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Earnings Call Analysis
Q3-2024 Analysis
AIA Engineering Ltd
The company's latest performance depicts a modest increase in output and sales. With a production of 82,000 tonnes and sales of 74,000 tonnes during the quarter, the company is projecting to hit a 10,000 tonnes growth for the full year, reaching approximately 300,000 metric tonnes, up from 291,000 metric tonnes the previous year. Despite a drop in realization from INR 165 to INR 154 per tonne primarily due to product mix alterations, the company generated sales of INR 1,146 crores. Earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at INR 395 crores with a nearly stable margin, although it marked a slight decrease from both the previous quarter and the same period last year.
Management exudes confidence and excitement about the company's prospects, bolstered by a robust balance sheet, excess capacity, and compelling product solutions. The focus is on converting a substantial portion of the 2.5 million tonnes forged grinding media market to high chrome products. While the sales growth was expected to be more pronounced, the company now anticipates only a marginal increase of 8,000 to 10,000 tonnes year-over-year, attributing the slower-than-expected progress to challenges such as customer risk perceptions and the time-consuming nature of conversions from forged to chrome products.
The company maintains a strong net cash position of INR 3,100 crores and is committed to a conservative capital allocation policy. With significant investments in capital expenditures (CapEx) planned, including an approximate INR 146 crores spent this current fiscal year and projections of INR 150 crores and INR 200 crores for the subsequent years, management is preparing for future expansions and inorganic growth opportunities without immediate plans to return capital to shareholders.
The company anticipates an increase in freight costs due to external factors like the Red Sea insurgency, which has not yet affected the quarter's profit and loss but is expected to in the future. However, the company reported a foreign exchange gain of INR 17.40 crores during the quarter.
Segment performance reveals a growth of 15,000 tonnes in the mining sector over the prior year's 9-month period, along with an expected decrease in the non-mining segment volume. The management cites timing issues rather than structural problems for the variation and predicts a continuation of 80,000 to 90,000 tonnes for non-mining business going forward.
The company is making use of its export packing credit limit, which offers an interest subvention that effectively lowers the interest rate to around 5%-5.7%. Despite having enough cash on hand, management chooses not to raise any term loans at present, keeping leverage minimal.
Looking ahead, the company aims to increase its total production capacity from 440,000 tonnes to 540,000 tonnes. This includes strategic moves such as the acquisition of a 30% stake in MPS, an Australian company with expertise in mill lining designs, to bolster its position in the market and drive conversion opportunities. The company's efforts to understand and navigate the complexities of the mining industry, including forging ties and enhancing design capabilities, are aligned with its expansion objectives.
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Good evening, ladies and gentlemen. Thank you for standing by. This is Lezanne, the moderator for your call today. Welcome to the post results conference call of AIA Engineering Limited. We have with us today the management team of AIA Engineering Limited. [Operator Instructions] I would now like to turn the conference over to the AIA Engineering management team. Thank you, and over to you, sir.
Thank you so much. A very warm welcome to everyone. This is Kunal. And as usual, I also have Sanjay bhai here with me. I will start with a quick rundown on numbers for this quarter, and then we'll get on to Q&A. I think this was a steady quarter, nothing exceptional to report on any metrics. We produced 82,000 tonnes, sold 74,000 tonnes, which brought our 9-month sales to about 225,000 tonnes.
We've done -- and we target to be closer to 300 metric tonnes for the full year, up from 291 metric tonnes for full year last year. So, overall, about a 10,000 tonnes growth we expect between -- we've done about 8,000 tonnes in 9 months and a little more as the year closes.
Rest of the numbers are in line with Q2. One change has been our realization, which has dropped from INR 165 to about INR 154 and largely because of product mix, and we keep talking about product mix. Two aspects of it. One is grinding media versus nongrinding media and the alloys that we sell in each of these categories, we do 11% chrome to 30% chrome. So -- and that generally is -- influences the realization. So the 74,000 tonnes at INR 154 realization translated to INR 1,146 crores of sales, leading to an EBITDA of INR 395 crores as compared to INR 444 crores in sequential second quarter and INR 483 crores in the third quarter last year.
EBITDA at 33.79%, almost comparable to second quarter EBITDA, which was at 34.32% and a profit after tax of INR 279 crores.
