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Ladies and gentlemen, good day, and welcome to the Q1 FY '24 Earnings Conference Call of IFGL Refractories Limited, hosted by Monarch Networth Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital Limited. Thank you, and over to you, sir.
Yes. Thank you, Jacob. Good evening to everyone. And on behalf of Monarch Networth Capital, we welcome you all to the IFGL Refractories 1Q FY '24 earnings call. We are delighted to host the management and from their side, we have the CEO, Mr. Kamal Sarda; and their CFO. So without taking much more time, I'll hand over the call to Mr. Kamal Sarda for their opening remarks. Thank you, and over to you, Kamal sir.
Thanks, Sahil. Good evening, friends. Thank you for joining IFGL's quarter 1 FY '24 earnings call. I have with me Amit Agarwal, our CFO; and SGA, our Investor Relations Advisor. We have uploaded the results and also the presentation on the stock exchange, and I hope you all have had a chance to go through the same. Just a brief on the industry. In general, the refractory industry has been performing well; barring some weaknesses in Europe because of macroeconomic factors and the Russia, Ukraine conflict. Considering the steel industry's viewpoint the subdued global economic recovery has had some dampening effect on the worldwide steel production.The steel industry in India is on an expansion mode catering to increased demand of government's initiatives of [indiscernible] infrastructure development and capital goods manufacturing. India's steel consumption has grown by over 10% Y-on-Y, in FY '22-'23.To align with the steel industrial [indiscernible] growth in India and its transition, IFGL has undertaken a massive expansion program in all its locations in India. Pursuant to our ongoing capital expenditure strategy, we are pleased to share that we are embarking on the establishment of a new manufacturing facility in Orissa. We have received the green light from the Government of Orissa Investment Promotion Authority, IPICOL, for the establishment of this new manufacturing site. We've also got the approval of the land. The location is yet to be finalized. The projected expenditure for this facility will be approximately INR 150 crores and will be funded through both loans and internal approvals. This upcoming state-of-the-art manufacturing facility, is intended for production of continuous casting refractories with an annual capacity of 240,000 pieces. The commencement should start immediately after the land is acquired, and it should take about 18 to 24 months to complete. We have selected Orissa for this new project because Orissa from the present 30 million tonnes is set to grow impressively and massively to 130 million tonnes by 2030-'31. This exponential growth is reinforced by Orissa's rich resources and good infrastructure, a skilled workforce and a promising trajectory marked by a robust concentration on steel manufacturing, as I said.Moving to our current capacity expansion initially at our current manufacturing facilities the aggregate estimated capital expenditure is about INR 177 crores, which may slightly come down to INR 160 crores because of some readjustment of CapEx. In both in Orissa and Vizag, we have spent approximately 50% of the planned CapEx so far. And in Kandla, we have completed almost -- we have spent about 90% of that. The remaining CapEx is expected to be completed by March '24. Our state-of-the-art research center at Kalunga is almost ready and likely to be operationalized by -- in, not by -- in Q3 FY '24. With these enhanced capacities and new production capabilities, we expect to improve the scale of business, which will lead to scale benefits and operating leverage playing out on the long term for the benefits for the company.I now hand over to Amit Agarwal for giving you a brief on the financial highlights. Thank you.
Thank you, sir. For the overview let me just give you the brief on the financials, starting with [indiscernible] and highlights. Total income increased by 2% year-on-year to increase INR 230 crores in Q1 FY '24. EBITDA increased 63% year-on-year to increase INR 46.5 crores in Q1 FY '24 [indiscernible]. EBITDA margin stood at 20.2% in the Q1 FY '24 with an increase of 760 basis points year-on-year. PAT grew by 88% year-on-year to INR 22.5 crores in Q1 FY '24. [indiscernible] move to consolidated financial highlights. Total consolidated income increased by 19% year-on-year to INR 427 crores in Q1 FY '24. Consolidated EBITDA grew by 72% year-on-year to INR 59 crores in Q1 FY '24. Consolidated EBITDA margin stood at 13.9% in Q1 FY '24, with an increase of 420 basis points year-on-year. Consolidated PAT was up by 104% year-on-year to INR 29.6 crores in Q1 FY '24.We are pleased to announce that we have achieved highest ever revenue, PBT and PAT EBITDA in our company [indiscernible] quarter.I think with this, we shall now leave the floor open for question and answer. Thank you.
