Ladies and gentlemen, good day, and welcome to Steel Authority of India Q2 FY25 Earnings Conference Call hosted by Nuvama Institutional Equities. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kejriwal from Nuvama Institutional Equities. Thank you, and over to you, sir. Thank you, Yusuf. Good afternoon, everyone. On behalf of Nuvama Institutional Equities, we welcome you all for Q2 FY25 conference call of Steel Authority of India. We are delighted to have Mr. Anil Tulsiani, Director of Finance, along with his team for this call, and I would like to thank the management for giving us an opportunity to host this call. Now, I will request Mr. Tulsiani for his opening remark, and thereafter, we will open the floor for Q&A. Over to you, sir. Thank you, Mr. Ashish. Good afternoon, everyone. I welcome all our investors and analysts who are joining this results conference for the financial results of SAIL for the period Q2 and H1 financial year 2025. Though I am sure most of you would have already seen the results on the websites of the company and stock exchanges, I would briefly run through the same for the benefit of the house. First, I will deliberate on the world economic scenarios. The global economy has been reeling under the impact of several factors like high inflation and consequent monetary tightening policies to counter the same rising geographical, political uncertainties, supply chain disruption, etc. The scenario has, however, been showing a gradual improvement with headline inflation moderating, leading to rate cuts by major central banks. While this will support growth, economies need to watch out for downside risks like resurgence of monetary volatility and deeper slowdown in China. These have led to revisions in the projections for global economic growth. IMF, in the World Economic Outlook released during October 24, has retained the projections for 2024 at 3.2%, but the same has been revised downwards to 3.2% during 2025 from earlier projections of 3.3%. The projections for emerging and developing economies are set to decline in 2024 and 2025 to 4.2% as compared to the estimates for 2023 at 4.4%. On the other hand, the advanced economies see a marginal improvement in the projections for the two years at 1.8% compared to estimates for 2023 at 1.7%. Now, coming to the Indian economy, the Indian economy has also been impacted on global cues, with the GDP growth for Q1 FY25 being estimated at 6.7%, down from 8.2% achieved during similar periods during FY24. However, bolstered by the strength of policy frameworks and increasing demand, it continues to fare much better than its counterparts. India has countered the forces of inflation better than the other economies, thereby maintaining relative stability in the domestic market. The sustained momentum in manufacturing and services, high frequency of investment activity, government continued thrust of infrastructure development, expansion in steel consumption, improved prospects in private consumption have all pointed to a robust outlook. The projections by major agencies like RBI, World Bank, IMF, etc., the economy is poised to grow between 6.5% to 7.3% over the next two years, helping it maintain its position as one of the fastest growing among the major economies. Coming to the world steel scenario, the slowdown in China, which is the biggest producer and consumer of steel, has led to a major impact on the performance of the global steel industry. The demand for steel in China has been particularly impacted as investment in the real estate sector has been consistently coming down. The demand for steel is estimated to be 3.3% lower in 2023 than previous year and expected to remain negative at 3% in 2024 and 1% in 2025. Meanwhile, the production in the country has also come down by 3.6% during the end of September 2024 over CPLY. The surge of exports from China has dented the international prices in a big way, and the performance of the industry in general and steel in particular has been impacted significantly on the back of international price trends. The developed world is projected to experience a 2% decrease in steel demand in 2024 as major steel using economies like the U.S., Japan, Korea, and Germany face significant declines. At the same time, the demand growth for steel in the European Union also remains a big challenge. The demand is set to decline by around 5% in 2024 and by 0.7% in 2025. The overall growth in demand for the world is poised to remain negative by 0.9% in 2024 before turning positive at 1.2% during 2025, respectively, as countries like India, Germany, Brazil, the U.S., and Japan will drive the growth. Coming to the Indian steel industry, despite all challenges, including the softening of the steel prices, the Indian steel industry has consistently been growing in terms of production as well as consumption. During H125 as well, crude steel production has grown by 3.6% over CPLY. At the same time, finished steel consumption has grown by 13.5% during the period over CPLY. As per WSA, India has emerged as the strongest driver of demand for steel since 2021 and projected to grow at more than 8% during 2024 and 2025. Indian steel demand will continue to charge ahead driven by the continued growth in all steel using sectors and especially by continued strong growth in infrastructure investment. The top line and bottom line for Indian producers have been impacted as the prices declined consistently till August 2024. As there have been signs of prices strengthening, especially