Jindal Steel And Power Ltd

NSE:JINDALSTEL

Earnings Call Transcript 2019-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to the Jindal Steel & Power Limited Q1 FY '19 Earnings Conference Call hosted by HSBC Securities and Capital Markets. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajesh Lachhani from HSBC Securities. Thank you, and over to you, sir.

[Rajesh V. Lachhani, Analyst]

Thank you, Imba. Hello, everyone. On behalf of HSBC Securities and Capital Markets India, I welcome you all for Jindal Steel & Power Limited Q1 FY '19 Results Conference Call. We are pleased to host the management team from JSPL. I would now request Nishant Baranwal, Head of Investor Relations at JSPL, to introduce the management team. Over to you, Nishant.

[Nishant Baranwal, Head of Investor Relations]

Thanks, Rajesh. Good afternoon, everyone. It is said, make hay while the sun shines, and there was enough sun last quarter. But instead of hay, we made steel and profits. With this, we welcome you all to our first quarter FY '19 earnings call. We have with us today from the management, Mr. Ansari, our CEO; Mr. Bharat Rohra, our CEO of Power; and Mr. Deepak Sogani, our Group CFO. To begin the call, I would request Mr. Ansari to begin with this opening remarks. Thank you.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So good afternoon to everyone, and welcome to this conference call. As Nishant mentioned in his opening remarks, it obviously show that the performance, which has been done, is really quite remarkable. So it is my pleasure to share some of these results with you. So if you look at our JSPL stand-alone performance, our production has gone up year-on-year by 36%. Revenues have gone up by 100%. It's double compared to the last year. EBITDA has gone up by 119% and EBITDA per tonne has also gone up significantly almost by 50% compared to last year and almost INR 1,000 compared to last quarter. I would also -- since we're talking about stand-alone, let me also take this opportunity and tell you about how the Angul ramp-up is happening. Angul ramp-up is happening quite reasonably well, the way we expected it to happen. In such a large plant, when you ramp up, there are always methodologies by which you take it to a certain level, then you stabilize it, then you take it to the next level and so on. So that process is on. We are almost -- we are about 55%, 60% capacity. The ramp-up is already [ pre agrees ] debt level. And going forward, we are quite confident that we will achieve the kind of numbers, which we have mentioned earlier in Angul. As far as Raigarh is concerned, it continues to do well. It's operating close to about 97%, 98% capacity, and we know they're doing quite well. And since we talked about stand-alone, let me also go to the consolidated performance. In the consolidated performance, our production has gone up by 31% to 1.65 million tonne in this quarter. The revenues are up by 71% to INR 9,665 crores. The EBITDA has gone up by 68% to INR 2,277 crores. And EBITDA per tonne is there, of course, we already mentioned about this. The PAT in this particular quarter -- in the last quarter, we had shared with you that after several quarters, we became positive in terms of PAT on a stand-alone basis. This quarter, we are very happy to report that not only the stand-alone basis, but also on a consolidated basis, we are positive in terms of PAT at the -- to the tune of about INR 110 crores. As far as Oman is concerned, which is part of our consolidated performance, they have been doing -- they have continued to do wonderfully well. In this quarter, their EBITDA numbers are close to about $68 million, I think, $68 million. Now that we have got some additional gas and we are also making some modification in Oman plant, we should be able to -- from October onwards, the production levels will also increase so that we can make out more metallics in Oman compared to what we have been making, and we'll buy less of metallics, which we were doing earlier. So that will certainly help us in releasing our cost. And also, we have put some one additional cost there, which should also be commissioned by about October or so. So in the coming -- after that, in the coming months, our production should also improve so that Oman performance also will continue improving as the time goes by.If you also look at the overview of steel, the overall -- if you look at the steel, what -- we see that the market in India continues to be fairly strong. And if you look at the demand pattern, which is there, the visibility growth at some point of time, their steel demand also outgrew the GDP growth and that's something we did very healthy. So we think that we should be able to continue -- this entire business should continue improving. Of course, it may -- so happen in the monsoon period, there is always a little pressure on the long products so that we might feel that at some point of time. But in the coming months, I'm sure that all that -- the prices -- because slightly under pressure at the moment, will become again much better.So the steel -- the overview looks very good. As far as the imports are concerned, we are, of course -- now that the trade fair is something, which is the trade fair is there, we do expect that there would be some pressure, which might come, but we are well prepared for that. We are very competitive, and we think that we should be able to manage any issue, with just coming all of that. So all in all, the steel business in India is looking good. Also in Oman, it is reasonably well. In Oman, we are also -- in addition to the market -- local markets of Oman and U.A.E., which is our stronghold, we are also -- we have started exporting quite a bit of material to other places like Kuwait. And we have also now -- we are targeting Europe also, so that's another area where we will continue working for.And also within our own company, there are several initiatives, which have been taken to make further improvements. We -- of course, we are operating at fairly high level, but there is no end to improvement, and we fully believe in that. So there are many, many improvement plans, which we have taken up, which in the -- between the next few months, you will also see will result into very substantial improvements of the overall performance of the company. So by and large, a good performance as far as steel is concerned and the numbers we have already talked about. You have already those numbers. I don't want to repeat everything. We will cover -- whatever is balanced, we will cover in the question-and-answer session. Now I want to pass it on to Mr. Bharat Rohra, who can talk about the JPL performance. Thank you.

[Bharat Rohra, Former Chief Executive Officer of Power Business]

