has made a positive contribution. That's why overall overseas subsidiaries all together contributed INR 112 crores positively as against INR 191 crores negative in the previous quarter. On a consolidated basis, both overseas subsidiaries and the Indian subsidiaries together, after adjusting consolidated adjustments, the net contribution is INR 517 crores. The overall EBITDA on a consolidated basis is INR 4,547 crores, which works out to INR 808 per ton. The profit after tax is INR 474 crores. The net debt is INR 69,498 crores. Average cost of debt has gone up 6.89%. There is a slight increase in the debt, partly contributed by FX fluctuations, partly due to the CapEx which we incurred during the quarter. The EBITDA to debt is 3.51 times. The net worth is 1.09 times. The revenue acceptances are INR 2,338. Capital account acceptances are INR 95. We have spent capital expenditure of INR 4,100 crores during the quarter, aggregating to INR 10,700 crores for the entire year. During the quarter, we also commissioned our coke oven plant, one battery at Vizianagaram. In future there is no need for us to procure coke for the Vizianagaram operations. That will positively contribute partially in the Q3 and fully in Q4. We also commissioned our 60 megawatts power plant at Dolvi. Part of the benefit had come in Q3. Full benefit will come in Q4. On the value added side, we have commissioned the CAL unit 0.5 million tons at Vasind and the tinplate two at Tarapore and LRPC unit at Vizianagaram. These are some of the positives as far as improvement in the product mix and the cost reduction side. JSW Steel got the clearance for nine of the projects under PLI scheme. Out of these nine projects, six projects already under implementation. They are part of the capital expenditure announcements that have been made by the company. Three more projects, we have to take it up. During the course of time we will take. PLI scheme, totally, INR 16,751 crore is the investment. Out of that, INR 5,350 crore is already committed. Capital expenditure is going on. With that, I'll stop here. If any questions are there, we are here to clarify. Thank you. Operator, over to you. Thank you. We will now begin the question answer session. Participants who wish to ask a question may press star and 1 on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have the first question on the line of Amit Dixit from ICICI Securities. Please go ahead. Yeah. Thanks for the opportunity, sir, and congratulations for a good turnaround in a very testing quarter. I have a couple of questions. The first one relates to the note 2 of the account financial statements, wherein we have received a show cause notice, you know, from the director of mines, Joda, amounting to INR 702 crores. While we have not made any, you know, provision so far, but in the past, we have seen that any such demand of royalty, ultimately, you know, we have to pay. While it appears from the note that it is currently not legally tenable, but do you foresee any such repetition that in past, we will have to ultimately pay this INR 702 crores? If you have read the note, it is clear that it is not legal to issue such notices. That is why the appellate authority has given a stay here. It is not unique to JSW Steel to operate the way the mines are getting operated. Basically, the show cause notice or the demand notice was issued based on the difference between actual grade of iron ore that is being mined, compare it to Geological Report. Other is mining plan, whatever we have stated versus what is actually happening. It is a notional demand. It is not actual mistake that is being done. No mine in India will adhere to the Geological Report, the actual mining. Number 2 is, no mine can get operated as per the mining plan. It is only indicative plans which get approved. It goes on changing. Also the mine is for 50 years. If we are mining on a single month X quantity of iron ore of a different grade, that need not exactly match with reference to the mining plan or with reference to the Geological Report. Just seeing the facts itself, it shows that it is not a valid demand that has been made. We have a very strong case, which we have been advised legally. We are contesting this particular point. That is why there was no need for any provision in our view, supported by legal experts. Okay. The second question is Sorry to interrupt, Mr. Dixit, but could you kindly repeat your second question as it was not very clear on the call? No, sorry. Am I clear now? Yes. Yeah. The second question is essentially on cost. You indicated in your opening remarks that the coking coal cost was on a conversion basis, was down $100 per ton. What kind of movement we expect in Q4? Iron ore prices have been moving up. What kind of, you know, increase in iron ore cost do you see in the next quarter, that is Q4? As far as coking coal is concerned, we have been able to get an advantage of $100 in the