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Thank you so much. A very warm welcome to all of you. Thank you for joining our call. We've got -- we'll -- as usual, I'll run through some housekeeping numbers for the quarter, give you a small update on the business, and we can then move to questions and answers. So finally, we ended the fourth quarter and got past a tumultuous year. We've done 80,000 tonnes, 79,377 tonnes this quarter and ended the full year almost at par with last year. We did 267,000 tonnes full year last year and closed this year with 266,000 tonnes. So we are happy that in a very difficult year, we managed to be at par with the previous year and could make up volumes in the fourth quarter. The larger part of that catch-up in the fourth quarter is the pent-up demand within cement. As you know, there was a sharp recovery in consumption levels and utilization at cement plants across the country and, likewise, across the world. So -- and on account of that, we had a good nonmining demand that came in this quarter and -- which built into the 79,000 tonnes that we did this quarter. We produced 62,400 tonnes this quarter, and a large part of that was because of the inventory that we started moving. We've built up inventory for some of that requirement, and that got liquidated this quarter. So overall, there was a reduction in inventory this quarter also leading to some working capital improvement. Our sales, the INR value was at INR 2,818 crores, which is comparable to INR 2,884 crores last year. So both years, right from -- in all major line items are virtually the same. EBITDA was INR 822 crores last year to INR 827 this year; and profit before tax, INR 718 crores [ versus ] INR 729 million crores; and then profit after tax was INR 590 crores last year versus INR 566 crores this year. But last year, we got a INR 20 crore deferred tax reversal on account of the new tax regime and which is why there was an increase in profit after tax. Otherwise, virtually, the numbers are comparable for both years. Fourth quarter, in particular, had some amount of skew in terms of raw material increase. As you know, most major commodities are on a run -- are on a pair rather, and they've gone up a few times. And we are seeing the same. Steel prices go up. All the downstream material, including scrap, has seen a sharp increase and -- which is reflected in our costs. So we -- our rupees per kilo, in total sales to total volume last year was about INR 100 a kilo, and we are seeing some increase of that [ to INR 105 ] per kilo. But over the next few quarters, we see all of that price pass-through come in. So this is something with a lag and a -- lead and a lag effect. So that -- all raw material prices are generally a price pass-through. You will see that over the next few quarters, our realization moving up and a lot of that increased costs moving up as well. But on a net basis, we're almost 8% to 10% absolute increase in cost of goods sold and most of that being represented by the increase in raw material costs and which is where fourth quarter, if you were to compare with sequential second quarter, there was almost a 10% reduction on an operating margin -- or a 9% reduction in operating margin or EBITDA levels. So the first 3 quarters and the fourth quarter looks structurally different on account of this 1 parameter, which is raw material cost. And over the next few quarters, you'll see some of that normalizing. I think from a currency -- other income standpoint, there is -- the MEIS benefits now withdrawn or that it's capped, and it's not replaced with the new scheme, which is RoDTEP, the remission of duties and taxes on exports, which is a WTO compliant reimbursement remission of the taxes for which credits are not available. So that theme's implemented but not announced. So to that extent, we don't know what that number would be. We've not provided that in our books. So there is a reduction. If you look at quarter 1 and 2 versus quarter 4, there's almost a INR 10 crore reduction on account of just that. This quarter, because of our exports, we would have been about INR 11 crores, INR 12 crores. So that's what is not included in our other income. The other big line item is in terms of foreign exchange. Last quarter, we saw increase -- the rupee run up almost to 75 levels. And when we closed December, all that translated into realized and unrealized gains, while this quarter, some of that -- while the rupee also appreciated a bit, some of that got included in our sales price. So that's an offset to that extent. Our treasury income is at par and reflects the lower yields on most debt products. So this quarter, we've done our EBITDA of INR 192 crores, about 22.3% on an EBITDA to sales, and INR 137 crores of profit after tax. Moving on. There's reduction in raw material between the third and the fourth quarter. Our reduction in stock, as you can see, because of our -- we sold some material out of stock and a slight increase in receivables in line with the increased sales this quarter. But overall, there is a reduction in working capital. Total days have reduced from 120 to 117, so it's a lot -- almost at par with the previous quarter. So working capital is tightly under control, and receivables from customers are absolutely on track. We are happy to report there is no issue in terms of cash flow or overdue situation, so it is largely under control. Next, I would -- just a sec, I'll give you a view into the segmental sales this quarter. We did 49,000 tonnes in the mining space, up from 43 in the third quarter last year. And as you see, 29,700 in the nonmining, which includes cement and utility, and that has sharply increased from 21,000 tonnes. So the first quarter was 12,000, then 21,000, 21,000 and now 29,000 tonnes. So it's largely balanced whatever we had lost in the first quarter. And so the full year mining stands at 177,000 tonnes versus 1 EP this year and nonmining which was 89,900 last year at 85,458. And so last year, total was at 267,000 tonnes. We closed that with 266,000 tonnes. So that's as far as numbers are concerned. Nothing abnormal except the raw material and the price pass-through thereof. There are a few updates on the business front. First and the foremost is our continued inability or rather even more restricted ability last month, 2 months for our engineers to travel. And as we have discussed many times in the past, travel is a very integral part of our business development activity.These are hardcore engineered solutions, which require discussions with staff on the floor, with managers, with supervisors, walk through them -- walk them through our solutions, the benefits, keep measuring trials that we have done and involves a lot of mutual confidence-building exercises, right? And that requires in-person. Our business is not very attuned to being conducted to virtual meetings. And on account of that, we continue to be hampered.We are -- like the rest of the world, we are optimistic that now a solution is in front of us in terms of vaccines. It could be 2 months, it could be 6 months, whatever the time it takes. But that's clearly at a time when our people will be able to travel. We are hoping borders open up. There are many places where, today, there is restrictions on people in India to travel or our staff outside of India also to travel between countries, what protocols get put in place, quarantine rules, vaccine passports and all sorts of things. So we're in the midst of figuring those things out. And as things normalize and travel begins in 3 to 6 months' time, I think that's where we'll get back to our business development and the whole solution and the whole philosophy of -- around migrating, converting forged to high chrome and in addition now to sell the mill lining solution to mining customers. So that's the most important update, that business continues status quo. While it's -- we don't enjoy this phase where we've got the teams, we've got the knowledge, we've got everything to go out and keep doing our work, it's very heartening that we are still able to service this large volume. 