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APL Apollo Tubes Ltd
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Ladies and gentlemen, good day and welcome to the APL Apollo Tubes Limited Earnings Conference Call hosted by InCred Equities. [Operator Instructions]I now hand the conference over to Mr. Rahul Agarwal from InCred Equities. Thank you, and over to you, sir.
Thanks, Zico and good afternoon to everyone on the call. Thanks for joining in. We welcome you all to discuss APL Apollo Tubes' First Quarter Fiscal '24 financial performance of the company. We have with us the senior management of the company led by Mr. Sanjay Gupta, Chairman and Managing Director; Mr. Deepak Goyal, Director Operations and Group CFO; and Anubhav Gupta, Chief Strategy Officer for APL Group.I now hand over to the management for their remarks and after which, we will get into the Q&A session. Over to you, Anubhav.
Thanks Rahul and thanks to InCred Capital for hosting APL Apollo Tubes' for its Q1 FY '24 Earnings Call and thanks to all the shareholders and analysts who have joined this call. We welcome you to our Q1 FY '24 earnings call.The Q1 went pretty well in terms of the sales volume as we touched 660,000 tonnes, highest ever volume for the quarter. This was despite the fact that there was some volatility in the raw material prices. The steel prices globally and in India fell by around 5% to 10%, so there was some sense of destocking in the market, but despite that we were able to achieve our quarterly volumes target, and because of some destocking, there was slightly -- slight decline in the EBITDA per tonnes spreads for the company.So we were expecting around INR 4,800 tonne to INR 5,000 per tonne, but we ended up having INR 4,600 per tonne. So yes, we could have earned extra INR 150 million to INR 200 million in the quarter in terms of EBITDA, but now things are back to normal and we are seeing very good traction in month of July and August-September also look promising. So we shall be able to make up whatever we lost in Q1.The EBITDA growth in absolute terms for the quarter was up 58% YoY and so was the net profit, which was up 60% YoY, so we have started FY '24 on a strong note to achieve our volume targets of 2.8 million tonnes to 3 million tonnes for the full year and INR 14 billion to INR 15 billion of absolute EBITDA, which is our target for this year.Coming to the balance sheet, the working capital days remain good at 6 days, which helped us fund our CapEx of INR 1.8 billion, which was pending for Raipur, and to achieve our 5 million tonnes capacity. So we told you that almost INR 5 billion to INR 6 billion would be spent to finish our capacity to 5 million tonnes and out of that around INR 1.8 billion is spent in Q1 and over the next 3 quarters to 4 quarters, we will spend another INR 3 billion to INR 3.5 billion to complete 5 million tonne capacity for the group.The debt was slightly higher by INR 400 million QoQ basis. In June, we ended with INR 2.8 billion of net debt. But they should start coming down, as now Raipur is ramping up and the operating cash flows remain strong with 6 to 7 days of working capital cycle.Apart from this, just to talk a bit on our Raipur plant, so 1 million tonne of capacity which we added, out of this 600,000 tonne is fully operational, which is divided into 2 segments; one is heavy structural tubes and second is coated products and our narrow [indiscernible] section of 400,000 tonne, this will be starting over the next 1 months to 1.5 months, where just 1 line of galvanization is under process and once it starts, it will -- we will kick-start this 400,000 tonne of plant, and this will give us incremental volume over the next 2 quarter to 3 quarters.In the quarter 1, we did around 75,000 tonnes of volume from Raipur and if we annualize this, the utilization levels remain at 30% but in Q2, this will ramp up to 100,000 tonnes and then 150,000 tonnes, in Q3, and eventually 175,000 tonnes to 200,000 tonnes by Q4. So we do believe that Raipur, we should be able to do around 500,000 tonnes to 600,000 tonnes for the full year.In Q1 the EBITDA spread from Raipur was around INR 4,000 per ton. The gross spreads are pretty good. It is just that the utilization level was 30%. So that's why EBITDA per tonnes is INR 4,000 per tonne. But otherwise based on our gross margin spreads, we believe that INR 6,000 per tonne to INR 7,000 per tonne kind of stabilized EBITDA spreads from Raipur, look very, very promising.As we are talking about Raipur, which is mix of our innovative products, so market creation also becomes very, very important. So glad to share that for the heavy structural segment with the market creation efforts, we have got now more orders for railway stations, for high-rise building, some of the live sights we had shown in our presentation as well. So the conviction and confidence remain very high, that with our products, we are going to revolutionize the construction industry and these new products will help us achieve our volume targets over the next 2 years to 3 years.Apart from that, the focus on other value-added products like coated products, the distribution of those products have started and there is good pull demand from our distributors, which carry high EBITDA spreads. So this gives us confidence that we should be able to ramp up Raipur plant to 500,000 tonnes to 600,000 tonnes this year, and eventually 1 million tonnes by FY '25, '26.Other updates on the capacity addition to achieve 5 million tonnes. So just to give you a breakup of new incremental capacity which is coming; so Raipur, we're going to add 300,000 tonnes over 1 million tonnes then 0.3 million tonnes is coming in Dubai, 0.2 million tonnes is coming in East India and around 0.6 million tonnes we are going to add brownfield capacity in our existing plants. So with this, we will be a 5 million tonnes capacity company, and we should be able to utilize this capacity by FY '26.So that's our vision statement for 2025 that we will be selling this much of volume with higher EBITDA spread than INR 5,000 per tonne, which is the current run rate,So that's it from our side Rahul and we can open the floor for Q&A.
[Operator Instructions] Our first question is from the line of Amit Dixit from ICICI Securities.
I have couple of questions. The first one is on the narrow tubes' capacity ramp-up at Raipur. But in the prepared remarks, you indicated that it is going to be started shortly. Can you give us a sense of a timeline from the capacity ramp-up plan that you have mentioned, I think, it's more like Q4? And how do we look at EBITDA per tonne trajectory in Q4? More specifically, will we hit INR 6,000 to INR 7,000 EBITDA per tonne from Raipur in Q4 itself or will we have to wait for FY '25?
So coming to the first question, which is around the narrow line in the Raipur; so see, I mean this is the product, which is high-thickness coated sheets, okay. It's a complete innovation from the House of APL Apollo, because so far if you see in India or globally, the color-coated sheets, which are available are full thickness of 1 mm, 1.2-mm. But we started -- we thought that we should be able to produce a color-coated sheet of up to 4 mm thick. So beyond 1.2 mm, which industry has not produced ever. So we put up the line and it was started last year. We were buying the galvanized sheets from the industry and then we were color coating it, right. So that we started last year and we tested the market because it was a new product, innovative product. The market applications were [Technical Difficulty]. Yes, sorry. Amit, you are there?
Yes I'm here.
Yes. So the applications were [indiscernible] right, which are used in the construction industry. The solar structures, right, ducting, they were like various applications, which you could see. So we tested the market last year, right, and the result was pretty good. But the difficulty was that we were buying the galvanized sheets from outside, so the supply was not stable. So anyways, we were going to set up our in-house galvanizing line. So that got a bit delayed. We thought we should be able to start in like in July, August.So now it's pretty much on track and end August, first week of September we should be firing that galvanized line. And once this is there, then it's a continuous process where we put HR coil and then we galvanize it, and then we color-coat it. So this will be like full in-house back to back color coated sheet, and with that like I said last year, we tested the market, there were good demand and we are hopeful that the ramp-up for this product will be pretty strong and the utilization levels for Raipur will start inching up from 30% to 40%, 50%, 55%.And coming to the second question, the EBITDA spreads from Raipur. So see, I mean if you see that at utilization levels of 30%, we are able to make EBITDA spreads of around INR 3,000 to INR 4,000. So with 80%, 90% realization, definitely the plant will reach those levels. But, it will take 2 to 2.5 years, right? So, but what we can promise you is that EBITDA spreads will continue to improve, as the utilization levels continue to go up.
Okay, that's very helpful. My second question is on, as I look at the broad EBITDA per tonne project -- I mean progression in the quarter, I mean from Q4 to Q1, what I see that Apollo Z as a group, the EBITDA per tonne has declined -- I mean EBITDA per tonne has been stable or is up. So is it due to purely Raipur effect that Apollo Z is down or is it something else?
So Apollo Z is not being manufactured in Raipur. It's a non-Raipur product and this is in our Bangalore plant and in our Secunderabad plant in North India, where the maximum production takes place for Apollo Z.
Okay. So what explains the EBITDA per tonne decline Q-o-Q, because this is the only category where we are seeing that [indiscernible].