last quarter. It will be flattish this quarter. We don't expect too much movement. It will be range bound. As far as iron ore is concerned, I think we have already seen the prices going up, and we expect this also to remain in the range bound manner in this quarter. It's already moved up in the last few weeks. Okay. Are we carrying any inventory of iron ore? Mm. The low cost inventory. We are basically not carrying too much of inventory of iron ore, no. Okay, great. Thank you, sir, and all the best. Thank you. We have the next question from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi, thank you. Couple of questions. First one is on the follow-up to Amit's question. Can you talk about the magnitude of difference, possibly an indication of how much is the difference between the actual mining plan grade and what's actually happened in the quarter? Related to that would be any update on the IBM revision case also. I think it had gone to higher court, but after that, do we have any update on that? That's the first question As far as magnitude of difference is not relevant here, how much difference is there. Fundamentally, we have to understand is there any ground, either legally or otherwise, for questioning about actual grade of iron ore that is mined vis-à-vis what is stated in the mining plan or in the GR report. It can never happen in the practical sense. It will happen over 50 years' life of the mine. Based on that, the magnitude of difference is not very relevant here. Similarly, as far as the IBM revision is concerned, the prices are getting revised, considering some of the points we've already been contesting. There is also a proposal to make amendments, that is to the law, to change the method of computation of average selling price. We hope those amendments are done. In the meantime, the case is going on. Okay. Thank you, sir. Next question is on Bhushan Steel. Just wanted to go back to the earnings trajectory for that particular business. Two quarters ago, it was used to report higher EBITDA per ton on standalone. I think it was mentioned that possibly it is because of the higher value-added mix that BPSL has, and that entire trajectory has kind of reversed in the past two quarters. Just wanted to see what's going on and is that likely to sustain or do we, once maybe, things normalize, you would expect BPSL to again generate higher margins in the standalone business? No. BPSL, as I mentioned, the capacity utilization improved. In the Q2, we had suffered due to lack of iron ore. Whereas, in the case of Q3, there was high cost inventory of coal that is to be consumed. Also there are some NRV losses which has to be taken. NRV losses are large, 158 crores in the company. Similarly, the pellet plant, there were certain shutdowns which have been taken. They had to buy the pellets from outside at a higher price. These were some of the reasons why BPSL performance was not as expected. Even then, the EBITDA per ton, which they have made in the last quarter was INR 5,010 per ton. This NRV and inventory losses, which amounted to INR 158 crores, if I take that, if they are not there in future, if you make that assumption, INR 2,317 is on account of this one-time losses. If I take these two into account, the actual EBITDA in BPSL is INR 7,307. In going forward in future, the capacity utilization is better. Their capacity expansion from 2.7- 3.5 is complete, more volumes will come. Now their costs are under control. BPSL performance will be much, much better in Q4 over Q3. Okay. Thank you. Thank you. We have the next question on the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, thank you. First on the cost, if you could just share the $ per ton number for cooking coal. What was it in Q3? On the other side, we in the opening you've not shared that there is some cost deflation on other items as well in terms of power, fluxes, and consumables. If one can quantify how much was that and is the deflation or normalization expected in Q4 also on a quarter-on-quarter basis? As far as the power cost is concerned, dependent upon the thermal coal prices. Thermal coal prices have come down, due to which there is around INR 600 reduction per ton of steel on power alone. This is expected to continue. May not be additional incremental reduction, these prices are not going to be higher. Similarly, on the coal side, already Jayant has covered that point. There won't be any increase on account of coal. We are more or less covered for this quarter. The ferroalloy and fluxes, they have started coming down. The full benefit of lower prices of consumables, fluxes, and other items have not fully come in in the Q3. Those benefits will flow more in Q4 or fully in Q4. Okay. Is it possible to quantify? I mean, just to understand the quantum, I mean, how big is this? We already said INR 7,880 per ton is the lower cost, which is 14% lower than the Q2. That constitutes various items. A significant