[Operator Instructions] The first question is from the line of [ Aditi Sawant from ABM Advisors ].
My first question, could you provide information on how the funding for the new INR 150 crores project in Odisha will be arranged?
So we have not yet finalized, this project will commence after the land acquisition takes place. So it should take about a couple of months. But definitely, it will be funded by both internal approvals as well as loans.
And the second is based on the information presented, what are the projected revenue goals for this specific project in Odisha? I think I've mentioned somewhere, if I'm not wrong, with the current capacities, the peak turnover will be somewhere around INR 150 crores to INR 200 crores. And then we have the scope of putting up more facilities in that land. We are acquiring more land for that purpose.
[Operator Instructions] The next question is from the line of Dhviti from Molecule Ventures.
Sir, can you list down the key difference in business profile of us versus our competitors like RHI and Vesuvius?
I don't know what is your -- can you ask a specific question? That's a very generic -- this you can always get from the market as well.
I wanted to understand basically, in terms of product differentiation, what kind of offerings are we providing in the market, given that they are able to have a much higher margin profile over the years. So I wanted to understand the key difference, why have we been lagging behind the industry starters?
If you look at our last 2, 3 years margins, I don't think we are lagging behind. Of course, they have a wider product basket. We must agree that they are a very large company, they are a foreign company based in India. We are Indian company based out of -- we have facilities outside India as well. But the product -- barring the product profile difference, I don't think we have a very significant different margin profiles.
And last 2 quarters, sir, we have been able to do good 13% margin. So going forward, sir, what are the sustainable levels that we are hoping to get in the future?
In my last call, I mentioned we should be about 12%. So that's the sustainable margin, which we have mentioned, 12% plus. And I think in the last couple of -- not a couple of last 3, 4 quarters, we are around that.
[Operator Instructions] The next question is from the line of [ Park Vajani from KK Advisors ].
Just wanted to know -- I had 2 questions. So considering the Odisha's prominent status in the steel industry. So what is your perspective on the current and future outlook of the sector in the region?
I mentioned in my speech, I think you missed, the current capacity is still manufacturing capacity in Vizag is somewhere around 30 million, 35 million tonnes, and which is stated to expand to 130 million tonnes plus by 2030-'31. So 130 means Odisha is going to produce almost like 40% to 45% of the Indian steel. So that's the, I would say, the opportunity in Odisha.
Now my second question was on, I mean, what specific type of products are we aiming to manufacture at the Odisha plant? And I mean given this overall improvement in our company's margins, so can we anticipate that these products could contribute to the higher margin side? Can you give some guidance on that side, sir?
So we will be producing continuous casting refractory, which is used in the tundish, in steelmaking side of the steel industry. And definitely, these are considered to be a higher-margin products because of the higher technology, and this will be a state-of-art manufacturing facility with one of the best technologies, which we have within the group. And we hope with this, the margins should be better.
[Operator Instructions] The next question is from the line of Dhiral Shah from Phillip Capital.
So if I could get a segmental mix and when I look at the India revenues and on a Y-o-Y basis, the revenue has remained flat. But when I look at the steel growth under the data, industrial data the steel industry has grown only 7% to 9%.
Gentlemen, I think there is some disturbance at your back end. I'm unable to hear you properly.
My question is on India revenue side. So when I look at the India revenue on a Y-o-Y basis it is almost remains flat. But when I look at the industry [technical difficulty]
I'm unable to hear you properly. Your question is coming a bit smudged.
Mr. Shah, may we request you to come to quieter place.