Moving on, similar export benefits, our treasury income is comparable to previous periods. We had some foreign exchange gain this quarter, about INR 17.40 crores. So total other income at INR 83 crores. Our working capital, again, largely in sync. We've had some increase in WIP and FG, but that's more accounting related, which is stock in transit. Otherwise, working capital continues to be at par with previous periods, around 90 days. This quarter, it's about 100 days, but overall 90 days of working capital.
From a sales standpoint, we've done -- of the 74,000 tonnes, 53,395 tonnes in the mining segment and non-mining is 20,745 tonnes. 9-month mining is at 158,000 tonnes and up from 144,000 tonnes in 9 months last year. So it's a nice 15,000 tonnes growth as far as mining is concerned.
Our non-mining has shrunk by about 6,000 tonnes and I think nothing exceptional. It's just -- it's a timing issue more than anything else. In the previous period, we had some more -- with some OE orders that materialized in that period, but nothing material to report for that period.
Total CapEx for this year is at INR 146 crores. We had identified INR 600 crores of total CapEx, of which -- INR 500 crores of total CapEx, of which INR 200 crores was to go into the grinding media plant, which we are on track. It's in the stage of installation or being set up.
We hope to commission it between December and March '25 -- December '24 and March '25. And total cost for that plant will be INR 200 crores. We are also spending INR 200 crores on various debottlenecking efforts. We're buying land. We're setting up some warehouses, et cetera, to support the whole operation and INR 100 crores towards renewable. So all put together, we are at about INR 500 crores and of which we spent INR 146 crores in 9 months this year and another INR 50 crores approximately for the end of the year. So it will be INR 200 crores for the full year.
We've also transferred money towards the purchase of shares in the Australian company called MPS at 30% -- we now have a 30% stake and we transferred money for that at INR 43 crores. So there's a total outflow of INR 186 crores for non-OpEx reasons.
Our net cash for the period is at INR 3,100-odd crores. And I think overall, as far as business is concerned, I think with 2 paradoxes: one is, from a business standpoint, I don't think we've been more excited or better situated for the opportunity in front of us, right from our balance sheet, our excess capacity on the ground, our network and team in place and the solutions that we have for the customers and the opportunity, largely the 2.5 million tonnes forged grinding media market, which we're looking to convert to high chrome.
At the same time, we recognize the -- and we've spoken about it in previous quarters about the challenges that we have to overcome to convert, and a lot of that is linked to customers' mindset, customers' perception of risk when someone changes from forged to chrome. And it's taking longer than that -- longer than we have imagined and which is where we were hoping to be at 320,000 tonnes at least. We will be falling short this year. We continue with our overall, I wouldn't say a guidance, but at least an indicative direction of saying 25,000 tonnes to 30,000 tonnes each year we are looking to add.
But it's contingent on a lot of these conversions coming into play. And we've got customers or prospects where each customer can give 20,000 tonnes to 25,000 tonnes to customers who are between 5,000 tonnes and 10,000 tonnes. It just -- the time line is -- there is an uncertainty around time line, and we hope -- we are doing all we can and hoping that a lot of that opportunity materializes soon enough.
Our macro from a mining environment, I think our solutions have a deep opportunity just because we are improving operational parameters for the customer and especially at a time when the grades -- EC grades of copper are falling and plants need to run at optimal utilization. I think our products feed into that and reducing operational costs, which is power, wear cost, or mill turners, reagent cost, et cetera.
So I think, overall, we remain very, very excited about the opportunity. At the same time, like I said, it's taking a little longer to convert and we hope to share better news as we move forward. Before we get into Q&A, maybe Sanjay bhai can share a quick update, and then we can get into Q&A.
Yes. Good afternoon to all. So thank you very much, Kunal. I think Kunal has covered most of the points. Most important point being the fact that we continue to remain completely committed and focused on the conversion opportunities. As I had indicated in the previous call, it is likely to take a little more time. And therefore, we see this year getting flattish, maybe a very marginal growth of 8,000 to 10,000 tonnes in sales as compared to last year. But we should continue seeing good traction in the coming years. But having said that, the process is harder, long, but we remain very, very excited about it, and we are quite confident that eventually, it is just a matter of time.