portion is cooking coal. Cooking coal, we already given the number of $100 per ton, per ton of coal. That benefit has come. All this together is INR 7,808. It's not possible to give breakup of various items. Okay, that's fine. The second question is on the price direction. If you could just share, I mean, we do hear a lot of reports of price increases in early Jan and even mid-Jan. If you could quantify how are we seeing the prices in this quarter and also how is the export market looking? How is the order book after the export duty being removed from mid-November onwards? On the pricing side things are looking up. In the last few weeks, we have seen the international prices move up. On a dollar basis, I think China moved up by about $100. European CFR also we have seen move up in the range of $140+. We are seeing a reflection of that in India. Primarily the cost increase, some of that, you know, had become unsustainable and therefore the steel prices are coming back to a level where margins will become a little bit more livable. You are seeing the prices increase from 1st January and as you said in some of the products maybe, mid-January as well. You will see this probably play out in this quarter, which is seasonally a better quarter. In India, fundamentally the demand drivers are strong. Infrastructure, construction, manufacturing, automotive, CapEx coming back. You will see this also, you know, giving the requisite tailwind for a better demand. Understood. I have no question. I'll get back in the queue. Thanks and all the best. Would that be the last question? Yes, operator. We can move to the - Sure. question please. We have the next question on the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Hi, good evening. Thanks for the opportunity. Just on the cost discussion. I just wanted to understand, you mentioned power and fuel fell by INR 600 per ton. Are you referring that in the context of Q4 or in Q3? Q3. Okay. Can we expect a similar or a fall in Q4 as well, given that LNG has declined and generally there has been a deflation in energy costs? No, we don't expect similar benefit incrementally to come in. At the same time, we'll remain more or less in the same range as per the power is concerned. One addition here is, on a combined basis, we have started in Dolvi, particularly the 60 megawatts of power plant. That benefit will come in power cost to some extent, but it is not quite substantial. Got it. Also, on your guidances which you have given in the past, are you maintaining your volume guidance and the CapEx guidance, just to confirm? Yeah, I will take a minute. The total guidance we have given for the production is 25 million tons and sales 24 million tons for this financial year. This 25 million tons there are three parts. One is 23.6 million tons is for operations on a consolidated basis other than overseas, other than JSW Ispat Special Products. We have given for overseas, Ohio 0.7 million production crude steel and the JSW Ispat we have given 0.77 lakh tons. This 1.4 million tons there are some slippages. In the JSW Ispat side we had taken shutdown almost close to four months for maintenance and general market conditions. Actually, there were slippages in the JSW Ispat. In Ohio also because of the market conditions, they could not achieve the targeted crude steel. If I take out these two, then the production guidance is 23.6 as against 25 on a consolidated basis. This 23.6 includes Bhushan Power & Steel. We have achieved 17.25 million tons so far for nine months. We will be able to achieve the balance in the Q4 and we will achieve our production guidance other than JSW Ispat and Ohio. Sales side out of 24 if I take out JSW Ispat and Ohio, our guidance is 22.6. We have achieved 15.51. We are working very hard to achieve even sales guidance by reducing our inventories. Our inventories are concerned during the current quarter it went up by around 180,000 tons. We have 2.039 million tons of inventory as against 3.5 million tons as on 31st March 2022. There's accumulation of inventory. There is large scope for reducing inventory. In addition to clearing whatever we are producing, our plan is to reduce the inventories because export tax also has gone. There is opportunity to export certain volumes from India by clearing our inventories. With that we are keeping our guidance even for sales to achieve 22.6 million tons. Okay. Okay. Understood. Thanks for the elaborate reply. Just then the last question. Could you also quantify the external, I don't know, sales and revenue booking you did in the quarter? We'll give you numbers separately. Okay. That's all from my side. Thank you. Thank you. We have the next question on the line of Ritesh Shah from Investec. Please go ahead. Mr. Shah, can you hear us? Sir, couple of questions. First is on the CapEx. Sir, can you highlight how does the PLI scheme fit in on the CapEx that we have indicated, and any color on