Jindal Steel And Power Ltd

NSE:JINDALSTEL

Earnings Call Transcript 2018-Q4

[Operator]

Good morning, ladies and gentlemen. Welcome to the Jindal Steel & Power Limited Q4 FY '18 Post Results Conference Call, hosted by Prabhudas Lilladher Pvt Ltd [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Mr. Kamlesh Bagmar from Prabhudas Lilladher Pvt Ltd. Thank you, and over to you, sir.

[Kamlesh Bagmar, Senior Research Analyst]

Yes, thanks, [ Lilian ]. On behalf of Prabhudas Lilladher, I welcome you all to the Q4 FY '18 results conference call of Jindal Steel & Power. Without much ado, I would hand over the call to Nishant Baranwal, Head of Investor Relations. Over to you, Nishant.

[Nishant Baranwal, Head of Investor Relations]

Thank you, Kamlesh. Good morning, everybody. We welcome you all to JSPL's Fourth Quarter and Full Year FY 2018 Financial Results Conference Call. Today, we have with us Mr. N.A. Ansari, our CEO of Steel; Mr. Bharat Rohra, our CEO of Power; Mr. Deepak Sogani, our CFO. To begin the call, I would request Mr. Ansari to give us opening remarks. Sir?

[Naushad Akhter Ansari]

Thank you, Nishant. So good morning to all, and welcome to this conference. I'm very happy to report an overall excellent performance by Jindal Steel & Power Limited in this quarter and in this year. So I will -- you already have the brief report with you. I will just share some highlights of this report. The -- in the fourth quarter, we have had the highest-ever steel production in our company. And if you look at the number, the standalone number was 1.26 million tonnes for the quarter, which was 38% more than the corresponding quarter last year. And on a consolidated basis, this number is 1.72 million tonnes. That includes the 0.46 million tonnes of Oman, and that number is 32% higher than the last -- than the corresponding quarter.On a yearly basis, our consolidated number for the production is 5.7 million, which is 19% higher. And for the quarter, it is 4.02 million, which is 16% higher compared to the corresponding quarter.If you look at the revenue, the revenue is also [ 5 ] because on a consolidated basis, it is INR 8,599 crores for the quarter, which is 27% higher. And for the year, it is INR 27,841 crores, which is 23% higher. On a stand-alone basis, the revenue is INR 5,752 crores, which is again 27% higher compared to the corresponding quarters. And for the year, it is INR 17,522 crores, which is 13% higher. If we look at the EBITDA number for stand-alone, which is, for the quarter, it is INR 1,519 crores, which is 56% higher compared to the corresponding quarter. And for the year, it is INR 3,973 crores, which is 37% higher.On a consolidated basis, EBITDA is INR 2,136 crores, which, again, is 38% higher. And for the year, it is INR 6,469 crores, which is 37% higher. If you look at the stand-alone EBITDA per tonne, that number has also gone up pretty significantly compared to the last quarter. It is now INR 12,800 per tonne compared to the last quarter number of INR 9,800. If you look at the entire year, the yearly average is about INR 10,500 per tonne. I'm very happy to report that after many quarters, I think about 13 quarters, JSPL has [ something 2 quarters ]. And our PAT is INR 145 crores.If you also look at Oman, Oman has also done exceptionally well. Oman has got an EBITDA of 71 million for the quarter, which is -- $71 million, which is 121% higher compared to the corresponding quarter. And for the year, it is $221 million, which is about 120%. This also includes the pellet production report because pellet production has also, for the quarter, gone up by about 15% to 1.84 million tonnes in this quarter. And on a yearly basis, 56.86 million tonnes, which is about 6% higher. I would like to add -- via the numbers you have -- if you already have, I would like to add that this all has been possible because of major initiatives taken by our company, in all our operation as well as in financial matters. So if you look at Angul, for example. So Angul production has ramped -- is ramping up quite well. The blast furnace and the BOF and the entire chain is working quite well as per the expectation. And as we had mentioned earlier also that a plant like this takes about 6 months, 7 months to come to about 80%, 85% capacity. And we are ramping up very well for -- as far as that company is concerned.The Angul is working quite consistently. In the last quarter, they have done very well. And as a result, they are consistent performers. Oman has done wonderfully well. They have achieved their production levels. Last quarter, they produced about [ 46 ] million tonne as against [ 29 ] million tonne in the corresponding quarter last year. And they are already at the level of about 2 million tonnes per year. And going forward, they could be able to do much more. As far as -- I'd also like to talk a little more about Mozambique and Australia at this point. The Mozambique is the -- everybody is seeing it on the 100,000, 250,000 tonnes per month; and Australia is very close to about 100,000 tonnes per month. Let me also tell you something about what's going -- what's going -- what's likely to happen before. What is also happening? We have taken major initiatives in terms of managing our costs, managing our customer satisfaction and also our supply chain. So these are resulting into very [ high zero of ] the market. The market is accepting our products very well. Obviously, [ our portfolio ], is very well-known that our product quality is very good. So at the same time, while we are ramping up the production, the market was required to accept that entire quantity. And I'm very happy to report that based on all the initiatives that we have taken, market has absolutely no difficulty in taking our product. Despite the NSR going up essentially for -- in, let's say, in the last quarter compared to the earlier quarter, the market is accepting the product, and we are in a fairly good situation as far as inventory is concerned. We have also taken several other initiatives in terms of managing our working capital, et cetera. And all those are yielding results. So that despite -- we are completing our capital target despite making our -- despite needing our hardworking capital. Our debt level has actually come down to about INR 42,000 crores, which should, if you can remember, the maximum -- the peak number was something like INR 46,500 crores. But compared to the peak, we're already down by about INR 4,500 crores. So that's, in short, that I wanted to start a discussion with. And then I will request Dr. Bharat Rohra. Bharat Rohra is the CEO of Power plants, who will also communicate about the JPL's performance.

[Bharat Rohra, Chief Executive Officer of Power Business]

Thank you. Good morning, ladies and gentlemen. The year 2018 have seen mixed fortunes for JPL. The first 2 quarters, we did a very good performance. But in the next 2 quarters, our performance was impacted due to the issues on the availability of coal. As a whole, on a year-on-year basis, the performance in the year 2018 has been much better than the previous years. The generation has increased 19% from 9,100 million units to 10,900 million units. The turnover increased 31% from INR 3,100 crores to INR 4,080 crores. The EBITDA has increased 37% from INR 1,048 crores to INR 1,434 cores. And the cash profit has increased from -- will increase 19% from INR 655 crores to INR 778 crores. In the later part of the year, as I said in the beginning, there has been a serious shortage of coal, and due to this, the [ JPL's ] performance, which could have been much better, has been severely impacted. The coal availability and the coal cost have been major stumbling blocks. Coal availability has been impacted due to 2 reasons: Number one was the ban on import of coal for [indiscernible] state utilities, due to which, everybody has concentrated on arranging coal from Coal India. And secondly, Coal India tried to push up the production from various mines -- [ CCL and CL ] were directed to increase production. The additional mine capacity is in December itself. So January, February, March they will virtually close down some of the mines because they did not have the permission to produce beyond a particular level. From April onwards, the production has been restored. And now, we hope that with government efforts, it might improve. Now due to the [ severe availability ] of coal, it is obvious that the price will start going up. And the price started shooting up from October onwards. And in the fourth quarter, it went up from INR 1.68 to INR 2.38 per kilowatt hour. On a year-on-year basis also, the price jumped about 15%.The PPAs continues to be a real commodity, and all utilities are now coming up only with short-term and medium-term power fulfillment contracts. Long-term PPAs are something which everybody is looking forward to, but they don't seem to be coming. Presently, we have about 810 megawatts of long-term PPAs, and another 500 megawatts of medium- and short-term PPAs. A few PPAs under medium and short-term are under negotiation, and we expect to increase our PLF for the year 2019 to over 50%.With increased efforts of Coal India, we hope to manage the coal for this. We will be making about 8.5 million tonnes of coal in this year. Half of this is going to come from JSPL with Coal India. And the other half, we plan to arrange through various sources, including a major component through imports.So that's all I would like to say in my opening remarks. Thank you.