Hi, good morning, everybody. Amit, you have seen the decline in the EBITDA per tonne in the Z product, this product is -- we will purchase from this product from the galvanized coil. And if you see the first quarter, all the steel plants are in the pressures. Our steel plants -- due to almost INR 5500 decline in the raw material prices, steel plants [Foreign Language]. So we never give these galvanized product prices. [Foreign Language]. But if you see the overall margin -- we done the volume, almost 483,000 tonne from APL, 91,000 tonne from AMPL and 86,000 tonne from ADPL. Total is 660,000 tonnes. [Foreign Language] due to -- there is 2 reasons behind it. [Foreign Language]. But if you see the old APL, so our volume is 483,000 plus 91,000, [Foreign Language] and EBITDA INR 330 crores. So INR 330 crores divide by [ INR 571 crores ], almost our EBITDA margin is INR 5700 per tonne in spite of the almost 5% to 10% raw material price have declined. So, I think we are on the track there. Just a matter of time [Foreign Language]
Thank you. Our next question is from the line of Aman Agarwal from Equirus Securities.
Sir, with respect to the upcoming capacities that you have mentioned on the new capacity in the Eastern India and the Dubai and the brownfield expansion. The VAP expansion that you were mentioning, can you give us a breakup of which product would be coming up with these capacity?
In the East India, our plant is [Foreign Language]. Right now we are looking for the land [Foreign Language] but this is very small quantity of 2 lakh tonne capacity. So totally it is commodity products. [Foreign Language] up to 300 square.
Understood, sir. And sir secondly on the target VAP share, I see a slight trim down from earlier guidance of 75% to around 70% now. Any particular reason why we have slightly trimmed down the guidance?
Boss, we can't define -- narrow margin [Foreign Language]. Where we are in the phase of volume [Foreign Language]
Understood sir, understood. And sir lastly, on the margin side, last quarter we mentioned that due to strong demand pull, we had reduced the channel discount that we were offering. So how was the situation this quarter around the discount that we offered to the channel partner?
[Foreign Language] first several days is very good -- not good, I can say very good. July we have done almost 200,000 [Foreign Language]. And August and September, we are targeting 2.5 plus 2.5. So total in this quarter [Foreign Language] 30 lakhs to 40 lakhs target [Foreign Language] with a EBITDA margin of INR 650 crore to INR 700 crore. So we are right on track. Second half, we are targeting for volume of almost 15 lakh tonne to 16 lakh tonne with EBITDA margin of INR 750 crores to INR 800 crores. So for overall full year 28 lakh tonne to 30 lakh tonne will be the volume and INR 1400 crore [Foreign Language] EBITDA, present scenario, I don't see any pressure.
Understood, sir. And sir, on the long run, EBITDA per tonne guidance, we still maintain on the INR 5,000 for FY '24 and gradually to around INR 6,000 per by FY '25 and maybe FY '26. We stick to that?
I'm a promoter. I am bullish on my numbers. [Foreign Language] I'm looking -- I'm not satisfied with INR 6,000, INR 7,000, INR 8000. My target is 5 figures. But right now the [indiscernible] are -- we have to slowly and slowly cover up [Foreign Language] designing project on 300 projects. [Foreign Language] so these two things are our factor to increase our margins.
Thank you. Our next question is from the line of Sneha Talreja from Edelweiss Securities.
Just 2 questions from my end. 1 is related to the new Raipur facility. So you are going to add further 0.3 million tonnes, so where are you adding this, in which product profile? Also if at all, you could give some breakup of the current product portfolio, you are manufacturing 3 products here. So which one of them is right now going where and what is the utilization rate amongst these products? Like are we selling more of higher diameter products or color coated or [ color-coded ] product, so where are we in each of these products, is something that I would want to know?
First of all, you have to understand what is Raipur. In Raipur, we have 3 segments; 1 segment is we call [ excessive ] [Foreign Language]. And the second [Foreign Language]. 50,000 almost some -- 13,000 tonne -- 16,000 tonne per month range. This quarter we are targeting to achieve 20,000 tonnes per month. [Foreign Language].#3, narrow structure; in narrow structure, we have 2 parts. One is flat product and one is tubes. Tubes we have a capacity of 25,000 tonnes. Flat products 5,000 tonnes color and 5,000 for PB. 5[Foreign Language]. So total capacity is 35,000 tonnes.[Foreign Language] sector by sector, 3,000, 4,000 tonne is color tube, 7,000, 8,000 tonnes is pre-galvanized tube, Apollo Z, and 3,000, 4,000 tonne is CRC automotive tube, then 3,000, 4,000 tonnes is [ light tube ].
Understood, sir. Sir thanks a lot for the elaborate answer. Sir, one more thing is like last -- this particular quarter you said prices were falling, so how is the channel inventory at this point of time? Last time you had guided that inventory is about 15 to 20 odd years, where is it now?
Channel inventories are almost blank. So there is a very good symptom of demand creating. Although there is a monsoon time, but actually good demand will be created from August.
Next question is from the line of Jatin Damania from Kotak.
[Foreign Language] now since we are saying that Raipur will be INR 6,000 to INR 7,000 EBITDA per tonne, so once we ramp up our capacity to 1 million tonne. But just wanted to understand while for 2025, we are giving a times of -- near about 2.5 times increase in the EBITDA. So segments and which all facilities will drive the EBITDA?
Jatin for what we are targeting for INR 2,500 crores EBITDA, we have, we -- right now 3 company we are earning; one is APL, one is AMPL, and one is ABPL. AMPL capacity is almost 400,000 tonne. ABPL we are going for 1.2 million tonne [indiscernible] and Dubai is 300,000 tonne [Foreign Language] so 31 lakh tonnes is APL. Our total capacity out of 5 million ton, APL is 3.1 million tonne, AMPL is 0.4 million [Foreign Language]. 5 million tonne is AMPL, Apollo Metalex. 1.2 million tonne is ABPL, and 0.3 million tonne is Dubai.My target is INR 10,000 per tonne EBITDA in Dubai, almost INR 300 crore. ABPL I'm looking at least EBITDA of INR 7,000 to INR 8,000 per ton -- transaction side INR 600 crores, INR 700 crores -- INR 840 crores from ABPL. AMPL we are running same phase of INR 8000 a tonne EBITDA, is almost close to INR 400 crore. And APL, I think INR 4500 per tonne is the EBITDA margin. 3100 into 4500, INR 1400 crores, 14 plus 4, 18 plus 8, 26 plus 3, almost we are targeting for INR 3,000 crores of EBITDA. Currently, we are talking INR 2,500 crore of EBITDA.
Thank you. Our next question is from the line of Vikash Singh from PhillipCapital.
Sir, I just wanted to understand this 5 million tonne of capacity which we are talking about. What kind of volumes and value additions percentage we would be doing, considering that once we start increasing our SKUs, usually the utilization rates seems to usually decline. So if you could give us some insights into it?
Our value-added product is almost close to 3.5 million tonnes and [indiscernible] products is 1.5 million ton.
So roughly about 70% we would be doing value addition. And what is the sales volume we are targeting for that 5 million ton?
Full 5, Vikash. So this is the sellable capacity what we are talking about.
Understood. So actual capacity would be higher than that?
[Foreign Language].
Agree sir.
So you may say 10% higher, 5.5 million tonnes.
Understood sir. My second question pertains to this railway revamping plan. Now that the CapEx seems to be pretty large, wanted to understand where we are placed? How big this opportunity could be for us and whether we are already in place to gain this segment, or there is still some time before we can get into that space?
So Vikash, when you look at the modernization of railway station, there are 4 structures, okay. 1 is the station building, which is called the concourse. So concourse is a modern structure, where there will be platform on the ground floor and then on the upper floor there will be like retail, office complexes et cetera, which are -- which you see in countries outside India.Second structure is the footover bridges, FOBs, right. Third is the ceiling roofing truss, which is over and above the concourse structure, which covers the complete new building. And fourth is the -- fourth are the office complexes, which a lot of the railway stations are having. So if you look at our opportunity for Apollo in heavy structurals.So there are 2 products which are 2 applications, which are 100% on tubular. One is the foot over bridges right, and second is the truss, the ceiling, the roofing of the structure. So, in India there is like target of 1,500 railway stations which are going for redevelopment. So depending on like some railway station it will be like 500 tonnes, some railway station it will be like 2000 tonnes, 3,000 tonnes, depending on, like how big the station.Now what we are trying to do is that, the bulk of the consumption of steel will be in the concourse structure and the station -- and the office complexes which are nearby. So that railways has 2 option, go for RCC or go for steel. Now where the railway -- where the government has approved steel structures, then there are 2 options, one is for conventional steel, second is for tubular.So here what we are doing is that we are convincing the contractors and its consultants who have secured the project, right that he should build that concourse structure and office complexes on steel tubes. So glad to share that Tirupati railway station has been approved 100% on tubular, like all the four structures are 100% on tubes. Okay.So with that, it has opened the -- like, I would say floodgates right, to go and approach the contractors, that that whosoever has won the contract, that you please construct your buildings, your structures on tubes right? So as we speak, there are almost 30, 40 such buildings where we are going and talking to the contractors, their consultants, and authorities, right?So just to provide numbers, like New Delhi railway station, you can see the tender document, right. Right now it's under bidding. It will have at least 20,000 tonnes to 30,000 tonnes of tube consumption. Other than that, like whether it is Mumbai, Ahmedabad, then 1,497 other small cities, where these railway stations are upcoming. So this is -- this throws a huge opportunity to supply -- to create market and supply our products.
Understood. And all this would be in the value-added segment right, the heavy to super heavy structure right?
Yes. Heavy and super heavy. That is correct.
Our next question is from the line of Aditya Welekar from Axis Securities.
Sir just I want to confirm if I heard it right. So for FY '25, we are targeting a sales volume of 5 million tonnes right?
'25, '26.
Yes. So that's FY '26.
This year, we are targeting 28 lakh tonne to 30 lakh tonne, next year we are targeting 36 lakh tonne to 40 lakh tonne and '25, '26, we are targeting 46 lakh tonne to 50 lakh tonne.
Understood, understood. Sir my next question is, in this quarter, have we taken inventory loss? Is it due to the drop in the secondary steel prices? And if yes, currently what is the spread between primary and secondary?
Boss, after a long battle, now Apollo come out with this inventory loss and gained [indiscernible]. [Foreign Language] unsold material 70,000 tonne to 80,000 tonnes material, so like I can say 70,000 tonne into INR 5,500 tonne [Foreign Language]. On our full business, this is very less. [Foreign Language]. Now we have come out from this position. [Foreign Language]
Understood sir. Sir next is, what is our CapEx guidance for '25? So I guess our, for '24 guidance is INR 600 million. So will that be enough?
[Foreign Language]. Maybe INR 10 crores, INR 20 crores plus minus, 5% plus minus. [Foreign Language] roadmap plan for another 5 million tonne capacity for next 5 years up to 2030. [Foreign Language]. [Foreign Language] from '26 January -- '26 and '27. '26 January to '27 December we will have INR 2000 crores CapEx [Foreign Language] 10 million ton.
Our next question is from the line of Lavanya Tottala from UBS.
So I just wanted to understand the opportunities that we are seeing for the heavy structural. When should we start realizing the impact of this on the volumes, like in the coming quarters, how do you see that? And in the railway structure business, which you are highlighting, in that, what will be the pricing difference for a contractor to use conventional steel versus tubular steel, will there be any benefit of using tubular over conventional steel for railway bridges [ and all ]?
Thank you, Lavanya. If you see our numbers, last quarter we were done -- last quarter, Q4, 40,000 tonne [Foreign Language] Q1 50,000 tonnes. These 2 type of growth is coming in the big sectors. One from the projects [Foreign Language], from the retail also [Foreign Language]. Right now this product is not in the market. Now slowly and slowly the architects and all the consumers are knowing that they can switch to 500 square, 400 square, 600 by 300, 600 by 200. [Foreign Language] So I'm seeing the trend from the market that retail [Foreign Language]. So I'm hopeful that year-over-year this product [Foreign Language] 40% to 50% growth.
Got it, sir. And on the railwaY 's conventional steel versus tubular steel, how would that differ?
Lavanya, there is no such data. [Foreign Language] I'm not convinced with the team. [Foreign Language] positive response like Max Hospital, Nanavati Hospital has completed their first phase. [Foreign Language] supplied Tirupati railway station with 2000 tonne material supply. [Foreign Language] maybe you seen in any quarter with a growth of 50%. So these growth are project based. But we are very hopeful [Foreign Language], we are very, very bullish on these projects, with our product. Third world, U.S., China and European countries, [Foreign Language]. So we are very hopeful that India [Foreign Language]. But there is no such data we can commit to that [Foreign Language] quarter by quarter [Foreign Language].
And just to add that the tubular steel is 10% to 20% lighter than the conventional steel.
Okay, got it. So the contractors that we are working on, these are all small contractors or we are in contact with some large EPC contractors also...
We are working with contractors ranging from Larsen and Toubro to Ahluwalia, to Sam, to Nagarjuna, to Ashoka Buildcon to smaller contractors. So all types of contractors, because our structure will be used to make a small hut. It can be used to create a 5-star hotel. So irrespective of the structure, any EPC contractor who is doing the structure we reach out to him.
Our next question is from the line of Mr. Rahul Agarwal from InCred Equities.
Sir, just one question on the net debt number. It is INR 280 crores for the quarter. Can I get the gross debt and the gross cash number, please?
[Foreign Language]
Just a sec. INR 950 crores is our gross debt and INR 650 crores is our LPR.
Okay get it sir. Sir one, why we are asking this sir, there is one trend, which I'm observing that quarter-on-quarter the finance cost and the other income, both are rising sequentially over the last 4 to 5 quarters. Why should this happen?
[Foreign Language] Rahul, this is because of the our -- AMPL and APL even though cash positive [Foreign Language]
[Foreign Language] And my second question was on the state incentive. There were a press release on the exchange you talked about incentives for the Raipur plant, there was multiple questions there, but largely wanted to understand, is it only applicable to sales done within Chhattisgarh? Do we have to assume 3/4 of 9% savings of state GST, because it says 75%?
[Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language] And what would be like a tentative sale volume number for Chhattisgarh? [Foreign Language].
[Foreign Language].
Okay, so INR 500 crores is the total, INR 50 crores per year [Foreign Language], is that correct?
[Foreign Language] No. INR 1,000 crores is the total.
[Foreign Language].
INR 500 crores [Foreign Language]. Another INR 500 crores, we already applied.
Sir, what is that regards to?
Phase 2 CapEx plan. We have total investment in Raipur is around [indiscernible]. Out that INR 840 crores is CapEx, so government has allowed INR 500 crores of the incentive and second stage [Foreign Language] under process to apply.
[Foreign Language] Okay, I get it. And just -- Deepak ji, just in terms of accounting, this will come as other income in the books of account?
Yes other income, in other income.
[Foreign Language] 483,000 tons, 91,000 tonnes volume [Foreign Language] AMPL. Total volume is 574,000 AMPL and APL and ABPL volume 86,000 tonnes. [Foreign Language] INR 3 crores EBITDA [Foreign Language] EBITDA per tonne is INR 5,700 per tonne [Foreign Language] INR 4,600 per tonnes [Foreign Language].
Our next question is from the line of Kunal Kothari from Centrum Broking.
Sir, wanted to understand the capacity part, right now it is at 3.6 million tonnes. So can you give us the timeline about how much capacity will be added when and it will get commissioned till 5 million ton?
Up to March '24, we complete our capacity for 5 million tonnes.
So you mean 5 million tonne will be completed in FY '24 itself?
Yeah.
Okay. And what will the...
Once Siliguri plant has got completed by March '24, that is -- you can say 4.8 million tonnes.
Okay. And sir, on the brownfield expansion, on the existing plants, can you elaborate like, in what kind of products that we are expanding earlier? If I believe that the brownfield expansion was about 3 lakh tonnes, which you expanded to 6 lakh tonnes, in the existing capacity, is it right?
So here 300,000 tonne is coming from new Raipur, right, from 1 it is going to 1.3. And then there are 11 plants, which are in APL Apollo which are running and then Apollo Metalex also 100,000 tonne will get added from 0.4 to 0.5. So in other 10 plant, there will be like small, small brownfield expansion, which will take place, right? So put together, it will be like 0.4 from the existing 10 plants.
Okay. So in due course of time till March end like some capacities will come kicking in. Right?
That's right. Except East India plant, we target to complete all brownfield greenfield expansions by March '24.
Thank you. Our next question is from the line of Madhav from FIL.
Sir, just wanted an update, sir [Technical Difficulty] in terms of further traction and so if you could both scale up [Technical Difficulty].
So Madhav, we did one sample early this year, right, near Lucknow, so that sample got approved. Based on that there is another small order of 50 water tanks, which the government has approved as of now. So the work on those 50 water tanks will start and as we are talking, we are also talking to lot more contractors and authorities to take this number to -- higher, right. So, one thing is for sure that the government authorities have given their approval. So slowly they are starting -- it's a very new thing for them. So they are taking some time. But our design, our sample, everything has been passed by the authority. Now the question is that from 1 to 50, how do we move from 50 to 5,000, 10,000 right? So, so that also is undergoing.
And this again has benefit from like lower cost to inception [Technical Difficulty]?
So, compared to RCC, steel is always expensive, so it will be slightly expensive, but the time taken normally in RCC water tank takes 6 months to complete. Steel end to end can be done in 2 to 3 months. Almost 3 to 4 months.
Our next question is from the line of Dhananjai Bagrodia from ASK.
Just a couple of questions, sir. Now [indiscernible] expenses has been trending lower per tonne. Is this something which we see even more scope from here or would this flatten out going ahead?
Dhananjai, what costs are you mentioning?
Employee [Technical Difficulty] would be flattening out over some time?
Mr. Dhananjai, may we request you to repeat your question, please.
Hello, can you hear me now?
Yes, Dhananjai, [indiscernible] this is my question, my part --- yes, tell me, tell me.
Sir employee expenses and other expenses per tonne year on year has been reducing quite a bit. Is this something which we see even more scope reducing or is this something which will be flat going ahead?
[Foreign Language]
[Foreign Language]
[Foreign Language].
Dhananjai, what we are saying is INR 900 per tonne, though it looks -- it appears lower than INR 1,000 per tonne. But we are not satisfied with INR 900 per tonne, this our target is to bring it down below INR 700 per ton.
INR 600 per ton.
INR 600 per ton.
[Foreign Language]. Dhananjai, this I promise you, where we reach the 5 million tonne of capacity, my employment cost is -- come down from INR 600 -- less than INR 600 per ton.
Okay. Sure. And other expenses too?
Other expenditure Dhananjai [Foreign Language].
[Foreign Language].
[Foreign Language] In our business there is mainly four type of expenditure. One is the employee cost, #2 is store consumer [Foreign Language]. #3 is power. Power [Foreign Language] I am working on this, [Foreign Language] And power [Foreign Language] and one major factor, we are working on the freight factor. Freight factor [Foreign Language] INR 1,400 to INR 1,500 per tonne [Foreign Language]. Now I am trying with the EV vehicles. [Foreign Language] EV vehicle model success [Foreign Language] I bring out this freight cost to INR 1,500 to INR 1,000 tonne [Foreign Language]
[Foreign Language] full year CapEx number [Foreign Language] final?
INR300 crore with balance three quarters [Foreign Language]. Maybe INR 20 crores less [Foreign Language] INR275 crores to INR 280 crores [Foreign Language] INR 300 crores.
So, Q1 we did INR 180 crores and then INR 250 crores maybe in 9 months.
Our next question is from the line of CA Garvit Goyal from Nvest Analytics.
Yes, sir. My question is, just a clarification. In the presentation, you mentioned within 2025, so doubling of revenue will be in the FY '25 or by FY '26 because in earlier...
So we say, calendar 2025 which is March '26 fiscal year.
Understood sir. And sir, one more clarification, on the market share price, so currently what is our market share in the overall structural steel tube industry of INR 80 lakh, I think you mentioned in the earlier con call?
So if you look at the current trends, we believe that our market share is above 60% in structural steel tubing, which comprises of sizes from 8 by 8 mm dia and goes up 1000 by 1000 mm dia. So there we should be above 60%
Understood. And sir EBITDA per tonne is intact, I think 5,000 for the entire year right?
[Foreign Language] my EBITDA per tonne for this quarter is INR 5700 per tonne. If you exclude the EBITDA number?
Thank you. Ladies and gentlemen, due to time constraint, that was the last question of our question and answer session. I would now like to hand the conference over to Mr. Anubhav Gupta from APL Apollo Tubes Limited for closing comments.
Thank you. Thanks, Rahul and InCred for hosting us and thanks to all the participants who took out their time and joined for this call. Hope to see you for second quarter FY '24 soon. Thank you so much. Bye.
Thank you. On behalf of InCred Equities that concludes this conference. Thank you for joining us. And you may now disconnect your lines.