And all our efforts are completely in the right direction. And we do hope to share some more exciting things as we move ahead and we achieve those goals. I think even on the CapEx, we've done about INR 146 crores. We've done another target under INR 150-odd crores in the current fiscal and then another about INR 200-odd crores in '24, '25. So all those expansion projects are on stream. So I think with this, let the house be open for Q&A.
[Operator Instructions] The first question is from the line of Mohit Kumar from ICICI Securities.
My first question is on this, sir. Is there impact of freight cost in this particular quarter? And are you seeing that the freight cost has jumped substantially in the quarter because of Grade C and does that impact -- does it impact the Q4 also?
Yes, good question. I think I should have added that in the starting commentary. While this quarter, we've not seen -- the current P&L for Q3 does not reflect the increased freight cost. But surely, going forward, there will be a freight cost increase, which has surely come along because of the Red Sea insurgency. But as a concept, most of it is a pass through or most of it would be -- the effort would be to pass it on. So we are also on a wait and watch basis right now, hoping that this is temporary and it's just something that it doesn't require us to engage with the customer.
So while we remain on wait and watch, there will be some costs that we'll have to eat in the short term. But if we find these costs to be stickier and looking that it persists, there will -- it will be absolutely passed out, like we did in the '21, '22 phase where shipping went up by 3x to 5x. .
Understood. My second question is on the non-mining sector. The volume has been declining in the last 9 months. Does it mean that there's some weakness in the cement industry, which is percolating to a weakness in volumes. It looks like the FY '24, they will decline in the overall volume Y-o-Y for the entire fiscal.
Not really, not really. The non-mining -- that's why when non-mining was a little higher, we kept explaining that there is this smaller terms -- shorter term demand that probably came in. See a lot of our solutions for cement also have much longer wear life.
Our casting, for example, where mining liner, their average life could be 3 to 6 months, tube mill liner for cement could be 5 years, 7 years, sometimes even 10 years. And same thing for vertical mill parts that we sell to cement and thermal power business, right?
So there was some amount of -- some amount of I would say a little backlog that came in from -- that didn't get processed in 2021. Companies saying let's keep surplus capacity and maybe added some bit of it more than anything structural.
Exactly.
Our guidance, what we've seen over last 5 years is non-mining is around 80,000 tonnes to 90,000 tonnes, and we expect that to continue at that level. Now we've gone to 100,000 tonnes, but I think 80,000 tonnes to 90,000 tonnes is a fair figure to consider plotting the non-mining business.
The next question is from the line of Rohit Singh from Invest Analyst. The line for the current participant has dropped off. We'll move on to the next question. That is from the line of Karan Gupta from [ K3 ] Capital.
I appreciate the opportunity. Just one question. Can you throw some light on your capital allocation policy going forward with INR 3,100 crores of net cash, that seems to be a sizable amount. So what are your needs going to be? And are you working on some policy of returning capital to share holders?
So yes. Thanks for the question. So you see, we are following a little conservative policy right now. As you would be aware, yes, we are growing. There are a lot of opportunities that are coming. So we are constantly doing CapEx, about an average run rate of INR 200 crores, INR 250 crores a year plus incremental working capital. My working capital, gross is a little longer, net is about 100 days, but I have to invest significantly in that.
Having said that, we have comfortable cash, we believe that there could be some opportunities which might warrant us to deploy some unexpected cash. Therefore, what we have internally decided that till we reach a particular level of penetration in the overall global mining space of at least a sale of 300,000 tonnes to 350,000 tonnes to about close to 400,000 tonnes, we will have to continuously incur CapEx, and we might want to have an opportunity to look at any inorganic possibility.
Therefore, we are maintaining a little higher cash. We are consciously reviewing it every quarter, and we will, therefore, take an appropriate call but not in immediate future, not at least for next 1 year.
Okay, sir. That's helpful. Has there ever been any thought of maybe using some leverage on the balance sheet, if at all?
See, we are using to a significant extent our export packing credit limit to the extent of about INR 400 crores to INR 450 crores where there is an interest subvention. And we effectively -- in rupee terms, the rate of interest goes down to around -- just in the range of about 5%, correct? 5.7%. We don't have any term loans. We don't need any term loans. We have enough cash on the books. But except for that, there is no need for any leverage at this point in time.