what CapEx we should bake in for FY 25? No, in the PLI scheme, out of the nine projects which I talked about, three projects of CapEx is not committed. Those three projects are electrical steel majorly and one tinplate facility in Bhushan Power and Steel. These are the three projects which are not there. These three projects together constitute almost close to INR 9,000 crore. As we have been guiding, we have to take a call on this electrical steel. We are doing the feasibility study and in the next few months we will take the call on this projects. If I take out this INR 9,000 crore, the balance CapEx for the six projects total together is INR 5,350. As I mentioned, all these six projects are already part of our CapEx program, which includes 5 million ton of JVML projects which will be implemented at Vizianagaram. That includes certain special grades of which are coil covered under specialty steel. That is one. Similarly, some tinplate lines, some of the units where we are doing expansion in the wire rod side in Bhushan Power & Steel. These are the projects which are covered under these six heads. For this we are spending INR 5,350 as a part of overall CapEx program. That's helpful. Sir, my second question is more on spreads. Jayant sir indicated that the coking coal prices will remain flattish this quarter. I just wanted to get a sense because if we look at the spot trend line, it has been marching upwards one way to $325. Is it on back of low cost inventory that we have or is it we are optimizing the blend which would actually give us the benefit of flattish coking coal cost curve on a sequential basis? It's a combination of a better blend and, you know, usually the coking coal you have an inventory of 60- 70 days in the system. Therefore, whatever increases are now happening, which you see if it continues, will reflect in the Q1 of next year. Sure. That helps. Sir, a related question. You indicated on local pricing to move up 1st January, 15th January for few products. If we have to look at the benchmark HRC, are the local prices at premium to import parity math? From an import, parity perspective, if we were to see, I think we are by and large similar to the international offers now. International offers have also increased. Therefore, since international prices have gone up, we do see an opportunity for some increases in the domestic market, as we go along. We'll watch how the international prices move and then take a view. Perfect. Sir, last question I'll just squeeze in. Sir, how should one look at the profitability of domestic sales versus exports given the duties have been taken off? Yeah. The international, the export numbers, especially, the volume part will improve. The realizations as you are aware, because the international markets were weak, have been lower. Going forward, we see a much improved FOB realization as far as exports is concerned. Whatever impact was there, the double whammy, 1 was export duty and the lower export realization, both in this quarter we will see a positive uptrend. As far as domestic is concerned, I think we have seen an improvement in the month of January onwards. We see an opportunity for this quarter to be better than what we have seen in the last quarter. International and domestic at this point of time seem to be similarly poised. Sure. Perfect. Thank you so much for the answers. Wish Wish you good luck. Thank you. We have the next question from the line of Indrajit from CLSA. Please go ahead. Hi. Good evening. Thank you for the opportunity. Two questions. First, on the net debt movement, if you can quantify what was the working capital buildup during the quarter and year to date, and what kind of liquidation can we expect in fourth quarter? As far as the finished goods inventory, as I mentioned to you, is around six and a half, seven lakh tonnes. Which is estimated to be 4,200 crores. That is a kind of unwinding which can happen but may not happen fully, at least half a million. 75% of that there is a scope to happen in the Q4. Sure. Thank you. Also on the NRV loss that we have been recording for the past three quarters, as things stand today in terms of prices, if it were to continue for the full quarter, are we likely to see no NRV loss in 4th quarter, or would there be still some bit of NRV loss on accounting basis that we'll have? No, there is a 2 million ton inventory is there today that is higher cost because costs are coming down. In this quarter there may not be any increase in the cost. Therefore, when the opening inventory is sold, there could be some inventory loss, but it is not significant as we have seen in the past. Sure. Thank you so much. Thank you. We have the next question on the line of Pinakin Parekh from JP Morgan. Please go ahead. Sir, my first question is on net debt. INR 69,000 crores. Mr. Parekh, would you kindly go off the speaker phone? Your voice is breaking up on the call. Just looking at the net