So when I look at your India revenue on a Y-o-Y basis, it has almost remained flat. But when we look at the IIP data and particularly in that the steel sector growth, so steel sector is almost growing 7% to 9% in terms of production. So our revenue has remained flat. Any particular reason for that?
No, this could be quarterly aberrations here and there, but I think we have grown. If you look at our growth between '21-'22, '22-'23 and '23-'24, we have grown. I think our growth is almost like 8% to 9% compared to the previous quarter.
So what is reason for quarterly here and there?
But I think we have grown between the March '22 figures, March '23 figures and June '24 figures, so June '23 figures.
And sir, what is the outlook for the India business side for the full year FY '24?
So we should be growing at around 10% to 15%.
And sir, what is the current capacity utilization across the plant that we have?
It should be above 70% across.
Okay. And so this is across the product that we manufacture?
Yes.
And sir, any reason for the sharp improvement in the margins in the overseas business, particularly?
Sorry. Sorry.
Any particular reason for the improvement that we have seen in the overseas business, what are the steps that we have taken, which has led to the very good improvement in the overseas market?
If you're comparing with the quarter 1 of '22-'23 compared to quarter 1 of '23-'24, if you recollect, we have acquired Sheffield refractory in February '23. So in the first quarter, Sheffield refractory's full quarterly figures have come in. So that is one of the things. But other than that, I think all the other -- our U.S. subsidiaries have done comparatively well. They were not -- they had not done well in the first quarter of last year.
The next question is from the line of Rushabh Shah from Anubhuti Advisors LLP.
Sir, first question is the existing -- I just wanted to understand how much revenue did Sheffield contribute this quarter and what it was for us in the fourth quarter last year.
I think in the last year, it was around INR 20 crores. And in this quarter is about INR 54 crores.
INR 54 crores. Okay. And I just wanted to understand more specific to Sheffield. So Europe margins were sequentially compressed sharply this time around. So was this related to Sheffield or there was some one-off in the European business?
No, no, there's nothing which is one-off here. It's just the general margin trend, which is there.
So Sheffield margins are also more in line with what our European existing margins.
Yes, Yes.
And sir, with respect to, I think, INR 150-odd crores, excluding that is Odisha expansion of what we are doing, the other CapEx plans will be [indiscernible] will that be contributing anything in this year?
So this year, only the Vizag plant has been commissioned in 2021 and '22. So that has contributed a bit of it. The rest of that is getting commissioned by middle of this year and end of this year.
And what can we basically bake in with respect to how much revenue can the incremental CapEx help us maybe any turn or how much can we expect for the combined CapEx to help us in top line?
On the brownfield expansion I mentioned on the peak full capacity level, it will be around 3x on a greenfield, I have already mentioned in the recent new plant, which will take about 1.5, 2 years time to complete.
And Odisha will contribute to how much on the refill path?
About INR 150 crores to INR 200 crores at the peak level.
INR 150 crores to INR 200 crores. Just one last question. If you can give a color of how the overseas guidance on how the overseas business outlook is looking as of today and in the U.S. and Europe.
Europe is still having some issues. We hope that H2 should be better. So if there is a recovery in H2, European companies or European market should do well. U.S. is doing well. The U.S. is doing, I think, comparatively well. So U.S. will continue to remain at a good level in this tranche also.
The next question is from the line of Dhviti from Molecule Ventures.
I have some follow-up questions. First on the CapEx side, have we developed the technical know-how in-house currently?
Which time you're talking about?
On the capacity expansion which we are doing, all the technical knowhow that is available with us is in-house right now? Or are we sourcing it from somebody else?
Everything is our own develop. And then to add to that, we are putting up this research center, which is going to get operationalized by -- in quarter 3. So that will add to our technical strengths.
So we have not been using Krosaki's technical knowhow for the last 5, 6 years, if I'm not wrong, correct.
Maybe more, maybe more, more than 10, 15 years.
And sir, my next question is, can you throw some light on after sales services to our clients as to how efficient we are. And just some details on that would be good.
Our products are all consumables. So in that, there is nothing called after-sales service. They are a service when the product is sold. So we sell those products and also make -- do the application contracts also. Most of the contracts in India are apply and supply, supply and apply other way around.
Sir, one number specific question that I had. So in FY '21, after the change in the Income Tax Act, we were not supposed to amortize our goodwill, which we passed as a special resolution to write it off as a onetime payment and just adjust it against the results. But even after that, we have been amortizing goodwill every single year. So going forward, how are we going to adjust? Are we doing it one time or we are just going to let this entire amortization happen over the period?
We will continue with the amortization till we could win it there. I think we have 4 years left. So I think we were advised not to go in for such kind of adjustments. In any case it's a noncash item, which will get amortized over a period of time. It's a noncash charge.
But sir, if I was -- I was under the impression that under income tax, we are not allowed to amortize goodwill anymore than we have to either adjust it against your deferred tax.
No, no, there are 2 things. Under income tax, they will not be allowed as a deduction. Okay. So that's one part of the story. And the second is that amortized because since the goodwill is already created, as per the Indian accounting standards, the new account Ind AS, we have to amortize this over a period of time. So we will continue with the amortization. That's I think we have done it -- we have mentioned that it will be run in 10 years, 6 years already passed 4 years is left. So '24, '25, '26, '27, until it will be done in FY '27.
The next question is from the line of [ Sanjay Nandi from VT Capital ].
Sir, recently, we have a [indiscernible] stake of 15% from --
Can you speak a bit loudly, please?
So recently, we have taken the 15% stake from our Japanese parent, TRL Krosaki. So what is our thought process going forward, sir?
I don't -- that's a promoter's call. So I don't have what will be the thought process. The promoter stake will go to 72.6% after the -- after acquiring the Krosaki shares. I'm not too sure what they have a plan to source. So they have imposed confidence in the company. Hence, they have acquired those share, or they are in the process of acquiring those shares.
So can you please guide some price lines at what price we are going to acquire the shares or--
It's already mentioned in the stock exchange, it will be acquired at INR 200. That's the INR 200 rate at which the agreement was signed.
And can you just guide us on the like overall top line growth, what we can achieve going forward considering all those CapEx in Orissa and some other CapEx is like what kind of top line we can expect?
What we have mentioned in the past, I will continue -- I will maintain the same that we are talking of doubling our turnover in 5 years time to 2026.
And that the margin will be expected at 12% fixed.
So that's our plan of action. That's how the CapEx and all other things are in the same line.
The next question is from the line of [ Laxminarayan from Tunga Investments ].
A couple of questions. One is that if I look at our revenue mix over the last couple of years, our credit books in stand-alone has actually gone up substantially, right? Now the capacity which are -- first is what led to that? And second, is the capacity which we are actually building, whether it will actually reduce the bought-out items and thereby increasing the margins? How does one think about that?
Yes, you're right. Some of the products which we plan to manufacture, I think we are trying to source it so that we are into that business already. Like magnesia carbon bricks, we are presently importing from -- importing and selling and we are putting up the plant in Vizag. So that will, I think, significantly switch from traded to manufactured goods. And obviously, when we manufacture, the margins will improve from there.
So the capacity which you are building -- putting up, right? And how much is actually -- you have talked through the demand. See, one is definitely the traded goods mix will change? And second, what are -- where are you trying to get the --
Other the magnesia carbon bricks, which we are importing and selling other than that, all are new capacities and new product lines.
And this would be -- there will be a mix of domestic and international? Or how do you think about it?
The Kandla plant is because it's in a special economic zone. So that capacity is meant for exports. But Vizag and Rourkela whatever capacity addition are mainly for domestic market, but then we are free to export from there also.
And what kind of demand offtake certainty you have in a sense that is there a clear market, which you want to -- organic growth, which you're going to handle from there? Or you intend to get market share from some other players. What is the thought process of --
It will be a mix. But primarily, if you look at -- I mentioned that in the Odisha market, Odisha state from current level of 30, 35 million tonnes to 130 million tonnes in about 8, 9 years time, that itself is a huge capacity expansion in India that will increase the demand significantly. So major part of the demand -- additional demand will come from the new capacities.