The next question is from the line of Amit Anwani from PL Capital.
My first question is on -- just to reconfirm the CapEx, we used to talk about 540,000 tonnes that is on track, right? 50,000 tonnes for...
Yes, yes. Very much, very much. We are already at 440,000 tonnes and another 80,000 tonnes plus another 20,000-odd tonnes. So it will be 540,000 tonnes.
Great, sir. So just wanted to understand on mill liner, we started the journey 4, 5 years back. And so, sir, what is the traction which we are developing. So we talked about Australian market and few other markets with value-added products on mill liner. So just to understand, are we on track and what is happening on the mill liner now?
Yes, we are very much on track, and we remain rather quite excited about the opportunities which are unfolding. So that is the reason why in order to strengthen our design and market acquisition portfolio, we acquired this stake in this Australian company, MPS, which are experts in complementary mill lining designs apart from the other available patented designs that we have.
We see this as a very good opportunity. We are currently at a run rate of around 30,000-odd tonnes of mill liners already on an annual basis. And we continue to -- I would say that it is a very important development in our long-term strategic planning to take a major conversion possibility because that goes as a line item. When we overall approach any mine, so we talk of mill liners, we talk of grinding media, and then we also talk of the beneficiation benefits.
So grinding and beneficiation are our focus areas and mill liner is exactly panning out the way we have anticipated.
Sur sir, my second question is on, as you highlighted that there's a delay happening with respect to conversion because of the acceptability by the customers. And I can see almost from 7, 8 years, so earlier because of the anti-dumping across 2, 3 geographies and COVID, and then now we were on track and doing capacity. But again, this year, we are missing majorly.
So past 9 years, we have never added more than 25,000 tonnes or 30,000 tonnes incremental, I think just 2, 3 instances. So any change in strategy? Because, again, this year also we targeted 25,000-plus tonnes addition and we are going to be flattish and you're doing so much CapEx. So any read through or any change in basis you understand the problem that the receptibility is leading to delays in incremental volumes. So I just wanted to understand the thought on that?
So you see whenever -- I mean, of course, I've been quite repetitive on this issue, and I will once again slightly elaborate. So the process is extremely long and time-consuming. Again, it is not possible to exactly predict how it happens. So let me give you an example. Today, we are working in almost all leading geographies where -- and we are working with almost all known or even relatively unknown names in mining space, with focus on copper and gold being the driving force, and of course, iron ore also happening. The problem is these mines are very large. They are highly [ bureaucratic ] organizations.
Earlier -- of course, I must be very honest with you, what was the situation prevailing before 9 years and today, is considerably and totally different in the sense that we have also climbed up our learning curve. We have now understood how the mining overall operates, what are their expectations, what are the threats and potential opportunities, both.
We have significantly strengthened our knowledge-base by doing a lot of research on the DP or the down process that is the beneficiation process plus this extraordinary tie-ups that we have done on the mill liner unique designs plus significant strengthening and training of our teams.
So all these things have happened. Having said that, as Kunal explained, on a structural standpoint, if you look at the opportunity landscape and where we are positioned we are extremely, extremely excited and we continue to remain excited and focused on the process. There is nothing that we see as something as a major deterrent which forces me to change my direction or my strategy.
So as I explained on the previous call also, this year, we had predicted that the conversion pace or the time that it's taking is more. Certain very important mines with extraordinary opportunities are also in the process of being developed. And the only thing is the time. So I don't think that you should very honestly read anything negative. But the reality is that, yes, it is a time-consuming process. It is unpredictable. But we are on track.
And if you look at the overall opportunity landscape, vis-a-vis where we are positioned, on a medium- to long-term scenario, we will be, hopefully, definitely be in a position to talk about higher numbers. But at this point in time, we are conservatively saying a definite possibility of around 25,000 tonnes to 30,000-odd tonnes incremental volume growth in the coming year.
Sure sir. Lastly, on the overall conversion market, roughly about 2.5 million tonnes. So as I recollect, I think we used to highlight 2 million tonnes. So I just wanted to clarify. And second thing is, is the competition doing better than us in the sense that the overall global conversions has been at the faster pace than compared to AIA conversions of customers, yes?