266,000 tonnes is a very material, large amount to produce, to execute, to supply, to make despite hundreds of challenges in terms of finding containers and times it takes to reach the customer side. We have still not defaulted on delivery dates, right? So we're making sure all that gets done. After supply, there would be operational issues, process issues, measuring performances. They're able to do all of that despite being remote, right? So that itself was something that we worried about as COVID hit last year, but we've got a phenomenal team that's making sure that customer does not suffer. And we continue to engage with them as required to make sure current engine continues. So that's the first update. Second is from our business in Canada. As you all know, our competition had filed an application with the Canadian Border Services Agency to look at our pricing and to determine whether there is any pricing that can lead to dumping or lead to dumping actions. And so that's a subjudicial process. We are engaging. We'll not be able to talk much about it right now because we are engaged in defending our position on it. As part of that process, there is a -- as part of rules, there is an interim duty that generally gets levied and which has been determined at 32.2%. So that's something that got applied from May 1. And the rest of the process, we expect by July or August to be completed, and we'll have the final outcome. We are engaging with all the regulatory bodies to make sure that the right information is put forward and to defend ourselves in the best way possible. But in the interim, there will be an interruption in our supply to those customers on account of this large levy. We would imagine that we will not have sales for them for at least 6 more months and maybe more, depending on how situation evolves. So that's going to be a tonnage that will be impacted on account of that action there. I think from a CapEx standpoint, as you all know, we are in the midst of commissioning our mill lining plant. That was to be commissioned early this year. The equipment is there, but it requires -- a lot of that equipment comes from Europe and the severe constraints for engineers to come down and travel. So we -- so what was to be March or April this year then June this year, I think, is now moving to November or December of this year, and that's also subject to these engineers being able to come and install and commission that equipment. So as we speak, mill lining plant commissioning dates being pushed to later part of this year. And so we spent about INR 118 crores on CapEx for this year, which includes spend on the mill lining plant. For next year, we expect to do about INR 200 crores, of which INR 80 crores would be balanced spend for the mill lining plant. We are in the midst of setting up additional 5.4 megawatts of wind power, and we paid INR 6 crores this year. The balance of [ 30 ] comes next year. The 110 -- there's another INR 90 crores where we need other supporting infrastructure for our plants, some amount of land and general CapEx. So total INR 200 crores is our CapEx estimate for next year. The Board also announced dividend for this year at 450% on par value or INR 9 per share, and that will entail our total outflow of INR 84 crores. So we're happy to report that we continue to pay dividends and close out at -- total payout at INR 84 crores. We added INR 500 crores plus of cash this year. Our net cash stands at INR 2,040 crores, which is up from INR 1,400 crores, INR 1,460 crores end of March last year. So -- and large part of that reflects the operating cash flow, which has been converted into cash and some amount of working capital improvement. So net cash after debt of about INR 180 crores is at INR 2,000 crores.I think that sums up our major agenda points in the housekeeping for numbers. I'll have Sanjay by -- just again explain some of these things in his own words, and we can then move on to Q&A. Thank you, Sanjay.
Good afternoon, everyone. Thank you, Kunal. Happy to report that the company could manage to reach almost the same level of performance as we did in '19, '20. That's gratifying. At the same time, Kunal has mentioned some of the red flags, which we currently are witnessing. One very important part, I think what we had extensively discussed in the Board today, mercifully, the COVID-19 pandemic second wave seems to be receding quite fast in India, hopefully. And therefore, it gives the hope that by end of June, maybe beginning of July, the next quarter, if things start moving again, then the key focus -- the 3 pillars of growth on which the company is focused can be again pushed with full vigor. From a medium- to long-term perspective, the prospects are extremely encouraging. The initial results that we are getting from the new initiatives are very, very encouraging. It is just unfortunately a pause which, as Kunal explained, due to the problems associated with travel and the fact that 90% of the developmental work does happen at the mine site itself. That is a big impediment, which is coming in our way, but we are very hopeful that from next quarter onwards, things should start moving. Of course, Canada, he has discussed, we -- it's a bit early for us to see how much will be the impact. But at least for 1 or 2 quarters, the sales may be impacted. But as we have mentioned in the past, we, as a company, Canada has been given just the appropriate attention that is required with a lot of focus on multiple avenues of new development, either on the DP basis or on the mill liner basis or on the pure chrome advantage basis, of which multiple mines all over the world are currently under development. Everywhere, things are encouraging. So I think this year, hopefully, we will not be able to tell you at this point in time what could be the targeted sales performance of this quarter or next quarter. But we know for sure that on a long term -- medium- to long-term basis, there is enough food on the plate to keep on growing steadily year-after-year from next year onwards. I think with this, I will request the moderator to throw the house open for Q&A.
[Operator Instructions] The first question is from the line of Ravi Swaminathan from Spark Capital.
My first question is with respect to the fact that commodities have been on a significant rising trend. So are you seeing mines, et cetera, increasing their outputs because of which we are seeing increased volumes and new mines getting opened, et cetera? So if you can...
Yes. Sure. So clearly, there is an uptick in -- there's a supply/demand mismatch. So [ mines and utilization ] who can scale up production are clearly doing that. So I think you are right on that account that there may be -- but where there is a possibility to increase utilization, right? So that is one. I think that whenever that's possible, they are doing that. But more importantly, we're seeing gold and copper guys talk about new expansion, right? So copper looks to be on a structural bull run. And our understanding just because of the underlying demand that, therefore, from electronics and electronic vehicles and all of that. And the fact that there has not been CapEx in the mining space in last 10 years, the last 7, 8, 10, 9 years. So we are seeing a lot of people make conversations around adding capacity, at least for gold and copper. And likewise, for iron, at the price that it's trading, there is significant interest in that sense. But again, that depends on whether the price increase is structural. Is it momentary? Will it correct? So I mean that depends on a lot of things. Gold and copper, clearly, gold just because it's only proxy to the weakening or the printing that the world is doing and which is why we continue to be a safe haven asset. So that and copper clearly look to be something that is structural and will continue in bullish terms, not necessarily the prices that it is in, just the demand that comes from it. We don't understand iron ore and where that will go.
But just to add, Ravi, just to make it very clear that our focus still for the growth is not dependent on the CapEx cycles of mines but rather the huge headroom that we have in terms of the conversion opportunity, and we remain focused on that. So notwithstanding whether the cycle is boom or maybe it's on the downside, we should continue our journey relentlessly. That's what our focus remains despite the other cycles.
And given the fact that prices are, say, on the uptake and the utilization of -- across mines can keep going up, so will it be -- will it make it easier for us to penetrate into new gold and copper customers? So basically, will customers be open to experiment with your new products or increase wallet share to you?
We wish we had the answer for it. I think our -- you explained our rationale why we're building up -- we believe our product, our chrome grinding media has fair chances of being the media of choice. And more plants, more mines coming up or not will not change that fundamental proposition.
Got it, sir. And do we stick to that 30,000 tonnes of incremental volume every year? Or can it go up because of this -- what is...
I think for this year, we are not giving out a guidance on this year simply because the Canada situation is evolving. We'll have to wait and watch with what happens with that tonnage.
And the COVID...