A very good afternoon to all my friends. For Jindal Power, the first quarter of the year 2019 has been better than the last quarter of year 2018, but a lot more requires to be done to bring back JPL to its fast flurry. The availability of coal from the mines, which were in the neighborhood, was severely impacted during the last year, and some of the mines were closed due to environmental reasons. Fortunately, for us, the mine which was closest to us and we also have a FSA from Kulda, that mine was restored in this quarter, which is under review, and our coal position improved slightly. However, due to the severe shortage of coal in FY '18, the stocks at all the IPPs have been extremely precarious and all IPPs have been highly aggressive in the coal auctions. So to make up the balance quantity, which we acquired beyond the FSS, we are still struggling in the auctions due to the high prices. Overall, the availability of coal from Coal India during Q1 FY '19 has reduced to 137 as compared to 183 metric tonnes in Q4. The financial performance during the quarter has improved as compared to the previous quarter. We generated 2,751 million units in this quarter as compared to 2,300 million units in the Q4 of FY '18, which is up by 19%. The NSR has also improved slightly from INR 3.49 to INR 3.56 per unit. The average coal cost has decreased for this year from INR 2.38 per unit to INR 2.06 per unit in Q1. This is primarily due to the availability of the FSA coal, which brought down our average coal cost. However, the auction prices have still been very high. The turnover has increased from INR 950 crores to INR 968 crores and EBITDA from INR 265 crores has gone up to INR 314 crores. The cash profit has increased from INR 98 crores to INR 167 crores because of the reduction in the coal cost as compared to the previous quarter.However, when we compare our performance on year-on-year basis with Q1 FY '18, the performance has gone down as the generation has gone down from 3,186 million units in that quarter to 2,751 million units in the current quarter. Due to reduced generation and due to increasing coal cost, the EBITDA and cost -- cash profit have reduced because in the Q1 of FY '18, the coal cost was as low as INR 1.62. The plant as such is performing extremely well and the limited units that are under operation are always giving a very high PLF. However, due to some of the units not being operated due to nonavailability of PPS, the overall PLF[Audio Gap] 37% in the current quarter. The PPS were all dried up, and no long-term PPA has come to the market except the one of aggregation of 2,500 megawatts by PFC for generators not having PPS. This was also not subscribed fully as it had a offtake guarantee of only 55%, and coal was not being made available under FSS for such a scheme. Apart from this, there has been only short-term power procurement tenders, which are just valid for a few months. Each, we have that about 2 to 3 short-term tenders. And now as on date, we have long-term PPS for 800 megawatts, medium-term PPS for 200 megawatts and another 500 megawatts under short term and bilateral. The outlook for the current quarter shall be similar to the first quarter. However, the company is focusing on arranging coal from more sources and sometimes have happened, and the availability of coal in the third and fourth quarters will improve so that the PPS of over 1,500 megawatts that we now have on hand can be serviced properly. Thank you very much.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So I will pass it on to the CFO, Mr. Deepak Sogani, to talk about the financial performance of the company. Deepak?

[Deepak Sogani, CFO & Director]

Good afternoon, everybody. I am very pleased to announce a very healthy set of numbers in the first quarter. They are by and large in line with our annual expectation of financial performance in the current year. Just to run you through the numbers briefly. On the consolidated side, our revenues have grown on an annual basis by 71%. On a stand-alone basis, our revenues have grown by 100%. Our EBITDA on a consolidated basis has grown again on a Y-o-Y basis at 68%, and it is standing at 220 -- INR 2,277 crores versus INR 1,353 crores in the first quarter of FY '18. Our stand-alone EBITDA of JSPL has also increased on a Y-o-Y basis by 119%, and it stands at INR 1,645 crores versus INR 750 crores in first quarter of FY '18. Our JPL EBITDA in the current quarter was INR 314 crores, which was down by 33% on account of the factors that Bharat just mentioned. The EBITDA per tonne in our business has also improved very significantly. In the current quarter, the EBITDA per tonne is INR 13,847 as opposed to INR 9,208 in the first quarter of 2018 and INR 12,827 in the previous quarter. And I'm very pleased to announce that after 14 quarters, this is the quarter where we have made a consolidated profit after tax of INR 110 crores. The same figure in the corresponding quarter last year was minus INR 421 crores. And in the previous quarter, it was minus INR 426 crores. And on the stand-alone basis also, we have reported a positive PAT of INR 332 crore as against minus INR 178 crore in the first quarter of FY '18 and positive INR 145 crore in the previous quarter. I'm also happy to report that the Oman performance is absolutely in line with our expectations on the current financial year numbers and has reported a INR 68 million EBITDA in the first quarter of 2019. The other thing that I'd like to kind of touch upon that from our financial point of view, in the current quarter based on the operational improvement that our credit rating agencies saw in the fourth quarter and the outlook that we saw for the current FY '19, we were able to get a credit rating improvement in JSPL from D to BBB- from all the 3 rating agencies, CRISIL, ICRA and CARE. And even in JPL, the credit rating improved from A- negative outlook to A- stable outlook. So there was a very strong[Audio Gap] agencies. On the consolidated debt side on CapEx side, from a commentary point of view, our consolidated debt reported last quarter was INR 42,000 crore. And in the current quarter, the reported consolidated debt is INR 42,670 crores. Although on a net-net basis, we have repaid some debt. We have also kind of seen, on the reporting side due to foreign currency translation, method of reporting. And because of the movement in the currency from INR 65.04 to INR 68.58, we have seen a movement of INR 3.53 on the foreign currency rate, because of which, the reported debt figure increased by INR 700 crore. So on the net, we had actually ended up paying INR 330 crore. We also would like to report a total CapEx cash outflow in the current quarter of INR 532 crore, which is in line with the anticipated CapEx outflow in the current year. I think with that, I would like to kind of complete my initial commentary on the financials, and we're all ready to take any questions that you may have.

[Nishant Baranwal, Head of Investor Relations]

So operator, let's start with questions. But before we start with questions, like a comment for our times. Since we have the management with us, please speak yourself to small, strategic questions. We, at IR, myself and management are always there to help you with the data questions. And also, if we could limit ourselves to 2 questions, it'll be great because the list -- because the queue is long. Thank you. Operator, we can begin.

[Operator]

[Operator Instructions] We'll take the first question from the line of Atul Tiwari from Citigroup.

[Atul Tiwari, Vice President and Analyst]

Sir, my first question is on the CapEx number that you do for the quarter. So does it mean that for the remaining part of the year, we will do only about INR 500-odd crores because I thought the full year CapEx guidance was close to just about INR 1,000 crore?

[Deepak Sogani, CFO & Director]

Yes. So I think you're absolutely right. We had said that INR 1,000 crore is the residual CapEx that is remaining for our Angul business. And we also said that around INR 500 crores sustenance CapEx will be incurred on an annual basis. So the total cash outflow in the current year would be around INR 1,500 crore, which will come down in the subsequent year to INR 500 crore to INR 700 crore from a sustenance point of view.

[Atul Tiwari, Vice President and Analyst]

Okay. So basically the kind of CapEx that we have seen in the first quarter, that number should come down materially going ahead on a quarterly basis because there seems to be some kind of a fronting of CapEx in the quarter.

[Deepak Sogani, CFO & Director]

So that is absolutely correct. If I was to decompose being on a very high level, out of the INR 532 crore, almost INR 400 crore will be the CapEx, which will not get incurred in the next year.

[Atul Tiwari, Vice President and Analyst]

Okay. Okay. And sir, my second question is, if I try to kind of back calculate your India businesses, NSR and the cost on a per tonne of steel basis, the numbers appear to be quite high, both on the NSR front as well as on the cost per tonne front. So I mean, any color on that why we are getting this kind of high net realizations and high cost in the business?

[Deepak Sogani, CFO & Director]

So I think let me just start off by a commentary on that and then maybe, Ansari, you can add on to that. We've seen a quarter where the NSRs have improved very significantly by almost INR 4,000 per tonne, right? And you can see our EBITDA per tonne has also gone up in the steel business by almost INR 1,020, right? So the cost increase that we witnessed in the steel business is around INR 3,000 per tonne, around INR 3,000 per tonne, right? That's been the core business. Now what has also happened is that because we were ramping up our Angul business and we were trying to continuously kind of expand the blast furnace capacity, we, at times, have produced more of the grand shorts and the pulled item. And some of these other pulled item and grand short, and they are getting bigger and bigger in related sales. So if I was to just try and kind of give you some decomposition, I think we sold almost INR 300 crore of these other byproducts and DRI and big item and other stuff, which was a part of the ramping-up process and which has absorbed it as a little cost. So the higher cost that you'll see, partially it's because of the fact that we ended up selling some of these byproducts, which absorb some of our cost structure, right? Am I making myself clear?

[Atul Tiwari, Vice President and Analyst]

Yes. Yes. And just the last one from my side. Sir, any comment on the ramp-up of Angul project? What is the kind of per-month output that we are seeing from that project currently? And how it is expected to pan out over next 2 quarters? And when we are likely to see the restart of the gasifier and the gas DRI project. That's my last one question.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

Right. So let me address this question. So when you talk in terms of Angul ramp-up, Angul ramp-up is composed obviously of several very large units, the blast furnace, the BOF, the center plant and all the material handling, et cetera, which is there. When we talk in terms of ramp-up, each of these facilities need to be stabilized at various levels and it needs to match with each other so that we can have an integrated plan and production. And that is how -- the earlier part, which was there, which was addressed by Deepak, that is all we also have plan to produce some grand shorts and big items and so on. I think that's something, which is also part of the same plan. The ramp-up is going reasonably well. Obviously, you always want to do better than what it is. You always expect that we'll do that, but I think these large units, these are one of the largest units[Technical Difficulty]

[Operator]

It looks like the management line just dropped. Ladies and gentlemen, we request that you please remain connected while we call them back.Ladies and gentlemen, thank you for your patience. We have the management line now connected.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

Okay. But can we go to the last question again, please?

[Operator]

Mr. Tiwari?

[Atul Tiwari, Vice President and Analyst]

Yes. Yes. First of all, basically I was asking about the color on the Angul ramp-up, especially in terms of monthly output that you are assuming right now, and how it is going to pan out in the future. And obviously, the comment on restart of the coal gasifier and the DRI plant?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

Right. So as I was mentioning that Angul unit obviously has very large blast furnace, large BOF, and therefore, these units obviously have their own inertia and you cannot -- you need to take them in a process, which is very defined process to take it up. And that is exactly what is happening. So for example, in a blast furnace, you stabilized first how do you really -- how do you make sure that there is this entire coke in the coal processes stabilized and that the fuel process is stabilizing in coal part, the PCI index, and you make sure that, that is something we could stabilize. And you stabilize those at different levels. For example, ultimately, we want to go to PCI levels close to 170 kt, 180 kt per tonne. Right now, we are operating close to 110 kt, 120 kt. So these are all being done in phases as per kind of a graduated plan. That's the basis on which this is happening. And therefore, it might look to you that it is somewhat slower, but actually I think it is very important to run these plants in a very[Audio Gap] some large blast furnaces in some of the plants where we have a lot of experience that the blast furnaces suddenly chilled out and they have problems of [ months ] and so on. We really don't want to get into any of those at all. We want to make sure that we have this process pretty sure and regular process. So that's the way we are operating this entire blast furnace. And the BF has to match with the BOF, the entire cycle has to match. So that's not happening. So right now, we have somewhere close to about 55%, 60%. And as I mentioned, that going forward by the year-end, we should be closing somewhere close to about 85% or so. That's the kind of number that we are talking about. And as far as start-up of coal gasification plant is concerned, you are aware that the blast furnace route is a cheaper route for providing the metrics of the BOF and the steelmaking. And the [ BRI ] route, which is somewhat more expensive compared to the blast furnace, we want to start only when we reach a level of the production in BOF and SMS where it is really called for. So once I reach that to the said level, it is something, which is -- we do that. So we will be doing this, let's say, in -- as and when we reach the level of close to, what, 272,000, 280,000 kind of production. That is the way that we really want to do. So once we reach that level, we will certainly start. Now it might take a couple of months or so to reach that.

[Operator]

Our next question is from the line of Amit Dixit from Edelweiss.

[Amit A. Dixit, Financial Analyst]

It's certainly very comforting for us to see the pinch of green finally after a long wait. So my first question is on the EBITDA and free cash flow. So given we had a good EBITDA and possibly with the steel cycle, it will sustain. So is there any possibility of us generating free cash flow this year?

[Deepak Sogani, CFO & Director]

Amit, let me take this question. So if you look at the larger volume kind of numbers that we've been guiding on, we should be able to do somewhere around 6 million tonne in India in the current year. Right now, focusing on the free cash flow from the Indian operation, right? And from global operations, obviously [indiscernible], add-on, right? If we do around 6 million tonne of sales in the current year, I think this is all numerical. I don't think I would like to call it guidance because it's not a guidance. We're just doing a mathematical computation on the call right away. So if we do 6 million tonne and if we, let's say, take an average of INR 12,000 EBITDA given the fact that in the first quarter our EBITDA is almost INR 14,000 per tonne, hopefully, we should be able to average out at least INR 12,000 per tonne in the full year and we should also see pickup in the volumes. So if you take that computation, we'll see INR 7,200 crores of EBITDA coming in into the business. And we have scheduled interest and bank payments of around INR 4,000 crore in the business, which includes INR 1,200 crore scheduled principal repayment. So part of the usage of cash is the nearest point to deleverage. So INR 4,000 crore includes INR 1,200 crore of repayment that we just highlight. And let's take INR 1,500 crores of CapEx, so we have INR 5,500 crores of cash requirement in the current year. And if I net it out of the INR 1,200 crore of principal that I've been paying, then I'm talking of INR 4,300 crore of [indiscernible] INR 7,200 crore of cash generated from the business. In this sector, around INR 500 crore of working capital, which we needed for Angul, et cetera, as the business is ramping up. So if you add that -- if you deduct INR 500 crore of working capital, still we will be left with around INR 3,500 crore to somewhere around that kind of level of free cash flow in the stand-alone business, right? And if you look at the international business, in Oman, anyway, we are expecting to do somewhere around 300 million of EBITDA, and we should have a free cash flow of almost $200 million from there also. And so ballpark, the free cash flow situation for the year at this point of time appears to be very positive.