[Nishant Baranwal, Head of Investor Relations]

Now I request Mr. Deepak Sogani, our CFO, please, to kindly give his opening remarks.

[Deepak Sogani, CFO & Director]

Yes, good morning, all. Let me kind of add on to this conversation that's going on, firstly, by stating that in the quarters that just went by, we saw all the 3 rating agencies upgrade JSPL from D to triple B- and to bring it to investment grade rating. That corroborates the strength for the operational performance that we had demonstrated in the current quarter. So we are fairly and steadily back in the block in the current quarter. And the financial results, top of the city, right? So that's one point that I wanted you to highlight very clearly and as one stakeholder said, "We have got all the positive comments." Secondly, I would like to say that from the banking side also, the banks have clearly recognized and they have taken us out of the [ GLF ] in the last quarter. So I think from a banking community point of view also, they completely understand our financial and operational performance improvement, and they kind of recognize that we are not only fairly solid, but we are now performing fairly well. So I just want to highlight these 2 to begin with.The second commentary that I would like to make is, a lot of you have been tracking our Angul volume. I think Angul is the new kid on the block with additional 5-million-tonne volume that has to be harnessed in the current year. And we are pleased to kind of, again, bring that focus that in the last quarter, in Angul, we were able to do around 500k volume as against 250k the last quarter. So almost 100% growth in the volume in the Angul plant. And in the subsequent quarters, we shall be able to see even more volume coming up from Angul. So I think that is the most difficult thing that we'll add on to our performance even further. And as we have been highlighting that post the Angul commissioning, we are now having 10.6 million tonne global capacity, 8.6 million tonne in India and 2 million tonne overseas. In FY '18, we ended up doing a 19% Y-o-Y growth from volume and strategy point results, but the headroom is immense because we have now so much of additional capacity in the marketplace [ still ]. So we are targeting somewhere around 9.5 million tonne volume in the coming years, say, 99.5 million tonnes, which would reflect almost 65%-plus or 70% kind of a volumetric growth. So a lot of volumetric growth is very certainly ahead of us, which is clearly coming out to the last quarter volume growth also on top of the previous quarter.The third commentary that I would like to make is on the EBITDA per tonne. As you may have noticed on the results, our EBITDA per tonne in the current quarter is INR 12,800 per tonne, which is around INR 3,000 higher in the last quarter, which is a very significant pickup. And based on the macro environment and the steel sector environment at this point of time, we are comfortable with the current pricing regime, and we feel comfortable that we should be able to continue to derive the EBITDA levels that we have been able to get in the current quarter, which is far in excess of what we've been able to get in the last year. So just to kind of highlight, in the last year, our EBITDA per tonne on a blended basis was around INR 10,500. And already, we are seeing roughly around 25% pickup from that level in the last quarter. In the current quarter, it will continue. But on the EBITDA per tonne, I would also like to add one more layer of color on strategy. Very rightly pointed out, there's so many initiatives that we are taking to improve our efficiency on the operational front and on the cost front. I think the point that I'd like to highlight that on account of the multiple initiatives that we're taking across the board, we believe that structurally, one obviously, Angul plant is a most profitable plant. This is a larger plant and more efficient plant than the other plants. But as the volume picks up and as the federal operational efficiency initiatives that we have put in place and are maturing, structurally, we should be able to harness almost INR 2,000 per tonne EBITDA improvement without any external cost or pricing issues. So while the external environment is good, we are also now fairly well-prepared to improve our profitability by almost INR 2,000 per tonne. That will actually hold us in very good stead even if there is a bit of volatility in the market. So I just want to highlight that structurally, we are becoming a much stronger organization. It's not just the macro environment is supporting, the EBITDA per tonne are strong, but we see that the underlying current operation, we not only support it but even strengthen it as we kind of progress through the quarters. And as you are well aware, in the last quarter, we saw a total NSR pickup of INR 4,000 and cost pickup of INR 1,000, which is how the EBITDA per tonne has gone up from INR 9,800 to INR 12,800, right? So that is a very strong trend that is continuing. So that's my second comment that I wanted to highlight. The third comment that is very important for us to interpret the financial results. In the financial results, we have kind of reported, obviously, a very strong profitable quarter, the last quarter, which is a PBT-positive quarter for GST is stand-alone. And on the consolidated basis also, both the volume and EBITDA per tonne, all the metrics are extremely positive.We have taken some exceptional expenses of INR 437 crores in the financials on the consolidated basis, and partly, it was reflected in the standalone financials also. So I just comment -- I would like to comment on it to date. Primarily, these expenses are pertaining to royalties that we have been asked to -- additional royalties that we have been asked to pay in cost. Of primarily these earnings, they are [indiscernible] provisions. So these are all not driven. Primarily, they are noncash expenses. As you may recall, out of this INR 437 crore, INR 137 crore actually pertained to some royalty expenses that we had reported in the last quarter, pertaining to additional royalty demand in some mining operations. [indiscernible] that INR 137 crore that we had notified to all of you last quarter, we were also examining last year, examining options for recovering of the same, but we have decided to take a charge for this INR 137 crores, which is the only cash expense out of the INR 437 crores. The INR 300 crore again pertains to variety of past royalty charges. And even this INR 137 crore actually pertains to royalty charges for a fairly long period of time that was demanded of us in the last quarter but did not pertain to the last quarter. It pertained to maybe several years additional royalty demand by the department. And therefore, we have decided to classify it as an exceptional item, right?So broadly, that is the larger color on the exceptional item. But I would also like to take this opportunity to say that by virtue of where we are in our journey today, we do have certain exceptional items in the balance sheet, both on the positive side as well as on the negative side, right? And the plus side seems to be significantly more powerful, and I'm just trying to take the liberty of doing a full discussion on the other items as well, right? So ballpark, as you're well aware, that in our -- as you are aware that we have some mining assets, which totaled almost, one second -- So I think we're just trying to do disclosure on the exceptional items, right? So you're well aware that we had reported this 437 crore exceptional items. And you are aware that we had kind of taken -- so you're also aware that we had kind of, in past, the coal levy of INR 3,000 crore, of which INR 1,700 crore has been charged off in the previous years. We are still contesting the balance of INR 1,300 crore. And we obviously are looking for a favorable outcome in that in due course, okay? So now that disclosure is now over. Now we speak on the other item. We speak about the deleverage. The next item is on the balance sheet side. And I -- we will be able to take any questions on the exceptional items when the question-and-answer session opens. So we now talk on the deleverage.On the deleverage, as we've already kind of highlighted that from the peak debt level, we are minus INR 4,500 crores. I think the point that I'd like to highlight is that we are at the end of the CapEx cycle. All the [ needed ] CapEx has actually been done. And we have already started deleveraging extremely significantly. Based on the original liquidity that is coming to us from the QIP and additional working capital that has been sanctioned, broadly we believe that we are having a fair amount of positive liquidity available with us. We have also been able to kind of add to our working capital to kind of help the Angul business ramp up. So from a liquidity point of view, we are feeling fairly comfortable at this point of time to drive our business to the next level. So I think broadly, that is the commentary, and kindly open it up to share some answers.