for long products, especially after the monsoon season, the industry is hopeful of better results in the coming quarters. With the prices of imported coal also remaining in check, the industry can also heave a sigh of relief on the cost front. Now, coming to the performance of the company for the half year, the performance of the company during H125 stands as follows. The crude steel production is at 9.457 million tons, which is similar to CPLY of 9.47 million tons. Saleable steel sales volume at 8.108 million tons registered a decline of 6.3% over CPLY of 8.651 million tons. The percentage decline in the domestic sales has been lower at 4.5% to stand at 8.063 MTs. With the NSR declining by around 5%, the turnover fell by nearly 10% over CPLY to stand at INR 48,262 crores. On the profitability front, the company registered an EBITDA of INR 5,593 crores, EBITDA of INR 1,127 crores, and PAC of INR 844 crores. With the concerns of rising borrowings, we are happy to share that the borrowing stands at a similar level as compared to Q1 financial year 2025. Borrowing at the end of Q2 financial year 2025 stood at INR 35,596 crores. In fact, the borrowing during August peaked to INR 39,153 crores, and since then, it has been reduced by almost 5,000 crores, and it stands at INR 34,224 crores at the end of October 2024. In the area of operational efficiency, the company has been making steady progress for reducing coal coke consumption, increasing the use of PVF, bringing down the specific energy consumption, and improving grid productivity. We are undertaking various drives towards decarbonization in three phases, with the first phase having brought down the specific CO2 consumption by almost 20%. The company is now gearing up to bring it down by 12% to 2.1 tons per ton of crude steel by financial year 2030-31. Continuing with the drive towards improving the product mix, the proportion of semis in saleable steel production stood at around 16%. By engaging convergence services in and around the plant, demand sectors, the percentage share of semis in sales has been lower at 9%. Order for a Bar Mill of 1 MTPA capacity at Durgapur Steel Plant has been placed, which will further reduce the percentage of semis. Going forward, the boost from the various measures being taken by government on infrastructure spending bodes well for steel demand in the country. With the overall outlook positive for the sustained growth in domestic consumption, we are hopeful of the realization and consequently the margin will improve for the company in the quarters to come. With these words, I hand back to Mr. Kejriwal for opening the Q&A session. I'm sure you all have lots of queries on the performance. 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 their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Amit Dixit from ICICI Securities. Please proceed. Yeah, hi. Good Good afternoon, everyone, and thanks for the opportunity. I have two questions. The first one is around the rail price provision and the benefit of 1637 lakh crores growth that has been recognized in this quarter for a prior period. So I just wanted to understand what is the quantum of FY23 towards rail price revision still left? And is there something for FY24, if you can quantify it? And when do we expect to get the money for this? Yes, this rail price increase, whatever is there, it is based on, see, there's a system wherein we have normally the railways give us an ad hoc price for the rails for a particular financial year. Subsequently, the cost is finalized by the CA Cost. And after that, based on that, we put up the recommendation of CA Cost for a discussion with the railways. So this is for 2022-23, where earlier our ad hoc price was around INR 75,000, and the CA Cost is revised to be around INR 89,000. And the benefit of this is around INR 40,000 per ton. Now, in this particular quarter, we'll be submitting the cost for 2023-24 also to CA Cost. And probably by the end of this financial year, we'll be able to assess what will be the pricing for the rails for 2023-24. Now, I think I answered both your questions. So just a little bit of clarification now. For FY23, there's a difference of INR 14,000. We have already recognized 1637 lakh crores. So how much is remaining now to be recognized for FY23? Yeah, no, for FY23, there will not be anything. There will be a couple of rounds of talks with the railways. And if this price is agreed to, then we'll raise the invoices in line with this on the railways. When do we expect the cash inflow to happen? It should happen probably from the end of this quarter, and it will continue in the next quarter, the fourth quarter also. This will also reduce it. Pardon? Will reduce my? This will also reduce your leverage that is taking. Sure, sure. It will reduce it. Okay. The second question is around coking coal. So is it possible to let us know what kind of coking coal reduction we saw in Q2, and what do we expect to see in Q3? Also, if you could highlight the realization uptick that we might see in Q3 based on the price increases taken so far. In Q2, the pricing or the imported coal price, which we had, was at around about in the range of around about INR 22,000. Okay. And if you see that in Q1, it was around INR 24,000. So the average is coming to around about INR 23,000 for H1. This is the thing. And going ahead, we have got a projection of around about, it is working out to around about INR 20,000 in the month of October and November. But again, in the month of December, there