debt number, sir. INR 69,000 crore, it is a net debt to EBITDA is at 3.5 times. While it is below the company's stated cap of 3.75. Given that globally cost of capital is rising, liquidity is reducing, is the company comfortable with this kind of leverage on its balance sheet? We understand that there would be some working capital relief, but on an absolute basis. Even though we have been guiding 3.75, our effort is to bring it down significantly lower than 3.75. We have been working in that direction. This year is an aberration. That's why you have seen this kind of slippages in the overall EBITDA to debt. We are not comfortable at these levels. We'll bring it down as we have been mentioning. Out of the INR 69,500 crores, as I mentioned, FX fluctuation is INR 3,400 crores in this. Otherwise if I take it out, INR 66,000 crores is actual debt without FX fluctuation because that can be reversed. If I look at January rupee started appreciating. 66 versus 57 is INR 9,000 crores is an increase, actual increase in the debt. Out of that INR 4,000 crores is inventory alone. Therefore we should be able to manage the debt as on 31st March, 2023 at lower levels than what is there as on 31st December. Our aim is to bring it down even below 3.5. Sure, sir. My second question is on steel prices. If we look at the latest Chinese offers, they have gone to $640-$650 a ton. This implies landed steel prices, HRC at INR 61,000 a ton ± INR 1,000. Does the company see domestic prices rising to those levels eventually in the next 2-3 months? Or should domestic prices remain at a discount to the imported prices? I mean we understand the domestic HR is around INR 56,000-INR 57,000 a ton. I think domestic HR prices will reflect the change in international numbers. If you were to look at quarter two to quarter three, our realizations fell by INR 3,200, primarily in response to what has happened internationally. Prices went down by $40-$45 and that has been reflected in the Indian market as well. Since it has gone up, now we see the increase also now taking place in the domestic market. We are expecting that this will follow a similar pattern. Understood. Thank you very much, sir. Thank you. We have the next question on the line of Abhiram Iyer from Deutsche Bank. Please go ahead Yeah, hello. First of all, congrats on reversing the results from Q2. My question primarily concerned with, you know, a bit more clarification on the working capital reversal into the next quarter. Given that, you know, we're gonna see an inventory release, would we, could we expect the revenue acceptances to come down from the current levels of $2.3 billion? Could you please quantify how much that might be? That depends upon the coking coal price. Coking coal price, if it is $300, if we say six months usance we avail, it should be $1.8 billion-$1.9 billion. It will come down. $2.3 billion has to come down. The issue remains is what would be the coking coal price in future. Based on that this number goes on fluctuating. Therefore $2.3 billion today at the current prices more or less will remain at these levels. Got it. You mentioned, you know, 50%-75% maybe of the INR 4,000 crores. That's primarily down to reduction in the current inventory levels. Current inventory levels and corresponding amount, in the debt. Understood. Understood. Thanks a lot for the clarification, sir. Operator, can we move to the next question? Sure. We have the next question on the line of Rahul Jain from Systematix. Yeah, hello sir. Thanks for taking my question. Firstly on, we've seen a consistent, you know, weak performance at JSW Coated despite adding a lot of capacities there. When do we expect some kind of, you know, margin uptake and in the near term? JSW Coated performance below the expectation is attributable majorly to HR Coil inventories. Those inventory losses were taken by Coated. Now in this quarter, if I consolidate the coated including the VIL and VTL, in fact there is a positive EBITDA of INR 11 crores. We also have taken in the current quarter INR 105 crores NRV the inventory loss. If we take that 105, if it will not be there in future, then it is INR 161 crores EBITDA will come in for coated. The performance in Q4 will be much, much better in the case of coated. They not only commissioned their can line at Vasind, which I mentioned, and also tin plate in Tarapur, the second tin plate. All this will give more volumes for coated. Coated business, as you know, almost 35%-40% of coated production is intended for exports. Export duties really was a big dampener for coated business in the first five months of the year. That is May to November. Export duty is removed, export markets are looking better, so we'll be able to really push more volume and at the same time inventory losses are not there. Both together you will find definitely very good improvement in Q4 for coated. Yeah. True. Sir, how should we look at our volume build up over the next two years? Because I think now from the near term we just have volume from Dolvi, more higher capacity utilization and [VTCF], BPSL and Vijayanagar will come in FY 25. That is the right way to look at it? If you look including BPSL, including JSW Ispat, the total installed capacity fully operational by end of this financial year will be close to 27.5 or 28 million tons. You will find definitely a good volume growth which no other company would be able to give, at least in India. That we can expect. Over and above that, the downstream capacity also has become operational fully at Vasind, Tarapur, Kalmeshwar, Khopoli and also at Vijayanagar. Both we have rich product mix and at the same time volume growth. I think this is the story. Plus the cost saving projects like coke oven plant, power plants, pellet plants, wherever we have taken up, they all have been commissioned. Over and above that in the year 2024, FY 2024 if you look at it, the capacity will go up by another 9 million tons by end of this financial year. All this together I think very, very positive if you look at next two years. Right. Right. Right. Right. So we are going to maintain the product mix in the sales mix, like exports 20% and remaining domestic, we are going to keep it similar? As we have been saying, the export percentage will be 10%-25%. That is the range. Mm-hmm. During the first nine months it was 12% in this current financial year. In the, in a challenging time where export duty was there. It will be in this range even going forward at higher volumes also. Right. Okay, sir. Thank you so much. All the best. Thank you. Participants are requested to kindly restrict your questions to two per participant. Participants are requested to kindly restrict your questions to two per participant. We have the next question on the line of Bhavin Chheda from Edelweiss Holdings. Please go ahead. Yeah, good evening, sir. Good recovery in overall performance despite challenging environment. Two questions. First on India. iron ore I think, was 41% captive of standalone operations. how that number will go going forward in FY 2024? Any incremental mining volumes coming up? Yeah. We are now expanding our capacity in Orissa. We have applied for incremental increase in the environmental clearances. Some of them have come, some of them on the way. There will be more iron ore coming in from Orissa mines, therefore, this percentage will definitely go up. Any numbers, sir, in terms of million tons or, whatever number you can share? It will be in the range of around 50%. You'll eventually reach, around 50% by next year? Yes. Okay. Also international operations, we have seen, across Italy, U.S. and as well as plate mill profitability improving. Will this momentum continue as steel prices are also going up? U.S. is still into EBITDA losses, though the losses were lower on quarter-on-quarter basis at the Ohio operation. What's the outlook there? As far as the plate mill is concerned, it is doing well. As you have seen, even in this quarter $17.2 million they have made an EBITDA. For the nine months, Baytown has made an EBITDA of $75 million in this year. Whereas in Ohio majorly again attributable to inventory losses, even the $22.8 million EBITDA loss which they have posted in the Q3, out of that $15.5 million is attributable to inventory loss. Actual loss attributable to operating profits is only around $7 million. The Q4 we expect the things will be better than what they were in Q3. Sir, Italy would sustain this kind of run rate? The Italian, you know, we have got the Italian rail orders, and the first tranche has come to us, which will basically be running till almost April, May. We also have very good export orders. With that we see the Italian operations run very smoothly between now to almost June. The second tranche of the Italian rail order should also be received subject to certain, you know, contractual requirements which we need to fulfill. That also should be there with us in the coming financial year. Italian operations look to be good, supported by the rail business, both from Italy and from the international market. Oh, thank you. Thank you. We have the next question in line of Shubham Shukla from Voyager Capital. Please go ahead. Hi, everyone. Good evening. My question is around capacity and utilization. Currently, we're having production capacity of 28 million tons per annum, and we are growing to 38 million tons. We had a utilization of 89% in financial year 2022. Like, what's our utilization for this quarter and for the whole, like, financial year 2022 and 2023, both on consolidated basis and standalone? For, like, next financial year with enhanced capacity we see and given the current inventory stress we have now. Inventory stress is very temporary, as I mentioned to you, because of the export volumes from the downstream falling. That was the reason why inventory got accumulated. I think we should be able to clear it very quickly. As far as the future, particularly Q4, the capacity utilization in BPSL was 85%, which improved from 72% in the Q2. There is a scope for improving the capacity utilization on a higher installed capacity. Their volumes will increase. Second, the Dolvi unit is concerned, further ramp-up is possible. We were at 92.5% on an average basis. All the three units together, Salem, Dolvi and Vijayanagar. There could be a possibility of increase in the capacity utilization in all these three locations. Okay. Thank you, sir. My next question will be around the remarks which you gave earlier on, like, coking coal purchase. Like, we don't need them for Vizianagaram facility for Q4, like, for the coming few quarters. For the next few quarters, we don't need coke at Vizianagaram. Even if small quantities are required, there is surplus at Dolvi, so we'll be able to meet without buying from third parties. Okay, sir. Thank you so much. Thank you. We have the next question from the line of Prashanth Kota from Emkay Global. Please go ahead. Hello, sir. Good evening, and thanks for the opportunity. Sir, I have actually only one question, two parts. No, no second question. Just more strategic in nature. If you look at the last 15, 20 years, if you have observing JSW Steel and also the other companies in other sectors in India specifically, there are 6- 7 main attributes that JSW has that, you know, promoter perseverance and passion for steel, capital allocation efficiency, nimble-footed sales strategy, manufacturing and operational excellence, and doing things at large scale, and India at heart and business in mind. With these attributes, if anybody else was doing, any other company you look at in India, the market caps are INR 3 to 10 lakh crore. If you look at what is happening to us, as an outsider when you observe, two things, sir. One is, we have not been given a level playing field on the iron ore sites last when 15, 20 years. That is we'll have to buy while others get it for very low cost. We'll have to buy it at 100% premium in auctions while others get it at very low cost. Now, have we registered this as a grievance to the existing authorities of the China, the honorable, the government dignitaries? Prashanth, if I can interrupt, your line is not very clear. Could you ask your question, please? Hello sir. Sorry. Sir, if you look at, am I clear now? Yeah. Could just ask your question, please? Yeah. Sure. Thanks, Ashwin. Sir, if you look at the JSW's performance and track record over the last 15, 20 years, and the key attributes of, you know, of JSW, for example, promoter passion for steel and perseverance, capital allocation efficiency, manufacturing excellence, and a nimble-footed sales strategy, and doing things at scale, and having India in heart and business in the mind. With these seven attributes, any other sector if you see large companies today are, you know, INR 3 lakh crore to INR 10 lakh crore market cap. For in our case, there have been one big setback that we have had is the lack of iron ore access despite putting up so much capacity. How it is, they're inviting companies to come and put capacity and giving them money, you know, PLI, whatever. Land resources for free. We have never got that opportunity. Sir, have we registered this as a grievance with existing authorities who are more considerate? Existing, you know, government functionaries and dignitaries. Whatever has happened has happened earlier. This government has changed the law. Under MMDR Act today the resources can be given only through auction. In my view, it is a very good thing which has happened. We got at least some mines in the auction that made us to survive in the year 2020-2021 by mining in Orissa. Today for us or for any new player, they have to participate in the auctions to get captive iron ore. That we'll continue to do and we increase our captive iron ore in future. Related to that, in the raw tech, whenever that is put in place, shouldn't royalty on iron ore be given a credit and also the premiums, actually, to be honest, to be fair? To have a level playing field for all the companies. As you know, the concept of RoDTEP is to be WTO compliant as giving the refund of the duties and taxes where the manufacturer is not getting the set off. That is the concept. Based on which they have to fix the quantum of refunds that could be given. As on date, particularly the carbon steel sector, there is no RoDTEP. We have been requesting to provide adequate amounts in the budget, thereby steel sector can be accommodated to get the RoDTEP, which is very, very important. Whether an X item is to be included here for refund purposes or not, it depends upon whether you are looking the set off. As a non-modifiable tax, if it is there, it will form part of the consideration by the government. Thank you. We have the next question on the line of Alok Deora from Motilal Oswal. Please go ahead. Good evening, sir. Sir, most of the questions have been answered. Actually I missed one question in between because also I got disconnected. This sale, saleable steel, our guidance for this year, if you could just reiterate because earlier we had about sales of around 24 million tons. For this year, what's the number we are looking at now, considering the nine months, you know, sales levels? We answered that question. If we exclude JSW Ispat and Ohio, what our guidance we have given both for production and sales, we'll stick to that. Alok, you can call us after the call. Sure. The question was answered extensively. We'll be happy to explain. No problem. No problem. Thank you. Thank you. Call us after the call. Sure. Operator, you can take the next question. Sure. Thank you. We have the next question on the line of Ashish Jain from Macquarie. Please go ahead. Hi, sir. Good evening. Sir, I just one question. You know, on the global, steel supply side, what is the observation? Are we seeing production ramping up, you know, across some of the key exporting nations like Japan, Korea and all? What is your, you know, assessment of how supplies could ramp up globally? In the last year, if you see the global steel production has corrected downwards, and the demand correction in the last year was more than that. In this year as well, we see the production to be impacted in many parts of the world. Certain countries like India will show a positive growth, but you will see other countries showing a muted growth by virtue of the various headwinds which economically we are facing in the world. As far as exports from China is concerned and the local domestic demand, I think China may see an upside in terms of local consumption and local demand in the second half of this year with economy opening up. That should be positive for the world as well. The exports from China have been range bound, and they have been controlling it in the range of 4-5 million tons. We don't see that increasing from China internationally. The next year on the supply demand side, I think the situation is positively poised from the supply side slightly weaker and demand should be range bound to slightly lower. Yeah. Basically, you think that it could tighten further in 2023? Sir, just on Chinese exports. Sorry. I could hear that. What will tighten, you said? Supply. No, the demand supply balance, I mean to say. The demand supply balance overall, could tighten in 2023 further is what is implied. Yes, because of economic headwinds in many parts of the world, there would be a supply demand tightening which could happen except for some countries like India and China having a better kind of a performance in H2 domestically. Great. Thank you so much, sir. Thanks a lot, sir. Yeah. Thank you. We have the next question from the line of Noel Vaz from Union. Please go ahead. My question has been answered. Thank you. Thank you. That was the last question. I would now like to hand it over to the management for closing comments. Thank you. The way I think Jayant has answered, with regard to the calendar year 2023 is concerned, if we look at 2022, there is a 80 million tons lower steel production in the world. When 80 million tons lower production is there, automatically lower demand for iron ore, lower demand for coking coal. There should not be any reason why these prices are going up. That's why Chinese have made a statement saying that iron ore prices are completely speculative in nature if you look at demand supply scenario. Same is applicable for coking coal. If you look at 2023 calendar year, the production is not going to be higher than what we have seen in the year 2022. Even in China, assuming that it gets opened up, Chinese policy is more consumption-led growth than investment-led growth. Therefore, steel demand may not be substantially increasing in China. Further, their property market related issues are structural in nature, so it will take time for them to recover. Therefore, overall supply side for steel are still constrained. Europe is not doing well. There, in that context, if you look at supply side is constrained and the demand side, particularly India story, if you look at it looks very, very attractive for next year. Capacities are only 154 million ton other than NMDC's 3 million ton. We are not seeing any big supply in India. At the same time, the incremental demand is expected to be around 10 million ton. Short term, if you look at it as a Q4 is concerned from JSW Steel point of view, is that, there will be better volumes and there will be reduction in inventory. Costs will be under control because coking coal increases are not impacting in this quarter. Margins will be better for the Q4. Thank you. Thank you, ladies and gentlemen, and please contact us separately if you have more questions. Back to you, operator. Thank you. On behalf of JSW Steel Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.