And if you look at last year, our export benefits has actually declined from INR 10-odd crores to almost INR 3 crores after the annual report, right? Is it directionally would go down? Or is it because of the [ ROCE ] plant that it will actually get augmented elsewhere? How does one think about the export benefits?
So in the past if you -- I don't know how much you are aware of. So we had this MEIS scheme. So there was a huge backlog, which the government decided to hold back and they released -- they had given sort of a window where they allowed all the old [ ABIs ] to be released. So that was there in the past. And now it is only [indiscernible] road tap, which is there as an export incentive. So I think the current levels would continue as it is nothing onetime or a big chunk from INR 3 crores to INR 10 crores is not going to happen.
So coming to made in India, sold in India revenues, right, what percentage is actually into flow control devices and what is the non-flow control devices broadly the mix? And how has that actually changed over the last 5 years?
So most of the products which you make in India in the ladle and tundish. And if you look at the quarter 1 FY '24, our domestic sale was around 60% of the total sales. Most of it is in the ladle and tundish area.
Sir, one suggestion regarding your investor presentation, if you can also add the performance on a quarterly basis if possible of your international businesses separately, like the one which you give in the annual report, it will be helpful for us to understand the different international subsidiaries, how they have been performing. That information is not available.
I think what is more important is how the company is doing as a whole. There's no point of going so much of detail into what our individual subsidiaries are -- there will be changes here and there. But what is important in the project that -- what is the Indian operations doing? And what is our overall company performance on a consol level. So that is where we thought that we must focus on and that's where we will try and push our performance to the investors as well as the research team. Instead of going into too much of a detail into and bogging everyone, what is each individual company doing and then we go up a lot of questions, which are possibly what you are more interested in what is my -- what is the overall company doing? So that's how we would like to keep our focus in the investor presentations as well. I will take your suggestions. And I will discuss with my manager. So I will discuss -- take up your suggestion.
One last question. Regarding the refractory industry in India, in particular, right? So while on one side, we are having increased steel production and also high quality steel that is going to come up. I see that the -- there are industry is consolidating now. How do you see it over the next 5 years? How the top 5 players in the industry would shape up. Are you already seeing a significant consolidation, like what we hear?
So largely, in my personal view, the large part of consolidation has already happened. If we look at in today's refractory industry segment, the top 5 companies would contribute almost 60 -- or maybe around 2/3 of the Indian refractory. I think the consolidation scope is there. I'm not saying, I'm not ruling it out, but already the large companies are already acquired by large groups or here and there, the consolidation has already taken place. But then, yes, but more than that, then it goes into that sort of one company becoming too big. The major part of consolidation to me personally looks like being over.
We have the next question from the line of Vignesh Iyer from Sequent Investment.
Sir, you said the capacity utilization is around 70%. So just to get the idea about the industry, what is the usual -- maximum capacity utilizing that the industry can be? I mean is it 80%, 85% or 95%, 100%?
I'm sorry, I've not been able to hear your question. It looks like there is a network issue somewhere. I don't know if it is at my end.
Sir, just to get the understanding of the industry as a whole, I mean if I heard it right, you're running your capacity at 70% utilization as of now. So what is the maximum of utilization usually that this industry can reach like it is 80%, 85%? Or is it like a product where it can reach 95%, 100% as well?
Yes, yes, some products, it can. It is in our company, also some products, we are already running at 100% capacities. [indiscernible] why not?
So as I am new to the industry, I'm getting the hang of things, right? So that is -- so another thing is, see, interesting to when I look at --
It looks like there is a network problem. I don't know where is the network problem at my end or your end.
The next question is from the line of Gunit Singh from CCIPL.
Sir, I want to understand the price realizations in Q1 and Q2 and as compared to previous years. And I want to know that, have we taken any drop in the price realizations?
Mr. Singh we request you to stay on hold as we are reconnecting the management line now. All right. Ladies and gentlemen, we have the line for the management reconnected now.
Sir, firstly, I would like to understand what is the outlook for FY '24 in terms of top line and bottom line?
The top line, I mentioned that we are talking of growth somewhere between 10% to 15%. And I think somewhere or the other I had mentioned, we are talking of a consolidated turnover of 1750 plus.
And what kind of margins can we expect in FY '24?
To consol my guidance is about 12% plus, EBITDA margins.
And what are the price realization has been in Q1 and Q2? And how do they compare it with, say, the same period last year?
So in the Q1, we have got some indications of price relations to be going down. Q2 will also see something. But I think it is -- it's compensated by the overall softening of raw materials, softening of freight rates, softening of freight costs. To a large extent, I think that it will compensate that. But we'll have to watch in Q2 full or maybe FY '23-'24 full year because the orders keep on coming, they are all like continuously keep on coming. But yes, there is a pressure on price reduction.
So the 1750 year target that we have set, would it still stand if the prices stay at the lower level?
Yes.
The next question is from the line of [ Rajvi Shah from Money Curve Investment. }
My question is are domestic sales currently showing an increase and what percentage and when will the turnover is the constitute? And could you provide some perspective on whether this proportion is expected to change in the future?
So we have put a very specific focus on the domestic steel industry. Domestic marketing team an entire focus has been given a good big boost. So we expect the domestic business to grow faster. Having said that, the European business is down because the -- sorry, the export business is down because of the slow Europe -- slowness in the Europe and the Middle East segment. Once that improves, we expect the export also to come back.
The next question is from the line of [ Kartik Shah from Point Investment ].
So one question for you, sir. Sir, government aims to cover some refractories in PLI 2.0 scheme. So how will this change things for us and by when is it likely to be announced? Any ideas?
No, we don't know when it will be announced. So we have to wait what kind of PLIs they announced for the refractory industry. So once they announce only then we'll be able to say exactly what do we mean by -- I think there was some news article in the newspaper today also. But we'll have to wait what they announced wait for the scheme details, and then only we'll be able to say that whether it benefits the entire refractory industry or specific refractories.
[Operator Instructions] The next question is from the line of Sanjay Nandi from VT Capital.
Sir, just 2 wind up questions, like our peers Vesuvius they are trying to come up with some new product called mold powder. So are we planning to put some premium product apart from our existing products that we make, so as to improve our margins?
I'm sorry. I'm sorry, I'm unable to hear.
Sir, I'm just trying to say like our peers Vesuvius, they have been up with a new product kind of like mold powder, which will be a margin accretive business. So are we planning to put some products in our line from which we can improve our overall margins?
So all the product lines, which we are trying to put are both top line and bottom line growth. So we are also putting mold casting plugs, mold powder brand in our Vishakhapatnam plant.
We are doing that thing right.
Yes, yes, yes, please.
And sir, are we manufacturing any ramming mass or products like that in our portfolio.
Yes, we do manufacture.
And sir, are we planning to use some recycled refractories, like what RHI has guided to be using that thing in their product line for which they can reduce their cost, are we planning?
We already do with the continuous process. We are already doing it. We already do recycling of our internal rejects also try and use some reject from the steel plants, which you bring back, our own products which are reused.
Can you please guide us.
Recycling has to be done because -- I don't know I think we should be doing about 10%, 12% of our total.
[Operator Instructions] The next question is from the line of [ Laxminarayanan of Timber Investments] .
Sir, if I just look at your stand-alone raw material purchase, we purchased close to INR 30 crores of refractory from our China Monocon, Tianjin Monocon. Can you just help me understand what exactly we purchased? Is it the raw material we purchased for making something? Or is it the finished product itself we buy from them?
It is a mix of both. It's a mix of both because they are stationed there, bought in China and what happens is, sometimes you need to inspect the goods, and they would like to sell in R&D. That's how they try to do business. So that's why it is a mix of both raw material as well as some of the finished products also we import through our Chinese operations.
Sir, if I look at our India sales, right, what percentage actually goes to these large integrated steel companies and how much is to the Tier 2 steel companies like Usha Martin and the likes, Kalyani, et cetera. And how that mix has actually changed. The reason why I'm asking this question is that a couple of years back when we met you talked about we getting into some of some JSW large things in a very large manner, right? So I just wanted to understand how our mix of --
Laxminarayanan, we are present in all the large steel mills, including the public sector plants. Yes, we were in all these teams, talk of JSW, you talk of JSPL, if you talk of Tata Steel, better than the Tata Steel Kalinganagar our presence is comparatively smaller. But we are trying to increase our share there. But then we are present in almost all the large steel mills in India.
Sir, given the Tata Refractories itself has actually become quite large, right? Are we -- is it one of the reasons where our share in Tata Kalinganagar has actually come down?
No, no, no. No, there's no linkage to that at all. Tata Refractories is no more a Tata Group Company, it's a Krosaki group company. So any kind of the earlier preferential treatment, I don't know whether what is the status of that today. They are no more a Tata Refractory they TRL Krosaki Limited.
So in our India sales, how much is too large? I mean now that you said you are across all, but what percentage broadly? Is it like 80%, 90% to these large sale JSW and Tatas? And what is the mix between large and --
We don't differentiate that. I don't have that figure right now. For us, the customer is the customer. As I mentioned, I -- we are present in all the large steel mills including the public sector undertaking and the business is growing. That's what is more important for us. Maybe we don't have -- I don't have those figures, how much is large and how much large is growing, how much small and growing. But every segment is growing that much I know. And every steel mill, which was small in maybe 5 years back, today is a very large steel mill. We cannot afford to differentiate someone is a small steel mill or a large steel mill. Yes. There is a mini mill segment, yes, and there is other segments. So that is what is -- both these segments are growing fast.
Sir, there is definitely a movement towards giving refractories as a solution. And also there is a significant amount of technology is also going in, in terms of automating refractories, et cetera, right? And how are we thinking about it? And how much of our revenues comes from these kind of solutions, right, saying that x number of heat this can actually withstand right? So what -- has it changed over the last couple of...
Yes, somewhere around 80% of our revenues are -- not 80% about 70% of our revenues come into the performance contracts, which we call it like performance contract means either per heat or a per tonne of steel produced and we are paid by that. So around 70% of the domestic sale business comes from that. And that is how it will make up for any other refractory companies.
Sorry.
It could have been about 50% or it could have been about 50%. So that is now increasing.
And in terms of...
I don't have the figures, I am just guessing.
So there is talk about automation in the refractory industry in terms of how the products are being applied, right? How we are taking up that challenge. And I mean, how are we poised to be --
Automation in the Indian steel applications is very, very limited. Very, very limited. There's hardly any. Yes, there is hardly any automation. So I think it some sort of a marketing tool, which somebody is trying to apply. But in the Indian steel industry, the automation is hardly any.
And there are multiple ways of steel manufacturing--
It's more about safe application practices, which, of course, definitely, we are very clear on that, that these application procedures are to be very safe.
And sir, in terms of our repeat business, right, is it fair to assume that almost all of our business is repeat business?
Yes.
[Operator Instructions] As there are no further questions from the participants. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital for closing comments.
Yes. We just wanted to thank Kamal sir. And Kamal sir for patiently answering all the questions, and also want to thank all the participants here from Monarch Networth for joining the call. Kamal sir, would you like to give any closing comments?
No, no. I think Sahil, thank you very much. It has been a good question-answer session. I hope I've been able to answer most of the queries. And in case you have any further queries, you can contact SGA, our Investor Relations Advisors. And thank you all very much for the participation, and thanks Monarch for hosting this call. Thank you.
Thank you, sir.
Thank you. On behalf of Monarch Networth Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.