And the COVID and the fact that we can't -- there will be ups and downs. There will be mines that get shut for other reasons, right, or some other considerations where they produce less. So we have to keep all of that in mind and which is where I think we will hold on to giving a guidance for another quarter, maybe 2, get a fair sense on what's happening. And so to -- I think what happens in 3 or 6 months is not something that's in our hands. But fundamentally, growing between 20,000 and 40,000 tonnes, given everything else that we're doing, is a fair expectation, right? We always talked about how it takes time. Sometimes, you will have a few mines convert at the same time. Sometimes the same guy will take longer than we expect. But given where we are with the development, the initiatives that we are having in terms of benefits that chrome has versus forged in -- plus the mill lining, the whole strategy tactic around mill lining and the combination, I think we are reasonably optimistic about adding 20,000, 30,000 tonnes each year.
Yes.
Got it. And can -- what kind of volumes we were doing before this announcement?
24,000 tonnes per year.
24,000 tonnes per year.
24,000 tonnes per annum. Got it, sir. And this input cost increase, which has happened, is it safe to assume we will be able to pass it on over 2 to 3 quarters, that is by FY '22 itself?
[indiscernible] pass on, again, it's an effort. Raw material is generally a pass-through. I don't think we've encountered in last few cycles that we've seen like it has been. Generally, it's a fair pass-through. 2 quarters becomes 3, residual in the fourth quarter. That's what we'll see. We'll make our attempt to be as quick about it as possible.
Got it, sir. And the mill liner, so basically, will the volumes start kicking in from FY '23? Is it safe to assume?
Yes, yes, yes.
Got it, sir. And finally...
November, it will be too close a call to -- because we're still assuming things open up, engineers come, it gets commissioned, I mean we'll just have to let COVID play out and do what is -- or guide what is in our hands, which is why I think all tonnage we should expect from the new plant next year.
Got it. And realizations would be like INR 150 to the [ KGB ] INR 100 company average in mill liners.
Or higher, yes.
Or higher. Okay, sir. And what kind of growth visibility is there in the nonmining volumes? So basically, after a very long period of time, we are bullish on domestic cement, et cetera.
That was a catch-up, Ravi. I don't think we're bullish about it. It's just that if there was a catch-up, there was a pent-up that happened. All of a sudden, demand kicked in, and the material got supplied. It's still flat. I don't think there is -- we are looking at any -- not any material increase, right? We did 89,000 tonnes, became 85,000 this year. It will become 90,000 or it will become 82,000 I mean virtually, it's not something that's material. 85,000 level can become 120,000 tonnes, for example.
The next question is from the line of Ashutosh Tiwari from Equirus.
Yes. Congrats on good volume performance despite COVID impact, you [ flagged ] as well as you did. So firstly, on this Canada volumes, like you say, 24,000 tonnes on an annual basis. These are only grinding media supplied to Canada. There's no [ for sale over ] there.
A small quantity, not material.
That would mean that the relation on an average would be lower than the company average in Canada volumes.
Yes.
So the impact on [ cement ] will be lesser than the volume impact. Yes. Secondly...
I'll trust you [indiscernible].
Sorry?
Yes. I'll trust you to do the math on it, yes.
Yes. Secondly, was there any kind of volume in the last quarter? Is that Q4?
Yes, yes, yes. In the reporting quarter, yes.
Okay. Okay. And like, sir, obviously, 20,000 to 30,000 volumes that we plan to add every year, I mean, obviously, this year impact was because Canada and all. But despite the COVID impact in the travel and all, will you really add any volumes on new mines in this year as well, like '22 and '23? I'm saying?
Yes. So we keep making efforts, right? But it's very difficult. Some may close, work that we've done. Maybe some [ priors ] have been done. Maybe we're supplying [ 1 mill and ] the other can be added. Absolutely. And we are still hopeful that things open up maybe by August, September, where the last big efforts are pending. So we are not shutting our tills that no growth possible this year. It's just difficult to guide until things really start.
So hypothetically, even if the Canada goes to 0 this year, then also mining volume is not impacted to the extent of Canada volumes.
We'll share a better visibility on that by end of first quarter or the second at best. It's too early to talk about it. I think we're doing enough to make good of that volume, but I think just allow us a quarter or 2 before we can guide on what this year looks like.
Obviously, the efforts will be in that direction. But give us 1 more quarter.
No. I got it. Okay. And on this mill liner CapEx and the property commission now expected by the second half, so is that deferment because of this travel restriction that impacting our [indiscernible]
Yes. Because a lot of our equipment is imported European technology, we can't -- there's got a lot of electronics of automation in it. I mean that needs their engineers. If we do here some -- we try doing it here, and it gets -- something is a problem, we risk warranty and other issues. So we need them to come down and install and commission and do the trial production. And all that cannot happen until they are comfortable visiting India.
All of that was planned in first quarter. It's not happening...
Their countries have put travel restriction on India now. I mean so to that extent, if that doesn't open up...
Hope they come in Q2, then we can start in Q3. Let us see. Let us hope things normalize much, much quicker.
Yes. Whether India there a lot of travel in August, which means they get the visa, come down in September, 2 months of commission. So we think it's November now, subject to them being available to travel. So next quarter, maybe when we do the June quarter. In July, we'll have a little more insight into what's happening with that.
And along with the -- you mentioned about this RM impact on margin in the quarter. Was freight also a sizable area which impacted our margins in...
Areas of what?
Ocean freight cost, ocean freight.
So ocean freight was an increase, but we also had long-term contracts, so -- for some part of the quarter. So a lot of that cost will now start rolling in. But that's also a price pass-through, cost pass-through. So our attempt will be to look at pass-through for that line item as well.
Okay. So I think from -- so gradually, from Q1 even to say that your relations also will start going up because it's pass-through of this commodity as well as this freight cost.
Yes, yes, yes.
And lastly, on this Canada, like you said that over the next 6 months, all the supplies will not happen with those customers. So can this -- hello?
Yes. Please go ahead.
So can you switch between, like, say, like [ lay ] supply, order suppliers too quickly?
No. There is -- we have a competitor who can supply now. So...
Okay. So [ like any ] product.
High chrome option is always there.
So Generally, that something we worry about once the supplies begin, you see?
Because we shifted...
See, customers may not prefer doing that, but [ if we don't take care of supply ] or there's a significant duty or other such things that happens. Obviously, assumptions change, right, and...
Historically, it doesn't happen often. No.
Yes. That I understand. I think also in I think Canada, I think over the last 4, 5 years, we have gained a lot of market share and that [ restriction shifted from that lots ] once we were building than them.
The next question is from the line of Renjith Sivaram from ICICI Securities.
[Technical Difficulty]
Renjith, your voice...
Renjith, we lost you. Can you repeat your question, please?
[indiscernible] the line from your side. We can't hear you. We've lost the line from Mr. Sivaram. We take the next question from the line of Sandeep Tulsiyan from JM Financial.
Yes. First question is pertaining to if I were to make a statement that there were no new client conversions in the whole of FY '21. And the entire volumes came in from existing set of clients only. Would that be the correct understanding?
Not really. I mean there will be a few clients that we would have added. I mean not -- but that's an exercise that will always happen. Yes.
I want to just understand so without any conversions, were volumes in sync with what we were able to do? And just trying to get a sense where we are headed towards probably in FY '22, barring the disruption in the Canada volumes. Where can we go towards is what I'm just trying to understand.
Yes. So there were customers that we added, but nothing that was material, just 20,000 tonnes in all of that nature. But there will be smaller mines that we keep developing. There are those things that will continue. But a large part would have come from existing customers.
Okay. So with the mine utilization going higher and the consumable demand increasing accordingly, barring this Canada disruption of, say, 8% to 9% of sales, we should be looking at a growth in the base business in FY '22, correct?
We will -- like we said, we will guide in a quarter or 2. I think we're still doing our work. There are too many variables for us to say one way or the other.
Okay. Fine. Fair enough. And sir, is it possible to get a breakup of domestic and export sales for the year?
In terms of revenue?
In terms of revenue, yes.
I don't have it on me, but I'll get you that figure. I'll speak about it in a little bit.
Okay. And lastly, just one thing on the commodity prices. I think although ferrochrome prices had peaked in, say, February and March periods, they have cooled off substantially over the last, say, 1, 1.5 months. So I just want to understand, what can be the tentative price hikes that can be rolled out in the coming quarters to offset these softened commodity prices?
So most raw material increase will be passed through. It's very volatile. So I mean what was there 1 month back, it's again started inching up. So I mean that it's -- the volatility is there, right? So at a point in time, every quarter, where there is a price variation formula, it will be adjusted according to the formula. Whenever we're taking new orders, it will reflect the new cost, right? But if in the previous quarters, average we're taking in this quarter and the supply will happen in the quarter after next, when it's representing pricing that is 4.5 months ago, right? So that is why it takes 3 quarters for us to really flush out and reflect the pricing that we have today. And then there is a volatility delta that kicks in. So broadly, we will have a pass-through wherever -- whatever that cost is with the lag effect.
The next question is from the line of Sumit Jain from ASK Investment Managers.
[ Great ] performance in the light of difficulties. Since we've had this experience in Brazil, and now we are facing this in Canada, and the commentary that every year, we try to add something like 25,000, 30,000 tonnes, all of these things put together, there is some volume loss in Canada, some volume you might gain. Would it be safe to say that FY '22, you can close on flat and or slight growth in volume without looking at the guidance? I mean that is -- that would be the end of it?
From a directional point of view, obviously, [ Sumit ], that would be the efforts. Okay. Now the problem is we exactly do not know since Canada, the final verdict will come somewhere in June, July. July, I think, July or August, the final rate and how the customers are going to react. So let us take a worst-case scenario that we -- for the whole year, we lose the volume completely. Even then, the endeavor would be to ensure that at least we are flat. But as we say, our people, various locations. So in cement, we are working in 125 countries. In mines, we are working in over 30, 35 countries, several mining locations, more than 150, 200 mining locations. All of our teams all across the world, 70, 80 people are currently in the process of ensuring that whatever are the given constraints, what best we can do and how much we should target, obviously, with an effort to somehow push the growth. And therefore, on a -- just to sound a little positive, we are not pessimistic. And we are not saying that we will -- so we are not working for a negative growth, but we are trying to see what best we can do and how much we can commit. Therefore, we have start some more time, maybe a quarter, at least a quarter more where we can get a little better picture. Very honestly, before 15 days, it was very gloomy. But today, we've been much better. In the last 15 days, India seems to have started faring very well. Similarly, many countries have also started opening. Probably the travel restrictions to India should be removed and from India also should be removed, hopefully, by July. So there are many, many variables which are beyond us as we speak this point in time. But our endeavor is that on a normal year, as we had replied to one of the previous questions, with these 3 major focus areas, there is nothing that can stop us from growing and having an incremental volume of 25,000, 30,000, 40,000 tonnes year-over-year from -- hopefully, from next year. Let us wait for a while for this year. We are trying our level best. That's all I can say.
Sure. Understood. In Brazil, it has been now 2 years. What is the progress made there? Because if some of that comes back, then clearly, you'll end up this year in a much better fashion.
So we had some volume this quarter. It's just a continuous effort. I know you've been keen and optimistic about it. This year, we are making our efforts. I mean we'll have, hopefully, better news to report on it. But we did have some quantity in the fourth quarter that we just reported.
Got that. And coming back to Canada. Like it happened in Brazil, eventually, the duty might settle as you know, a low teens side. And we'll come to know about it later. But if that happens, then the loss of volumes will not be to the entire extent that you have in Canada. Is that the correct understanding of the projection?
It will be recouped by what you said? Sorry, we missed you in the first part.
So in Brazil, the initial duty was 30%-plus. The final duty was 11%, 12%. And similar experience might pan out in Canada. If it happens in terms of duty the way it has happened in Brazil, then is it safe to assume that the volume will be retained in Canada?
We're too early to say, [ Sumit ] by -- there's too many questions rolled into one. We wish -- singularly, we're struggling for each answer. Today, our focus is only on one aspect, is to defend assets, okay? I mean it is presumptuous to say there will be a duty, there will not be a duty. I don't think this is connected at all with the Brazil case. The facts are very different. Data is very different. The regime is very different. So I think at this time, all we are saying is we are geared towards making sure we present the right data, and we hope that justice prevails or the right outcomes happen.
So Kunal, my question is trade is if the duty settles to a 11%, 12% kind of a duty, then do the customers take the material from us?
Yes. That's what I'm saying. It's not -- there's no -- we cannot have a presumptions conversation with the customer, right? It's not -- we don't know whether it will be 10%, it will be 0%, it will be 20%. We don't know that today. There is no conversation today that's possible with that assumption on what that duty will be. We'll just -- it is unchartered for us. We'll just have to bite the bullet one day at a time, cross the bridge as it comes. I understand you would like to have some visibility about it. But unfortunately, if we start thinking that way, we will keep affecting what we are in the process of, right? So our current objective is only to defend well and see what happens with that, right? We'll cross the bridge once we know what that outcome of that is. And then we'll create strategy that aligns with it thereafter.
Sure. And in terms of the gross margin, as you've explained, which Q2 has fallen from 66%, about 50%, But like you said, this is a pass-through. So is it safe to assume that eventually, we get back to the gross margin?
That's what -- I mean this is the force of the fiscal cycle I have seen over the last 16, 17 years. So I mean that is generally because raw material is expected to be a pass-through. No customer expects one to eat a vendor, to eat or raw material inflation, right? So -- and generally, a metals type business -- so we are -- that's the current expectation that over a few quarters, most of this price increase will be passed through.
