AIA Engineering Ltd
NSE:AIAENG
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
3 406.8
4 813.35
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
You don't have any saved screeners yet
Ladies and gentlemen, good evening. Thank you for standing by. This is Sagar, 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. Please go ahead, sir.
Thank you everyone for joining us on this fourth quarter call and results for our full-year fiscal year '23-'24. And as usual, I've got Sanjay Bhai, and I am Kunal, both of us will take you through the snapshot of this quarter and then get into Q&A. I'll quickly update for numbers and highlights of this quarter. There are 2 updates that we would like to share, and then, we'll get into Q&A.
We've ended the full year at 2,97,000 tonnes, up from 2,91,000 tonnes last year, so about a 6,000-tonne increase year-on-year. And for this quarter, we've done 71,400 tonnes, and it was largely comparable to the fourth quarter last year, which was at about 73,500. So it's been a flat quarter year-on-year as well as sequentially where we've done 74,000 tonnes in the third quarter of this year.
Our revenue for the full year is at INR 1,130 crores, and that translates to a realization of about INR 158 per kilo. Our EBITDA for the year stands -- for the quarter stands at INR 374.63 crores, which is at 32.57%. And the EBITDA for the full year is at INR 1,616 crores, which is the highest ever in our existence, so it's been a record year for us, and an EBITDA margin of 33.31%.
Profit after tax of INR 260 crores, and the profit after tax for the full year at INR 1,135 crores. Year-on-year, again, profit after tax is largely flat. It was INR 268 crores, and EBITDA was INR 379 crores, both figures are comparable this quarter compared to the fourth quarter last year and lower down from INR 395 crores of EBITDA in the third quarter and INR 279 crores in the sequential third quarter of this year.
So overall, it's a flat quarter compared sequentially and year-on-year. Highlights of some other line items, our total other income is at INR 76 crores for the quarter, which includes INR 72 crores from a treasury income and INR 19.26 crores, which is our other operating income, which is our export benefits and a small exchange gain of INR 4.23 crores. That sums up to INR 76 crores overall. And that's, again, comparable to INR 83 crores in the third quarter, but which had an additional foreign exchange gain. If you knock that out, it's largely comparable between these 2 quarters.
Working capital, again, continues to be flat. We are at 101 days, consolidated, and that's comparable to the third quarter last year and also the fourth quarter last year. Most of our sales have come from -- the growth in sales have come from the mining side. So if I were to break up the 71,000 tons, mining is at 26,500 and -- sorry, mining is at 44,900 and non-mining is 26,500. So for the full year, of the 2,97,000, we've done 2,03,000 tonnes in mining, which is up from 192,000 tonnes in 12 months last year, FY '22-'23. And non-mining, which is about 99,000 tons, is at 93,000 tonnes -- 93,600 tons. So it's a little lower, about 5% lower, while mining is up by about INR 10,000 to INR 11,000. So 2,91,000 tons, that's how it adds up to 2,97,000 for the full year.
We've done -- our net cash is at INR 3,290 crores, I think that's broadly the number highlights for the quarter. We've got 2 more updates. You would have seen our filing on the stock exchange is around anti-dumping and anti-countervailing duty process that has been initiated by the U.S. authorities, based on a petition that was filed by our competitor there, which has a local plant in U.S., which is Magotteaux U.S.A. And so -- and as we've seen and experienced with Canada and Brazil, it's now almost a sub judice matter, where there's a department in the U.S., a trade department now looking at the whole -- our sales in that region, and they'll do whatever is required on their side.
We did 27,000 tonnes in U.S. in calendar year '23 because that is a period under review. And as always, we'll continue to not only defend our business in that region, but also actively cooperate and participate with the authorities there to make sure that a fair assessment is done. Beyond that, we may not be able to speak much. For now, we expect business to continue as usual. So nothing more to report on that account.
Our business in -- the antidumping duty in Brazil is also undergoing an investigation, a sunset review. So 5 years, the duty was applied for, and then, there is a sunset review, which is ongoing. And we hope to hear the outcomes of that next month, in 4 to 6 weeks from now. So that is our update on the trade side.
One more update is around our capacity. So we are very happy to report that our brownfield expansion for our non-grinding media business -- we were -- as we have reported, we are spending a total of INR 200 crores, of which we have spent INR 110 crores already, and we'll do the balance in this year, FY '25, where we've done some brownfield, some capacity balancing equipment. We're buying land for storage facilities and doing some reorganization of our older plants in Odhav. In addition to the efficiency that, that will bring, better organized supply chain and operational debottlenecking, it has also given us additional capacity of 20,000 tonnes.
So as we speak, our total capacity, which is at 440,000 tonnes, now remains enhanced to 460,000 tonnes, which includes this brownfield. On the ongoing brownfield for grinding media, we had originally reported 80,000-tonne grinding media capacity addition. A lot of our equipment comes from Europe, which is facing delays and interruptions. So what we've done over this quarter is we've chosen to implement one module of that capacity, which is 36,000 tonnes, and we hope to be ready and commission that in the next 3 to 4 months. The balance capacity for that, given the challenges that were there with the supply chain, we've decided now to put a halt on it because we are still with surplus capacity. As our market -- as we start consuming more from our existing capacity, we will decide on further capacity addition.
Customers need for us to have buffer capacity. And so we will be looking to add more capacity. And this will be now that the balance portion of this brownfield will be like a plug-and-play where we start and finish it in 6 to 9 months. So that module is now being put on hold. So for now, our current phase of expansion will end with 440,000 becoming 460,000 tonnes, current capacity plus 36,000 tonnes of grinding media that will come online in the next 3, 4 months, which will take our total capacity to 496,000 tonnes. So these are the 2 updates, the action in the U.S. and the capacity -- the updates on our capacity for grinding media and non-grinding media.
Lastly, as far as market is concerned, I think we remain status quo with everything that we have said over the last few quarters. We continue to not -- while our endeavor is to add 30,000, 40,000 tonnes of sales each year, and we are prospecting far more opportunity to convert from forge to chrome. We will have to -- we are not sharing an update on exact numbers that we hope to -- that we plan to sell for this year. So while our endeavor is -- and that is just a directional figure, we continue to not share a guidance note on tonnages for this quarter.
With that having said, I'll ask Sanjay Bhai share a small update from his side, and we can get into Q&A from there.
Yes. Good evening, everyone, and thanks for attending this call. So just to add a couple of further updates. So as Kunal explained, yes, we remain absolutely committed and focused on working on all the opportunities, which we believe remain absolutely the same, either we talk of all the 3 basic cores on which we are focused on in terms of our mining opportunities, that is to say, iron, copper and gold. We are working on several conversion opportunities as we speak. And therefore, although we appreciate and understand that this year was flat, as it was indicated on the Q3 call, that does not change the tone or the direction with which we are working, that is an incremental 30,000, 40,000 tonnes at least on which we are currently working, and we remain committed to that.
We believe that as we move forward, we should be able to guide you a little better. But there are -- all I can say is there are several such opportunities on which we are very bullish and working. And directionally, this modular approach does not and should not be read as a deferment, but this is just more structural and strategic in nature. That's my first point.
Second, we are also making significant investments on the renewables. So this year, we are participating in a hybrid solar and wind project, where we'll be adding almost -- under the group captive scheme, where we will be adding gross 60 megawatts, which would translate into effective about 40% to 50% of the power sector, which should become operational in the current year. And because it is under this group captive scheme, the investment is in the range of INR 30 crores to INR 40 crores, but that will make us -- by the end of this year, we will be at least around more than 50% to 60% effective captive.
Yes. So this will become -- this will be implemented in the current year by end of the year. The impact will come next year. So that will add another further significant renewable capacity, and I think the other CapEx plans and everything, Kunal has discussed.
So just to conclude, directionally, we are absolutely committed, and we remain very buoyant internally. But yes, we are facing challenges, like this U.S. antidumping, and we will take it in our stride and do the needful.
With this, I think moderator, let's throw the house open for Q&A.
[Operator Instructions] The first question is from the line of Amit Agicha from H.G. Hawa.
Am I audible?
Yes.
Congratulations for the results. And my question was with respect to the MPS acquisition, like it is mentioned in the presentation that 43% shares are acquired at the rate of INR 64 crores in FY 2024, so in the last con call, it was mentioned 30% stake is also acquired, so is it meaning that we are having 73% holding now?
No, no, no.
It is plus 13%, total of 43% now.
Okay. So in all the total spending is 43% plus the balance INR 64 crores right?
No, no. We are -- we bought 30% before and 13% now. Total is 43%. Yes.
And the total cost of acquisition is INR 64 crores.
Yes. Both put together. Correct.
The next question is from the line of CA Garvit Goyal from Nvest Analytics.
Sir, you mentioned about putting more brownfield expansion on gold. So can you let us know what is the capacity that we are currently putting on hold?
No, no. So as against the first and foremost, 80,000 was the composite. Now we are implementing the first module through a modular approach of 36,000, so it is 4,40,000 plus 20,000 brownfield already implemented at Odhav and a few other locations as explained by Kunal plus 36,000, so this will be 4,96,000, which should become operational by Q3 this year.
Earlier, the total capacity target was 5,20,000, right?
Correct. Correct. 5,20,000 becomes 4,96,000.
Yes.
Understood. And sir, what is the exact reason? Is it due to slower penetration happening across the industry or anything else?
That's what Sanjay Bhai explained, right? This is -- we are already doing capacity ahead of time. And there was an opportunity to do it modular. It was taking time. If you remember, our current guidance for commissioning was December, so end of this year, and it was moving to next quarter. We said, let's go ahead with what is available, how can we try and get a module up and early? That choice became available as we reconfigured our equipment. And then we decided to say let's do something now. And then we -- then the next module can be easy to plug when we decide to go ahead and do it. So we are spending about 100 -- total INR 170 crores -- instead of INR 250 crores, we are doing it at INR 175 crores and getting done with it soon.
The next question is from the line of Ravi Swaminathan from Avendus Spark.
Moderator, there seems to be an echo, which is coming while...
But Ravi, we can hear your voice very clearly.
Okay. Okay. It seems to be from the moderator side is what my sense is, just wanted to highlight that. My first question is with respect to the overall mining demand environment. So with gold prices going up and copper also resurging back in terms of prices, how do you see the mining activity across your various geographies? Has there been any pickup that can lead to increase in grinding media demand? Are you seeing anything of that sort, sir?
As we have always maintained, we want to remain very agnostic to mining demand cycle, correct? So just because now there is an uptick that doesn't mean that automatically next quarter I will start getting more inquiries, no. The whole approach is conversion, correct? And it is a very painstakingly time-consuming approach. So keeping aside the mining cycle, all I can say is that the demand opportunity of 1.5 million to 2 million tonne conversion on which we are focused is absolutely intact. We are very, very bullish on wherever -- all those geographies where gold and copper are predominant, not to discount iron, correct? So we are equally very, very bullish on all these 3.
As we speak, significant opportunities are under conversion process. Unfortunately, I can't give you details beyond this. But all I can say is that from an opportunity landscape, there is absolutely nil dilution. On the contrary, there are still more aggravated efforts, which are being put. The only point is that it is beyond our control, the whole conversion takes its own sweet time. Having said that, our internal focus remains absolutely committed on all those conversion opportunities, and we are working on. There is no letdown in the pipeline. On the contrary, pipeline looks to be very, very buoyant.
Understood, sir. And with respect to the EBITDA margin, so earlier you used to guide it to be in the range of 22%, 23%. And then a couple of quarters ago, you had mentioned 23% to 24%. What kind of range that it is likely to settle in keeping in mind the cost savings that -- initiatives that we are taking?
Ravi, I think we've had a consistent answer on this. And our macro guidance continues at 20% to 22%. We've done better, beyond that, as you know, for many quarters. But as a business model, we will defend that margin going forward. There is always an opportunity that if we are able to reduce our cost, there is a case for the customer benefiting out of that. That becomes something that becomes an operational leverage at our side. It could become a margin thing. We will see whether it's possible on a sustainable basis. So that's an effort that continues, but from a guidance standpoint, I think we stand to what we've been historically maintaining.
And just to add to Kunal, there is a logic to that because our whole focus is conversion, where we continue to believe that there could be challenges. Yes, our endeavor will be to do better. In fact, we have been consistently doing better operating margins than what our guidance is. But at this point in time, we have not really relooked it, so let's mention what we have spoken earlier.
The next question is from the line of Bhoomika Nair from DAM Capital.
Kunal Bhai, Sanjay Bhai, I understand that this year has been a little tough in terms of the conversion, and it's been a little slower in terms of what we had expected, but if I look at over the last 5 years, right, from 2019 in mining, we were about 170,000, and this year, we've closed around 204,000 roughly. This gives an average CAGR of 4%. Now while annual conversions, et cetera, there could be taking a longer conversion aspect, but the pace of conversion and the pace of volume growth has been relatively a bit slower.
On an absolute basis, it's been about 30-odd thousand kind of an incremental volumes over a span of 5 years. So just trying to understand what has -- what is driving this lower conversion, and as we move ahead, at some point, I think we were looking at some 30,000 incremental volumes on an annual basis. You think that is something that is really doable? What are the challenges? And what can really drive that conversion at a faster pace?
Thank you, Bhoomika. And I think important question, I think for most people on the call also. I think there is context to this 5-year period because there was COVID in between, right? There was a challenge in developing markets. There was a serious increase in freight costs for almost 2 years that made the conversion virtually impossible just because of the extra cost our customers -- potential customers will have to pay compared to an incumbent, which is in the same region, right?
So I think we lost almost 3 to 4 years during which time that it was layered with this whole trade action where we've lost volumes in Canada, Brazil and South Africa, right, collectively closer to between 50,000 and 60,000 tonnes. So it's been a very challenging period. The fact that despite all those headwinds, we've grown from 170,000 to 204,000 is something that excites us, that encourages us, that motivates us that we are on the right track, we are not at 100,000 tonnes.
I mean, all of these collectively are black swan events that actually take a company down, right? No customer migrated back to an incumbent or to another competitor, 100% of our volumes remain, we delivered, right? All of that, you know the journey. You've seen our price pass-throughs come along, including all of freight, right? So the point is that now over the last 12 months or 18 months, markets have been cleared, the travel has started. Freights have normalized over the last 6, 9 months.
It's -- now I think we are in a level playing field, basically now looking back to growth. I think next 3 years will be our -- really will be a period to look at us, whether we've grown or not, right? Our efforts continue, and like Sanjay Bhai had said before, we are very, very optimistic because we have a solution for a pain area that the customer suffers from. Your yields from existing mines are falling is a reality for any copper mine you can call and check with, right?
Improvement in yield of recovery is an absolute interest, top 3 item for any mining company, right? Helping them reduce their ESG footprint in terms of reagents or in terms of lower power consumption, all of these are -- ESGs are top priority for most mining companies, right? So from a solution standpoint, we are only sharpening and deepening our engagement with the customer. We only remain optimistic and enthusiastic. The reality is that it's taken time, right?
Even despite these things, we would be happier as we sold 30,000, 40,000, 50,000 tonnes more. But keeping reality in mind, and all the headwinds that we have faced, I think we are well placed now, and look at us over the next 3 years. I mean last 5 years may not be the best indicator of the potential that our solution has. We continue to remain excited about it. And adding -- being able to add 30,000 tonnes a year, I think, should be a fair goal for what we're trying to offer, right, for the opportunity that is there in front of us.
Got it. Got it. And so in a sense, what you're trying to say that 30,000 incremental volumes should be doable, all things being satisfiable in the next couple of years?
If you ask me -- for us, it's an open-and-shut case where someone should migrate, right? This is our -- I mean, with all the benefits that we've spoken about and discussed plenty times before, but the reality is that there is a friction process, right? There is a challenge in terms of various things, again, that we've spoken about. And it takes time, and we are happy to do that, right? That it takes time. We are happy to be -- we are here for the long haul.
And everything we offer is of priority interest to the customer. I mean if it takes 6 months more or a year more or even 2 more, that's okay in the time -- relative to the time that we are looking at to keep this business. I don't think we worry about -- as much about losing the market as much as how do I find ways to grow faster.
And a very simple math, Bhoomika, is that, as Kunal explained, what we lost was around 50,000 tonnes. If you just do an adjusted math, then your CAGR would look better. Having said that, that is a part of our business. We have realized it. This is always going to happen. So we have also climbed up our knowledge curve significantly. We have sharpened our tools. We have done excellent work on the DP side. Now, we have all sorts of mill liner solutions.
So now even our confidence is much better. I absolutely agree with you. Just from a statistics point of view, it doesn't look so good. But there is a whole lot of changed -- completely changed platform on which we are standing today vis-a-vis where we were 5 years ago. That's a very important point to take care. Let's not speak more, let -- time will tell. Let's see how it goes.
Sure. So the other thing is on this whole U.S. litigation, while obviously, as such, volumes have not yet gotten impacted and we are continuing to sell into that geography. What is the risk that this can get impacted because that is a fairly large chunk of our overall volumes? In your opinion, what is the likelihood of that kind of being impacted, if any?
This is like doing a crystal ball gauge into the future. And I think we've been advised not to speculate on what it means. I mean, you know that there is a reasonable amount of volume that we are doing over there.
It's a long process.
It's a long process. It will take 9 to 10 months for us to engage with everyone. And we are also learning as we engage and go through the process. But -- I mean I would be restricted in having a response that could be a little speculative in nature in terms of what can the outcomes be. But we are -- we remain confident that we've done -- we've got a fair price, we've got everything in place. We've got great lawyers who are helping us defend. So the competition has to do what they have to do, and we have to do what we have to do. So I mean, we are looking at it inward to say, we are well placed to defend it vigorously, basically.
Got it. And just lastly, if I may, on this MPS acquisition in Australia. I mean, how do you see that evolving over a period of time? We've kind of taken a decent stake now here. How can it help us in terms of scaling up volumes, particularly in the mill liner space?
I think MPS brings competency that we don't have, which is the whole process and application side of mill liner in relation to grinding. So great fit. It complements us well. We've taken on -- we have added to our repertoire when we go out and engage with the customer. So surely, we are seeing dividends in terms of our ability to do a better engagement to include more customers now that we are going out.
I think it's a no-brainer because that was competency that that's a prerequisite to doing liner business. It would have taken us 5, 7, 8 years overall to acquire that knowledge, which is available to us now. So it will show benefits, may not be in a quarter or 2, but surely, it will -- you will see an acceleration in our mill liner work.
And it is a very profitable enterprise. So whatever is our target profits, we are achieving that. So that way also, it is good.
The next question is from the line of Pritesh Chheda from Lucky Investments.
First of all, just a clarification, mill liner capacity is where you're adding this incremental 20,000 tonnes.
It is what we are calling non-grinding media, so that capacity is used for our vertical mill parts, other mill parts. Some of it can also go towards mill liners. But for us, capacity is grinding media and other than grinding media. We just clarified or talked about mill liners because we set up a plan for that. But now we have -- and while it was getting commission and the opportunity and all of that, now we're going back to our older classification, which is grinding media and other than grinding media, and this 20,000 fits into that.
Okay. Now you have added 50,000 tonnes of mill liners year before -- I think, last year. There was this whole idea of incremental addition of 10,000 tonnes per annum. But when I look at this year, your others has -- the volume has declined. So what is playing out there in terms of the decline in volume where mill liner itself incrementally was supposed to add 10,000 tonnes of volume?
Others does not reflect mill liners. Others reflects non-mining segment. So mill liners are part of the mining volume that has been reported because it's going towards the mining segment. We've not done a product-wise this thing. But having said that, we have not grown at 10,000 tonnes in mill liners. It's a little -- I don't have it on top of my head right now, but it's a little lower. We don't want to really get into exact how many products, what products have done what tonnage just from a competitive landscape standpoint, but it has grown. It has grown, but not at the 10,000 pace that we have hoped to. We are hoping next 12 months, we'll -- that pace will accelerate as well.
Okay. So mill liner is a non-grinding media, right?
Mill liner is non-grinding media. Correct.
Okay. Perfect. Okay. Then on the other question, your experience with the other trade action has been that the volumes have first been lost to regain later. That's how you mentioned...
Can you repeat your question?
I said your experience in the past trade actions in Canada, Brazil or Africa has been first loss of volumes to regain later.
Yes.
Right. Can -- so is it that in the incremental 27,000 tonnes of antidumping duty imposed by U.S., or let's say, not being imposed, review by U.S., the experience has to be similar?
Exactly. I'll tell you why. See, as Kunal explained the matter is subjudice. We are completely restricted. But geographically, each geography's situation would not be the same. Therefore, experience cannot be the same.
Second point is, in the past, we have lost. In Brazil, we have gained quite a bit, so we are quite okay with it. Don't worry about it. All I have to say that each geography is different, so parameters are not exactly comparable. So the similar analogy cannot and should not be drawn.
The recent review was in Canada. What happened in Canada specifically? What were the volumes at that time before the trade...
It was close to about 24,000 tonnes, and we are at about 7,000 tonnes now.
11,000 tonnes?
7,000 tonnes.
7,000.
Correct.
And the matter is still subjudice.
It's not subjudice. It's already part -- we've got an administrative process in place where I will have to expand on. It's a little more complex in Canada than everywhere else. But I don't think that is an impediment for our sales in Canada. We are doing enough work, and we will start -- you will see our numbers in Canada go up in next 12 months and sooner than that. So I don't think today the -- what the Canada action has done is it has put in some administrative things in place so that there is a certain pricing mechanisms that we have to adhere to and which we are doing. I think -- I don't think the action there is now a deterrent in our ability to get more sales.
Okay. So would you then be able to -- in your revised format of selling, whatever trade changes have been brought in or implemented, will it be at a similar EBITDA per kg, like similar margin as earlier or a differential margin?
I don't think -- it's too much granular detail, I mean, for us to go into every region. And I think you'll have to look at us -- margin as a company as a whole. I'm afraid we'll not be able to get into that granular conversation.
Okay. No problem. Just to reiterate, Canada was 24,000 before the matter, and post that, it went down to 6,000.
No, it went down to 0. Now, it is 7,000.
Same. Okay.
The next question is from the line of Mani, who is an individual investor.
I wanted to understand a little bit more about the mill liner segment. If you can explain what kind of revenue does that contribute to current -- currently to base revenue. That's number one.
Number two, I also wanted to understand if the strategy of the mill liner segment is very similar to what it is in the grinding media where you believe that the solution which you offer in mill liners -- I'm assuming the solution that you offer is ferrochrome-based mill liner. And that is a significantly better solution compared to the steel mill lining market that is there. Is that understanding correct? Or if you can just a little more talk about the mill liner segment and your strategy over there, that would be helpful.
For everyone, I'll just do a quick thing, and we can do offline if you want to understand a little more. But mill liners, there are 4 -- 3 or 4 other incumbents. So we are not doing -- it's not steel versus chrome. That advantage we bring is not so much in metallurgy as much as in design. So the whole mill liner conversation is working through proprietary some patented designs that we offer that have ultimately allowed the customer for a higher throughput. It helps them save power cost, and of course, the cost of the mill lining, so that is the whole overall solution that we look at when we talk about mill liners.
The whole objective for us within that space is to not just sell out of the plant that we set up a 50,000 tonnes to set up, let's say, to sell 30,000, 40,000 tonnes next year. The idea is that, that allows us to have a conversation for the whole grinding suite with the customer, which includes mill liners and grinding media because it's -- the whole solution together delivers a super normal consequence for the customer. So our interest is to sell that whole combination.
Of course, there will be customers that buy just linings from us, and that's the journey and the conversion timeline that it takes, but that's the strategic reason why we are doing mill liners. The whole idea is to engage with the customer on that whole basket of products, right? I think that's where it is.
And it's high chrome.
And it is not high chrome, it's a chrome solution, and we'll continue to add -- our aim is to add 8,000 to 10,000 tonnes a year and fully utilize the plant in the next 4, 5 years.
The next question is from the line of Charanjit Singh from DSP Mutual Funds.
Sir, my first question is regarding our stance on whether we'll be keen to now put up any capacities in the other locations apart from India looking at the kind of duty structure restrictions. Now this is the fourth geography which we have seen. So what are your thoughts on that in terms of doing some capital allocation in the international markets? That's my first question.
I don't think our view has changed. We continue to believe India is a great location to not -- it's not a cost location for us. It's the competence issue. It's availability of ecosystem that allows us to produce. Nevertheless, we believe there's a large -- I don't think that trade action in 2 or 3 countries -- I don't think there are many more countries where we expect to see trade action. We see -- there are mining clusters in at least 15 countries. So there is enough plus additional, let's say, 10% to 15%, where there is follow-on opportunity for us to grow. So I think there is a larger market outside of these territories that we continue to focus on. And we will see. For now, there is no plans -- I mean, we continue to stay put with our current structure and our current growth plan.
The other question is now if you look at the overall mining production growth globally. Now there have been also a discussion that maybe those numbers will go up as copper and other commodities are seeing increased demand. So what are your thoughts in terms of when you are looking at this production growth picking up, while conversion from forge to high chrome is one of the most important factor, but overall underlying volumes itself, if it goes up, it benefits us. So just if you can touch upon on the overall production growth what you are seeing in the markets?
You are absolutely right that if the underlying growth happens at an existing mine site, we will be natural beneficiaries of that growth. But we are not counting on that. I mean there are several factors where despite their desire to grow, they may not be able to grow. There are approvals in place. There's the whole excavation part, post process. So to that extent, while they want to produce more, they may have limitations. But if they can, obviously, we will be the natural beneficiary over there. But we are not counting on that as a strategy. For us, converting and migrating our customer from use of forge to chrome is where we spend most of our effort on.
Got it, sir. Sir, lastly, now we have added this mill liner capability in our entire portfolio. And there was also discussions earlier we used to talk about that as a complete solution provider, we'll be able to target this market. So if earlier, when we are targeting only the grinding media, now with the liner, what percentage of the overall CapEx within this segment we are able to capture from a liner's perspective, sir, with liner and grinding media together?
You mean to say the consumable cost.
Correct. Yes. That's correct.
Not CapEx. So I think this covers almost everything.
And because in the grinding side, their wear cost includes these parts, liner and grinding mill -- at mine. So of their grinding circuit, this would be most of -- all of their consumables from a grinding standpoint. Of course, they use reagents and other things, but this is the largest -- sorry this is the largest cost line item for them or the top 3 at their operating side.
Okay, sir. Got it. And just lastly, if you can touch upon how is our progress in Chile as a market? We had got some initial traction, but if you can update on how is the journey there in Chile specifically? That's my last question, sir.
It's great. We are on track. We hope to report something good -- something -- a conversion in that market soon, but it will take time it takes. So we are as eager to hear news about it as you are, so we are fully active and putting efforts in that region.
The next question is from the line of Priyankar Biswas from BNP.
So my first question is, we had seen this Red Sea crisis for some time, I mean, disruption on the freight, et cetera. So can you just tell me how much impact had it on your volume shipments? So what am I trying to see is, like, let's say, if this crisis was not there, hypothetically, so how much higher could you have possibly done?
So I think we were -- as we had reported when that happened, we were on a wait-and-watch mode to see whether this is temporary or it's sticky. It appeared that it looks to be a little longer time. But over this last quarter, we've seen rates going down, to start normalizing. We are not seeing carriers being interrupted or being hold up, et cetera. And in line with that risk -- overall risk perception going down, rates have started going down.
So we've passed through some rate, and the rate is getting adjusted. So our view is that the rates are getting normalized soon. And to that extent -- and if they don't, we will be passing them. So I think for now, we are happy to see that rates are getting -- going down. They are getting normalized or in that direction.
So what I meant was not from the freight rate point of view. What I meant is because of the disruptions and the longer selling times, would you have lost some volumes, I mean, like delayed shipments or something like that? So probably you could have done maybe better in the quarter.
It only means you've to plan sharper and maybe a little longer lead time.
But I don't think we have lost any volumes due to that. No.
Okay. One more question. So besides Chile, so [Technical Difficulty].
Sorry to interrupt. Mr. Biswas, your voice was getting muffled and eaten up in between. Can you please repeat the question once again?
Can you hear me now?
Much better, sir.
Yes. Since you discussed about Chile, so I would just additionally ask about Peru, where you had actually opened up a new subsidiary as well, I mean, some months back. So what are the progress in the other LatAm geographies? And when can we start hearing news flow from there?
Soon. That continues to be status quo. I think it continues to be lot of effort that we continue to put in, in those regions.
And what are the minerals that we are targeting there?
Copper and gold, of course, but mostly copper.
The next question is from the line of Anupam Gupta from IIFL.
So just a couple of questions. Firstly, on the volume side of it. So obviously, the conversion has been slower than what everyone has been expecting. Is there -- would you, at any point of time, ascribe this to maybe slightly more intense competition from the incumbents in this case? So let's say, when I -- when you say Peru and Chile, obviously, the poised incumbent there is pretty large in those regions. So is the volume conversion in a way also been slow because the incumbent is giving you intense competition for that shift to happen?
Not really, Anupam Bhai. I think incumbents will do what they have to do, and there's always a friction point in terms of migrating from one solution to other, wherever it is. I think the more important question is the efficacy of our solution, right? All these things that we are speaking about, that's how 15% of the market's gotten converted to chrome. There's no reason that this -- it's not going at least another 10%, 15% more, right?
So -- but every single place, every single country has its own set of challenges, its own set of existing customs in terms of where they have bought from, how they think about it, the time it takes, their risk appetite. And I think that's where it is. It's a large market. We've done enough work. We continue to put in work. In our mind, the breakthrough is around the corner. And we continue to believe in our solution, right? Now that's where the real life world is where it -- what appears open and shut to us still takes -- well, that's -- like we keep saying [indiscernible], right? That means that for the next guy, it's even more, that's why we keep this business. That is the whole joy and fun in this game is because that once the business comes to us, it stays, right?
And when we are looking at keeping this business for a few decades out, it's okay if it takes a few years in that conversion journey, right? As much as we are eager and anxious to make this happen yesterday, we also understand that we will have to do what it takes as we remain for a longer haul. We are not here to have a slash-and-burn, right?
Sure. Understand that. And a couple of booking-keeping questions. Firstly, now that you have trimmed down the capacity addition part of it, what should be the CapEx one should build for FY '25 and '26, including what you are doing for power?
So FY '25, the total CapEx is INR 200 crores, which is INR 90 crores for grinding media balance, which we're commissioning now; INR 35 crores for power and INR 75 crores for that ongoing debottlenecking, other things that we're doing. So total INR 200 crores. We spent about INR 210 crores, FY '24.
And FY '26 should be similar quantum at this point also, right?
FY '26 for now, because we are not -- unless we -- that will depend on what new capacity that we are doing. There is no announced capacity or CapEx plan for FY '26 as we speak. We plan to complete all of this in this year. Through the year, we'll have -- we'll see where things go and decide on what's happening on that front.
Okay. And one just lastly, what should be your tax rate for '25-'26?
I think it continues at 22%, blended -- between 22% and 23%.
The next question is from the line of Lokesh Manik from Vallum Capital.
My question was on the -- more on the macro front. So if we recap, let's say, 7, 8 years, we see many countries become protectionist. And one of the reasons why competitors have -- our competitor for that matter has been successful in their endeavors is they've taken advantage of this trend. In this slide, do you think you need to rethink your strategy of manufacturing out of India for the reasons that we have stated in the past and into this call as well?
You may be shifting a portion of manufacturing in countries that are more on the -- exhibiting this protectionism trend, if you safeguard your volumes because the cost of losing the business, as I understand, is significantly higher given that you take 3 years just to get put into the customer's business and then you develop and you slowly build your volumes in these businesses. So the cost seems to be significantly higher when such actions are taken to us. So either moving a portion of the manufacturing in those countries or reorganizing the supply chain if you discussed this at the Board level, if you can share some insights on that, that will be really helpful.
I think, first of all, I want to remove this myth that a trade action stops our business, okay? It has stopped only in South Africa. And South Africa is a very unique case because their currency weakens against our Indian rupee, yes. So we've been consistently hit by a 3% to 4% hit on the currency weakening every year. On top of that, they applied a ban on export of scrap, which means local scrap is 30% cheaper than what I buy in India, which is international pegged price, correct?
Without the custom duty -- it's not a dumping action, it's a custom duty that they apply for the whole iron and steel industry, and we were part of that, right, to protect the local industry. Had -- even had they not applied our product, just by the ban on export of scrap and the weakening of the currency, there's a challenge with that. So if you leave aside that region, which is its own story there. That's South Africa for you.
I think Brazil, we are -- I think they're doing okay in volumes. We continue to make efforts to take more volume. Same thing for Canada. I mean we have -- yes, it has reduced, but it has not changed our fundamental viability or presence in that market. Every customer wants 2 suppliers. When there is a supplier that is hungry to provide more value to you, that is ready to invest in stock for the just in time, right, why would any customer depend on one single location plant? I'm not a rubber or a plastic or a steel industry where you've got 10 producers in your local industry.
The consumers in Brazil and Canada may not want to depend on one supplier. What happens if there is an interruption at that plant? So -- I don't want to insult the customer by telling them that they'll only buy -- because of the trade action they'll stop buying, right? It was already a challenge for them to buy all the way from India back in the day whenever they converted when they had a choice of a local consumer because they want to diversify and risk mitigate their supply chains.
Trade action only is a cost implication for them if at all there is a trade action. I don't think that fundamentally changes our value proposition or our opportunity. Now, in the short term, there could be some where volumes get affected. Now that depends on every country. So Canada started with an interim duty, and so volume got impacted immediately as those duties came in.
In the U.S., when the process started, it was -- they have a different process that they follow, right? And so Brazil had -- likewise, Brazil had a different process. So all they are saying is in a year or 2, there could be some interruptions. In the U.S., the situation is different. So I don't want to compare it to Brazil and Canada. It's an independent situation where I think our proposition and our standing is a little different. But I cannot talk and speculate about what it means. We have to go through the process.
I'm not speculating on that. What I mean to say is that have you thought that a portion of manufacturing could be moved there to satisfy these authorities? Is that possible on the cost if that is possible? That's what I mean to say.
See, moving manufacturing, that is first of all for us to say that India is -- our current situation has an issue. We don't think our current situation has an issue. That's what I'm trying to make a point. Trade action is part of the deal. If my benefits to the customers, I'm saying, are plenty, I'm saying the customer wants an alternate choice, right? There have got an opportunity, right? I may have a little lower volume. In the scheme of things, this does not move the needle for us. I'm just saying that producing outside the country.
We may set up a plant somewhere outside the country. We may not do that. All of that is conjecture for us -- for a business to continue to take. But for now, our current structure is robust. It has allowed us to supply and work with many, many countries. A country which has some duties -- we are talking about a trade action, but we supply to at least 50 countries where there are double-digit import duties. We are not talking about those duties whereby competition is preferential access.
So we are not going into those granular details where we still have a market share in that market, maybe half the market. So all I'm trying to tell you is just because this gets announced, it gets talked about, and it appears, of course, 27,000 tonnes, I understand optically it appears that there's a large action. All we are trying to say is that India remains a great destination for our type of products, which requires shop floor competence. It requires hands to do some of the work.
Over the last 10 years, India and China have been 2 countries where a large majority of these investments have come. So while I'm not saying we will never set up manufacturing outside of India, for now, we will do it for different reasons if at all that becomes a conversation. But for now, our view and our thinking of our positioning has not changed because of one more action around trade. I think the competition is doing what they think is right for their interest. For us, we continue to doing more of the same. I just believe that of the 100 things that we face as a challenge every year, this is just one more that we have to overcome, understand deal with it and overcome.
The next question is from the line of CA Garvit Goyal from Nvest Analytics.
Sir, my question is already answered.
All right. So I think I'll do the closing. Sanjay, you may add to that.
No, no. As always, myself and Kunal remain available. We are definitely looking forward to much better things to talk about going forward. We will just inform as and when things happen. So I think with this, Kunal, you can give the concluding.
Exactly. Thank you so much. And Sanjay Bhai and I remain available offline to have a conversation and clarify any other further questions you have and look forward to connecting at the end of the first quarter for fiscal year '25. Thank you. Have a great evening.
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. Have a great evening.