[Bharat Rohra, Chief Executive Officer of Power Business]

Thank you, sir. And I will ask the operator to open it to questions. But before we start, may I, again, as always, request all of you to kindly ask more strategy questions. Myself and [ Deepak ] are always there on the IR team to help you with the data questions. With that, I will now request the operator to kindly open the line. Operator?

[Operator]

[Operator Instructions] We'll take the first question from the line of [ Fora Mesa ] from [ PNB Mutual Fund ].

[Unknown Analyst]

Yes, so my first question on the cost efficiency of about INR 2,000 a tonne, what you mentioned, is it specific to Angul plant or is that on the company as a whole? And if you can, in addition to that, can you split INR 2,000 per tonne broadly into raw material savings and non-raw material savings?

[Deepak Sogani, CFO & Director]

Okay. So this INR 2,000 per tonne that we are talking about, it's primarily related to the Angul plant. Operator, there seems to be disturbance. We are getting echo.[Technical Difficulty]

[Operator]

Please go ahead.

[Deepak Sogani, CFO & Director]

Okay, shall we? Shall we continue?

[Operator]

Yes, sir.

[Deepak Sogani, CFO & Director]

So as I was saying, that this INR 2,000 per tonne is what we are targeting at Angul plant primarily because of the efficiency, which we expect to [ bench in both ] time, making us [indiscernible] in steel making, and also this will get directed to the downstream product. You see, the whole idea of this INR 2,000 reduction that as you ramp up the glass furnace, your coal requirement keeps coming down on a quarterly basis. And your PCA, [ DCA ], we can increase. And also, the overall [PNC ] efficiency comes down substantially. So that gives a very substantial saving. For example, if you are operating at somewhere around, let's say, about 8,000 tonnes per day or 8,500 tonnes per day, and as we ramp up, we will be going beyond 10,500 to 11,000 tonnes per day. So that additional production is going to cut down the steel cost very substantially and improve the glass furnace productivity. And obviously, the fixed cost also gets distributed. So that is the first part on the glass furnace. At the same time, the BOS is also ramping up, and the [indiscernible] ramps up. So as you ramp up, your refractory costs keeps coming down. Your fixed costs in terms of the bank audit [indiscernible] keeps coming down substantially. And this also as well as the improvement which is going to happen in the [ late game ] environment. Combined together, we are targeting a minimum of INR 2,000 per tonne production.

[Unknown Analyst]

And Angul as a total percentage of production.[Audio Gap] or would be about 40% on a stand-alone basis or in FY '19 and FY '20, still could be that number can be much higher?

[Deepak Sogani, CFO & Director]

So if we look at this FY '19 number for Indian operations, we are talking close to about 7 million tonnes, roughly around, of LIBOR plus figure. Out of 7 million tonnes, about 50% will come from RIGOR, and about 50% again will come from Angul. So it is roughly about 50%.

[Unknown Analyst]

And so my last question, with respect to the balance sheet. The INR 42,500 crore, does it include the current maturities of long-term within 1 year? Or that number is already above that?

[Deepak Sogani, CFO & Director]

This covers both, the current maturities of long-term as well as the noncurrent components of the long-term. This is the complete debt of the company consolidated across all geographies.

[Unknown Analyst]

And with respect to that, what kind of working capital increase should be there? Or we still have room to further take down our working capital requirement a number of days?

[Deepak Sogani, CFO & Director]

So broadly, there is always a lot of room for improvement. So the way we run our business is continuous improvement quarter-on-quarter on all fronts. We have been able to kind of optimize our working capital cycle quite significantly over the last couple of quarters. But I still believe that we will be able to optimize it further. We are there, I think, right now running at around 38 days, 40 days. We should be able to bring it down further by another 8 to 10 days, and we're working on that, okay?

[Nishant Baranwal, Head of Investor Relations]

Before we go ahead, if I could just request that you need to limit questions to only 2 because we have a long Q-and-A list.

[Operator]

The next question is from the line of Atul Tiwari from Citigroup.

[Atul Tiwari, Vice President and Analyst]

So my question is on your next year's India business guidance of 7 million tonnes of steel. Obviously, you guys can produce, but will market be able to absorb it, if you could give some more color on this issue? In which product segments you are seeing improved demand? Because not only you guys, but your competitors are also going to be ramping up somewhat. And also after the NCLP resolution, some of the NCLP-related [indiscernible], which are running at low capacity, they will also be ramping up. So I mean, how do we like get more confidence about this 7-million-tonne volume guidance in FY '19?

[Deepak Sogani, CFO & Director]

All right. So if you really look at the Indian market today, it is close to about 100 million tonne market. And we're also seeing that the annual growth and the demand for the steel is -- last year was already it was already close to about 5%. This year, we are expecting at least 5.5% to 6%. And going forward, based on the GDP growth, we certainly expect it to be around 6% or so. Which means we're saying that every year, we are expecting a demand of -- additional demand of about 6 million tonnes on a compounded basis. If that be the case and you're also aware that there are no immediate new plants, which are going to come, let's say, in this year or next year. They would obviously -- they're obviously -- people are talking about expansion and in terms of this JSW, and other companies are also talking about expansion. So that is fine. Therefore, as far as today's scenario is concerned, and also in the next 2 years, 3 years as we proceed further, we certainly see that the demand pickup is considerably more than whatever capacity buildup is going to happen. You also mentioned about the companies which are under NCLT and which are going to be taken over or not. Those companies are not really closed. Most of them are still producing. So it also still possible, certainly anything is possible, that the new owners will try and push and bring in [indiscernible] essentially and capacity utilization compared to what has been happening now. And if that be the case, then I would imagine that this -- there's still -- there will be maybe another 5%, 10% kind of increase in it essentially in the coming year or 2. Now having said that, if you look at the entire market, and today, India still continues to be a [ net fixed quota ]. And also, if you look at our product profile, that is primarily we are mostly into long. Obviously, about 2.2 million on a -- between the 2 plants, we also make this. If we look at the current demand in infrastructure growth, which is very substantial, you can find that everywhere that one is picking up substantially. We can see that in terms of the capacity, which are most of the fabricators and other [indiscernible] of orders. We also have absolutely no issue in terms of getting orders. Our order books are generally full for 25 days, 30 days. This is despite all the increase in production rate that has been happening in the last few months and few quarters. So we don't see any difficulty at all in selling our products. And in fact, the market, you could also see the product price. NSR is also quite stable. In fact, the quarter 4 compared to quarter 3 was substantially higher, more than -- somewhere between INR 4,000 to INR 5,000 per tonne. And at this time also, it is almost at the similar level. So no, we don't see any difficulty at all in selling our product. And primarily, you should also remember that our product quality is one of the best. If you look at our [ plain stay ] we have one of the best [ plain stays ] in the world. And therefore, if there is any shortage in demand, so to speak, we certainly believe that our product can sell fast compared to anybody else. And also we have -- you're also aware that there are substantial percentage of secondary players, so to speak, in the field. And something -- somewhere around 40% to 45%. And certainly, if there is -- if push comes to shove, we should be certainly in a much better situation compared to most of the people. So I hope I have responded to your question.