Which means that the [ OPM ] of 21%, 22% are eventually achievable, doable.
Of course. Subject to other variables. No, no, no. No disclaimers. Go ahead. No problem.Somebody asked us about domestic and export. The domestic sales of INR 572 crores. Export was -- or sales outside India was INR 2,247 crores, INR 2,247 crores. So just -- and thank you [ Sumit bhai ]. Yes.
We take the next question from the line of [ Raja Kumar ], an individual investor.
Yes. Sir, just 2 questions. Yes, can you hear me?
Yes. Yes.
Yes. Sir, the first question is I look at your -- the production for Q4, it's about [ 62,000 ] tonnes. I just wanted to know, is it something because of the impending Canada, actually, you have deliberately reduced your production because -- I mean, in other words, I want to know whether this will be your expected sales for Q1 of upcoming year?
So there is a small part of that, but not -- I mean we would have sold 24,000 tonnes. Canada would be 2,000 tonnes a month, right? That's -- the difference is more than that. So maybe a month or so, there could be an impact on that. But the rest is just stock availability that we had that we built for this quarter. So nothing per se to read into it. We just built into stock in December with anticipated orders and deliveries in this quarter also. Because of the shipping, the shipping times going up, container availability being a concern, we are shipping ahead of time. So you would see some amount of orders that we shipped as a fallout of last quarter, where we produced last quarter so that we can ship it out as early as possible this quarter. So you'll have to look at that number on an annual basis versus just one versus the other quarter.
Okay. Okay. Got it, sir. Sir, the second question is I see that there's a lot of talk on ban on the conventional power plants coming up. So given that scenario, I just want to know whether -- what would be the impact for AIA because we...
As you know, nonmining volume, we don't expect that to grow. So I mean we expect that to be a flat amount. New plants don't come with -- in coal -- is okay for us. Anyway, we don't expect that market to grow. Existing plants...
So these existing volumes will not be impacted because it's a continuous replacement demand.
Okay. Okay. Got it, sir. Sir, the last question, you have a small subsidy called [indiscernible] team. I saw that in September, you laid a provision to impair. You took a decision to kind of [ dispense ] you. again, in December, we took an action to restart. So -- but I saw the current quarter is we have shown the losses. So just wanted to know what is the management -- why you took a different turn, and I think the results are not showing up in a positive way.
I don't think there is much to read into. I mean that's a plant, that's a capacity that's part of the group. At the time when COVID had hit and surplus capacity was there is -- that's part of a normal evaluation of available capacity. And then we had a revisit on where we stood on that, and it continues. We have -- we are not -- we don't have enough orders. Our capacity is much larger than our current -- our utilization is at a lower level right now. We would have done easily 300,000 to 320,000 tonnes this year had things been normal, right? So we have surplus capacities. Some part of financials that you talked about are a result of that.
Okay. So the current -- understanding is you intend to continue with subsidiary, right?
Yes, yes, yes.
The next question is from the line of Lokesh Manik from Vallum Capital.
Sir, my question was on new customer acquisition. So have you seen a delay on that front, given the nature of customer conversion that is there in your business? What would have probably -- what you could have targeted in, say, 2021 and flow through in '23, '24 in terms of sales, so that could have been pushed out a little bit into the future?
Yes. Lokesh, unfortunately, there is a very considerable delay that we are seeing for that very reason. And our process is something which cannot be done or which can be done with -- in a very limited manner through video conferencing and through Zoom. [Technical Difficulty]
Hello? Hello?[Technical Difficulty]
Ladies and gentlemen, thank you for patiently waiting. The line for the management is reconnected. Sir, you may go ahead. We still have Lokesh Manik on the line.
Yes. Mitesh (sic) [ Lokesh ], so sorry about this disruption. So as I was explaining, our kind of business warrants a continuous interaction with the customers, physical presence of our people going there into the mine site, taking samples, having discussions, coming back, suggesting the solution, again doing trials, again, having feedback, et cetera. Now this is not possible because of the COVID restrictions on travel. So last year, somewhere in the month of March, this process practically came to a grinding halt. We thought that from November, December, things started looking up from January. again, it started a little bit. Unfortunately, again, in January, February, we saw second wave in Europe, America and many other parts of the world where mines are located. And therefore, that was disrupted in the month of April, May. We saw India coming into difficulties. So practically, last whole year and this first quarter is gone. Nevertheless, whatever little we could do, some small last-mile conversions, we did try to finish. I think hopefully, by July, August, things should reconnect and we should be able to restart our travel and interaction. And hopefully, that process will be on. Fundamentally, the opportunity remains the same. There is absolutely no customer who has said -- come to us and say that now they are not interested, et cetera. So let's hope things come to a normalcy from next quarter. That is what we believe.
Right. Just another question on the Canada import duty. Is there any threat of it being retrospectively applicable?
Not really. No. There is a -- it's unlikely that it's applied retrospective.
The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.
Increasingly, we are seeing miners talk about ESG emphasis. So in that tone, how are we giving thus the solution to our customers to improve their ESG score?
Very material, right? Whether that converts into a purchase decision, we'll have to see. But right from saving, the biggest ESG consequence is our ability to save consumption of reagents. That's absolutely the most toxic material that gets used, including sometimes cyanide, right? So -- and that's required to just run the process. And use of chrome, one can reduce consumption of reagents, number one. Number two is if your recovery goes up, which means you're grinding less for the same amount of metals, right? We can save power for -- when we are using these mill linings. So all of these things are -- each of these actions has an ESG consequence for the miner. So that is absolutely of interest. I think that adoption interest is largely driven by stakeholders making miners accountable, getting them to look at it from this standpoint. I think a lot of mining companies are taking those initiatives to reduce their environmental footprint. And I think we'll be right up there in terms of our ability to help in each of those regards.
Sure. That's useful. And secondly, in terms of the nonmining volumes, what is the share of cement in that? And what is our market share in the cement?
It's largely cement. Nonmining is largely cement. I mean 90% of that would be -- or 80% of that would be cement. And you also have the utility, which is predominantly in India. So that's one. Cement, I think we expect -- I mean the global market has been flat. And in the organized side, there are 2 players. One is our competition, and other is us. So 2 players that have a reasonable market share in the organized sector outside of China. You've got players in China that occupy that space in China. So outside of China, there are 2 players. And then you've got these smaller manufacturers who are present in local regions. But largely, it's a status quo in terms of market share. I don't think we can go higher than our current volume. There's an equilibrium in terms of market share for each producer today.
Sure. Is it fair to say 50% share ex of China?
I mean we don't know what our competition would be doing. So we would rather not have that number calculated, but it will not be 15% or 20%. It's a reasonable market share that we have.
[ 30, 35 ].
Sure. Just lastly, you mentioned that there is -- there will be a pass-through that we have seen historically also. Now does that imply that our percentage margins come down because the customer gives us the input cost inflation but not the margins on that?
Possibly, yes. Which is why, I mean we are not -- there is a price margin guidance that we have of 20% to 22%. We've done more than that. But there are several variables that come in play, and a lot of these cross-currency, shipping, raw material, the pass-through. There's a lot of things that come into play into margin. So all things being equal, yes, theoretically, what you're saying is correct. But other things also give as things move, right? So -- but as of now, the focus is on making sure that we pass through the raw material. That itself is a large endeavor. Margins will follow suit. But again, that's not an absolute number that we are guiding on.
Just one last point from my side. Are we seeing that incrementally, the clients are talking about new mines opening or greenfield you did speak about in the beginning of the call. But are you seeing any customers which are there?
Yes. So copper and gold, we are hearing miners talk about new capacity, yes.
The next question is from the line of [ Pradesh Chira ] from Lucky Investments.
Yes. Sir, I have one question. When we talk about client and mine -- newer mines or in terms of prospects, these are basically existing mines where the commercial production exists, right? That's how it is?
Yes.
Okay. And when we are talking about our -- incrementally, we are seeing investments emerging in gold and copper. And last full decade, there haven't been any investments in mine. Is it fair to assume that some of these investments for business to flow to us, will at least be 2, 3 years away because they have to go...
So -- yes. So first and foremost, let me, again, reiterate the cost of -- a bit of a [ repetition ] that when we talk of an opportunity in mining of about 2 million tonnes, 2.5 million tonnes per year, that is the pure replacement demand that we are talking, that is coming or emanating out of the current mining which is happening. Then we say that about 15%, 20% of that is converted into high chrome, which means about 80% of the demand is still yet to be converted, and this is the opportunity on which we are working. So for next, say, 5 years, 10 years, we don't expect -- so for the next 5 or 10 years -- sorry, they have just been reconnected back to the original line. So there was a disruption. So at least for the next 5, 10 years, we don't worry whether technically or theoretically the mine new CapEx cycle grows or not because our focus is on converting this existing replacement demand into high chrome use a major part of it. We can't convert the full part, but we want to convert a significant part so that we become a dominant player. Having said that, in the previous conversation, whenever we talk about the new mining cycle, I mean the new CapEx cycle, it will eventually pan out into a -- theoretically increase the demand for replacement. But as we said, since the focus or the endeavor is not linked to the new CapEx cycle of the mines, it doesn't matter whether that CapEx cycle happens or does not happen, at least in near term. This is how we look at it.
Okay. And associated question with this. Is it a case where in the existing opportunity or in the existing mines, as the mine becomes older, the need for slightly higher-quality grinding media increases? Or where the mines are, where the cost of production is higher, the need for the high-quality grinding media increases? Is there a correlation by any chance in that form?
So a very pertinent question, I must say, because you see our whole focus, if you see the solution strength that we have, capability that we have developed, our mine operates under various conditions. And as the mine grows older, it will have to go deeper. And therefore, the [ variability ] and the characteristics of ore becomes more and more difficult to grind. And there is where high chrome becomes an important substitute because it enables the same mine to improve the throughput and the quality of our grinding without incurring significant additional CapEx to sustain or maintain the same level of output. So this is one of the very important attributes on which our mill liner business is focused on, to improve the throughput, to reduce the cost and not to make that mine incur heavy CapEx in terms of grinding equipment, et cetera, for maintaining the output. So this is one major advantage that we, as a part of one of our solutions, we do offer. And yes, you're right. In a way, yes, quality of grinding, improvement in throughputs, improvement in grinding efficiencies is a very important value-add that we profess or we endeavor to bring on table.
Okay. And lastly, on the mill lining side, considering the realization being 50% higher than the grinding media, high chrome, will the margins also have to be higher in mill lining?
See, theoretically, yes, but we always talk of a weighted average sustainable margin at the pure operating level of 20%, 23%, excluding other income, other nonoperating income, et cetera, that you normally, as the investor [ track the media ] or the analysts, they take it out. So the idea is to ensure that this is the minimum operating level margin with which we can confidently talk about. And -- but it's a function of product mix, multiple factors, raw material going up in one quarter, our ability to pass it through in the second quarter, product mix improving. There are multiple factors. But a long-term, sustainable show 100% pure operating EBITDA or marginal basis is something that we want to talk about.
The next question is from the line of Anirudh Shetty from Solidarity Investment Managers.
My first question is around these import duties that we have seen from Brazil and now Canada. So just wanted to understand the trend over here. Are you guys seeing an increasingly protectionist trend happening in this industry? And if yes, so, what are the implications for AIA?
Not really. I think first of all, our product is not like [ speed ] or a commodity in that sense where it's mass produced. You've got plenty players, right? The old thesis for our product is to add value, and that some part of that value that we bring is reflected in our margins, right? So the idea is not to be having to sell at a price where we -- where some of these actions become part of the business. Of course, it has to be market linked. There is competition. There are other factors that come into play. But we don't think there is a protectionist trend. I think this is just a tactic that companies would use as markets evolve. I don't think this is -- we don't believe that this is a trend in that sense.
My next question is on the overall industry. So it's 2 million tonnes, 2.5 million tonnes. What would the broad split be between iron, copper, gold and I think everything else?
I think iron would be about 40% of that, of the mix, and then followed by gold and copper would be the second and the third largest.
Right. And a point on that opportunity just through conversion of existing forged metals is well taken. But in a situation where commodity prices go in that structured bull run, and of course, new mines come out whenever they do, can one make a case or an ancillary like AIA to benefit not only from volume growth but also increasing margins because then the customer allows you to make a higher profitability because even the add prices for them have gone up?
Not really. I don't think there is any such cause-effect connection. Our margins are linked to the value we add to the customer and the efforts that we make, not -- generally it's not linked to how much money your customer is making. So by extension, when they're not making money, we should not be making money, right? I think that's not connected. Our job is to make sure that we add value, design solutions, we engineer, we engage and demonstrate value that we bring and partner with our customers, making sure we are fairly compensated for it. So no, that's independent of whether they're doing well or not.
Got it. And just one final question. For our existing grinding media and mill liner business that's coming, what would the peak utilization possible -- would be possibly?
For our plants?
Yes.
I think -- so we should be able to go almost to 90%. But we have maintenance downtimes and other things where that depends on what cycle it is in that year. But we can go up to 100%.
Yes. And this is true for both grinding media as well as mill linings?
Correct. So 90% -- 100% -- I mean melting capacity is there. That depends on -- 80% to 90% is something that is absolutely possible to achieve.
The next question is from the line of [ Karan Singh ], an individual investor.
Hello? Hello? It's [ Karan Singh ] from [ DST ]. Sir, first question is on this -- the entire travel restrictions which are there. So just wanted to understand once the travel restrictions open up, generally, will it take a quarter or 2 for these volume conversions to start happening in terms of internal processes involved. And on an annual basis, if you look at historically what would have been our volume, which would have come from the new customers? That's my first question.
So I think most of our -- generally, most of our growth is coming from new customers. So we have existing customers where there is a growth potential. But generally, that depends on what that customer's philosophy. Do we want -- do they want to buy 100% from one supplier? Do they want to split into half, one plant versus another plant? So I don't think that -- we can generalize that. But generally, most of our growth comes from new customers.
Okay. So -- and in terms of this conversion, once the travel restrictions open up, will it take a quarter or more than that for the new volumes to start coming in? What could have been the...
I think once travel restrictions lift, we get back to a normal pre-COVID engagement with the customer, and their own startup activity, right? We start our activity, start engaging. When do orders convert out of that? Now that's a cycle itself, right? And that -- some work we've done. Some is nearing closure. Some requires trials. So that's in different stages, which is where we are saying we'll take a quarter or 2 and come back with the plan saying, here's our world view on where tonnages should be in 12 months from now and then 24 months from now. So allow us a quarter or 2 to get a firm handle on that.
Okay. And sir, in terms of the liners, overall, the conversion section for any new customer, is it the short term versus the grinding media?
For liners, there is much more -- the results are much more tangible because we're looking at improvement in throughput. We're looking at reduction in power cost; obviously, a cost reduction in ware cost, ware part cost. So it's not faster. It's a little more tangible and also quantifiable. So yes, we hope that the conversion there is faster, and that feeds into our own grinding media strategy as well, right? So mill lining is part of that larger ware part strategy that we have.
Okay. And sir, lastly, on copper and gold. Generally, how are the realizations for [ forged and ] iron ore? And in terms of our success factor for conversion in copper and gold, is it much better than iron ore?
No. Not really. It's just that for gold and copper, there is a recovery angle to it. There's a reagent angle to it. There is -- it's not just cost of grinding media, right? There's recovery. There's reagent consumption. And that put together also offers -- there's an additional value that the customer gets on migrating from forged to chrome, which is where we believe that, that -- that's an easier lower-hanging fruit as opposed to iron ore. But a lot of our early breakthroughs were with iron ore. So I don't think it's one versus the other. It's just that we're a little more bullish about gold and copper. Also, the metals have a bullish undertone with gold being a safe haven asset and copper just having structural -- looks to be having a structural underlying demand. So all put together, we are just more excited about it. Otherwise, our value-add and propositions are there for both. Mill linings brings iron ore back into play because then we're looking at power cost, reduction in power cost, increasing throughput to produce more steel for the same amount of grinding installations. So these are things that -- we are excited about all 3. But gold and copper is just something that -- because of this extra value-add allows us a little more leeway when we discuss with customers.
The next question is from the line of Renjith Sivaram from ICICI.
Sir, sorry, I got disconnected last time.
Yes, yes, yes. We can hear you now.
Yes. I just wanted to check whether is this dispute or in this -- with the authorities of Canada, we are the only party which is impacted? Or you see other manufacturers like us also impacted so that we have no -- we are a group of people who are trying to [indiscernible]
Understand, we are [ one of ] the suppliers to Canada for grinding media. So the duty will be applicable to producers in India, but us being -- no, the largest producer in India will be the ones will be really affected.
So is the imports from India only impacted in other manufacturing bases over there?
No. The action is against producers in India.
Okay, okay. I think the kind of contingency that we will be planning like, for example, we won't be able to go over the cash from [ this or that ]. So what is the contingency that we had?
So what we've explained to before on this call today, that today, the focus is on defending this action. I think it's premature to start thinking and engaging with the customer with a preconceived outcome in mind, right? So we've got 3 months still to go in this effort, and that's what we are focused on. We'll see what happens with this. We'll see what the outcome is and then come back with mitigation plan depending on what that outcome is.
Do you still [indiscernible] like Brazil, we have seen through this cycle. Canada now -- or do you see any further issues in other geographies, which can probably come about? Or can we just [indiscernible]
It's difficult to generalize like that. It's difficult to generalize like that.
Okay. So just lastly on the mill liners. So we expect sales from mill liner probably from FY '23 onwards? Because FY '22 will be -- '22 will be mostly regarding the commissioning of the factory.
Exactly. '23 is when we expect volumes from the plant. Yes, that's the current plan.
Okay. And the grinding media, just for some more clarity regarding the overall volume ramp-up, and then we will rework on our new clients to add that additional 50,000 tonnes for us.
Exactly. Exactly. We have surplus capacity. So we don't have to rush into adding new capacity until we have clarity on utilization for the sale.
So why don't we increase of our dividend because we are paying less -- lesser dividends, and we have INR 2,000 crores of net cash. So is there anything that -- why is this a lower dividend payout?
Okay. Very, very relevant question. I agree with you that we have a very comfortable cash position. We had, again, extensively discussed this today in the Board. So what the Board felt and what the management felt actually that, given the current volatility, given the fact that there are many things which are still not under our control, let us, at this point in time, declare this, so to say, the kind of a minimum dividend that we want to -- that the company wants to give. And after 2 quarters, the situation will be again reviewed. And if necessary, a fresh call will be again taken in one or the other form. So this is just a bit of a conservative approach with which the company is currently viewing the situation. And as things become normal, we will once again shortly look at it and see what are the other ways in which the payout can be announced.
The next question is from the line of Anupam Gupta from IIFL.
If I understand right, you said you had resumed some volumes to Brazil in the fourth quarter and also in [ first quarter ], is that right?
In the fourth reporting quarter, yes.
Okay. So what I want to understand, that is basically -- is that also a reason of -- so did that have an impact on margins in the fourth quarter apart from the normative impact, which you saw?
No. I don't think out of 80,000 tonnes, we can't be discussing 4,000 tonnes. This is just in response to the question that [ Sujit ] had asked on what's happening with Brazil. I don't think we have anything else to report on it at this time.
Okay. Okay. Understand. And just a clarification, I [ wasn't able to hear ] your reply to Renjith's question of after opening up, how soon can the volumes come back? Because what we have seen for over the last 1 year is that the overall cycle of marketing has gotten disrupted. So now that you'll restart, let's say, a couple of months down the line, will it result in meaningful incremental volume this year? Or will that still be, let's say, 6-, 7-month process of [ something ]?
Which is where we are saying that, we'll give a guidance on that in a quarter or 2 once we get a better handle on what's happening, where the customer stands. We are unfortunately not in a position to answer that today. We are hoping we'll have some better answers in a quarter or 2 in terms of guidance for the year ahead. How are these mines opening up? Are they actually opening up? What is happening with vaccination? There are questions that we still have. It will be presumptuous right now, premature to start discussing what happens. So once that post-COVID markets opening, what formats, will they be ready to welcome and accept us at the plants. We just want to wait and watch for next 2 quarters on how all of that pans out. Once it's already we are there, the solution is there, the engagement is there, the customers are there, right? Now if that takes 3 months, 6 months or 9 months, it's a question of time in that sense, right? So we are not so curious about how long it will take. It's just that if we have to get back to pre-COVID in that sense, in allowing us to really engage with customers.
And you see, Anupam, just at some mines would be at the last mile, some mines would be at the initial phase. So it depends. So it's not that after the travel starts, it will take 6 months or 12 months, but something will start moving hopefully from third quarter. That's what we feel. But let's wait and watch.
Okay. Understand. And just one more question on your pass-through. So raw material, I understand, is a definite pass-through. But is freight changes also a pass-through? Because generally, your competitor has created a pass-through.
[ That is most of care ] This is our intention that freight also becomes a pass-through. We work towards the other.
The next question is from the line of Varun Ginodia from AMBIT Capital.
Hello?
Yes. Yes. We can hear you.
So most of the questions of mine are answered. Just one question. You mentioned you had some volumes in Brazil in 4Q. Is it possible to give that number? Like how much was it from the Brazil out of total volumes in fourth quarter?
About 3,500 to 4,000 tonnes.
About 4,000 was from Brazil in 4Q. Okay. Okay. The rest of my questions are answered.
The next question is from Rita Tahilramani from Invesco.
Just 2 questions. First, what would be the probable price differentials between your price as well as against the competitor in Canada?
No. We don't have access to that, no. So we don't know what that would be. It's not fair to hazard a guess on it.
Okay. Secondly, we always say there is some kind of -- at least that time for -- for the customer to switch to a new supplier. Like how is it -- how is it fungible for these mines to switch to another competitor in the interim?
That's a... [Audio Gap]Because then you don't have an accountable supplier for that grinding ecosystem, right? So it's in their interest to continue with whoever they are. Sudden shocks like the one like the interim duty, which was expected, which is part of the process, but still a material amount, tantamount to that shock external factor. And to that extent, I mean customers would want to look at the costs involved. And there is a local producer, which is Magotteaux, in that market. And I think that they can -- they should be able to migrate without significant challenges.
But that is a theory. In practice, once the customer is onboarded, generally, he will -- there is the benefits, and then he would not want to shift unless there are extraordinary circumstances. So there are very, very less number of such instances historically.
So that means if the situation normalizes, as I said, a bit of confidence that...
How do you mean -- what is your -- so let's understand. Throughout this process of COVID, we have not disrupted our supplies to any customer, and that is what is evident from the volumes that we have done. So from an existing customer standpoint, there is no such material thing that we have witnessed over the last 1, 1.5 years. So that's point number one. And therefore, our customer, once he is starting to take our material and he sees the benefit, as I explained, there is hardly an instance where he has gone back to, say, theoretically the original supplier or the previous -- or a high-chrome converted customer, from forged to high chrome moves back to forged. Those things -- those type of things, we have not witnessed. So this is more of an academic or a theoretical discussion, actually.
The next question is from [ Prakul Devan ], an investor.
Hello? Am I audible?
Yes.
I have 2 questions. First question is most of our customers do not have high debtor days as what we have. So what could be the reason why we have such high debtor days? And the second question is...
Sorry, you said compared to whom?
Compared to our customers. I mean, let's say, if you are supplying to cement industry, they don't have such high debtor days or mining industry.
So we are an industrial product, long-term solution provider. And these are the -- our debtor days are also analogous with their own production cycle time. So our working capital cycle is sum total of after they produce, how much time they stock and then they sell. So their entire working capital cycle, generally, if you see, our data for the last many, many years, it hovers around 70 to 80 days. And we are happy giving that much credit as a part of the normal -- none of our customers have ever really seriously defaulted.
No. And also, these large customers have their own credit policy. These are not...
It's their working capital cycle. This is not only their credit. This is not a credit item. They use it, then they produce their product, they sell it, they stock it, they distribute it. So I think it's a long-term situation. And 70, 80 days is a very, very normal credit period that we are happy to offer.
Okay. Okay. No, my understanding was, since we offer value-added solutions, the customer should not have a problem in paying much earlier than...
They are paying on time, absolutely.
But the number of days...
And we are happy accepting the payment terms that these guys have. These are large, large companies. I would rather -- a conversation is on value-add in the pricing and not on payment terms. There's no point in having a conversation on a shorter debtor days. These are large companies. I don't think...
Yes. And they are not borrowing anyway.
Exactly.
Okay. Okay. And the second question is we have -- as you said, mainly there are 2 players in the international markets, we and the competition. I presume our prices will be lower than the competition.
Not necessarily. Not straight away. There could be some products where we are definitely cheaper. There could be some products where we are expensive. So there's not [ an exact ] comparative.
It's not a market-driven price, and we don't know the competition pricing, right? So we operate in our own world. We understand the value that we bring to the table, and our pricing reflects that.
Okay. No. Because what I was coming to that when you are discussing with the customer, you will have some clear idea from customer about the competition price.
Not really. Unfortunately, not.
Okay. Perfect. Because my next question was related with that, if our pricing is lower than the competition, our market share is higher than the competition.
No. No. It's not so simple. I'll tell you, we are in a very complicated set of economic conditions that each client, each customer operates within his geography. We are 10,000 miles away. We are an Indian player. Otherwise, we have many advantages to offer. So it's a very, very complex mass with which our customer converts. So many times, it's not just a function of price. We have seen situations where they prefer to be with 2 suppliers, their global risk management policies. Even if my competitor is at a higher price, they may want to prefer buying something from them, something from me. So it's a complex set. But broadly speaking, we are having large capacities, scale capacities, having significant benefits that we offer and bring the customer to a situation where his saves on power, he saves on throughputs, he improves his consumption ratios, and he gets to benefit significantly. And therefore, he comes to me, and he stays with me for a very, very long period of time. I make enough margins. I have hardly any incidence of bad debts. So I know it's a very complex situation. It's not just a commodity that we -- they don't take a decision just based on the price.
Okay. Okay. And my last question is, in future, do you see the Chinese producers coming to international market, I mean, the competition?
So historically, for the last 25, 30 years, we haven't seen China becoming a competition, serious competition outside of China, neither us, nor Magotteaux, our competitor. So we don't see any reason because they work on a very different yardstick. We are working on solution capability as the main focus, and they work more on a standardized basis. So no, we don't see China as a threat at all. Of course, there will always be there as a price spoiler or many, many situations, but no serious competition at all outside of China.
Sir, we don't have anybody in the queue.
Yes. So let's end the call.
Thank you. Thank you so much.
Thank you for attending the call, and we look forward to -- we look forward to connecting with you at the end of first quarter. Have a good evening.
Thank you.
And always I remain available for any off-line questions for today.
Yes. Thank you.