[Amit A. Dixit, Financial Analyst]

Okay. My second question is on Oman. Since we have received the increased gas allocations, so has it come at the increased price or prices as per the old contract?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So we have the original gas, which is available to us. It's also worth $3 per MMBtu. And this additional quantity, which is about 14%, 15% additional, which is there. This is a marginal half price of $3.5 per MMBtu. So it's a very marginal increase in overall liquidity of 7 to 8 months.

[Amit A. Dixit, Financial Analyst]

And it is for how many years? I mean, is it -- there is some time component to it? Or I mean, is it for 10 years or something? I mean, that would look typical contract time, I think, in Oman.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

This is for the entire period as per the original contract. So the additional quantity will also be available for the original contract, which is for 25 years, and it is -- which is also -- something which will be extended. So that no doubt that Oman government obviously wants our business to continue. So we -- certainly, this contract will be [indiscernible] so at that point in time, once we reach that level.

[Operator]

Our next question is from the line of Sanjay Jain from Motilal Oswal Securities.

[Sanjay Jain]

I wanted a bit more color on Angul in terms of our casting capacities and the rolling capacities, where are we. And what is the status of our expansion of coke in plants?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

All right. So we have 2 existing casters in Angul. One is a slap caster, the other is a billet caster. And there is another billet caster, which has also now being commissioned only recently. So now, therefore, we have 3 casters available, 2 billet casters and 1 slab caster. Between them, there is sufficient capacity to cost cuts close to about 5 million tonnes of steel. So that is -- that takes care of the entire capacity of steelmaking, which we have. The casting capacity is adequate. As far as rolling capacity is concerned, we have -- at the moment, there are 2 mills, one is a plate mill and the other is rebar mill. The rebar mill is having a capacity of 1.4 million tonnes. And the plate mill, which originally was having a capacity of about 1 million tonne, we are already pushing it up. Now it should be going close to about 1.5 million tonne. So altogether, the finishing capacity there should be close to about 3 million tonne, roughly close to about 3 million tonne in the times to come. And then the rest of the cast product is primarily to go to Patratu, because Patratu have 1.6 million tonne of rolling capacity. And these billets, which will be cast from Angul, are expected to reach Patratu to match their requirements. So overall, that covers the entire steelmaking and casting capacity.

[Sanjay Jain]

And coke oven, sir?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

And the coke oven is something, which is -- we have 2 units, which are already operational, 2 other units are under construction. And those units, which are under construction, one is expected to come somewhere between December to March -- December this year to March next year. And the second one will follow maybe another 2, 3 -- after a few months, it will also follow. So right now the balance of the coke, we are buying from market. Once the coke oven is up and running, then we will be able to use our own coke and cut down the cost substantially.

[Sanjay Jain]

Great. Looking at all the situation and the challenges that you highlighted in ramping up the blast furnace and the steel production at Angul, what is the right guidance, a reasonable conservative guidance for the steel volumes at Angul and Raigarh?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So together, in India, we are talking about close to about 6 million tonnes of steel in this financial year, and that's the kind of number that we would expect. And of course, combined with Oman, which should be a little lower, 2 million tonne, that should upwards of 8 million tonne. That's the way it should be.

[Operator]

Our next question is from the line of Pinakin Parekh from JPMorgan.

[Pinakin M. Parekh, Associate]

Two questions. First question is broadly the production, and the stand-alone entity has been flat on a quarter-on-quarter basis. So is there any particular reasons or issues that we have faced in any of the facilities we're ramping up? And sir, my second issue is -- second question is on the maintenance CapEx guidance of INR 500 crores, which is roughly $70 million. Now given the facilities that we have both across steel and power and geographic spread that we have, so just trying to understand, is this maintenance CapEx number low vis-à-vis the depreciation run rate of INR 4,000 crore annually that we'll be running on? Or is this maintenance CapEx, something which, as the company becomes more profitable, we should see this number spike up?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So for the first part, when we are talking in terms of the production ramp-up in Angul, in the month of April, we also had a shutdown for almost about 10 days or so. And the idea was that there were [indiscernible], which are required to become -- as I mentioned, that as you ramp up the plant, you also find ourselves in bottlenecks and items we see coming up and you need to take care of that. So in order to do that, we have also taken a shutdown there, and that, of course, has resulted into but -- a little loss of production compared to what one could do that. So -- but as I mentioned to you, this is part of this ramp-up plan. And this ramp-up plan, it is very important to operate the blast furnace as -- whereas BOF, in such a way that there is -- the equipment is properly kept safe and so on. And also, we need to make sure that the product, which really comes out that is of the right quality. So it all -- it takes a little time to get in the production from different units, the quality which is required to be done, the finishing capacity, the raw material incoming. Everything, it requires to be -- to all [ began ]. And also, I would also like to add that in this quarter also, I mean one of the issues, which was there was the logistics issue, which were there in terms of late availability for raw material, et cetera. But that, of course, had some little impact on that. But combined together, by and large, as I said, we are moving further as per the plan by and large according to the ramp-up plan.

[Deepak Sogani, CFO & Director]

So on the second question, Pinakin, where you wanted to kind of get a view on the maintenance CapEx. You're right, our consolidated depreciation for the year would be around kind of INR 4,000 crore. And our guidance on regular maintenance CapEx is around INR 500 crore to INR 700 crore. That's what we've been believing. I think the color on that is 2 things. One, from a plant aging point of view, our Angul plant is absolutely new. And right now, we don't expect any major expenditure to happen on that. Number two, our Oman plant is also relatively new, and we don't expect any major maintenance to happen on that as well. And third color on that is that, obviously third -- even in JPL, being it's a very stable plant, not much of maintenance is required there. It has changed in operation there as well. And the last commentary on that is the fact that several -- in an ongoing continuous manufacturing plant like ours, we have several regular kind of ongoing maintenances which are small in nature, which we take it in to our regular operating expenses, right? Some repair, maintenance, some [ refracting ] material, many of these small things are basically taken as consumed, right? So we treat CapEx as only those which are kind of material in nature and have to be kind of taken as CapEx projects separate from the ongoing operations. So perhaps, some part of the regular maintenance gets covered in the expenditure itself.

[Operator]

Our next question is from the line of Vineet Maloo from Birla Sun Mutual Fund.

[Vineet Maloo, Fund Manager]

I just want to know what are the balance facilities that we need to commission? For example, it was mentioned that we are putting up a new caster in Oman. Every year, you had to do some changes in the CGP to get the production started there for gasifier, et cetera, right? So I just want to know, what are these balancing facilities which are left which we will take care of? And what is the time frame we're looking at to complete these?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

Right. So the first point, which you mentioned about CGP, there is no further work which is required to be done in CGP. The CGP and the connected DRI, they are all 100% ready to be operated at any time with any -- so I know they are through [indiscernible] I had mentioned earlier, we will start that at the right time. As far as balancing facilities are concerned, in Oman, for example, we are putting an additional caster so that we can produce a little [ more ]. On Oman, we had only one caster. So the difficulty which were facing that whenever that caster is in the shutdown, and obviously, there was a certain loss of production. In order to take care of that, a caster has been put up. That caster is going to be commissioned by end of October. So it's a question of 2, 3 months kind of number where it's going to be commissioned, and that will help Oman in doing that. There is no further expenditure -- any major expenditure required in Oman at all compared to that. As far as Angul is concerned, Angul, I already mentioned there's a coke oven, the 2 coke oven batteries, which are under construction. They would be completed in this financial year, the first one and the second one thereafter. And the caster has already been set up here. So really, there are no further -- I mean, there is a project which is already completed, the gas recovery project which is there, that's practically already completed with -- I would say another couple of months, we will be commissioning it. In a 1 month or 2, it will be commissioned. So further expenditure in terms of balancing, major thing is not there. However, as you -- when you build a plant, you bake it based on a certain calculation assumptions and so on. And as you continue operating it, you will find that, okay, maybe if I do this minor expenditure here, it can further improve this entire productivity and so on. So that is something which is an on -- that will continue an ongoing process. And for that, we really don't require very large CapEx [ et cetera ] as what has been mentioned by Singapore, the kind of numbers we see, as talked about, about INR 500 crores or so, that should be enough to kind of cover the entire thing. That's the way to...

[Vineet Maloo, Fund Manager]

No, sir. My question is more a point of view of constraints in achieving full production, let's say. So I mean, whether it would be any facility, whether it would be Oman or Angul, especially Angul because that's where we are looking forward to production going up. So I just wanted to know what are the constraints which exist? So you're saying there's no balancing gap, which is there anymore. So then, other than the ramp-up thing, is there any other concern you're looking at? What is holding us from firing the CGP again? I just wanted to understand the operation part.

[Bharat Rohra, Former Chief Executive Officer of Power Business]

Not -- really, there is no constraint at all. The coke oven battery which we have talked, that's not really a constraint in the sense that it really is going to reduce my cost today, if I want to operate the plant at full capacity, I can still buy the coke from market and then operate, so it is not really limiting me from operating that. But it will certainly cut down my costs and that's the whole idea of putting up the coke oven battery [ sooner ]. So there is really no additional facility, which is really required. I mean, no additional major facility which is really required for us to achieve the kind of rated capacity that is already there. As far as CGP is concerned, what we have said is that once we reach a certain level of BOF and steelmaking operation, then only it makes better sense to start the CGP and the DRI and that is how we are really planning. So that number is somewhere close -- somewhere between 270,000 to 300,000. Once we reach that level, that's the time when we will start the CGP. But to repeat -- I mean, to answer your question once more, there is no major balancing facility required for achieving the Angul capacity.

[Vineet Maloo, Fund Manager]

Sure. Sir, one last thing is, you know that -- I mean, what is making you sell -- let's assume INR 300-odd crores of other product sales? I mean, why are we selling so much of iron and not really steel?

[Bharat Rohra, Former Chief Executive Officer of Power Business]

So it is something, we, as I told you, we have in this ramp-up process, the ramp-up process ideally, I mean, ideally once you stabilize the plant, then what you will do is you will also sell everything as finished product to the extent possible. But when you are ramping up the process, there could always be a little bit of unbalance which is there, and this is one part. In addition, there are also the opportunities -- there are certain opportunities which are -- which require that you have -- you may have an option that, okay, the BOF is ramping up a little slowly, do I continue operating the blast furnace at high capacity? To answer that question, yes, as long as you can make some extra money, yes, why not, we should do that. So that's the process which will continue on and that's how that ramping up and balancing steel will continue. So once we ramp up close to about 80%, 85% capacity, then it will only be an opportunity in that whether we really -- what product we sell. And the whole advantage which we want to also communicate, that we have that additional flexibility that we can have different products and which can be sold in the market depending on the margins given at that point of time, so it gives us the additional flexibility. But today, obviously, it is a ramping-up process, which determines that what we said and what we -- if there is any addition which is available, we should make and sell it. Does that answer your question?

[Vineet Maloo, Fund Manager]

Yes, it does. So lastly, quickly, I mean, what's the status at Mozambique and Australia?

[Nishant Baranwal, Head of Investor Relations]

Vineet, we have a long queue. If I could take this off-line with you, would that be fine?

[Vineet Maloo, Fund Manager]

Sir, I'm done with my question. Just a broad strategic view on Mozambique and Australia, what's happening on that. That's all.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So let me take that question. From an international business point of view, as we have maintained in our last call, given the fact that the Indian business performance is improving, we are kind of improving, focusing more and kind of improving the operations in Australia as well as in Africa different geographies, Mozambique as well as South Africa. We are continuously focusing to improve the production. So first level of improvement is to take the production forward. And in the last quarter, in Australia, we have seen the maximum production per month of around 50,000 tonnes per month happening. We are seeing gradual progress in the production there. I think that's headline number one, over there. Similarly, in Mozambique, we are trying to increase the production there by almost, I would say, 50%. That should happen in the current quarter, so that will be again a very large initiative to take the business forward over there. In South Africa, we again are focusing to take that forward, yes. So I think internationally, the current focus is to improve the production in operations, right, while we are looking at other alternatives also on the strategic side, but there's nothing to report at this point of time.

[Operator]

Our next question is from the line of Rakesh Vyas from HDFC Mutual Fund.

[Rakesh Vyas, Dedicated Fund Manager for Overseas Investments]

A couple of questions from my side. First one on the CGP, sir. Is it fair to assume that given the coal situation that exists currently in India where even the power plants, especially IPPs are struggling to get adequate coal, CGP restart will get deferred until the time the coal situation improves materially from here?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

Not really. It is something -- as you are aware that before we kind of stopped the CGP, we have done enough experimentation with the different kind of coal which are there. And it was also found that a combination of imported coal and indigenous coal, we can operate reasonably well. So that is something which is possible. And on top of it, on top of it, there are 2 other factors, which I want to tell you there. One is that we also have -- and now in the government, there is a policy for linkage and possibly a grant and that's something which we are following up very aggressively. And we are very hopeful that very soon, we will have some linkages available for that. So that should really provide sufficient coal for that. On top of it, for DRI, we are also wanting to use almost 25% to 30% of the coke coal and gas because the idea is that the Syngas, which will be there will be only about 70% or so -- 70%, 75%. 20%, 25% -- 25%, 30%, we will use the coke coal and gas, so that the costs -- overall costs can be reduced substantially. So therefore, to answer your question, no, we are not really worried on that synergy. We think that once this linkage is available and even before that the -- there has been [ coking ] coal, that's something which we can start with. The only thing we are waiting for is once we reach that level of production 270 to -- somewhere between 270,000, 300,000. That's when we are going to start.

[Rakesh Vyas, Dedicated Fund Manager for Overseas Investments]

Got it, sir. And my second question is on stand-alone P&L. So depreciation quarter-on-quarter, fourth quarter versus first quarter, has increased by almost INR 100 crore. And if I annualize it and then look at the capitalization that could have happened, it's almost more than INR 6,000 crore. Can you throw some light on what am I missing?

[Deepak Sogani, CFO & Director]

This is the capitalization of the BOF primarily, large product that is BOF, Angul.

[Rakesh Vyas, Dedicated Fund Manager for Overseas Investments]

So it only -- so the capitalized happened only in first quarter not in the fourth quarter. Is that the correct understanding then?

[Deepak Sogani, CFO & Director]

Yes. It happened towards the end of the first quarter, right? And at the end of the last quarter, in the fourth quarter that is, around mid of March, so you're right, the capitalization actually took place in the last quarter. However, the depreciation charge relating to the capitalized cost came in into the books for the last quarter only for around 15 days. And in this quarter, it is coming for the full 3 months. I think that's the difference, yes?

[Operator]

Our next question is from the line of [indiscernible] from NBS Brokerage.

[Unknown Analyst]

Yes. Sir, my question is basically on your international operations. I just want to know when Mozambique or your South Africa and Australia, whenever in future if they are fully ramped up, what would be the total coal which will be coming out from there?

[Bharat Rohra, Former Chief Executive Officer of Power Business]

That's -- I guess, we are looking at the international businesses since it's kind of difficult to give a commentary on it at this point of time as to what will be the full production level of these businesses because to take them to their maximum potential, certain other capital expenditure, then other steps may have to be taken. So at the management level, right now we are focusing on these businesses on the now and here, in terms of what we need to kind of do in the current year to a period without much of cash outlay. We just want to kind of renew the cash performance from these businesses. I think our near-term focus is that, and therefore our near-term focus is to double the production of Mozambique, Australia and South Africa, all the 3 of them, we would like to double. It's very minimal cash outlay because you are talking about very minimal -- some more management focus, some limited cash outflow to improve the cash generation [indiscernible]. That's a near-term goal. We haven't applied mind in terms of the long-term potential, et cetera, at this moment.

[Unknown Analyst]

Okay. And my second question is very general to the business, basically. Just want to understand how the year -- like 4 months in the year -- 4, 5 months in the year are already over. So how do you perceive this in the next several months to go when it comes to the steel industry as a whole?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

All right. So if you look at the Indian steel business as such, we certainly see that there is quite a bit of upward demand on an overall basis for the entire year that I'm talking about. For 2, 3 reasons, one is that there is very substantial expenditure in the infrastructure sector which is happening. And we also see a bit of -- that there are some private businesses also where we do certainly see that there is quite a bit of uptick on that. So therefore, the demand is increasing. And I don't think that this is -- the capacity utilization is already quite large in the country and no new capacity is likely to come very soon and as -- even in the next few years because the bank loans are not so easily available now anymore. So therefore, I think for the years to come and certainly for this year, we do think that demand will continue to be strong. And with that strong and with the kind of supply that we have, I think the prices are -- prices are expected to be fairly robust. So as -- we are very hopeful that the steel business will continue doing as well for the year as it has done in this quarter 1. That's the way we look. There may be a little bit of...

[Unknown Analyst]

And my last question has to do with the NSR, can you just give an average NSR for this quarter versus the Q1 of last year?

[Nishant Baranwal, Head of Investor Relations]

[ Bhativ ], can we take this...

[Unknown Analyst]

Yes. Sure. Sure. Not an issue. Not an issue. Definitely.

[Operator]

Our next question is from the line of Saumil Mehta from BNP Paribas.

[Saumil Mehta]

Sir, with respect to the commissioning now for the Angul, have we capitalized the entire CapEx? Or there is some CapEx yet to be capitalized? And what would be the final number on the entire plant?

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So I think you know the bulk of the CapEx has already been capitalized. The large bulk of the CapEx, which we just heard on the call from a previous question that came up, was basic oxygen furnace [ commission ] that took place in the fourth quarter of last year, right? There are some small projects that are going on. Obviously, the DRI plant is already capitalized. The GDP plant has already capitalized, long time back. So those need not -- no. No. So there are some small projects on the coke oven batteries that are requiring to be capitalized. So I think in relation with the total capitalization that has already happened in Angul, if I may want to take a view, I would say maybe around -- around maybe at this point, they're not more than INR 500 crore more of capitalization is remaining, right?

[Saumil Mehta]

And now Angul, barring the CPP, what would be the gross block at the Angul plant?

[Deepak Sogani, CFO & Director]

Well, I don't know whether we are segregating the [ CGP ] gross flow opportunity total and capitalization versus our total capitalization. It would suffice to say that, obviously, it was a large investment that we made[Audio Gap]effectively as we can, as Ansari just spoke about it. So that will follow in due course. [Audio Gap]year ends, we should be somewhere close to about 85% capacity or so. So that is the way that we really expect this Angul capacity to be there. Right now, as I mentioned, the ramp-up is happening quite okay. I mean, it might look a little slower, but the fact is that we just want to make sure it remains -- everything remains safe and so on. So therefore, by the time the financial year ends, we should be somewhere close to [indiscernible]

[Saumil Mehta]

So, in FY '20, the fair assumption should be that the plant should be operating at optimal utilization along with any benefits of Syngas?

[Bharat Rohra, Former Chief Executive Officer of Power Business]

By optimal, if you mean 100% capacity, is that what you really mean by the term optimal?

[Saumil Mehta]

Plus 90%.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

Yes. I mean, I would say yes. Certainly. I mean, as I said that we think that we should be exiting FY '19 at somewhere around 85% capacity or so. So certainly in FY '20, certainly it should be [indiscernible]

[Operator]

Our next question is from the line of [ Rajat Agarwal ] from [ Ajinkya ] Securities.

[Unknown Analyst]

Sir, the debt reduction cycle which we have planned, the degree of impact, the foreign currency fluctuation is taking on that, and how much that we will be losing in the next 1 year?

[Deepak Sogani, CFO & Director]

So I think we don't have any significant foreign currency debt in this stand-alone business, okay? That's the point number one. We have foreign currency debt residing in our Oman business. We have some foreign currency debt residing in our Mauritius business, and we have some foreign currency debt residing in our Australian business. The Oman business balance sheet is our complete foreign currency balance sheet where the revenues are also in foreign currency. Even the Mauritius takeout is largely expected to be from the Oman cash flows. So again, we have a clear hedge available for the Mauritius data as well. And the Australian balance sheet is also primarily a dollar balance sheet because sales over there are also dollar-related sales, right? So from a pure -- the reported change in the consolidated debt was primarily a foreign currency translation-related issue rather than an economic issue with Oman hedging strategy, okay? so I think that's one point. Now in terms of the second question on how much debt we will be able to retire. I think on a normal basis, we have close to INR 2,500-odd crores of principal to be repaid in the current year between JSPL stand-alone, JPL and Oman, right? And we have free cash flow -- as we just discussed earlier, we have around INR 2,000 crore to INR 3,000 crore of free cash flow coming in -- in that -- in India and maybe another INR 1,500 crore in Oman. So between this INR 4,000-odd crores of free cash flow, that is the amount available for repayment. That's net of CapEx.

[Operator]

Our next question is from the line of Abhishek Poddar from Kotak Securities.

[Abhishek Poddar, Research Analyst]

Sir, this other income, for the first time that you are reporting in many quarters of 1.3 million, could you explain what is the reason for that? And second is, also we have seen interest costs declining by about 9%. So what is the average borrowing cost? And what level of interest should we see hereon?

[Deepak Sogani, CFO & Director]

So your first question is on the other income, is it?

[Abhishek Poddar, Research Analyst]

Yes, sir.

[Deepak Sogani, CFO & Director]

There is the -- there is no other income reported.

[Nishant Baranwal, Head of Investor Relations]

Abhishek, are you referring to other operating income?

[Abhishek Poddar, Research Analyst]

Yes. Absolutely. My apologies. That's the one, yes.

[Deepak Sogani, CFO & Director]

Yes. So this additional operating income of around INR 60-odd crore [ is all you are seeing ], right?

[Abhishek Poddar, Research Analyst]

So on the [indiscernible], it's about INR 1,258 million, about INR 125 crores.

[Deepak Sogani, CFO & Director]

Yes. Of course. Of course. Of course. I think net other operating income primarily relates with the sale of some of the byproducts and sale of some of the scrap-related items, right? Small items in the overall scheme of things.

[Abhishek Poddar, Research Analyst]

Will this be a continuing one or this will go...

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

I think it will be -- I think as I see it, continuing at half of this level anyways, from the numbers that I see right now. So you can say some small -- this not a very large amount in the total P&L. No. We should see some of it continue for sure, half of it at least on a sustaining basis.

[Abhishek Poddar, Research Analyst]

Right. Then is there any specific reason for interest costs to decline sequentially? And what will be the borrowing cost for this quarter for the [ consolidated ] entity?

[Deepak Sogani, CFO & Director]

Clearly, there has been a bit of a reduction in this rate also, based on our improvement in the rating where we have seen partially, right? And we're expecting some other banks also to pass on some more interest benefit to us. So that's happened. The second reason why this happened is, obviously, we repaid -- we started repaying the debt early in the quarter, right? And the -- some of the planned matching, additional borrowing happened later in the quarter, small amounts. I guess, even that led to a part reduction in the interest cost. And we also saw some refund coming in from the income tax department, which led to a reduction in the interest costs, right? Between all these 2 or 3 things that I spoke about, ballpark, yes, directionally we've seen some cost reduction in the interest rates. We have seen a small decline in the debt levels also. And directionally, we should be able to see further decline in our debt levels. And interest rates also directionally should come down. But on the other hand, we see the interest rate curve also hardening. So between the 2 of them, we're still taking a view that the overall interest rate may not come down significantly, but the cost will come down because the debt levels should go there. That's the view we're taking right now.

[Abhishek Poddar, Research Analyst]

Okay. Fair point. So just one last question, on the [indiscernible] you mentioned then there is an [ ancillary ] case where about INR 1,297 crores is paid to a vendor. Could you explain what was the nature of this transaction and why this money has been [ blocked better ]?

[Deepak Sogani, CFO & Director]

So I think this is a fairly -- we have discussed this many times. It's a clear case. We had been taking some, I don't know, fines from Sarda mines where we have given some advances in the past. And those advances and some of our iron ore [ finds ] are stuck up over there. And that company has obviously now gone in NCLT. That's the situation.

[Abhishek Poddar, Research Analyst]

Okay. But you expect this to be recovered, is it?

[Deepak Sogani, CFO & Director]

Yes. Yes. Yes. Absolutely. We obviously have lost our [ claim ]. They have a fair amount of liquidity in the form of the assets that are available there, right, which is [ in a sense of ] they have almost 12 million tonne of iron ore tonnes available at their mine. So the mine has a lot of cash value. [ As another issue this is all for them ] we should be able to realize that cash, right?

[Operator]

It would be from Gopal Nawandhar from SBI Life Insurance.

[Gopal Nawandhar]

Sir, can you just help us understand why this raw material cost quarter-on-quarter has gone up by INR 7,000?

[Deepak Sogani, CFO & Director]

Yes. I think let me just say, as you can see, that our EBITDA per tonne has gone up by INR 1,000. The steelmaking cost has gone up by INR 3,000. The additional cost that you see that has gone up, it is relating to the sale of the byproduct, as we discussed in the call earlier. We had additional sale of [indiscernible] and pulled iron and pig iron and other byproducts in this quarter. In the process of ramping up, we've obviously sold some of these byproducts in addition to steel. And the costs that relates to these byproducts is the additional cost that we are talking about, yes?

[Gopal Nawandhar]

So how should be look at -- what should be the amount -- or the normal cost, raw material cost increase quarter-on-quarter?

[Deepak Sogani, CFO & Director]

I think I said that NSR went up by INR 4,000. And steelmaking cost went up by around INR 3,000 ballpark, right? And directionally, we are seeing that the steel...

[Gopal Nawandhar]

You are saying entirely -- so whatever like we are reducing from the revenue this INR 300-odd crore has to be removed from raw material cost?

[Deepak Sogani, CFO & Director]

You're right.

[Gopal Nawandhar]

And the sales...

[Deepak Sogani, CFO & Director]

And directionally, if we also make a commentary, that as Angul starts operating at little higher levels, we will certainly -- we're all working to improve the cost of steelmaking from Angul, right? We should see significant benefit of INR 2,000 to INR 3,000 per tonne coming in from Angul once it stabilizes. Right now, it has not stabilized. It's moving gradually. That's where it is.

[Gopal Nawandhar]

Okay. And these kind of sales of byproducts, these will continue for some more quarters? Or how should we look?

[Deepak Sogani, CFO & Director]

I think, see -- again directionally, we are trying to ramp up the blast furnace and we're trying to do the balancing of the plant in Angul. In that process, we are obviously kind of leveraging the value of the byproducts to enable us to test the plant at different levels at a component level. Otherwise, we'd have to run the entire plant in a balanced channel to make only steel. The flexibility to make these byproducts and to sell them allows us to test blast furnace at a different level, BOF at a different level. And while the plant is still in the balancing mode, some more time, maybe some more byproduct sales may come into our P&L. But eventually, like a driver, we don't see much of that. Eventually, once they are more stabilized, they should come down, right?

[Gopal Nawandhar]

Okay. And sir, can you just help us understand how the steel prices are currently versus average of last quarter?

[Deepak Sogani, CFO & Director]

So if you look at the steel prices, and we have already seen that the NSR in the last quarter has gone up significantly. And if we talk about the current prices, the current price, let's say in the past as we speak, so obviously the -- in the monsoon period, as you're aware, the long steel prices in India, takes -- normally the demand comes down because the construction slows down, the material -- people don't really have places where they can keep the material and so on. They don't unload, et cetera. So generally, that is what happens every time in India, and this is not the trend. So therefore this time also, this time also, the demand for the long product, we certainly see that there is some reduction in that. And therefore, the prices have marginally come down, especially for the long product, not so much for the flat product. So for example, in the long product, I'd imagine that compared to last quarter, today the prices might be down by about 2.5%, 3% kind of a number. And that's the kind of number which will be there. But we also see very, very positive signs in the sense that only a few days back, the secondary sector has started also putting up the price per -- the prices are going up. And that's a very positive sign because what it indicates that we have already bottomed up. And from now on, the prices are going to go up. So I'm very hopeful that by the time September, in the middle of September or so, the prices will be somewhere very close to what they were in the month of June.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

From the indications we have, it appears that the -- whatever inventory levels were there in the market for long has come down. And we will obviously see a significant price improvement happening in the coming months, so that's a lot of thinking on the matter.

[Deepak Sogani, CFO & Director]

Absolutely.

[Gopal Nawandhar]

And sir, lastly, was there any ForEx gain or loss during the quarter in the operating profit?

[Nishant Baranwal, Head of Investor Relations]

Gopal, can I take this question separately with you? This is Nishant here.

[Gopal Nawandhar]

Yes. Okay.

[Operator]

Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the floor back to Mr. Rajesh Lachhani for closing comments. Over to you, sir.

[Rajesh V. Lachhani, Analyst]

Yes. Thank you all for joining the earnings call. I'll hand over the call to the management for any closing remarks. Over to you, sir.

[Naushad Akhter Ansari, Chief Executive Officer of Steel Business]

So thank you very much. I would like to thank all of you for so much of interest in the company, and certainly, it has been a wonderful quarter. There is one more news, which I wanted to share at this point of time. You might have already read that after an initial -- a stretch of almost about 14 to 15 years, we have finally been able to get Indian railway major order for the rails. And that's a very substantial order of close to 100,000 tonnes, close to about INR 560-odd crores or so. So therefore, this opens up a new chapter for us because for so long we were really trying to get these orders. Now for within India itself, we are now in a position to supply rails for all the passenger traffic. So far, whatever we have supplied was more for [ trains ], et cetera. Of course, we have been supplying rails outside India. But in India, this is going to be the first time. So this is really a very major breakthrough for us and we wanted to share that information also with you. And I also want to -- in the closing remarks, I want also want to tell that we -- be rest assured that Angul ramp-up plant is happening quite well. The site what might look like a flatter production in this quarter compared to last because we just want to make sure that everything really gels very well, and you will see the results later -- in the later half of this year. So thank you very much for your interest.

[Bharat Rohra, Former Chief Executive Officer of Power Business]

Thank you very much.

[Deepak Sogani, CFO & Director]

Thank you, everyone.

[Operator]

Thank you. Ladies and gentlemen, on behalf of HSBC Securities and Capital Markets, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.