[Atul Tiwari, Vice President and Analyst]

Yes. And second and last question, what is CapEx guidance for the next year for the stand-alone and the consolidated basis?

[Deepak Sogani, CFO & Director]

So as we have communicated earlier also, most of our CapEx lines have already completed, and that's why we are ramping up the plants successfully. And of course, there are some areas where we are still spending some money. For example, we are setting up 2 additional [ portfolio investments ]. That's -- there is a [ costa ] project which is going on as far as [ bigger costa ] project. But these are some balancing items which are going on. That will be somewhere close to about INR 500 crores or so in this coming year. That's the kind of number we've prepared. And that should cover up our -- the entire FX requirement, by and large, for the new projects which we have.

[Atul Tiwari, Vice President and Analyst]

Okay. So does this infuse your regular maintenance CapEx also because it looks like a really small number. So that's why INR 500 crores, I mean, you do have asset base of like INR 80,000 crores, INR 90,000 crores.

[Deepak Sogani, CFO & Director]

Yes, you are absolutely correct. But let me tell you this. Angul plant is absolutely a new plant, practically a new plant. And when we talk in terms of the maintenance CapEx, that does start at some point of time. Right now, we are still in that process where we are utilizing all of this capacity. So in the coming years, certainly, we will have some additional CapEx -- maintenance CapEx requirement, which will be there may be in terms of another INR 400 crores or so, something in that order. So that would happen. Something will be required maybe in Raigarh and so on. Oman is also fairly new plant. We don't really much of the CapEx there. So we're talking about practically this year, we are looking at this CapEx of probably around INR 500 crores, max INR 600 crores. And in the coming years, obviously, there will be some additional needs for the maintenance.

[Operator]

The next question is from the line of Abhijith Vara from Sundaram Mutual Fund.

[Abhijith Vara]

Sir, just I wanted to clarify what is monthly production run rate for Angul, sir, right now?

[Bharat Rohra, Chief Executive Officer of Power Business]

Could you repeat the question?

[Deepak Sogani, CFO & Director]

Monthly production run rate for Angul at this point of time.

[Bharat Rohra, Chief Executive Officer of Power Business]

Okay, so let's give you some numbers for Angul. So now, if you look at quarter 4 Angul number, we have produced in this year of the quarter for about 470,000. And in the coming months, we are talking about producing something close to about 250,000, which will be ramping up going to about 300,000, going then back to the 350,000, and finally going -- we expect to reach level of 400,000. So that's the kind of ramping that which we had mentioned. As I have repeatedly mentioned a plant like this ramping up to 80%, 85% capacity, it takes about 6 months, 7 months kind of number to reach. And we expect that in a couple of months, we should be reaching to that level. And thereafter, it will be further increasing there. So for example, in the October quarter, for example -- in the October quarter, we should be doing somewhere around 400,000 to 450,000 tonnes per month. That's the kind of number we are expecting to do.

[Abhijith Vara]

Okay. Sure, sir. And you have the money available, note that not the entire money has been exhausted. So after working capital requirement, you'll still have some money to reduce a bit? Or will be exhausted with this year's growth?

[Deepak Sogani, CFO & Director]

Sure. So I think this royalty money actually got used for some debt reduction in the last quarter. Partly, we used it for some CapEx and working capital purposes to ramp up our Angul business. And maybe around INR 300-odd crore is still available. And if we were to lop it off, our net debt would have been even lower than what we reported. We're not [indiscernible] of excess cash in the reported debt figure. So yes, you're right.

[Abhijith Vara]

Net debt will be almost, for last question.

[Deepak Sogani, CFO & Director]

In -- I'm going to kind of start there. In net debt, but if you ask me the available liquidity at the end of the last quarter because our seed money came in pretty much at the end of March. Another you can add, another INR 350 crores to INR 400 crores. Actually, we know that [indiscernible] later. We are seeing INR 482 crores unutilized funds from the [indiscernible]. So if you were to [ run ] that off, the net debt would be lower by INR 482 crores, right.

[Operator]

The next question is from the line of Ritesh Shah from Investec Capital.

[Ritesh Shah, Analyst]

So in the initial comments, you indicated 8.5 million tonnes of coal requirement for this year. Now a broad math will indicate like you're guiding towards 1,900-2,000 megawatt of power sales. This corresponds to around 1,375 megawatts, what we did, at this year. Sir, could you please help understand the bridge, how we will go from 1,375 to 1,900-2,000 for FY '19?

[Bharat Rohra, Chief Executive Officer of Power Business]

Yes. We have already in place PPAs for 1,350 megawatts. That is last year. We have PPAs in hand for about 1,100 megawatts. So there has been an incremental increase in the PPAs of about 450 megawatts. In addition to this, we are under discussions with various utilities for another 300 megawatts, and that should be fruitful in the next 2 months. So on that basis, we have a target of having an average [ invasion ] in this range of 1,700 to 1,900 megabytes in the current year.

[Ritesh Shah, Analyst]

Okay. Sir, can you provide some color on next 2 months basically? Like which states are we targeting or something?

[Bharat Rohra, Chief Executive Officer of Power Business]

Which -- can you please repeat the question?

[Ritesh Shah, Analyst]

This incremental 300 megawatts, it is expected from which state? I mean, earlier, we had guided for like 325 megawatts from [ UP ], which hadn't materialized.

[Bharat Rohra, Chief Executive Officer of Power Business]

No, we have got a PPA of about 200 megawatts from [ UP ], which is on a short-term basis. So that is in place. That is part of the 1,350, which is already being generated and transmitted. And the next -- the other PPA, which is still under discussion. Because it is under discussion, so I would not like to disclose with whom it is going to be.

[Ritesh Shah, Analyst]

Okay, that's fine. Sir, my second question is the auditors have qualified potential, basically, impairment of INR 974 crores for the hydro projects. So what exactly is this? Is it possible if you could please provide some more color over here? And again, another one-off in the notice, there is an additional levy pertaining to INR 1,274 crores. Now is it something which is not that an exceptional under provision, which has already been factored? How should one look at this?