may be a slight upward increase because the Platts and Argus indexes have increased a bit during these two months. Okay. What about realization, sir? Realization, you want to know about the period of October and November? Yeah. October and November, the average realization has been in October, it was lower at around about 48,000 odd. And in the month of November, it is around about 49,500. It is mainly increased in November because of this thing, because of long products. Flat products still remain the challenge. Okay, and how does it compare on average with the realization in Q2? With Q2, the realization was around INR 50,500 on the overall basis, and H1, it was INR 52,000. Got it, sir. Thank you so much and all the best. Thank you. Thank you. Next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, Gurathan, sir. Thank you for the chance. So my first question is on our sales volume. We've seen a very significant decline. And if we compare with all the peers and industry which has reported, our performance is much worse. So what is the likely reason for this? Any reason why we are losing market share versus peers as well? Yeah, actually, there has been a decline. Because basically, I'll just give you the data for that. There has been a decline of around 5.2% in the home sales. Because of, see, what has happened is that due to the lower exports from the country, more of the product has come into the market. So that has had an impact on our sales also. But if you really see, in Q2, we have improved over the Q1. In Q1, we had sales of around 4.01 million tons. And in Q2, it has become 4.10. The impact is basically we have not been able to export much material. So that has also had an impact on our overall sales quantity. But in the month of October, I would just like to tell you that in the month of October, we have been able to sell quite a lot, quite a lot of quantity. And this has helped us reduce our stock by around one lakh tons. So the sales during the month of October has been 1.648. So if we actually take it as a going ahead for the entire quarter, it could end up to around 5 million tons. Understood, and sir, in previous question, you answered NSR. Was it blended or was it only long or any particular? I gave you the blended price. Okay. So roughly, we are looking at maybe around 1,500-2,000 drop in 3Q. And on the cost side, you shared coking coal for October, November. But given the inventory lag, what sort of cost reduction we are looking in 3Q from coking coal front? coking coal front, we expect a drop. See, because already I mentioned to you that in Q1, it was in Q2, it is INR 21,681. Now we are getting it at around about INR 20,000. If we continue, I think we should get the benefit of the lower coal prices in the month of September and October. We'll surely get it in the month of November also for our consumption. It should be in the range of around INR 20,000. There should be a benefit of around, you can say, INR 1,600 or INR 1,700 on Q2 prices. On H1, if you see, it will be around about INR 2,000 odd, INR 2,000. Understood. Got it. So my second question is on the balance sheet. Our net debt, I mean, we've not started any growth CapEx, but our net debt has been on the rise over the last two, three years. What sort of annual CapEx are we looking at this year, next year, and when do we start the growth CapEx for the new expansion? So this year, we have actually projected to the ministry of around about 6,000-odd growth of CapEx. But next year, of course, it will go because many of our major CapEx will be freezing most of our contracts for our IISCO modernization also. And also some of the major projects which we have taken up, like the blast furnace of revamping of the blast furnace of Durgapur and the bar mill at Durgapur. So the major expenditure for this will start coming in from next year onward. So next year, I'm not able to predict the exact figure to you, but it should be surely more than what it is for this particular tranche. Got it. Sir, if I can just squeeze in one more. For the last few years, we've just been able to sell around two to 2.5 million tons of iron ore, and we are holding around 40 million tons of iron ore inventory, which we have basically recording in the balance sheet at around 4,000 odd crores. Sir, I mean, what are we looking practically over the next one, two years, and are we looking to write it off? Because this is unnecessarily inflating our book value and impacting our return ratios. There is no question of writing it off. Actually, it's an asset which we have got, and this is an asset which is not just which was it came into our books here around about three years ago. But it is an asset which is there, which I don't know, fines are not going to diminish in value since we are lying out there for another three years. Because we have stocks which can say are more than 40-50 years old also. So they were just valued around three years ago. And yes, we have a plan of reducing these stocks. We have already got our pellet plant and beneficiation plant at Gua in the pipeline. Once that comes in, there will be a depletion of around about 3 to 3.5 million tons of iron ore from Gua, which is the main place where the majority of the stock is there. Now we have got permission also to dispatch from there to our steel plant also. We are gradually dispatching material from there to our steel plant. Understood. So thank you and all the best, sir. Thank you. Thank you. Next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah, hi. Thank you. So just on rails, notional price booking, just wanted to understand generally how do you do it? Typically, let's say if pricing is going up, is it also possible in that phase that there is overbooking of rails realization, and then there is, let's say, some write-back that happens later? Is that also possible, or you always book it on a conservative basis? Actually, what happens is we have got a system of railway budgeting. Normally, at the beginning of the year, the railways normally tell us that there's a particular ad hoc price for a particular year. So we consider that for raising our invoices on that. Subsequently, we take up immediately because that is based on some historical data. Then we pick up with the railways that the prices have gone up or there are indications of the prices and the cost going up, and we request the railways to give us an ad hoc price. So once the revised ad hoc price is given, we do the accounting on that, invoicing as well as accounting on that. Subsequently, we submit our details to the CA Cost organization. So once the CA Cost finalizes the prices for us, they submit it to the railways. Now, based on whatever prices have been finalized by the CA Cost, we have discussions with the railways. So when we have discussions with the railways, so there are some sort of negotiations with them. And normally, you can see some certain percentage of prices they request for a reduction, which we negotiate and we finally come to a final price. So that is the final price for a particular year. So this is the basis on which we work. So basically, at each and every step, whatever is the price available with us, we do our accounting on that. Understood. So also, to understand, let's say the notional price, that ad hoc price that railways would have shared with you, let's say that price is actually higher than the current market trends. So would you kind of then advise the railways about it and accordingly book the realization at a lower price? I'm not sure. Normally, what happens is, for example, we just give the railways that our price is going to be, say, X figure. So railways are also a bit conservative. Normally, on that, they'll reduce another INR 5,000 or something like that and give it to us as an ad hoc price. They will not give us that exact price. So then once the CA Cost finalizes it, then we get the benefit of that. So the bottom line, it is always lower than the real market price, and there is always a higher recovery that comes in the subsequent. Yeah, yeah, yeah. Except when the final pricing negotiation goes on with the railways. So at that point of time, we normally have a reduction in that. So that, then we take it into the particular quarter where the impact comes in, where we finalize it. The final price that is decided, is it a cost-plus mechanism, or is it simply linked to how, let's say, the historical prices have been? No, no, no. It's cost-plus. Absolutely. CA cost, Chief Adviser Cost, is the agency who actually takes all the cost details from us. And based on that, the pricing of the rails is arranged. So it's a fixed margin business in a way, is it? Yes, yes. It's a fixed margin. Understood. And the receivables, again, would be subject to railway budgets, right? I mean, how good the budgets are, if the budgets are. Yeah. Actually, normally what happens is Railways, we haven't faced much of a challenge for budgets from the Railways because ours is a very small portion of the entire railway budget. But there were some challenges in the year 2019, 2020, and 2021, when the budgets were exhausted. So then they gave us the extra budgetary support in the beginning of the financial year 2021. Understood. Thank you. And also, lastly, could you also refresh about the CapEx plans for this year and next year? This year, like I told you, that we'll be having a CapEx of around about 6,000 crores, around 6,000 crores. Though initially, we had estimated in our budget estimates for 2024, 2025, 6,300 crores. So we expect that it should be around about 6,000 crores. We have spent how much? I can just give you the figure. We have already spent around about 2,250 odd crores in the H1 period. And normally, the CapEx picks up when we join the second half. Sure. Sure. Understood, and the big picture of CapEx program will mostly start from FY 27, the expansion budget? Not FY 25. I think the major expenditures will start coming in from 26, 27. 25, 26, we may. We will have these initial advances which we have to give. And for the drawings and engineerings and all these things, we will have to give some money for that. And some expenditure, which I had also told you earlier, that we have already placed orders for some of the major packages. So like the bar mill at Durgapur and the blast furnace also at Durgapur. And also a stamp charging battery for Rourkela. So some progress payments will start coming in from next year onwards, 25, 26 also. Sure. Understood. Thank you very much. Thank you. Next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead. Mr. Kirtan, your line is unmuted. Please proceed. Am I audible now? Yes. Please go ahead. Yeah. Thanks for this opportunity. This quarter, we are seeing an increment in the structural steel production to 16% from historical trend of 8%-9%. What has helped to increase the structural steel production this quarter? Actually, what has happened is that we have got two major new mills. One is an MSM at Durgapur Steel Plant, and the other one is the medium structural mill. And then we have the universal structural mill in IISCO. So these mills have now stabilized, and the products have now also been accepted in the market. So because of that, there has been a quite good increase in the volumes of sales of these products. But in terms of the profitability, when we look at around INR 3,100 per ton, this has still not sort of fed into the profitability. So what would be the reason that despite increasing structural steel production, we are not seeing the corresponding increase in the profits? The profit means see, basically what has happened is that the price of flat has not gone up during these flat products have not gone up during this quarter. So this is a major challenge which is there. Actually, as long as this comes in, which also includes the structural, the improvement in prices is there. And further in the month of October also, we see a further improvement in prices forming over the prices of long products. Typically, this structural product from MSM and the USM, how much additional realization it will generate over the benchmark indicator? See, what happens is now, see, we have got basically these two major mills which are there from which we'll be trying to market the products. There will be some mills where we'll be gradually phasing it out. Like we have a section mill in Durgapur. So the products from that will be gradually phased out over the years. So we can say that whatever indication of the pricing is there, it is of these major mills only. Thanks. Another question in terms of when we look at the saleable steel in Q1, it was around 4.2 million ton against the crude steel production of 4.7 million ton. That has changed to 4.6 million ton during this quarter versus crude steel production of around 4.8 million ton. What was the reason for lower saleable steel availability during Q1? Yeah. We will just tell you what has happened is our hot strip mill at Bokaro, it was under major maintenance. It was, of course, a planned maintenance during Q1. So that is why there is a difference of the saleable steel and crude steel. And what is the reason for increasing the semis proportion to around 16% this quarter, which was sort of trending down to 13%-14% in the earlier quarter? It could be similar to thing because see what is happening is we have produced flats which are also considered as semis. So that production has actually changed this ratio to some extent. Flats for this Bokaro where we were not able to take HRCs. We were not able to produce the finished products. Understood. So in terms of the expansion projects that we are undertaking at IISCO in Durgapur, what stage of approval we are in at this point of time? Actually, the Durgapur Steel Plant, yesterday in the board meeting, the board has considered the proposal of brownfield expansion of Durgapur Steel Plant also. So we have now the stage two approval to go ahead with the call? We don't have stage two approval. See, we have stage one. We will be having the stage one approval for this brownfield expansion of Durgapur, and we already have the stage one approval for IISCO Steel Plant also. Right. And how far we are from the stage two approval now? Stage two for Durgapur should take another, you can say, eight months or something, six to eight months because we'll immediately start on the tendering and then come back to the board for the stage two approval. In case of IISCO Steel Plant, already out of the major technical packages, I think out of 14 major technical packages, I'm not sure of the figure, but it should be 14, or out of it, already eight packages we have tendered out. We'll start getting the offers now and evaluate it. Probably by middle of next year, we'll be able to freeze that also. Right. So probably the CapEx spend will start after, basically, in the second half of the next year once we get the stage two approval. That is what I had already explained earlier also. That maybe the initial payments, like upfront payments against some milestone payments will be made next year, so 2025, 2026 by the end. Some progress payments of already the projects which are already for which we have placed orders, like the stamp charged battery and the mills and the blast furnace at Durgapur, they will start in 2025, 2026. Thank you, sir, for this detailed clarification. Thank you. Thank you. Next question is from the line of Pallav Agarwal from Antique Stock Broking. Please proceed. Good afternoon, sir. I had a question on the segmental data. So if I look at the segment assets and liabilities for this quarter, it's sharply lower than previous quarters across all plants. So has there been some reclassification, or is there some error in reporting these numbers? Yeah. Pallav ji, this is Amit. Actually, yes, you've noted it correctly. There has been some inadvertent error while reporting those numbers. We've already taken action against that. And the revised numbers will shortly be put up on the website. Maybe you can refer to the Q2 numbers that are H1 numbers that are being displayed there. These are the numbers which will hold true for Q2 as well. Okay. At least in terms of the assets liabilities, that should be the same. Okay. So the other question was on the coal cost that you mentioned of INR 20,000 that you expect. So this is mainly imported coal, or this is a mix of both imported and domestic coal? No, this is imported coal. What would be the mix right now of imported and domestic coal? See, basically, we are having 85% mixed, 85% is imported coal, and 15% is indigenous coal. And how would the domestic coal? Indigenous or domestic coal, it's in the range of around, but it is also linked with the imported coal prices, and it will be in the range of around about INR 13,000-INR 13,500. Sure, sir. So lastly, so what are the utilization levels that you're operating at in terms of crude and saleable steel? Because if I remember, we had some, I think, debottlenecking at Bhilai Bokaro or something that was planned. So are we operating close to optimum capacity right now, or is there some headroom still available? No. Actually, we are basically operating at a very good capacity. So we'll be having an annualized crude steel production of around 19.2 million tons. So this is more or less, I think, it will be more than 95% of our capacity. Okay. So unless we go for the next phase of expansion, volume growth may not really happen in a material way? It's not like that. Actually, we have got some of our debottlenecking schemes also, which will be coming up now. And we are trying to shed our assets also so that they go up by, means another 2.5-3 million tons are added during these coming two to three years. Sure, sir. Okay. Yeah. Thank you, sir. Thank you. Next question is from the line of Raashi Chopra from Citigroup. Please go ahead. Thank you. Just on the NSR, you mentioned that the average was about 50,500 in this quarter. Could you split it up for flats and longs, please? Yeah. For this quarter, the longs will be around 52,000, and the flats will be around about 49,000. On a spot basis, what is the breakup? There are flats and there are longs? In the month of October, for the flat, it was around INR 46,500-47,000. Long, sorry. For the long, it was INR 52,500-53,000. This is October and November, as you speak? November, slight marginal improvement. Sorry. Marginal improvement in both the cases. Okay. Thank you. Then on the volume side, how much finished steel inventory do you have as of the end of the quarter? Come again? I didn't get your question. The finished steel inventory, which was about 1.84 million as of June, the end of the June quarter, what is that standard as of September? It's at 1.93. What sales volume are you targeting for the full year now, for 2025? Around 18, you can say. Just lastly on your last question, on the growth plan, are you maintaining that the 35 million ton target by FY31? Yes, yes. We are still maintaining, and we are moving in line with that. Okay. So as of now, its sweating capacity is by about 3 million tons. You have IISCO at 4 million tons, Bokaro at about 2.5, and Durgapur about 1. And then we have got Rourkela Steel Plant, which will also be coming in. So that is also there, around 3.8 million tons. When is this expected? We are waiting for some clearances of land. So once those clearances of land come in place, so then after that, we'll take up this expansion plan. But then it is planned within by 31. Got it. Okay. Thank you. Thank you. Next question is from the line of Rahul Gupta from Morgan Stanley. Please proceed. Yeah. Hi. Thank you for taking my questions. A couple of questions. First, just taking forward this expansion pipeline. I remember you talked about Bokaro expansion as well of 2.4 million ton. Any update on what's happening on its approval? Durgapur, you got first round of approval, but any update on Bokaro? Bokaro will be actually, a pre-assignment has already been made for Bokaro Steel Plant. And the final DPR, it has already been prepared, but it is under examination. Got it. Another question that I have is on coking coal. I remember last quarter, you talked about some long-term coking coal contracts booked, which would have run off by December or January. What's the update on that? The reason I ask this question is because you talked about international coking coal prices coming off by INR 1,600-INR 1,700 quarter on quarter. Just trying to weave both the data over here. See, basically, these long-term agreements, we have a system of having a long-term agreement for three years, which is extendable by another two years. So the majority of these are now in the year 2024, 2025, they'll be coming to an end. But then we'll be continuing these contracts with these long-term suppliers. And the pricing, of course, see, the pricing is very clear that it is a percentage or discount or a premium on the flat and long industry. So that will be negotiated. This is normally negotiated by all the steel companies during normally for the next financial year, just in the quarter prior to the beginning of the financial year. So that is what we are doing. Regarding these agreements, already we have taken up with all the suppliers to finalize these agreements, which are mainly the commercial terms, which will be finalized before we go in for these negotiations with the suppliers regarding the quantities and the rates, which will take place in the month of February. Okay. Got it. So just trying to understand this better. So when you had done this contract earlier this year, so where are prices now versus the contracted prices then? See, as I explained to you, all our prices are based on the indicators. Okay. So whatever is the price which is, suppose I have a supplier from whom I have negotiated and taken an X% discount. So this X% discount prevails for throughout the year based on, and the base of that is the Platts and Argus indices. Got it. Thank you so much. Thank you. Next question is from the line of Pratim Roy from B&K Securities. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. I have just one or two questions. Firstly, I just want to know how much more realization benefit we can expect in the second half. That is the first question. And the second question is that what kind of cost reduction we can expect in the next two to three years? As coking coal prices are flattening and there is no major catch-up in the pipeline, so how much cost we can expect to put down in next two to three years? These are the two questions. Thank you. Yeah. Regarding the pricing of rail, the system which normally is there is now, see, CA Cost has submitted its pricing to the Railways for 2022, 2023. Now, 2023, 2024, rail pricing has to be submitted by CA Cost to the Railways. So for that, the Railways have to submit a request to the CA Cost to finalize the pricing. So that we are now following up with the Railways to request the CA Cost to start that activity. Once that activity starts, we submit the details to the CA Cost, and then normally they finalize it within two to three months' time. So this is the pricing we finance. So if the CA Cost is able to indicate the pricing for 2023, 2024 within, say, 31st March 2025, then we'll be taking the benefit of that in 2024, 2025, as it will get carried over to the next year. Again, how we can expect any other benefit? Regarding the debt reduction, from today's level, it's around about 34,500. We are planning a reduction of around about another 4,500 to 5,400 in the remaining part of this financial year, provided the marketing support us. In this financial year, we are expecting that 5,000 or so, and that will be used. INR 34,500-5,000 from today's level. So you can say it should be in the range of INR 29,000 crores, INR 29,000-30,000 crores by the end of this financial year, right? Yeah. Yeah. Okay. Thank you so much. Wish you the best. Thank you. Next question is from the line of Vikash Singh from PhillipCapital. Please proceed. Good afternoon, sir. And thank you for the opportunity. So now that we have also decided to grow the Durgapur plant as well, just wanted to understand with IISCO and Durgapur already the finalization happened, what is the peak level of debt which we will be comfortable with? Because as you see that our interest cost is very high and we are very susceptible to the EBITDA levels. See, we have planned our entire expansion considering a debt-to-equity ratio of 1:1. So in that, the maximum debt I think we will reach is this will be at around INR 1 lakh crore. The debt equity just one second. Please hold on. The debt will be in the year it will maximize at INR 20,000 crore in the financial year 2029. And the debt-equity ratio at that point of time will be around 1.1. Understood, sir. And just, sir, any update on our raw material pellet plant site if you could like to give? See, pellet plant, there are quite a few pellet plants in the offing. Some are coming on firm basis. Construct, own, and manage, and maintain. So construct, operate, and maintain. So this one plant is coming up at Durgapur of one million ton. Then we are having another plant which is coming up at Rourkela Steel Plant. So this will also be there of around about two million ton. And then we have one large plant which we are planning to set up at Gua Mines. So this plant also is basically a four million ton pellet plant which we are planning out there. So this is also some jobs have already been started by our consultant to prepare the final DPR for this. And besides that, for IISCO and Durgapur pellet facility, we will also be having a firm plant out there. Understood. Sir, just one last question. Though we have heard about the one lakh crore CapEx number, as of now, we only understand that the IISCO could be INR 35,000 crores. So could you give me how much plant-wise we are thinking of spending in this bifurcation of this one lakh crore over plant-wise? See, the DPRs of the other plants have not yet been frozen, so this is just an indicator figure which we have taken for the time being, and once the DPRs are frozen and maybe not only the DPR, once the orders are placed, we will come to know what is the actual CapEx outflow for these modernization and expansion projects, so for the time being, we are only considering this on some sort of a presumptive basis. The moment any of the projects is frozen or the expansion plans are frozen, then only we'll be able to declare what is the CapEx. Understood, sir. Sir, just one clarity on this assumptions of 1 lakh crore. This 1 lakh crore assumption is average or on the higher side? We just wanted to understand once we start finalizing, what is the probability of this number going up? We really do not know what is going to happen. This is our calculation. This is the calculations by our consultants and our team of experts and all. So we maintain that for the time being. Noted, sir. Noted. That's all from my side and all the best. Thank you. Thank you. Let that be the last question. We'll take balance offline. Okay, sir. Ladies and gentlemen, we'll take this as the last question for the day. I now hand the conference over to the management for the closing comments. Thank you very much. Quite a lot of good questions asked by the various analysts. And I appreciate their thinking about sales. And I assure you that this company will improve in the coming months with a lot of emphasis on cost reduction and profit maximization. And so thank you, everyone. All the best. Thank you. On behalf of Nuvama Institutional Equities, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.