No, I really don't get what you are saying. But...
Could you repeat your question?
So one is we highlighted 2.5 million tonnes of conversion from forged to high chrome. So I just wanted to understand that the overall conversion versus AIA, which is facing delays -- the overall global conversion, is it faster than...
Yes. So the point is that we are the only one leading the whole charge towards conversion from forged to chrome.
How about [indiscernible], sir. Is it not into this?
Yes, they are also working on it. So between us, a lot of that conversion is happening. We are not sure of how much surplus capacity they have in other things. They're not a public company. So we don't have access to that information. But I would imagine as we understand, a lot of that conversations right now for conversion. Because what we are offering is a whole suite of products, right? Which is we are saying we'll take responsibility for the grinding circuit, which is mill liners and grinding media for the grinding mills, right?
And so the conversation is very different. The conversation is not to say you're using our product, and I'll just give you the same product at a cheaper price, which is your general export -- India export story. What we are saying is that a lot of our intervention is adding to disproportionate savings for the customers.
And that requires them to at least adapt to a different solution, get used to a new supplier, the products. So all of that, I think what's taking time is just getting used to that, that there is this whole change management process. I don't think there is anyone else doing conversion to chrome really besides us, given this context.
Sure. Sir, just to add what you feel would have been the conversion rate right now out of 2.5 million tonnes, forged to high chrome?
About 0.5 million tonne is being serviced by chrome as we speak.
The next question is from the line of Swati Jhunjhunwala from BOB Capital.
My question is on the volumes. So this year, we have missed the volume addition mark by 30,000 tonnes additions in FY '24. For FY '25, when we are seeing 30,000 tonnes incremental additions, does this include the 10,000 tonnes to 15,000 tonnes that we have missed this year? Or is that over and above that?
See the thing is that -- and I will just share the context again. We are not -- we're not changing the funnel where you make [ coal calls ] and 1 converts, right? That's the metric when you're saying the backlog adds up or not. Our expectation or rather our hope and our effort is to do much more than that. It's just that there is uncertainty linked to when that conversion will happen, how long that will take.
And which is where -- because everyone is asking us how to model and what to use, 25,000 tonnes or 30,000 tonnes is just an indicative figure. It's not coming out of a funnel conversations in years. What we are doing in here and what -- and hence the backlog gets added, right? I mean it is where -- what we have missed this year is not -- the opportunity remains, the effort remains. It's a fair chance I do more than that. But there's a fair chance it takes longer, and that's just the nature of our business right now.
[Operator Instructions] The next question is from the line of [ Rohit Singh ] from [ Invest Analytics ].
Sir, my question is on the margin side and the realization side. So what is the outlook for the current quarter in the terms of margins and the realization?
I think margin, we've discussed enough times where our guidance, we're not giving a margin guidance, but we are saying that our business will do enough to do a 20%, 22% margin. we have done better, but we are not sharing a precise quarterly margin guidance. And as far as the realization is concerned, we expect it to be between INR 150 and INR 160 depending on the product mix.
No, like in last quarter, you mentioned a dip of 300 to 400 bps. So in that manner, I was asking for you, is there any further downward estimate of the margins? That is what I was asking for?
There is -- from current levels, there could be a further adjustment because of the freights that's increased, right? So near term, there is a likely increase in freight costs because of the Red Sea turbulence. But longer term -- medium term, rather, if that is sticky, they get passed through. So -- but on a longer-term basis, so longer-term basis, our margin guidance remains at 20%, 22%.
Understood, sir. And just, I joined the con call a bit later. So what is the guidance of volume for FY '24?
So as we explained, actually, our target is about 25,000 tonnes to 30,000 tonnes of -- for FY '24, '25. And we have shared the details that yes, there are a lot of mines on which we are working. This volume could be a little higher, but we remain conservative, and this is about 25,000 tonnes to 30,000 tonnes. That's what we are saying as the target.
For FY '24?
'24, '25. For '24, if you go by the same run rate, we should be around 300,000 tonnes sales.
The next question is from the line of Anirudh Shetty from Solidarity Investment Managers.
Just one question from my end. In the past, you have mentioned that copper and gold are opportunities that could do better than the others in terms of growth. So in the industry -- in the overall industry, the 2.5 million tonnes market, and for our business, what would the share be from gold and copper, respectively?
So Anirudh, it is almost equal. Again, in terms of opportunity, we are equally focused on iron ore. What we said was -- what we said was that copper and gold are the current areas of focus given the fact that we should be able to demonstrate the strong benefit that we are offering on the table. Again, we don't share the industry segment-wise volumes, but you can broadly say that between the 3, more or less, they are equal.
Okay. And -- so would that be true for us as well in our volume mix? Are we more or less equal across these 3?
Yes, I think so.
The next question is from the line of Chirag from Centrum Broking.
The question was on mill liners. So just to clarify, you mentioned that 30,000 metric tonnes would be approximately the mill liners volume. That is for this year, correct, sir, FY '24?
Yes.
Yes. So sir, we were -- we had put up a plan to 50,000 metric tonnes. So any...
I want to clarify, we are also manufacturing mill liners in certain other multipurpose facilities. So this is the combined figure I have given you.
Okay. So, sir...
27,000 metric tonnes to 30,000 metric tonnes. Yes, it's a range, actually.
27,000 metric tonnes to 30,000 metric tonnes?
Yes, this year. That's what the expectation is.
Sure, sir. So sir, the 30,000 metric tonne plant, the new greenfield plant that we have plus what would be the capacity of the other mill liners that we have in other plants?
No. When we are talking of a multipurpose plant there, we can manufacture this mining mill liners.
The total capacity is about 70,000 tonnes, all put together for mill liners. We can do more, but because the plant is also used for other products, you can consider total 70,000 tonnes.
Okay. Okay. So basically, at least for the next 2, 3 years, we would not be looking at further expansion of this new mill liner plant, correct? .
Correct. No.
Okay. And this volume of 300,000 metric tonnes (sic) [ 30,000 metric tonnes ] this year and possibly 25,000 metric tonnes to 30,000 metric tonnes capacity addition for FY '25 that you are -- I mean you are likely to do. So that includes this incremental opportunity of mill liner. Correct?
Yes, yes. Of course.
Sure, sir. And is it possible to broadly mention that how much mill liner would be more profitable compared to the chrome media?
That product wise profitability is difficult to discuss. But every product has its own profit profile. But you will have to look at it in a totality because I can't do just one, right? It's a whole set of internals that we sell and there are only so much casting I can sell or liners I can sell in sync with grinding media. So you'll have to look at it at the whole pool together.
Okay. And on this Australian company where we have taken 30% stake, so here eventually, what is the, I mean, business plan. So are we eventually will be taking over the entire company or they are going to be...
No, no, no. So they will -- we want to eventually take up a majority stake, but we will not take over the entire company. The current set of people who are experts, they will continue the operating team. We were not going to disturb. They will continue the operations. We are only adding strategic as well as marketing related inputs.
Okay.
We will be taking up the majority. That's the plan.
Okay. And so, their mill liners are of different material than ours? Or it is just a similar product?
No, no, no. You know, so there are different categories of mill liners. This is a complementary design capability that we are increasing, and they do have a set of customers who are also using those designs and manufacturing complementary types of liners. It's a little complicated. But yes, it complements and it strengthens our portfolio of aggressively marketing mill liners in this mining segment.
Okay. And sir, what would be the global addressable market be of mill liners?
In my view, what we are totally -- currently manufacturing, the metal liner part is about 300,000 tonnes.
Okay. And the one that this Australian company makes?
It's a part of it. It's a part of it. They are not making liners. Mind you, they don't have any manufacturing capacity.
They are a design and a service company and which have access to the market. There's IP and there's access to the market that they have.
The next question is from the line of Anupam Gupta from IIFL.
So sir, a couple of questions. Firstly, on mining, where you said that the time lines to convert is relatively uncertain. Can you give us some idea of what sort of would say potential volumes are under trial at this point of time in terms of customers? Or any sort of...
Basically, higher quantities, Anupam.
Sir, come again, I didn't get your answer.
Yes, yes. But it just -- the learning is that it is -- it will take time just because of the nature of the market, the conservatism. All the things that you have said -- like I said, that's the paradox, right? But we are -- we feel the most confident about the product. But there's a natural law that I can't -- we can't inviolate. That's something that we'll have to respect the time that customers take to warm up to it and say, now I'm ready to go migrate, is something that we'll have to -- that's the nurture part of the market that we'll have to participate in.
And there are customers where -- which is 25,000 tonnes, 30,000 tonnes at each level, right? And if 2 such convert, it will be a 50,000 tonne conversion. It's just that -- until I don't do it, there's no point in speaking about it, right? The proof of the pudding is having it. And to that extent, we are just keeping it as -- because there's no point in me saying this much and then trying to explain why it didn't happen.
The fact is we are taking it as is, which is -- there is uncertainty linked to the timing of when and how that conversion will happen. And that's just -- we'll try and share as much more color as we can going forward.
Okay. Just to clarify, let's say, will this be more in geographies where you have lesser presence, let's say, Peru or Chile where we are trying to enter...
Anupam, today, we are ready to set up even further capacity. We don't have to -- we cannot afford to stay in one and not in the other on any metric. So whether we are in a market or not in a market, we are making efforts across the board to go, penetrate, right? .
And there are different stages with each of these customers. I don't think it's geography linked as much as how -- where the company is and what stage it is and what is their priority, right? How do they look at the whole change management process. So it's a little more nuanced than trying to say one geography or one. I understand where you're coming from. But unfortunately, I don't have an objective answer to this.
No, the only thing to add what Kunal says, I think you may take it like this. We are present in all important geographies where significant mining is happening. All.
Yes. Okay. Okay. And just -- understand that, sir. And one question on the non-mining volumes. They have been at best 90 kt levels for some time now. Although all the domestic market -- cement market has also grown, domestic thermal coal market has also grown and CapEx has also happened. Anything -- why is the relation not happening there?
No, no. I'll tell you, I'll tell you. See, as Kunal explained, one mine location could offer 25,000, 30,000 tonne opportunity, correct? One mine, single mine or even more. Our entire country's cement, even at present high level of production, is being serviced on a volume of 27,000, 28,000 tonnes. So the requirement for a tonne of cement produced is miniscule as compared to mining. That is point number one.
Therefore, even though the cement production may grow, say, by 10%, 15%. My volume growth will be from 25,000 tonnes or 27,000 tonnes to maybe -- again, see initial supply versus replacement. So all these cycles. So we continue to enjoy a 95%-plus market share in cement in India. We have never lost any customers so far.
Globally, we are in more than 130 countries in cement [Foreign Language] globally, we are talking about 70,000, 75,000 tonnes supply ex-China, 35% market share. So the market itself is small, although growing so that the incremental volume impact is absolutely insignificant.
Same is thermal, correct. But the growth in thermal at present is not that much. The power is more focused on renewables. Whatever we are able to supply in thermal, we are doing it 7,000, 8,000, 10,000 tonnes. That's about it. [Foreign Language]. There is no impact at all on the overall scheme of things.
The next question is from the line of [ Ritesh Chheda ] from Lucky Investments.
Sir, the 50,000 tonnes, the liner capacity that you had added, what is the utilization there?
Currently, overall is about 50%.
And the 440,000 tonnes total capacity that we have, what would be your guess in terms of the utilization of that. How many years it will take?
See, I want to clarify 2 things. We don't share plant-wise capacity utilization figures. But overall, for castings, including mining liners, the larger VSMS and other type of liners, overall utilization is in the range of 50% to 60%, and that's about it.
Yes, I know that the 440,000 tonnes, how you have on ground. How many years you will take to utilize that?
See, we are -- our internal target is that we can theoretically go up to 80%. Our target is that we want to do it in 3 years. Now let us see. But you should not treat it as a guidance, don't catch me.
No problem, sir. 440,000 tonnes, 80% utilization, 3 years?
Yes.
[Operator Instructions]
Operator, I think we are done with questions. So I think we can just wind down the call, yes.
All right. Thank you, everyone, for joining, and Sanjay bhai and I remain available off-line for any further questions. Thank you, and have a good evening.
Thank you, members of the management team. Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using Chorus Call Conferencing Services. You may please disconnect your lines now. Thank you, and have a great evening.