[Deepak Sogani, CFO & Director]

So I think, let me, first of all, correct the interpretation of the reporting, right? There is no qualification on the hydro projects, okay? This is only covered under the emphasis on certain matters by the auditors, okay? And you're well aware that we have invested certain amounts of sums in our power business in the hydro projects in the past years, and all of them are viable projects. There are 3 different projects of different capacities that were some -- that are under development. And we have been waiting for the revision or the revised hydro policy to come in. So till the time the policy comes out, we are obviously not wanting to expand our footprint in that area, and therefore, the progress is a bit slow on our end. However, these are all extremely good quality assets, and when the right policy comes in, they will obviously create value. The current disclosure by the auditors is by way of abundant caution. We do not foresee taking charges on account of these hydro projects anytime near in our financials, okay? So let me just end this completely here, okay?

[Ritesh Shah, Analyst]

Yes. That helps. And sir, my second point was on INR 1,274 crores.

[Operator]

Sorry to interrupt. Mr. Shah, may we request that you return to the question queue? There are participants waiting for their turn. The next question is from the line of Nitesh Jain from Axis Capital.

[Nitesh Jain, Executive Director of Materials]

Ansari Ji, I have 2 questions. Number one is on the cost of production of steel business in India. How should we look at like the dynamics of the local iron ore pricing, and I think it has softened a bit after remaining high for some time, also coking coal has slightly gone down. So in the coming quarters, should we assume a meaningful reduction in cost of production for the Raigarh and the Angul? I'm not talking about only the operational efficiency part, which is your internal target but keeping in view the basic raw material pricing as well. This is point number one. And the second question is on the long product pricing market. How do you see that in April and March? Is the steel realization for JSPL higher than the Q4 average you reported? These are the 2 questions.

[Naushad Akhter Ansari]

Thank you, Mr. Jain. So let me, Jain, attempt to answer this. The first question is, if you look at the difference in a raw material basket vis-a-vis the finished products and compare this from April 17 till April 18, you would actually find that this margin has gone up by about 42%, 43%. So -- and we expect that the similar -- the numbers, which are there, we expect that we would have the similar margins in the coming quarters and years primarily because the demand is quite robust so to speak. And so therefore, this gap between demand and supply, I think, will continue keeping the price at that level. As far as the second part is concerned, the realization for the long product, which was there in quarter 4 and beyond that in April, May -- in the month of April or so, they're almost at the similar bookings, so it is -- there is not really any major difference we can prove. As you can see, depending on which products we are talking about, there is marginally up and down, very marginally if at all, within a very narrow range, so to speak. So we don't see any, let's say, appreciable change between the quarter 4 numbers and the current quarter numbers. So that's where we are. So to answer -- I hope that your question is answered by this.

[Operator]

The next question is from the line of Amit Dixit from Edelweiss Securities.

[Amit A. Dixit, Financial Analyst]

I have 2 questions. The first one is what would be the Angul exit rate in the month of March and DRI -- likelihood of DRI plant to start up going ahead. And the second question would be that, in power business, we have seen that the offtake from Coal India -- actually, the sales volume of Coal India has materially gone up in April. So are we seeing better availability of coal for power business? These are the 2 questions.

[Naushad Akhter Ansari]

Okay, so the first question, I will attempt to answer. And as I already mentioned a little while back, that in Angul we are -- the ramp-up is happening quite well. And going -- as we go towards the end of the financial year, we should be very close to our full capacity. The current full capacity in Angul is roughly about 5 million tonnes, and the exit rate in the month of March should be somewhere closer to that. That's the kind of number that we are expecting to operate there. That is first part. As far as the coal is concerned, I will request Mr. Bharat Rohra to respond. The DRI plant to startup, we are targeting the DRI plant to start up sometime around end of July, early August. So that's something, which we are -- is depending on the ramp-up of the blast furnace and BOF. So that's the kind of target, which we have, that middle of this year, we will be at start-up.

[Bharat Rohra, Chief Executive Officer of Power Business]

Yes. Regarding -- Mr. Dixit, regarding the full availability, because they had issues on the environmental front, so we mined in our area. They have started production in the month of April, and availability is better than March. Although it is not to our expectations, but we expect it to improve in May, June because these are dry months, and we can make a very good production in these 2 months.

[Operator]

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

[Pinakin M. Parekh, Associate]

Just circling back to the steel. 7 million tonne guidance versus, I think, roughly 4.06 million tonne of production, which we saw in F '18. Sir, can you give us a sense of what is the expected percentage share of semis of the 7 million tonnes that you plan to sell versus what it was in F '18?

[Naushad Akhter Ansari]

All right. So when we talk in terms of semis, we really don't talk in terms of the normal billets or slabs, so that's not the kind of semis we generally sell. The semis that we actually sell is the value-added rounds or even the square billets, which are value added, which are used for much higher applications. So if you look at our total balance, for example, the point is that our rolling mill capacity is [ almost value and power ] and steelmaking capacity, and so I'm talking in a combined manner for Raigarh, Angul as well as Patratu. And so therefore, we still have of course, some capital capacity for making semis. We take always a decision whether, at any given point of time, let's say, in a given month or a given quarter, does it make better sense to sell the value-added semis or make one of those products, which we make, for example, the structures or the plates or the rebars or the wire rods, whatever. So we don't -- that's always a dynamic decision, which we keep taking depending on the market need. And fortunately, we have that flexibility to do so. So if -- so therefore, to answer this question, whether there is a fixed pattern for steel or semis, I would answer that there is a minimum -- certainly, there is that minimum [ prior ] number, which is there. For example, we supplied the rounds to -- for the seamless pipe industry, and they're -- by and large, they are our partners and depend on us, and we depend on them. So that's the kind of number, which we -- on a regular basis, we supply. On the other hand, there are some which are more opportunity-based situation where we determine what to do. So I really don't want to give you a very fixed number that is the kind of semis percentage, which we are going to sell because, again, the [ world of ] semis is certainly very different for us.

[Pinakin M. Parekh, Associate]

Understood. Sir, my second question is going back to the CapEx number of INR 500 crores for the year and also the depreciation run rate on a consolidated basis is roughly INR 1,000 crores a quarter, which is INR 4,000 crores a year. Now we understand this is because a lot of the new projects have been CapEx -- expensed starting -- expensed through the P&L. But sir, you mentioned the INR 500 crores is on the balancing facilities. So what will be the maintenance CapEx for a company as large as JSPL?

[Naushad Akhter Ansari]

So it will be somewhere close to about INR 400 crores, INR 500 crores addition. That's the kind of number, which is there, so this is [indiscernible].

[Deepak Sogani, CFO & Director]

Last -- One thing let me clarify. I think, there are 2 components to our CapEx or maybe 3 different kinds of conversations on the CapEx: One, that we are at the end of our large CapEx cycle in Angul. There is no new large project that is being envisaged either in Angul, Raigarh or Oman. So therefore, I would like to provide an assurance to the different -- to all on the call that there is no large CapEx that is on that [ handwheel ] at this point of this time, point number one. Point number two, very clearly, some -- as we are stabilizing Angul, we need to do the residual balancing CapExs, which are essential for us to stabilize the plant well or to fix some of the residual parts. And as Ansari Ji mentioned, that CapEx is around INR 500-odd crores, right? That's the point number two. Point number three, obviously, there is a regular maintenance CapEx, which will be around INR 500 crores -- INR 400 crores to INR 500 crores. And I think to bring clarity, this regular maintenance, maybe on Angul, there will be a little less this year, but ballpark to be on the conservative side, I would like to kind of guide everybody to factor in about INR 500 crore of maintenance CapEx on a regular basis, including this year. So ballpark about INR 1,000 crores is a decent number to take on the CapEx side this year. I think that you are more focusing on the projects that are kind of outstanding. That's our guidance, but it's very small compared to the overall large gross block that we carry with us. Yes?

[Operator]

The next question is from the line of from Bhavin Chheda from Enam Holdings.

[Bhavin Chheda]

Sir, on your guidance, which looks very strong on volume and the way the Angul is ramping up and looking at cost savings also. So you spoke of INR 2,000 in cost savings, and as you mentioned, the realizations are largely steady in April, May over quarter 4 exit, which means, in the steel business, we are still headed for improvement in this strong EBITDA from current levels?

[Naushad Akhter Ansari]

Okay. So let me put it like this. There are 2 things which we have talked about. One is that -- what is the margin level, which is there, and what has been communicated earlier by Mr. Deepak Sogani also is that irrespective of what is the market scenario, we are targeting a kind of sales or cost reduction of INR 2,000. And now the rest of it, obviously, the NSR depends on what is the market scenario. Today, it is quite steady. What's going to happen in the next few months or so, we certainly expect that these numbers should be good simply because the demand for it is there. And these 2 things -- these 2 factors combined together, obviously should increase our margins certainly. I mean, so to answer your question, yes, we are certainly looking -- hoping that this reduction will increase our margin substantially.

[Bhavin Chheda]

Yes. And my second question's on -- your coal mining operations have not yet contributed meaningfully. Maybe it's negative on -- in the FY '18. And now all the mines are operating. So can you give some guidance or some outlook there of what kind of run rate we can expect in FY '19? And would there be any meaningful contribution in '19?

[Deepak Sogani, CFO & Director]

No. I think let me kind of very quickly comment on it. It is a fact that we were not able to focus on our international coal and iron [ investments ] a effectively in the past, point number one. Point number two, now that we are very strong in the Indian operations and our volume is ramping up, the need for these supplies has increased for us, so we, obviously, use part of the coking coal from Australia and Mozambique. And it is in our interest to increase the production level to support the backward integration of our current business. Therefore, in line with that, over the last couple of quarters, a large -- a larger, I would say, management focus has been there to develop these assets and to grow these assets. And accordingly, as Ansari Ji pointed out, both in Mozambique and in Australia, about the [ last ] tonne per month kind of a production is now already in the ballpark. Sometimes, that's standard. So that's the rate at which we are operating. The next point that I would like to say is that, in FY '19, the focus will be significantly higher than what it was in FY '18 to develop these assets, right? Both in Mozambique and in Australia, larger initiatives are happening, and we should be able to certainly demonstrate improvement on where we are in these businesses. However, given the large EBITDAs from our steel business and from our power business, the EBITDA from our mining operations are unlikely to be comparable, and these are more from our raw material security point of view and backward integration point of view kind of investments that we made. So they de-risk our business model. One -- I do not like to kind of guide for us to start seeing them on a stand-alone basis from a EBITDA perspective. Big picture.

[Operator]

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

[Sanjay Jain]

First question is on what is the CapEx that we have done in FY '18?

[Deepak Sogani, CFO & Director]

I think, just one second. If you can just first -- just wait for a second. We'll just get the exact detail, or maybe we can respond offline. And in the meanwhile, if you prefer to ask your next question, you may do so while we're getting the data compiled for this. Okay?

[Sanjay Jain]

Okay. Secondly, in the previous quarter, we were seeing that Australia will break even in the fourth quarter. And now when we see the numbers, if you take consolidated EBITDA and deduct stand-alone Jindal Power and Oman, then we get a negative number of about INR 120 crores in this reconciliation. So I mean, what I'm trying to understand is that -- is this -- are these the losses or there is a...

[Deepak Sogani, CFO & Director]

No, no. I think -- let me correct you. I think you're looking at ex Oman, right? If you add...

[Sanjay Jain]

Yes, actually Oman ex -- basically, consolidated minus standalone minus Jindal power minus Oman.

[Deepak Sogani, CFO & Director]

Yes, yes. So obviously, on the -- other than Oman and other than JPL and other than J-Steel, which are our profitable businesses or EBITDA positive businesses, the balance are not held positive, and that's the whole idea, right? So clearly, I think 2 points that I would like to highlight. As I said, just made commentary that we, obviously, will have a larger managerial focus on it in FY '19. We look at them as an integrated part of our business to provide us long-term raw material security, and we don't want to kind of look at them as a stand-alone return on capital employed kind of investment because that doesn't make so much -- that was not the intent with which these investments were made whenever they were made. But nevertheless, these are -- I would like to probably guide that both the Australian businesses and the African businesses are very marginal in terms of [ health ] obviously. This year, we will see [ it return positive ] coming both Mozambique as well as Australia. But even today, it is not as if we need to support them. It's not a -- it's a very marginal kind of a play over there given the larger volumes and EBITDA that we are working on. So it's very small, and it doesn't matter in the larger context.

[Sanjay Jain]

Yes. That I understand. The only thing that I want to understand, like, see, for FY '18, there is a negative INR 400 crore. So for FY '19, is this going to be similar kind of number? Or we should see some reduction here?

[Deepak Sogani, CFO & Director]

I would not only see reduction, but I would actually like to believe it will be maybe positive INR 400 crore. I would like to believe that it will be in that zone. Given the fact that Australian operations -- Australia actually started producing effectively in the last 4 months, 5 months only. So in that 12-month period, we have seen Australian operations only for a part of the year and Mozambique operations were also at a lesser rate in parts and have increased the rate even only now right? So on the whole, if you look at it, even on the last quarter exit run rate basis, the overall volume and profitability should be higher in FY '19. Let's run through the year and see how it fares, but it should still be marginal there. And now the total CapEx in last year was basically around what I've been told, is around INR 900-odd crore -- around INR 1,000 crore, you can say, net of oxygen plant steel. So not -- and if any further details are required on the CapEx, you can share the numbers, but ballpark 1,000-odd crore net of oxygen plant steel was the CapEx in the last year.

[Sanjay Jain]

What do you mean by net of...

[Operator]

Sorry to interrupt, Mr. Jain. Sir, may we request that you return to the question queue? The next question is from the line of Anmol Das from Stewart & Mackertich.

[Anmol Das]

I just have one question. Does JSPL have any subsidiaries overseas or within the domestic market, which they are planning for a divestment because many other peers of yours are into that?

[Deepak Sogani, CFO & Director]

What?

[Naushad Akhter Ansari]

They are asking if there's any subsidiaries we are wanting to divest.

[Deepak Sogani, CFO & Director]

So the...

[Naushad Akhter Ansari]

So obviously, I mean, we have, for example, the Jindal Shadeed, which is in Oman, which is a 100% owned company by us. So there is a company which is there. And we, of course, have developed [ jitar ], which is part of [ Jindal Mining ] and so on. So there are obviously companies, which are there. And as far as divestment is concerned, year-over-year, obviously looking at Oman whether we should go for any IPO or so. But right now these are all work in progress. We are still looking at various options, whether it makes any sense to go for IPO at this stage or do it a little later or should we have some direct investment like [ even on that ]. Those options are being looked at, but right now that is something that we really can't share at the moment.

[Operator]

The next question is from the line of Abhijith Vara from Sundaram Mutual Funds.

[Abhijith Vara]

Sir, what is the status of this sale of [indiscernible]?

[Naushad Akhter Ansari]

Sorry, can you repeat?

[Abhijith Vara]

The 1,000-megawatt power plant?

[Naushad Akhter Ansari]

Okay. So the -- it is a status quo. The long [ stock ] date remains as June this year. And obviously, the 2 companies are discussing whether they should extend this agreement for a further period of 6 months to 1 year, and that discussion is on. Most likely that might happen, but as of now it is a status quo.

[Abhijith Vara]

Okay. And second, I wanted to just clarify all the provisions for the past levies have been taken or there's still some more precaution left?

[Deepak Sogani, CFO & Director]

So thanks for asking that question, and let me kind of give you my commentary on that, right? Clearly, you're aware there was a large coal block financial levy that have been imposed on us of around INR 3,000 crore in past, which we have paid, and we have taken a charge-off around INR 1,700 crore, and around INR 1,300 crore is still remaining to be charged off. We are contesting. It is being contested, and we are obviously hopeful of recovering bulk of the payment that we made in past. So that is the reason why we have not taken this charge so far, right? On the other hand, let me also say that there is a sub judice matter where around 12 million tonne of our mines are not yet accounted for. So while on the exceptional side in the balance sheet maybe there are certain items which we are contesting and which we are hoping will come out to be favorable, there is one large item that is likely to be even more favorable, which has also not yet been taken or factored into the conversation effectively. So on a ballpark basis, if I look at some of these contingent liabilities and contingent assets, my assessment is that we will come out to be significantly more positive given the fact that we already made these payments, which are not deferred payments, and we are contesting the recovery of that, right?

[Abhijith Vara]

Just the payment of INR 2,000 crores has been made or the entire INR 3,000 crores has been made?

[Deepak Sogani, CFO & Director]

We have made INR 3,000 crore payment. That is a onetime excess warranty payment that was coal-related levy that is [ also for our part ], which we had no choice, the Supreme Court had asked we pay. And we are contesting the same, and we have accounted for almost INR 1,700 crores, INR 1,800 crores of it. And we still are hoping to be able to recover the entire loss. So that is the whole reason why it has not been fully charged off and of course for us to be able to contest it effectively. There are -- and there is no further cash flow. The cash is already out long time back. Right now whatever will happen will only give us cash back, right? And also, there is a large, about 12 million tonne of iron ore mines that belong to us, which is sub judice and we are demanding right on those iron ore mines. The payment for that also has been made by us in past or expended long time back. Whenever those iron ore mines come to us, and they will at some point of time, that will, again, give cash flow to us. If you look at the largest concept of our business, in netting off between the contingent liability and assets and provisions, my assessment is that all the cash that we have paid out, all the larger payments that were required to be paid and whatever provisions, when and if they come, they are only noncash related. But we are hoping to actually generate significant cash from the payments that we have made in past on these provisions. That's the summary for it.

[Operator]

The next question is from the line of Abhijit Mitra from ICICI Securities.

[Abhijit Mitra, Vice President of Metals, Mining and Defence]

Just to understand, given that we have -- we are looking for 7-million-tonne steel production in domestic business in FY '19, what kind of net debt to EBITDA we are aiming for? Is it fair to say that without factoring in any meaningful divestments or -- of any of the subsidiaries, can we reach 3x to 4x kind of a target, which we have kind of alluded to in the last quarter in FY '19 itself, if we are looking for this kind of production? That's question #1. Question #2 is I also wanted to understand what is the gap that exists right now between Angul and Raigarh in terms of their EBITDA performance. The reason I'm asking is that as Angul ramps up and as this gap kind of narrows down or, so to speak up, the EBITDA converges, we are -- we're initially expecting to see a better EBITDA performance. So part of that is the INR 2,000 per tonne of cost benefit or cost optimization that you have earlier referred to. But if you could also help us understand the current gap in EBITDA performance between these 2 plants, that would also be helpful.

[Deepak Sogani, CFO & Director]

So I think, let me take your first question on the net debt to EBITDA. I think we are extremely -- we are reporting a very good set of net debt-to-EBITDA number also this quarter-end or this year-end. FY '17 ending net debt to EBITDA was a little over 13x, right? And FY '18 net debt to EBITDA is around 6.5x, right? And next year, all without any divestments, you should look at the volume that we have said around 9.5 million tonne -- 9 million to 9.5 million tonne in the power business. So if we do a quick rough back-of-the-envelope computation, we will arrive at -- and today's EBITDA per tonne is around INR 12,800 crore. So if we apply that, we are talking about an EBITDA per tonne on 9.7 into 12,000, we are talking somewhere around [ INR 11,000 core or INR 10,000 crore per ] EBITDA of the steel business itself, and power business will also get added. So even if we ballpark, the current year is looking fairly positive from a pricing ratio point of view as well as volume point of view. So if we -- even though ballpark to INR 12,000 crore EBITDA or more, whatever -- wherever you land, I'm not giving the guidance on the EBITDA. Let me just very clearly highlight, I'm just trying to do the math with you on the fly. But if it was INR 12,000 crore, let us say, and if you were to kind of envisage the free cash flows after bank interest and bank repayment of around INR 6,500 -- or I think INR 2,500 -- it's around INR 6,500 crore of bank-related payments. So we will have a CapEx of INR 1,000 -- INR 7,500. We should be able to have free cash flows over and above our bank payments and CapEx requirements of INR 4,000 crores to INR 5,000 crores, and that should bring down our net debt to EBITDA. We are committed to reduce our net debt from INR 42,000 crore to at least INR 36,000 crore this year, primarily from an operational performance point of view and if required, partly through nonoperating through divestments and other things. If you take INR 36,000 crore as the ballpark net debt at the end of FY '19 and if you take INR 12,000 crore as a ballpark EBITDA -- computed EBITDA, not a guided EBITDA, must very clearly kind of state, then the net debt to EBITDA is only in the range of 3 or 3.5, so very positive. Now one point that I missed out in my commentary earlier on, which my colleagues pointed out I should have, is the EBITDA per tonne color, right? I think, last quarter, when we said -- and this is a very important point, and we should digest the significance of the point. When we are reporting INR 12,800 EBITDA per tonne for the full quarter, actually the NSRs of the quarter built up over the 3 months, January, February and March. And March actually saw 3 rounds of price increase, and the March NSRs were quite positive, right? So on a blended basis, EBITDA per tonne -- on a run-rate basis EBITDA per tonne going into April is actually even better than INR 12,800 by maybe INR 1,500, INR 2,000, in that ballpark zone. So we'll see how the quarter plays out on the blended basis. But the exit EBITDA per tonne is higher than the average EBITDA per tonne for the last quarter by a reasonable amount. That's one anchor point that I wanted to kind of certainly leave behind with you. And now I'll request Ansari Ji to comment on the EBITDA differential between the Angul and the Raigarh business.

[Naushad Akhter Ansari]

So let me put it like this. The -- if you look at the cost differential between Angul and Raigarh today, and let's say rather than talking about the year and the quarter, let me talk about the month of March, so the difference between Raigarh and Angul, it will be somewhere close to about INR 500 to INR 1,000. Raigarh is still cheaper by -- compared to Angul. But going forward, as Angul ramps up and comes to the right kind of efficiency, it is certainly going to be more profitable overall compared to Raigarh primarily because of the larger volume which it has got, the larger units which are there, and therefore, they bring their own efficiencies as well as the new processes and so on. So therefore, certainly the -- going forward, the benefit of Angul cost reduction should start happening in a couple of quarters -- in a quarter or a couple of quarters max. And so that's the kind of number which is there. So as I'm talking about EBITDA per -- because, let's say, the product prices will keep changing based on what the NSR is applied, but primarily what is going to drive it is the cost potential, which is Raigarh and Angul. Does that answer your question?

[Abhijit Mitra, Vice President of Metals, Mining and Defence]

Yes, to an extent it does.

[Operator]

The last question is from the line of from Prateek Singh from Crédit Suisse.

[Prateek Singh, Research Analyst]

So just wanted to get a handle on the Q-o-Q net debt movement because, I remember in the last quarter, I think, the number that was given was around INR 42,400 crores. Now at INR 42,000 crores, that means that's not much of a net debt offense because despite having that INR 12 billion QIP, of which I understand that INR 5 billion was spent on working capital and despite a decent cash generation this quarter. So how do we bridge this all -- so is the number correct of my last quarter [ net debt ]?

[Deepak Sogani, CFO & Director]

So you are correct. Last quarter, we had reported -- last quarter is the first day when we started talking of the reduction in our debt levels. Last quarter, we had reported INR 42,406 crores [indiscernible], right? And this quarter, it is roughly INR 42,002 crores, so there is a reduction of INR 405 crores from the last quarter, which is primarily based on our scheduled repayments, et cetera, right? In addition, I already highlighted on the call earlier on, we had unutilized cash of around INR 482 crores or around INR 500 crores, which, if you reduce from the gross debt and if you want to compute the net debt, you can certainly kind of reduce it by another INR 482 crores. That is cash in hand, not paid out to the bank. But on a net debt basis, there is certainly some more reduction that is possible to be factored into the quarterly performance, okay?

[Prateek Singh, Research Analyst]

Right. So what I'm saying is that even if you factor that total net debt differential due to QIP would be around INR 1,200 crores plus your net debt cash because of what is [ EBITDA ] this quarter. Even then the net debt movement does not seem that high. [indiscernible]

[Deepak Sogani, CFO & Director]

No. So if you -- so no, I think, right. So in the current quarter, if you're looking at the -- obviously, we have multiple factors that benefit in ]. On the quarterly basis, we have obviously reported a INR 1,500 crore kind of a stand-alone EBITDA, right? Correct?

[Prateek Singh, Research Analyst]

Right, right.

[Deepak Sogani, CFO & Director]

And you're well aware that our Angul business is ramping up, and you've got this INR 1,200 crore additional QIP fund also. So we are talking about INR 2,700 crore additional funds that came in, in that business in the current quarter, correct? Right?

[Prateek Singh, Research Analyst]

Right.

[Deepak Sogani, CFO & Director]

And out of that, I've already told you INR 500 crore is unutilized. So we are left with around INR 2,200 crore, correct?

[Prateek Singh, Research Analyst]

Correct, sir.

[Deepak Sogani, CFO & Director]

Right. And we have also reported around INR 1,000 crore of -- maybe if we've taken INR 500 crores out, another INR 400 crore out, so INR 1,800 crore cash still remains, right, to be factored in, correct?

[Prateek Singh, Research Analyst]

Right.

[Deepak Sogani, CFO & Director]

So partly, obviously, the utilization of the residual cash is on multiple accounts. We have obviously kind of paid out on the -- partly on account of our working capital. There has been a significant improvement. We were obviously looking to kind of ramp up our working capital, so there has been a working capital increase of almost, I would say, around INR 1,000 crore has been pumped into Angul on account of inventory on both raw materials and [ this should ] [indiscernible] build the inventory and our working capital there in the last quarter because we wanted to kind of really accelerate. So out of the INR 1,800 crores, about INR 1,000 crores incremental money going in primarily and very focused to help us grow the Angul business very, very quickly and sharply, right? And balance INR 1,800 -- INR 800-odd crore has been spent partly on CapExs or part of CapEx saving, et cetera, right? So that's the ballpark explanation. I think we are [ home ], and we are a company which has now just started, in the last 1 quarter, 2 quarters started generating surplus cash flow. And obviously, part of the cash flow gets absorbed in the past payment and the liabilities and stuff like that. But in the coming years, as the liquidity settles down, the additional liquidity will become even more visible and available. Yes?

[Prateek Singh, Research Analyst]

Understood, understood, understood, sir. Sir, and just my second question was I think it was asked earlier...

[Nishant Baranwal, Head of Investor Relations]

Prateek, really sorry to cut you off. We'll take these questions offline. I guess, we will -- this is already the longest call we've had, I'm sure many of the analysts will tell us. But before I close, I would call the -- revert back to Mr. Ansari for his closing remarks.

[Naushad Akhter Ansari]

So as you can see, we are firmly on the path of recovery, and we were in difficulty a few years back. But we are firmly on the path of recovery. After so many quarters, we have come into profit. And going forward, with all the initiatives, which have been taken in terms of the cost reduction and also the market is playing out well, we should be doing much better than what we have been doing. Couple of points which I also want to highlight and Mr. Sogani mentioned. In the month -- in quarter 4, for example, if you look at our average NSR, it was something around INR 40,200, whereas in the month of March, [ we've said ] it has gone up to about INR 42,000. And today, it is actually even better, it is close to about INR 43,000. So therefore, overall, we certainly see very positive sentiments coupled with our cost reduction, coupled with our substantial volume increase, which we are planning, and coupled as the market continues to play well, primarily because of the demand-supply gap, we do believe that we should be doing much better in the coming quarters and year compared to what we have done in the past.So I thank you all for your very insightful questions, and once again, thank you all.

[Nishant Baranwal, Head of Investor Relations]

Thank you very much for joining us for today's call. And with this, I'll revert back to Mr. Kamlesh Bagmar from Prabhudas Lilladher. Thank you very much.

[Kamlesh Bagmar, Senior Research Analyst]

Thanks.

[Operator]

Thank you. Ladies and gentlemen, on behalf of Prabhudas Lilladher, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines.